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. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  2. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  3. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

  4. Duncan, It's called the RIGHT OF ASSOCIATION and in the old days people believed it did apply to contracts and employment. Then along came title vii.....that aside, I believe that I am free to work or not work for whomever I like regardless: I don't need a law to tell me I'm free. The day I really am compelled to ignore all the facts of social reality in my associations and I blithely go along with it, I'll be a slave of the state. That day is not today......... in the meantime this proposed bill would probably be violative of 18 usc sec 1981 that prohibits discrimination in contracts... a law violated regularly because who could ever really expect to enforce it along the millions of contracts made in the marketplace daily? Some of these so-called civil rights laws are unenforceable and unjust Utopian Social Engineering. Forcing people to love each other will never work.

  5. I am the father of a sweet little one-year-old named girl, who happens to have Down Syndrome. To anyone who reads this who may be considering the decision to terminate, please know that your child will absolutely light up your life as my daughter has the lives of everyone around her. There is no part of me that condones abortion of a child on the basis that he/she has or might have Down Syndrome. From an intellectual standpoint, however, I question the enforceability of this potential law. As it stands now, the bill reads in relevant part as follows: "A person may not intentionally perform or attempt to perform an abortion . . . if the person knows that the pregnant woman is seeking the abortion solely because the fetus has been diagnosed with Down syndrome or a potential diagnosis of Down syndrome." It includes similarly worded provisions abortion on "any other disability" or based on sex selection. It goes so far as to make the medical provider at least potentially liable for wrongful death. First, how does a medical provider "know" that "the pregnant woman is seeking the abortion SOLELY" because of anything? What if the woman says she just doesn't want the baby - not because of the diagnosis - she just doesn't want him/her? Further, how can the doctor be liable for wrongful death, when a Child Wrongful Death claim belongs to the parents? Is there any circumstance in which the mother's comparative fault will not exceed the doctor's alleged comparative fault, thereby barring the claim? If the State wants to discourage women from aborting their children because of a Down Syndrome diagnosis, I'm all for that. Purporting to ban it with an unenforceable law, however, is not the way to effectuate this policy.

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