United States District Court, E.D. Kentucky, Central Division
MEMORANDUM OPINION AND ORDER
M. HOOD SENIOR U.S. DISTRICT JUDGE.
matter was recently transferred to the undersigned because it
is related to another matter pending before this Court,
Hitachi Auto. Sys. Am., Inc. v. TI Auto. Ligonier
Corp., No. 5:18-cv-438-JMH-MAS. In the above-captioned
action, Plaintiff Hitachi has filed a motion for a temporary
restraining order (“TRO”) and preliminary
injunction. [DE 3]. Hitachi seeks a court order requiring TI
Ligonier to immediately resume production and shipment of
certain parts pursuant revised design specifications. [DE 3-1
at 20-21, Pg ID 81-82].
reviewing the motion and accompanying materials, the Court
does not have sufficient information to demonstrate that
Hitachi will suffer immediate irreparable harm without an ex
parte TRO. As a result, Hitachi's motion for a TRO is
DENIED at this time.
the Court will withhold consideration of Hitachi's motion
for a preliminary injunction until a hearing may be held. As
such, a MOTION HEARING on the motion for
preliminary injunction [DE 3] is scheduled for
Wednesday, May 1, 2019, at 2:00 p.m.,
subject to intervening orders of the Court.
Factual & Procedural Background
Automotive manufactures automotive systems for major
automotive manufacturers. [DE 3-1 at 3, Pg ID 64]. To that
end, Hitachi has multiple contracts with TI Ligonier for the
supply of automotive parts. [Id.]. Two of those
requirement contracts appear to be relevant to the instant
February 26, 2016, the parties entered into Requirements
Contract No. B015833 (“Gen-1 Requirements
Contract”) where the TI agreed to manufacture and
supply 100% of Hitachi's requirements for Gen-1 LFY LH
Rail parts. [DE 3-1 at 4, Pg ID 65; DE 3-2 at 2, Pg ID 85].
Then, on August 4, 2016, the parties entered into
Requirements Contract No. B015894 (“.675T Requirements
Contract”) where TI agreed to manufacture and supply
100% of Hitachi's requirements for .675T Bare Fuel Rail
parts. [DE 3-1 at 4, Pg ID 65; DE 3-3 at 2, Pg ID 87].
Hitachi asserts that both parts are critical components in
Hitachi's fuel rail systems.
“special note” at the bottom of the contracts
expressly limits the requirements contracts to the terms
stated in the contracts themselves “and the terms and
conditions of purchase set forth in Hitachi Automotive
Systems Americas, Inc.'s, Supplier Handbook.” [See
DE 3-2; DE 3-3 (emphasis omitted)]. Pursuant to the terms and
conditions, time is of the essence, and TI is obligated to
manufacture and deliver the parts to Hitachi on the delivery
date, in conformity with specific engineering requirements,
and for the contractually agreed price certain per part. [DE
3-1 at 5, Pg ID 66].
present dispute relevant to this motion is about design
changes to the parts that Hitachi claims it is contractually
permitted to make. Section 15.9 of the terms and conditions
These terms may be modified only in writing signed by
authorized representatives of buyer and supplier. However,
buyer may, at any time, by written change order, make changes
in: . . . (B) the drawings, designs or specifications
applicable to the goods or services covered by this order. .
. . If such changes materially affect the time for
performance, the cost of manufacturing the goods, or the
costs of furnishing services, buyer will make an equitable
adjustment in the purchase price or the delivery schedule or
both. Any dispute with respect to an equitable adjustment
shall not relieve seller of its obligation to perform in
accordance with a written change order.
[DE 3-4 at 11, Pg ID 98].
to Hitachi, General Motors (“GM”) mandated a
change in specification pertaining to the parts at issue
through an Engineering Work Order (“EWO”) in
November 2018. [DE 3-1 at 6, Pg ID 67]. To effectuate these
mandated changes, Hitachi claims that it notified TI Ligonier
of the requested specification changes on December 13, 2018.
[Id.]. According to Hitachi, the parties worked
together for several months to implement the EWO change and
eventually reached a solution to the specification change
that was ready to be submitted to GM for testing and
Hitachi claims that they submitted a request for quotes to TI
regarding additional costs for the parts based on the change
in specifications. [Id.]. Hitachi claims that TI
only responded to the request for quote for the .675T Bare
Fuel Rail parts, as evidenced by an email from Scott Hacias,
Senior Manager of Business Development at TI, and that the
offered quote was 11% higher than the original price per
part. [DE 3-1 at 7, Pg ID 68; DE 3-5 at 4-5, Pg 104-05].
Hacias's email also provided a lead time for the
prototype of six to seven weeks and a production lead time of
fourteen weeks. [DE 3-5 at 4-5, Pg ID 104-05].
April 8, 2019, Anne Wells, a Hitachi Procurement Manager,
followed-up on the quoted price, stating in part, GM is
pushing hard for a cost breakdown for quotes (see summary
The quote is much higher than expected and we need a cost
breakdown to better understand the cost drivers so that we
can better explain.
It seems they are unwilling to wait until Scott's return
next week and have demanded that we escalate which is the
cause for this email. If there any way you would have someone
that could support us in completing the attached worksheet in
support of the submitted quote?
[DE 3-5 at 3-4, Pg Id. 103-04].
relations apparently soured. In response to Hitachi's
request for a cost breakdown, Todd Pontillo, a TI employee,
responded to Wells's email and said,
As a general matter, Hitachi has not demonstrated any
willingness to work with, or have a collaborative or
cooperative partnership with, TI. As such, TI is not
interested in expanding our commercial relationship with
Hitachi in any way.
TI withdraws its prior engineering estimate for this new
product design/specification and will not be providing any
further estimates or quotes. Instead, we are only willing to
supply the product in accordance with current contract
[DE 3-5 at 3, Pg ID 103].
Wells responded on April 11, 2019, saying in relevant part, I
am sure you are aware that this is not an expansion of
business, however, it is for contracted business that ...