A federal judge in New York has dismissed a $130 million breach of contract lawsuit against Dallas-based infrastructure company Arcosa and its subsidiary, Trinity Meyer Utility Services.
The dismissal marks a win for a team of Texas-based Gibson, Dunn & Crutcher lawyers and Arcosa Chief Legal Officer Bryan Stevenson, who was described by Gibson Dunn’s Mike Raiff as “very involved” in the case’s strategies. Arcosa Associate General Counsel Justin Allen was also heavily involved in the case. The lawyers said they pursued an “aggressive litigation strategy” to get the case dismissed.
The lawsuit, brought by Tennessee-based Thomas & Betts Corp., began in 2019 over an argument about the indemnification provisions of a contract drawn up between the parties when T&B sold its steel structure business to Trinity Meyer in 2014.
All the companies involved have different identities since entering their 2014 purchase agreement. T&B is now known as ABB Installation Products. Trinity Meyer, once a part of Dallas-based Trinity Industries, is now known as Meyer Utility Structures and is owned by Arcosa, which spun off from Trinity Industries in 2018 as an independent company.
“As a new company, [Arcosa] was facing a substantial, $130 million claim, so it was important to this new company to be able to get rid of this claim at an early stage and not spend years in discovery fighting it,” Raiff, a partner in Gibson Dunn’s Dallas office and lead lawyer on the case, told The Texas Lawbook.
Chicago lawyer James Figliulo, the lead attorney for T&B, did not immediately respond to a request for comment.
The dispute surfaced because of warranty claims that a non-party in the litigation, Electric Transmissions Texas, brought because electrical transmission towers it purchased from T&B in 2011 needed to be replaced. T&B argued that its contract with the defendants held them responsible, while the defendants argued the opposite.
The case began in New York state court, but the defendants moved it to federal court in September 2019. By January, the defendants had added six counterclaims of their own and asked U.S. District Judge Paul Engelmayer to dismiss T&B’s lawsuit.
On Thursday, Judge Engelmayer sided with the defendants on all their arguments, dismissing the case with prejudice. The Gibson Dunn lawyers said Judge Engelmayer sided with them on three important points: 1) T&B was required to comply with the claim notice provisions of the 2014 asset purchase agreement (APA) before pursuing a claim against Meyer, 2) the claim notice requirements were conditions precedent in the lawsuit, and 3) T&B failed to allege compliance with the claim notice provisions and therefore failed to allege that it satisfied the required condition precedent.
The defendants also argued Arcosa was never a party to the APA, and Judge Engelmayer cited that as another reason for why the suit should be dismissed.
The judge also dismissed the defendants’ counterclaims because he found that they were “premised on T&B’s claim that Meyer is liable for the ETT Warranty Claims.”
“From the start we thought this was meritless, but it’s always challenging to convince a court to throw out a $130 million claim at the motion to dismiss stage,” Raiff said. “For us, Judge Engelmayer completely understood the underlying contract and the parties’ obligations, and in the end, he didn’t have a problem with throwing it out at an early stage.”
Raiff said he has worked on cases with Arcosa CLO Stevenson since his days as associate general counsel of Blockbuster. Stevenson was also a client before the Arcosa spinoff, when he served as associate general counsel of Trinity Industries.
The Gibson Dunn team also included New York partner Reed Brodsky and Dallas associates Christine Demana, Bryan Clegg and Matt Scorcio.