Higuchi International Corporation v. Autoliv ASP, Inc.

On November 12, 2021, Higuchi International Corporation d/b/a Higuchi manufacturing America, (“Higuchi” or “Plaintiff”), represented by Todd A. Holleman of Miller of Canfield, Paddock and Stone P.L.C., filed a contract lawsuit against Autoliv ASP, INC., (“Autoliv” or “Defendant”), seeking damages for the Defendant’s alleged  breach of contract. This case was filed in U.S. District court in the Eastern District of Michigan with Judge David R. Grand and Judge Paul D. Borman presiding.

In the complaint, the Plaintiff alleged that, “Higuchi and Autoliv are parties to a long-term supply agreement under which Higuchi agreed to sell to Autoliv and Autoliv agreed to purchase from Higuchi stamped steel parts required by Autoliv or its affiliated entities to build automotive components subject to applicable terms and conditions.” The Plaintiff then alleged that, “Higuchi and Autoliv are also parties to a raw materials agreement (“RMA”) under which the parties agreed to a mechanism to quarterly set the price Autoliv would pay Higuchi for the steel Higuchi purchased to manufacture Autoliv’s parts subject to the terms and conditions.” 

The Plaintiff also alleged that, “Based on Autoliv’s forecasts, Higuchi would purchase the steel necessary to manufacture the forecasted quantity of parts at least three months in advance and pay the price charged for the steel at that time. Autoliv’s forecasts were inaccurate leaving Higuchi with excess steel inventory that when used to satisfy later orders will be priced at an amount lower than what Higuchi paid.” 

Plaintiff further alleged that, “Due to circumstances beyond its reasonable control, Higuchi can no longer meet what Autoliv has asserted are Higuchi’s obligations under the LTA and the terms of the RMA should be adjusted or set aside. Higuchi has tried to negotiate a resolution and sustainable way to move forward but Autoliv has refused to negotiate toward such a result.” 

Plaintiff then alleged that, “Higuchi has and will continue to incur significant unanticipated costs beyond its reasonable control making it impossible to meet Autoliv’s requirements caused by (a) Steel shortages and Autoliv delays in negotiating with Coil Plus and approving alternate steel suppliers; (b) Inconsistent and unpredictable Autoliv forecasting and ordering; (c) Autoliv’s failure to provide promised revenue and profits through increased sales growth; (d) An unanticipated increase in raw material steel prices. Higuchi is unable to comply with Autoliv’s unrealistic demands, which are contrary to the parties’ contract and fail to recognize the relief under the LTA and RMA afforded to Higuchi under these circumstances.”

There are two claims for relief laid down by Plaintiff. The first claim alleged is for declaratory relief over the application of the force majeure provision in Article 26 of the Terms and Conditions as applied to the LTA, RMA and Autoliv’s demands. The second claim alleged is for commercial impracticality wherein the Plaintiff alleged that the current manufacturing environment experiencing with the effects of the Covid-19 pandemic makes it impossible for Higuchi to meet the purported LTA obligations that Autoliv seeks to impose on it or accept the RMA pricing.

In their prayer for relief, the Plaintiff requested the Court to award judgment in favor of Higuchi, relieving it of its purported obligations under the LTA under UCC 2-165 and to adjust or set aside the RMA.

This case summary may not reflect the current position of the parties to this litigation or the status of this case. Sign up to view the latest case updates and court documents.