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 suite and demanded damages for the cost of the recall of $186 million. When Interstate asked our team 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 the eight weeks of trail, the jury agreed, finding design defects to be the sole cause of the failures and awarding Interstate punitive damages for fraud of $96 million. While the appellate court nullified the punitive damage award, the liability findings were upheld by the Supreme Court of Texas; the verdict nullified Lycoming’s $186 million counterclaim.