T. Sky Woodward and John Parker Sweeney Receive Favorable Ruling on Behalf of Beretta U.S.A. Corp.

October 13, 2021 11:57 AM
T. Sky Woodward and John Parker Sweeney

In August 2021, a Bradley Arant Boult Cummings LLP (“Bradley”) team led by IADC member  T. Sky Woodward and including DRI Past President and IADC member John Parker Sweeney, Marc A. Nardone (IADC Trial Academy), Gregory C. Marshall, James W. (Jay) Porter, III, Erin K. Sullivan, Connor M. Blair, and Anna M. Lashley received a denial of certiorari from the Maryland Court of Appeals in favor of client Beretta U.S.A. Corp. (“Beretta”), leaving intact a published decision by the Maryland Court of Special Appeals affirming the Baltimore County Circuit Court’s reduction of a $20 million jury award for breach of a Non-Disclosure Agreement to $1 on a motion for JNOV.

In 2012, Beretta and a Baltimore-based firearm manufacturer, Adcor Industries, Inc. (“Adcor”), began exploring the possibility of working together to manufacture and market a semi-automatic rifle. Both parties signed Non-Disclosure Agreements (“NDAs”) and exchanged design information for evaluation and testing. No agreement was ever made to produce a firearm together or for Beretta to purchase Adcor’s intellectual property. Ultimately, Adcor’s prices to supply component parts were too high, and Beretta ended the relationship.

Bitterly disappointed (and hurting financially), Adcor threatened litigation and demanded that its information be returned pursuant to the terms of the NDA.  Beretta returned Adcor’s information but advised that a copy of all documents would be kept in order to defend against the threatened litigation.

Making good on its threat, in 2015 Adcor filed a 17-count complaint against Beretta in the Circuit Court for Baltimore County, alleging breach of contract, misappropriation of trade secrets, fraud, unjust enrichment, and breach of the NDA, among other causes of action. Adcor’s complaint sought hundreds of millions of dollars in damages, including punitive damages and a constructive trust.

Beretta’s motion for summary judgment was granted in part, which disposed of half of the case in October 2018. The case went to trial in December 2018. At the close of Adcor’s case-in-chief at trial, the court granted Beretta’s motion for judgment on every remaining count, except breach of the NDA. The jury found that Beretta breached the NDA and returned a verdict of $20 million in favor of Adcor.

Beretta filed a post-trial motion for judgment notwithstanding the verdict (“JNOV”). In February 2019, the trial court held that Adcor had failed to produce any evidence of actual damages caused by breach of the NDA, and vacated the $20 million verdict, ordering entry of a new judgment for nominal damages in the amount of $1.

In a unanimous, reported opinion issued in April 2021, Maryland’s Court of Special Appeals credited every fact in favor of Adcor, and then squarely rejected each of the arguments, affirming the judgment of the trial court in every respect. Adcor petitioned the Maryland Court of Appeals for review, and the Court rejected the petition on August 2, 2021.

The Bradley team persisted against Adcor’s relentless efforts – fueled by a litigation funding company – to convert its business disappointment into a litigation windfall. Adcor’s principal, Jimmy Stavrakis, is currently serving 13 years in federal prison for conspiring to set fire to his business premises. The principals of Adcor’s litigation funding company are also serving time in federal prison for operating a Ponzi scheme, the proceeds of which supported Adcor’s litigation. 

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