United States Ex Rel. Morsell v. Symantec Corp.
130 F. Supp. 3d 106
| D.D.C. | 2015Background
- Symantec negotiated and executed a GSA Multiple Award Schedule (MAS) contract (Jan 2007–Sept 2012) after submitting Commercial Sales Practices (CSPs) and a Final Proposal Revision certified to be "current, accurate and complete."
- Relator Lori Morsell (qui tam) alleged Symantec’s CSPs and related disclosures understated or omitted favorable commercial pricing (including non-published discounts, Rewards program terms, and reseller rebates) and misrepresented discount-approval controls (eSPA). The United States intervened; California and Florida also intervened; Relator proceeded on behalf of New York.
- The Omnibus Complaint asserts federal FCA claims (presentment, false statements, causing others to present false claims, and reverse false claims), plus common-law claims (negligent misrepresentation, breach of contract, unjust enrichment, payment by mistake) and parallel state FCA claims.
- Symantec moved to dismiss; the United States moved for partial summary judgment on contract validity and several falsity/Price Reduction Clause issues. The court treated factual allegations as true for the Rule 12(b)(6) motion and considered evidentiary submissions for the summary judgment motion.
- The court denied dismissal of the United States’ federal FCA and related common-law claims (in large part), dismissed state FCA claims for California, Florida, and New York (with leave to amend), and denied the United States’ motion for partial summary judgment in full because genuine disputes of material fact remain.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the United States plausibly pleaded FCA presentment and false-statement claims (including implied certification and fraudulent inducement theories) | Government: CSPs and certifications impliedly and expressly represented compliance with the Price Reduction Clause and completeness; failures to disclose better commercial pricing, rebates, and control-system weaknesses rendered claims false and material | Symantec: disclosures reflected the give-and-take of negotiations, lacked particularity, and do not show knowing falsity or material breach | Court: Denied dismissal as to the United States’ federal FCA claims; allegations suffice at pleading stage under implied certification and fraudulent inducement theories (Symantec’s briefing deficient) |
| Whether Symantec caused resellers to submit false claims and made/caused material false statements | Government: Symantec authorized GSA to share CSPs; resellers relied on those disclosures and submitted inflated claims | Symantec: did not address causation for reseller claims and disputes falsity/knowledge | Court: Denied dismissal of Counts III and IV — factual allegations as to causation, falsity, and knowledge survive the motion |
| Whether state FCA claims (California, Florida, New York) are sufficiently pleaded | States/Relator: parallel state claims flow from the same facts alleged for federal FCA | Symantec: state pleadings are conclusory, fail to allege requisite scienter, causal connection, or existence of false claims | Court: Dismissed state FCA claims for California, Florida, and New York; granted leave to amend to plead more specific allegations |
| Whether the Government is entitled to partial summary judgment on contract validity, CSP falsity (Frequency Chart, eSPA, rebates), Price Reduction Clause breaches, and false certifications | Government: documentary and expert analyses show the Contract was valid and disclosures were false, so summary adjudication is appropriate on those discrete issues | Symantec: factual disputes exist about contract formation, data/ methodologies (Robinson vs Symantec), scope of negotiations, meaning of contractual terms, and whether rebates were within negotiation scope | Court: Denied the Government’s partial summary judgment motion in full because the Government failed to show absence of genuine disputes of material fact on all contested issues |
| Whether quasi-contract claims (unjust enrichment, payment by mistake) are barred by an existing contract | Government: pleads alternative theories and alleges indirect payments via resellers and questions about contract validity, so quasi-contract remedies remain | Symantec: existence of an express contract precludes quasi-contract claims for direct purchases | Court: Denied dismissal for claims based on direct purchases insofar as contract validity is contested and for indirect reseller purchases (no express contract alleged) |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard; claims must be plausible)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burdens)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment: evidence viewed in nonmovant's favor)
- United States v. Sci. Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. — implied certification theory; materiality/knowledge limits)
- United States ex rel. Bettis v. Odebrecht Contractors of Cal., Inc., 393 F.3d 1321 (D.C. Cir. — fraudulent inducement theory)
- United States v. Moore, 612 F.3d 698 (D.C. Cir. — materiality is not limited to actual influence)
- United States v. Triple Canopy, Inc., 775 F.3d 628 (4th Cir. — implied certification/materiality analysis)
- Heath v. AT&T, 791 F.3d 112 (D.C. Cir. — knowledge and materiality under implied certification)