In 1997, Beckman Coulter signed a contract with Dovatron International Inc. to make circuit boards for use in a blood analyzer manufactured by Beckman Coulter. Flextronics acquired Dovatron in 2000.
Beckman Coulter sued Flextronics in 2001 after the electronics company terminated the five-year contract. Fullerton-based Beckman Coulter accused Flextronics of breach of contract and economic duress, among other claims.
The bulk of the judgment was an award of $750 million in punitive damages for economic duress stemming from a charge that Flextronics refused to release inventory parts owned by Beckman Coulter unless the company paid for additional parts that it did not need, said attorney Daniel J. Callahan, who represented Beckman Coulter.
The jury determined that Beckman Coulter stood to sustain $295.7 million in economic damages without the spare parts for its blood analyzer. Jurors multiplied the potential damages by four and arrived at the punitive amount.
The other count of economic duress pertained to a $300,000 surcharge that Flextronics was found to have charged Beckman Coulter over and above their contract for the production of the circuit boards. The jury determined potential economic damages to Beckman Coulter would have been $45 million and again arrived at punitive damages totaling four times as much.
The fraud allegation stemmed from an account by a Flextronics employee, who testified her superiors ordered her to overcharge Beckman Coulter to the tune of about $355,000, Callahan said.
The jury recommended Beckman Coulter should receive the actual damages and added on punitive damages of $1.4 million.
Another $2.1 million was awarded to the company for the breach of contract charge.