International medical equipment manufacturer Stryker Corp. must pay $4.75 million to a small Colorado company after breaching its business contracts with the local medical distributor, a federal judge in Denver ruled last week.
Stryker Corp., through its subsidiary Howmedica Osteonics Corporation, improperly terminated one contract with Greenwood Village’s ORP Surgical, then wrongly poached its employees after a second contract ended, Senior Judge R. Brooke Jackson found in a 30-page order issued May 10 in U.S. District Court for the District of Colorado.
Stryker, which has about 46,000 worldwide employees, was founded by the grandfather of Pat Stryker, a Fort Collins resident who is one of Colorado’s richest women with an estimated worth of $3.4 billion. ORP Surgical, by contrast, has about 30 employees.
In last week’s order, Jackson also sanctioned Stryker’s attorneys for significant misconduct ranging from discovery violations to rude behavior during the two-year civil lawsuit.
“While it might be logically possible to give Stryker the benefit of the doubt, it does not deserve it,” Jackson wrote in the ruling. “Its witnesses lacked credibility. Stryker witnesses equivocated, spun far-fetched stories and even made flat-out misrepresentations.”
Stryker did not return a request for comment Monday. Chris Carrington, who represented ORP Surgical, said he was pleased that the company and its primary owner, Lee Petrides, persevered in the case.
“It’s not a lot of companies that can survive litigation with a $14 billion-a-year Goliath,” he said. “Lee just wasn’t going to be bullied.”
The Greenwood Village company had contracted with Stryker to sell Stryker’s medical equipment under two separate agreements, one for joint equipment and another for trauma equipment, according to the order.
In March 2019, Stryker terminated the joint equipment contract “for cause,” which Stryker said meant it did not have to pay certain penalties for ending the contract. ORP Surgical contended that the contract was ended without cause, and that Stryker was required to pay the penalties.
Amid escalating tension between the two companies, ORP Surgical voluntarily ended the second contract for trauma equipment in April 2020. Under the terms of that contract, Stryker was prohibited from hiring ORP Surgical employees for at least one year.
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However, within 48 hours of the contract’s termination, Stryker had hired 12 ORP Surgical sales representatives, according to the order. ORP Surgical sued in May 2020, and Stryker made counterclaims. Voluminous and “antagonistic” litigation ensued, Jackson wrote.
The judge ultimately found after a trial that Stryker violated both contracts and ordered the company to pay $4.75 million in damages. He also admonished attorneys from the Chicago-based Seyfarth Shaw law firm for their misconduct and ordered both the law firm and Stryker to pay fees as a sanction.
“Stryker’s counsel turned this case sour with nasty litigation tactics,” Jackson wrote. “As I stated during the trial, I was appalled at Stryker’s lawyers’ playing fast and loose with discovery obligations.”
He also found that the attorneys were abusive, “rude, unprofessional and inappropriate” during a deposition.