Speed RMG wins $47MM verdict against Arctic Cat

Speed RMG Partners, a marketing, design and engineering firm based in North Carolina, won a $47 million verdict in its case against Arctic Cat, following a relationship the two parties began in 2015. Speed RMG Partners is a collaborative effort between off-road racer Robby Gordon, and Todd Romano, the founder of UTV aftermarket company DragonFire Racing.

When forming this relationship in 2015, Arctic Cat said it reflected the company’s “commitment to the high-performance off-road vehicle market, and its Wildcat side-by-sides and accessories. Gordon and Romano will provide research and development consulting on new technologies.” That same year, Arctic Cat told its dealers about a special Wildcat XX vehicle being developed through this partnership.

Speed RMG presented two theories of breach of contract. First, Speed argued that Arctic Cat owed it mandatory minimum royalties, even for vehicles not made or sold. Second, Speed argued that Arctic Cat breached the right of first refusal by failing to manufacture vehicles for which Speed presented designs.

According to files presented in the case, Arctic Cat intended for production of at least some vehicles to begin in January 2016. In October 2015, an Arctic Cat engineering group leader emailed a component provider that Arctic Cat planned a January 11 start of production date. That December, Arctic Cat’s certification engineer sent an internal email commenting that he expected a January 2016 “build date” for one of the Wildcat models. But by February 2016, Arctic Cat delayed the launch of the partnership Wildcat models.

Arctic Cat asked the Court to dismiss Textron from the suit because, as stated in case files, there were no direct claims against Textron. After the two-week federal trial, the jury entered a verdict for Speed RMG Partners, awarding both contract and fraud damages. In the end, Textron was dismissed from this legal action. According to Rutan & Tucker LLP, attorneys for Speed RMG Partners, the trial team intends to pursue interest on the award, which it anticipates will reach eight-figures. 

Case information via Speed RMG Partners, LLC v. Arctic Cat Sales Inc., 20-CV-609 (NEB/LIB), 1 (D. Minn. Mar. 22, 2022)

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