Motion to Dismiss in RETRACTABLE TECHNOLOGIES, INC vs. LOCKE LORD, LLP, et al| Trellis.Law

On November 07, 2019 a Clerk Notice was filed involving a dispute between Retractable Technologies, Inc, and Hardin, Roy, Locke Lord, Llp, for OTHER (CIVIL) in the District Court of Dallas County.

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FILED
5/27/2020 12:06 PM
FELICIA PITRE
TCPA Resp w/Exhs Page 1 DISTRICT CLERK
DALLAS 00., TEXAS
Loaidi Grove DEPUTY

CAUSE NO. DC-19-17946

RETRACTABLE TECHNOLOGIES, INC. § IN THE DISTRICT COURT
§
Plaintiff §

§
V. §

§ 44th JUDICIAL DISTRICT
LOCKE LORD, LLP, and §
ROY HARDIN §

§
Defendants. § DALLAS COUNTY, TEXAS

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
DEFENDANTS’ MOTION TO DISMISS UNDER THE TEXAS CITIZENS
PARTICIPATION ACT

TO THE HONORABLE JUDGE OF SAID COURT:

NOW COMES PlaintiffRetractable Technologies, Inc. (“RTI” 0r “Plaintiff”), and ﬁles this
Response t0 Defendants’ Motion t0 Dismiss under the Texas Citizens Participation Act, and in

support thereof would respectfully show the Court the following:

I. Introduction

1. This case involves a client suing its attorneys for the attorneys’ legal malpractice

and breach of ﬁduciary duty. In this case, RTI is the client and Defendants are the attorneys.

2. In light of Defendants’ characterization 0f RTI’s claims in their TCPA Motion, it

is important to note at the onset what RTI’S lawsuit against Defendants is not about. RTI’S lawsuit

is not based on 0r in response t0 an international mega law ﬁrm with over 600 attorneys (Locke

Lord, LLP) and one 0f its senior partners (Roy Hardin) engaging in any protected First Amendment

speech. Rather, RTI’S lawsuit is based 0n Locke Lord, LLP and Roy Hardin’s unlawful conduct,

failure t0 communicate, failure t0 disclose material conﬂicts of interests, and failure t0 advise RTI

0f material applicable law. These omissions and bad acts 0f Locke Lord, LLP and Roy Hardin

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
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TCPA Resp lexhs Page 2

directly and proximately resulted in RTI paying millions 0f dollars in unnecessary attorneys’ fees

t0 Defendants and millions 0f dollars 0f unnecessary expenses, which but for Defendants’

omissions and acts would not have been incurred by RTI.

3. As a result 0f Defendants’ acts 0r omissions, 0n November 7, 2019, RTI ﬁled this

lawsuit, alleging two causes 0f action against Defendants: Breach 0f Fiduciary Duty and Legal

Malpractice.

4. Defendants ﬁled an answer 0n December 13, 2019. On the same day, RTI served

Defendants with Plaintiff’s First Set 0f Written Discovery. On December 16, 2019, RTI served

Defendants with Plaintiff’s First Amended Set 0f Written Discovery.

5. Only days before Defendants’ responses and document production were due,

Defendants ﬁled their Motion to Dismiss under the Texas Citizens Participation Act (the “TCPA

Motion”).

6. Defendants’ TCPA Motion is nothing more than a frivolous attempt at delaying this

Lawsuit and avoiding discovery. In essence, Defendants are claiming that, as attorneys, they m
a protected right t0 commit malpractice and breach their ﬁduciary duty and then hide behind the

TCPA. Defendants’ TCPA Motion is a prime example 0f the outright abuse and misuse 0f the

TCPA that has become all too common.

7. Defendants’ TCPA Motion essentially argues that attorneys should always be

protected by the TCPA for unlawful conduct that is committed While representing a client in any

litigation matter. Public policy alone should preclude this Court from granting Defendants’ TCPA

Motion. If this Court grants Defendants’ TCPA Motion, this would lead to an absurd and

inequitable result. The granting of Defendants’ TCPA Motion would open the door for every

lawyer who breaches his ﬁduciary duty and commits legal malpractice While representing a client

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
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in litigation to file a frivolous TCPA motion. This will further result in large fees being incurred

by clients in responding to these frivolous TCPA motions and the case being unduly delayed when

the court rightfully denies the motion and the attorneys are then able to pursue a sham interlocutory

appeal. Essentially, aggrieved clients will be denied access to the courts and forced to incur

additional unnecessary attorneys’ fees unrelated to the bad acts of their attorneys. This clearly does

not align with the express purpose of the TCPA.

8. This Court should sanction Defendants for filing this frivolous TCPA Motion to

send a message that this type of abuse of the TCPA will not be tolerated and award Plaintiff its

attorneys’ fees in having to respond to the TCPA Motion.

