ICO Calls Foul on Appeals Court Decision in Boeing Case, Files Retrial Petition

By | May 7, 2012 | Feature, Telecom

[Satellite News 05-07-12] Pendrell subsidiary ICO Global Communications has filed a petition with the California District Court of Appeals seeking a rehearing of a decision it made in April that overturned a favorable 2008 Los Angeles Superior Court jury verdict in its ongoing litigation against Boeing, ICO confirmed May 7.

   ICO’s litigation stems from when Hughes Electronics Corp. signed a contract with the company in 1995 to build and launch 12 satellites. Boeing inherited the contract when it acquired Hughes in 2000. At the time, only two of the satellites were completed. Less than a year later, one of the satellites was lost due to a failure aboard a Sea Launch rocket. Four years later, Boeing filed suit against ICO, which filed a countersuit for breach of contract after Boeing allegedly demanded ICO pay another $400 million to finish the job. ICO sought unspecified punitive damages and around $1.5 billion in actual damages, plus interest.
   The Los Angeles court’s 2008 verdict was entered as a final judgment against Boeing in the amount of $603 million, which represented the largest court award in the United States that year. The award had grown to nearly $800 million during the three years that the appeal had been pending due to accumulated interest. On April 13, the California District Court of Appeals issued an unpublished opinion overturning the 2008 jury verdict in the case.
   In the petition, ICO cited procedural irregularities and the participation of two California appellate court justices that later determined they were required to recuse themselves from deliberations. California law requires appellate courts to issue a decision within 90 days of the submission of the case, which typically occurs at the conclusion of oral arguments. Because of this requirement, the practice in California is that appellate decisions are largely developed and drafted prior to oral arguments. In the ICO case, two of the four justices serving on the court, including the presiding judge, recused themselves after oral argument without explanation. A third justice from a different division was then appointed to the case, and given 12 business days to review the 50,000-plus page appellate record before the second round of oral arguments took place.
   ICO’s appellate team leader, Arnold and Porter Attorney Jerry Falk said ICO’s petition raises several serious issues about the process by which the case was resolved. “We believe the court misapprehended key facts and reached erroneous conclusions of law in deciding to overturn the jury’s verdict. We are hopeful that upon further consideration the court will correct the mistakes we identified and reach a different result,” Falk said in a statement.
   ICO’s motion also asserts that the court erred in substituting its own interpretation of the evidence for the jury’s conclusions. The company also filed a Public Records Act request under California law seeking records that might shed light on the reasons for the justices’ recusals and is seeking a new panel of justices to hear its case.
   “The jury had found Boeing liable for fraud, breach of contract and tortious interference, and after finding that Boeing engaged in ‘malice, oppression or fraud,’ they also assessed punitive damages against Boeing,” ICO said in the petition. “At trial, the jury heard evidence of a multi-faceted plan on the part of Boeing and its subsidiaries to drive ICO out of business. The evidence presented at trial included efforts by Boeing to capture ICO ‘s S-band radio spectrum to support Boeing’s own competitive satellite program, efforts to damage ICO’s prospects by lobbying regulatory authorities and secret agreements among vendors intended to coerce ICO to abandon certain rights.”
   Boeing declined to comment on the case.

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