Georgia Court Rules Allegations Against Lockheed Martin Had Not Been Publicly Disclosed

I am a whistleblower attorney, and in yesterday’s blog entry, I wrote
about a Northern District of Georgia decision in a case against Lockheed
Martin. Lockheed Martin asked the Court to dismiss the lawsuit, but Judge
Totenberg refused, and let the case proceed on toward trial.

Former Lockheed employee James Michael Harris brought the case against
Lockheed Martin, alleging that the Marietta, Georgia, company had been
overbilling the Government. Mr. Harris had worked at Lockheed in the trim
department for twenty-seven and one-half years. Mr. Harris alleged that
Lockheed had billed the Government under a cost-plus contract for work
that it did under a fixed-price contract. In other words, although Lockheed
already had contracted to do the work for a set price, it re-coded the
work to look like it was being performed under a different contract, under
which the Government paid Lockheed for each hour of work it performed.
Lockheed recoded the work so that it could be paid twice for the same work.

Lockheed denies the allegations. For purposes of this motion to dismiss,
though, Lockheed claimed that the allegations already had been “publicly
disclosed” in an Ohio whistleblower lawsuit, and so Mr. Harris was
not entitled to bring a False Claims Act lawsuit. Under the False Claims
Act, a federal court does not have jurisdiction over an action that is
“based upon the public disclosure of allegations or transactions
in a criminal, civil, or administrative hearing, in a congressional, administrative,
or Government Accounting Office report, hearing, audit, or investigation,
or from the news media.”
31 U.S.C. § 3730(e)(4)(A) (2008).

The Act does have an important exception, though. Even if the allegations
or transactions have been publicly disclosed, a person can still be a
whistleblower if he is an “original source.” Under the False
Claims Act, an “original source” is someone with “direct
and independent knowledge of the information on which the allegations
are based” who “has voluntarily provided the information to
the Government before filing an action under this section which is based
on the information.” 31 U.S.C. § 3730(e)(4)(B) (2008). (These
provisions were amended after Mr. Harris made his allegations, in a way
that would have been even more helpful to Mr. Harris.)

The Court ruled that the facts Mr. Harris alleged had not been publicly
disclosed in the Ohio suit. The public disclosure bar “operates
to preclude only those claims based on the facts publicly disclosed”;
“apart from the location and company involved, the scheme alleged
in the Howard case and the one Mr. Harris sets forth here have markedly
different bases in fact and origin.”

The Court also ruled that Mr. Harris could have brought his claims anyway,
even if they had been publicly disclosed, because he was “an original
source under 31 U.S.C. § 3730(e)(4)(B) (2008).” The Court noted
that Mr. Harris was basing his claims “on his own observations while
an employee for over twenty-seven years” at Lockheed Martin in Marietta,
Georgia. Mr. Harris has alleged that he himself had been told to participate
in the scheme, and the Court said those claims “sufficiently establish
that Mr. Harris had direct and independent knowledge of the facts he asserts.”
Id. at 13.