United States v. Dyncorp International, LLC
Civil Action No. 2016-1473
| D.D.C. | Oct 4, 2017Background
- DynCorp, a State Department contractor, subcontracted services through Corporate Bank; the government alleges DynCorp knowingly submitted unreasonable labor rates and made false statements that led to inflated contract prices.
- The government sued under the False Claims Act and common-law claims (unjust enrichment, payment by mistake, breach of contract); court previously sustained some FCA theories and dismissed certain common-law claims tied to cost-reimbursable charges.
- DynCorp answered with twelve affirmative defenses; the government moved to strike four defenses as legally invalid or improperly pled (fifth, sixth, seventh, ninth defenses).
- The challenged defenses principally involve a DCAA audit and a settlement with the State Department (fifth and sixth), statute-of-limitations and laches (seventh), and breach/inequitable-conduct (ninth).
- The Court evaluated Rule 12(f) standards and applied government-specific doctrines (high bar for estoppel/waiver, limits on laches against the United States) in deciding which defenses to strike.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver / Equitable estoppel / Accord & satisfaction (DCAA audit and DOS settlement) | These defenses are legally invalid because contracting officers/audits cannot waive FCA claims and only DOJ can settle fraud claims | Dyncorp says the audit and DOS settlement show waiver/estoppel or accord and satisfaction, preventing relitigation of price reasonableness | Struck: estoppel, waiver, and accord-and-satisfaction defenses are precluded as a matter of law absent clear Attorney General/DOJ involvement |
| Statute of limitations (31 U.S.C. § 3731) | Strike is unnecessary because government limited damages to post-2005 charges; factual issues like tolling remain | Dyncorp asserts limitations and tolling may bar some claims | Not struck in part: statute-of-limitations defense survives because factual disputes (e.g., tolling) remain |
| Laches as a defense to liability | Government argues laches cannot bar the United States from enforcing its rights | Dyncorp contends delay/prejudice justify laches to defeat liability | Struck as to liability: laches unavailable to bar government liability generally |
| Laches as to prejudgment interest | Government seeks to preclude all laches arguments | Dyncorp seeks to preserve laches to limit or bar prejudgment interest | Not struck as to interest: laches may apply narrowly to bar prejudgment interest and survives at this stage |
| Prior material breach (breach of contract) vs. inequitable conduct/unclean hands | Government urges striking unclean hands/inequitable-conduct; prior-breach is not a defense to FCA claims | Dyncorp argues DOS breaches and inequitable conduct excuse or bar enforcement | Inequitable-conduct/unclean-hands struck; prior material breach retained — not struck at this early stage |
Key Cases Cited
- United States v. Honeywell Int’l, Inc., 841 F. Supp. 2d 112 (D.D.C.) (government waiver requires clear intent and authority)
- Morris Commc’ns, Inc. v. FCC, 566 F.3d 184 (D.C. Cir.) (elements for equitable estoppel against the government)
- United States v. Philip Morris Inc., 300 F. Supp. 2d 61 (D.D.C.) (application of estoppel against the government must be rigid and sparing)
- United States v. Summerlin, 310 U.S. 414 (U.S.) (laches generally unavailable against the United States)
- West Virginia v. United States, 479 U.S. 305 (U.S.) (laches may bar prejudgment interest in limited circumstances)
- Stone Forest Indust., Inc. v. United States, 973 F.2d 1548 (Fed. Cir.) (analysis of prior material breach and materiality in contract defense)
- Kellogg Brown & Root Servs., Inc. v. United States, 856 F. Supp. 2d 176 (D.D.C.) (discussion of prior breach as a contractual defense)
- Gen. Accounting Office v. Gen. Accounting Office Pers. Appeals Bd., 698 F.2d 516 (D.C. Cir.) (standards for actionable government misrepresentation)