Kramer Levin Client Sirius XM Radio Wins Appeal

Kramer Levin has represented Sirius XM Radio Inc. (Sirius) in the successful defense of claims brought in an AAA arbitration by U.S. Electronics, Inc. ("USE") arising from agreements between Sirius and USE that gave USE a non-exclusive right to design, manufacture and distribute radios capable of receiving the Sirius satellite radio service. USE asserted claims of breach of contract, breach of the implied covenant of good faith and fair dealing, tortious interference with contract, tortious interference with prospective business relations and unfair competition; USE further alleged that Sirius acted in bad faith so as to preclude the enforcement of a limitation of liability provision excluding lost profits damages. USE sought $133 million in damages. The case was tried before a panel of three arbitrators and consumed 20 days of hearings. After extensive post-hearing submissions and closing arguments, the panel  issued a 149-page Award dismissing with prejudice all of USE’s claims, finding in great detail that none of the allegations of wrongdoing had been proven and that Sirius had acted in good faith,  enforcing the limitation of liability provision, and denying USE any recovery. USE subsequently filed a petition to vacate the Award in Supreme Court, New York County, alleging evident partiality on the part of one of the arbitrators and also alleging that the panel exceeded their power and acted in manifest disregard of the law. Sirius cross-moved to confirm the Award. The Commercial Division of the Supreme Court denied USE‘s petition, granted Sirius’ cross-motion and entered judgment confirming the Award. USE appealed from this judgment to the Appellate Division - First Department on the issue of alleged evident partiality. On May 11, 2010, the Appellate Division entered its unanimous decision and order, ruling against USE and in favor of Sirius by affirming the judgment."

The Kramer Levin defense team was led by litigation partners Michael S. Oberman (who served as lead trial counsel and argued both the motions in the Commercial Division and the appeal) and Intellectual Property partners Peter Abruzzese and Nicholas L. Coch. Other members of the team are Litigation partner Charlotte Moses Fischman, Litigation counsel Eve Preminger, Litigation special counsel Yehudis Lewis, Litigation associate Michael Eisenkraft and Intellectual Property associate Mark Baghdassarian.