9. Plaintiff’s position is that the TCPA is wholly inapplicable to the claims at issue

and that Defendants have filed their TCPA Motion solely as a means of delay and to avoid

discovery from moving forward. Nonetheless, Plaintiff has established by clear and specific

evidence a prima facie case for each essential elements of its claims. As such, in the unlikely event

this Court finds that the TCPA does apply to Plaintiff’s claims, the TCPA Motion should still be

denied because Plaintiff can meet its burden under the TCPA.

II. Summary of the Arguments

10. RTI will show that Defendants’ TCPA Motion should be denied because:

(A) The TCPA is not applicable to RTI’s claims because the TCPA’s commercial
speech exemption applies;

(B) Defendants have failed to meet their burden under the TCPA with proof by a
preponderance of the evidence that the TCPA is applicable to RTI’s claims;

(C) Even if the TCPA applies to RTI’s claims, RTI has met its burden by establishing
by clear and specific evidence a prima facie case for each essential element of its
claims for legal malpractice and breach of fiduciary duty;

(D) Defendants’ TCPA Motion is frivolous and brought in bad faith solely for the
purpose of delay.

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
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TCPA Resp lexhs Page 4

11. The TCPA provides that the Court must consider the pleadings and afﬁdavits When

considering the aforementioned items.1 The Court must “View the pleadings and evidence in the

light most favorable” t0 RTLZ In fact, the Court can consider “only the pleadings and evidence in

favor 0f [RTI’S] case” when determining whether RTI has met its burden.3

III. Supporting Evidence

12. In support of this Response, RTI (a) references and incorporates the pleadings and

documents 0f record pursuant t0 the TCPA, t0 which RTI requests the Court to take judicial notice

and (b) submits the following evidence:

Exhibit A Afﬁdavit 0f Thomas Shaw (“Shaw Afﬁdavit”)

Exhibit A—l Draft Complaint Prepared by Akin Gump

Exhibit A—2 2007 Fee Agreement

Exhibit A-3 Original Complaint

Exhibit A-4 2010 Fee Agreement

Exhibit A-5 Retractable Techs., Inc. v. Becton Dickinson & C0., 842 F.3d
883 (5th Cir. 2016) (“Fifth Circuit Opinion”).

1
TEX. CIV. PRAC. & REM. CODE § 27.006(a).
2
Brugger v. Swinford, No. 14-16-00069-CV, 2016 WL 4444036, *2 (Tex. App.—Houston [14th Dist] 2016, no
pet.) (citing Cheniere Energy, Inc. v. Lozﬁ, 449 S.W.3d 210, 214-15 (Tex. App.—Houston [lst Dist] 2014, no pet.))
(emphasis added); see also Apple Tree Café Touring, Inc. v. Levatino, No. 05-16-01380-CV, 2017 Tex. App. LEXIS
7405, *9 (Tex. App.—Da11as 2017, pet. denied) (“When determining whether the non-movant presented a prima
facie case, we consider only the pleadings and evidence in favor 0f the non-movant’s case.”) (citing Moldovan v.
Polito, No. 05-15-01052-CV, 2016 TeX. App. LEXIS 8283, *5 (Tex. App.—Dallas 2016, n0 pet.) (mem. 0p.)). See
also Wayne Dolceﬁno & Dolceﬁno Commc’n, LLC v. Cypress Creek EMS, N0. 01-17-00254-CV, 2017 WL
6460107, *5 (Tex. App.—H0ust0n [lst Dist] 2017, n0 pet. h.) (“We View the evidence in the light most favorable to
the nonmovant.”); MVS Int’l Corp. v. Int’l Advert. Sols., LLC, No. 08-16-00173-CV, 2017 WL 4534331, *4 (Tex.
App.— E1 Paso 2017, n0 pet.) (“The pleadings and evidence should be Viewed in a light favorable t0 the non-
movant.”).
3
Apple Tree Café Touring, Inc. v. Levatino, No. 05-16-01380-CV, 2017 TeX. App. LEXIS 7405, *9 (Tex. App.—
Dallas 2017, pet. denied).

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
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Exhibit A-6 Summary of Payments t0 Locke Lord

Exhibit B Afﬁdavit 0f Michele Larios (“Larios Afﬁdavit”)

Exhibit C Declaration 0f James McCormack (“McCormack
Declaration”)

Exhibit D Transcript 0f the Deposition 0f Roy Hardin, March 12,
2020 (“Hardin Deposition”).

Deposition Exhibits, 1 — 22.

Exhibit E Transcript 0f the Deposition 0f Christine Beaulieu, March
12, 2020 (“Beaulieu Deposition”).

