PORTLAND — Freightliner LLC says it will appeal an $850 million judgment against the Portland, Ore., based truck manufacturer and its parent company, DaimlerChrysler.

The tangled legal case, brought by German truckmaker MAN, stems from alleged fraud committed in the 1990s by then Western Star subsidiary ERF.

MAN bought ERF from Western Star in 2000 but says it didn’t discover accounting problems until the following year. Freightliner bought Kelowna, B.C.-based Western Star in late 2000, after ERF had been sold, but MAN later sued Freightliner in a British court claiming it should be held responsible for monetary damages in the ERF case. A London judge awarded damages of 250 million British pounds but that suit is currently under appeal. A final decision isn’t expected until next summer.

In 2004 MAN filed another lawsuit in Oregon, alleging that Freightliner had purposely shifted assets to deplete Western Star resources so it wouldn’t be able to pay the British judgment. A jury at Multnomah County Circuit Court sided with MAN, ordering Freightliner to pay at least $484 million for the British case (more if that court increases the award), plus $350 million in punitive damages to be paid by Freightliner and its parent DaimlerChrysler.

Freightliner attorneys argued that the company didn’t own ERF when the fraud allegedly occurred. The asset shift was part of a restructuring effort to cut costs, they said, and it had nothing to do with the ERF case. Following the judgment — reportedly the largest punitive award in the state’s history — Freightliner issued a statement saying it was disappointed with the verdict and would “vigorously pursue an appeal.”

— via Truckinginfo.com