A Missouri state appeals court on Tuesday determined that diversified manufacturer Rockwell Automation Inc. was liable for $97.6 million in damages for a 1999 gas explosion that destroyed a Kansas City Power & Light Co. plant.
Kansas City Power & Light, a unit of Great Plains Energy (GXP.N: Quote, Profile, Research), in 2001 filed suit against Rockwell charging that defects in two of that Milwaukee-based company’s products contributed to a natural gas explosion that destroyed a 12-story boiler at the KCPL plant.
What happened is that a Rockwell distributor sold an Allen-Bradley PLC to an OEM who was then used by Forney Corporation to make a boiler management system for KCPL. The court found that the AB PLC, and its Troubleshooting Guide, were defective because they did not prevent the explosion and fire. Rockwell’s argument was that they had no way of knowing where their product was used, and no control over how it was used, and in any case, their liability was limited to $190K.
This is where the jury and the trial judge and the appeals court judge leave this plane of reality and go somewhere else, far, far away…
A jury hearing that case calculated KCPL was due damages of $97.6 million, but a district judge determined a prior contract limited Rockwell’s liability to $190,867.
The Missouri Court of Appeals for the Western District on Tuesday overruled that decision and determined that Rockwell, which makes automation systems, was liable for the full amount, according to a copy of the ruling obtained from the court’s Web site at:
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“We do not expect a judgment in this case to have any material financial impact on Rockwell Automation because the company has insurance covering this incident,” said Rockwell Automation spokesman John Bernaden, who added that the company expects “further legal proceedings” in the case.
Great Plains spokesman Tom Robinson said, “We’re pleased with the decision of the court.”
Rockwell shares closed on Tuesday down 4 cents at $75.95 and Great Plains Energy shares finished off 30 cents at $28.45, both on the New York Stock Exchange.
So Rockwell sells a distributor a cheap PLC, who resells it and it winds up being used by a third party or maybe a fourth party, installed in an application that the Forney Corporation could reasonably be assumed to know better than Rockwell, since it was Forney’s chief business, and Rockwell still has to pony up $97 million dollars.
What the heck is wrong with this picture?????