Park Electrochemical Corp. v. Delco Electronics Corp.

MEMORANDUM *

We affirm the jury verdicts on appeal, as well as the denial of Nelco’s attorneys fees. We reverse the denial of Nelco’s costs. Because the facts are familiar to the parties, we recount them only as necessary to explain our decision.

1. The district court did not prejudice Nelco by refusing its request to modify the jury instructions on the breach of contract claim. The additional sentence Nelco requested simply repeated, in slightly different words, the explanation contained in the jury instructions given. That instruction stated that the buyer could not “reduce or eliminate its requirements solely to avoid its contract with the seller.” The instruction thereby limited the “legitimate business reason” referred to in the next sentence of the instruction in very much the same manner as the sentence Nelco sought to add. Nelco could not have been prejudiced by the district court’s refusal to adopt Nelco’s language. See Swinton v. Potomac Corp., 270 F.3d 794, 806 (9th Cir.2001) (absent prejudice from instructional error, new trial not warranted).

2. Because the jury found for Delco on the breach of contract claim, Delco argues, Delco cannot be liable on the good faith…

dissenting in part.

Because I believe Nelco was prejudiced by an erroneous jury instruction on the breach of contract claim, I respectfully dissent from Section 1 of the memorandum disposition. Nelco timely objected to the proposed instruction and sought additional language which would have ameliorated the error, satisfying the requirements of Rule 51. See Fed. R. Civ. Pro. 51.

The district court instructed the jury on the breach of contract claim as follows:

The error in this case was instructing the jury that it need only find that Delco had a legitimate business reason for terminating the contract to rule in Delco’s favor. At a minimum, the court needed to define “legitimate.” As it stood, the instruction erroneously permitted the jury to conclude that any business reason for terminating the contract (including the desire for greater profitability) was valid. The instruction effectively created an option contract for Delco, which the case law has uniformly held a requirements contract is not. See, e.g., Empire Gas Carp. v. American Bakeries Co., 840 F.2d 1333, 1340 (7th Cir.1988).

A

As a matter of common-sense, for the buyer to terminate a requirements contract in good…