AngioDynamics, Inc. v. Biolitec AG, 991 F. Supp. 2d 299

Background

AngioDynamics obtained a $23,156,287.00 judgment (plus pre-judgment interest) in the Northern District of New York against Biolitec, Inc. (BI) for BI’s failure to indemnify under a Supply and Distribution Agreement (SDA).
BI filed Chapter 11; a bankruptcy trustee settled and withdrew BI’s appeal, and the New York judgment became final.
AngioDynamics sued Biolitec AG (BAG), Biomed Technology Holdings, Ltd. (Biomed), and Wolfgang Neuberger in D. Mass., alleging tortious interference, veil-piercing, fraudulent transfer, and Chapter 93A violations based on alleged diversion of BI assets to evade the New York judgment.
Defendants engaged in discovery misconduct; the court entered default judgment on liability against them for that misconduct.
On damages, AngioDynamics sought the New York judgment amount as actual damages, trebled under Mass. Gen. Laws ch. 93A, plus pre-judgment interest and attorney’s fees; Defendants argued res judicata and other substantive defenses.
The court accepted the complaint’s allegations as true due to default, found willful deceptive conduct warranting treble damages, awarded trebled damages plus interest and fees, and entered total judgment of $74,920,422.57 jointly and severally against BAG, Biomed, and Neuberger.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the New York judgment can be used to calculate damages here	Use the NY judgment as the value of the breached SDA and starting point for damages	NY judgment cannot bind these defendants; they lacked full opportunity to appeal (res judicata/claim preclusion defense)	Court used the NY judgment as the measure of contract loss; res judicata not implicated because plaintiff uses the judgment as evidence of contract value, not claim preclusion
Whether tortious interference is sufficiently alleged to support damages	Allegations show defendants induced breach by siphoning BI assets; Angio entitled to contract loss ($23,156,287)	Complaint lacks improper means to support tortious interference	Court accepts prior rulings finding sufficient allegations; awards $23,156,287 as tortious interference damages
Whether veil piercing and fraudulent transfer claims permit recovery from defendants	Piercing and fraudulent-transfer allegations show defendants controlled and benefited from transfers; plaintiff may recover value of transfers or creditor claim	Claims insufficient or limited to transfers to BAG; challenge to scope and amount	Court sustained veil-piercing and fraudulent-transfer theories; defendants stand in BI’s shoes and are liable for the NY judgment amount; fraudulent-transfer claim supports at least $18,444,137.50 (subsidiary to the $23.1M)
Whether Chapter 93A trebling, pre-judgment interest, and fees are appropriate	Defendants’ conduct was willful/deceptive; treble damages permitted; seek 12% interest and fees	Argue conduct is mere breach of contract and center-of-gravity not Massachusetts	Court finds conduct willful/deceptive, trebles damages to $69,468,861, awards $3,600,961.23 interest and $1,850,600.34 fees/costs

Key Cases Cited

McKinnon v. Kwong Wah Rest., 83 F.3d 498 (1st Cir.) (default judgment requires acceptance of complaint allegations as true)
Ortiz-Gonzalez v. Fonovisa, 277 F.3d 59 (1st Cir.) (same principle on defaults)
Remexcel Managerial Consultants v. Arlequin, 583 F.3d 45 (1st Cir.) (limitations on attacking sufficiency of complaint after default/judgment)
KPS & Assoc. v. Designs by FMC, Inc., 318 F.3d 1 (1st Cir.) (upholding doubling of damages under chapter 93A in default context)
R.W. Granger & Sons v. J & S Insulation, Inc., 435 Mass. 66 (Mass. 2001) (interest and attorney’s fees may be included in amount subject to multiplication)
AngioDynamics, Inc. v. Biolitec, 910 F. Supp. 2d 346 (D. Mass.) (prior findings on veil piercing and sufficiency of pleadings)
AngioDynamics, Inc. v. Biolitec AG, 711 F.3d 248 (1st Cir.) (appellate affirmation of probability of success on veil-piercing claim)