Nordam and Cessna Tangle over CJ4 Cabinetry Contract

 - May 3, 2011, 10:00 AM

Nordam Group of Tulsa has filed a lawsuit against Cessna Aircraft, alleging a breach of contract and seeking to prevent the OEM from transferring intellectual property to a competitor, according to court documents. The claim states that unless Cessna is halted, Nordam will suffer more than $30 million in damages. Last Thursday, U.S. Chief District Judge Claire Eagan in Tulsa turned down Cessna’s request to dismiss or move the case to U.S. District Court in Wichita. The judge did, however, grant Cessna’s motion to stay the proceedings pending resolution of the dispute before the American Arbitration Association. In the lawsuit, Nordam claims the Wichita-based OEM “shopped around” the cabinetry portion of the Master Agreement, and informed Nordam that if it did not lower its price for CJ4 cabinetry by 20 percent, Cessna would place no more purchase orders with Nordam for the cabinetry and would procure them from another source. Nordam further says that Cessna had demanded as part of the sole-source Master Agreement that Nordam buy a CJ4, contribute $560,000 toward the aircraft’s development and deliver 11 ship-sets of consigned parts without cost to Cessna. The Wichita-based OEM said only, “We have no comment while the matter is being litigated.”