IV. FACTUAL BACKGROUND

13. RTI is in the business 0f marketing and developing safety syringe technology.4

Becton, Dickinson and Company (“BD”) is the nation’s dominant maker and seller 0f disposable

syringes and a major competitor of RTI.5 From 1998 t0 2004, RTI had been involved in intense

litigation With BD, Which eventually resulted in BD paying RTI a $100 million settlement in July
2004.6

14. In or around early 2006, RTI began to investigate bringing an antitrust lawsuit

against BD (“Underlying Litigation”).7 In fact, RTI had solicited a bid for pursuing an antitrust

lawsuit from Akin Gump.8 In conjunction with its bid, Akin Gump prepared a draft complaint for

RTI’S review.9 The draft complaint that was prepared by Akin Gump was solely an antitrust lawsuit

and did not mention anything about patent infringement.” Thereafter, RTI reached out t0 Monty

4
Shaw Afﬁdavit p. 2 1] 2; EX. B, Larios Afﬁdavit p. 2 1] 2.
EX. A,
5
Shaw Afﬁdavit p. 2 1] 3; EX. B, Larios Afﬁdavit p. 2 1] 3.
EX. A,
6
EX. A, Shaw Afﬁdavit p. 2 1] 3; EX. B, Larios Afﬁdavit p. 2 1] 3.
7
EX. A, Shaw Afﬁdavit p. 2 1] 4; EX. B, Larios Afﬁdavit p. 2 1] 4.
8
EX. A, Shaw Afﬁdavit p. 2 1] 4; EX. B, Larios Afﬁdavit p. 2 1] 4.
9
Ex. A, Shaw Afﬁdavit p. 2 1] 4; EX. B, Larios Afﬁdavit p. 2 1] 4; See EX. A-l to Ex. A, Shaw Afﬁdavit.
10
Ex. A, Shaw Afﬁdavit p. 2 1] 4; EX. B, Larios Afﬁdavit p. 2 1] 4.

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Ross of Locke Lord.” Mr. Ross had worked with RTI 0n the previous patent litigation against

BD.” Mr. Ross requested that RTI allow Defendants the opportunity t0 make a pitch for the new

antitrust matter against BD.”

15. Prior to Defendants’ meeting with RTI, on August 3, 2006, Hardin had asked

several attorneys with Locke Lord to research “Whether or not there are really bad 5th Circuit cases

that would impact the claims we intend to make in a way that would not be so in the 3rd [Circuit].”14

16. In response to Hardin’s request, Christopher Bass (an attorney with Locke Lord)

responded that he had spoken With Paul Rogers (a partner with Locke Lord and one 0f the authors

of ANTITRUST LAW: POLICY AND PRACTICE textbook) and that Mr. Rogers said “that 5th

[Circuit] would be the worst.”15 Mr. Bass also mentioned that he had spoken With Brad Weber (a

partner at Locke Lord and currently the Co-Leader of Locke Lord‘s Antitrust Practice Group)

regarding the Fifth Circuit and he said “we deﬁantly don't want 5th Circuit he says they put up too

many h00ps.”16

17. In response to Mr. Bass, Hardin responded as follows: “I believe and understand

that antitrust lawyers think the 5th is the worst. I sense, however, that this is a reﬂection of their

take on the current members of the 5th as being overly conservative - in other words, a sense that

if vou should succeed in the lower court the 5th will ﬁnd a wav to reverse. I totallv accept

this premise?“ Hardin is not specialized in antitrust law and at this point in his career he had

never been the ﬁrst chair in an antitrust case.”

11
Ex. A, Shaw Afﬁdavit p. 2 11 5; Ex. B, Larios Afﬁdavit p. 2 11 5.
12
Ex. A, Shaw Afﬁdavit p. 2 1] 5; EX. B, Larios Afﬁdavit p. 2 11 5.
13
Ex. A, Shaw Afﬁdavit p. 2 1] 5; EX. B, Larios Afﬁdavit p. 2 11 5.
14
Exhibit 5 to Ex. D, Hardin Deposition.
15
Exhibit 6 to Ex. D, Hardin Deposition; https://www.smu.edu/Law/Facultv/Proﬁles/Rogers-III-C-Paul.
16
Exhibit 6 to EX. D, Hardin Deposition; https://www.lockelord.com/nrofessionals/w/weber-bradlev-c.
17
Exhibit 7 t0 Ex. D, Hardin Deposition.
18
EX. D, Hardin Deposition at pp. 10:3-10 and 23:13-19.

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18. On September 8, 2006, Defendants met With the representatives 0f RTI to pitch RTI

on pursuing additional potential claims against BD, including patent infringement and antitrust

claims.” At the time of this pitch meeting, there was not a pending legal proceeding relating t0

RTI’s potential patent infringement and/or antitrust claims against BD.20

19. At this pitch meeting, Defendants represented t0 RTI that RTI had a strong case for

claims of patent infringement and antitrust against BD.21 At this meeting, Hardin presented to RTI

that BD’s ongoing and continuing patent infringement would work better as one prong of an

antitrust lawsuit.” Speciﬁcally, Defendants represented t0 RTI that With a ﬁnding 0f patent

infringement, RTI’s antitrust claims against BD would be self—proving.23

20. During this pitch meeting, Defendants failed t0 disclose t0 and/or inform RTI that

the Fifth Circuit had previously held in 1954 and 1976 that patent infringement is not illegal

conduct under the Sherman Antitrust Act and that the theory being proposed by Defendants had

been previously rejected by the Fifth Circuit.” Hardin and Locke Lord also failed to disclose to

