The Mormon leaders of Brigham Young University aren’t exactly a litigious bunch. Their case against Pfizer Inc. over the anti-inflammatory drug Celebrex probably reminded them why. The case dragged on for six years and got ugly, with bitter discovery fights, sanctions threatened and won, and accusations of tainting the jury pool. Two different law firms, Sidley Austin and Winston & Strawn, stepped in to represent Pfizer only to be forced out of the case.
One person to emerge from the fight unblemished, however, is Leo Beus of the 30-lawyer Arizona firm Beus Gilbert, who staved off Pfizer’s defense until BYU could finally reach a deal worth nearly a half-a-billion dollars.
As we reported, Pfizer disclosed in a regulatory filing Tuesday that it was taking a $450 million charge to settle BYU’s claims that Monstanto’s pharmaceutical unit, later acquired by Pfizer, breached a research agreement with a BYU star chemist and stole his trade secrets. An eight-week trial had been scheduled to begin May 29 in U.S. District Court in Salt Lake City, and Beus told us he was itching to get the case before a jury.
“I wanted to try this case so bad, I couldn’t see straight,” Beus told us, in what he said was his first media interview in 15 years. “There was very strong evidence.”
While BYU had pegged damages as high as $9.7 billion, $450 million is serious money for a university whose endowment was valued at $808 million in 2010 by U.S. News and World Reports. Still, Beus was holding out for more. “Do I think [BYU] settled too cheaply? Absolutely,” he said.
Ultimately, both sides had strong incentives to settle. Pfizer faced unflattering accusations and a heavily Mormon jury pool. Provo, Utah-based BYU had already spent six years litigating the case, on top of six years of failed mediation efforts before the suit was filed. “They really don’t like to litigate except as a last resort,” said Beus, who could only recall one other case brought by the school. (The school has been a plaintiff in just a handful of cases over the years, according to state and federal court records.)
Pfizer had long argued that it met all of its obligations under the research agreement with BYU and didn’t owe BYU a cent. That argument became less and less tenable as a team of lawyers at Beus Gilbert won several pre-trial rulings.
In March, U.S. District Judge Ted Stewart rejected bids by Pfizer’s lawyers at DLA Piper and Wilmer Cutler Pickering Hale and Dorr to toss some of the school’s trade secrets theft and breach of contract claims on summary judgment. The judge also interpreted a key paragraph of the Pfizer-BYU research agreement in BYU’s favor, ruling that the contract barred the drug company from using certain cellular materials outside of the joint venture. “That was a killer,” Beus told us. “We had numerous admissions that they had used those biological materials outside the cooperate effort, mainly in their own drug development practices. That’s how they got to Celebrex.”
Beus, who filed the original complaint for BYU in 2006, faced off against a revolving cast of high-powered opposing counsel in the case. Pfizer’s original lawyers at Sidley Austin got slapped with a $900,000 sanction in 2009 for supposedly failing to comply with discovery requests. Pfizer swapped Sidley for Winston & Strawn, only to have Winston withdraw a few months later because of a conflict of interest. One of the Winston partners tapped by Pfizer, Gene Schaerr, had represented BYU in other matters. Magistrate judge Brooke Wells wrote in an August 2010 opinion that Schaerr appeared to “abandon” BYU, his alma mater, in favor of more lucrative work for Pfizer–an accusation Schearr disputed at the time, as The National Law Journal reported.
Beus told us he wasn’t phased by the caliber of Pfizer’s lineup. His small Scottsdale firm has represented trustees in several billion-dollar bankruptcies, he said. “We’re a funny little law firm. We don’t tout what we do. We don’t even have a Web site,” Beus said. “But in every case we take on, we go up against the best lawyers in the country. I’m used to that.”
Beus’s representation of BYU will probably be a “one-off affair,” he said. But he hopes the school keeps an open mind to litigation in the future. “As a university, BYU absolutely has to protect its intellectual property,” he said. “Be serious with us, and you’ll probably get a very fair settlement.”
