In a recent case decided by the United States District Court for the District of Colorado, Rosenbauer America, LLC (“RBA”), a Delaware limited liability company that manufactures fire and emergency vehicles, faced a lawsuit filed by Max Fire Apparatus, Inc. (“Max Fire”), a Colorado corporation engaged in selling and distributing RBA vehicles. Max Fire alleged that RBA’s termination of the Dealer Agreement constituted breaches of the Dealer Agreement and the associated Dealer Handbook, as well as a violation of the duty of good faith and fair dealing. RBA filed a Motion for Partial Summary Judgment, seeking to preclude Max Fire from recovering damages for future lost profits or business value resulting from the termination of the Dealer Agreement. Max Fire opposed this motion, to which RBA replied. The court ultimately partially granted and partially denied the motion. Max Fire and RBA entered into a Dealer Agreement in 2016.  The Dealer Agreement was set to automatically renew annually unless terminated in writing by either party. Termination of the Agreement required written notice within thirty days via Certified Mail by either party. The agreement also referenced a “Dealer Handbook,” which required Max Fire to adhere to RBA’s established policies and the latest version of the Handbook. In November 2022, Max Fire received the August 2022 version of the Dealer Handbook. The Handbook included a termination section stating that termination, while uncommon, could occur due to non-performance, marginal performance, or critical ethical failures. Termination decisions would be based on reasons deemed adverse to […]

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In a recent case decided by the Court of Chancery of Delaware, California Safe Soil, LLC (“CSS”) filed a lawsuit against KDC Agribusiness, LLC (“KDC”) and its officers—Hal, Matthew, Justin, and Barry Kamine (“Individual Defendants”)—alleging trade secret misappropriation, tortious interference with a contract, conspiracy, unjust enrichment, and fraud. The claims revolved around CSS’s innovative process for recycling food waste into a nutrient-rich byproduct, which could be used to create environmentally friendly fertilizers and animal feed. CSS sought to protect this process as a trade secret. The law of trade secrets including trade secret misappropriation frequently is an issue in disputes regarding franchise, dealer agreements and license agreements in general. On December 11, 2015, CSS entered into a License Agreement with KDC, granting KDC a nonexclusive license to use the CSS Process under specific terms. The agreement required milestone payments tied to facility development and running royalties on product sales. KDC was also provided the option for exclusivity if certain financial obligations were met. KDC sought to leverage the CSS Process to construct a large-scale facility in Pennsylvania, aiming to expand production. However, disagreements arose when KDC stopped making the required payments under the agreement, resulting in CSS terminating the license. Despite this, KDC continued to utilize the CSS Process without authorization and did not pay royalties, prompting CSS to initiate legal action. Legal Issues The central legal issue before the court was whether the CSS process qualified as a trade secret under both federal and Delaware law and, if so, […]

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