RTI the previous opinions 0f Mr. Rogers and Mr. Weber that the Fifth Circuit is “the worst” circuit

and has “too many h00ps”.25 Importantly, Hardin did not disclose t0 RTI that Hardin accepted the

premise that the Fifth Circuit is overly conservative and that the sense is that if you should succeed

in the lower court the Fifth Circuit will ﬁnd a way to reverse.26 Furthermore, Hardin did not tell

RTI that if RTI obtained a judgment against BD that it would likely not hold up 0n appeal t0 the

Fifth Circuit.”

19
Ex. A, Shaw Afﬁdavit p. 2 1] 6; Ex. B, Larios Afﬁdavit p. 3 1] 6; Exhibits 2-4 to Hardin Deposition.
2°
EX. A, Shaw Afﬁdavit pp. 2-3 1] 6; EX. B, Larios Afﬁdavit p. 3 1] 6.
21
EX. A, Shaw Afﬁdavit p. 3 1] 7; EX. B, Larios Afﬁdavit p. 3 1]
7.
22
EX. A, Shaw Afﬁdavit p. 3 1] 7; EX. B, Larios Afﬁdavit p. 3 1] 7; Exhibit 3-4 t0 Hardin Deposition.
23
EX. A, Shaw Afﬁdavit p. 3 1] 7; EX. B, Larios Afﬁdavit p. 3 1]
7.
24
EX. A, Shaw Afﬁdavit p. 3 1] 8; EX. B, Larios Afﬁdavit p. 3 1]
8.
25
Exhibit 6 to Ex. D, Hardin Deposition; Ex. D, Hardin Deposition at p. 6525-21.
26
Exhibits 6-7 to EX. D, Hardin Deposition; EX. D, Hardin Deposition at p. 6525-21.
27
Ex. D, Hardin Deposition at p. 28:18-24.

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21. Defendants instead sold RTI 0n pursuing a lawsuit against BD based on this

previously rejected theory, which resulted in RTI hiring Defendants t0 pursue RTI’S patent

infringement claims and antitrust claims against BD.28 In deciding to hire Defendants, RTI relied

wholly on Defendants t0 provide them with correct legal advice regarding patent infringement and

for Defendants to fully inform RTI of the applicable antitrust laws, including antitrust laws in the

Fifth Circuit.” However, Defendants Wholly failed to inform and/or explain to RTI that the Fifth

Circuit had previously expressly disavowed the theory being proposed by Defendants 01‘, at the

minimum, that extremely adverse authority existed in the Fifth Circuit.”

22. If Defendants had disclosed the existence 0f this adverse authority t0 RTI at the

onset or before ﬁling the lawsuit, RTI would not have paid millions 0f dollars in attorneys’ fees

and out-of-pocket costs t0 Defendants and t0 pursue the lawsuit against BD.31 Furthermore, if

Defendants had explained and disclosed that the Fifth Circuit was considered by more than one

Locke Lord attorney t0 be the worst circuit for an antitrust lawsuit and that the Fifth Circuit would

most likely ﬁnd a way to reverse the lower court’s judgment, RTI would not have paid millions 0f

dollars in attorneys’ fees and out-of-pocket costs t0 the Defendants to pursue the lawsuit against

ED.”

23. Prior to hiring Defendants, RTI’S representatives asked Defendants whether they

had any potential conﬂicts 0f interest in representing RTI.” Defendants afﬁrmatively represented

28
EX. A, Shaw Afﬁdavit p. 3 1] 9; EX. B, Larios Afﬁdavit p. 3 1]
9.
29
EX. A, Shaw Afﬁdavit p. 3 1] 9; EX. B, Larios Afﬁdavit p. 3 1]
9.
3°
EX. A, Shaw Afﬁdavit p. 3 1] 9; EX. B, Larios Afﬁdavit p. 3 1] 9.
31
EX. A, Shaw Afﬁdavit p. 3 1]
9 and pp. 6-7 1] 21; EX. B, Larios Afﬁdavit pp. 3-4 1]
9.
32
Ex. A, Shaw Afﬁdavit p. 3 1]
9 and pp. 6-7 1] 21; EX. B, Larios Afﬁdavit pp. 3-4 1]
9.
33
Ex. A, Shaw Afﬁdavit p. 4 1] 10; EX. B, Larios Afﬁdavit p. 4 1]
10.

