Just because a defense contractor employs only 30 people doesn't mean it's a 98-pound weakling.
Anaheim's Cable & Computer Technology took Lockheed Sanders, a division of government defense contract behemoth Lockheed Martin, to court for breach of an oral contract and won $53.3 million in punitive damages plus an additional $11.2 million in compensatory damages. "Their attorneys made arguments from documents and tried to break down people on cross-examination as opposed to having Lockheed people themselves take the stand, look the jury in the eye and say, 'No, no, no, that isn't how it happened,'" Jeffrey S. Davidson of Los Angeles' Kirkland & Ellis says.
Lockheed Sanders' counsel, John Quinn and Dominic Suprenant of Quinn Emmanuel Urqhart Oliver & Hedges, declined to comment for this story.
In May 1996, Lockheed Sanders approached Cable & Computer to team up to bid on a contract to upgrade mission computers for the U.S. Air Force's B-1 bomber.
The two companies had worked together since 1993 using similar agreements.
The final bid documents were due on Nov. 11, 1996, five months after Cable & Computer and Lockheed agreed to work together. But 12 days before the bid was due, Lockheed backed out, citing pricing differentials. Cable & Computer could not submit a competitive bid at that point.
Immediately after reneging on the Cable & Computer joint venture agreement, Lockheed Sanders teamed with its sister company, Lockheed Martin Federal Systems, and won the contract.
According to the plaintiff's counsel, the defense took the position that no teaming agreement existed. Getting to trial was the first obstacle, according to lead attorney Eric C. Liebeler , also of Kirkland & Ellis. The U.S. District Court for the Central District of California awarded Lockheed Sanders summary judgment early in the case, but the 9th Circuit disagreed.
"[W]e had some anxious moments, when it didn't look like we were going to make it to trial," Davidson says. Liebeler also had doubts early on.
"It was not until I actually read the 9th Circuit opinion ... that I thought we would [win]," Liebeler says. "[A]t that point, we were all over the legal hurdles, and then it was going to be a factual issue in front of the jury."
At trial, Davidson and Liebeler had to persuade the jury that Boeing would have awarded the Cable & Computer-Lockheed team the contract if Lockheed had not withdrawn.
"Imagine somebody fixing a horse race, fixing an election [or] fixing a lottery," Davidson says. "How do you show that the people they hurt would have won, anyway?" Finding an expert to testify against Lockheed wasn't easy.
"There were a number [of experts] that said, 'That may be the case, but I'm not going to work against Lockheed,'" Davidson says. Davidson and Liebeler's trial strategy was simple: Key witnesses were to take the stand, look the jury in the eye and tell their stories.
According to Davidson, the defense witnesses' weaknesses were devastating to the other side. "Their top executives ... claim[ed to] have no knowledge of any of this," Davidson says.
Reprinted with permission from the Los Angeles Daily Journal, January 25, 2002.