The settlement of the Eaton v. Frisby litigation last week was not a surprise. The case went quiet after Eaton got its clock cleaned last year at the Mississippi Supreme Court, which is a reliable indicator of advanced settlement negotiations. I suspect that the case has been basically settled for months.
Here is Alison Grant’s story on the settlement in the Plain Dealer. The article notes:
The case spawned more than 2,400 docket entries in Hinds County Circuit Court in Mississippi — where Eaton sued Frisby in 2004, alleging that six former Eaton engineers who took jobs at Frisby stole valuable trade secrets used to make hydraulic pumps and motors for aircraft. Those same six engineers now will divide more than $12 million as part of the settlement, a Triumph spokesman said.
What a win for the Frisby-six. They went from facing jail time in a federal criminal prosecution to dividing $12 million. Federal criminal defendants are almost never acquitted, much less end up making money. Other than the politically motivated sham prosecution of Justice Oliver Diaz, I can’t think of another federal prosecution in Mississippi that did not end in a conviction.
Eaton went from a billion dollar claim to paying $147.5 million to end the litigation. The result should be a lesson to all corporations on how important it is to have in-house lawyers who are competent and ethical. In contrast, the Eaton in-house lawyers seemed straight from the Dilbert comic strip.
Eaton spent millions of dollars trying to dig out of the hole dug by its in-house lawyers and original outside attorneys. But despite the efforts of some of the brightest legal minds in (or outside) Mississippi, the damage done by the original lawyers who wanted to cheat was too much to overcome.
The settlement ends that biggest civil action in Mississippi over the last decade. It will probably be a long time before Mississippi ever sees a case of this magnitude.