Williams v. C Martin Company Inc
2:07-cv-06592
E.D. La.Apr 24, 2014Background
- Relator Robyn Williams filed a qui tam action under the False Claims Act against Laura Craig, CMC, MJI, Medley, and Jarvis.
- Relator asserts three FCA claims: fraudulent inducement on a Local-Bid Preference, fraudulent inducement as to a Service-Disabled Veteran status, and a separate Performance claim regarding the MD Contract.
- MD Contract RFP provided a 30% local-bid preference and required 100% local subcontractors; disputes exist whether CMC qualified as local or was a JV with MJI.
- GSM Contract was a service-disabled-veteran set-aside; CMC bid under Craig’s asserted SDV status, which SBA challenged; VA status determinations were contested.
- Relator contends CMC falsely certified local status and SDV status and that CMC overbilled or failed to perform under the MD Contract during phase-in and maintenance.
- The court granted some motions, denied others, ruled on spoliation and sanctions, limited expert testimony, and set forth the damages framework, ultimately granting summary judgment on the performance claim and partial relief on others.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Materiality of local-bid misrepresentation | Williams argues false local status influenced FEMA award. | CMC asserts local status or license evidence shows compliance; no material impact shown. | Materiality disputed; summary judgment denied; issue for trial. |
| Validity of the Service-Disabled Veteran claim by Craig/CMC | Craig's SDV certification was false. | MJI and others lack knowledge of falsity; in some defendants, evidence insufficient. | Genuine disputes about Craig’s SDV status preclude summary judgment for MJI/Medley/Jarvis. |
| Liability of MJI, Medley, Jarvis for SDV claim | MJI defendants actively encouraged the bid and knew/should have known of falsity. | No evidence MJI knew or acted with requisite scienter. | Summary judgment granted in favor of MJI/Medley/Jarvis on this claim. |
| Dismissal of Relator's MD Contract performance claim | CMS submitted false certifications and PMI forms; billed for work not performed. | Phase-in and PMI claims lack material falsity proof; insufficient evidence of false invoices. | Performance claim dismissed with prejudice. |
| Damages framework and trebling under FCA | Treble gross damages; damages based on full payments. | Treble only actual damages after deducting value of performed work. | Court adopts net-damages approach: treble gross payments, then deduct value of performance; viable for trial. |
Key Cases Cited
- U.S. ex rel. Longhi v. United States, 575 F.3d 458 (5th Cir. 2009) (materiality and scienter standards; definition of damages in FCA cases)
- U.S. ex rel. Taylor-Vick v. Smith, 513 F.3d 228 (5th Cir. 2008) (guilty knowledge and scienter requirements under FCA)
- United States ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370 (5th Cir. 2004) (scope of FCA liability beyond direct submission of false claim)
- United States v. Science Applications Int'l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (damages calculation: gross vs. net damages; category where performance worthless)
- Longhi v. United States, 575 F.3d 458 (5th Cir. 2009) (damages framework and effect of compensation on trebling)
- United States v. Rogan, 517 F.3d 449 (7th Cir. 2008) (trebling of payments where no tangible government benefit)
- Bornstein v. United States, 423 U.S. 303 (Supreme Court 1976) (trebling of damages before applying offsets; Bornstein rule relevance to FCA damages)
- United States v. TDC Mgmt. Corp., Inc., 288 F.3d 421 (D.C. Cir. 2002) (damages when program value is vitiated by fraud; full contract value awarded)
- United States v. United Nations, N/A (N/A) (not cited in this opinion for damages context)