Bernstein, Shur Lawyer Successfully Defends Company Against Fraud Claim

PORTLAND, Maine (April 20, 2000) -- A federal magistrate today ruled that a dermatology and cosmetics manufacturer represented by Portland lawyer Todd S. Holbrook acted in good faith in dealing with defective psoriasis medication supplied to a Scarborough company.

"My client tried to do the right thing from the beginning and we're just glad the judge recognized that," said Holbrook, a shareholder at Bernstein, Shur, Sawyer & Nelson, one of northern New England's largest law firms.

Holbrook's client, Corwood Laboratories, Inc., had been sued by Dermalogix Partners, Inc., of Scarborough, which claimed $500,000 in damages as a result of receiving a defective supply of psoriasis spray treatment from Corwood. Much of the zinc in the product had settled out during production of the batch, rendering the medication harmless but ineffective against the chronic skin disease. The suit charged Corwood with breach of contract, negligence and fraud.

Holbrook countered that Corwood had responded by immediately recalling the product and promptly supplying replacement product that Dermalogix then sold. Following two days of testimony in the U.S. District Court in Portland, U.S. Magistrate Judge David M. Cohen agreed with Corwood, concluding the Hauppauge, N.Y.-based company acted in good faith and did not intend to deceive Dermalogix. The negligence and breach of contract claims were dismissed before trial as a result of a motion by Holbrook.

As a further show of good faith and to offset Dermalogix's expenses related to the recall, Corwood dropped a counterclaim against Dermalogix seeking payment for the replacement batch, Holbrook said. Corwood did not charge for the bad batch and was never paid for the replacement.

Holbrook, a resident of Falmouth, is a member of Bernstein, Shur's Litigation Department and practices in the areas of intellectual property, products liability and general commercial litigation. The firm has more than 60 attorneys in offices in Portland and Augusta.

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