AmLaw Litigation Daily Profiles Kramer Levin Arbitration Victory for Sirius

On August 27, 2008, an AAA Arbitration Panel issued a 149-page Award dismissing with prejudice all claims of U.S. Electronics, Inc. ("USE") against our client Sirius XM Radio Inc. ("Sirius")--a resounding and unqualified victory. USE was licensed for a three-year term to develop and market radio receivers and accessories compatible with the Sirius broadcast service. In an arbitration lasting over two years and consuming 20 days of hearings, USE alleged that Sirius breached the parties' contract in bad faith (so as to overcome limitation of liability provisions) and tortiously interfered with USE's relationships with retail stores and manufacturers of the receivers. As reflected in the length of the hearings, USE leveled dozens of allegations against Sirius, such as wrongfully withholding from USE a fair allocation of the core chip sets required to make a receiver; favoring another licensee of Sirius; denying USE access to Sirius' latest technology; and improperly denying type acceptance approval for USE's proposed products. USE sought up to $133 million in damages, mostly claimed lost profits attributable to lost sales allegedly caused by Sirius' supposed wrongdoing. The Panel's Award--which closely tracks Sirius' proposed findings of fact and conclusions of law--finds in great detail that none of the factual allegations was proved and that Sirius acted in good faith; rejects each claim for liability; and concludes that Sirius' central legal argument was correct such that the claim for lost profits is also barred by the limitation of liability provisions. The defense team was led by Peter A. Abruzzese, Nicholas L. Coch, Michael S. Oberman (Lead Trial Counsel), and included Mark Baghdassarian, Jean-Paul Ciardullo, Yehudis Lewis, Matthew B. Moses, Jonathan A. Popolow, Scott Ruskay-Kidd, Juliana Oliveira and Neil Pakrashi.

AmLaw Litigation Daily profiled the victory in the September 2, 2008 issue.