March 14, 2005
MCKENNA LONG & ALDRIDGE SECURES VICTORY FOR GENERAL MOTORS
Motion for Directed Verdict in Favor of the Defendants
LOS ANGELES, CA - (March 14, 2005) - The law firms of McKenna Long & Aldridge LLP and White, Getgey & Meyer Co., LLP obtained a directed verdict on behalf of their client General Motors Corporation in a civil False Claims Act case alleging that performance of subcontracts by General Motors and other Defendants had caused more than $200 Million in damages to the United States Navy's Arleigh Burke guided missile destroyer program.
In a written opinion issued on March 11, 2005, District Judge Thomas E. Rose of the Southern District of Ohio confirmed his grant of Defendants' Motion for Judgment as a Matter of Law at the conclusion of Plaintiffs' case in "United States ex rel. Sanders and Thacker v. Allison Engine Company, General Motors Corporation, General Tool Company and Southern Ohio Fabrication Company." The United States declined to intervene in the action. The Court concluded, after five weeks of trial, that Plaintiffs had failed to establish that any false claim had been presented to the Government or that any false statements had been used to get a false claim paid by the Government. The Court noted that Plaintiffs' evidence had focused on actions alleged to have constituted contract violations by the Defendants, all of whom were subcontractors, but Plaintiffs had failed to present any evidence of claims submitted by the prime contractor shipyards to the Navy, or evidence showing how any such claims could have been rendered false.
The Court stated that contrary to the Plaintiffs' position that such evidence was "totally irrelevant," no fewer than nine Courts of Appeal had found that submission of a false claims to the Government was essential to False Claims Act liability.
Allison Engine Company, formerly a part of General Motors, was a first-tier subcontractor to both Bath Ironworks and Ingalls Shipbuilding, and supplied generator sets for use in the Navy's destroyers. Whistleblowers alleged that Allison was either aware of, or deliberately ignored, the alleged quality problems of its subcontractors, and failed to inform the shipyards or the Navy of these discrepancies. The allegedly "false" documents were Allison's Certificates of Compliance submitted with the generator sets at the time of their delivery to the shipyards. Plaintiffs contended that these Certificates guaranteed that Allison, and its subcontractors, were in compliance with every contract provision flowed down to them from the Navy through the prime contractors. Plaintiffs argued that evidence of a false invoice to the Navy could be "implied" from the use of federal funds to pay Defendants. The Court rejected Plaintiffs' "implied certification" theory, finding that there was no evidence of any certification of continuing contract compliance in this Government contract.
The Court previously had dismissed, on a motion for summary judgment, allegations by Plaintiffs that concerned the pricing of the generator sets.
General Motors was represented by Jay Gallagher, Mike Kavanaugh and Susan Mitchell of the Los Angeles Office of McKenna Long & Aldridge LLP, and David Kamp of White, Getgey & Meyer Co., LLP of Cincinnati, Ohio.
About McKenna Long & Aldridge LLP
McKenna Long & Aldridge is a full-service law firm of nearly 350 lawyers and public policy advisors with offices in Atlanta, Brussels, Denver, Los Angeles, Philadelphia, San Diego, San Francisco and Washington, DC. The firm provides business solutions in the areas of corporate law, government contracts, intellectual property and technology, complex litigation, public policy and regulatory affairs, real estate and finance. To learn more about the firm and its services, log onto www.mckennalong.com.