Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The court battle between Mack Trucks Inc. and an Ohio Mack dealership took a sharp turn this week when a federal judge slashed more than $9.7 million from a jury’s award to Mack Trucks on its counterclaims for misappropriation of trade secrets. The October verdict was a major victory for Mack Trucks because the jury not only rejected all of plaintiff Toledo Mack Sales & Service’s claims � for which it was seeking more than $14 million � but went on to award Mack Trucks more than $11.3 million. Now Senior U.S. District Judge Ronald L. Buckwalter has ruled that the jury was too generous and that the award must be reduced to $1.6 million. In the suit, Toledo claimed that Mack instituted policies designed to discriminate against it because its business approach was to sell trucks at low prices � an approach Toledo claimed conflicted with Mack’s interest in keeping truck prices high. But Toledo suffered a major setback midway through the monthlong trial. Buckwalter dismissed its only federal claim � an antitrust claim under the Sherman Act. That left only two claims to go to the jury � a claim of discrimination under the Ohio Motor Vehicle Dealers Act and a claim of tortious interference with contractual relations. Mack’s lawyers � Barbara W. Mather and Jeremy Heep of Pepper Hamilton � told the jury that Toledo hadn’t proven that it lost any sales due to Mack’s conduct. Instead, the defense team said, the evidence showed that the only illegal conduct was committed by Toledo when it gave valuable and secret information to a generic parts manufacturer. Mather told the jury that Mack routinely provided dealerships such as Toledo with price lists for more than 40,000 truck parts, and that Toledo violated its agreement to keep that price list confidential when it gave the massive document to PAI Industries Inc. An even more serious violation occurred, Mather said, when Toledo gave PAI access to MacSpec, a massive database that Mack spent $32 million developing that includes details on the design and repair histories of more than 1 million trucks. In its verdict, the jury found that Toledo had misappropriated Mack’s trade secrets and engaged in a “civil conspiracy” with PAI. The jury awarded Mack $11.34 million on the claim relating to MacSpec and $16,500 on its claim relating to the price list and microfiches, for a total verdict of $11,356,500. Now Buckwalter has ruled that the jury’s award was excessive. The evidence, Buckwalter said, showed that the development costs for MacSpec were about $32.7 million over a period of 15 years, and that PAI admitted it had used the database for 10 months. As a result, Buckwalter said, the jury’s award of about one-third of the development costs represented an unfair “windfall” for Mack Trucks. “While there is no formula to gauge what is appropriate, the award must bear some relationship to the span of time over which the development costs were incurred and the length of time of PAI’s usage,” Buckwalter wrote in his nine-page opinion in Toledo Mack Sales & Service Inc. v. Mack Trucks Inc. For Toledo’s lawyers � Wayne A. Mack, J. Manly Parks, James H. Steigerwald and David A. Degnan of Duane Morris � the ruling is a significant victory, but far less relief than they were seeking. In their post-trial motions, the plaintiff’s team had urged Buckwalter to revive the antitrust claims and grant a new trial, and to toss out the entire award to Mack Trucks on its counterclaim. The evidence, the plaintiff’s team argued, showed that MacSpec cost just $50,000 to develop � a figure equal to the amount Mack Trucks was already paid in a settlement with PAI. They also argued that Mack Trucks’ claim for misappropriation of trade secrets was fatally flawed because Toledo purchased the MacSpec database and was allegedly forbidden under its contract to provide it to third parties. Under the “gist of the action” doctrine and the economic loss rule, the plaintiff’s team argued, Mack Trucks should have pursued a claim for breach of contract because its tort claim for misappropriation was barred. In response, Mack Trucks’ lawyers argued that Toledo was trying to have it both ways. Throughout the litigation, the defense team said, Toledo took the position that there was no licensing agreement that governed its use of MacSpec. “Toledo now argues that the trade secrets claim is barred by a contract that it has argued never existed. � This is improper,” Mather and Heep wrote. In an interview yesterday, Wayne Mack said Toledo intends to pursue an appeal to challenge several of the judge’s rulings, most notably Buckwalter’s decision to dismiss the plaintiff’s antitrust claim under the Robinson-Patman Act. But the time for an appeal has not yet come, Wayne Mack said, because Mack Trucks must first decide whether to accept the judge’s remittitur or opt for a new trial. Mack Trucks issued a statement yesterday that said the company appreciated that Buckwalter had “rejected all of the other side’s attempts to overturn the results reached by the jury.” As for the remittitur of its counterclaim, the statement said “We have to decide now whether to accept the $1.6 million, which is still a substantial amount, on a claim that the jury and we believe is worth $11.3 million. No decisions have yet been made.” (Copies of the nine-page opinion in Toledo Mack Sales & Service Inc. v. Mack Trucks Inc. , PICS No. 07-0271, are available from The Legal Intelligencer . Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.) •

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.