Preview
FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018
NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------------------------- X
CRESCO LABS NEW YORK, LLC, a New :
York limited liability company, and CRESCO :
LABS, LLC, an Illinois limited liability : Index No. 652343/2018
company, :
: Hon. Andrew Borrok
:
Plaintiffs/Counterclaim Defendants, :
: AFFIRMATION OF JASON P.
v. : HIPP IN SUPPORT OF
: PLAINTIFFS’ MOTION FOR
: LEAVE TO FILE SUR-REPLY
FIORELLO PHARMACEUTICALS, INC., a :
New York corporation, : Mot. Seq. No. __
:
Defendant/Counterclaimant.
----------------------------------------------------------- X
I, Jason P. Hipp, being duly sworn, depose and say the following statements to be true:
1. I am an attorney at the law firm Jenner & Block, LLP and represent Cresco Labs
New York, LLC and Cresco Labs, LLC (collectively, “Cresco” or “Plaintiffs”), in this
proceeding against Fiorello Pharmaceuticals, Inc. (“Fiorello” or “Defendant”).
2. I submit this affirmation in support of Plaintiffs’ Motion for Leave to File Sur-
Reply in Opposition to Defendant’s Motion for Summary Judgment (NYSCEF Doc. No. 280). I
make these statements based on my personal knowledge or my review of the record in this case.
3. This case concerns a binding letter of intent (“LOI”) entered into between Cresco
and Fiorello in February 2018. Under this LOI, Cresco was to acquire 100% of the outstanding
shares of Fiorello for a minimum of $22.5 million and up to $32.5 million in total consideration.
The parties each desired to preclude the other from engaging in negotiations with other parties
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while they sought agreement on the specific terms of the LOI. As such, the LOI included a
mutual No-Shop Provision, meaning that while Fiorello was prohibited from engaging in
discussions with other potential acquirers, Cresco was similarly prohibited from engaging in
discussions with other potential targets.
4. Fiorello egregiously breached the No-Shop Provision by discussing a sale with
multiple third parties, and ultimately entered into a deal with one of them. Fiorello’s breach
meant that Cresco could no longer acquire Fiorello’s stock and obtain a foothold in the New
York market without paying a premium for the last available New York-licensed company—
precisely the harm the No-Shop Provision was intended to prevent.
5. On June 26, 2018, Cresco filed its initial complaint. NYSCEF Doc. No. 8. On
November 20, 2018, Cresco filed the Amended Complaint, which included a claim against
Fiorello for breach of the No-Shop Provision in the LOI between Cresco and Fiorello. NYSCEF
Doc. No. 60. On May 24, 2019, this Court issued a decision and order denying Defendants’
motion to dismiss the claim for breach of the No-Shop Provision. NYSCEF Doc. No. 119.
6. On January 6, 2022, Fiorello filed its opening brief in support of its motion for
summary judgment. NYSCEF No. 341. In its opening brief, Fiorello asked the Court to limit
Cresco’s damages for Fiorello’s breach of the No-Shop Provision, relying primarily on the Court
of Appeals’ decision in Goodstein Const. Corp. v. City of New York, 80 N.Y.2d 366, 373 (1992).
7. After Cresco distinguished Goodstein in its opposition brief, NYSCEF No. 342,
Fiorello cited for the first time in its reply brief a new authority that it characterizes as
“controlling,” even though the decision was from May 18, 2021, well before Fiorello served its
opening brief in support of summary judgment. NYSCEF No. 530 at 2, 9, 14, and 15 (discussing
Garda USA, Inc. v. Sun Capital Partners, 194 A.D.3d 545 (1st Dep’t 2021)).
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8. Fiorello’s reliance on this authority in its reply brief has deprived Cresco of an
opportunity to respond. Consequently, there is good cause to allow Cresco to file a sur-reply
limited to responding to Fiorello’s new legal authority.
9. Cresco’s proposed sur-reply has been submitted with this Motion as Exhibit 1.
10. In the event Fiorello opts to pursue additional discovery pursuant to the Court’s
orders of January 21, 2022 (NYSCEF Doc. Nos. 677, 678), and thereafter the parties substitute
their summary judgment papers, Cresco will withdraw this motion for leave to file a sur-reply
and instead respond to Garda in its substituted opposition brief.
11. I affirm that the foregoing is true under penalty of perjury.
New York, New York /s Jason P. Hipp _
January 24, 2022 Jason P. Hipp, Esq.
Jenner & Block LLP
Counsel for Plaintiffs
Cresco Labs New York, LLC and
Cresco Labs, LLC
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CERTIFICATION OF COMPLIANCE WITH WORD COUNT LIMIT
I hereby certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division
that the total number of words in this affirmation, exclusive of the caption and signature block, is
600.
