UNITED THERAPEUTICS CORP. v. LIQUIDIA TECHS., INC., 2023 NCBC 60

STATE OF NORTH CAROLINA
DURHAM COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
21 CVS 4094
UNITED THERAPEUTICS
CORPORATION,
Plaintiff,
v.
LIQUIDIA TECHNOLOGIES, INC.
and ROBERT ROSCIGNO,
Defendants.
ORDER AND OPINION ON
PLAINTIFF’S MOTION FOR LIMITED
RECONSIDERATION
1. 	THIS MATTER is before the Court on Plaintiff United Therapeutics
Corporation’s Motion for Limited Reconsideration of Order on Plaintiff’s Motion to
Amend, (the “Motion”), (ECF No. 132).
2. 	Having considered the Motion, the related briefs, and other appropriate
matters of record, the Court hereby DENIES the Motion.1
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Jim W. Phillips Jr.,
Eric M. David, and Kasi W. Robinson; McDermott Will & Emery, LLP by Douglas
H. Carsten, Arthur P. Dykhuis, and Katherine Pappas; and Goodwin Proctor, LLP,
by William C. Jackson, for Plaintiff United Therapeutics Corporation.
Parker Poe Adams & Bernstein LLP, by Stephen V. Carey and Corri A. Hopkins;
and Cooley, LLP, by Sanya Sukduang, Jonathan Davies, Lauren Strosnick, and
Adam Pivovar, for Defendant Liquidia Technologies, Inc.
McGuire Woods, LLP, by Mark E. Anderson, David E. Finkelson, Corrine S.
Hockman, and Miles O. Indest, for Defendant Dr. Robert Roscigno.
Earp, Judge.
1 The Court decides the Motion without a hearing as permitted by Rule 7.4 of the North
Carolina Business Court Rules.
United Therapeutics Corp. v. Liquidia Techs., Inc., 2023 NCBC 60.

I. PROCEDURAL AND FACTUAL BACKGROUND
3. 	The parties in this case are two competing pharmaceutical companies and
an executive who worked for both companies at different times in his career.
4. 	At the core of United Therapeutics Corporation’s (“UTC”) Complaint and
its First Amended Complaint, (ECF Nos. 3, 15), are documents allegedly containing
UTC’s trade secrets, at least some of which were produced by Liquidia Technologies,
Inc. (“Liquidia”) to UTC during litigation in Delaware. 	See generally United
Therapeutics Corp. v. Liquidia Techs., Inc., 624 F. Supp. 3d 436 (D. Del. 2022). UTC
contends that Roscigno took the documents, which contain its trade secrets, to
Liquidia.
5. 	UTC filed its Complaint in this action on 10 December 2021, (ECF No. 3).
It asserted claims for misappropriation of trade secrets (under both state and federal
law) and conversion against Liquidia and Roscigno, as well as a claim for violation of
the UDTPA against Liquidia alone. 	Defendant Roscigno subsequently removed the
case to federal court on 7 January 2022. (ECF No. 6.)
6. 	On 10 January 2022, UTC filed its First Amended Complaint dismissing
the sole federal cause of action. 	(ECF No. 15.) 	On 31 March 2022, the case was
remanded back to the Business Court. 	See United Therapeutics Corp. v. Liquidia
Corp., 2022 U.S. Dist. LEXIS 123346, at *9 (M.D.N.C. Mar. 31, 2022).
7. 	UTC subsequently dismissed its claim for conversion against both Liquidia
and Roscigno on 27 May 2022, (ECF No. 31).

