Lockheed foe gets high court's ear

Semtek filed suit here in 1997 after collapse of Russian satellite deal

Legal matters

June 27, 2000|By BLOOMBERG NEWS

WASHINGTON - Lockheed Martin Corp. has failed to stop a lawsuit that accuses the world's largest defense contractor of undercutting satellite contracts between a Russian company and a small Los Angeles firm.

The U.S. Supreme Court agreed yesterday to consider an appeal by Semtek International Inc., which seeks to pursue a 1997 case it filed in Baltimore Circuit Court. The company at one point sought $100 million from Lockheed Martin.

The court's decision to take the case revives Semtek's second legal bid to get compensation for the collapse of its planned joint venture with Russia's Merkuriy Ltd. The venture would have let Semtek use Russian satellites to sell voice, video- and data-transmission services at what it hoped would be cut-rate prices.

Courts threw out the original lawsuit, filed in California, citing that state's two-year statute of limitations. Semtek then tried again with an identical suit in Maryland, where the statute of limitations is three years.

After some procedural wrangling, the Court of Special Appeals ruled last year that it was bound by the ruling in the California case and that Semtek couldn't sue in Maryland. The high court is being asked to determine if the Maryland court is bound by the California ruling.

Semtek signed a series of agreements from 1992 to 1994 in a bid to set up a joint venture with Merkuriy, which had been designated by Russia's space agency to market satellite technology for commercial use. The lawsuit claims that Martin Marietta Technologies Inc., now part of Lockheed Martin, used a middleman to persuade Merkuriy to break off its negotiations with Semtek. Martin Marietta and Transworld Communications Inc. eventually struck their own accord with the Russian company to provide financing and marketing for the Luch I satellite.

Lockheed Martin has denied any wrongdoing, saying its agreement with Merkuriy doesn't involve the satellites Semtek was discussing with the Russian company.

Semtek hired a high-profile appellate lawyer, Harvard law professor Laurence Tribe, in its successful bid to persuade the Supreme Court to intervene.

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