Kasowitz Defeats Motion to Dismiss Cannabis FinTech Startup Spence Labs’s “Corporate Catch and Kill” Complaint

Kasowitz Benson Torres, together with co-counsel Swanson, Martin & Bell, defeated a motion to dismiss fintech startup Spence Labs’s fraud lawsuit against defendant Fidelity National Information Services, Inc. (“FIS”).  In its complaint, Spence Labs, which developed revolutionary payment processing products for the nascent cannabis industry, alleges that FIS employed an unlawful “catch and kill” strategy by which it falsely represented that it intended to enter into a business relationship with Spence Labs, inducing Spence Labs to make significant changes to its operations in anticipation of the relationship, and then reneged on its misrepresentations—all to eliminate Spence Labs as a competitor.

On August 13, 2024, Judge Steven C. Seeger of the U.S. District Court for the Northern District of Illinois ruled that Spence Labs’s complaint stated claims for fraudulent concealment, unjust enrichment, promissory estoppel, and fraudulent inducement/misrepresentation.  Spence Labs’s claims now proceed in discovery. 

The Kasowitz Benson Torres team representing Spence Labs includes partner Andrew L. Schwartz and associates Sabrina Baig, Aishling Fitzpatrick, and John P. Planamento, with co-counsel William D. Patterson and Benjamin D. Lothson of Swanson, Martin & Bell.