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February 2016

Arizona Supreme Court Issues Opinion Upholding Verdict in Favor of Gordon & Rees’ Client

On February 5, 2016, the Arizona Supreme Court issued its Opinion in American Power Products v. CSK Auto, reversing the Court of Appeals opinion and reinstating the trial result: a very favorable verdict for Gordon & Rees’ client, CSK Auto (now O’Reilly Auto Parts). (Read the opinion here).
In 2005, American Power Products, a gas and electric powered scooter, generator, and light vendor, sued CSK for claims arising from the purchase of its products for resale in CSK’s stores.  American claimed that CSK wrongfully took a variety of discounts and wrongfully returned product in violation of the terms of the manufacturer warranty, which American claimed governed the account.  Over the course of a three week trial in the fall of 2011, 24 witnesses testified and the Court admitted 164 exhibits.  Closing arguments were held on a Friday before a three day weekend.  American asked for just shy of $11 million in damages.  Gordon & Rees Phoenix Partner Leon Silver, who represented CSK from the very beginning of the dispute, argued that the appropriate award was $10,733.   After two hours of deliberations, the jurors returned a 6-2 verdict awarding American $10,733.
In apparent disbelief of the result, American hired a private investigator to interview jurors.  Through these interviews American learned that during jury deliberations, a juror asked the bailiff how long deliberations usually lasted. Without consulting anyone, the bailiff answered “an hour or two should be plenty.” American sought a new trial, arguing that the statement could have prejudiced the jury and in the absence of clear evidence either way, prejudice had to be presumed.
The trial court disagreed and at oral argument characterized the communication as a “throwaway question” that was “not directed to this case, not to the substance of this case at all.” The court also disagreed with American’s contention that the jury’s rapid verdict was “so aberrational that it’s kind of stunning” by responding that it “[didn’t] think it was stunning at all.”
A divided court of appeals reversed and remanded, finding that the trial court could not determine from the record how the jury might have interpreted the bailiff’s comment, and therefore prejudice should be presumed.
The Arizona Supreme Court granted CSK’s Petition for Review.  Silver, with substantial assistance from Andrew Jacob, and after a moot court with Leslie Benitez and David Gersten, argued the case on September 22, 2015.  Silver argued that there was no disputed fact over which to hold hearing.  CSK made the strategic decision not to dispute the fact of the alleged statement, but rather argued it lacked prejudicial content.  If additional facts would have made the context of the statement such that prejudice should be found, Silver argued, it was American’s burden to come forward with those facts.
In its Opinion, a unanimous Arizona Supreme Court agreed with CSK’s arguments and reversed the Court of Appeals.  The Supreme Court found that the trial court reasonably determined that the bailiff’s statement had no bearing on the issues, as it did not favor one party over the other or clearly interfere with the jury’s deliberations or decision-making process and that in the absence of a disputed material fact, no hearing was needed.
The case will be remanded to the Court of Appeals to address issues relating to the award of attorneys’ fees and costs by the trial court that were not addressed in the Appellate Court’s initial opinion.