October 31, 2008

Boeing Hit with $237 Million in Punitive Damages

According to Reuters, a Los Angeles jury has awarded $236.86 million in punitive damages against Boeing, on top of $370.6 million in compensatory damages awarded last week. The plaintiff in the case is ICO Global Communications Ltd., a satellite communications company. Apparently, ICO accused Boeing of fraud and breach of contract for its failure to deliver on a contract to launch a dozen satellites that were supposed to form the basis of a new global communications network.

According to this story on Am Law, ICO's lawyers asked for $1.5 billion in compensatory damages and $949 million in punitive damages. They'll just have to make do with a total judgment in excess of $600 million.

The case number is BC320115, in case any enterprising readers want to download case documents from the L.A. Superior Court's website.

Not surprisingly, Boeing says it plans to appeal. If the appeal is unsuccessful and the full punitive damages award is affirmed on appeal, this would apparently be the 6th highest punitive damages award ever to survive appeal, behind these five:

1. Hilao v. Estate of Marcos (9th Cir. 1996) 103 F.3d 767 ($1.2 billion)

2. Motorola Credit Corp. v. Uzan (2d Cir. 2007) 509 F.3d 74 ($1 billion)

3. Exxon Shipping Co. v. Baker (2008) 128 S.Ct. 2605 ($507.5 million)

4. The $270 million punitive damages award against NiSource and Chesapeake Energy that the West Virginia Supreme Court declined to even review

5. Time Warner Entertainment v. Six Flags Over Georgia (Ga. Ct. App. 2002) 563 S.E.2d 178, cert. denied ($257 million)

If anyone knows of a larger award that survived appeal, we'd love to hear about it. Earlier this year we invited our readers to identify anything missing from this list, and no one named anything bigger than these five.