Argo v. General-Dynamics (May 1, 2001, F035495) [nonpub. opn.]

A group of plaintiffs who had worked at General Dynamics’ plant in San Diego sued the company, claiming that General Dynamics discouraged them from joining a 1993 class action by telling them that involvement in the suit would hurt their long-term career prospects. Plaintiffs claimed this was a fraud because General Dynamics had a secret plan to close its San Diego plant, and therefore knew the plaintiffs had no long-term career prospects with the company.

A jury awarded the plaintiffs $1.7 million in compensatory damages and $99.3 million in punitive damages, and General Dynamics retained Horvitz & Levy LLP to handle its appeal. We persuaded the Court of Appeal to reverse with directions to enter judgment for General Dynamics.

The court concluded that plaintiffs had failed to present any evidence supporting their claim that General Dynamics had a "secret plan" to close the San Diego plant. Rather, the facts showed that General Dynamics kept the plaintiffs fully informed of its efforts to sell the plant, making them aware that their careers might well be short-lived. When the sale fell through, General Dynamics decided to close the plant, and made an immediate announcement of that decision. Accordingly, there was no basis for the jury’s finding of liability against General Dynamics.

The National Law Journal described the General Dynamics decision as “the latest in a series of significant appellate wins for Horvitz & Levy,” noting that within “the past year, the firm has won reversals in separate cases of $20 million, $221 million, $405.4 million and $174.9 million.”

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