Jury Awards $107 Million to 2 Ex-Aerospace Employees

By Chris Kraul

Los Angeles Times (July 27, 1996)

Courts: General Dynamics is found liable after failing to compensate them for equity in subsidiary when it sold missile business to Hughes Aircraft.

Two victims of Southern California's aerospace industry collapse received some sweet solace Friday when a Los Angeles County Superior Court jury awarded them $107.4 million in damages after finding that their former employer, General Dynamics, was liable for fraud and breach of oral contract.

William Forti and Dolores Blanton, two longtime employees at the company's missile plant in Pomona, were awarded $3.7 million each in compensatory damages and $50 million each in punitive damages in the case, which was tried in the court's Norwalk Division. General Dynamics, which sold the Pomona plant to Hughes Aircraft in 1992, is expected to appeal the verdict.

According to their lawsuit, filed in 1992, Forti and Blanton agreed in 1990 to start a new company for General Dynamics called E-Metrics in which they and five other General Dynamics employees were to receive an equity interest. General Dynamics would retain 80% control. The venture was to have pursued novel computer technology.

But in 1992, General Dynamics sold E-Metrics along with the rest of its Pomona-based missile business to Hughes Aircraft for $500 million and did not compensate Forti and Blanton for their equity in the spinoff, the suit says. Both were also laid off as a result of the closure of the Pomona division. They were among about 125,000 Southland aerospace workers who lost their jobs in the defense industry shakeout.

Former General Dynamics Vice President Sterling Starr, who headed the Pomona division, testified that no ownership promise was made to Forti and Blanton, according to lead plaintiff attorney Don Howarth. But the jury believed the testimony of five witnesses, including the plaintiffs, that oral promises were made.

After three days of deliberations, the jury in Superior Court Judge Chris Conway's courtroom handed down the compensatory damages award. The panel then went back in deliberations and two hours later emerged with the punitive damage award.

General Dynamics attorneys Michael Mugg of San Bernardino and Linda Listrom of Chicago did not return telephone calls.

Blanton worked 15 years as an administrative assistant at General Dynamics.

Forti was a business development executive; after being laid off by the aerospace employer, he became a successful inventor. He and his son Mark sell a one-ounce Frisbee-like plastic ring called an X-zylo that can be thrown the length of two football fields.

Brian Bubb, part of the victorious legal team, said the toy has been a "tremendous success" and that Wal-Mart recently agreed to sell the product in its stores.

"He may be financially set, but I'm sure he takes great pride in the work he and his son are doing in developing their own business," Bubb said.