VICI Racing, LLC v. T-Mobile USA, Inc.

763 F.3d 273 (2014)

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VICI Racing, LLC v. T-Mobile USA, Inc.

United States Court of Appeals for the Third Circuit
763 F.3d 273 (2014)

Facts

T-Mobile USA, Inc. (defendant) was the corporate sponsor of VICI Racing, LLC (VICI) (plaintiff), a sports-car racing team. The parties’ sponsorship agreement required T-Mobile to pay $1 million to VICI in 2009, $7 million in 2010, and another $7 million in 2011. Section 11.2 of the sponsorship agreement, entitled “Limitation of Liabilities,” limited the maximum aggregate liability of either party to the higher of (1) $50,000 or (2) the aggregate amount payable under the agreement. Section 11.2 also specified that it contained the sole and exclusive remedy available under the contract. T-Mobile failed to make its 2010 payment, and VICI sued. On summary judgment, the trial court declined to construe § 11.2 as a liquidated-damages clause, and it ordered T-Mobile to pay $7 million. VICI appealed, arguing that it was entitled to $14 million in damages. VICI’s theory was that Section 11.2 was a liquidated-damages clause that allowed it to collect the aggregate amount payable under the agreement. According to VICI, it was entitled to $7 million in damages for T-Mobile’s unpaid 2010 payment as well as $7 million for T-Mobile’s unpaid 2011 payment.

Rule of Law

Issue

Holding and Reasoning (Baylson, J.)

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