8. 	On 10 April 2023, just over a year after the case was remanded to this
Court, UTC filed a Motion for Leave to Amend its Complaint a second time. 	In its
motion, UTC sought to add parties, allegations to existing claims, and new claims,
including a claim for declaratory judgment with respect to Roscigno’s employment
agreements with UTC and its subsidiary, Lung Rx. (ECF No. 80.)
9. 	This Court granted UTC’s motion in part but, among other things, denied
UTC’s request to add a new claim for declaratory judgment. 	(Order on Plaintiff’s
Motion to Amend [“20 July 2023 Order”]), (ECF No. 120.) On 10 August 2023, UTC
filed the present Motion, requesting that the Court reconsider its ruling and permit
UTC to amend its pleading to add the proposed declaratory judgment claim.
II. LEGAL STANDARD
10. 	“Rule 54(b) is the source of authority for what litigants typically refer to as
motions to reconsider.” Pender Farm Dev., LLC v. NDCO, LLC, 2020 NCBC LEXIS
110, at *4 (N.C. Super. Ct. Sept. 25, 2020) (internal quotations omitted). 	The rule
provides that an interlocutory ruling “is subject to revision at any time before the
entry of judgment adjudicating all the claims and the rights and liabilities of all the
parties.” N.C.G.S. § 1A-1, Rule 54(b).
11. 	Absent guidance from North Carolina’s appellate courts on the standard to
apply when considering a motion to reconsider an interlocutory ruling under Rule
54(b), the Court turns to federal case law addressing similarly worded portions of
Federal Rule 54(b). See Ehmann v. Medflow, Inc., 2019 NCBC LEXIS 10, at *9 (N.C.
Super. Ct. Feb. 6, 2019) (“Without the benefit of North Carolina appellate precedent,

in considering a motion for reconsideration the Business Court has previously relied
on case law addressing Federal Rule of Civil Procedure 54(b).”).
12. 	“Courts will reconsider an interlocutory order in the following situations:
(1) there has been an intervening change in controlling law; (2) there is additional
evidence that was not previously available; or (3) the prior decision was based on clear
error or would work manifest injustice.” 	Aveka L.L.C. v. Adidas Am., Inc., 385 F.
Supp. 2d 559, 566 (M.D.N.C. 2005) (citations omitted). 	“Such problems rarely arise
and the motion to reconsider should be equally rare.” W4 Farms, Inc. v. Tyson Farms,
Inc., 2017 NCBC LEXIS 99, at *5 (N.C. Super. Ct. Oct. 19, 2017) (citing DirecTV, Inc.
v. Hart, 366 F. Supp. 2d 315, 317 (E.D.N.C. 2004)).
13. 	“A motion for reconsideration under Rule 54(b) is within the trial court’s
discretion.” 	Id. at *5 (citing Aveka L.L.C., 385 F. Supp. 2d at 565); Ward v. FSC I,
LLC, 2017 NCBC LEXIS 19, at *6 (N.C. Super. Ct. Mar. 7, 2017).
III. LEGAL ANALYSIS
14. 	Quoting a line from the Court of Appeals’ decision in Stetser v. TAP Pharm.
Prods. Inc., UTC argues that “Rule 15(a) contemplates liberal amendments to the
pleadings, which 	should always be allowed unless 	some 	material prejudice is
demonstrated.” 	Stetser v. TAP Pharm. Prods. Inc., 165 N.C. App. 1, 31 (2004). 	It
contends that the Court erred by not finding that material prejudice would result if
the amendment to add a declaratory judgment claim were denied, and that UTC’s
delay in bringing the motion is not a sufficient basis, standing alone, to deny this

amendment. (Br. Supp. Mot. Ltd. Reconsideration Order Pl.’s Mot. Amend [“Pl.’s Br.
Supp. Mot.”] 4, ECF No. 133).
15. 	But Stetser does not stand for the proposition that a finding of material
prejudice is the only basis upon which to deny a motion to amend. 	In the very next
sentence of the same opinion, the Court of Appeals identified “[s]ome of the reasons
for denying a motion to amend [as including] undue delay by the moving party, unfair
prejudice to the nonmoving party, bad faith, futility of the amendment, and repeated
failure to cure defects by previous amendments.” 	Id. 	Indeed, the Stetser court
included undue delay among its reasons for denying the motion to amend in that case.
This is not surprising, as it has long been the law that,
a trial court may appropriately deny a motion for leave to amend on the
basis of undue delay where a party seeks to amend its pleading after a
significant period of time has passed since filing the pleading and where
the record or party offers no explanation for the delay.
Rabon v. Hopkins, 208 N.C. App. 351, 354 (2010) (affirming a trial court’s denial of a
motion to amend when the plaintiff moved to amend nine months after filing the
complaint without providing a sufficient explanation for the delay).
16. 	In this case, the focus of the proposed declaratory judgment claim is on two
employment agreements between UTC (or its subsidiary, Lung Rx) and Roscigno
dating back to 1997 and 2007, respectively. UTC has long been aware of the existence
of these agreements and their potential import to this case. 	(20 July 2023 Order, ¶
33.) 	In fact, UTC referenced the employment agreements several times in its
Complaint filed over a year and a half ago. 	(Complaint ¶¶ 14, 18, 22, 32.) 	As this
Court found, UTC offers no reasonable explanation for its delay in asserting a