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to RTI that Defendants did not have any conﬂicts 0f interest.“ Speciﬁcally, Defendants did not

inform RTI that they represented Henry Schein, Inc. (“Henry Schein”).35

24. Henry Schein was one of the very distributors that RTI believed BD had colluded

with in committing the antitrust Violations that were the subj ect of the potential antitrust litigation

With BD.36 Prior t0 hiring Defendants, RTI had informed Defendants 0f these issues With

distributors like Henry Schein.” Speciﬁcally, RTI had been alleging that BD falsely claimed that

RTI needles were less sharp than BD needles and contained dead space.” RTI had informed Hardin

that Henry Schein perpetuated these misrepresentations.” Nonetheless, Defendants never

disclosed to RTI that they represented Henry Schein.40

25. On or around February 12, 2007, unbeknownst t0 RTI, Michael Powell (a partner

0f Locke Lord), expressed his concerns to Defendants about What the courts might say about

Defendants’ theory that BD’S patent infringement constituted bad conduct under the applicable

antitrust laws.“ Speciﬁcally, Mr. Powell stated that he was afraid that the courts might say that

“BD’s infringement 0f a patent is, in the short run, not anticompetitive. It is procompetitive. ..

The antitrust laws were not intended to protect your legal monopoly. Again, that is the function 0f

the patent laws.”42 Importantly, Defendants did not disclose Mr. Powell’s concerns about the

Viability 0f Defendants’ theory t0 RTI.43

34
EX. A, Shaw Afﬁdavit p. 4 1] 10; EX. B, Larios Afﬁdavit p. 4 1] 10; Exhibit 4 to Ex. D, Hardin Deposition.
35
Ex. A, Shaw Afﬁdavit p. 4 1] 10; Ex. B, Larios Afﬁdavit p. 4 1] 10; Hardin Deposition pp. 110:20-25 andl 19:25-
120:3.
36
EX. A, Shaw Afﬁdavit p. 4 1] 11; EX. B, Larios Afﬁdavit p. 4 1]
11.
37
EX. A, Shaw Afﬁdavit p. 4 1] 11; EX. B, Larios Afﬁdavit p. 4 1]
11.
38
EX. A, Shaw Afﬁdavit p. 4 1] 11; EX. B, Larios Afﬁdavit p. 4 1]
11.
39
EX. A, Shaw Afﬁdavit p. 4 1] 11; EX. B, Larios Afﬁdavit p. 4 1]
11.
4°
EX. A, Shaw Afﬁdavit p. 4 1] 11; EX. B, Larios Afﬁdavit p. 4 1] 11; Hardin Deposition pp. 110:20-25 andl 19:25-
120:3.
41
Exhibit 12 t0 EX. D, Hardin Deposition; EX. A, Shaw Afﬁdavit p. 4 1]
9.
42
Id.
43
Ex. A, Shaw Afﬁdavit p. 4 1]
9.

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26. Based 0n the theory being presented by Defendants and without the knowledge of

the Fifth Circuit’s previous rulings 0r Mr. Powell’s concerns about the Viability 0f the case and

based 0n Defendants’ representation that they did not have any conﬂicts of interest, RTI hired

Defendants t0 pursue its claims against BD for patent infringement and antitrust violations.“ On

March 9, 2007, RTI entered into a fee agreement With Defendants.“

27. On June 15, 2007, Defendants initiated a legal proceeding on behalfofRTI by ﬁling

suit against BD for patent infringement, false advertising under the Lanham Act, Violations 0f the

Sherman and Clayton Act, the Texas Antitrust Act, and for common law unfair competition (the

“Original Complaint”).46

28. On January 18, 2008, the district court severed RTI’S claims for patent infringement

and antitrust Violations.” The district court also stayed RTI’S claims for antitrust Violations until a

resolution could be reached 0n RTI’S patent infringement claims.“

29. Ultimately, in October 2009, RTI was able t0 obtain a ﬁnding of patent

infringement against BD. RTI was awarded $5,000,000.00 despite paying $7,000,000.00 in fees

and expenses related t0 pursuing the patent infringement claims.” Thereafter, Defendants once

again reiterated t0 RTI that this result was a huge Victory for RTI’S antitrust claims against BD and

that the antitrust claims would now be self—proving due to the ﬁnding 0f patent infringement.”

30. On May 4, 2010, Hardin submitted a memorandum to the Executive Committee for

Locke Lord. Speciﬁcally, Hardin stated the following:

“The basic requirements 0f a Sherman Act Section 2 case are (a)
market power in a relevant market and (b) illegal conduct used t0

44
EX. A, Shaw Afﬁdavit p. 4 1] 12; EX. B, Larios Afﬁdavit p. 4 1]
12.
45
EX. A, Shaw Afﬁdavit p. 4 1] 12; EX. B, Larios Afﬁdavit p. 5 1] 13; See EX. A-2 t0 EX. A, Shaw Afﬁdavit.
46
EX. A, Shaw Afﬁdavit pp. 4-5 1] 13; EX. B, Larios Afﬁdavit p. 5 1]
13.
47
EX. A, Shaw Afﬁdavit p. 5 1] 14; EX. B, Larios Afﬁdavit p. 5 1]
14.
48
EX. A, Shaw Afﬁdavit p. 5 1] 14; EX. B, Larios Afﬁdavit p. 5 1]
14.
49
Ex. A, Shaw Afﬁdavit p. 5 1] 15; EX. B, Larios Afﬁdavit p. 5 1]
15.
50
Ex. A, Shaw Afﬁdavit p. 5 1] 15; EX. B, Larios Afﬁdavit p. 5 1]
15.

