Boeing to appeal California satellite verdict

WASHINGTON Oct 21 (Reuters) - A Los Angeles jury on Tuesday ordered Boeing Co (BA.N) to pay damages of $370.6 million to ICO Global Communications (Holdings) Ltd ICOG.O in a long-running legal dispute over communications satellites, and Boeing immediately said it would appeal.

The dispute dates back to a $2 billion contract initially awarded in 1995 by ICO to Hughes Electronics, which was acquired by Boeing in 2000.

ICO's plan was to build and launch a dozen satellites that would form the basis of new global communications network, but according to arguments presented in the case, only one satellite was ever launched into space, another exploded on launch, and 10 more are incomplete and in storage.

ICO, a satellite communications company based in Reston, Virginia, could not immediately be reached for comment. ICO was taken over by wireless pioneer Craig McCaw in 2000.

Boeing General Counsel Michael Luttig said the company would appeal the verdict, citing fundamental errors in the conduct of the trial before the Los Angeles County Superior Court Judge Emilie Elias. The trial began in June.

"There were fundamental errors in the case as it was submitted to the jury. There were fundamental errors in the conduct of the trial. There were fundamental errors in the instructions to the jury and in the court's interaction with the jury during the deliberations," Luttig said.

Luttig said the appeal could take years to resolve.

Chicago-based Boeing initially sued ICO in 2004 after ICO terminated its contract for the satellites. ICO countersued, accusing Boeing of breach of contract and fraud, and seeking $2 billion in damages.

Boeing has denied wrongdoing in the case and says ICO's problems stemmed from a bad business decision betting on the future of satellite phones.

In its opening arguments, Boeing said ICO repeatedly asked Boeing for delays, and then eventually cancelled its contract with Boeing.

Boeing has cited the lawsuit in its filings with the Securities and Exchange Commission. (Reporting by Andrea Shalal-Esa; Editing by Gary Hill)