New York Litigators Secure Appellate Victory for Ochsner Medical Center and University of Queensland

A Ropes & Gray litigation team secured an important appellate victory for leading medical institutions, Ochsner Medical Center and the University of Queensland, affirming the dismissal of the principal claims in a high-stakes contractual dispute relating to the operation of a cross-border medical education program.

The case arose out of an affiliation agreement among UQ and Ochsner and International Pathways, Inc., a medical student recruitment firm. The agreement established a four-year medical education program that enabled U.S. medical students to obtain their medical degrees through studies at UQ, in Queensland, Australia, and Ochsner, in Louisiana. At the end of 2019, IPI filed a lawsuit in the Commercial Division of New York Supreme Court alleging, among other things, that Ochsner and UQ breached the parties’ agreement by allowing the agreement to expire after its initial term and commencing a new medical education program without IPI. As a result of these alleged breaches, IPI claimed it was entitled to share in the future revenues of the new medical education program as if the parties’ agreement had never expired—an amount totaling nearly $30 million.

On May 22, 2020, Justice Ostrager of the Commercial Division dismissed IPI’s main claims, adopting the core arguments made by UQ and Ochsner in support of their motion to dismiss. In particular, Justice Ostrager agreed with our plain language interpretation of the agreement as imposing restrictions on the parties’ ability to form post-contractual competitor programs only where the contract was terminated early—and not where, as here, the contract expired naturally at the end of its term. IPI subsequently appealed the dismissal of its claims to the First Department of the New York Appellate Division and, on April 6, 2021, the Appellate Division issued a decision affirming the lower court’s ruling in its entirety.   

The New York-based Ropes & Gray team was led by litigation & enforcement partners David Hennes and Lisa Bebchick (who presented the oral argument in the First Department).