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maintain that power. BD has such a large market share in the
relevant market that we believe the ﬁrst element will not be difﬁcult
to prove. Patent infringement, alreadV proven, is illegal conduct
and BD used it here t0 make its bad copies and keep RTI’S products
out of hospitals. We also have strong evidence 0f false advertising
and willfully maintaining its faulty retractable syringes in the market
just t0 be able to say they had one. We further believe that the
traditional bad acts of exclusive contracting and bundling are
present — but even Without these more common Sherman Act
Section 2 ‘bad acts’ we believe we had a sound case for liabilitv
that is almost self proving due t0 the patent infringement RTI
has alreadv paid us t0 prove?“

31. Hardin’s statements in his memorandum t0 the Executive Committee for Locke

Lord were consistent With his previous representations that he had made t0 RTI at the pitch meeting

in September 2006 (Le. that patent infringement was illegal conduct under the applicable antitrust

laws and that it made the antitrust claims “self—proving”).52

32. On May 21, 2010, RTI entered into another fee agreement With Defendants, which

capped RTI’S attorney’s fees at $2,000,000.00 per year plus expenses and provided Defendants

with a 30% contingency fees in some pending RTI matters, including the antitrust 02136.53

33. In 20 1 0, the district court reactivated RTI’S non-patent claims. Thereafter, RTI paid

Defendants an additional $14,000,000.00 in attorneys’ fees related t0 RTI’S antitrust claims.“

During the course of this litigation, RTI requested that Defendants take the depositions 0f the

corporate representatives 0f the distributors (including Henry Schein) that RTI believed BD was

colluding With in committing the antitrust Violations that were the subject 0f the potential antitrust

51
Exhibit 11 t0 EX. D, Hardin Deposition; EX. D, Hardin Deposition pp. 82: 14-17 and 85:19-25.
52
Exhibit 11 t0 EX. D, Hardin Deposition; EX. D, Hardin Deposition pp. 82: 14-17 and 85:19-25; EX. A, Shaw
Afﬁdavit p. 3 1]
7.
53
Ex. A, Shaw Afﬁdavit p. 5 1] 16; EX. A-4 t0 EX.A, Shaw Afﬁdavit.
54
Ex. A, Shaw Afﬁdavit p. 5 1] 17; EX. B, Larios Afﬁdavit p. 5 1] 16.

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litigation With BD.55 Nonetheless, Defendants failed t0 pursue the depositions of the distributors,

including Henry Schein.56

34. On September 19, 2013, following an eight-day trial, a jury returned a verdict in

favor of RTI with damages 0f $1 8,508,014.00.” Notably, during the trial, the contract between

BD and Henry Schein was one of the contracts that was put into evidence and a topic 0f discussion

during the trial as to whether it was an exclusionary contractsg On January 15, 2015, a ﬁnal

judgment was entered by the district court in RTI’ s favor with RTI being awarded $340,524,042.00

in damages and $1 1,722,823.20 in attorneys’ fees.” Subsequently, BD appealed the ﬁnal judgment

to the Fifth Circuit.“

35. On December 2, 2016, the Fifth Circuit reversed the district court’s award 0f all

damages and attorneys’ fees t0 RTI and rendered a judgment in BD’S favor as t0 the antitrust

verdict.“ The Fifth Circuit opined the following:

This court long ago held that a defendant’s patent infringement
cannot serve as a basis for imposing antitrust liability because
the patent laws and antitrust laws serve two different and
incongruent purposes that “t0 an extent c0nﬂict.”Kinnear—
Weed Corp. v. Humble Oil & Ref. C0., 214 F.2d 891, 894 (5th Cir.
1954). Patent laws are designed to secure for patent holders a time-
limited exclusive right t0 exploit their discoveries, but this is “not
the kind 0f public purpose protected by the antitrust laws,” which
seek t0 “protect the free ﬂow 0f interstate commerce.” Id. That a
patentee may anticompetitively extend its market power t0 products
other than those covered and thus Violate the antitrust
by a patent,
laws, is well settled. See United States
v. Line Material C0., 333

U.S. 287, 308, 68 S.Ct. 550, 561, 92 L.Ed. 701 (1948). RTI,
however, cites n0 case holding the converse: that antitrust
liability may be founded in whole 0r in part upon patent
infringement. By deﬁnition, patent infringement invades the

