Bilzin Sumberg Team Obtains Zero Verdict In Defense Of $200 Million Claim

Press Release
October 29, 2007

Miami, Florida, October 29, 2007 The Litigation Group at Bilzin Sumberg Baena Price & Axelrod LLP has just obtained a total defense verdict in favor of its client, Harris Specialty Chemicals, after a three week trial before a Miami-Dade jury. Harris, now owned by BASF, is a worldwide leader in the manufacture of construction chemicals now marketed under the popular brand name Thoro.

Since the North American Free Trade Agreement (NAFTA) came into effect in 1994, major American companies in unprecedented numbers have chosen to cross the border and associate with Mexican businesses for the manufacturing, distribution and sale of products. The business terms and nature of these associations has been the subject of fiercely contested lawsuits throughout the United States for the last ten years. Mexican companies have been encouraged to file suit by the typical result of these lawsuits: large jury awards, such as the $624 million verdict awarded against Wal-Mart to a Mexican company which claimed breach of a joint venture agreement. Bilzin Sumberg's recent victory on behalf of Harris is a significant step in reversing this trend.

The plaintiff, Punto Azul, is a long-established Mexican company that markets consumer and electronic goods in Mexico. As with previous similar lawsuits brought by the same team of plaintiff attorneys, Punto Azul sued Harris and others in Miami-Dade County, claiming that it had entered into a binding joint venture agreement with Harris in 1998. Punto Azul alleged that the joint venture agreement entitled it to exclusively manufacture and market Harris-branded products throughout Mexico, as well as throughout all of Central and South America. Punto Azul alleged Harris breach of the joint venture agreement, as well as fraud, tortious interference, and breach of fiduciary duty, and sought $200 million in damages.

Punto Azul's claim relied upon the same evidence that resulted in verdicts for the Mexican plaintiffs in the previous lawsuits, and as a result the defense of Punto Azul's claim posed several challenges, most notably the leniency afforded to litigants in Florida to pursue claims arising from joint venture agreements. Punto Azul attempted to support its allegations that a joint venture existed by referencing one initial meeting during which a possible joint venture was discussed, as well as advertisements and internal correspondence most of which was in Spanish which suggested the past existence of such a relationship between the companies. Punto Azul further claimed that the parties involvement over a year-long timeframe constituted performance of the alleged agreement.

Notwithstanding these challenges, Bilzin Sumberg's litigation team mounted an aggressive defense to the claims. Through pretrial motions, Litigation Group Chair Michael N. Kreitzer and a Litigation associate were able to convince the court to bifurcate the proceedings and to dismiss, by summary judgment, several of the defendants. The trial team was also successful by summary judgment in limiting substantially the plaintiffs' damage claim thereby meaningfully reducing Harris financial exposure in the event of an adverse verdict. At trial, Mr. Kreitzer was able to create serious doubt in the minds of the jurors as to whether any agreement at all was reached with respect to the formation of a joint venture. Also, the plaintiffs witnesses were forced to concede that they had taken contrary positions as to the existence of the joint venture in writings and by their actions before the case was ever filed in court. Important to the victory was also the introduction into evidence of a document obtained by the trial team directly from the Mexican Government that contradicted the plaintiff's testimony that articles of incorporation in respect of the joint venture had been signed by Harris and filed with the Mexican government. The government documents proved that the articles had never been filed as had been asserted throughout the trial by the Plaintiff thereby calling into question the credibility of the plaintiffs witnesses and the legitimacy of the plaintiffs entire case.

The Bilzin Sumberg attorneys persuaded the jury that the parties never reached an agreement in the first place, and the jury therefore never even reached the issue of breach. The jury also found for the Defendants on counts for fraud, tortious interference, and breach of fiduciary duty.

"We are very pleased with the outcome. We feel that the end result was completely justified for our clients," stated Mr. Kreitzer.

"This case further proves that the American jury system works. We're grateful and proud that this jury had the gumption to use common sense to thoughtfully navigate through hundreds of documents and several weeks of trial, and arrive at a sensible result," he added.

"Harris Specialty Chemicals is a sophisticated business operation, and they would never enter into a joint venture, or any business arrangement for that matter, without properly documenting the transactions and agreements. They did not achieve the level of success they currently enjoy by making poor business decisions," he further noted.

Michael N. Kreitzer has a broad commercial trial practice, with extensive experience in both jury and non-jury cases in state and federal trial courts, as well as appellate courts. His practice focuses on complex commercial disputes, construction litigation and shareholder and partnership disputes. He also represents clients in eminent domain concerns, trusts and probate matters, common carrier law and product liability disputes, as well as intellectual property claims, professional malpractice and commercial landlord/tenant disputes. Mr. Kreitzer has substantial experience in all aspects of construction matters and litigation, and is a Florida Bar Board Certified Attorney in Business Litigation.

About Bilzin Sumberg 
Bilzin Sumberg is a commercial law firm based in Florida. The Firm’s core practices include Business Finance & Restructuring, Corporate, Environmental, International, Land Development & Government Relations, Litigation, Real Estate, and Tax. For more information, please visit bilzin.com

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Michael N. Kreitzer

Michael N. Kreitzer

Partner, Litigation Practice Group Chair
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