September 25, 2024
Jury Says Dialight Must Pay $7.8 Million in Supply Chain Dispute
Dialight’s claim of being owed up to $220 million ends with jury siding with supplier
A New York jury has delivered a mixed verdict in the long-running legal dispute between Dialight PLC and Sanmina Corporation, rejecting Dialight's claims of fraudulent inducement and willful misconduct while finding both companies in breach of their manufacturing agreement. While the federal court has not yet publicly filed the verdict, details of the outcome were disclosed in Dialight's regulatory filings.
The verdict, announced by Dialight on September 25, 2024, comes after a trial that began on September 9, following a mistrial declared in July due to juror issues.
Damages Awarded
The jury found Dialight liable for breaching the Manufacturing Services Agreement, awarding Sanmina approximately $5.3 million for accounts receivable and $3.4 million for excess and obsolete materials. Dialight, a UK-based industrial lighting manufacturer, was awarded $900,000 for Sanmina's breach of the same agreement. As a result, Dialight is currently on the hook for a net amount of $7.8 million to Sanmina.
The case, which dates back to 2019, centered on a dispute over manufacturing services provided by Sanmina, a California-based electronics manufacturer, to Dialight. Dialight had initially sought up to $220 million in damages, alleging that Sanmina fraudulently induced them into signing the Manufacturing Services Agreement and overcharged for labor and materials.
Sanmina, in turn, claimed that Dialight owed over $13 million for goods delivered and materials ordered based on Dialight's forecasts.
The jury's decision to reject Dialight's fraud claims while finding both parties in breach of contract represents a significant departure from the potential outcomes anticipated by both companies.
Dialight, which reported revenues of approximately $188 million in 2023, stated in a press release that it is considering post-trial motions regarding damage levels, interest, and legal costs. The company is also reviewing its options for appeal.
