Judge Triples Amount Toyota Must Pay Clark in Forklift Case

A federal court judge in North Carolina last week tripled the award Toyota Material Handling USA must pay Clark Material Handling Company in connection with a lawsuit involving competition in the forklift market in the Southeast.

Toyota must now pay Clark three times the original $3 million a federal court jury awarded Clark Material Handling in connection with a lawsuit, plus all of Clark’s legal fees and interest dating back to 2012 — totaling more than $11 million.

The jury trial in the case of Clark Materials Handling Co. versus Toyota Material Handling USA Inc. (TMHU) — which originally was filed in August, 2012 — stemmed from a complaint by Clark that Toyota “pressured, coerced and intimidated” a Charlotte heavy equipment dealer to stop selling Clark equipment.

Clark Cries ‘Foul!’

Clark claimed that Toyota used unfair competition, tortious interference with contract, and tortious interference with prospective economic advantage when it allegedly coerced Southeast Industrial Equipment Inc (SIE) to stop offering Clark products to its customers. The suit also accused Toyota of violating anti-unfair trade practice acts in both North and South Carolina.

After the trial, Toyota issued this statement:

“While the jury returned a mixed verdict … the judge ordered more briefing before he enters a final judgment. The judge indicated that there is still more work to be done before the case is complete.”

Clark Celebrates, Toyota Appeals

A Clark spokesperson said the company was pleased with the verdict.

Toyota already has filed an appeal of the judgment, citing legal and evidentiary errors that were made during the trial.

During the trial, which was held last February, the eight-person jury found that Toyota:

1. Wrongfully interfered with a contract right between Clark and SIE

2. Wrongfully interfered with a prospective economic advantage attained by Clark in its contract with SIE

3. Coerced SIE into terminating its dealer relationship with Clark, causing the dealer to stop purchasing forklifts made by Clark

4. Unlawfully coerced SIE to end its relationship with Clark by threatening to terminate SIE’s Toyota dealership in Richmond, Virginia

The jury voted “no” on a charge that Toyota unlawfully coerced SIE to end its relationship with Clark by unfairly demanding that SIE issue a retraction or denial of an article on ForkliftAction.com, in which it reported that SIE had become a Clark dealer.

Competition in the Carolinas

According to court filings filed jointly before the trial, SIE has offered Toyota products to its customers in the Carolinas and Virgina since 1987. The dealership’s current non-exclusive agreement was initiated April 18, 2012 and is due to expire April 17 of this year. The document authorizes SIE to sell other forklift brands and the dealership currently offers Aisle-Master, Hoist and Combilift vehicles.

In January 2012, SIE started to consider adding Clark to its product offering and the dealership notified Toyota of its intention in April 2012 and began selling Clark forklifts in July of that year.

But the dealership abruptly announced that it was terminating its deal with Clark later that same month, citing a “perceived conflict with its current vendor” which was identified in court documents as Toyota.

Clark’s attorneys, led by Natalma McKew and Evan Margosian Sauda — charged that SIE was unfairly influenced by Toyota to dump its deal with Clark. Toyota was represented in the case by attorney Paul Joseph Osowski.

TMHU is headquartered in Columbus, Indiana but is owned by Toyota Industries Corp, of Kariya, Japan. Clark is based in Lexington, Kentucky and is owned by Young An Hat Co. Ltd, of Bucheon, South Korea.

Both companies compete in the forklift trucks and parts market in the Southeastern US, but Toyota enjoys a substantially larger market share. Clark has only 2 to 3% of forklift market in that region. Toyota forklifts are sold by 67 dealers, and Clark’s vehicles are sold by 79 dealers.