United States Ex Rel. Frascella v. Oracle Corp.
2010 U.S. Dist. LEXIS 118077
| E.D. Va. | 2010Background
- This FCA action against Oracle seeks relief for alleged false statements and PRC/non-disclosure failures in a GSA MAS contract for software licenses.
- GSA MAS contracts require pricing disclosures, pricing-policy analysis, and potential data audits to ensure fair and reasonable government pricing.
- Oracle's initial 1997 disclosures and CPC compliance preceded a 1998 contract award; the BOA for the contract covered sales to Oracle's U.S. commercial end-user customers, with a PRC exception for orders over $200,000.
- A September 1998 GSA OIG pre-award audit questioned whether Oracle offered fair prices given its commercial discounts and noted inadequate data to verify sales data.
- In 2001 Oracle amended the contract to add E-Business products with new disclosures showing discounts tied to order size; Frascella filed a qui tam complaint in 2007, DOJ intervened in 2010.
- The court grants in part and denies in part Oracle’s motion to dismiss, determining certain claims are time-barred while others survive and require amendment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of 1997 disclosures claims | United States tolls based on officials' knowledge | Limitations run from 1998 audit | Claims based on 1997 disclosures are time-barred |
| Who qualifies as responsible official for tolling | Broad DOJ/agency officials can toll | Only DOJ officials count | Court need not decide; however, 1997 disclosures still untimely under either interpretation |
| Scope of tolling to govern counts (FCA and common-law) | Relator’s filing tolls for related claims | Tolling applies narrowly to same conduct | Tolling applies to related claims; pre-2001 and pre-2004 conduct time-barred accordingly |
| Rule 12(b)(6) sufficiency of remaining claims | Allegations show false statements and PRC violations | Claims lack materiality/altering facts | Remaining claims plausibly alleged; FCA and related claims survive with amendment |
| Relation back and amendments required | Amend to reflect post-2001/2004 conduct | Pre-cutoff claims barred | Amended complaint required; restrict claims to conduct on/after May 29, 2001 (FCA) and May 29, 2004 (fraud) respectively |
Key Cases Cited
- United States v. Boeing Co., Inc., 845 F.2d 476 (4th Cir. 1988) (broadly supports tolling by officials with responsibility to act)
- Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 (4th Cir. 1999) (false representations to induce government approval may sustain FCA claim)
- United States v. Inc. Vill. of Island Park, 791 F. Supp. 354 (E.D.N.Y. 1992) (HUD audit triggers tolling when officials should have known)
- United States v. Intrados Intl. Mgmt. Group, 265 F. Supp. 2d 1 (D.D.C. 2002) (applies tolling principles to FCA/common-law claims)