Jury orders L-3 to pay OSI Systems $125.6 million

SSN Staff  - 
Thursday, June 1, 2006

NEW YORK--On May 25, in U.S. District Court in Manhattan, a jury awarded OSI Systems, a manufacturer of security and medical scanners based in Hawthorne, Calif., $125.6 million in compensatory and punitive damages, resulting from a lawsuit brought against L-3 Communications, a manufacturer of security products and provider of intelligence, surveillance and reconnaissance systems. OSI successfully argued that L-3 "engaged in malice, oppression or intentional fraud as the two companies sought to acquire a third company, PerkinElmer Security Detection Systems," in 2000, the Associated Press reported.
In a statement, L-3 Communications said, "The company believes this verdict and the damages awarded are inconsistent with the law and evidence presented. The company intends to move to have the verdict set aside and, if necessary, to appeal."
Calls to the company resulted in no further comment.
The suit arose out of a letter of intent between L-3 and OSI relating to L-3's intended acquisition of PerkinElmer prior to the Sept. 11 attacks on New York City and the Pentagon. OSI successfully alleged that L-3 promised to acquire the company, then to give OSI rights to Perkin Elmer's assets, but then reneged on that promise, costing the company "an opportunity of a lifetime," as OSI's lawyer, Howard Rubinroit, argued in his closing statement, as reported by the Associated Press. OSI theoretically could have capitalized on the post-9/11 rush to put scanners in airports and other sensitive facilities.