Neal Roberts v. United States
2013 U.S. App. LEXIS 4204
8th Cir.2013Background
- Relators Rille and Roberts filed a qui tam action against HP for kickbacks and defective pricing in government sales.
- The United States intervened and settled with HP for $55 million: $9 million allocated to kickbacks, $46 million to defective pricing (Contract 35F).
- District court awarded relators 21% of the kickback share and 15% of the defective pricing share under 31 U.S.C. § 3730(d)(1).
- Government appeals, contending relators get nothing from the $46 million defective pricing settlement.
- Relators aided government investigations, drafted subpoenas, and supported prosecutions; HP later disclosed defective pricing after government intervention and internal auditing.
- District court found the defective pricing claim related to the relators’ action and that the government had no knowledge of the defect before relators’ involvement; the government did not challenge these factual findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether relators are entitled to a share of the defective pricing settlement | Rille and Roberts contributed to prosecution and discovery; overlap with relators’ claim. | Defective pricing settlement is not the same claim pleaded by relators; unrelated to the relators’ action. | Relators entitled to a share of the defective pricing settlement. |
| Whether Rule 9(b) pleading standards bar recovery from the defective pricing settlement | Rule 9(b) applicability to the relators’ pleadings should not bar recovery. | Heightened pleading requirements should bar relief if not satisfied. | Rule 9(b) does not deprive relators of recovery; interrelation allowed post-intervention. |
| Whether the government’s pursuit of an alternate remedy affects relator recovery | Settlement tied to the relators’ allegations and government investigation; overlap supports recovery. | Alternate remedy should not extend relator recovery beyond the relator-brought claim. | Recovery allowed only for proceeds of the claim brought by the relators; court to assess factual overlap for defective pricing claim. |
| Whether the defective pricing claim settled by the government is the same claim brought by relators | Disclosures and investigation were catalyzed by relators’ action; overlap exists. | Settlement may involve a different or additional claim not initially brought by relators. | Factual overlap insufficiently shown; remand for findings on overlap and potential remittitur. |
Key Cases Cited
- United States ex rel. Bledsoe v. Cmty. Health Sys., Inc., 342 F.3d 634 (6th Cir.2003) (relator must show overlap with government settlement; Rule 9(b) not determinative when government intervenes)
- United States ex rel. Bledsoe v. Cmty. Health Sys., Inc. (Bledsoe II), 501 F.3d 493 (6th Cir.2007) (Rule 9(b) performance and overlap limits for recovery after government settlement; government’s alternate remedies)
- United States ex rel. Barajas v. United States, 258 F.3d 1004 (9th Cir.2001) (the right to recovery under § 3730(d)(1) mirrors the extent of contribution; alternate remedies)
- United States ex rel. Batiste v. SLM Corp., 659 F.3d 1204 (D.C.Cir.2011) (purpose of FCA is to encourage whistleblowing; information must launch investigation; remedial overlap)
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (2007) (original source/public disclosure doctrine; reliance on disclosure facts distinct from relator’s claim)