West Electronics Sales Team v. Rubycon America, Inc.

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California Court of Appeals, Fourth Appellate District (Super.Ct. No. 759129, 1999) (unpublished opinion)

West, a manufacturer’s representative sued Rubycon, a manufacturer of electronics for violations of the Illinois Sales Representative Act for excluding three accounts from West’s sales territory and for eventually terminating the agreement between the parties without allegedly paying all commissions due. The case went to trial in which an Orange County jury awarded West compensatory damages and exemplary damages under the Act. The Fourth District Appellate Court reversed the decision of the trial court finding that the evidence did not support the imposition of exemplary damages.

The California appellate court found that “to justify the imposition of punitive damages under Illinois law, the defendant’s conduct must be ‘intentional, deliberate and outrageous.’” Rubycon, at p. 7 (quoting Roboserve v. Kato Kagaku Co., Ltd., 78 F.3d 266, 2765-276 (7th Cir. 1996). In quoting the Seventh Circuit’s decision in Roboserve,  the California Fourth District Appellate court said: “rather than evidence of outrageous conduct, what emerges from a review of the facts is a picture of a highly competitive marketplace with sophisticated advocates on all sides jockeying for position and profit.” Rubycon at pps. 7-8 (quoting Roboserve,  at 276). The California court found a similar situation in the case before it. It noted that West had testified that the electronics industry was extremely competitive and that he tolerated commission reductions for several years because the arrangement continued to be profitable for his company. Further the court noted that “although the jury found Rubycon breached the OEM Agreement, Rubycon’s reliance on the partial termination clause to justify its conduct was not unreasonable or outrageous and certainly does not suggest an evil motive or intent to harm.” Id. at 8. Accordingly, the California appellate court reversed the punitive damage award by the trial court.