Deceptive Trade Practices Case | Duncan Firm

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Duncan Firm Develops and Helps Try $369M Precedent-Setting Florida Complex Deceptive Trade Practices Case

Over the course of most lawyer’s careers, they don’t get to develop, lead and participate in a precedent setting case to achieve justice. In 2004, Duncan Firm’s Phillip Duncan and James Bartolomei first represented a group of Arkansans who essentially had their business sabotaged and stolen from them. The theft and related tortious conduct resulted in a Texas-based private equity firm and its co-conspirators generating as much as billions of dollars in revenue over 14 years, and eventually resulted in a $369M trial court judgement after 2 appeals.

Starting in October 2004, defendants—including Dr. James St. Louis, Dr. Michael Perry, Laser Spine Institute and certain EFO related entities—were found to have misappropriated Laserscopic’s then cutting-edge business model of minimally invasive spine surgery, an alternative to traditional open back surgery. Duncan Firm first filed suit in Arkansas federal court in 2005, and because of jurisdictional reasons, refiled the case in Florida in 2006, associating Andrews Law Group. Duncan Firm then associated with Boies Schiller (lawyers on the case switched firms at some point, joining Pillsbury Winthrop Shaw Pittman), eventually taking the case to trial starting in 2010.

An uncommon and unique business model at the time, the spine surgery business was immediately profitable for Plaintiffs, and was poised for tremendous success. During the process of seeking out potential investors to grow the business and pour money into marketing and operations, however, certain defendants, while conducting their diligence, went from investors to coveting the business for themselves, and were found to have conspired with a director/executive doctor inside the plaintiff’s business to help usurp the value to defendants’ new business, Laser Spine Institute (LSI). The case was tried over the course of more than month. In 2012, the trial court found defendants hired away Plaintiff’s employees, defamed its CEO, used Laserscopic’s business plan, confidential documents, internal forms and patient leads to launch their business and get a critical head start. At trial, Laserscopic Spinal presented two alternative theories of recovery: destruction of business ($86 million in damages) and disgorgement of LSI’s profits ($264 million in damages over a five (5) year period.) The trial court found disgorgement was proper but awarded less than $2 million.

On December 28, 2018, the Florida appellate court ruled in favor or Plaintiffs. The appellate court issued its second reversal of a lower court decision in the long-running, 14-year litigation. Duncan Firm’s clients, including Joe Samuel Bailey and Laserscopic Spinal Centers of America Inc. won disgorgement, compensatory and punitive damages and statutory interest totaling over $370 million. The appellate court had previously reversed the original damages award, holding that awarded damages by the trial court were “grossly insufficient” and that punitive damages were appropriate. On remand, the trial court entered the same compensatory damages of $1.6M and $5M in punitive damages. On the second appeal, the appellate court directed the trial court to enter the damages sought by Duncan Firm’s clients, including $264 million in disgorgement damages and $6.8 million in out of pocket losses plus interest. On July 3, 2019, the trial court entered a final judgment that, with interest, exceeded $370 million. Kynes Markman & Feldman P.A., & Gunster also assisted with the all the appellate and post-trial judgment work to help achieve this result.

Ultimately, the damages award based on a disgorgement theory was akin to fruit of the forbidden tree, with defendants having obtained their ill-gotten gains via what the appellate court deemed to be some the most egregious business conduct ever in the state of Florida.