TKS Asks Court to Set Aside Goss Verdict

By: Jim Rosenberg Three-and-a-half years after filing its complaint, Goss International won a federal lawsuit against Japanese press maker Tokyo Kikai Seisakusho Ltd. and its TKS (U.S.A.) Inc. subsidiary when a jury awarded Goss approximately $10.5 million earlier this month. Judge Linda R. Reade tripled that to $31.6 million, in accordance with the law. Attorneys' fees also will be awarded.

"This is round one; there are at least two more rounds," said Barry J. Reingold, the Perkins Coie LLC lawyer who handled the case for TKS. His client has filed motions for a new trial (arguing that the verdict "was against the weight of evidence," the jury was improperly instructed, and that evidence was admitted and excluded in error) and for judgement as a matter of law and dismissal of the concluded suit because "the jury's finding ... can only have been based on speculation or some other improper basis."

The judge may deny the motion or set aside all or part of the verdict. One way or the other, said Reingold, it's going to the 8th Circuit appeals court. In the meantime, TKS sought to stay execution of the judgement. Judge Reade granted that request, pending a ruling on TKS's other post-trial motions, provided that TKS post a $40 million bond no later than Dec. 22.

Based in Bolingbrook, Ill., Goss claimed in U.S. District Court in Cedar Rapids, Iowa -- former location of its principal U.S. manufacturing site -- that TKS damaged its business by selling presses between 1996 and 2000 below their actual market value. The suit was filed under the Antidumping Act of 1916, which requires that the damage be intentional and the practice "common and systematic."

For Goss to demonstrate the latter, the court admitted evidence from years preceding the period allowed by the statue of limitations.

Similarly, Judge Reade allowed testimony on sales other than those for which Goss sought damages, because it might show Goss' reputation forced it to lower prices to win sales -- raising the possibility that dumping by TKS did not cause damages. The court also allowed evidence that the U.S. newspaper industry invited TKS into the market and that Stonington Partners' 1996 acquisition of Goss was relevant to Goss' profit erosion.

For lost sales, the jury awarded Goss nearly $1.4 million for a 1996 Dallas Morning News project, but nothing for a 1999 Dow Jones & Co. project. For price suppression, it awarded Goss almost $1.7 million for a 1997 Orlando Sentinel contract and almost $7.5 million for a project the same year at The Star-Ledger in New Jersey, but nothing for 1996 and 1998 projects elsewhere.

The verdict in what is believed to be the only successful litigation under the seldom-invoked law concluded a trial lasting nearly three weeks. Japan's Mitsubishi, Germany's MAN Roland and Koenig & Bauer AG, and their U.S. subsidiaries earlier reached settlements with Goss for undisclosed terms.

The suit followed administrative determinations of dumping under another law -- findings that lawyers could not mention to the jury. While TKS lawyers did not take up at trial their contention that the 1916 law contravenes U.S. treaty obligations, they did try to show that the law was not aimed at products that are neither priced nor sold at wholesale.

In a statement issued after the verdict, Goss CEO Bob Brown said, "TKS violated U.S. law and then tried to cover up their actions by destroying documents." With respect to that allegation, Goss sought in July to add to its complaint claims under state conspiracy and federal Racketeer Influenced and Corrupt Organizations laws, based on information it said it obtained during discovery in Japan in spring. The motion was denied, but Goss is free to bring a separate action.

Material related to those claims, however, was submitted under seal as an "offer of proof" several days into the suit. Material that "would relate to the RICO and conspiracy claims" was included not because the amended complaint was rejected but because the material relates "to the claims that we're trying at this trial," said Goss General Counsel MaryAnn Spiegel. "There is overlap in the evidence that way."

Goss' offer-of-proof accuses TKS and another lawyer at Reingold's firm of concealing price manipulation in projects for three large dailies and Dow Jones & Co. It alleges a secret rebate through through false document dating and use of another supplier, disguised free installation, discounted controls and inkers, a misleading final-payment report, contract dates misreported to reflect a favorable exchange rate, a price "artificially inflated" by a promised future discount, and underreported expenses.

After the verdict, a Goss spokesman said that now, "we can turn our attention to the conspiracy and RICO claims. We are in the process of evaluating that."

Goss trial counsel William G. Schopf, of Schopf & Weiss, called the result "a verdict for American industry and the American worker." But he conceded there is probably little direct benefit for the hundreds left jobless in Cedar Rapids. "We filed this... when the plant was still open," said Schopf. "The law often can't work fast enough to keep up" with economic changes, he added.

"The plant closing and bankruptcy were a sham," declared Machinists and Aerospace Workers District 6 Business Representative Joe Ironside, who worked 14 years for Goss. "It was a long-term game plan," he said, adding that bankruptcy killed all hope of saving employee benefits. "The workers got nothing but screwed in this deal."

Schopf said he hopes the precedent set here will in the future help workers, who are more "vulnerable" than shareholders.

But the lawyer also looks beyond workers and owners to customers. Should newspapers, he asked, force prices so low that products are dumped and the sole domestic manufacturer is destroyed?