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United States ex rel. McCarthy v. Marathon Technologies, Inc.

United States District Court, N.D. Illinois, Eastern Division

April 22, 2015

UNITED STATES OF AMERICA EX REL. LAWRENCE MCCARTHY, Relator-Plaintiff,
v.
MARATHON TECHNOLOGIES, INC., SIGMATEK, INC. d/b/a MTI SIGMATEK, and JERRY KOZLOWSKI, Defendant.

MEMORANDUM OPINION AND ORDER

SHARON JOHNSON COLEMAN, District Judge.

Relator-plaintiff, Lawrence McCarthy ("relator"), filed a six-count complaint under the False Claims Act ("FCA"), 31 U.S.C. ยง 3729 et seq. on behalf of the United States of America against corporate defendants Marathon Technologies, Inc. ("Marathon") and Sigmatek, Inc. ("Sigmatek"), and the president and owner of Marathon and Sigmatek, Jerry Kozlowski. Relator claims that the defendants knowingly violated the terms of two contracts with the United States government and knowingly submitted false claims for payment. Relator moves to strike portions of Marathon and Sigmatek's answer and affirmative defenses pursuant to Federal Rule of Civil Procedure 12(f). Relator also moves to dismiss Marathon and Sigmatek's counterclaims pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, the motions [40] are granted in part and denied in part.

Background

This Court set forth the factual allegations more fully in its Order of September 30, 2014, granting in part and denying in part defendants' motion to dismiss the complaint. See Dkt. 32. Relator McCarthy was a Buyer-Purchasing Manager, and later, Administrator/Internal Auditor/Management Representative at Marathon, and was responsible for the certification processes and internal auditing related to the quality assurance of Marathon's gun mounts and tripods. During his employment, Relator asserts that he discovered that Marathon had not complied with various contract requirements for the gun mounts and learned that they had fraudulently obtained SBA certification in order to be awarded the contract for the tripods.

Marathon and Sigmatek filed an Answer, including ten affirmative defenses and two counterclaims against relator. (Dkt. 39). The affirmative defenses are as follows:

1. "The Complaint fails to state a claim upon which relief may be granted."
2. "To the extent any penalties the Relator seeks are excessively greater than actual damages, such penalties violate the United States Constitution."
3. "Relator is not entitled to the share of any recovery he seeks because he planned and initiated any violations of the False Claims Act."
4. "Relator's claims are barred because the United States knew of, ratified or otherwise consented to the transactions or occurrences that are the subject of the Complaint."
5. "Relator's claims are barred by waiver and/or estoppel."
6. "Relator's claims are barred by laches."
7. "Relator's qui tam claims for damages are barred because the United States suffered no damages."
8. "Relator's claims are barred by the doctrine of primary jurisdiction."
9. "Relator's claims are barred by his failure to exhaust ...

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