On July 26, 2018, a majority, three-judge panel from the U.S. Court of Appeals for the Ninth Circuit granted a new trial to Yujin Robot Co., Ltd., a South Korean electronics manufacturer, in connection with a dispute against its former U.S. distributor, saying the distributor's $2 million jury award rested on insufficient evidence.

Background

In 2013, Yujin and Synet Electronics, Inc. entered into an oral agreement under which Synet would distribute robotic vacuum cleaners that Yujin was introducing to the U.S. market.

After Synet failed to meet its sales quotas or pay Yujin for units it had received, Yujin brought suit seeking over $300,000 for items shipped to the U.S. for distribution. In response, Synet countersued, claiming Yujin breached the contract.

In 2016, prior to the start of a jury trial, Yujin was awarded summary judgment on liability, with damages to be determined at trial. Synet, on its counterclaim, sought nearly $3 million from Yujin for "losses, potential losses and end-user returns," among other things, though it failed to produce any documentary evidence corroborating that amount.

"Despite displaying a stack of papers to the jury that purportedly represented purchase orders from Amazon.com, Synet actually introduced into evidence a single invoice and purchase order for roughly $18,000 from one of four retailers," and no other papers showing canceled orders, the panel said.

After the jury awarded Synet over $2 million on its counterclaims and nothing to Yujin, Yujin appealed.

On Appeal

In reversing the jury's verdict and granting Yujin's request for a new trial, the Ninth Circuit found that the lower court applied the wrong standard for proving lost profits, calling the original $2 million verdict "without a doubt excessive under the correct legal standards...[and] unsupported by any of the kind of evidence required under California law."

The court also emphasized the rarity of its decision, citing the "high standards of review" in place for remanding a case for a new trial on damages.

Click here to read the full decision.

The Pryor Cashman Team

Representing Yujin in this matter was Litigation Partner Philip Hoffman and Associate Alex Goldberg.

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