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A Philadelphia attorney and a team of Texas litigators secured a $96 million verdict against a Williamsport, Pa.-based manufacturer of airport engines last week at the close of a seven-week jury trial in Anderson, Texas. The 12-member jury in Grimes County found Lycoming Engines liable for fraud and ordered the airplane-engine manufacturer to pay nearly $86.4 million in punitive damages and more than $9.7 million in actual damages in Interstate Southwest Ltd. v. Avco Corp., according to a court document. Bruce McKissock of McKissock & Hoffman collaborated with the Dallas firm Rose Walker to represent Lycoming’s opponent, a forging plant in Navasota, Texas, called Interstate Southwest Ltd. The jury found Lycoming 100 percent liable for the failure of crankshafts that broke in flight and caused several small airplane engines to fail in flight. The result of the failures was several crashes, injuries and deaths in Cessnas, Pipers and other planes that carried Lycoming engines. In 2002, the Federal Aviation Administration grounded aircraft equipped with specific engines manufactured by Lycoming because of safety concerns, according to court documents. A crankshaft transfers power from an engine’s cylinders to the airplane propeller. Interstate forged the steel crankshafts used in airplane engines built by Lycoming, starting in 1995, according to court documents. At issue during trial was why the crankshafts had failed and whether Lycoming had fraudulently induced Interstate to extend their contract in 2001 by not telling Interstate about the ongoing crankshaft failures, according to court documents. Lycoming argued that the crankshafts had failed because Interstate overheated the metal during the forging process. Interstate contended that Lycoming — designer of the crankshafts — had weakened the steel by specifying that it contain an elevated level of the element vanadium, according to court documents. After deliberating for three hours Feb. 14, the jurors found Lycoming 100 percent liable by a 10-2 vote. They found Lycoming had perpetrated a fraud on Interstate and that Lycoming’s design of the crankshafts had alone caused the failures, according to court documents. The jurors deliberated for another two hours the following day before issuing the $86 million punitive award, McKissock said. An attorney for Lycoming, Scott Cowan of Jones Day in Houston, said his client plans to pursue post-trial motions and appeal the verdict if necessary. What’s uncertain is the future of a related lawsuit pending in Lycoming County, Pa. Lycoming recalled more than 1,500 crankshafts, which allegedly cost the company $170 million. Lycoming and its insurer sued Interstate’s parent companies in Lycoming County Court of Common Pleas in 2003, demanding that Interstate indemnify Lycoming for its losses, according to court documents. That lawsuit has been stayed while Interstate and its parent companies work through bankruptcy proceedings in Alabama, Cowan said. “Based on our position in the Texas case, we don’t believe [the verdict] will have an impact on the Pennsylvania litigation,” he said. But McKissock said the jury’s finding that Lycoming should bear all responsibility for the crankshaft failures will preclude the manufacturer from successfully pursuing the Pennsylvania indemnity action. “That should be res judicata to any claim being brought up here,” he said. Ann Thornton Field, a Cozen O’Connor attorney who is counsel to Lycoming in the Pennsylvania action, declined to comment yesterday. McKissock said his legal team spent $4 million on testing and expert analysis in the case. His Texas counterparts, Martin Rose and Hal Walker, focused on proving the contractual issues surrounding Lycoming’s alleged fraud, and McKissock tapped his experience with cases involving metallurgy and aviation product design. Plaintiffs’ experts testified that poor design placed twice as much pressure on the crankshafts than they were designed to handle, McKissock said. One expert, Anthony J. DeArdo of the University of Pittsburgh’s engineering department, contacted a lab at Ohio State University shortly before trial to request that scientists run a last-minute metallurgical analysis of the metal used during forging, McKissock said. The Ohio State lab informed DeArdo that they had already conducted such a test — two years before — at Lycoming’s request. McKissock said the results supported the plaintiffs’ case, proving the vanadium weakened the steel. The document was not turned over to Interstate during discovery, lawyers said. “It wasn’t given to them because it was our position that that was privileged information that they weren’t entitled to,” Cowan said. Cowan represented Lycoming at trial with Jones Day colleagues Jack Carnegie in Houston, Richard I. Werder Jr. in New York, and Richard J. Bedell Jr. in Cleveland. Lycoming is a division of AVCO Corp., a Textron Inc. subsidiary.

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