Cases & Deals

Applied Medical obtains $33 million judgment in cross-border business dispute

Clients Applied Medical Resources Corporation

After nearly three years of protracted litigation, Jones Day client Applied Medical Distribution Corporation obtained a damages award and judgment exceeding $33 million against a South Korean corporation, Ah Sung International, Inc., and its President/majority shareholder, and senior director.

Ah Sung was the exclusive distributor of Applied's specialized surgical devices in South Korea for over a dozen years. Applied terminated its relationship with Ah Sung in 2014 due to suspected fraud in negotiating transfer pricing from Applied to Ah Sung. Applied brought five claims against Ah Sung in California after Ah Sung and its President refused to comply with the termination provisions in the companies' contract. Applied later added Ah Sung's President/majority shareholder and an individual director as defendants after confirming that they had been misrepresenting material information to Applied for many years to drive down Applied's prices. Applied also learned that Ah Sung was bilking customers and injuring Applied's brand and market presence. In response, Ah Sung brought counterclaims against Applied seeking approximately $5 million in damages.

After Ah Sung refused to comply with various court orders the District Court, the Hon. Judge James V. Selna, awarded default judgment against Ah Sung and the individual defendants, and awarded Applied over $33 million in damages. The court also enjoined Ah Sung from prosecuting a parallel action in South Korea, finding that Ah Sung was directly contravening the parties' forum selection and choice of law agreement by attempting to litigate substantially similar claims to those in the California case in South Korea. Applied initiated enforcement proceedings in South Korea to collect the judgment. The South Korean court rejected all of Ah Sung's arguments, and the action was dismissed. Ah Sung has appealed that judgment to the South Korean Court of Appeals.

Applied Medical Distribution Corp. v. Ah Sung International, Inc., No. 14-cv-01900 (C.D. Cal.)

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