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ICO Global Communications asks to reinstate Boeing verdict

ICO asks the California Supreme Court to reinstate a $603-million award against the aerospace giant, alleging two appeals court judges had conflicts of interest.

May 24, 2012|By Ryan Faughnder, Los Angeles Times

A company headed by cellphone pioneer Craig O. McCaw asked the California Supreme Court to reinstate a $603-million fraud and breach-of-contract verdict against Boeing Co., alleging that two appellate justices had conflicts of interest.

ICO Global Communications, a subsidiary of Pendrell Corp., said in its appeal filed Wednesday that two state 2nd District Court of Appeal judges considered Boeing's petition to toss out the trial court verdict even though they owned stock in Boeing.

Both judges eventually recused themselves from the case before a final three-judge panel overturned the 2008 trial court verdict in April.

"If this were a jury trial and two jurors were found to have engaged in deliberations while they had a conflict of interest, there is no doubt a mistrial would have been declared, and the process would have started over," said Barry Lee, ICO's lead attorney.

Boeing declined to comment.

Due process "requires that the appellate proceeding not create the 'appearance of bias.' That requirement was not met here given the panel's extended deliberations with conflicted members," the petition stated.

The justices did not say why they recused themselves, but ICO based its claims of conflicts of interest on public disclosure documents showing they owned Boeing shares.

Justice Elizabeth Grimes had "reviewed the briefs and the record, conferred with her colleagues, joined in a request for supplemental briefing on specific issues and participated in oral argument," the petition stated.

After Grimes recused herself last November, Presiding Justice Tricia Bigelow replaced her on the panel. But early this year, Bigelow also recused herself.

ICO had been awarded $603 million in compensatory and punitive damages at trial on allegations that Boeing breached two contracts to build and launch a dozen telecommunications satellites.

But the 2nd District Court of Appeal ruled that ICO had waived its claims for breach of contract and that evidence of fraud was insufficient. ICO's petition to the state's high court also challenges the appellate court's legal analysis.

McCaw, a billionaire, built his fortune on McCaw Cellular Communications Inc., a major cellphone carrier, and sold it to AT&T Corp. in 1994. He has since been involved in a number of wireless and telecom ventures. As chairman, he owns about a third of Pendrell, which is based in Kirkland, Wash.

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