The Ninth Circuit Affirms Willenken’s Victory of Summary Judgment on Behalf of Major LED Manufacturer

Willenken once again achieved total victory for firm client Lumens Co., Ltd. (“Lumens”), a Korea-based LED manufacturer embroiled in a longstanding dispute with its U.S.-based distributor, GoEco LED (“GoEco”). On Feb. 24, 2020, the U.S. Court of Appeals for the Ninth Circuit issued a memorandum disposition affirming Lumens’ victory of summary judgment against its U.S.-based distributor, finalizing the award of $1 million in damages and dismissal of $16 million in counterclaims that the firm, led by Amelia Sargent and Jason Wilson, had achieved in 2018.

On Dec. 12, 2019, Amelia presented oral argument to the Ninth Circuit on behalf of Lumens in response to the defendant and counterclaimant’s appeal. In the original suit, Lumens had sued GoEco for breach of contract over nonpayment of more than $1 million worth of LED products. In the appeal against this claim, GoEco argued that it did not owe the $1 million in damages to Lumens because the invoices were not contracts. The Ninth Circuit ruled that even if the invoices were not contracts, there was still indeed a contract between Lumens and GoEco that was breached.

GoEco furthermore argued that the parties’ memorandum of understanding (MoU) was a requirements contract for the sale of goods that required Lumens to use its “best efforts” to continue to supply GoEco with LED panels, even after GoEco had failed to pay $1 million for the goods shipped. The District Court had not decided this issue, instead dismissing the counterclaims for lack of evidence of damages. The Ninth Circuit rejected GoEco’s argument, agreeing with Lumens at the MoU was not a requirements contract as a matter of law.

On the counterclaims, GoEco also argued that it provided sufficient evidence of its claimed $16 million in damages because the Uniform Commercial Code provided a formula for calculating lost profits, and GoEco was not obligated to provide proof of net damages. The Ninth Circuit rejected this argument, affirming the District Court’s conclusion that GoEco lacked evidence of damages and that the testimony of two principals did not contain the necessary facts or data required to calculate damages.

The Court, aided by Willenken’s cogent reasoning, unpacked each of GoEco’s arguments and rejected them, affirming Lumens’ victory.