Dechert Client’s (ULMA Piping) Reduced Jury Verdict Award and Denial of Attorneys’ Fees Confirmed

February 14, 2020

Dechert is representing Spain-based ULMA Forja, S.Coop. (Ulma Piping) in a suit filed by Boltex Manufacturing Co. LP and Weldbend Corp. All three companies are manufacturers of flanges, which are carbon steel parts that connect pipes, valves, pumps and various other equipment involved in the oil and gas industry. Boltex and Weldbend filed a suit against Ulma Piping alleging false advertising and unfair competition in the sale of ASTM A105 carbon steel flanges in the U.S. In September 2019, a Houston jury returned a verdict in favor of the plaintiffs, awarding them US$31 million. Of the US$31 million award, US$26 million was disgorgement of Ulma Piping’s profits.  At the time of the verdict, it was clear that the disgorgement award was advisory, meaning that it was for Houston-based U.S. District Judge Andrew Hanen to decide the amount of disgorgement, if any, that plaintiffs should receive.

On November 1, Judge Hanen ruled that plaintiffs are not entitled to the vast majority of the US$31 million jury award because they “are not entitled to multiple recoveries for the same loss . . . .” Specifically, Judge Hanen directed plaintiffs to choose between the US$1.8 million that he held plaintiffs were entitled to under their Texas unfair competition claim or the US$6.67 million that he held plaintiffs were entitled to under the Lanham Act, which includes the amount of disgorgement of Ulma Piping’s profits that he believed was equitable and appropriate. Thus, Judge Hanen cut the proposed jury award by approximately 80%. Judge Hanen also denied plaintiffs’ request for attorneys’ fees finding that the case was not exceptional. Neither the jury nor the Judge opined on the quality of ULMA Piping’s ASTM A105 carbon steel flanges. In particular, Judge Hanen rejected plaintiffs’ claim that ULMA Piping’s defense was unsubstantiated. Plaintiffs requested that the court reconsider its November 1 ruling. 

On February 7, 2020, Judge Hanen denied plaintiffs’ request for reconsideration, reaffirming his reduction of the jury award by approximately 80% and his denial of plaintiffs’ request for attorneys’ fees, and issued a Final Judgment in the litigation. Notably, Judge Hanen’s order and Final Judgment did not question the quality of ULMA’s A105 flanges, including those manufactured before December 2017 and not heat treated pursuant to the letter of ASTM A961 or A941. Nor did Judge Hanen address, much less challenge, the fact that since mid-December 2017, ULMA has heat treated all of its A105 flanges in accordance with ASTM A961 or A941.

The Dechert team representing Ulma Piping includes partners Andrew J. Levander, Mauricio A. España and Hector Gonzalez.

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