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Judge Overturns $25M Verdict Because of Fraud by Plaintiff Company

Fraud with red strikethrough over it

In one of his last rulings before leaving the bench after 13 years, U.S. District Judge Leonard Davis of the Eastern District of Texas dramatically erased a $25 million jury verdict. Davis based his ruling on what he described as "without question the worst conduct this court has ever seen."

Davis vacated the verdict because of the fraudulent actions during the trial by corporate plaintiff LBDS, a Richardson-based holding company. LBDS' actions included document forgery, and the company misled its own lawyers, opposing counsel, Davis himself and the jurors, the judge wrote.

In his ruling, issued on May 15, Davis granted the defendants, South Korean-based ISOL Technology and its CEO, $738,706 in attorney fees and dismissed all the jury's findings against the defendants. ISOL manufactures magnetic resonance imaging (MRI) machines. LBDS had sought to market those machines in the United States.

In 2014, prior to the surfacing of the fraud allegations against LBDS, an East Texas jury had awarded LBDS the $25 million verdict based on findings that the ISOL defendants engaged in unfair competition and misappropriation of LBDS' trade secrets.

Read more at the Texas Lawyer.

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