Interstate Southwest LTD v. Avco Corporation, et al.
When a number of small airplanes experienced engine crankshaft failure and crashed, engine-maker Lycoming blamed a small Texas company that made the crankshaft forgings, and the FAA agreed. In the midst of a worldwide recall of Lycoming engines, Lycoming threatened suit and demanded damages for the cost of the recall of $186,000,000. When Interstate asked us to get involved we started buying and testing Lycoming engines; becoming the second largest owner of Lycoming engines in the world. We then won a race to the courthouse, suing Avco Lycoming in Navasota Texas. Our technical investigation demonstrated that the problem was a defective design of the crankshaft, not poor quality control in the forging factory. Following 8 weeks of trial, the jury agreed, finding design defects to be the sole cause of the failures and awarding Interstate punitive damages for fraud of $96,000,000. While the appellate court nullified the punitive damage award, the liability findings were upheld by the Supreme Court of Texas; the verdict nullified Lycoming $186 million counterclaim