Neal Roberts v. United States

707 F.3d 1011, 2013 WL 764734, 2013 U.S. App. LEXIS 4204
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 1, 2013
Docket11-2054
StatusPublished
Cited by17 cases

This text of 707 F.3d 1011 (Neal Roberts v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neal Roberts v. United States, 707 F.3d 1011, 2013 WL 764734, 2013 U.S. App. LEXIS 4204 (8th Cir. 2013).

Opinions

BYE, Circuit Judge.

Relators Norman Rille and Neal Roberts brought a qui tam action against Hewlett-Packard Company (HP) alleging HP engaged in unlawful kickback and defective pricing schemes in its sale of computer equipment to the federal government. The United States intervened in the action and reached a $55 million settlement with HP, allocating $9 million of the settlement to the kickback scheme and $46 million to the defective pricing scheme. The district court1 awarded the relators a 21% share of the kickback settlement and a 15% share of the defective pricing settlement pursuant to 31 U.S.C. § 3730(d)(1). The United States appeals, contending the relators are not entitled to any share of [1013]*1013the $46 million allocated to the defective pricing scheme. We affirm.

I

Systems integration consultants (SICs) recommend computer systems and related technology products to the federal government. SICs sometimes buy computer products directly from manufacturers and then resell them to the government; other times SICs recommended a particular manufacturer to the government and the manufacturer sells its products directly to the government.

Accenture LLP and Accenture Ltd. (collectively Accenture) were SICs. Norman Rille worked as a senior manager for Accenture from 2000 to 2002. While working at Accenture, Rille discovered the company was involved in what it called an “Alliance” relationship with HP and other computer and technology vendors who sold computer equipment to the government. Under these “Alliance” relationships, SICs received kickbacks from HP and other companies in two forms: (1) lump sum payments made by HP to SICs for recommending HP products to the government; and (2) discounts given to SICs when they purchased HP products for resale to the government.

Rille left Accenture with over 700,000 pages of electronic data related to the “Alliance” relationships. He shared this information with Neal Roberts, a certified fraud examiner. Roberts investigated the relationships by studying the data provided by Rille. On September 8, 2004, Roberts and Rille disclosed the documents involving the Alliance relationships to the government.

Shortly thereafter on September 17, 2004, Rille and Roberts filed a qui tam action against HP and other defendants on behalf of the United States. The original complaint alleged HP violated the Anti-Kickback Act, 41 U.S.C. §§ 51-52, as well as the False Claims Act (FCA), 31 U.S.C. §§ 3729-3733. The relators alleged the computer companies defrauded the government out of “hundreds of millions of dollars” by exchanging unlawful kickbacks to consultants for government referrals and by engaging in defective pricing schemes.

As relevant to the issues now on appeal, the relators amended their complaint to set forth the fraud allegations in more detail. The amended allegations regarding the defective pricing scheme stated HP “exploited the trust the Government ha[d] reposed in them ... to provide accurate best pricing information.”2 Second Am. Compl. at ¶ 5, App. at 47. More specifically, the Second Amended Complaint alleged:

[A]s part of the schemes to defraud the Government and concealment, Defendants failed to provide to GSA and other governmental agencies current, accurate, and complete disclosure of their best pricing (after all discounts, rebates, and other benefits) for any entities, whether such entity sells to the Government or not, ... thereby causing defective GSA and other governmental pricing schedules. This resulted in FCA violations, as to both direct sales to the Government by a Defendant, and indirect sales through [a consultant], Alliance, or Technology Vendor, with or without a Kickback.

Id. at ¶ 6, App. at 48.

During the course of the relators’ suit, the relators worked closely with govern[1014]*1014ment investigators and attorneys to corroborate HP’s unlawful practices. Among other things, the relators hosted meetings with government officials in September 2005 and August 2006 to coordinate prosecution of the fraud action. In October 2005, the government asked the relators’ counsel to draft administrative subpoenas to issue from the General Services Administration (GSA) Office of Inspector General (OIG) to all potential defendants, including HP, and compiled voluminous binders for the government’s use, detailing thirty-one separate subpoenas. Also at the government’s request, in November 2006 the re-lators prepared a “lexicon” of forms used by HP in Alliance programs. The relators also purchased a document review software system called “Ringtail” to electronically house the voluminous documents produced as a result of the subpoenas, along with thirty-eight individual licenses for federal agents to use the Ringtail system to review the documents. Federal agents made use of the licenses. For example, over a three-year period beginning in September 2006, one OIG agent accessed roughly 4,230 documents using the Ring-tail system.

After responding to the subpoenas, HP notified the government it had hired an independent third party to assess its business processes to determine whether it had engaged in defective pricing schemes. In August 2008, HP notified the government of the results of the independent audit, admitting it had not complied with the price reductions clause in one particular government contract, GS-35F-0066N (hereinafter Contract 35F). The government then performed its own audit of Contract 35F and determined HP had not fully informed the GSA of prices it had given to non-government end users, resulting in a “defectively priced” GSA contract. Ultimately, HP changed its practices by lowering its prices by 10%, saving the government millions of dollars.

The government decided to intervene directly in the relators’ action in December 2006 and filed its own complaint against HP and the other defendants in the rela-tors’ action in April 2007. In its separate complaint, the government acknowledged the relators’ complaint “made detailed allegations regarding the Relators’ direct and independent knowledge of [the] wrongdoing alleged herein.” Government Compl. at ¶ 9. In many respects, the government’s complaint simply paraphrased directly from the relators’ complaint.

On August 30, 2010, the government and HP entered into a settlement agreement of what they labeled the conduct “covered” by the relators’ action. Under the terms of the settlement, the government received $55 million from HP. The government attributed $9 million of the settlement to the kickback scheme alleged in the relators’ action, and attributed the remaining $46 million to the defective pricing scheme related to Contract 35F. In the settlement agreement, the government attributed the defective pricing settlement to HP’s “voluntary” disclosure of its false pricing and the government’s subsequent audit. The relators’ action was dismissed with prejudice as a result of the settlement.

After the district court approved settlement, the relators moved for a determination of their share of the settlement proceeds pursuant to 31 U.S.C. § 3730(d)(1).3

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Cite This Page — Counsel Stack

Bluebook (online)
707 F.3d 1011, 2013 WL 764734, 2013 U.S. App. LEXIS 4204, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neal-roberts-v-united-states-ca8-2013.