Druckzentrum Harry Jung GmbH & Co. KG v. Motorola, Inc.
1:09-cv-07231
N.D. Ill.Aug 9, 2012Background
- DHJ sued Motorola in the Northern District of Illinois for breach of contract and fraudulent misrepresentation.
- DHJ and Motorola entered into a Corporate Supply Agreement (CSA) in Oct 2007 and a Net Initial Award (NIA) in Jan 2008 under Motorola’s Rapid Sourcing Initiative.
- NIA promised good-faith efforts to award DHJ products that reasonably likely would achieve the target percentage (2% Base Share with up to 8% Swing Spend); actual percentage could vary.
- DHJ contends Motorola’s execution of the award, pricing negotiations, and forecast updates violated the contract; Motorola argues the 2% target was not a guaranteed guaranteed share and could vary.
- Motorola later moved print operations to Asia/China, signaling changes in business environment; DHJ ceased work and issued a Notice of Cancellation in Apr 2009.
- DHJ’s insolvency trustee pursued the claims on behalf of creditors; Motorola sought summary judgment on all counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract—exclusivity and pre-NIA breach | DHJ claims exclusivity and pre-NIA breach support liability | Motorola breached only via proper termination and non-exclusive forecast | DHJ’s exclusivity and pre-NIA breach claims dismissed |
| Termination properly effected under CSA/NIA | DHJ contends termination was not properly term-based | Motorola provided termination-notice through emails indicating end of Flensburg/EMEA operations | Summary judgment for Motorola on termination-ground breach |
| 2% Base Share calculation basis (aggregate vs quarterly) | DHJ argues quarterly base share; data disputes assert aggregate basis | NIA contemplated aggregate spend with quarterly reviews; no strict quarterly base | DHJ cannot prove quarterly-base assumption; 2% based on aggregate spend is not breached |
| Good-faith requirement in awarding DHJ business | DHJ alleges Motorola acted in bad faith by shifting business to China | NIA required good-faith efforts; transfer to China allowed by contract | No bad-faith evidence; summary judgment for Motorola on good-faith claim |
| Fraudulent misrepresentation | Motorola inflated forecasts to induce lower prices | No evidence of knowingly false statements; forecasts updated regularly | Summary judgment for Motorola on fraud counts |
Key Cases Cited
- Palucki v. Sears, Roebuck & Co., 879 F.2d 1568 (7th Cir. 1989) (credible evidence threshold for summary judgment)
- Pugh v. City of Attica, 259 F.3d 619 (7th Cir. 2001) (court review of summary judgment standards in municipal cases)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (burden-shifting on summary judgment; movant's initial burden)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (material facts in dispute preclude summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment requires no genuine issue of material fact)