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Law360
Atty, Co. Must Pay Sanctions After Tossed Takeda Unit Suit
By Dave Simpson
June 22, 2020

Psychiatrist Louis Sanfilippo

Psychiatrist Louis Sanfilippo

A psychiatrist’s company and its attorney must pay more than $133,000 in attorney fee sanctions following a now-dismissed suit against Takeda Pharmaceutical Co. unit Shire LLC and BakerHostetler, as a New York federal judge accepted a magistrate judge’s recommendation Monday.

Stephen M. Lobbin of SML Avvocati PC filed his objections to the magistrate’s recommended sanctions too late, U.S. District Judge Analisa Torres ruled Monday, accepting the recommendation that LCS Group LLC, Lobbin, and Foundation Law Group LLP, jointly and severally pay $133,803.75 to the defendants

“Having concluded that objections were not timely made to the magistrate judge’s decisions on the motion for attorney’s fees, the court concludes that the parties have waived further judicial review,” the judge said.

In February, Lobbin said Shire was being “spiteful, and downright mean” by asking the New York federal magistrate judge to order, rather than recommend the sanction, arguing that it was not rational for the Takeda unit to keep putting time and expensive legal resources into the dismissed patent-related suit given that he had offered “everything he is able to pay” — $50,000 — to end the matter.

“To the undersigned counsel, certainly it feels entirely personal and spiteful, and downright mean,” he said Monday. “There is no hint of possible mercy or forgiveness moving forward, short of personal annihilation. Shire’s twisted objectives should have no place under Rule 11, in any part of our legal system, or in civilized society.”

The barbed response follows the March 2019 dismissal of the patent-related suit brought in 2018 by a psychiatrist’s company against Shire, which makes the attention deficit hyperactivity disorder drug Vyvanse.

Psychiatrist Louis Sanfilippo is the principal of the plaintiff, LCS Group LLC, and a longtime friend of Lobbin, who was LCS’ counsel.

The suit claimed that Shire violated a confidential disclosure agreement by challenging Sanfilippo’s patent related to the treatment of a binge-eating disorder using the drug. LCS also accused BakerHostetler of negligence and malpractice for not advising Sanfilippo against signing a confidential disclosure agreement with Shire.

In her dismissal order, Judge Torres said that even a cursory review of Racketeer Influenced and Corrupt Organizations case law showed that LCS’ RICO allegations against Shire were frivolous.

Saying LCS and Lobbin would be sanctioned for filing a complaint for “improper purposes,” Judge Torres also said that they had been on notice that their claims were deficient from a related Patent Trial and Appeal Board case in South Carolina, and had been warned that trying to relitigate the matter would be considered an abuse of the justice system. Sanfilippo did not appeal the PTAB finding but went ahead with the Shire suit.

In January, a magistrate judge issued a final recommendation that LCS, Lobbin and Lobbin’s former firm in Los Angeles, Foundation Law Group LLP, be held jointly liable for the sanction.

Shortly thereafter, amid a long apology for what he called an “over-pleading” error, Lobbin argued that a magistrate judge’s recommended punishment was so harsh that it could financially hobble his family and his small San Diego firm.

Shire is represented by Porter F. Fleming of Haug Partners LLP.

BakerHostetler is represented in-house by Tracy Cole.

The case is LCS Group LLC v. Shire LLC et al., case number 1:18-cv-02688, in the U.S. District Court for the Southern District of New York.