Warner served as trial counsel for Daimler Purchasing Coordination Corp. (“DPCC”), a U.S.-based purchasing arm of Daimler AG.
DPCC entered into a long-term requirements contract with A123 Systems, Inc. (“Old A123”) for lithium-ion starter batteries used in several Mercedes-Benz vehicle platforms. After Old A123 filed a Chapter 11 bankruptcy petition and rejected its contract with DPCC, Old A123 sold substantially all of its assets to a third party, who then called the new entity A123 Systems, LLC (“New A123”). After years of development, design validation and other testing, New A123 was the only entity from which DPCC could purchase the starter batteries while still meeting its planned start of production date. New A123 used that leverage to extract higher starter battery prices from DPCC every year throughout the life of the program.
Accordingly, DPCC filed a proof of claim in the bankruptcy proceeding and sought damages under the UCC arising from Old A123’s rejection of the contract. Over the course of this four-year battle, the trustee in the bankruptcy questioned whether the parties had ever entered into an enforceable contract. DPCC won partial summary judgment on the question of whether the parties entered into a valid requirements contract.
After a bench trial, Judge Kevin Carey heard testimony and received evidence on the remaining issues: the length of the parties’ contract and the amount of DPCC’s damages. Judge Carey ruled in favor of DPCC, finding that the parties’ contract extended through 2018.
He also made several other findings in favor of DPCC, including awarding damages for starter batteries purchased from New A123 directly by Daimler AG and finding that DPCC was entitled to damages for its spare parts requirements, spanning 15 years after the end of production.
