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San Diego County, California

The plaintiffs in this action were ________ former employees of the Convair Division of General Dynamics Corporation, alleging that the defendant General Dynamics, two former vice presidents and two former managers of the Convair Division, directly and indirectly threatened the plaintiffs’ careers at the company if the plaintiffs participated in a settlement of a then-existing class action lawsuit against General Dynamics. The plaintiffs additionally asserted that when the threats of career jeopardy were made, the defendants defrauded them because the company had already developed a secret plan to shut down the plant where the plaintiffs had worked. The plaintiffs sought recovery under five causes of action: intentional misrepresentation, negligent misrepresentation; concealment; intentional interference with prospective economic advantage and negligent interference with prospective economic advantage.

The incidents out of which the subject lawsuit arose occurred in ________. The plaintiffs contended that the defendants directly and indirectly threatened to terminate the plaintiffs’ careers at the company if the plaintiffs participated in an underlying lawsuit, which had been filed by employees against General Dynamics alleging failure to pay overtime wages as required by the Fair Labor Standards Act. The plaintiffs alleged that while making the threats that the plaintiffs careers with the defendant company would be jeopardized, the defendant, through its vice presidents and certain managers, was developing a secret plan to shut down the plant where the plaintiffs worked, putting them out of a job.

The defendants denied that they defrauded the plaintiffs or interfered with their right to participate in the underlying overtime lawsuit and specifically denied causing the plaintiffs any harm. Additionally, the defendant General Dynamics filed a cross-claim against 23 of the plaintiffs, or cross-defendants, for indemnification and contribution. In its cross-claim, General Dynamics alleged that the cross-defendants were liable for any damages General Dynamics may be ordered to pay as a result of statements the cross-defendants made to their fellow employees that were not authorized by General Dynamics.

The cross defendants maintained that they merely repeated threats they had heard from their bosses to fellow employees, including other plaintiffs. The cross-defendants asserted that they made these threats because they were told to pass along similar information to their co-employees and subordinates and because they were simply repeating actual threats they were told by their superiors, including the defendants.

Alternatively, the cross-defendants’ contended that because the amounts the plaintiffs would have recovered by joining the p 7 3 overtime lawsuit had never been paid by General Dynamics, the company had effectively authorized and ratified the threats the cross-defendants repeated to their co-employees and subordinates.

Prior to trial, the Court limited the plaintiffs’ compensatory damages to the amount they would have recovered had they joined the underlying overtime wage case, which had already been settled. The plaintiffs have another lawsuit pending seeking to recover back overtime since ________ on fraud theories. Given the Trial Court’s ruling limiting the plaintiffs’ damages, the parties stipulated as to each plaintiff’s compensatory damages, ranging from $________ to $________ per plaintiff, which totaled slightly more than $1.8 million.

With regard to punitive damages, the plaintiffs argued that given the reprehensibility and widespread nature of the conduct, the profits the company made from its scheme, and General Dynamics’ net worth ($1.7 billion at the time of trial), only a substantial punitive damages verdict would serve the purposes of punishment and deterrence.

The plaintiffs’ original demand was $23.2 million, reduced to $9.8 million during trial. In closing argument, the plaintiffs’ attorney Monaghan asked the jury to award approximately $________ million in punitive damages. The defendants offered $1.5 million prior to trial, raised to $1.8 million and then $3.6 million during trial, but conditioned on dismissal of this case and several other lawsuits against General Dynamics.

The jury found for 97 of the plaintiffs on all five counts, to recover a total of $________ from General Dynamics and the individual defendant Vietch, one of the two vice presidents, broken down as follows: $________ in compensatory damages against General Dynamics and the individual defendant, $________ in punitive damages against General Dynamics and $________ in punitive damages against the individual defendant.

The jury also returned a defense verdict as to one of the plaintiffs. Before the case was submitted to the jury, the Trial Court granted a defense non-suit as to three other plaintiffs.

Finally, the jury found in favor of all cross-defendants. Costs remain to be assessed against the defendants General Dynamics and Veitch. The defendants have announced they will file motions for New Trial, JNOV and Remittitur.

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