SOURCE: Continuant

Continuant

September 11, 2014 18:53 ET

Continuant Awarded Prejudgment Interest in Landmark Court Ruling

CAMDEN, NJ--(Marketwired - September 11, 2014) - In a landmark court ruling, a New Jersey federal court today awarded $2.6 million in prejudgment interest to Washington State-based independent voice and data maintenance and managed services provider, Continuant (www.continuant.com), in its eight-year legal battle with Avaya, Inc. over Avaya's antitrust violations. That lengthy battle resulted in a $20 million jury verdict in favor of Continuant on March 27 of this year. 

According to Anthony P. La Rocco of K&L Gates LLP, who led Continuant's legal team, "Today's ruling further vindicates Continuant's position in the lawsuit because prejudgment interest may only be awarded under federal statute if the court concludes that the defendant abused the litigation process for the purpose of delaying the resolution of the case or increasing the plaintiff's costs, which is tantamount to bad faith." La Rocco added that this may be the first time in history that prejudgment interest has been awarded in an antitrust lawsuit brought under the federal statute.

Calling today's ruling "long-awaited justice for Continuant," La Rocco asserted that the ruling "shows that Avaya's abuse of the litigation process to the detriment of Continuant was truly extraordinary in its scope and duration." In explaining the rationale for its ruling, La Rocco said the court asked "a basic question": Which party would have benefitted by delaying the resolution of this case for years? "The only sensible answer that the court can find is Avaya," he said. 

In its ruling, the court stated that "Avaya's claim cast a shadow over [Continuant's] business and extending the litigation, in my view, could only work to Avaya's benefit." Ultimately, the court concluded that the degree to which Avaya prolonged the case "far surpassed the kinds of delay" found in other federal antitrust cases that have considered awarding prejudgment interest. The court also concluded that Avaya used its delay tactics to gain a business advantage, which itself rises to the level of "bad faith."

Continuant Co-Founder and Chief Sales Officer, Bruce Shelby -- who was one of three company executives who was also sued personally by Avaya -- described the prejudgment interest ruling as fair compensation for damages. "Once Avaya realized that it could not quickly run our company out of business, it did everything it could to keep the case from going to trial, attempting to bring Continuant to its knees through scorched-earth litigation," Shelby said. "At the conclusion of our trial, the jury determined that we were damaged and awarded compensation for that damage. Now the court has awarded interest on the money that we could have used to run our business if Avaya hadn't delayed our case."

Avaya initially sued Continuant in June 2006, with its primary claim being that Continuant violated Avaya's intellectual property rights by using the On Demand Maintenance Commands of Avaya systems to perform maintenance and service. Avaya filed an additional 16 claims against Continuant. Continuant filed an antitrust counterclaim against Avaya in August 2006. On January 7, 2014 the court dismissed Avaya's entire case against Continuant, ruling that Continuant's access of Avaya's systems was proper. The court's ruling was followed by a jury verdict in Continuant's favor, finding that Avaya had violated federal antitrust laws.

The $20 million jury award was automatically trebled to $60 million as required by the statute.

The judgment against Avaya was entered today, to include both the $60 million trebled verdict amount, and the $2.6 million Prejudgment Interest award. Continuant will shortly be filing a further motion seeking reimbursement from Avaya for legal fees and costs Continuant expended in the case, which it is entitled to receive under the statute.

To learn more about the eight-year lawsuit from the perspective of Continuant's owners, click here.

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