declaratory judgment claim. (20 July 2023 Order, ¶ 33.) See Strickland v. Lawrence,
176 N.C. App. 656, 667 (2006) (affirming trial court’s denial of motion to amend when
plaintiffs presented no evidence to support their claim that the amendment was based
upon information obtained in discovery).
17. 	Further, this Court has found that the proposed claim would increase the
stakes of the lawsuit for the Defendants. 	UTC’s position is that the employment
agreements give it the right to own property developed by Roscigno while working for
Liquidia if that property was developed using UTC’s trade secrets. 	At issue is a
newly-developed treprostinil treatment for pulmonary arterial hypertension. 	While
UTC has sought damages and equitable relief for alleged misappropriation of trade
secrets from the start, it has not, until now, asserted that it has a right to own its
competitor’s product. As stated in the 20 July 2023 Order, the proposed claim would
present new legal issues about the ownership of intellectual property that “heretofore
have not be a focus of this case.” (20 July 2023 Order ¶ 34.)
18. 	In KixSports v. Munn, the plaintiff asserted claims for, among other things,
breach of fiduciary duty, breach of operating agreement, and misappropriation of
trade secrets. KixSports, LLC v. Munn, 2019 NCBC LEXIS 92, at *1 (N.C. Super. Ct.
Jan. 24, 2019). Fifteen months after filing the original complaint, the plaintiff sought
to add a new claim for declaratory judgment, alleging that a competing business
belonged to the plaintiff because the defendants created the competing business using
the plaintiff’s resources. Id. at *3. This Court held that the new declaratory judgment
claim would “greatly change the nature of the defense and greatly increase the stakes

of the lawsuit.” Id. at *6 (internal citation and quotation marks omitted). In a well-
reasoned opinion, the Honorable Adam M. Conrad explained:
There is a clear and significant difference between [plaintiff’s] current claims
(which seek damages for breach of duties owed to [plaintiff]) and the new
declaratory judgment claim (which alleges that [plaintiff] owns [the competing
business]). 	At present, Defendants face the possibility of substantial damages if
[plaintiff] prevails. If the amendment were granted, Defendants could lose their
business in its entirety[.]
Id.
19. 	So too, here. 	UTC’s First Amended Complaint prays for a permanent
injunction, compensatory damages, punitive damages, attorneys’ fees, and the cost of
the action. 	Addition of the proposed declaratory judgment claim puts Roscigno and
Liquidia at risk that Roscigno would have to “assign and transfer to United
Therapeutics all right, title and interest in and to any patentable or unpatentable
inventions, discoveries and ideas [Roscigno] made or conceived while employed by
Liquidia[.]” 	To the extent that it was at all unclear in the 20 July 2023 Order, in
addition to other prejudice resulting from undue delay, the Court specifically finds
that adding a declaratory judgment claim now, after months of hard-fought litigation,
would unfairly prejudice Defendants by, for the first time, putting ownership of
inventions, discoveries and ideas Roscigno made or conceived while employed by
Liquidia at risk. Cf. Kinnard v. Mecklenburg Fair, Ltd., 46 N.C. App. 725, 727 (1980)
(affirming the denial of a motion to amend to add a claim for unfair and deceptive
trade practices where the allegations would not only greatly change the nature of the
defense but also would subject defendant to potential treble damages so as to greatly
increase the stakes of the lawsuit); Clean N Dry, Inc. v. Edwards, 284 N.C. App. 771

