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Second Round of Sanctions May Cost Motorola

Jordana Mishory
Daily Business Review
June 17, 2008

In 2007, the company was hit with nearly $23 million in sanctions for willfully violating a court order after a trial ended in 2006 with a deadlocked jury.

A Broward Circuit judge has ruled Motorola could be forced to pay more money in a second round of sanctions to a defunct company suing in a $10 billion trade secrets case.

Judge Jeffrey Streitfeld decided that Motorola's renewed motion to stay proceedings pending appeal was "frivolous and filed in bad faith." 

A retrial scheduled for Monday has been reset for July 28.

Motorola is defending itself in a lawsuit filed by SPS Technologies of Fort Lauderdale, Fla., which claims the third-largest cellular handset maker stole its idea for a satellite vehicle-tracking device.

Motorola was hit with nearly $23 million in sanctions in 2007 for willfully violating a court order after a two-month trial ended in November 2006 with a deadlocked jury.

The Schaumburg, Ill.-based telecommunications company has appealed the sanctions imposed by Broward Circuit Judge Leroy Moe and his denial of a directed verdict to the 4th District Court of Appeal.

Streitfeld took over the case from Moe last fall when the case was moved into the complex litigation unit, and the company filed its third motion for a stay pending appeal last month.

Motorola contends the appeals court should rule before a retrial, and a stay would be the "most efficient use of scarce judicial resources." But Streitfeld ruled June 4 in a two-page order that Motorola must pay for the time SPS spent responding to the latest motion for a stay.

The last time Motorola was sanctioned in the case, SPS attorney Willie Gary proposed an hourly fee of $11,000, which was knocked down to about $1,000 an hour.

The flamboyant attorney with Gary Williams Finney Lewis Watson & Sperando in Stuart claimed Motorola's appeal has no effect on the pending retrial. "You don't appeal an issue when you have a jury that couldn't reach a verdict," he said. "It's unheard of. You just don't do it."

Gary said the judge had enough of Motorola's delaying action. He had no estimate of the number of hours put in by his firm on Motorola's motion to stay.

Motorola attorney Faith Gay, a partner at Quinn Emanuel in New York, said she is confident about the appeal pending in the 4th DCA. She said Motorola may appeal Streitfeld's denial of a stay.

SPS sued in 2002 alleging Motorola stole the technology to develop a satellite system to track vehicles after the two companies broke off negotiations on a joint venture.

Moe agreed with Motorola's request that experts could not read the testimony of witnesses during the 2006 trial. In January 2007, Moe ruled Motorola violated the order and prejudiced the plaintiff's case, likely causing the deadlocked jury. Moe later awarded SPS attorneys $20 million in fees and $2.9 million in costs. Motorola appealed the sanctions and Moe's denial of a directed verdict on grounds that SPS had not proved legally sufficient damages.

On the stay issue, Streitfeld concluded Motorola's third request was frivolous. He made comments about the request at several hearings before denying it.

"This defendant could have easily said, 'Judge, we object to going to trial until the appeal is concluded,'" the judge said at a May 16 hearing. "If they had done that, I might have respected that."

Motorola renewed its motion for stay pending appeal May 27 and expressed concern that SPS would argue Motorola waived its appeal on the directed verdict issue even though Motorola has asked for a stay twice before. Moe rejected one, and Streitfeld rejected the other.

If the 4th DCA rules in favor of Motorola, the company contends, "That decision will moot the need for any retrial or further appellate review of those issues."

In another motion filed May 27, Motorola asked for a trial continuance to obtain additional deposition testimony from one of SPS' experts and file a dispositive motion on SPS' new software theory. Streitfeld granted the requests.

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