In a complex appeal, CCL attorneys filed their opening brief, asking the U.S. Court of Appeals for the Seventh Circuit to restore a jury’s verdict from the first trial after a second trial resulted in a diametrically opposed result. The dispute revolves around competing breach of contract claims between a federal contractor and the equipment supplier for a major construction project in Illinois on bids from the Army Corps of Engineers. CCL’s client, Slurry Systems, Inc., had won the bid to build slurry walls for the Chicago Underflow Plan at McCook Reservoir. To dig the foundations for the walls, Slurry Systems rented a 40-foot tall trench cutter from Bauer, a German company that manufactures the cutters and certified that the work could be completed within nine months using its equipment. Constant problems with the trench cutter and repeated failures by Bauer to effect repairs dragged the cutter rental out for 26 months. A Bauer subsidiary, Pileco, Inc., sued Slurry Systems in federal court for unpaid rent, while Slurry Systems counterclaimed for breaches of Bauer’s obligations under the contract and its warranty of merchantability of the equipment.

The first trial resulted in a $2 million dollar award to Pileco, which was offset by an award of $25 million to Slurry Systems on its claims, including $20 million in punitive damages. On his own motion, the magistrate judge presiding over the case refused to enter judgment on the verdict and ordered a new trial, asserting that the verdict was against the weight of the evidence because Slurry Systems deserved a higher award for the time and costs of when the trench cutter was out of service. In the second trial, however, a new jury again found for Pileco on its claims, but against Slurry Systems on its claims. Pileco asked for, but was denied, attorney fees and costs. Both sides appealed.

In the brief filed today, CCL’s Robert S. Peck and Kathryn Minton, representing Slurry Systems, asked the Seventh Circuit to order the District Court to revert to the first verdict, less the punitive damages, because the judge misapplied the law by ordering a new trial. The jury awarded punitive damages on a count for which it did not find any compensatory damages. Under the applicable Illinois law, the punitive damages had to be disallowed and did not provide a reason to retry the case. In addition, the brief argued that the judge has an obligation to reconcile the jury verdict or suggest a remittitur before the option of a new trial can be pursued, which requires a miscarriage of justice as a justification. No such egregious action occurred here, the brief argued. Even if the judge could order a new trial, the new trial was tainted by Pileco’s attempt to try a different case with a new legal theory, whic the rules governing retrials prohibit. Moreover, Peck and Minton argued that the new judgment was more egregiously against the weight of the evidence. The brief suggested the alternative remedy would be for judgment in Slurry System’s favor as a matter of law or a third trial.