Top Defense Results: Patriot Rail Corp. v. Sierra Railroad Company

Just seven months before trial, an Orrick, Herrington & Sutcliffe LLP team led by McGregor W. Scott, Michael C. Weed and Jonathan "J.R." Riddell took over a case that had been litigated by a smaller firm for nearly six years.

The late switch worked for Orrick's client, Sierra Railroad Co. The company not only defeated Florida-based Patriot Rail Corp.'s fraud and breach of contract lawsuit, but won $52.8 million in a counter-claim.

In 2009, Patriot sued Davis-based Sierra after negotiations for the Florida company's purchase of Sierra's railroad division failed.

Sierra's counterclaim alleged that Patriot had misappropriated Sierra's trade secrets to steal its contract with McClellan Business Park LLC, breached the parties' confidentiality agreement and intentionally interfered with Sierra's business relationship with McClellan. Patriot Rail Corp. v. Sierra Railroad Company, 09-CV00009 (E.D. Cal., filed Dec. 31, 2008).

Sierra expected the case to settle, but in 2014, "once the looming trial date became more in focus," Scott said he got a cold call from Sierra's general counsel. "They needed to move to a more heavyweight trial team to actually prep and get ready for trial."

Scott brought fellow Sacramento-based partners Weed and Riddell on board - Weed for his commercial litigation background and Riddell for his expertise on damages - and they all agreed: "We are the plaintiff not the defendant," Scott said. "We're not defending this case, and we're here to win money."

To streamline and strengthen their case, the lead Orrick lawyers dismissed one of the defendants and decreased the number of causes of action.

The other side seemed unfazed, Weed said, confident they had a trump card in their pocket for trial: the testimony of McClellan's president, Larry D. Kelley. During direct examination, Kelley told the jury that he would never have renewed Sierra's contract, seemingly eliminating Sierra's chance of winning damages.

But during cross-examination, Scott said he got Kelley to admit that he would have awarded the contract to Sierra if the company had come in with the best bid. Through another McClellan witness, Weed said he established that Sierra's bid was "undoubtedly the best after Patriot's."

"From what we were able to locate in publicly available documents, this was the second-largest jury verdict to come out of the Eastern District," Riddell said.

And, according to Riddell, it was money the client needed, as years of litigation and lost revenues had driven Sierra to the brink of bankruptcy. A hearing on post-trial motions is scheduled for Feb. 26. A Patriot spokeswoman declined to comment.

"This really was a bet-the-company case," Riddell said.

- ALISON FROST