After a jury denied Whirlpool’s attempt to sue its former law firm for legal malpractice, a state appeals panel has handed the appliance giant a second loss, upholding the jury's verdict.
Whirlpool sued the law firm of Faegre Drinker Biddle & Reath LLP as well as individual attorney William Randolph “Randy” Rucker in 2015. In 2010, Rucker told the manufacturer that new anti-dumping and countervailing duties on certain aluminum imports from China would not affect appliance handles Whirlpool bought from Chinese companies. The duties were imposed by the U.S. Department of Commerce in an attempt to prevent Chinese companies from “dumping” extruded aluminum products – that is, selling them for less than cost - in the U.S. market.
After reviewing the new rules, the product specifications, and other documents, Rucker told Whirlpool he believed the handles fell under an exception for “finished merchandise” because they came from China complete and ready to install.
Two years later, U.S. Customs flagged a shipment of handles and required Whirlpool to pay duties at 407% of the value of the handles. When the company reached out to Rucker, he conceded that perhaps the handles were subject to duties after all, and the company could owe duties on handles purchased since 2010.
Whirlpool retained new legal counsel and re-sourced its handle manufacturing to North American companies. It negotiated a duty rate of 16% rather than 407%, and it filed a suit for legal malpractice. It sought damages in excess of $10 million, citing the cost of shipping handles from China when they could have been manufactured in North America; the duties collected on handles shipped after 2010; and legal fees.
During the two-week jury trial, witnesses testified that Whirlpool has a four-point procedure to follow when it is not sure whether a product is subject to duties, and it followed only two of the four parts. Witnesses described Whirlpool as “a sophisticated importer” that should reasonably have known better than to base its entire decision on the opinion of a single expert.
Witnesses for Whirlpool testified that Rucker was negligent in expressing himself with such certainty. The defense responded that Rucker performed due diligence and gave an informed opinion, protecting him from liability. Rucker said he remains confident in his interpretation of the rule, though it turned out to be different from the government’s interpretation.
“Plaintiff argued that a reasonably careful attorney would have advised the client that the law … was unsettled, would not have advised the client with as much certainty as Rucker did, and would not have misread the preliminary determination,” Justice Aurelia Pucinski wrote in the appellate court judgment. “Defendants, on the other hand, argued that they could not be found to have committed malpractice if Rucker made an informed judgment. Rucker reviewed all of the materials he could have and no one offered any evidence he should have reviewed anything else. They also argued he gave a reasoned opinion … no one viewed as off-base or outrageous.”
On appeal, Whirlpool argued the jury should never have received instructions on the informed judgment defense. The appellate justices disagreed, then said it didn’t even matter – the jury was presented with several defenses and returned a general verdict. As long as there was sufficient evidence to uphold the jury’s decision on any one of the defenses, the decision must be upheld.
“Even if the plaintiff is correct that the trial court’s actions constituted error, they would not have affected the outcome of the trial because the jury’s verdict can be sustained on the unrelated grounds of general negligence, causation and plaintiff’s contributory negligence,” Pucinski wrote.
Justices James Fitzgerald Smith and Mary Ellen Coghlan concurred with Pucinski’s judgment.
The decision was issued as an unpublished order under Supreme Court Rule 23, which limits its use as precedent.
According to Cook County court records, Whirlpool has been represented in the action by attorneys with the firm of Tabet Divito & Rothstein, of Chicago.
Rucker and the Faegre Drinker firm have been represented by the firm of Goldberg Kohn Ltd., of Chicago.