Former Distributor Wins “Breach of Contract” Suit Against NuVasive

After a 13-day trial and 5 hours of deliberation, a federal jury in California found that NuVasive, Inc. breached its contract with a Nevada-based distributor named Madsen Medical.

The finding on February 19, 2016 was followed four days later by the jury awarding $41.8 million to Madsen Medical and its owner Kris Madsen.

According to court documents, Madsen alleged that NuVasive fired her distributorship in 2012 and then “lured” six of her reps to sell directly for their former Madsen clients in Las Vegas and Reno, Nevada.

The jury added punitive damages of $20 million to compensatory damages of $7.5 million, plus $14 million for unjust enrichment and $300, 000 in back commissions, according to plaintiff’s attorneys Huang, Ybarra, Singer & May.

Madsen’s attorney told jurors NuVasive had not only broken its contract but acted with “malice, fraud or oppression” and the knowledge that what it was doing was wrong. He asked the jury to award Madsen an additional $15 million in damages, for that allegedly malicious behavior.

NuVasive’s attorney told jurors that NuVasive’s behavior did not rise to the level required for punitive damages of any amount.

According to San Diego’s NBC 7, NuVasive will not have to pay both the $7.5 compensatory damages and the $14 million unjust enrichment award. Instead, Judge Barry Ted Moskowitz will review the evidence and verdict and consider post-trial written arguments from both sides before deciding which of the two damage amounts—either $7.5 million or $14 million—NuVasive will have to pay Madsen, if affirmed.

“We are aware that the court in the Madsen case reached a verdict unfavorable to NuVasive, and we are in the process of filing post-trial motions to overturn the verdict and/or seek a new trial, ” the company said in a statement to NBC 7. “We believe that neither the law nor the facts support the verdict in this matter, and we intend to appeal in the event our post-trial motions are unsuccessful and a judgment is entered by the Court. As this is an ongoing litigation matter, our policy is not to comment further.”

NuVasive Suit Previously Dismissed

In August 2015, according to Madsen’s attorneys, the federal court dismissed a lawsuit filed by NuVasive against Madsen for breach of contract, unfair competition, and intentional interference with contractual relations based on Madsen’s having allegedly made threats and disparaging statements about NuVasive. NuVasive also sued Madsen Medical for failure to return medical equipment after the manufacturer-distributor relationship between NuVasive and Madsen Medical terminated.

Her attorneys said the federal judge granted the dismissal because NuVasive did not have sufficient evidence to proceed to trial on its claims, particularly in light of deposition testimony and documentary evidence that “flatly contradicted” NuVasive’s allegations.