Celltrion USA, Inc. v. Prime Healthcare Distributors LLC et al

On November 2, 2021, Celltrion USA, Inc. (“Celltrion” or “Plaintiff”), represented by Jeffrey Alan Simes of Goodwin Procter LLP, filed a contract lawsuit against Prime Healthcare Distributors LLC (“PHD”) and Lucy Ayoub (“Ayoub”) (collectively, “Defendants”), seeking monetary damages with prejudgment interest, costs, expenses and  attorneys’ fees for the Defendants’ alleged breaches of a November 23, 2020 Agreement (the “Agreement”), under which Celltrion supplied to Defendants DiaTrust™ COVID-19 Ag Rapid Tests. This case was filed in the U.S. District Court in the Eastern District of New York with Judges Rachel P. Kovner and Ramon E. Reyes, Jr. presiding. 

In the complaint, the Plaintiff alleged that, “Pursuant to the Agreement, Defendants agreed to purchase 8,000 DiaTrust™ test kits (comprising 200,000 tests) from Celltrion for agreed upon prices per kit. Defendants covenanted in the Agreement that they would make a “non-refundable, non-creditable, 100% advance payment” to Celltrion for the kits within three business days of invoicing from Celltrion.”

The Plaintiff further alleged that, “The Agreement further underscored that the sale was “final/non-returnable.” Although Celltrion issued an invoice to Defendants and made certain shipments of testing kits as Defendants requested, Defendants did not make the full payment required, nor have they returned testing kits that Celltrion shipped to them but which Defendants have not paid for.”

The Plaintiff also alleged that, “Defendants are not authorized to distribute the DiaTrust™ tests in their possession, custody or control on behalf of Celltrion. On information and belief, PHD is defunct and Ms. Ayoub is not otherwise authorized to distribute DiaTrust™ tests. Also on information and belief, the test kits received from Celltrion have expired or soon will expire. For at least the foregoing reasons, Defendants cannot sell or distribute the DiaTrust™ tests in their possession, custody or control to customers.”

The Plaintiff lists out five claims for relief. The first claim is for alleged breach of contract. The second claim is for alleged breach of covenant of good faith and fair dealing. The third and fourth claims are for alleged unjust enrichment and alleged conversion, respectively. Lastly, the fifth claim is for declaratory judgment. The Plaintiff also claimed that the Defendants breached the Agreement by failing to pay for the DiaTrust™ testing kits when invoiced and by failing to return the kits which it received but for which it has not paid. The Defendants are in possession of approximately 20,000 DiaTrust™ tests for which the wDefendants never paid and which are the property of the Plaintiff. The Defendants also have refused to return the property of the Plaintiff and are exercising dominion over that property in derogation of the Plaintiff’s rights.

In the prayer for relief, the Plaintiff requested the Court to enter judgment in favor of the Plaintiff and order that the Defendants pay all damages incurred by Plaintiff as a result of Defendants’ breaches of the Agreement. The Plaintiff further requested for prejudgment interest, costs, expenses, attorneys’ fees and such further and additional relief as the Court deems to be appropriate.

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