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A Better Partnership
December 01, 2014

MSC teaches lesson regarding merits practice

After full merits briefing and oral argument, the Michigan Supreme Court denied leave as improvidently granted in a multi-million-dollar commercial contract dispute, Service Source Inc. v. DHL Express (USA), Inc., No. 301013. The result teaches a valuable lesson about merits practice before the Court.

Plaintiff Service Source was a shipping reseller that obtained preferential wholesale shipping rates with DHL, then resold DHL's shipping services to smaller customers at a rate higher than Service Source's wholesale rate, but lower than the retail rate those customers would have ordinarily paid.  When DHL terminated all domestic service in the U.S. market, Service Source lost its valuable business.

Service Source sued for breach of contract, successfully moved for summary disposition on liability, and obtained a multi-million-dollar damage judgment following a bench trial.  The Court of Appeals affirmed.  The Michigan Supreme Court granted leave to appeal on the question of liability, the calculation of damages, and whether the parties' agreement constituted a requirements contract.

In addition to addressing the substance of these three issues, Service Source continued to insist in its merits briefing that leave was improvidently granted because all of the legal issues were controlled by Florida law, and there was nothing jurisprudentially significant about the trial court's rulings.  The Justices echoed these points at oral argument, and the Court ultimately denied leave to appeal.  The moral of the story?  It is never too late to persuade the Court that a case lacks jurisprudential significance, even after leave has been granted and the case has proceeded to merits arguments.

Disclaimer:  Warner Norcross & Judd represented Service Source, the successful appellee, in this case.

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