Lightfoot Wins $61 Million Judgment for Sunshine Mills
On Friday, December 3, 2010, a Franklin County, Alabama jury returned a verdict of $61,381,343 against Ross Systems, Inc., a computer software company and subsidiary of CDC Software. The verdict in favor of Red Bay, Alabama dog food manufacturer Sunshine Mills is the largest verdict in Alabama in 2010 and the largest verdict in Franklin County history. The fraud lawsuit related to Sunshine Mills’ purchase of manufacturing software from Ross Systems in 2005.
In the lawsuit, Sunshine Mills alleged that Ross Systems misrepresented the capabilities of its software during the sales process and that Ross Systems performed a sales demonstration that made it appear the software had capabilities the Ross software did not actually have. During the trial, several other Ross customers testified that similar misrepresentations had been made to them by Ross salesmen and that they had been shown misleading software demonstrations as well. A Ross employee also admitted in his testimony that Ross has a reference program through which it compensates existing customers for providing favorable reviews of the software to prospective customers. Moreover, internal Ross documents obtained by Sunshine Mills in the lawsuit revealed that at the time it made the sale to Sunshine Mills, Ross knew the software was a poor fit for Sunshine Mills’ business and that the software was not ready to be released to the market.
Sunshine Mills experienced significant and crippling problems with the software when it began to attempt to run its business on the software in May 2006. In internal documents, Ross Systems acknowledged that its software was the cause of Sunshine Mills’ problems, but in its communications with Sunshine Mills, Ross Systems blamed the problems on Sunshine Mills – claiming that Sunshine Mills had failed to adequately train its employees to use the software and failed to adequately test the software prior to going live with the system.
The fraud lawsuit was filed in April 2008. After a three week trial and two days of deliberations, the jury returned a verdict of $16,381,343 in compensatory damages and $45,000,000 in punitive damages.