(2022) (“We have previously held that UDTP claims greatly increase the stakes of a
lawsuit because UDTP allegations would not only greatly change the nature of the
defense but also would subject the defendant to potential treble damages.” (cleaned
up)); House Healers Restorations v. Ball, 112 N.C. App. 783, 786-87 (1993) (same).
20. 	Furthermore, the idea that the passage of time can itself result in unfair
prejudice is not a concept foreign to the law, and the Court has determined that the
addition of the proposed claim now—late in the twice-extended fact discovery period,
after the exchange of thousands of documents and multiple depositions—would
unfairly prejudice the defendants. See House Healers Restorations, 112 N.C. App. at
787 (affirming a trial court’s denial of a motion to amend where extensive discovery
had already taken place and the new counterclaims would require evidence of a
transaction that occurred three to five years earlier); Patrick v. Williams, 102 N.C.
App. 355, 360 (1991) (affirming a trial court’s denial of a motion to amend where a
full year had elapsed since movants filed their answer, both parties had conducted
extensive discovery, and the proposed claims would have required evidence of
negligence occurring approximately five years after the accident in question).
21. 	Although 	UTC 	argues 	that 	the 	addition 	of 	its 	proposed 	declaratory
judgment claim would not result in the need for more discovery, the Court does not
accept that representation at face value. As noted above, addition of the claim would
“greatly change the nature of the defense[.]” 	See Stetser, 165 N.C. App. at 32
(“Different evidence would be necessary to support these additional legal claims,
which could involve more discovery for the parties, slow the litigation process, and

present a more unwieldy litigation for the trial court to administrate.”); Freese v.
Smith, 110 N.C. App. 28, 33 (1993) (affirming the denial of a motion to amend when
“the addition of a new legal theory may well have changed defendant’s approach to
discovery.”). UTC cannot speak to the discovery Liquidia might require with respect
to the enforceability and effect of the employment agreements at issue. Moreover, to
capitalize on the claim if it were to be successful, UTC would need to delve into the
ownership rights of Liquidia’s intellectual property, a rabbit hole it has yet to explore.
All of this would come at additional cost and, given the parties’ track record with
respect to discovery disputes,2 has the very real potential of derailing the Case
Management Order in this case yet again.
22. 	Contrary to Liquidia’s position, UTC argues that it is the one that will be
prejudiced if the amendment is not allowed. UTC alleges, “Defendants should not be
able to wield the agreement as a shield, and at the same time, seek to avoid its
concomitant obligations by claiming prejudice when UTC seeks a remedy arising from
that agreement.” (Pl.’s Br. Supp. at 8.) But Roscigno has been clear from the start of
this action that the provisions of his agreements with UTC will be a critical part of
his defense. (See Dr. Roscigno’s Answer to Pl.’s First Am. Compl. [ “Answer”] Second
Defense, ECF No. 61) (“Plaintiff’s claims are barred, in whole or in part, by . . . the
terms of Dr. Roscigno’s agreements with UTC or Lung Rx[.]”). UTC’s argument only
2 The parties have been embattled over discovery issues for months. 	The Court has held
hearings regarding discovery disputes on five occasions, some of them extensive. At the time
of this Order, the Court is in receipt of another four Business Court Rule 10.9 disputes and a
Motion to Compel requiring its attention.

serves to highlight that it could have, but did not, bring its declaratory judgment
claim sooner.
23. 	The Court has fully considered the matters of record and the arguments of
the parties. It has detailed the bases for its decision to deny UTC’s Motion to Amend
to add a declaratory judgment claim, including the prejudice allowing the amendment
would inject in the proceedings. Having done so, the Court concludes that UTC has
failed to show that the 20 July 2023 Order, as it relates to UTC’s proposed declaratory
judgment claim, contains clear error. 	See DirecTV, Inc., 366 F. Supp. 2d at 317
(“Motions to reconsider are not proper where the motion merely asks the court to
rethink what the Court has already thought through—rightly or wrongly.” (cleaned
up)); W4 Farms, Inc., 2017 NCBC LEXIS 99, at *12 (same). 	Accordingly, the Court
concludes, in the exercise of its discretion, that the Motion should be DENIED.
CONCLUSION
24. 	WHEREFORE, the Court, for the reasons stated herein and in the exercise
of its discretion, hereby DENIES United Therapeutics Corporation’s Motion for
Limited Reconsideration of Order on Plaintiff’s Motion to Amend.
SO ORDERED, this the 31st day of August, 2023.
/s/ Julianna Theall Earp
Julianna Theall Earp
Special Superior Court Judge
for Complex Business Cases