In the business world, a company’s reputation is one of its most valuable assets. It can take years to build a solid reputation, but just one malicious act can threaten to destroy it. Sometimes, competitors in a cutthroat environment resort to false accusations to undermine your ethics and tarnish your standing with key customers.
This is exactly what happened in F-1 Consulting v. Accudata Systems, a trial involving two systems integration companies. Accudata Systems falsely accused F-1 Consulting of federal tax violations to its largest customer, a major energy company. Shortly after, F-1 Consulting lost the account. The challenge in this case was proving causation—there was no direct witness willing to confirm why F-1 was terminated, and the primary evidence was hearsay.
We took an aggressive approach in discovery against the defendant. First, we built a compelling narrative of wrongful conduct, proving that the defendant had purchased shares in F-1’s customer specifically to exploit a shareholder whistleblower process. We then engaged a former IRS chief counsel as an expert witness to dismantle the meritless and complex allegations. Lastly, we gathered circumstantial evidence related to the meeting where the decision to terminate F-1 was made, focusing on F-1’s track record, the timing of the decision, the key decision-makers, and their awareness of the false allegations.
At trial, we began by calling the defendant’s CEO as our first witness, delivering a powerful cross-examination that set the tone for the case. Despite the defendant’s refusal to offer a settlement before trial and their counterclaims demanding payment from F-1, our efforts led to a decisive victory. The jury awarded $11.4 million in damages, including $1 million in punitive damages, and the case was settled favorably shortly after trial.