Lawsuit against Boston Sci and Guidant can proceed

Updated: August 30, 2007 - 7:51 PM

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NEW YORK - A federal judge will allow a breach-of-contract claim by Johnson & Johnson to proceed in a $5.5 billion lawsuit over Boston Scientific Corporation's acquisition of heart-device maker Guidant last year.

In a ruling signed Wednesday and made public Thursday, U.S. District Judge Gerard Lynch in New York denied a motion by Boston Scientific and Guidant to dismiss a breach-of-contract claim related to Guidant's termination of a merger agreement with Johnson & Johnson last year.

However, the judge granted a motion to dismiss claims that Natick, Mass.-based Boston Scientific and Guidant violated an implied duty of good faith and fair dealing in the Guidant-Johnson & Johnson merger agreement, saying there is no basis under Indiana law for a claim of violation of such a duty. The contract is governed by Indiana law.

"We're pleased that the majority of the claims were dismissed," said Paul Donovan, a Boston Scientific spokesman. "We continue to believe the remaining claim is without merit."

DOW JONES NEWS SERVICE