Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

The Boeing Company v. Spirit Aerosystems, Inc.

Superior Court of Delaware

December 5, 2017

THE BOEING COMPANY, Plaintiff,
v.
SPIRIT AEROSYSTEMS, INC., Defendant.

          Submitted: September 1, 2017

         Upon Defendant-Counterclaim Plaintiff Spirit Aerosystems, Inc.'s Motion for Attorneys' fees

         GRANTED in part and DENIED in part

          William M. Lafferty, Esquire, John P. DiTomo, Esquire, Barnaby Grzaslewicz, Esquire, Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware, Craig S. Primis, Esquire, Michael A. Glick, Esquire, Tracie L. Bryant, Esquire, Kirkland & Ellis LLP, Washington, DC, Eric F. Leon, Equire, Kirkland & Ellis, New York, New York, Attorneys for Plaintiff The Boeing Company

          John A. Sensing, Esquire, Jesse L. Noa, Esquire, Potter Anderson & Corroon LLP, Wilmington, Delaware, Evan R. Chesler, Esquire, Darin P. McAtee, Esquire, Timothy G. Cameron, Esquire, J. Wesley Earnhardt, Esquire, Caravath, Swaine & Moore LLP, New York, New York, Attorneys for Defendant-Counterclaim Plaintiff Spirit Aerosystems, Inc.

          ERIC M. DAVIS, JUDGE.

         I. INTRODUCTION

         This civil action is assigned to the Complex Commercial Litigation Division of the Court. On December 5, 2014, Plaintiff The Boeing Company ("Boeing") filed a Complaint (the "Complaint") against Defendant Spirit Aerosystems, Inc. ("Spirit") for Breach of Contract and Declaratory Judgment. On September 25, 2015, Spirit filed a counterclaim (the "Counterclaim") against Boeing for Breach of Contract and Declaratory Judgment. Spirit sought a declaration that Boeing must indemnify Spirit for the costs associated with this and other legal proceedings.

         On December 20, 2016, the parties filed cross-motions for summary judgment. The cross-motions sought summary judgment on the Breach of Contract and Declaratory Judgment counts based on the parties' differing characterization of the liabilities at issue. After a hearing, the Court issued a decision denying Boeing's summary judgment and granting Spirit's motion for summary judgment.

         On July 12, 2017, Spirit filed a Motion for Attorneys' Fees, Costs, Expenses, and Pre-and Post-Judgment Interest (the "Motion"). Boeing filed an Opposition to Spirit Aerosystems, Inc.'s Motion for Attorneys' Fees, Costs, Expenses, and Pre- and Post-Judgment Interest (the "Response") on August 18, 2017. Spirit filed a Reply Brief in Further Support of Its Motion for Attorneys' Fees Costs, Expenses, and Pre- and Post-Judgment Interest (the "Reply") on September 1, 2017. After reviewing the Motion and the Response, the Court determined that no hearing was necessary and took the matter under advisement on December 1, 2017.

         This is the Court's decision on the Motion. For the reasons set forth below, the Court will GRANT in Part and DENY in Part the Motion.

         II. RELEVANT FACTS

         In June of 2005, Boeing sold its manufacturing facilities in Wichita, Kansas and Tulsa and McAlester, Oklahoma to Spirit.[1] The parties memorialized the sale through an Asset Purchase Agreement ("APA").[2] As part of the APA, Boeing and Spirit apportioned certain assets and liabilities related to the employees working at the Kansas and Oklahoma facilities.[3] For purposes of this litigation, the relevant assets and liabilities are Boeing's collective bargaining agreements ("CBAs") and Boeing's benefit plans, including pension and retiree medical benefits. Section 11.15 of the APA ("Section 11.15") states:

Except as otherwise expressly provided in this Agreement, if any Proceedings for the enforcement of this Agreement is brought, or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions hereof, the successful or prevailing party shall be entitled to recover reasonable attorneys' fees and other costs incurred in that Proceeding, in addition to any other relief to which it may be entitled.[4]

         The APA also provides that Boeing must indemnify Sprit in certain circumstances. Section 9.1 states:

After the Closing Date, and subject to the limitations set forth herein and except with respect to the matters that are the subject of Section 9.5, Seller agrees to indemnify, defend and hold harmless each Buyer Group Member from and against any and all losses, Liability, damages, costs and expenses, including costs of investigation and defense and reasonable fees and expenses of lawyers, experts and other professionals . . . arising from: . . . (iv) the Excluded Liabilities. . . .[5]

         Boeing terminated certain Hired Employees as defined in Section 6.2(a) of the APA. The Hired Employees claimed that Boeing breached its obligation under its CBAs to provide certain early retirement benefits.[6] Boeing's CBAs placed limits on union employees' entitlement to early retirement benefits in cases of termination.[7] The Hired Employees filed two underlying actions based on Boeing's alleged breach of the CBAs.

         On July 21, 2005, the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America ("UAW") filed a grievance on behalf of certain Hired Employees at the Oklahoma facilities.[8] Consistent with the CBA's grievance procedure, the UAW escalated its grievance to arbitration (the "UAW Arbitration").[9]

         Similarly, in June and August of 2005, the Society of Professional Engineering Employees in Aerospace ("SPEEA") and the International Association of Machinists ("IAM") and Aerospace Workers filed separate grievances on behalf of Hired Employees at the Kansas facilities.[10] Individual union members brought a class action suit in United States District Court for the District of Kansas and consolidated with the litigation brought by SPEEA and IAM (the "Harkness Class Action").

         As discussed above, Boeing filed the Complaint against Spirit on December 5, 2014. On September 25, 2015, Spirit answered the Complaint and filed the Counterclaim. As part of Spirit's claim for relief, Spirit sought a declaration that Boeing must indemnify Spirit for the costs associated with this and other legal proceedings. On June 27, 2017, the Court granted summary judgment in favor of Spirit.

         As part of the decision, the Court determined that "all liabilities related to Boeing's CBAs are considered Excluded Liabilities."[11] The Court found that the UAW Arbitration arose from Boeing's breach of its CBA's. Further, the Court held that the Harkness Class Action arose from Boeing's breach of its CBA's. The Court determined that fees under Section 9.1 are warranted for the Excluded Liabilities.

         The Court also ruled that under Section 11.15, Boeing must reimburse Spirit for its reasonable attorneys' fees, costs, and expenses incurred in connection with the present litigation and the underlying proceedings.

         On July 12, 2017 Spirit filed the Motion. Boeing filed the Response on August 18, 2017. Spirit filed the Reply on September 1, 2017.

         III. PARTIES' CONTENTIONS

         A. Spirit's Contentions

         Spirit seeks: $11, 049, 748.61 in past fees, costs and expenses; $851, 365.30 in pre-judgment interest to date; and post-judgment interest at a rate of $1, 665.03 per diem until the other amounts are paid in full.[12] Spirit requests $9, 609, 425.60 in fees for the present litigation. Additionally, Spirit seeks $1, 440, 323.01 in fees from the Harkness Class Action and Spirits' responses to Boeing's indemnification demands.

         Spirit claims that the fees are supported by documentation and reasonable under the factors listed in Rule 1.5 of the Delaware Rules of Professional Conduct ("Rule 1.5").

         B. Boeing's Contentions

         Boeing argues that Motion should be denied or at least reduced because: (1) Spirit's fee request lacks adequate support; (2) Sprit's attorney's fees are not reasonable; and (3) Spirit ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.