Jury hits Lycoming with $96 million judgment

The $96 million verdict of a Texas jury against Textron Lycoming has left two Dallas lawyers crowing, Lycoming in dead silence, and much of the aviation industry wondering how 12 country folk came to know so much about engineering.

The case concerned a back-and-forth legal battle between Lycoming and Interstate Southwest Ltd., supplier of the faulty crankshaft forgings that resulted in grounding all TIO-540 and LTIO-540 aircraft engines in 2002. Lycoming replaced 1,400 crankshafts at that time and concluded that Interstate was to blame for allowing “a variation” in the heat-treatment process. Interstate, disagreeing, hired the Dallas law firm Rose Walker and sued in the Grimes County District Court. That’s about halfway between Austin and Houston, in East Texas.

Lycoming promptly launched a countersuit in its home state of Pennsylvania, asking indemnity of $173 million. That trial has not yet been completed. Interstate’s lawyers say it cannot be pursued, due to the Texas court’s finding. Lycoming would not discuss the matter, but an uninvolved lawyer at an international law firm in Delaware commented that Lycoming almost certainly will appeal. “It is a little early for (Interstate lawyer) Marty Rose to be claiming total victory,” he added.

Rose and law partner Hal Walker convinced a Texas jury that Interstate’s experts “were able to determine that Lycoming’s design for the crankshafts, which dates back to smaller, lower horsepower engines from 40 years ago, was inadequate for the larger, higher horsepower engines that failed.” Rose also was able to connect the problem to the addition of vanadium to the steel, which Lycoming started doing shortly before the first failures. Interstate claimed that the vanadium “reduced the amount of stress the crankshafts could withstand.” Vanadium makes steel harder and, in some cases, easier to machine.

According to Walker, “The jurors found the combination of poor design and vanadium pushed these crankshafts beyond their limits. That’s why these planes crashed and not, as Lycoming claimed, because Interstate overheated the forgings.” The actual court documents are a little more reticent than the lawyers, but do state unequivocally that the “sole cause” of the crankshaft failures was Lycoming’s design. On Feb. 15, the jury awarded Interstate $9,725,650 in actual damages and a whopping $86,394,763 in punitive damages. State District Judge Jerry Sandel also found Textron Lycoming liable for fraud, according to the court documents.

The Delaware lawyer whom we consulted did not fault Rose and Walker for the astonishingly high punitive damages. “That’s their job,” he said. “Obviously, they were more convincing than their opponents. That’s the chance you take with a jury.”

Several heads of aviation firms with whom we spoke were less charitable. “I thought that was all taken care of when Congress limited awards against airplane manufacturers,” said one. “I think it’s time for serious tort reform.”

What does this case bode for the future? The Delaware lawyer suggested that the days of lawyer- and court-appointed experts should end, particularly in cases where technical disagreements are beyond the understanding of jurors. “You need a completely independent organization, like the National Institute for Aviation Research” at Wichita State University, he said. “They have unimpeachable credibility.”

Harder to address are questions about the FAA’s handling of cases such as Lycoming’s and the controversial separation in flight of an Airbus composite vertical fin. In both of these examples, the FAA declared the materials and processes involved to be airworthy. The original FAA Airworthiness Directive about the Lycoming crankshafts specifically cited “a variation in the heat treatment process.” Does this place any liability on the FAA? Does it bring the agency into the case on Lycoming’s side? Can the FAA stay out of it? So far, nobody has given us answers — or even guesses — to these questions.

Calls to the Lycoming factory were referred to corporate offices in Wichita, but the spokesman there declined to comment “at this time.” Not surprisingly, the FAA wouldn’t comment either. Many of those with whom we spoke in the aviation business were willing to comment, but not to be quoted directly. There is a decided “wait-and-see” attitude about long-term effects of the Lycoming case which, some predict, could be disastrous.

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