JACKSON, Miss. (AP) — The Eaton Corp. goes before the Mississippi Supreme Court on Aug. 5 seeking reinstatement of its $1 billion trade secrets lawsuit filed against a rival, Frisby Aerospace.
A Hinds County judge in 2010 threw out the case, saying Eaton knew about and sanctioned secret actions that attorney Ed Peters took to influence former judge Bobby DeLaughter, who was the initial judge on the case.
Frisby attorneys argued that Peters worked behind the scenes to influence DeLaughter and give Eaton an unfair advantage in the civil case.
Eaton alleges in its lawsuit that five former Eaton engineers took aerospace information and gave it their new employer, Frisby. Frisby then began competing with Eaton for military and commercial contracts, according to the lawsuit.
The Eaton case is among dozens the Supreme Court will consider during its July-August term. A decision is expected later this year.
In May 2012, federal prosecutors dropped criminal cases against the five aerospace engineers who had been accused of stealing trade secrets. The cases had been frozen since 2009, pending the outcome of the civil suit.
Frisby Aerospace is now part of Triumph Group, based near Philadelphia, Pa.
Cleveland, Ohio-based Eaton, which makes hydraulic aircraft pumps at a 600-employee factory in Jackson, filed suit in 2004. Eaton has argued that protecting trade secrets helps maintain those jobs.
After DeLaughter was removed from the state civil case, Circuit Judge Swan Yerger found that Eaton's lawyers had engaged in multiple forms of misconduct. The company or its lawyers paid a witness, had hired Peters to make improper back-channel communications with DeLaughter, and withheld emails about Peters. Eaton was fined $1.5 million by a judge before he dismissed the suit.
DeLaughter pleaded guilty to obstruction of justice as part of a judicial bribery scandal surrounding former Oxford lawyer Richard "Dickie" Scruggs and served 18 months in federal prison. Scruggs was found to have tried to influence DeLaughter in a separate dispute over legal fees by trying to make DeLaughter believe Scruggs could get him appointed to a federal judgeship.
Scruggs' associates paid Peters $1 million to influence DeLaughter. Peters was given immunity and never tried in the case, though he had to forfeit what was left of the money and surrender his law license. Peters was not been charged in the Eaton case.