Opinion ID: 3029917
Heading Depth: 2
Heading Rank: 5

Heading: The Armor Shield Litigation

Text: The dispute regarding the adoption of the ES-40 and G- 158 standards reflected a highly technical struggle between proponents of different methods of upgrading USTs, setting the stage for litigation between them. Sure enough, on November 12, 1998, less than a month after adoption of G-158 and its publication as a permanent standard, Armor Shield instituted an action charging antitrust violations in the United States District Court for the Northern District of Ohio (the “Armor Shield litigation”). Armor Shield named as defendants, among others, ASTM, Corrpro, Harco Technologies, Inc. (a Corrpro subsidiary), WRA, Baach, Rogers, and Bushman. The suit, however, did not include Mehalick or Jones, or any other employees or representatives of Corrpro or WRA. In its complaint, Armor Shield alleged, among other things, that the 6 To be “balanced,” a committee “could not be made up of more members who are or were affiliated with a commercial ‘producer’ than members who were classified as ‘users’ or ‘general interest.’” ASTM, 2005 WL 1941653, at  n.1 (internal citation omitted). 7 Bushman, for a time, also had served as Chairman of the E-50 (environmental assessment) committee and was one of Corrpro’s cofounders. Bushman’s affiliation with Corrpro ended in September 1993, when, pursuant to a negotiated severance agreement, he formally resigned as an officer, employee, and member of Corrpro’s board of directors. 9 defendants had restrained trade by “conspiring with one another to manipulate and violate ASTM’s regulations that all standards be developed through a rigorous and unbiased review process so as to promulgate the emergency ES-40 and G-158 permanent standards.” ASTM, 2005 WL 1941653, at . It is undisputed that the defendants strongly denied the allegations contained in Armor Shield’s complaint and defended themselves vigorously in the action. Nonetheless, effective December 14, 2001, the parties settled the Armor Shield litigation, with the defendants paying Armor Shield $1.4 million. The settlement agreement did not apportion responsibility among the defendants, but Rogers and WRA contributed $50,000 to the total settlement and Baach and Corrpro contributed $1.225 million.8 ASTM, 2005 WL 1941653, at  (“The settlement agreement did not specify how much of those amounts were attributable to Warren Rogers or Michael Baach individually or to separate the individual defendants from the corporate entities with which they were affiliated.”). The settlement agreement provided for Armor Shield’s complaint to be dismissed with prejudice, without any findings or admissions of wrongdoing by Baach, Rogers, or ASTM, or, for that matter, any of the defendants. The defendants in the Armor Shield litigation, who are the defendants here as well, incurred substantial costs and expenses. Specifically, in addition to their contributions to the settlement, Rogers and WRA incurred $338,083.85 in attorney’s fees, costs, and expenses. Ultimately, WRA paid the total amount on behalf of both itself and Rogers.9 Similarly, in 8 ASTM did not make a contribution towards the settlement. We note that the Rogers-WRA and Baach-Corrpro contributions do not equal $1.4 million, and thus conclude that other defendants in the underlying Armor Shield litigation, not involved in this litigation, must have contributed the balance. 9 On March 28, 2002, Rogers and WRA’s Board of Directors entered into a formal agreement whereby Rogers agreed to remit any monies he recovered from ASTM (pursuant to its indemnification provision) to WRA as reimbursement for the attorney’s fees, costs, and 10 addition to paying their share of the settlement costs, Baach and Corrpro incurred $615,121.68 in attorney’s fees, costs, and expenses. Of that amount, $80,408.61 was attributable to Baach alone, as he was represented in the litigation both jointly with Corrpro and individually. Although Corrpro advanced Baach’s individual legal fees, National Union Fire Insurance Company of Pittsburgh (“National Union”), Corrpro’s Director’s and Officer’s (“D&O”) liability insurance carrier, reimbursed it for these expenses. Moreover, after the exclusion of a $150,000 deductible, National Union reimbursed Corrpro for 50% of the reasonable defense costs and expenses it paid to its own law firm. Ultimately, Corrpro incurred a total of over $300,000 in unreimbursed legal fees, costs, and expenses defending against the Armor Shield litigation.10 Finally, in addition to making the above reimbursements, National Union paid $700,000 of the $1.225 million settlement, reducing Corrpro’s net contribution to the settlement to $525,000.11