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A 092304 Ed.Qxp Page 14 Akron Legal News Thursday, September 23, 2004 MILLIONS The Making of the Largest Jury Award in Summit County History It took seven months, but a very care- Philadelphia and southern New Jersey ful Judge James R. Williams finally for about six years. Although Melick ini- signed a judgment entry in the largest tially worked on the case while with jury award case in Summit County his- By Richard Weiner Keller & Kehoe, he had not done any tory. work on the case since he left K&K's em- Last September, a Summit County ju- founder of SMI, together with his tech- again. Internal Telxon documents re- ploy in January, 2002. At that time, ry granted a nearly $213 million award nical team invented and developed a veal that Telxon held SMI off in this way Melick had opened the Cleveland office against the former Fairlawn company, product that eventually became known expressly for the purpose of keeping SMI of Philadelphia-based litigation firm of Telxon Corporation. The largest Summit as the "Smart Handle," a shopping cart away from Symbol. Kelley, Jasons, McGuire & Spinelli. County jury award ever, it blasted the mounted media delivery device (adver- Apparently, and unbeknown to SMI, Over time, however, Melilck had become previous county record ($8 million in tising) for use in retail grocery stores, Telxon either never had the cash, or personally friendly with SMI founder 2002) by a factor of nearly 30 and, so and began looking for a strategic part- could not justify to its shareholders an Dennis Blaeuer, and the two of them far, is the sixth largest jury award in the ner to help manufacture and market the investment in a start-up company. This kept in touch periodically while Melick country this year according to the Na- product in the mid-1990's. Among other conclusion is based on the fact that, worked toward running the KJMS start- tional Law Journal. [Telxon v. Smart things, the sum total of which are pro- many months after promising to fund up office. Media of Delaware, Inc., et. al. Case No. prietary to SMI, the Smart Handle in- SMI, Telxon brought into the deal its After Melick had worked with the Kel- CV-1998-12-4664]. corporates a bar code reader in the han- own investment bankers, the Private ley firm for about ten months, in Sep- But for all of you solo and small firm dle of a shopping cart which allows con- Merchant Banking Group, and other af- tember of 2002, Blaeuer came to Melick practitioners out there, the award itself sumers to self-checkout, check prices, filiated technology distributor (Pricer) as and asked him to get involved in the is only a part of the story. Thirty-nine add up their grocery costs, and do a "new white knights" to perform Telxon's case once again as the trial approached. year old Gregory Melick, a "transplant- number of other "user friendly" things end of the bargain for it. This was fol- Melick asked the Kelley firm for permis- ed" South Jersey native who came to during the shopping experience. Impor- lowed by new, "richer" promises of up to sion to do so on a part-time basis, in Cleveland via Temple University Law tantly, the Smart Handle also delivers $65 million for 47 percent of SMI (never conjunction with Keller & Kehoe, but School and Philadelphia, and who once point-of-sale advertising to the con- happened) and, in the end, by a promise was denied that permission. Melick had dated fictional trial attorney Calista sumer as the consumer scans items. of a half million quick investment, done the start-up well, and the Kelley Flockhart (Ally McBeal) in high school, In late 1995 and early 1996 SMI was which also never happened. firm's asbestos defense practice in conducted the entire trial and pretrial meeting with representatives Symbol The other possible reason behind Cleveland was taking off. proceedings himself, without a secre- Technologies about such a possible Telxon's delays could have been that Melick had been presented with a tary, paralegal or legal assistant, and strategic partnership. Symbol, the lead- Telxon was developing a smart handle of choice-stay comfy in his asbestos prac- with only one other co-counsel (who was ing manufacturer of hand-held bar code its own, using confidential information tice, or take a real leap into the un- representing another individual party in scanners in the world, was Telxon's pri- gleaned from its negotiations with SMI. known. the action). Because of his late entry in- mary competitor at that time. In this vein, after the parties' deal had Knowing that the file was enormous, to the case as Smart Media's trial coun- In the Spring of 1996, and according broken off in the Spring of 1997, a Telx- and that the trial was coming up