Avid Bioservices Inc (CDMO)

[skweze]

Decision posted on the CSM MOTION for Partial Summary Judgment as to Validity and Enforceability of Limitation of Liability Clauses in Master Services Agreement.

I pasted the conclusion below. The decision is 44 pages and can be found on Pacer. There is apparently no charge for viewing opinions.

For the foregoing reasons, the Court GRANTS IN PART
and DENIES IN PART Defendant’s motion for partial
summary judgment. The Court holds that the Limitations
on Damages clauses in Paragraph 16 of the Master
Services Agreement apply to the FAC’s causes of action
for breach of contract, passive negligence, and
negligence per se. The damages limitations do not
apply to the claims in the FAC for active negligence,
negligent misrepresentation, and constructive fraud.

Just my layman's opinion: It looks like the judge split the baby and will allow limits of damages (not to exceed the the amount Peregrine paid CSM) against CSM for some of the claims, but not on the active negligence, negligent misrepresentation, and constructive fraud. Relative to the uncapped claims, Peregrine appears to say that CSM's project manager secretly and intentionally switched or tampered with the labeling of the A and B arms of the PHII trail and deliberately tried to cover up her conduct for the duration of the trial. (See the FAC and declarations in opposition to the MSJ for details.) If I were on the jury, that screams fraud, misrepresentation, and active negligence, but that's just me...

Damages could be significant. There are $20MM in additional trial costs accruing to CSM's misconduct that appear to be easily quantified, and then there are the losses for delay in time to market...perhaps not as easy to quantify but intuitively it would seem to be a very large sum.

All imo.