Summary: Whirlpool has alleged that, due to bad advice from an attorney, it now faces significant fines and penalties.
A partner in Drinker Biddle & Reath’s Chicago office is facing malpractice claims from Whirlpool, the Cook County Record reports. The appliance maker has blamed the attorney for giving the company bad legal advice; namely, that the company could continue to import aluminum appliance door handles from China. However, the company may now face additional trade duties, according to federal regulators.
On July 28, Whirlpool filed a suit in Cook County Circuit Court against the law firm and attorney William Randolph “Randy” Rucker. The complaint lists a single count of professional malpractice against Rucker and the firm.
In May, another Drinker Biddle & Reath attorney was accused of overbilling a client.
In the complaint, Whirlpool states that it has imported “aluminum extruded products” from China for years, specifically the door handles that are installed on Whirlpool appliances.
In 2010, the company became aware of an investigation that was conducted by federal regulations from the U.S. Commerce Department. The investigation centered on “dumping,” or the selling of imported items for less than they are worth by Chinese extruded aluminum product makers and distributors.
When it learned about the investigation, Whirlpool alleges that it contacted Rucker and the firm to ask what it meant for their business. The complaint reads, “Commerce Department orders regarding countervailing and antidumping duties tend to be detailed, complex, densely worded and difficult for non-experts to understand. Thus Whirlpool and others who import goods typically rely upon outside legal experts for advice in such matters.”
Whirlpool’s complaint continued, “Rucker and Drinker Biddle hold themselves out to be experts in the field of U.S. customs and trade law,” so the company did not doubt Rucker’s opinion when he said that Commerce Department notices regarding the dumping practices related to imported Chinese extruded aluminum products did not apply to the company’s door handles.
Katten Muchin Rosenman also faces a malpractice suit.
The complaint included a September 9, 2010 email from Rucker to a customs analyst at Whirlpool, who asked two days prior “whether Whirlpool should begin to deposit the estimated countervailing duties required for goods subject to the Sept. 7, 2010 Commerce Department notice.”
In response, Rucker “advised Whirlpool that Whirlpool’s ‘final finished door handles that are made from extruded aluminum would not be covered by the scope of the investigation,’ and thus were not subject to countervailing or antidumping duties.”
Two years later, after receiving similar advice from Rucker several times, Whirlpool said that the Commerce Department sent notice in May 2012 that the handles were “subject to the antidumping and countervailing duty notices and orders” and that regulators would seek an order for Whirlpool to pay “substantial cash deposits of estimated antidumping and countervailing duties on future” imports and goods Whirlpool imported after September 7, 2010.
In 2012, a $10 million malpractice case against Greenberg Traurig was dismissed.
Whirlpool stated that it began searching for a new door handle supplier outside of China and “other actions to reduce Whirlpool’s exposure…(and) mitigate Whirlpool’s damages caused by defendants’ conduct.”
Whirlpool has been “required to pay premium prices” for the new handles, as well as “significant legal fees, interest charges, tooling costs, lost sales, extra shipping expenses and other costs.”
The complaint also argues, “In addition, as a result of defendants’ conduct, Whirlpool will almost certainly incur substantial antidumping and countervailing duties and customs penalties.”
Whirlpool did not state how much the penalties may be, or how much it was forced to pay when it changed suppliers. The complaint only notes that it is seeking damages in excess of $50,000.
The complaint also seeks a jury trial. Whirlpool is represented by C. Barry Montgomery of Williams Montgomery & John and Janet Ramsey of Warner Norcross & Judd.
Source: CookCountyRecord.com
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