Forklift dealer Lilly Co has paid more than USD500,000 as part of a negotiated settlement with equipment manufacturer Nacco Materials Handling Group Inc (NMHG).

NMHG, through its Yale Materials Handling Corp division, sued Lilly on 22 February 2011, alleging that Lilly accessed Yale's secure website without authorisation and viewed proprietary information. Access to the website is restricted to authorised Yale dealers.

On 4 January, Judge S Thomas Anderson in the US District Court in Memphis signed a final judgment (Forkliftaction.com News #548) incorporating a 20 December settlement agreement between the parties, granting a permanent injunction against Lilly, granting additional inspection and other rights to NMHG and providing for Lilly's "payment of a significant six-figure amount to NMHG", says Brett Schemerhorn, vice president of marketing with the NMHG Americas division in Greenville, North Carolina.

"The Lilly Co admitted to improperly accessing and using confidential information that is provided for the benefit of our authorised dealers and is not publicly available," Schemerhorn says. "The Lilly Co admitted to illegal actions, is paying a significant sum to NMHG for its actions and is under a court order that controls their future actions."

In a 16 November opinion leading to sanctions against Lilly, Magistrate Judge Diane K Vescovo said: "Lilly failed to take reasonable steps to preserve, search for and collect potentially relevant information... Lilly's failure to take reasonable steps may have resulted in the destruction of relevant evidence."

Lilly has another view. "As previously reported, the parties compromised in order to end this dispute," says Jeffrey Smith, a Memphis attorney representing Lilly. "Lilly remains confident the court would have granted its motion to dismiss and would have overturned Magistrate Vescovo's erroneous order. As shown in its court papers, Lilly was given access to NMHG's dealer website by one of its authorised dealers."

Smith adds: "The last lawsuit filed by NMHG against Lilly took over five years and a number of appeals to resolve, ultimately affirming Lilly's position. Lilly chose to put this matter behind it to focus on selling forklifts."

Under the final order, the court retains jurisdiction to enforce the settlement agreement for a period of at least one year.

Memphis-based Lilly represented Yale for five decades in certain mid-south US markets until Yale terminated the relationship in January 2008.

Currently, Lilly represents Toyota Material Handling USA Inc in six Tennessee, Mississippi and Arkansas markets. Certain Lilly branches represent the lines of Clark Material Handling Co, Doosan Infracore America Corp and Linde Material Handling North America.

Yale Materials Handling is an NMHG operating division. The group's publicly traded parent firm, Nacco Industries Inc, is based in Mayfield Heights, Ohio near Cleveland.