Polsinelli Wins Appeal in Pharma Case Faulting Use of WilmerHale

Polsinelli prevailed in the appeal of a breach of contract suit accusing the firm of abusing a flat-fee arrangement while defending an online pharmacy and its former chief executive.

A US Court of Appeals for the Third Circuit panel on Wednesday dismissed claims that Polsinelli had breached a contract and unjustly enriched itself by passing work to another firm, WilmerHale, that billed by the hour. Philidor RX Services and its past leader, Andrew Davenport, brought the appeal.

“Appellants make no argument—and offer no support—for their novel theory that a purportedly excessive fee arrangement between an attorney and their client is unenforceable under Pennsylvania law,” the panel wrote.

Polsinelli and WilmerHale became involved in the case after the US Securities and Exchange Commission, the Justice Department, and Congress began investigating Philidor and Davenport—and their relationship with another company, Valeant Pharmaceuticals International Inc.

Davenport and Tanner were each sentenced to a year and a day in prison in 2018 after being found guilty of engaging in a kickback scheme through which they earned millions of dollars, in part through the use of shell companies they set up.

Philidor and Davenport agreed to pay Polsinelli a flat fee of $12 million plus another payment of $2 million, at Polsinelli’s sole discretion, “to pay reasonable separate counsel legal fees and costs,” according to the appellate order.

Jonathan Rosen, a former Polsinelli partner in Washington, was also listed as a defendant in the lawsuit. He’s now a partner with Rimon Law, according to his LinkedIn page.

The case is Philidor RX Services LLC, et al v. Polsinelli PC, et al, 3d Cir., No. 22-2836, 9/27/23.