Md. high court lets stand judge’s slash of $20M award to $1

A judge’s slashing of a $20 million jury verdict to $1 will stand after Maryland’s top court on Monday declined without comment to hear a Baltimore defense company’s argument that Beretta U.S.A. Corp. should be held fully liable for having breached a nondisclosure agreement regarding improvement to the AR-15 rifle.

In a one-line order, the Court of Appeals refused to disturb Baltimore County Circuit Judge Vicki Ballou-Watts’ decision that Beretta is liable only for fees and compensation received under its NDA with Adcor Industries Inc. and not for unjust enrichment or consequential damages that the jury found. Ballou-Watts added that Beretta had received no fees and compensation in breaching the NDA.

The intermediate Court of Special Appeals later affirmed the judge’s decision, prompting Adcor’s unsuccessful request for Court of Appeals review.

Neither Adcor’s attorney, Thomas M. Donnelly, nor counsel for Beretta responded immediately Tuesday to requests for comment on the high court’s denial of review.

Donnelly heads the Law Offices of Thomas M. Donnelly LLC in Baltimore. Beretta was represented by T. Sky Woodward, John Parker Sweeney and Marc A. Nardone of Bradley Arant Boult Cummings LLP in Washington.

Adcor sued Beretta in 2015, accusing the firearms manufacturer of having misappropriated work done by Adcor to improve the AR-15 rifle. Adcor said it provided samples of its improved AR-15 in October 2012 but claimed that by then Beretta had planned to retain Adcor’s trade secrets on improving the rifle in violation of their agreement.

The Baltimore County Circuit Court jury deliberated for roughly three-and-a-half hours in December 2018 before returning the $20 million verdict, meant to compensate Adcor for research and development done in contemplation of the partnership with Beretta as well as lost revenue.

But in February 2019 Ballou-Watts granted Beretta’s motion for judgment notwithstanding the verdict and reduced the damages to a dollar. Ballou-Watts said the evidence at trial failed to show Adcor had suffered more than just nominal financial damages of fees and compensation as provided under the NDA.

The Court of Special Appeals agreed with Ballou-Watts in an unreported 3-0 decision in March.

“(A)lthough in retrospect Adcor wishes it bargained for a broader remedy that included any benefit conferred upon Beretta, the role of the courts is not to alter the negotiated allocation of risks just because one of the parties comes to regret the deal it made,” Judge Steven B. Gould wrote for the Court of Special Appeals. “If we did, the unfairness to Beretta would be palpable.”

Gould was joined in the opinion by Judges Gregory Wells and James R. Eyler, a retired judge sitting by special assignment.

The Court of Special Appeals rendered its decision in Adcor Industries Inc. v. Beretta U.S.A. Corp., No. 118, September Term 2019.

Adcor’s request for high court review was docketed at the Court of Appeals as Adcor Industries Inc. v. Beretta U.S.A. Corp., Pet. Docket No. 103 (2021 Term).