Fox Rothschild Sued for Malpractice After $6 Million Award Nixed

Fox Rothschild LLP’s lack of preparation in a breach of contract case caused machine supplier Mighty Enterprises Inc. to lose $6 million when the Ninth Circuit reversed a punitive damages award, the company’s suit filed in Los Angeles against the firm says.

The law firm represented Mighty when it sued Taiwanese manufacturer She Hong Industrial Co. Ltd. in 2014 for wrongfully terminating a business agreement. The U.S. District Court for the Central District of California ruled in favor of Mighty, and a jury awarded the company more than $12 million, including $6 million in punitives.

Fox Rothschild failed to present evidence of She Hong’s financial condition or net worth in the punitive damages phase of the trial, Mighty said in the Monday complaint in California superior court.

The partners and attorneys working on the case only provided a general oral argument to the jury in favor of the damages, including a reference to a trial exhibit in the form of a document showing She Hong’s website.

The Taiwanese company appealed the verdict, and the U.S. Court of Appeals for the Ninth Circuit reversed the punitive award. Fox Rothschild’s failure to properly research, analyze, and investigate the evidence to support the verdict constituted professional negligence, the complaint says.

Following the reversal, Fox Rothschild also allegedly misrepresented to Mighty that the reversal was based on a mistake made by the trial court, and not on the firm’s misconduct.

Causes of Action: Professional negligence; breach of contract; breach of fiduciary duty.

Relief: Compensatory damages; pre-judgment and post-judgment interest; attorneys’ fees; costs.

Response: Fox Rothschild didn’t immediately respond to Bloomberg Law’s request for comment.

Attorneys: Lew Law Firm represents Mighty.

The case is Mighty Enters. Inc. v. Fox Rothschild LLP, Cal. Super. Ct., No. 21STCV10055, 3/16/21.