Alicia Diagnostics Alleges Medline Breached Distribution Agreement

On Saturday in the Northern District of Illinois, Alicia Diagnostics Inc. filed a complaint against Medline Industries Inc. over allegations that the defendant breached a distribution agreement between the parties that was to ensure timely delivery of products that Alicia Diagnostics was to distribute in Iran.

Medical equipment distributors Alicia Diagnostics and Medline entered into a distribution agreement in August 2016 that said Alicia Diagnostics would be the exclusive distributor of particular wound care products in Iran until Aug. 25, 2021. According to the complaint, through the Iranian Ministry of Health (MOH), the plaintiff registered around 80 Medline products to meet Iranian import regulations. Pursuant to this agreement, Alicia Diagnostics had to pay for the registration of and licensing to export the products to the MOH; for the products themselves that were to be sold and distributed; and for various deposits to ensure the plaintiff would fulfill its duties to both the MOH and the defendant, among other expenses.

The plaintiff alleged that despite the distribution agreement and the costs it had to accrue to deliver on its terms, the defendant failed to deliver on its duties of the contract. One named instance of an alleged failure by Medline was a promise that a wound care product delivery would take place in four to six weeks when, in reality, it took six months; this purportedly resulted in a loss of all profits for this particular product and late fees and fines by the MOH.

Further, the plaintiff claimed that despite this untimely delivery, Medline continued to assure Alicia Diagnostics that it would make timely deliveries. The plaintiff also argued that Medline failed to remedy the purported delays.

“As a result of Medline’s breaches, Alicia Diagnostics has suffered damages, including but not limited to, lost profits, lost opportunities, fines, penalties, legal costs, forfeited deposits, loss of licenses, and destruction of relationships and reputation with other parties,” according to the complaint.

The specific causes of action brought by the plaintiff are breaches of contract, distribution agreement, duty of good faith and fair dealing, and express warranty.

The plaintiff is represented by Douglass & Ladisch Douglass and Morgan & Morgan.