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Southern Track & Pump, Inc. v. Terex Corp.

United States District Court, Third Circuit

September 30, 2013

SOUTHERN TRACK AND PUMP, INC., Plaintiff,
v.
TEREX CORP., d/b/a TEREX CONSTRUCTION AMERICAS, Defendant.

Peter J. Walsh, Jr., Esquire of POTTER ANDERSON & CORROON LLP, Wilmington, DE. Suzanne H. Holly, Esquire of Berger Harris, LLC, Wilmington, DE. Attorneys for Plaintiff.

Ericka F. Johnson, Esquire and Ryan C. Cicoski, Esquire of WOMBLE CARLYLE SANDRIDGE & RICE PLLC, Wilmington, DE.

Cary E. Hiltgen, Esquire and Jeff C. Grotta, Esquire of HILTGEN & BREWER, P.C, Oklahoma City, ok. Attorneys for Defendant.

MEMORANDUM OPINION

STARK, U.S. District Judge

I. INTRODUCTION

Currently pending before the Court is Defendant Terex Corporation's ("Terex" or "Defendant") Motion to Preclude the Court's Unconstitutional Application of the Delaware Equipment Dealer Contract Statute, 6 Del. C. § 2720 et seq. ("Dealer Statute"). (D.I. 309) Plaintiff Southern Track and Pump, Inc. ("STP" or "Plaintiff) opposes the motion. (D.I. 313) For the reasons stated below, the Court will deny the motion.

II. BACKGROUND

On June 30, 2011, Plaintiff moved for partial summary judgment on Counts I and II of its Second Amended Complaint, seeking a finding that (i) the Dealer Statute applied to the parties' Distribution Agreement and (ii) Defendant had violated the statute, entitling Plaintiff to remedies, including damages and attorneys fees. (D.I. 204) On that same day. Defendant moved for partial summary judgment on all remaining counts of Plaintiff s complaint (D.I. 189, 191, and 193) as well as Counts I, II, and III of Defendant's Second Amended Counterclaims (D.I. 195, 197, and 199).

On December 21, 2011, the Court heard oral argument on the summary judgment motions and, on March 28, 2012, the Court issued an Order and Memorandum Opinion on these pending motions. (D.I. 266 and 267) Among other things, the Court granted Plaintiffs motion for partial summary judgment and granted Defendant's motion for partial summary judgment on Counts I and II of Defendant's counterclaims. (D.I. 267)

On April 27, 2012, the parties filed a proposed schedule that would have culminated in a three-to-five day jury trial on damages. (D.I. 272) Pursuant to the scheduling order (D.I. 275), the parties filed the Proposed Final Pretrial Order ("PTO") on October 22, 2012 (D.I. 293). In the PTO, Plaintiff argued that the Court's summary judgment rulings established that Defendant was liable for failing to repurchase all inventory, as required by § 2723(a), and the only remaining issue was to calculate damages under § 2727(a) using the "current net cost" formula. (D.I. 293 at 20-22) For its part. Defendant, in the PTO, raised several new defenses to liability, including for the first time challenging the constitutionality of the application of the Dealer Statute. (D.I. 293 at 28-29)

On November 1, 2012, the Court held the pre-trial conference, and ruled that most of Defendant's new legal theories were untimely. (D.I. 308 at 70) The Court agreed with Plaintiff that because liability was already established, the only remaining issue was the calculation of damages under § 2727(a). (Id. at 71) With respect to Defendant's new constitutional challenge, the Court ordered full briefing. (Id. at 72-73) In light of these rulings, the Court directed the parties to meet and confer to determine whether trial was still necessary. (Id. at 76) On November 5, 2012, the parties jointly informed the Court a trial was no longer needed. (D.I. 303) The Court entered Final Judgment on November 16, 2012. (D.I. 306 and 307)

Thereafter, according to the Court's direction. Defendant filed the pending motion. In it, Defendant contends that it did not waive its constitutional challenge and that the Court's construction of the Dealer Statute constitutes an unconstitutional taking and violates due process under both the U.S. and Delaware Constitutions. (D.I. 309) Defendant's motion to preclude arises from the Court's summary judgment order, in which the Court held that "by its plain terms, § 2723(a) requires suppliers to repurchase 'all' remaining unsold inventory from the dealer within 90 days of termination of the contract agreement." (D.I. 266 at 14) The motion further concerns rulings the Court made at the pre-trial hearing, including its ruling that once liability arises from a failure to repurchase, "the calculation of statutory damages is . . . governed by Section 2727(a)" (D.I. 308 at 71), which states, in relevant part, "If a supplier fails or refuses to repurchase any inventory covered under this subchapter within the time periods established, the supplier is civilly liable for 100 percent of the 'current net price' of the inventory, " 6 Del. C. § 2727. The Court added, "STP does not have to prove any additional elements in this case in order to obtain statutory damages for the new and used inventory." (D.I. 308 at 71) Defendant contends that the Court's construction and application of § 2723 and § 2727 here is unconstitutional.

Briefing on Defendant's motion to preclude was completed on December 21, 2012. (D.I. 313, 315) The Court heard oral ...


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