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Rubin Squared, Inc. v. Cambrex Corp.
Citation: 321 F. App'x 14Docket: No. 07-4063-cv
Court: Court of Appeals for the Second Circuit; March 25, 2009; Federal Appellate Court
Rubin Squared, Inc. appeals the August 24, 2007, summary judgment granted to Cambrex Corporation by the United States District Court for the Southern District of New York. Rubin Squared contends that Cambrex fraudulently induced the sale of Bio Science Contract Production Corp. by making false promissory statements during negotiations for the Asset Purchase Agreement (APA). The court found that the statements were either too vague to be actionable or, if actionable, not proven to have been breached or to have caused Rubin Squared's damages. Rubin Squared alleged that Cambrex promised to fund a $60 million expansion of Bio Science’s facilities. However, testimony indicated that the promise was contingent on an acceptable plan, making it too indefinite for reliance. The court referenced legal precedents stating that representations must pertain to ascertainable facts rather than opinions or speculation. Additionally, the APA's integration clause and the sophistication of the parties led to the conclusion that Rubin Squared's reliance on oral representations was unreasonable. Further, Rubin Squared claimed Cambrex promised Jacques Rubin would operate Bio Science with full authority, but evidence indicated that Cambrex's attempts to change operations were rejected by Rubin. There was no proof of Cambrex interfering with Rubin's control. Additionally, Rubin's admission that he would support management’s decision to proceed with a competitor's acquisition undermined any claims of breach regarding that aspect. Regarding the alleged promise that Rubin would become a Cambrex vice president post-acquisition, the court found that the limited authority of such a position could not be linked to Bio Science's failure. To succeed in a fraud claim, evidence of compensable injury from misrepresentation is required, which was not demonstrated. The court concluded that Rubin Squared did not present sufficient evidence to suggest Cambrex breached the implied duty of good faith in the APA. After considering all arguments, the district court's Opinion and Order was affirmed.