NORTHERN VIRGINIA – May 22, 2025 – A team of Greenberg Traurig, LLP litigators prevailed for FCA US LLC (f/k/a Chrysler), which is part of Stellantis, in FCA US LLC v. Kamax Inc. and Kamax Mexico S DE RL DE CE, Case Number: 371234, a high-profile dispute in the State of Michigan Court of Appeals that challenged the enforceability of over 1.3 million contracts with FCA’s suppliers.
“We are pleased with the Michigan Court of Appeals’ published decision affirming the enforceability of FCA’s requirements contract with Kamax Inc. The court correctly upheld the longstanding law that a range — such as 65% to 100% of FCA’s requirements — can serve as a valid and enforceable quantity term under Michigan law,” said Greenberg Traurig Shareholder Michelle D. Gambino, who led the attorney team. “This decision is not only a win for FCA, but also a strong endorsement of predictability and fairness in the commercial marketplace. The ruling reinforces the principle that supply chain contracts should not be made more burdensome than necessary. A contrary result would have set Michigan’s manufacturing sector back and created disruptive uncertainty across the industry.”
The dispute arose in 2024, when Kamax, a component part supplier, once again threatened to stop shipping parts to FCA unless FCA acquiesced to another noncontractual price increase. When Stellantis refused Kamax’s most recent attempt to raise its prices, Kamax stopped shipping parts and argued that it was not required to do so since the contract itself did not allegedly contain a sufficient quantity term.
Kamax’s actions caused two of FCA’s plants to close, sending hundreds of union workers home and causing FCA to not build hundreds of vehicles. To stop a massive supply chain disaster, FCA asked the court to order Kamax to continue to ship it parts, since the parties had an enforceable contract. The court agreed and entered both a temporary restraining order and a preliminary injunction ordering Kamax to continue to supply parts.
Nearly immediately thereafter, Kamax moved for a summary judgment, arguing that a recent Michigan Supreme Court decision, MSSC, Inc. v. Airboss Flexible Prods Co., required buyers to state a precise “set share” of what they needed from the supplier in their contracts, and that a range of what the buyer intended to order from the supplier was not specific enough to constitute a quantity term under the Uniform Commercial Code and the statute of frauds.
After lengthy briefing and argument, FCA prevailed at the trial court, and the court found that FCA’s purchase orders, of which there are over 1.3 million, contained a valid quantity term in the form of a range. Not deterred, Kamax immediately appealed this decision to the Michigan Supreme Court, which responded by stating the Court of Appeals must first weigh in on the issue.
On May 6, appellate counsel Cynthia Filipovich and Gambino appeared before the Michigan Court of Appeals to argue the appeal. Approximately one week later, the Michigan Court of Appeals in a per curiam published decision affirmed the trial court’s decision in favor of FCA, finding that a range suffices as a valid quantity term. This ruling secured the validity of over 1.3 million supply contracts, and likely millions of others that utilize ranges in their purchase orders.
Additional members of the Greenberg Traurig attorney team on the matter include Shareholders David G. Barger and Shawn R. McIntee, Of Counsel Mohsin S. Reza, and Associate Robert "Woody" Angle. Greenberg Traurig also worked with appellate counsel Filipovich from Clark Hill on the appeal.