OSI Wins Damages in Dispute With L-3

A federal jury has awarded $125 million in damages to OSI Systems Inc., a Hawthorne-based maker of airport security-detection systems, after lawyers successfully argued that a dispute with L-3 Communications Holdings Inc. caused it to lose substantial business after the Sept. 11 terrorist attacks.

The jury in U.S. District Court in Manhattan awarded $33 million in compensatory damages and $92.6 million in punitive damages, finding that L-3 Communications engaged in malice, oppression or intentional fraud as the two companies sought to acquire PerkinElmer’s detection systems business in 2002.

The jury also found that OSI breached a confidentiality agreement and awarded L-3 Communications damages of $1.

The verdict came Wednesday after a 3 1/2 -week trial in which witnesses disputed what occurred after PerkinElmer insisted that it only wanted to deal with one buyer even though both companies had agreed to acquire it together.

New York-based L-3 Communications said it “believes this verdict and the damages awarded are inconsistent with the law and evidence presented. The company intends to move to have the verdict set aside and, if necessary, to appeal.”

OSI’s lawyer, Howard Rubinroit, argued that L-3 Communications did not deliver on its promise to buy the assets of PerkinElmer for both companies and give OSI all the rights as if OSI’s name was on the contract.

“Acquiring the PerkinElmer business was an opportunity of a lifetime for OSI. It was post 9-11,” Rubinroit told the jury in his closing argument. “OSI was indeed the low-cost leader in the securities detection field, and it would have realized significant synergies and profits but for L-3’s misconduct here.”

Steven M. Kayman, a lawyer for L-3 Communications, told the jury that L-3 Communications put up all the money and took all the risks in the purchase of PerkinElmer and otherwise acted properly.

OSI shares rose $1.42 to $20.10, while L-3 Communications rose 66 cents to $78.14.