Ex-Stryker rep loses appeal of $750k loss

A former Stryker (NYSE:SYK) sales rep yesterday lost his appeal of a nearly $750,000 loss in a lawsuit over his move to rival Biomet (now Zimmer Biomet (NYSE:ZBH)).

Stryker in 2013 sued Christopher Ridgeway and another sales agent, Richard Steitzer, accusing them of scheming to poach reps and business from Stryker in Louisiana and New York. Stryker fired Ridgeway in September 2013, after discovering that he was allegedly running a pair of medical supply businesses on the side. In June of that year, Stryker alleged, Biomet began courting Ridgeway, looking to bring his entire Stryker sales teams on board. Ridgeway also allegedly induced a 3rd Stryker employee, Sheldon Green, to jump ship for Biomet and forwarded Stryker’ Louisiana customer list to Green, according to the complaint.

Ridgeway counter-sued, alleging that Stryker defamed him by falsely telling his customers that he was bound by a non-compete, costing him millions. A federal jury in the U.S. District Court for Western Michigan in February 2016 found for Stryker, awarding $745,195 in damages on 3 counts: breach of contract, breach of fiduciary duty and a trade-secrets claim.

Ridgeway appealed to the U.S. Court of Appeals for the 6th Circuit, arguing that there never was a non-compete and that Stryker fabricated the non-compete document used in his district court action. After Stryker sought millions more in costs and attorney’s fees, Ridgeway declared bankruptcy, prompting a stay in the district court case pending the resolution of the 6th Circuit appeal.

Ridgeway argued in his appeal that the case should have been tried under Louisiana law, where he was based, rather than under the laws of Michigan, Stryker’s home state. But Judge Julia Smith Gibbons, writing for the 3-judge panel, found that the lower court was correct to apply Michigan law, as that state’s interest in the case trumps Louisiana’s.

“Absent such evidence that Louisiana’s interest was not just greater but materially greater, there is no reason to disturb the parties’ choice of Michigan law,” Smith Gibbons wrote.

The 6th Circuit also shot down Ridgeway’s challenge to the lower court’s exclusion of a pair of emails he alleged showed that Stryker engaged in fraud by allegedly filing a non-compete form he never signed.

“Ridgeway offered no other evidence to demonstrate that the agreement attached to the complaint was not his, and therefore that Stryker’s statement that it was a ‘true and correct copy’ was false. Nor did Ridgeway offer any further evidence of fraudulent activity. The law does not permit Ridgeway to rely on the emails themselves to prove the fraud. The district court did not require Ridgeway to unequivocally prove the fraud but instead asked for some evidence to establish a reasonable basis for believing that fraud occurred. Because Ridgeway did not make such a showing, the district court did not abuse its discretion by rejecting Ridgeway’s crime-fraud-exception argument,” Gibbons wrote.

Ridgeway also lost his appeal of the lower court’s denial of his motion for an adverse-inference jury instruction based on the fraud allegation.

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