Specialty Auto Parts USA, Inc. v. Holley Performance Products, Inc.

Facts

Specialty and Holley are competing automotive-performance companies with a history of legal disputes spanning over twenty years. In 2000, Holley sued Specialty for allegedly misappropriating the trade dress of Holley’s carburetor main bodies. The parties resolved this dispute through a Settlement Agreement in which Holley agreed to “manufacture all of its HP line of main bodies with 6 identification surfaces cast into the main body” and “cast or stamp the word ‘Holley’ on one of the six flat surfaces on all HP main bodies manufactured for it.” In 2012, Specialty reopened the case, claiming Holley violated the Settlement Agreement. Judge McKinley determined that Holley had violated the agreement and enjoined Holley from manufacturing, distributing, or selling any HP line main bodies in violation of the agreement. After further litigation, Specialty filed a breach-of-contract claim in 2017, seeking disgorgement of Holley’s profits from the breaching products. Holley admitted to earning $2,028,264.19 in net profit from sales of the Ultra HP main bodies that violated the Settlement Agreement. Specialty was unable to quantify its actual damages but argued that disgorgement was appropriate to prevent Holley from profiting from its breach.