Ball Aerospace & Technologies Corp. (Ball), designs and manufactures spacecraft and aerospace components, instruments, and sensors for national defense, civil space, commercial space and other applications. Ball had developed a sensor that could be mounted to a fixed wing aircraft and flown over land to detect methane gas leaks. Ball also developed data analytics software that would process and display the data generated from the sensor flights.
Ball and a start-up company, Carina RST, Inc. (Carina), signed a Term Sheet, laid out in two phases, with the ultimate goal of Carina purchasing Ball’s sensors and data analytics services assuming certain conditions were met. In Phase 1, Carina was to conduct “validation surveys” with the sensor and software and determine in its sole discretion whether Ball’s technology was commercially viable for Carina’s purposes, which the Term Sheet referred to as “Commercial Validation.” If Carina determined that Ball’s technology satisfied Commercial Validation, the parties would proceed to Phase 2. In Phase 2, the parties would negotiate contracts for the sale of Ball’s sensors and data analytics services to Carina.
After signing the Term Sheet, Ball and Carina conducted the validation surveys and spent months pre-negotiating contracts for Carina’s purchase of Ball’s technology. The Term Sheet eventually expired on its own terms, with Ball and Carina unable to agree on whether Ball’s technology had satisfied Commercial Validation or on final contracts for Carina to purchase the technology.
Carina later sued Ball, claiming that Ball breached the Term Sheet by failing to make sufficient efforts to achieve Commercial Validation, delaying project milestones, and insisting on terms in Phase 2 contract negotiations contrary to those in the Term Sheet. Carina also asserted fraud based on those same facts. Carina alleged that Ball’s actions destroyed Carina’s contemplated business, resulting in damages of $70 million. Carina alleged that Ball intentionally destroyed Carina’s business and, in the process, prevented climate-friendly technology from benefitting society.
Ball denied that it breached any obligations under the Term Sheet. Ball maintained that it proved the technology achieved Commercial Validation, utilized its best efforts to meet project milestones, and negotiated the Phase 2 contracts in good faith.
During nearly two years of litigation, the parties produced over 31,000 documents and took 26 depositions, including 5 expert witnesses. Throughout discovery and before trial, Holland & Hart focused on learning the truth of what happened, strategizing as to the best way to persuasively present the very complicated facts to the court and jury, and determining how to clearly convey that Ball was the one who had developed the climate-benefitting technology and that Carina was responsible for its own business consequences.
Holland & Hart achieved summary judgment in Ball’s favor on Carina’s fraud claim before trial, eliminating a hot-button jury issue. At trial, Holland & Hart defeated Carina’s breach of contract claim by proving that Carina unreasonably withheld Commercial Validation and, thus, failed to perform its own obligations under the Term Sheet. Ball’s witnesses effectively testified that Ball had worked in good faith and met all of the specifications in the Term Sheet. The facts showed that Carina was unwilling to declare Commercial Validation not because of anything Ball did or didn’t do but, instead, because Carina was unable to get customers or investors for its business in the relevant time frame.
Holland & Hart’s strategy to demonstrate Ball’s performance under the Term Sheet methodically and accessibly and to expose Carina’s underlying objectives worked. The jury returned a complete defense verdict, finding that Carina failed to prove its breach of contract claim against Ball.
Holland & Hart’s Denver-based trial team included Geraldine Brimmer, Craig Stewart, Jessica Smith, and Kimberly Willis.