Suit Accuses Northrop of Malicious Prosecution
A former Northrop Corp. computer engineer and his attorneys filed a $34-million lawsuit against the aerospace giant Friday, claiming the company destroyed evidence and intimidated witnesses in defending itself against claims by two dozen unhappy purchasers of Northrop computer equipment.
The suit, filed in Los Angeles Superior Court, claims that Northrop lawyers waged such a legal blitzkrieg that attorneys for computer owners were forced to drop out of the case and potential witnesses feared they would never again work in the computer industry.
In one instance, an arbitrator who awarded $18.3 million to computer purchasers was the target of a campaign for removal from the case by Northrop attorneys, who alleged that he might be “mentally abnormal” because he was taking medication for epilepsy.
In another case, a Northrop employee who had testified in a deposition that Northrop’s computers were incapable of handling the workloads of prospective purchasers changed his testimony during the trial after being offered $9,000 to become an expert witness for the corporation, the lawsuit alleges.
Intimidation Charged
“Essentially, Northrop Corp. through its lawyers engaged in a total attempt to obstruct justice through the intimidation of witnesses, judges and the prior plaintiffs’ attorneys,” said Robert S. Kilborne, who is representing ex-engineer Robert Banghart and Orange County attorneys David Pastrana and Ronald Stock in the lawsuit.
The complaint seeks damages for malicious prosecution, racketeering, conspiracy to obstruct justice and alteration and destruction of evidence.
Northrop spokesman Tony Contafio said the company would have no comment on the case because it does not discuss pending litigation.
But he confirmed that Cutler & Cutler, the Los Angeles law firm named as one of the primary co-defendants in the lawsuit, is no longer representing the corporation in the computer cases. Spokesmen for Cutler & Cutler also declined comment.
Representing Small Companies
Kilborne said Pastrana and Stock figured they had struck gold a few years ago when they began representing two dozen small companies around the country that had bought office computer equipment from Northrop in the 1970s and early 1980s.
The computers, designed for medical office bookkeeping, were losing records and incorrectly billing patients so often that doctors were practically standing in line for legal help.
But the lawsuits seemed thwarted at every turn. Northrop attorneys repeatedly refused an arbitrator’s orders to produce documents that Pastrana and Stock said would show the company had failed to test its computers and knew they were defective when they shipped them to customers, the suit filed Friday alleges.
Northrop lawyers sued the arbitrator hearing one of the cases, alleging bias and physical and mental incapacity, after the arbitration service appointed to oversee the case refused to remove him.
They sued Banghart, a former computer engineer who was providing key evidence to plaintiffs in the cases, accusing him of disclosing trade secrets and demanding $5 million in damages. They threatened to sue employees who had offered to help.
Finally, they sued Pastrana and Stock for $15 million, forcing their removal from the case three months before the first suit was scheduled for trial and, Friday’s suit alleges, costing them nearly $2 million in legal business after their malpractice insurance was canceled.
Lack of Evidence
There has been no evidence on the public record that attorneys for Northrop destroyed or altered documents pertaining to the computer systems.
But a recent declaration filed by Kilborne in Norwalk Superior Court contains an account of a private hearing before Judge Mario Fukuto in which attorneys for Munger, Tolles & Rickershauser, the law firm that replaced Cutler & Cutler, disclosed that they had found such evidence.
The transcript of the September, 1985, hearing has been sealed by the court, but the public declaration said Northrop attorney Ronald Olson revealed that a paralegal worker had informed him that “certain documents” pertaining to the case had been altered or destroyed.
Fukuto turned the report over to the Los Angeles County district attorney for investigation, according to the declaration.
Allegations Investigated
Deputy Dist. Atty. Stanley Weisberg said both his office and the grand jury looked into the allegations in Pastrana’s and Stock’s suit, calling several witnesses for testimony, but concluded there was not sufficient evidence to file criminal charges.
The results of the inquiry were turned over to the State Bar for further investigation, Weisberg said.
Included in Banghart’s suit are court transcripts that show that at least two other employees who appeared for depositions in the case were threatened with being added as defendants in the suit.
Another employee, Barbara Rhodes, was told by her former Northrop boss that if she testified, she would never work in the computer industry again and her daughter “would be in some danger,” the suit alleges. Rhodes testified in an earlier case that she was “convinced” the phone call was an attempt to prevent her from testifying.
‘Unknown Female Agent’
The lawsuit also alleges that Northrop attorneys, through “an unknown female agent,” contacted a juror in one of the computer cases and offered a bribe, claiming to be from Herbert Hafif’s law offices, where Kilborne is an attorney. The juror was subsequently dismissed from the case.
Only a few of the computer cases went to full trials, and those that did resulted in awards of less than $100,000. Most were settled for undisclosed sums.
Joseph Jacob Aron, the arbitrator Northrop attorneys had sought to disqualify because of his alleged bias and epilepsy, awarded several Wisconsin physicians $18.3 million, but the award was overturned on appeal. Aron has since filed a countersuit against Northrop, alleging conspiracy, slander and abuse of process.
