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In a dramatic conclusion to a high stakes commercial litigation case, WilliamsMcCarthy LLP attorneys John Holevas and Joel Huotari won a federal trial on January 23, 2017 on behalf of their client, Arctic Cat.
The case, Driveline Systems v. Arctic Cat (N.D. Ill. 2008), featured allegations that Arctic Cat was liable on an “open account” contract theory, and that Arctic Cat breached its supply contract with Driveline, breached various confidentiality provisions, and committed copyright infringement. Driveline’s expert opined that Driveline’s damages on these counts exceeded $11 million. Arctic Cat counterclaimed for breach of contract and sought cover damages, relating to costs it incurred because of Driveline’s failure to ship product in a timely manner, which resulted in the shutdown of Arctic Cat’s assembly lines.
In March of 2017, the Honorable District Judge Frederick J. Kapala granted summary judgment in Arctic Cat’s favor on each of Driveline’s claims, other than the “open account” claim. The Court ruled that issues of fact necessitated a trial on the open account claim, and on Arctic Cat’s counterclaim. In addition, the Court reserved ruling on whether Artic Cat was a “prevailing party” on Driveline’s Copyright claim, which would entitle Arctic Cat to a presumption that it could recover its attorney’s fees under the Copyright Act, 17 U.S.C. § 505.
Inspired by the Honorable Judge Morton Denlow’s article “Trial on the Papers: An Alternative to Cross Motions for Summary Judgment,” published in the August 1999 issue of The Federal Lawyer, vol. 46 at p. 30, the parties consented to try the remaining claims “on the papers” under Federal Rule of Civil Procedure 52. This allowed the parties to try the case without the need for presenting live testimony from witnesses, many of which live outside of Illinois.
Having been presented with dueling trial briefs, affidavits, and expert reports, the Court issued an opinion on January 23, 2018 finding that, although Driveline had proven some amount of damages on its open account theory, Arctic Cat’s counterclaim damages more than offset that amount, resulting in a judgment in Arctic Cat’s favor.
Parties facing a federal trial can avoid the cost, inconvenience and scheduling problems that are inherent with traditional trials by considering a trial on the papers under Rule 52. If a jury is not needed, live testimony is not critical to your claim, and you don’t have a hotly contested record full of evidentiary disputes, Rule 52 provides a cost-effective alternative to a regular trial.
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