Liability law in the US involves "strict laibility". Basically this means that a "deep pocket" company or individual that causes 20% of the problem can be made to pay for 100% of the damages
It's not really my area of practice, but I think that the "strict liability" concept is more or less confined to the personal injury area and product liability suits--where a consumer/user of a product is injured in the course of using the product which, for one reason or another, through the actual or "deemed" (thus, the notion of strict liability) negligence of the manufacturer of the product itself or of a component therein, is alleged to be and may be found responsible for the injury and therefore for damages resulting therefrom.
I don't think that these concepts will have much application in the case of I*.
As to I*'s system design, many have questioned the technological premise behind it, as Valueman recently and others, including GG, have pointed out. Whether MOT can be pinned with liability for backing a flawed design is open to question. It's also not clear whether the system can never be made to work in a functional, or reasonable, manner. Certainly, I* and its partners, MOT included, admit to as many marketing gaffes as technical flaws. Whether I* phones can work in a manner reasonably appropriate to the purposed for which intended is still a possibility. It is also a possibility that G* will surpass as if I* were adrift dead in its satellite orbit. Let's hope so!!
MOT was designing and helping construct a first-of-its-kind consumer satellite phone system. The losses sustained in the failure of I*'s business model may be the subject of an action by MOT's partners, based in any number of possible contractual claims, which may include negligence as to one or more elements of design, manufacture, or execution. Strict liability, as such, would not enter into this analysis; breach of express or implied warranty might. But "business judgment" here may shield MOT or others from guesses that have not proved out.
First, it built a system that just doesn't work and as such probably can't escape liability for much of the cost of the failure. Second, it knew or should have known that the best available technology was CDMA and proceded with its IRID TDMA system that didn't work. Add to this the fact that G* will become a glowing success.
It may well be that MOT has "liability" for the failure, to the tune of $1.5 billion, or more of its own exposure. As to using CDMA vs. TDMA, I suspect that that in part was due to the time frame in which I* was on the drawing board, at a point in time when CDMA was not yet commercially proven or thought sufficiently reliable. Don't know.
I* will no doubt face continuing shareholder suits for false and misleading statements made as to the prospects and fitness of the I8 system for its intended purpose.
Regards. Steven |
