ILNews

Defense firm appeals $277M verdict for Humvee maker

Dave Stafford
October 21, 2013
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A defense contractor is appealing an Indiana judge’s order that it pay $277 million to the Mishawaka-based manufacturer of Army Humvee military vehicles. The contractor overcharged for armor kits to retrofit the vehicles during the bloodiest days of the Iraq war, the judge ruled.

United Kingdom-based BAE Systems Inc. and its subsidiary firms last month filed notice with the Indiana Court of Appeals that it would appeal rulings by now-retired St. Joseph Superior Judge Michael P. Scopelitis, who awarded damages to AM General LLC.

Attorneys from Washington, D.C.-based Covington & Burling LLP, an American Lawyer A-List firm, last week applied for temporary admission to represent BAE. No attorneys have appeared on the appellate docket for AM General, which had its own high-powered Washington counsel in the trial court from the firm of Williams & Connolly.

Scopelitis in April issued a series of rulings including a 194-page order that BAE Systems pay AM General judgments totaling $277,939,519 for breach of contract and violations of most-favored customer clauses. 

The notice of appeal indicates it follows denial of a motion to correct error in the trial court. No further proceedings have been scheduled in the case and the trial court transcript has not yet been completed, according to case filings.

Scopelitis’ findings painted a picture of rampant overcharges from BAE and its predecessor companies that AM General passed on to the Army, even as AM General sought to determine true costs. Armor Holdings, which developed the retrofit armor kits, was purchased by BAE, and Armor Holdings’ executives received multi-million-dollar payments and retention bonuses, Scopelitis noted.

But Scopelitis wrote that “BAE was concerned … that disclosing its costs data would reveal excessive profits,” including markups on armor kits of 36 to more than 44 percent, well above the 5 percent to 15 percent profit the Army typically deems reasonable for tank and vehicle purchases.

BAE noted its intent to appeal after the ruling and disagreed with the findings in what it called an “extremely complex contract dispute.”

“BAE Systems is firmly committed to the principles of fair contracting and providing both value and performance in support of its many government and commercial customers,” the company said after Scopelitis’ ruling.

 

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  1. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  2. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  3. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  4. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

  5. Here's an idea...how about we MORE heavily regulate the law schools to reduce the surplus of graduates, driving starting salaries up for those new grads, so that we can all pay our insane amount of student loans off in a reasonable amount of time and then be able to afford to do pro bono & low-fee work? I've got friends in other industries, radiology for example, and their schools accept a very limited number of students so there will never be a glut of new grads and everyone's pay stays high. For example, my radiologist friend's school accepted just six new students per year.

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