Spartech Corp. has been ordered to pay $3.4 million to a customer after a jury found it guilty of fraud.
Fontana Products Inc. sued Spartech last year, claiming Spartech supplied it with generic thermoplastic elastomer sheet rather than sheet made of Santoprene from Advanced Elastomer Systems LP of Akron, Ohio. A U.S. District Court eight-member jury in Los Angeles made the award March 19.
Fontana of Alta Loma, Calif., designs and installs the Fontana Safety-Rail widely used at horse racing tracks. Fontana bought sheet from Spartech and had it formed into railings by C&D Plastics of Ontario, Calif.
Fontana lawyer Theresa Barta said the company first suspected its sheet wasn't Santoprene in January 1997. A railing fell from a Fontana truck in Portland, Ore., and got chipped on the road. Railings made from Santoprene never did that, she said. Fontana also found that C&D Plastics was having difficulty forming the sheets, also uncharacteristic for Santoprene.
Barta said discovery at trial showed Spartech had switched Fontana's sheet from Santoprene in July 1995.
Spartech lawyer Richard Scherrer said from his St. Louis office that the company will file a motion to overturn the award. If that fails, Spartech will file an appeal.
Scherrer said Spartech's defense rested on production records that showed no difference between Santoprene and the substitute and that Fontana's rails did not fail when made of the other TPE. A judge did not allow the production records as evidence because they were produced too late in the trial.
Barta said she requested the production records early in the trial but Spartech claimed it could not find them. Spartech brought the records to court on the last day of trial.
Scherrer said Spartech's record-keeping generally is good and the company is ISO 9000 certified.
Barta said Fontana's rails help save riders' and horses' lives and so the substitution was a safety issue.
Fontana was awarded about $1.7 million for intentional fraud, $1.5 million as a punitive award and the rest for breach of warranty. U.S. District Judge Richard A. Paez presided over the 10-day trial.
