On March 4, 2026, the Massachusetts Superior Court granted summary judgment to the defendants on all claims arising from a post-acquisition earnout dispute, including a claim under Massachusetts General Laws Chapter 93A, Section 11, in Mahanthappa v. Alere, Inc. & Innovacon, Inc. The decision highlights courts’ reluctance to transform contract disagreements between sophisticated commercial parties into statutory unfair trade practice claims, particularly where the governing agreement is unambiguous and contains carefully negotiated earnout provisions.
The plaintiffs, former securityholders of biotechnology company TwistDx, alleged that health care company Alere deprived them of the opportunity to earn up to $125 million in contingent consideration following Alere’s 2010 acquisition of TwistDx. The Chapter 93A theory rested primarily on two alleged forms of misconduct: first, that Alere misled TwistDx into believing certain diagnostic products (C. diff and Norovirus tests) would qualify as “New Company Products” and trigger earnout payments; and second, that Alere terminated non-in vitro diagnostics (non-IVD) revenue-sharing payments in retaliation for the plaintiffs’ assertion of contractual claims.
The court rejected the misrepresentation theory on multiple independent grounds, collectively illustrating the high bar for Section 11 liability in a commercial earnout context. As an evidentiary matter, the alleged misrepresentation rested solely on a conclusory affidavit from TwistDx’s former CEO stating he had been “led to believe” the products would qualify for milestone treatment. The court held this assertion amounted to inadmissible lay opinion, not evidence of any specific false statement. Without proof of an identifiable misrepresentation, the 93A claim did not survive summary judgment.
Substantively, the claim failed because the court ruled that any alleged reliance would have been unreasonable as a matter of law. The merger agreement expressly defined “New Company Products” by reference to a schedule that did not include C. diff or Norovirus test and required any amendment to be made in a signed writing. No such amendment existed. Under settled Massachusetts law, a party may not reasonably rely on oral assurances that directly contradict unambiguous contractual terms. In a Section 11 dispute between sophisticated parties, the court enforced the contract as written and refused to use Chapter 93A to override the negotiated allocation of risk reflected in the earnout structure.
The court further concluded that the alleged misrepresentation did not occur “primarily and substantially” in Massachusetts, as Section 11 requires. The evidence showed that any communications occurred — and were acted on — in the United Kingdom. Because the “center of gravity” of the alleged unfair conduct was outside Massachusetts, the statutory claim independently failed. The decision reinforces that, even where a defendant is headquartered or has contacts in Massachusetts, Section 11 liability depends on where the allegedly unfair conduct itself occurred — not on general corporate presence.
The retaliation theory met a similar fate. The court concluded that Alere’s obligation to make non-IVD revenue-sharing payments expired by contract in May 2021, seven years after the first qualifying commercial sale. The court held that exercising an express contractual right cannot, without more, constitute an unfair act under Chapter 93A. Moreover, even assuming arguendo that retaliation could violate public policy, the relevant strategic decisions were made by Abbott Laboratories personnel in Illinois, and shareholders across multiple jurisdictions felt the financial impact. Abbott acquired Alere in 2017. As with the misrepresentation theory, the plaintiffs could not establish that the alleged misconduct occurred primarily and substantially in Massachusetts.
The decision reflects several themes that may be favorable to defendants in complex commercial disputes. First, where sophisticated parties negotiate detailed earnout provisions — including inward-facing “commercially reasonable efforts” standards and time-limited revenue-sharing mechanisms — courts often enforce those provisions as written and do not invoke Chapter 93A to impose obligations the parties chose not to include. Second, conclusory assertions of bad faith or deception, untethered to specific, admissible evidence, may be insufficient to convert a contract dispute into a statutory unfair trade practices claim. Third, Section 11’s territorial limitation remains a meaningful defense in multi-jurisdictional business disputes.
In sum, the court treated the Chapter 93A claim as derivative of — and constrained by — the contract. Having found no breach of the unambiguous merger agreement and no evidence of independently unfair or deceptive conduct centered in Massachusetts, the court entered summary judgment for the defendants on the Chapter 93A claim, as well as on the breach of contract and implied covenant counts.
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