Arbitron, the Beltsville firm that monitors the viewing habits of America's television watchers, has won a $2.95 million judgment against E-Systems Inc., a company Arbitron claims breached a 1973 contract to produce machines designed to keep track of the shows people were turning on and off.
In a brief order signed Friday and released Monday, U.S. District Court Judge Oliver Gasch said he agreed with an earlier finding by Magistrate Lawrence S. Margolis that E-Systems "had not substantially complied with the terms of the contract or with certain express warranties."
E-Systems had agreed to produce 3,515 machines to monitor what shows people were watching and then tabulate the information. But from the start, the machines malfunctioned, according to Margolis' opinion.
The contract called for the macines to be at least 95 percent accurate, but Margolis found after listening to five weeks of testimony and viewing nearly 2,000 exhibits that the machines failed 20 percent of the time when they were installed. Moreover, he said that 75 percent failed within four weeks of installation and 91 percent failed within 10 weeks.
E-Systems, a Dallas-based firm, claimed among other things that some of the problems were caused by Arbitron and that some of the equipment was damaged after it left E-Systems' Fairfax County manufacturing plant.
But Margolis said "the court is not persuaded that these factors adequately explain the consistent, pervasive problems found in the equipment which appear to be directly related to design and component defects."
The actual damage award was $2.46 million but, with interest added, the total award amounts to $2.95 million.