October 31, 2008 3:19 PM

Breaking: Manatt Wins $236 Million Punitive Damages Award Against Boeing

Posted by Zach Lowe

It's not the $949 million that ICO Global Communications' team from Manatt, Phelps & Phillips had asked for, but a Los Angeles trial jury late Friday hit Boeing with $236 million in punitive damages on top of the $370.6 million the same jury ordered Boeing to pay after finding the company breached a contract to build and launch 12 satellites for ICO Global Communications.

After the $370.6 compensatory damages verdict last week, Manatt partners Barry Lee and Robert Zeavin admitted they were slightly disappointed with the award to their client, a Virginia-based communications company cell phone pioneer Craig McCaw saved from collapse in 2000. They had asked for $1.5 billion, and said they were hoping to make up some of the difference in the punitive phase of the case.

The jury came up short of Manatt's request again, but total damages, with interest, will cost Boeing $707 million for breaching its contract, signed in the mid-1990s.

"It's not as high as we wanted," Zeavin says, "but a quarter-billion dollar punitive damages award in a commercial case is a big achievement." He would not say how much the firm would get.

ICO terminated the deal in 2004 when Boeing said it needed to charge an extra $400 million to complete the project. Lee and Zeavin claimed that Boeing, having just entered the satellite communications market itself, wanted to drive ICO out.

Boeing argued the additional charge resulted from delays caused by ICO's requests. A Los Angeles County Superior Court jury sided with ICO. A Munger, Tolles & Olson team led by partner Brad Brian represented Boeing.

The $370.6 million verdict was already the third-largest of the year, according to Bloomberg data.

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