Facts

In 1998, the U.S. Air Force entered into contract negotiations with The Boeing Co. The parties discussed the manufacture of a B-1 Towed Decoy System by Boeing. The system worked by setting up a decoy which is pulled behind the bomber to guard it from attacks by guided missiles. Later, the U.S. Attorney's Office filed an action against Boeing, alleging that Boeing failed to disclose the true cost of producing the system during negotiations.

PLAINTIFF'S CONTENTIONS:
Plaintiff initially contended that defendant agreed to produce 50 parts of the system at its Palmdale Site 9 facility, but actually intended to shut down the site and enlist others to produce the parts. Further, plaintiff alleged that defendant failed to disclose that it had previously hired subcontractors to perform certain manufacturing steps used to make the parts at a substantial cost savings. Last, plaintiff contended that paid $7.5 million more than it otherwise would have due to defendant's alleged misconduct.

Plaintiff initially sought $24 million, after trebling alleged damages and adding alleged penalties. Plaintiff later dropped the allegation that defendant intended to purchase the parts at the time defendant proposed to make them and reduced its alleged damages to $5.4 million. The amount plaintiff sought after trebling those alleged damages and adding penalties was over $16 million.

DEFENDANT'S CONTENTIONS:
Defendant denied the allegations. It admitted no liability and claimed that its actions in relation to the agreement were proper. Defendant declined to admit liability and claimed that its actions in relation to the agreement were proper.

Result

The parties settled the lawsuit for $4 million.