United States v. MWI Corp.
15 F. Supp. 3d 18
| D.D.C. | 2014Background
- MWI was found liable under the FCA for 58 false claims and related false certifications on Nigerian loan transactions.
- Jury damages were found to be $7.5 million; treble damages therefore $22.5 million.
- Nigeria repaid approximately $108 million to Ex-Im on the loans, including principal and interest.
- The court must decide whether Nigeria’s repayments offset the FCA liability and, if so, how much.
- MWI argued Bomstein requires full offset of compensatory payments; the government argued limits or different treatment are possible.
- Damages phase addressed whether offsets apply before or after trebling and whether any offset is limited to original loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bomstein offsets apply to eliminate FCA liability | Purcell argues Nigeria repayments are offset against damages only to the extent of treble damages. | MWI contends Bomstein requires a full offset against treble damages for compensatory payments from any source. | Full offset against trebled damages applied; no damages remain. |
| Whether Nigeria repayments are compensatory payments within Bomstein | Purcell contends repayments are not compensatory and should not offset liability. | MWI argues repayments were compensatory payments that offset liability. | Nigeria repayments are compensatory payments under Bomstein and offset liability. |
| Whether offset is limited to original loss amount | Purcell asserts the offset should be limited to the original loss of $7.5 million to prevent double counting. | MWI argues for a broader offset; district court should follow Bomstein's language without artificial segmentation. | Court rejected the limitation; offset is applied in full against trebled damages. |
| Calculation of civil penalties for 58 false claims | Purcell and government seek penalties within the statutory range for each false claim. | MWI argues for maximum deterrence given circumstances; dispute over total penalties. | Civil penalties set at $10,000 per false claim for 58 claims, totaling $580,000. |
Key Cases Cited
- Bornstein v. United States, 423 U.S. 303 (U.S. 1976) (treble damages offset against compensatory payments; statute aims to make government whole)
- Cook County, Ill. v. United States ex rel. Chandler, 538 U.S. 119 (U.S. 2003) (treble damages framework; district court determines penalties within statutory range)
- Kaahkeh v. United Planning Org., Inc., 655 F. Supp. 2d 107 (D.D.C. 2009) (single injury rule; avoid double recovery across counts)
- United States v. Science Applications International Corp., 626 F.3d 1257 (D.C. Cir. 2010) (damages theory for FCA: amount government would have paid absent false claims)
- United States v. Ekelman & Ass’n, Inc., 532 F.2d 545 (6th Cir. 1976) (offset principles for compensatory payments from multiple sources)
- Globe Remodeling Co., 196 F. Supp. 652 (D. Vt. 1960) (pre-Bomstein context on offsets for repayments to government)
- Miller v. Bill Harbert International Construction, Inc., 501 F. Supp. 2d 51 (D.D.C. 2007) (settlements and apportionment among joint tortfeasors informing liability computation)