Award of $10.75 Million to Innovative Technologies Corporation Upheld on Appeal

On October 28, 2011, the Second District Court of Appeals unanimously upheld an award of $10.75 million in damages, punitive damages, and attorneys’ fees to a Dayton-based government contractor, Innovative Technologies Corporation.  The Court’s action affirmed a Montgomery County jury verdict following a trial completed on January 3, 2008.  With interest and additional attorneys’ fees, ITC expects the final award to exceed $14 million.  A Montgomery County jury had originally made a larger award against Advanced Management Technologies, a Washington, D.C., area government contractor.  AMTI is a subsidiary of a publicly-traded company, Tetra Tech, Inc.  Following the trial, the lower court reduced the jury’s award but then added almost $3 million in attorneys’ fees to the final judgment for ITC.

The Court of Appeals concluded that AMTI had conspired with former ITC employees and another contractor called Kenton Trace Technologies, LLC, to unfairly obtain an Air Force contract that ITC had successfully performed for many years.  The Court said that AMTI had won the lucrative contract by stealing ITC’s trade secrets and enticing ITC’s employees to breach their employment agreements.  The Court of Appeals decision included almost $6 million in punitive damages.  In upholding that award, the Court of Appeals noted that AMTI had a history of engaging in unfair and deceptive business practices and that “AMTI’s conduct involved intentional malice, trickery, and deceit.”  The Court further observed that two key AMTI executives “both testified that AMTI still had a policy of obtaining proprietary information regarding competitors’ incumbent employees in order to gain an unfair advantage in the bidding process for government contracts.”

Jim Dyer and Mike Moloney represented ITC in the lawsuit.  Dyer said “The Court of Appeals today sent a strong message that the rules of fair competition apply to all companies, no matter how big.  ITC was essentially mugged by a large Washington, DC, beltway company that the Court said has a history of engaging in unfair and deceptive business practices.  AMTI stepped way over the line of legitimate, hard fought competition by stealing ITC’s trade secrets and encouraging ITC employees to breach their employment obligations to ITC.  We agree with the Court of Appeals that this conduct was reprehensible and deserved harsh punishment.”

 

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