Gilead Shareholders Awarded $1.8 Million for Attorneys’ Fees and Expenses In Delaware Section 220 Trial

In November 2020, Pomerantz received a ruling in a Section 220 books and records proceeding that included a startling admonition from the Delaware Court of Chancery criticizing the overly aggressive defense strategy adopted by Gilead Sciences, Inc.   

At the time, the Court opened the door for fee shifting in the case:

“Defendants like Gilead adopt this strategy with the apparent belief that there is no real downside to doing so, ignoring that this court has the power to shift fees as a tool to deter abusive litigation tactics. Gilead’s approach might call for fee shifting in this case, and the plaintiffs are granted leave to move for their expenses, including attorneys’ fees, incurred in connection with their efforts to obtain books and records.”

On July 22, 2021, Chancellor Kathaleen S. McCormick followed through and, based on the “bad faith litigation tactics” used by Gilead, awarded the plaintiffs $1.76 million for their attorneys’ fees and expenses spent in pursuit of their books and records requests.

Removing any doubt for the basis of the order, Chancellor McCormick said:

"Although there is a fine line between glaringly egregious conduct and an aggressive litigation position, Gilead crossed the line in this case."

The underlying Section 220 demand related to allegations that, in an effort to protect its profits and market share, even at the expense of patients using Gilead’s HIV treatments, Gilead had allegedly violated state and federal antitrust laws, delayed the development of safer HIV drugs to extend the profitability of the company’s existing HIV treatments; and infringed on U.S. government patents for HIV treatment regimens.