DAT, Convoy drop lawsuits against each other

In May, U.S. District Judge Karin Immergut appeared to tilt the dispute in Convoy’s favor when she dismissed most of DAT’s claims against Convoy but allowed all of Convoy’s claims against DAT to proceed. Convoy had complained that if a DAT load board customer does not agree to sign an exclusivity clause prohibiting them from posting their loads to any other load board, the customer has to pay DAT higher rates. Convoy also argued that a DAT exclusivity clause unfairly barred it from contributing its own data to any other competing trucking rate assessor.

At that point, DAT had little to gain except perhaps some remuneration for breach of contract, while it had a lot to lose: There was a chance that Immergut could find its strict exclusivity clauses illegal.

Meanwhile, after the decision in May, Convoy had successfully fended off most of DAT’s claims and had little to gain by further pursuing the matter in an expensive trial. A settlement seemed likely. In the end, while DAT’s attempt to punish Convoy for opening a competing load board and contributing to alternative rate assessors failed, DAT’s noncompete and exclusivity clauses have been left formally intact. 

An attorney familiar with the case commented, “Given the poor quality of DAT’s initial pleadings, as indicated by the judge’s dismissal without prejudice of most claims, DAT likely hoped Convoy would see [defending itself] as exceedingly expensive. Adding to that, on its face, DAT had a strong claim and DAT probably thought Convoy would capitulate early. DAT underestimated Convoy’s attachment to its new product and/or were blind to their own antitrust vulnerability. Convoy scrambled DAT’s plan with a strong and aggressive counterclaim. The only downside to the counterclaim was that it made it ‘must win’ litigation for DAT. When neither side can afford to lose, the case is prime for settlement.”

It’s still an open question as to what this legal outcome means for other current DAT load board customers, especially freight brokers who want full control over their own rate and shipment data.

Update:

In a statement Tuesday morning, a DAT spokesperson said, “DAT and Convoy have amicably resolved their dispute on confidential terms, including a payment by Convoy to DAT to avoid the uncertainty and expense of continued litigation. Convoy recognizes and appreciates DAT’s significant contributions to the freight industry and both Convoy and DAT are pleased to put this dispute behind them.”