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staff reporter Harris’ e-mail address is [email protected]. In a dusty nevada town, a collision between Old West prospecting and 21st century technology has produced a $137 million fraud verdict. The showdown at the courthouse in Tonopah pitted Australia’s Equatorial Mining Ltd. against Kvaerner ASA, a Norwegian engineering firm. At issue: Who was to blame for what the plaintiff, Equatorial Mining, called the catastrophic failure of its 1997 plan to purchase and develop a Tonopah copper mine? After a seven-week trial, a jury of 10 men and women-nearly all of whom had hands-on experience in the mining industry-placed that responsibility squarely with Kvaerner. Equatorial Tonopah Inc. v. Kvaerner US Inc., No. CV 16392 (Nye Co., Nev., Dist. Ct.). The Norwegian firm and its American subsidiary, Kvaerner US Inc., had been retained by Equatorial to assess the Tonopah mine’s commercial viability and to prepare a “bankable feasibility study.” Based on Kvaerner’s assessment, Equatorial and its subsidiary, Equatorial Tonopah Inc., acquired the site and set out to develop it. But extraction of the copper ore from the mine, which was suffused with clay and fluoride, proved to be more difficult than either party had forecast, and the project was abandoned only a year after it started. After a day-and-a-half of deliberation, the jury found that the Kvaerner entities had fraudulently concealed knowledge of the mine’s infirmities and negligently misrepresented its bankability. Finding no contributory negligence by Equatorial, it awarded the plaintiffs $136.9 million. It is believed to be the second-largest jury award in state history. “In Nevada, you don’t get a verdict like this on flimsy evidence,” said plaintiffs’ attorney Chris Wicker of Reno, Nev.’s Woodburn & Wedge. Co-lead counsel on the case, Wicker said that the damages comprised entirely the money Equatorial spent in building the mine and operating it for a year-and-a-half. Planning an appeal Lead defense counsel Val McWhorter maintained during and after trial that his client never affirmatively recommended that Equatorial go ahead with the project and that Kvaerner had said that further testing was needed. Asked if he planned to appeal, McWhorter answered, “Oh yeah!” But he declined to identify specific appealable issues. “The jury was a classic trial by your peers,” said Equatorial’s other lead trial counsel, Paul Yetter, a partner in Houston’s Yetter & Warden. “All 10 had mining experience. That’s what you do in that part of Nevada.” Reached at her home in nearby Round Mountain, Nev., jury forewoman Linda Rodgers said, “If they had the trial in Las Vegas, before a lot of city people, I think [a jury] would have been buffaloed.” Rodgers said that she gained her experience at the Round Mountain gold mine, working in the lab and in the field, where she collected core samples. McWhorter, a partner in the Vienna, Va., firm of Smith Pachter McWhorter & Allen, also said that he believed that the jurors’ experience had influenced their thinking. “At the outset, we thought it would be a plus,” McWhorter said. Before trial, each juror was given a set of three notebooks containing documents that the parties intended to introduce at trial, together with the resumes of key witnesses. Encouraged to take notes, the jurors were also allowed to question the witnesses by submitting questions to the judge, which were then relayed to counsel and incorporated into their examinations. Equatorial’s lawyers said that they relied heavily on presentation of videotaped deposition testimony, which was synchronized with documents being admitted into evidence. A key witness for both sides was Dr. Joseph Schlitt, a renowned metallurgist employed by Kvaerner. At trial, Yetter elicited from Schlitt testimony that he had knowledge of some of the Tonopah project’s inherent problems but had elected to tell only his company superiors, rather than tell Equatorial directly. Going into deliberation, Rodgers said that the jurors were all of similar mindsets. “We all felt that Equatorial had made a lot of mistakes,” she said. “But Kvaerner made some big boo-boos” in its defining of the contents of the mine. Harris’ e-mail address is [email protected].

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