New Ruling in the Atlanta, Georgia Whistleblower Case Against Lockheed Martin

I am an Atlanta, Georgia whistleblower lawyer, handling False Claims Act
cases around the country, and today I am writing about a brand-new opinion
from Judge Nina Totenberg, one of our newer judges in the Northern District
of Georgia.

Judge Totenberg has a False Claims Act case against Lockheed Martin pending
before her. James Harris, who worked in the trim department in Lockheed
Martin’s Marietta facility, filed the suit.

Mr. Harris has alleged that Lockheed was overcharging the Government in
several ways. One way related to the type of contracts Lockheed has made
with the Government. One type is “fixed-price” contract with
the Government – no matter how much work the contract takes, Lockheed
gets paid the same amount. Knowing that fact up front, Lockheed submits
a bid up front that is high enough to provide an ample profit for the
work it has agreed to do.

Another type of contract is “costs-plus.” In a costs-plus contract,
Lockheed keeps track of how much work it has done, or how many parts it
has made or used, and then charges the Government by the amount of work,
or by the part.

According to Mr. Harris, Lockheed told its employees to bill tasks that
were done on the “fixed-price” contract to the “costs-plus”
contract, so that Lockheed could get paid twice for the work – once
to the fixed-price contract (as part of the bid it had made originally,
that was supposed to be high enough to cover all of the hours needed to
complete the contract), and then again as hourly work performed under
the costs-plus contract. Mr. Harris also explained that Lockheed billed
the cost of airplane parts at a higher level in the “costs-plus”
contract – where it got reimbursed for the parts by the Government
— than in the fixed-price contract, where the parts were billed
internally as part of the costs incurred in performing the contract. A
false claims act lawyer filed suit for Mr. Harris, suing on behalf of the federal government to
recover the amount that the Government had overpaid.

Lockheed filed a motion to dismiss the lawsuit filed by Mr. Harris. This
past Friday, Judge Totenberg ruled against Lockheed, allowing the case
to proceed. Judge Totenberg’s Order, Case # 1:08-CV-3819-AT (N.D.Ga.
3/9/12). Lockheed made three arguments, and in future blog entries I will
discuss each in turn.

Lockheed had argued that Mr. Harris’ case was a duplicate of an Ohio
whistleblower case. Lockheed cited this section of the False Claims Act:

When a person brings an action under this subsection, no person other than
the Government may intervene or bring a related action based on the facts
underlying the pending action.

31 U.S.C. § 3730(b)(5).

Judge Totenberg wasn’t buying. In the Ohio False Claims Act case,
the relator had alleged that Lockheed and its outside vendors routinely
were making non-conforming tools (tools that didn’t match the specifications
set out by the Government in the contract), and failing to inspect the
tools for non-conformance. Other than the fact that the Ohio case involved
“a fraudulent billing scheme Lockheed Martin allegedly perpetrated
at its aircraft production facility in Marietta, Georgia against the United
States government”, Judge Totenberg said, “the rest of the
details of that scheme are entirely different.” Order, Case # 1:08-CV-3819-AT
at 11 (N.D.Ga. 3/9/12). See also
Cooper v. Blue Cross & Blue Shield of. Fla., Inc., 19 F.3d 562, 567 (11th Cir. 1994) (“once one suit has been filed
by a relator or by the government, all other suits against the same defendant
based on the same kind of conduct would be barred”). The Ohio whistleblower
case “did not put the government on notice of the type of billing
scheme in the trim department” that was alleged in the Georgia whistleblower
suit. Id. at 12.