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UNITED STATES EX REL. ROBINSON v. NORTHROP CORP.

June 16, 1993

UNITED STATES OF AMERICA, ex rel., REX A. ROBINSON, JAMES FREDERICKS, JAMES H. HOLZRICHTER, and LYNN T. AUSTRHEIM, Plaintiffs,
v.
NORTHROP CORPORATION, Defendant.


MORAN


The opinion of the court was delivered by: JAMES B. MORAN

 Before us now are defendant's motion for dismissal of plaintiffs' amended complaint pursuant to Fed.R.Civ.P. 12(b)(1), defendant's motion for dismissal of plaintiffs' complaint pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6), and defendant's motion to compel production of a document that plaintiffs submitted to the government describing the alleged false claims.

 BACKGROUND

 Count I of plaintiffs' amended complaint describes several allegedly false claims submitted by Northrop to the government, most relating to Northrop's roles in the production of the B-1 Bomber and the F-15 Fighter. According to Holzrichter, Northrop charged the government for scrapping parts that were not scrapped, for excess inventory, for non-conforming materials, and for parts that were scrapped accidentally and had to be reordered. According to Robinson, Northrop charged the government for labor that was not performed and for obsolete testing equipment. Fredericks claims that Northrop charged the government for brand new testing equipment after scrapping perfectly good equipment that did not need to be replaced. He also claims that Northrop certified to the government that the designs for certain testing equipment were complete, when in fact they were not, thereby prompting the government to pay Northrop money to which it was not entitled. Like Robinson, Austrheim alleges that Northrop charged the government for labor that was not performed and, like Fredericks, he alleges that Northrop received payment to which it was not entitled after it falsely certified to the government that certain projects were complete.

 In count II of the complaint, which concerns only state law claims, Robinson and Austrheim allege that Northrop officials harassed them and then discharged them in retaliation for their efforts to stop Northrop's fraudulent practices. Holzrichter and Fredericks also assert that they were harassed as a result of their criticisms of Northrop's practices, and Fredericks ultimately was discharged, but neither Holzrichter nor Fredericks brings a state law claim for retaliatory discharge.

 DISCUSSION

 Motion to Dismiss Pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6)

 On January 8, 1993, this court dismissed count I of plaintiffs' complaint without prejudice, holding that plaintiffs had not alleged fraud under the FCA with the specificity required by Fed.R.Civ.P. 9(b). United States ex rel. Robinson v. Northrop Corp., 89 C 6111, slip op. (N.D. Ill. 1/8/93). This court afforded plaintiffs the opportunity to amend their complaint, and they have. Defendant now moves to dismiss count I and/or to strike each paragraph of count I of plaintiffs' amended complaint pursuant to Rules 9(b) and 12(b)(6).

 Plaintiffs are not required to plead a wealth of evidentiary material, but must describe the outline of the fraudulent scheme and facts identifying the who, what, when and where of the fraud. This court has examined the amended complaint and finds that plaintiffs have pled sufficient detail necessary to put defendant on notice of the alleged fraud and have met Rule 9(b)'s pleading requirements. Defendant points to numerous examples in the amended complaint that it considers to be lacking in specificity. We agree with defendant that certain areas of the amended complaint lack exact details and, at times, contain superfluous information. However, that alone does not overcome the fact that plaintiffs have pled fraud with particularity. It is not necessary for this court to go through the complaint, paragraph-by-paragraph, to determine what information is extraneous to plaintiffs' claim. As the litigation proceeds, those issues will be resolved. At this stage of the litigation it is enough that plaintiffs have satisfied Rule 9(b). Defendant's motion to dismiss pursuant to Fed.R.Civ.P. 9(b) and 12(b)(6) is therefore denied.

 Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(1)

 Defendant also moves to dismiss plaintiffs' complaint pursuant to Fed.R.Civ.P. 12(b)(1). It contends that qui tam plaintiffs lack standing to sue under Article III; that the congressional authorization of qui tam suits violates the Appointments Clause of Article II; that qui tam suits violate the principle of separation of powers; and that qui tam suits deprive defendants of due process. The court is not persuaded by defendant's constitutional arguments.

 Qui Tam Provisions of the FCA

 The FCA provides that any person who knowingly submits a fraudulent claim for payment to the United States government is liable to the government for a civil penalty plus three times the amount of damages that the government incurs. 31 U.S.C. § 3729. Under the FCA's qui tam provisions a private individual may bring a civil action for FCA violations on behalf of both the government and the individual. § 3730(b)(1). The action is brought by a qui tam relator in the name of the government, and the government is then given the choice between assuming control of the case, § 3730(b)(2), or allowing the ...


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