55
EX. A, Shaw Afﬁdavit p. 5 1] 17; EX. B, Larios Afﬁdavit p. 5 1]
16.
56
EX. A, Shaw Afﬁdavit pp. 5-6 1] 17; EX. B, Larios Afﬁdavit p. 5 1]
16.
57
EX. A, Shaw Afﬁdavit p. 6 1] 18; EX. B, Larios Afﬁdavit p. 5 1]
17.
58
EX. A, Shaw Afﬁdavit p. 6 1] 18; EX. D, Hardin Deposition p. 115:11-16 and 123:5-15.
59
EX. A, Shaw Afﬁdavit p. 6 1] 18; EX. B, Larios Afﬁdavit pp. 5-6 1] 17.
60
Ex. A, Shaw Afﬁdavit p. 6 1] 18; EX. B, Larios Afﬁdavit p. 6 11
17.
61
Ex. A, Shaw Afﬁdavit p. 6 1] 19; EX. B, Larios Afﬁdavit p. 6 1]
18.

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
DEFENDANTS’ MOTION TO DISMISS UNDER THE TEXAS CITIZENS PARTICIPATION ACT Page 12
TCPA Resp lexhs Page 13

patentee’s monopoly rights, causes competing products t0 enter the
market, and therebv increases competition. RTI, in fact, persuaded
another jury 0f exactly this procompetitive result When it proved
patent infringement by BD’s lmL Integra safety syringe. The
judgment against BD, Which was then forced to remove the
competing product from the market, diminished competition but
enforced RTI’S patent rights.

We reafﬁrm What has been evident and unchallenged
sinceKinnear—Weed: “patent infringement is not an injury
cognizable under the Sherman Act.”N0rthwest Power Prods.,
Inc. v. Omark Indus., Ina, 576 F.2d 83, 88—89 (5th Cir.
1978) (citing Kinnear—Weed, 214 F.2d at 894). The jury’s verdict
cannot be legally supported by BD’S infringement 0n RTI patents.62

36. The Fifth Circuit’s opinion came as a surprise t0 RTI, as Defendants had never

explained the Fifth Circuit’s previous opinions from 1954 and 1978 t0 RTI.63 In particular,

Defendants had failed t0 explain that the Fifth Circuit already rejected the theory that RTI based

its antitrust claims on (i.e. that a ﬁnding 0f patent infringement would make the antitrust claims

“self—proving”).64 In addition, Defendants did not disclose t0 RTI at any time prior t0 trial that the

Fifth Circuit was almost certainly going t0 overturn any favorable judgment based 0n this

previously rejected theory.“

37. Accordingly, RTI discovered for the ﬁrst time that it had spent $23,772,155.56 in

unnecessary attorneys’ fees and out-of-pocket expenses on pursuing a theory that, unbeknownst t0

RTI, had been previously rejected by the Fifth Circuit.“ In making the decision t0 spend this

money, RTI relied on Defendants to adequately and fully explain the applicable antitrust laws t0

them which Defendants either intentionally 0r unintentionally failed t0 do.67 If Defendants had

62
See EX. A-5 t0 EX. A, Shaw Afﬁdavit- Retractable Techs., Inc. v. Becton Dickinson & C0., 842 F.3d 883, 893 (5th
Cir. 2016) (emphasis added).
63
EX. A, Shaw Afﬁdavit p. 6 1] 20; EX. B, Larios Afﬁdavit p. 6 1] 19.
64
EX. A, Shaw Afﬁdavit p. 6 1] 20; EX. B, Larios Afﬁdavit p. 6 1]
19.
65
EX. A, Shaw Afﬁdavit p. 6 1] 20; EX. B, Larios Afﬁdavit p. 6 1] 20.
66
Ex. A, Shaw Afﬁdavit p. 3 1]
9 and pp. 6-7 1] 21; EX. B, Larios Afﬁdavit p. 6 1]
20.
67
Ex. A, Shaw Afﬁdavit p. 3 1]
9 and pp. 6-7 1] 21; EX. B, Larios Afﬁdavit p. 6 1]
20.

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
DEFENDANTS’ MOTION TO DISMISS UNDER THE TEXAS CITIZENS PARTICIPATION ACT Page 13
TCPA Resp lexhs Page 14

explained that the Fifth Circuit previously rej ected the theory being proposed by Defendants at the

pitch meeting back in September 2006, RTI would not have spent $23,772,155.56 in unnecessary

attorneys’ fees and out-of-pocket costs pursuing the case based on this rej ected or untenable

theory.“ Accordingly, as a direct and proximate result 0f Defendants’ actions, RTI spent

$23,772,155.56 in unnecessary attorneys’ fees and out-of-pocket costs pursuing the case based on

this rej ected or untenable theory.69

38. Thereafter, the case was remanded to the trial court for a determination 0f whether

RTI would receive any disgorgement 0f proﬁts from BD.70 Ultimately, the answer was n0.“ On

August 17, 2017, the trial court entered a ﬁnal judgment that RTI take nothing in its suit from BD,

and the case was dismissed.”

