Soon after getting kicked out, Franco legally proclaimed his innocence and filed suit for "Defamation, Tortious Interference with Contractual Relations, Breach of Contract and Breach of Fiduciary Duty."
In late May and early June of this year, Franco’s lawsuit was tried before a jury in King County Superior Court in Seattle. On June 14, the jury announced its verdict. Harley won big: $75.1 million in awards for defamation and tortious interference.
However, that’s not how Centerline Logistics, the renamed tug-and-barge company, saw it, at least according to a press release sent out on June 21. “Centerline Prevails On All Counts in Franco Lawsuit,” read the headline. “We are happy to have this baseless lawsuit behind us, and we will now seek reimbursement from Franco for diverted company assets,” said Matt Godden, Centerline CEO.
The press release mentioned nothing about a $75.1 million award to Franco. How could it? Centerline had prevailed on everything.
Except for two things: One, Centerline was not a defendant in the lawsuit; two, it was a split decision: Harley Franco had prevailed on all three questions of defamation and all three questions of tortious interference. The defendants won on a breach of contract question and a fiduciary duty question.
The verdict, as decided by a jury, was that Macquarie Marine Services LLC had made defamatory statements about Franco. Also, Tobias Bachteler of Macquarie Capital (USA) Inc. was found guilty of defamation. (Macquarie is an Australian-based investment group that owns a minority share of what’s now Centerline Logistics.)
For these verdicts, Macquarie Capital and Macquarie Marine Services each were fined $2 million. Bachteler was fined $100,000, for a total defamation award to Franco of $4.1 million.
Macqaurie Capital and Macquarie Marine Services were also found guilty of “Tortious Interference with Contractual Relations,” with each charged to award the plaintiff, Franco, $35.5 million, for a total of $71 million. So the plaintiff’s total damage award was $75.1 million.
After the verdict and awards were announced, the defendants’ attorneys petitioned the court for reconsideration based on a legal concept of “litigation privilege,” meaning that statements included in court filings could not be considered defamatory.
The judge, King County Superior Court Judge Suzanne Parisien, ruled for the defendants and tossed the $75 million in awards. Franco’s lawyers asked for another reconsideration from the Superior Court but that was denied. Now the case goes to the Washington State Court of Appeals. Its decision could be at least 12-18 months away.
Franco is outraged that the jury verdict was overturned. “By her [Judge Parisien’s] vacating the jury’s award, that violates my right to a jury trial,” he told me. “We’re going to argue fiercely that the jury was correct, and the judge was incorrect in what she did.”
Franco sees himself as a guy who started with one tug and one barge from which he built a worldwide operation with a large and growing fleet of newbuild vessels. The company won many environmental awards. They won safety awards. Franco was even inducted into the International Maritime Hall of Fame a few years ago.
“They defamed me to the industry,” said Franco. “They defamed me to the bond holders. They defamed me to my customers. They defamed me to my employees. They defamed me to my friends and my family. And with their misstatements in the press, that defamation continues.”
To add insult to injury, after the judge’s reversal, someone left a cluster of mylar balloons spelling “LOSER” at the street end of his driveway. Meanwhile, the family was in mourning over the death of his mother, a few days prior.
When there’s this much bad blood, everybody gets splattered. It’s ugly.