3M Claims Lanny Davis Tried to Extort It
WASHINGTON (CN) - 3M claims an investment company conspired with high-powered lobbyist Lanny Davis in a smear campaign to "coerce" it into paying "tens of millions of dollars ... to save them from the consequences of yet another unprofitable investment," a screening test for methicillin-resistant Staphylococcus aureus.
3M sued defendants London-based Harvey Boulter, CEO of defendant Porton Capital and a director Porton Capital Technology Funds, both of the Cayman Islands; and Lanny Davis, a principal of co-defendants Davis & Associates, and Davis-Block, all of Washington.
Davis, who worked as a special counsel for President Clinton from 1996 to 1998, has lobbied for a string of controversial clients since leaving the White House, including African dictators, military coup supporters in Honduras, and the government of Pakistan.
3M claims Boulter and Davis smeared it "through every imaginable medium" after it canceled the rollout of BacLite, a test for methicillin-resistant Staphylococcus aureus, or MRSA, a dangerous infection, particularly in open wounds, that has created headaches for hospital surgery departments and their patients.
3M says it stopped marketing the test because it was not "commercially viable," and that Boulter and Davis then unleashed the hounds of publicity.
"Defendants' illicit campaign has included overt threats of reprisals by holders of large blocks of 3M stock; public demonstrations by paid individuals posing as victims of an altogether fabricated public health 'issue' allegedly created by 3M's decision to discontinue selling a product no one wanted; multiple press conferences aimed at disseminating false and defamatory information; and a constant stream of media advisories that flooded the airwaves with defamatory statements about 3M and its CEO, George Buckley ('Buckley'). Specifically, the public relations aspect of the pressure campaign - launched with great fanfare on May 11, 2011, by defendants' agents and self-proclaimed public relations expert, defendant Lanny Davis ('Davis') - has featured a barrage of disparaging and defamatory statements disseminated in domestic and international forums, and through every imaginable medium. It has included multiple media events, an interactive website, and various written commentaries asserting damaging and knowingly unfounded allegations that 3M put the health of victims of methicillin-resistant Staphylococcus aureus ('MRSA') at risk when 3M chose to cease its multi-year attempts to market an MRSA screening test that was not commercially viable."
3M adds: "When these tactics failed to yield the financial windfall defendants sought, they resorted to making extortionate demands upon 3M." It claims that Boulter and Davis then "acted together" to make a "crude extortion attempt" by "sending to 3M's counsel an unsolicited e-mail in which Boulter claimed that the British Minister of Defence had instructed Boulter to inform 3M that if it did not pay over $30 million, the Minister of Defence would interfere with 3M's ability to do business with the British government. He also threatened that the British government would reconsider the recently announced call to knighthood of Buckley. This crude extortion attempt threatened both to embarrass Buckley and to tarnish 3M's most valuable asset, its corporate brand."
3M claims Boulter did all this because he had partnered with the British government to invest in Acolyte Biomedica Limited, the company behind BacLite, which specialized in microorganism-detecting products.
3M acquired Acolyte and BacLite in 2007. 3M then marketed BacLite in the United Kingdom, including Australia and Canada, but it did not get U.S. Food and Drug Administration approval, and production was halted, the complaint states.
Potential vendors lashed out against 3M and demanded more than $66 million for the stopped production, and the defendants "looked for other ways to force 3M to pay them and other U.K. claimants tens of millions of dollars," then crafted and carried out the intimidation campaign, according to the complaint.
3M seeks compensatory and punitive damages for "intimidation and blackmail" under U.K. law, conspiracy, defamation, aiding and abetting and tortious interference.
It is represented by William Brewer III with Bickel & Brewer of Manhattan. Washington-based attorney Kenneth Pfaehler with SNR Denton is also handling the case.