in less sel ? and just five months before the tri- to SMI documents, Blaeuer was ap- on representative told William Dupre, than a year, Melick also knew that, if he al actually began ? Melick simply did proached by Telxon representatives who an individual counterclaimant in the nevertheless quit Kelley Jasons and par- not have the time or resources to inter- wanted to preempt SMI's potential deal case, that Telxon was going to "go ticipated in the case on his own, it view and hire staff, equip an office, etc., with Symbol with a proposal of their ahead" with the development of the would take all of his time, there was no and to simultaneously "get up to speed" own. In short, Telxon representatives Smart Handle "with or without" SMI. In guarantee of success, and that it could in time for trial in this complex com- told SMI that the Kroger Company fact, Symbol Technologies now has a potentially cost him everything he had, mercial case. (Cincinnati), one of Telxon's largest product almost identical to the Smart including his legal career/future, to- Despite these odds, however, Melick clients/customers, was on the verge of Handle, according to a report in the gether with his financial security. demonstrates that "where there's a will, investing $50 million in new in-store Akron Beacon Journal. Nevertheless, and driven by a strong there's a way", and that even smaller self-scanning technology, and that a Telxon was and has for many years belief in both the case and in Blaeuer, practices can achieve big results proposed partnership or joint venture been represented by the Cleveland law he left the Kelley firm and agreed to par- through hard work and perseverance. with SMI would ideally suit it's client's firm of Goodman, Weiss, Miller LLP. Ac- ticipate in the case. Keller & Kehoe sub- This is a highly complex case, with needs. Telxon's proposal was to fund, cording to public documents, one of the sequently withdrew as counsel of record plenty of twists and turns, but here are develop, manufacture and co-market a firm's principals, Robert Goodman, has for SMI, but continued representing in- some of the high points. final product for eventual rollout into been on Telxon's Board of Directors for dividual counterclaimant William Telxon is a wholly-owned subsidiary of stores, in exchange for an equity inter- many years, and has also personally Dupre, while Melick took the entire SMI Long Island, New York, publicly held est in SMI. SMI enthusiastically ac- consulted to the company. Lead trial case himself as in-house trial counsel to corporation Symbol Technologies. Sym- cepted Telxon's proposal, and shelved counsel for Goodman, Weiss was firm SMI. bol purchased Telxon on December 1, their discussions with Symbol. Prelimi- partner Steven Miller, Esquire, who was When you think of potentially huge, 2000 for $456 million, but posted infor- nary deal point documents were gener- assisted by associate attorneys James high profile, big-money corporate cases, mation on its web site last year indicat- ated and signed by Telxon in the sum- Wertheim and Kimberly Smith. you hardly think of two or three attor- ing that Telxon was worth only around mer of 1996, and SMI waited for the "fi- The Goodman firm was contacted for neys doing all of the work. The Good- $60 million, with $17 million of income nal" closing paper work from Telxon. this story, but informed us that Telxon man firm, for its part, staffed the case for 2002. This lawsuit was pending The promised documents and fund- would not allow them to comment on with three attorneys, two paralegals and when Telxon was purchased by Symbol ing, however, never came. the case. at least one audio-visual technician in a stock-for-stock merger. According to court documents over At the time that the suit was original- during the entire course of the trial, The original case was actually filed by the course of a total of approximately ly filed, SMI was represented by the with the three attorneys sharing the Telxon against Smart Media in 1998 in eighteen months, a pattern developed in Cleveland law firm of Keller & Kehoe, roles of opening and closing, direct ex- the form of a declaratory judgment ac- the dealings between Telxon and SMI which is a boutique complex commer- amination and cross-examination of the tion, and as an apparent attempt to wherein Telxon made repeated promises cial litigation firm that was formed by twelve live witnesses, and reading into head off a lawsuit that was then being of its readiness, ability and willingness two former litigation partners from evidence the deposition transcripts of threatened by Smart Media ("SMI") to perform its end of the deal, and then Hahn Loeser & Parks.
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