Judge Renée Marie Bumb, sitting by designation, recently considered Mylan Rule 60(b) motion and motion to enforce a settlement agreement with Endo, reached minutes before the Court issued its post-trial opinion in favor of Endo. Endo Pharms. Inc. v. Mylan Pharms Inc., C.A. No. 11-717-RMB (D. Del. Apr. 8, 2014 – unsealed June 2, 2014). After the Court issued its opinion in favor of Endo, Mylan filed a letter informing the Court that the parties had reached a settlement “in principle.” Id. at 3. Endo responded denying that the parties had reached an agreement, which prompted Mylan to seek the Court’s intervention and to file a Rule 60(b) motion for relief from the Court’s post-trial opinion and order. Id.
After trial, the Court instructed the parties to meet and confer regarding settlement. The parties did that, resulting in the exchange of a draft settlement and license agreement, exchanged while Mylan awaited final management approval of Endo’s offer. Id. at 12. The parties communicated this to the Court during a status conference held a few days prior to the Court issuing its post-trial opinion and order. Id. at 13. Shortly after the status conference, Mylan received final approval to accept Endo’s offer. Mylan contacted Endo via telephone and formally accept the offer, but 20 minutes later the Court issued its opinion and order. At that time, Endo informed Mylan that “nothing had been reduced to writing, and, in [Endo’s] view, they did not have an enforceable agreement.” Id. at 18.
Regarding Mylan’s Rule 60(b) motion, Judge Bumb found that Mylan “established extraordinary circumstances justifying relief from final judgment” because the parties “entered into an oral settlement agreement prior to entry of the Court’s judgment.” Id. at 20. Judge Bumb found that the parties entered into an oral settlement agreement based on the following facts: (1) Endo made a “final” offer of settlement to Mylan, proposing three terms; (2) Endo never withdrew or amended its offer; and (3) Mylan accepted the offer, reciting the three terms, to which Endo responded “that’s great.” Id. at 24. Judge Bumb found that these facts demonstrated an intent to be bound “as it reflects [Endo’s] understanding that an agreement had been reached as to the three terms[.]” Id. at 24-25. Endo argued that the oral agreement could not be enforced because the parties intended the agreement to be formalized in a written contract. Id. at 27. Judge Bumb disagreed. “Although the parties clearly intended that a written contract would ultimately be drafted, the record contains no evidence indicating that the parties made a settlement contingent upon the execution of a written agreement.” Id. at 28. The Court also determined that the agreement was enforceable because the three key terms agreed to were the “essential terms” required by the parties, even though other terms had not been completely worked out. Id. at 29-37.