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NORTHERN UTAH -- It's one of Utah's most prominent companies, embroiled in a high-stakes court battle against the U.S. government over allegedly defective military equipment. If the government wins, a whistleblower could get tens of millions of dollars.
The case has been working its way through the courts for more than four years and appears to be a long way from resolution.
The federal court released some transcripts of routine pre-trial hearings Tuesday that give a glimpse into a fascinating case.
Utah whistleblower Kendall Dye is not standing on his own. Three years ago, the U.S. Department of Justice joined his lawsuit against ATK Launch Systems, seeking many millions in damages. If ATK loses, Dye's take-home pay could be 30 percent of that.
The controversy swirls around nighttime combat. ATK sold the military thousands of high-powered illumination flares -- big ones -- that dangle from a parachute and light up a square mile.
No accidents have been blamed on the flares, but in the lawsuit the federal government claims they have defective igniters that can be set off by a modest shock. The government claims ATK failed to test properly and provided misleading information to the military.
The worry is a flare could explode accidentally in transit, and sink a ship or bring down an airplane.
In transcripts of pre-trial hearings, a justice department lawyer mentioned drop tests evidently performed by a suspicious whistleblower.
"They have dropped two flares from five feet and 10 feet. They exploded and they failed," the transcripts read.
At another point in the transcript, the judge suggested bringing a flare into court during a future trial to show the jury.
"If you put one of these on the table and roll it off," the government lawyer said, "you have got a good chance of it going off."
An ATK lawyer said the company offered to fix 60,000 flares at its own expense.
"It is cheap, 97 bucks a flare to retrofit it," the lawyer said. "And the government is taking the position, for whatever reason, not to engage in that process."
He suggested the government might be leaving the flares unfixed so they can win a higher damage award.
ATK issued a statement Tuesday, saying the lawsuit is completely without merit. They say 40,000 flares have been used successfully without a single report of a malfunction.
KSL tried to reach whistleblower Kendall Dye Tuesday but was unable to locate him. Lawyers for the government didn't return calls.
If the case goes to trial, it will likely be at least a year from now.
E-mail: hollenhorst@ksl.com