Dated: January 24, 2022
New York, New York /s Jason P. Hipp
Jason P. Hipp
1155 Avenue of the Americas
New York, New York 10036
212-891-1670
jhipp@jenner.com
Counsel for Plaintiffs
Cresco Labs New York, LLC and Cresco
Labs, LLC
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Preview
FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------------------------- X CRESCO LABS NEW YORK, LLC, a New : York limited liability company, and CRESCO : LABS, LLC, an Illinois limited liability : Index No. 652343/2018 company, : : Hon. Andrew Borrok : Plaintiffs/Counterclaim Defendants, : : AFFIRMATION OF JASON P. v. : HIPP IN SUPPORT OF : PLAINTIFFS’ MOTION FOR : LEAVE TO FILE SUR-REPLY FIORELLO PHARMACEUTICALS, INC., a : New York corporation, : Mot. Seq. No. __ : Defendant/Counterclaimant. ----------------------------------------------------------- X I, Jason P. Hipp, being duly sworn, depose and say the following statements to be true: 1. I am an attorney at the law firm Jenner & Block, LLP and represent Cresco Labs New York, LLC and Cresco Labs, LLC (collectively, “Cresco” or “Plaintiffs”), in this proceeding against Fiorello Pharmaceuticals, Inc. (“Fiorello” or “Defendant”). 2. I submit this affirmation in support of Plaintiffs’ Motion for Leave to File Sur- Reply in Opposition to Defendant’s Motion for Summary Judgment (NYSCEF Doc. No. 280). I make these statements based on my personal knowledge or my review of the record in this case. 3. This case concerns a binding letter of intent (“LOI”) entered into between Cresco and Fiorello in February 2018. Under this LOI, Cresco was to acquire 100% of the outstanding shares of Fiorello for a minimum of $22.5 million and up to $32.5 million in total consideration. The parties each desired to preclude the other from engaging in negotiations with other parties 1 1 of 5 FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022 while they sought agreement on the specific terms of the LOI. As such, the LOI included a mutual No-Shop Provision, meaning that while Fiorello was prohibited from engaging in discussions with other potential acquirers, Cresco was similarly prohibited from engaging in discussions with other potential targets. 4. Fiorello egregiously breached the No-Shop Provision by discussing a sale with multiple third parties, and ultimately entered into a deal with one of them. Fiorello’s breach meant that Cresco could no longer acquire Fiorello’s stock and obtain a foothold in the New York market without paying a premium for the last available New York-licensed company— precisely the harm the No-Shop Provision was intended to prevent. 5. On June 26, 2018, Cresco filed its initial complaint. NYSCEF Doc. No. 8. On November 20, 2018, Cresco filed the Amended Complaint, which included a claim against Fiorello for breach of the No-Shop Provision in the LOI between Cresco and Fiorello. NYSCEF Doc. No. 60. On May 24, 2019, this Court issued a decision and order denying Defendants’ motion to dismiss the claim for breach of the No-Shop Provision. NYSCEF Doc. No. 119. 6. On January 6, 2022, Fiorello filed its opening brief in support of its motion for summary judgment. NYSCEF No. 341. In its opening brief, Fiorello asked the Court to limit Cresco’s damages for Fiorello’s breach of the No-Shop Provision, relying primarily on the Court of Appeals’ decision in Goodstein Const. Corp. v. City of New York, 80 N.Y.2d 366, 373 (1992). 7. After Cresco distinguished Goodstein in its opposition brief, NYSCEF No. 342, Fiorello cited for the first time in its reply brief a new authority that it characterizes as “controlling,” even though the decision was from May 18, 2021, well before Fiorello served its opening brief in support of summary judgment. NYSCEF No. 530 at 2, 9, 14, and 15 (discussing Garda USA, Inc. v. Sun Capital Partners, 194 A.D.3d 545 (1st Dep’t 2021)). 2 2 of 5 FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022 8. Fiorello’s reliance on this authority in its reply brief has deprived Cresco of an opportunity to respond. Consequently, there is good cause to allow Cresco to file a sur-reply limited to responding to Fiorello’s new legal authority. 9. Cresco’s proposed sur-reply has been submitted with this Motion as Exhibit 1. 10. In the event Fiorello opts to pursue additional discovery pursuant to the Court’s orders of January 21, 2022 (NYSCEF Doc. Nos. 677, 678), and thereafter the parties substitute their summary judgment papers, Cresco will withdraw this motion for leave to file a sur-reply and instead respond to Garda in its substituted opposition brief. 11. I affirm that the foregoing is true under penalty of perjury. New York, New York /s Jason P. Hipp _ January 24, 2022 Jason P. Hipp, Esq. Jenner & Block LLP Counsel for Plaintiffs Cresco Labs New York, LLC and Cresco Labs, LLC 3 3 of 5 FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022 CERTIFICATION OF COMPLIANCE WITH WORD COUNT LIMIT I hereby certify pursuant to Rule 17 of the Rules of Practice for the Commercial Division that the total number of words in this affirmation, exclusive of the caption and signature block, is 600. Dated: January 24, 2022 New York, New York /s Jason P. Hipp Jason P. Hipp 1155 Avenue of the Americas New York, New York 10036 212-891-1670 jhipp@jenner.com Counsel for Plaintiffs Cresco Labs New York, LLC and Cresco Labs, LLC 4 4 of 5 FILED: NEW YORK COUNTY CLERK 01/24/2022 07:44 PM INDEX NO. 652343/2018 NYSCEF DOC. NO. 679 RECEIVED NYSCEF: 01/24/2022 5 of 5