News story

NMHG, Lilly resolve dispute on website access

Wednesday, 18 January 2012 ( #548 ) - Memphis, TN, United States
Equipment manufacturer Nacco Materials Handling Group Inc (NMHG) and forklift dealer Lilly Co have resolved a legal dispute after 47 weeks. An earlier dispute took five years to resolve. In the latest case, NMHG, through its Yale Materials Handling Corp unit, had alleged "Lilly accessed Yale's secure website without authorisation and accessed proprietary information, which was stored on computers in Ohio, Illinois, and Washington" causing damage to its business. On 4 January, District Judge S Thomas Anderson signed a final judgement reflecting a compromise. The judgement permanently prevents Lilly from accessing secure NMHG property and dismisses the case with "each side to bear its own costs and attorneys' fees". "In its verified complaint filed with the court, NMHG alleged, among other things, that it had suffered competitive injury due to Lilly Co's misappropriation of trade secrets in violation of applicable state and federal law," Michael Lockerby, representing NMHG, says in a statement. Lockerby is an attorney with the Washington, DC, law firm of Foley & Lardner LLP. "The parties agreed to move on and came to an agreement to resolve it," Jeffrey Smith, representing Lilly, says in a telephone interview. Smith is a partner in Memphis with the law firm of Adams and Reese LLP. NMHG filed the federal suit on 22 February 2011 in the court for the eastern district of North Carolina in Raleigh, but, at Lilly's request, the case was transferred on 25 May to the court for the western district of Tennessee in Memphis. Memphis-based Lilly was blunt in its 30 June motion for dismissal: "NMHG's complaint is filled with conclusions looking for facts. The few facts alleged do not raise NMHG's right to relief above a speculative level. "Though NMHG has alleged Lilly accessed its Yale dealer website, it has not alleged any facts showing the user ID and password were acquired by improper means. More to the point, it has not alleged any facts showing it has suffered any actual damage as a result of the alleged access. It has not pled any facts showing loss of customers, loss of business, loss of sales or any other loss. The complaint should be dismissed in its entirety." Lilly contests the facts and implications in NMHG's exhibit A, which lists 150 individual Lilly user names by location along with their respective computer hardware, internet protocol addresses, installation dates and equipment serial numbers. In Tennessee, the list for the Memphis facility had 50 name lines; Knoxville, 24; Jackson, 10; and Kingsport, six. In Mississippi, the Tupelo and Richland sites each listed 14 name lines and Biloxi had four. Alabama's Birmingham listed 18 and Madison six, and lone Arkansas location in Jonesboro recorded four. The exhibit also reported six computer servers functioning in the Memphis facility. Yale is an NMHG operating division. The group's publicly traded parent firm, Nacco Industries Inc, is based in Mayfield Heights, Ohio. Currently, family-owned and operated Lilly represents Toyota Material Handling USA Inc (TMHU) equipment in Memphis, Jackson, Richland, Biloxi, Tupelo and Jonesboro. The Lilly branches in Kingsport, Knoxville, Birmingham and Madison represent the lines of Clark Material Handling Co, Doosan Infracore America Corp, and Linde Material Handling North America. In the earlier litigation, NMHG's Yale unit sued Lilly and Yale competitor TMHU on 30 July 2003 alleging a complicated breach in dealer relationships in the US mid-south. That dispute went through numerous legal iterations. In January 2008, when Lilly sold a Yale territory to KMH System Inc, of Dayton, Ohio, Yale terminated Lilly as a dealer ( News #344). Lilly had represented the Yale brand for five decades at numerous locations in the mid-south. Apparently, in the most recent case, neither NMHG nor Lilly wanted to go through another five-year litigation slog.