The Delaware Supreme Court issued a split decision in a high-stakes dispute between Johnson & Johnson and former stockholders of Auris Health, Inc., over the pharmaceutical giant's acquisition of the surgical robotics company. In a ruling dated Jan. 12, 2026, the court affirmed in part, reversed in part, and remanded portions of the case to the Delaware Court of Chancery for further proceedings.
The case, styled *Johnson & Johnson v. Fortis Advisors LLC*, centers on a post-closing earnout dispute following J&J's acquisition of Auris Health, a medical robotics company. Fortis Advisors LLC serves as the representative for former stockholders of Auris Health in the litigation.
The dispute originated in the Delaware Court of Chancery, where Chancellor Laster presided over the case designated as C.A. No. 2020-0881-LWW. The matter reached the Delaware Supreme Court on appeal, where it was heard by the full court sitting en banc, including Chief Justice Seitz and Justices Valihura, Traynor, LeGrow, and Griffiths.
Justice LeGrow authored the opinion for the Delaware Supreme Court, which was submitted on Oct. 15, 2025, and decided on Jan. 12, 2026. The case represents the latest chapter in what appears to be ongoing litigation stemming from J&J's acquisition of the medical robotics firm.
Earnout disputes commonly arise in acquisition transactions when the purchase price includes contingent payments tied to the acquired company's future performance metrics. These arrangements can lead to disagreements between buyers and sellers over whether specified milestones have been achieved and whether additional payments are owed.
The involvement of Fortis Advisors as the representative for former Auris Health stockholders suggests the dispute involves a significant number of former shareholders who retained interests in post-closing payments under the acquisition agreement.
J&J, headquartered in New Brunswick, New Jersey, is one of the world's largest pharmaceutical and medical device companies. The company has been active in expanding its medical technology portfolio through strategic acquisitions, particularly in robotics and minimally invasive surgery.
Auris Health was founded as a medical robotics company focused on developing technologies for diagnostic and therapeutic procedures. The company's robotic platform was designed to enable physicians to navigate natural pathways in the body to reach peripheral areas of the lungs for early diagnosis and treatment of lung cancer.
The legal teams representing both sides in the dispute included prominent Delaware and national law firms. Johnson & Johnson and its subsidiary Ethicon were represented by attorneys from Orrick, Herrington & Sutcliffe LLP, Morris, Nichols, Arsht & Tunnell LLP, and Patterson Belknap Webb & Tyler LLP. E. Joshua Rosenkranz of Orrick argued the case for the defendants.
Fortis Advisors was represented by attorneys from Selendy Gay PLLC and Ross Aronstam & Moritz LLP. Philippe Selendy of Selendy Gay argued the case for the plaintiff.
The Delaware Supreme Court's mixed ruling indicates that both parties achieved partial victories in the appeal. The court's decision to affirm certain aspects of the Chancery Court's ruling while reversing others suggests the lower court correctly decided some legal issues while erring on others.
The remand portion of the ruling means that certain aspects of the case will return to the Court of Chancery for additional proceedings consistent with the Supreme Court's guidance. This could involve further factual development, application of legal standards clarified by the Supreme Court, or reconsideration of damages or other relief.
Delaware courts frequently handle complex corporate disputes due to the state's prominence as a jurisdiction of incorporation for major U.S. companies. The Delaware Court of Chancery specializes in business litigation, while the Delaware Supreme Court serves as the final arbiter of Delaware corporate law.
The case highlights the ongoing challenges in structuring and resolving earnout arrangements in major corporate acquisitions. As companies increasingly use contingent consideration structures to bridge valuation gaps in transactions, disputes over earnout provisions have become more common in Delaware courts.
The ruling's impact may extend beyond the immediate parties, as Delaware Supreme Court decisions often provide guidance for similar disputes involving earnout provisions and acquisition agreements. Legal practitioners and corporate counsel will likely analyze the decision for insights into how Delaware courts approach earnout-related claims.
The case number 490, 2024 on the Delaware Supreme Court's docket indicates this was among the matters heard by the high court during its 2024 term, though the decision was issued in early 2026.
With portions of the case now remanded to the Court of Chancery, further proceedings will be required before the dispute reaches final resolution. The timeline for completing the remanded proceedings will depend on the scope of issues requiring additional consideration by the trial court.