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Marching orders given in armored vehicle case
By Dan McCue
Staff Writer
U.S. District Judge Patrick Michael Duffy has established a schedule for the legal battle between the region’s premiere armored vehicle manufacturers that provides for an extended mediation process and a trial, if there ultimately is a need for one, commencing no sooner than Aug. 1, 2008.
Duffy’s conference and scheduling order, issued Oct. 16, establishes the ground rules for what is quickly shaping up as one of the nastiest cases of business litigation in memory.
On Aug. 21, Force Protection Inc. of Ladson sued its North Charleston-based competitor Protected Vehicles Inc., charging the latter with stealing its trade secrets.
The 29-page lawsuit, filed in the U.S. District Court in Charleston, asserted that Garth Barrett and other former Force Protection executives who left the
Ladson-based company two years ago to found Protected Vehicles left with more than their contributions to their 401(k) plans.
According to Force Protection, they also misappropriated confidential and proprietary information on their way out the door.
In court papers, Force Protection’s attorneys, Anne Louise Ross and John H. Tiller of the Charleston law firm Haynsworth Sinkler Boyd P.A., said Barrett “had unlimited access to the trade secrets and confidential information belonging to Force Protection relating to all aspects of (its) various armored vehicle products including research, design, development, manufacturing, marketing, sales and testing.” Barrett was a founder of Force Protection and also, at various times, its president, chief technology officer and facility security officer.
Force Protection charges that PVI relied on that confidential information to “unfairly compete with the armored vehicles produced by Force Protection, in particular, the Buffalo, Cougar and the Cheetah.”
Barrett’s co-defendants in the civil suit are Thomas Thebes, Force Protection’s former vice president of finance, and Paul Palmer, the company’s former production planner.
Protected Vehicles fired back on Oct. 2 with a countersuit that characterized Force Protection’s lawsuit as an “abuse of the judicial process” and an attempt to smear former executives turned “whistleblowers.”
The countersuit went on to allege its more well-established competitor has engaged in multiple violations of U.S. Securities and Exchange Commission rules and regulations to commit “extraordinary acts of fraud and deceit.”
It went on to cite former Force Protection CEO Michael Watts’ indictment and eventual guilty plea to one charge of income tax evasion.
Watts and his wife, Jan, were indicted in October 2004 for underreporting income on their 1997 tax return. The couple pleaded guilty to the charge in the U.S. District Court for the District of Northern California on May 22, 2007.
In their counterclaim, Protected Vehicles’ principals contend they were whistleblowers who “sought tirelessly” to reform the company and inoculate it from the misconduct of its management.
Force Protection’s litigation, they maintained, is “but the latest in a history of unlawful activities pursued by (the company) and its key management.”
Attorney Robert H. Hood Jr., who is representing Protected Vehicles, declined to comment when asked whether a nasty and protracted fight looms ahead for the two defense contractors.
“I would run afoul of the court if I discussed this case with the press,” he said. “Going forward, we’re going to rely on the legal briefs we file with the court to do our talking for us.”
Ross and Tiller of Haynsworth Sinkler did not respond to phone calls or e-mails requesting comment on the lawsuit or the countersuit. However, Force Protection’s attorneys asked the court for an extension of the time in which it is allowed to answer Protected Vehicles action.
In issuing his order, Duffy said he intended for the schedule he established to help in the effective administration of the case “in the shortest amount of time, and at the least possible cost to the litigants.”
Hood said he and the attorneys for Force Protection would be meeting on Nov. 5 for a conference pursuant to the Federal Rules of Civil Procedure, and could potentially compress or expand Duffy’s timeline in certain areas.
In the meantime, Duffy has informed the attorneys for both companies that the process of taking depositions and requesting documents and other evidence from the other side can now begin. This process of discovery must be completed no later than March 31, 2008.
As it stands now, the court expects motions to bring other parties into the lawsuits or to amend the initial pleadings by Dec. 3, 2007. Force Protection has until Dec. 31, 2007, to disclose its expert witness list; Protected Vehicles, until Jan. 30, 2008.
Motions to dismiss one or more claims in the cases are due by April 11, 2008, while motions on what evidence may or may not be introduced at trial are due by July 11, 2008.
All the while, the two companies will be engaged in a mediation process that is scheduled for completion by June 13, 2008. If no resolution of the case is reached by then, pretrial briefs are due in court by July 25, 2008.
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@setcommedia.com.
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