A federal judge has thrown out a $100 million jury award against Caterpillar in a 10-year-old legal battle. The suit was filed by now-defunct International Construction Products over a terminated agreement for direct online sales of Chinese construction equipment in the U.S.
A jury awarded the $100 million in April 2024 after an eight-day trial in which it determined Caterpillar wrongfully interfered with a contract between North Carolina-based ICP and IronPlanet. The amount was awarded as damages for future financial losses to ICP and its founder, Tim Frank.
The deal involved IronPlanet, an online seller of used construction equipment, setting up an online storefront in 2014 to sell new Lonking heavy equipment imported from China by ICP. At the time, IronPlanet was also in merger negotiations with Cat Auction Services. A month after the ICP deal was announced, IronPlanet terminated it. The Cat Auction Services merger was approved. Iron-Planet was sold in 2017 to Ritchie Bros. auction services.
ICP sued Caterpillar in 2015, alleging it illegally conspired to pressure and boycott IronPlanet by calling off the Cat Auction Services merger if it allowed the ICP relationship to continue. Caterpillar denied ICP’s claims, arguing its conduct was lawful, justified and did not prevent competition.
In April 2024, a jury rejected ICP’s antitrust claims against Caterpillar but sided with ICP on its allegations of “tortious interference.” Tortious interference is a legal term for intentionally causing a third party to breach a contract.
Judge Vacates $100M Award
On March 31, almost a year after the $100 million verdict, U.S. District Judge Richard G. Andrews ordered that the jury’s damages award be tossed out.
Andrews, who presided over the 2024 trial, ruled that ICP’s estimated earnings projections of “hundreds of millions of dollars” for five years into the future “can only be characterized as speculative.” He wrote that the plan to sell heavy equipment online in 2014 was a new endeavor, and no Lonking products had been sold.
“… I think ICP failed to show damages with reasonable certainty,” he wrote.
The judge, however, rejected Caterpillar’s request to overturn the tortious interference verdict. He wrote that the jury could reasonably conclude that IronPlanet breached its contract with ICP as a result of Caterpillar’s conduct.
The judge also rejected Caterpillar’s request for a new trial on the interference verdict and said a new trial on the damages award was moot since he had vacated it.
Caterpillar has filed an appeal to the U.S. Court of Appeals 3rd Circuit.
The judge also denied ICP’s request for a new trial on its antitrust claim against Caterpillar. And he denied ICP’s request that Caterpillar pay it interest on the $100 million before and after the 2024 judgment and cover its legal costs. The judge ruled that was moot since he had vacated the award.