39. In August 2017, RTI appealed t0 the Fifth Circuit Court 0f Appeals, but the trial

court’s ﬁnal judgment was afﬁrmed.” RTI then decided not t0 appeal the Fifth Circuit’s decision

to the United States Supreme Court in exchange for BD’S agreement t0 dismiss some pending

patent claims that it had against RTI.74 On May 14, 2019, all 0f the litigation between BD and RTI

was formally concluded.”

40. In or around 2017, RTI learned for the ﬁrst time that Defendants had previously

represented Henry Schein and that Henry Schein had been a long time client 0f Locke Lord, LLP.76

This was shocking news to RTI as Defendants had previously represented that they did not have

68
Ex. A, Shaw Afﬁdavit p. 7 1] 21; EX. B, Larios Afﬁdavit p. 6 1]
20.
69
Ex. A, Shaw Afﬁdavit p. 7 1] 21; EX. B, Larios Afﬁdavit pp. 6-7 1]
20.
7°
EX. A, Shaw Afﬁdavit p. 7 1] 22; EX. B, Larios Afﬁdavit p. 7 1]
21.
71
EX. A, Shaw Afﬁdavit p. 7 1] 22; EX. B, Larios Afﬁdavit p. 7 1]
21.
72
EX. A, Shaw Afﬁdavit p. 7 1] 22; EX. B, Larios Afﬁdavit p. 7 1]
21.
73
EX. A, Shaw Afﬁdavit p. 7 1] 23; EX. B, Larios Afﬁdavit p. 7 1]
22.
74
EX. A, Shaw Afﬁdavit p. 7 1] 23; EX. B, Larios Afﬁdavit p. 7 1]
22.
75
EX. A, Shaw Afﬁdavit p. 7 1] 23; EX. B, Larios Afﬁdavit p. 7 1]
22.
76
Ex. A, Shaw Afﬁdavit p. 7 1] 24; EX. B, Larios Afﬁdavit p. 7 1] 23; Hardin Deposition pp. 110220-25 andl 19:25-
120:3.

PLAINTIFF RETRACTABLE TECHNOLOGIES, INC.’S RESPONSE TO
DEFENDANTS’ MOTION TO DISMISS UNDER THE TEXAS CITIZENS PARTICIPATION ACT Page 14
TCPA Resp lexhs Page 15

any conﬂict of interest in representing RTI.77 However, a material conﬂict of interest did in fact

exist as Henry Schein was one of the very distributors that RTI believed BD had colluded With in

committing the antitrust Violations that were the subject of the potential antitrust litigation with

BD.78

41. In fact, RTI had previously approached Defendants about adding distributors

(including Henry Schein) to the lawsuit with BD.79 Notably, Defendants dissuaded RTI from

adding the distributors t0 the lawsuit With BD; however, Defendants never disclosed that one 0f

these distributors was actually Defendants’ client.8° If Defendants had disclosed at the pitch

meeting in September 2006 that Defendants represented or had represented Henry Schein, then

RTI would not have hired Defendantsgl Furthermore, RTI would have terminated Defendants’

legal services had Defendants disclosed this material conﬂict 0f interestgz If Defendants had

disclosed their representation 0f Henry Schein t0 RTI, RTI would never have hired Defendants t0

represent RTI, and RTI would not have paid Defendants a total of $38,372,1 18.19 in attorneys’

fees and costs since 2005.83 Accordingly, as a direct and proximate result 0f the Defendants’

failure t0 disclose the existence 0f a conﬂict of interest, RTI paid a total of $38,372,118.19

(including $23,772,155.56 for the BD antitrust/patent litigation) in attorneys’ fees and costs to

Defendants that RTI would not have paid had the conﬂict of interest been disclosed.“

42. As a result 0f Defendants’ unlawful conduct, failures to act, and/or fai

Case Info

Judge

FRAZIER, VERETTA Track Judge’s New Case

Case No.

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Document Filed Date

September 10, 2020

Case Filing Date

November 07, 2019

County

Parties

BASDEN, BRENT EDWARD Attorney for the Defendant
COX, HUNTER ROSS Attorney for the Plaintiff
HARDIN, ROY Defendant
HILL, FRANK WARREN Attorney for the Plaintiff
KONING, PAUL MATTHEW Attorney for the Defendant
LOCKE LORD, LLP Defendant
RETRACTABLE TECHNOLOGIES, INC Plaintiff
TILLOTSON, JEFFREY M Attorney for the Defendant
Blake Beckham Attorneys for Plaintiffs
Eve Henson Attorneys for Defendants
Jose Portela Attorneys for Plaintiffs
George Bowles Attorney
Michael Powell Attorney
Bradley Weber Attorney
Paul Schuster Attorney
Stephen Wilson Attorney
Otis Carroll Attorneys for Plaintiffs
Deborah Race Attorneys for Plaintiffs
Alessandro Pauri Attorney
Charles Schwartz Attorney
Thomas Shaw Attorney
Monty Ross Attorney
Michele Larios Attorney
William Thompson Attorney
Thad Spalding Attorney

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