Bottom line- Overturned. And quickly, I would expect.
Very clearly the court will rule that you cannot first say that a proposal WAS NOT binding and/or consummated, and then turn around and award the terms of that same proposal as a penalty for not negotiating in good faith.
Very clear from the judges' questions that they feel that if SIGA indeed failed to negotiate in good faith, that based on both New York and Delaware law, there should be a fixed amount awarded fairly commensurate with what PIP's actual costs were up to the breach.
Jay is right (nearly)! It is settle law in NYS but not clear in Delaware. However, the "heads I win and tales you lose" argument will carry the day. Furthermore, Delaware is settled law in that you cannot go and speculate on what the damages in the future will be.
Court of appeals judges are very subtle. Many people did not catch but the judge was helping SIGA to infer about forum shopping. They referred to most of the action haven taken place in NY, and yet they are in Delaware litigating. There is a bit of forum shopping by PIP and judges do not take to kindly to that.
This case will be partially overturned and probably remanded. However, PIP will only get reliance damages that are out of pocket. If I thought that SIGA was going to lose after listening to the oral arguments, I would not have bet the farm !
Love the money, not the game....
Sentiment: Strong Buy
I can't imagine how the verdict ever went against SIGA to begin with. "Non-Binding", for heaven's sake, is hard to misinterpret. I'm starting to go with the theory that I've seen posted on here that the judicial system is completely and thoroughly corrupt, and you'd better hope that the powers that be are not shorting SIGA.
"I can't imagine how the verdict ever went against SIGA to begin with. "Non-Binding"..."
I think PIP is arguing it went like this:
Say In January, you and I draft up a paper with a list of auto parts in it. It’s only for discussion, so we label it “non-binding”. Then, in February we draft up a true, real, actual contract and say in it “You know that list of auto parts from the draft composed in January? Well, we agree to sell the parts on that list for $10,000. Signed on this day....” That should theoretically hold, because the document marked “non-binding” isn’t binding, but the list in it is a list. Look, I’m not advocating it’s a GOOD argument. But, I think that IS their argument.
I can tell you how....because management had their heads up their backsides and their egos were too big to get it together! Nothing to do with corrupt judicial systems (which I agree with and have seen, but this isn't a case of that), it is simply poor management. They should have had better lawyers with them while they negotiated.
...actually it was SIGA's lawyer Lamb, that the judge interrupted when Lamb stated PIP did absolutely nothing for ST-246's development citing the $3mil bridge loan made by PIP to SIGA at a critical juncture when Drapkin(Siga's CEO) couldn't milk any more funding from Perelman at the time. Lamb was on the lam after that correction by the judge.
On the second review, I got the impression that the justice was supportive that the lower court should have rejected the bad faith claim. That's what he was getting at with the heads/tails characterization. If the court recognizes the claim, and finds bad faith then regardless of the basis of damages it is assuming that an agreement would have been reached. He noted that several states do not recognize such claims at all, while Siga attorney stressed that those that do, limit damages to reliance. This goes back to the notion that an agreement to agree in the future is unenforceable.
Not to much discussion as related to the likeliehood of future
litigation between the parties as related to efforts to compute
"net profits"---a lot of subjectivity---endless litigation.
A terrible decision by Parsons IMHO--hopefully to be
Musherga ..... were not worthy on this thread. Also, I assume you are not a civilian. Nicely worded and easily understood.
Contract law is exactly this. People like Delaware exactly for this reason. They do not try to go out and make new laws on contract because lord knows it makes things harry for all parties. I also felt, and why I LOADED up the truck because this would create such an over-reaching precedent in negotiations never heard of before.
I believe that this is a case of Parsons wanting to punish SIGA but trying to find a new theory to do it. However, this theory of 10 years monitoring and creating a contract and non-binding means binding ..... is a mess. I think the higher court will still punish SIGA, to not offend their brethren Parson or for him to lose face, but put it back into the fold of judicial precedent.
The irony in all of this is that PIP was using the "non-binding" language under contract law to protect them as a shield and then when no longer convenient, put it aside to use the LATS as a sword. Those justices saw right through that. Heads I win, tales you lose ...... is going to help me retire early.
Sentiment: Strong Buy