Cases & Deals

Garmin wins Second Circuit affirmation of dismissal of $1.9 billion in breach of contract and fraud claims

Clients Garmin International, Inc.

Jones Day client Garmin International, Inc. ("Garmin") obtained the dismissal of a multi-billion-dollar claim, as well as the plaintiffs’ payment of a confidential sum to Garmin, in settlement of a case brought by plaintiffs LightSquared, Inc., LightSquared LP; and LightSquared Subsidiary LLC (collectively, "LightSquared"). The case concerned the use of electromagnetic spectrum for GPS and a newly proposed communications network. LightSquared initially brought the case as an adversary proceeding in the United States Bankruptcy Court for the Southern District of New York. After successfully moving to withdraw the LightSquared case to the Southern District of New York, Garmin and the other defendants moved to dismiss the complaint. In its complaint, LightSquared had alleged that Garmin and other defendants should have warned LightSquared before the GPS industry filed objections with the FCC regarding a new cell phone and broadband network proposed by LightSquared. Following the GPS industry's objections, the FCC declined to approve LightSquared's plans for its communications network and LightSquared ultimately declared bankruptcy.

On February 5, 2015, U.S. District Judge Richard Berman granted defendants' motion to dismiss with respect to all of LightSquared's claims except for a narrow failure to warn theory. In dismissing LightSquared's breach of contract claim, the District Court stated that the alleged promises by defendants "are conclusory, vague and open-ended and say nothing about what specifically Defendants may or may not do." The court further stated, "It is implausible that such allegedly significant commitments, which purportedly bound Defendants' operations and FCC contact in perpetuity, would be left out of the parties' [agreements]."

Following the Court's ruling on the motion to dismiss, Jones Day assisted Garmin in conducting written discovery, collecting and producing documents, taking and defending depositions of senior executives, and obtaining discovery from third-parties. In December 2015, prior to the close of discovery, LightSquared agreed to dismissal with prejudice of all its remaining claims, restrictions on LightSquared's contemplated cell and broadband network and payment of confidential monetary consideration to Garmin.

In a related case brought by investors in LightSquared, Garmin and other GPS industry defendants won a Second Circuit decision affirming the dismissal of Harbinger Capital Partners LLC's $1.9 billion suit arising out of the LightSquared, Inc. bankruptcy. After LightSquared's bankruptcy, Harbinger filed suit in the Southern District of New York for securities and common law fraud and breach of contract, among other claims. On February 5, 2015, U.S. District Judge Richard Berman issued a forty-page opinion granting defendants' joint motion to dismiss Harbinger's complaint with prejudice. On December 7, 2015, following oral argument by the parties, the Second Circuit issued a summary order affirming the dismissal.

Harbinger Capital Partners LLC v. Deere & Co., No. 13-CV-5543 (RMB) (S.D.N.Y.); No. 15-408 (2d Cir.); LightSquared Inc. v. Deere & Co., No. 13-CV-8157 (RMB) (S.D.N.Y.)

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