Methode Electronics, Inc. v. Adam Technologies, Inc.

After earlier litigation, Methode Electronics (plaintiff), Adam Tech, and Vincent DeVito (defendants) signed a settlement agreement under which Methode sold its Adam Tech stock, trade name, and inventory to DeVito, while retaining rights to market its remaining Adam Tech merchandise; Adam Tech and DeVito could also sell certain transferred inventory during a license period. After signing, Adam Tech and DeVito sent a press release to Methode's customers offering merchandise for sale, and Methode sued in the Northern District of Illinois, alleging the release breached the settlement. To establish Illinois venue, Methode's complaint falsely alleged (via a specific paragraph) that the press release had been sent to distributors and customers in that district. The defendants warned Methode's counsel, Terrence Canade, that this venue allegation was false and threatened Rule 11 sanctions, but Methode's executive told Canade to proceed anyway; Methode later voluntarily dismissed the suit once challenged, and discovery confirmed the release was never sent to that district and that Methode's own people likely knew that when they filed. The district court imposed $65,000 in fines and fees against Methode and Canade for intentionally deceptive conduct.