Billion dollar damage

A US Superior Court jury in Orange County, CA has awarded Beckman Coulter approximately $934 million in compensatory and punitive damages as the result of a lawsuit the company filed against Flextronics.

Beckman Coulter, a manufacturer of laboratory instrument systems, filed the lawsuit in the second quarter of 2001 seeking unspecified damages for breach of contract in a dispute over the supply over circuit boards.

Flextronics, however, believes that the verdict should be overturned because it violates California law and Flextronics’ right to due process under state and federal constitutions.

It says that US Supreme Court rulings as applied in California establish that punitive damages generally must be limited to four times the amount of actual compensatory damages caused by tortious conduct. And in this case, it adds, the jury found only $800,000 of actual tort damages, meaning punitive damages, if any, should be limited to no more than $3.2 million instead of the $931 million awarded.

‘We intend to mount a vigorous challenge of this run-away jury verdict, and are fully confident that this award will be almost entirely eliminated in subsequent legal proceedings,’ said Michael Marks, Chief Executive Officer of Flextronics.

The judge presiding over the case has not yet entered a judgement on the jury’s verdict, and Flextronics expects to file appropriate post trial motions to correct the jury’s decision and will appeal if necessary.

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