United States of America, Ex Rel. Leocadio Barajas v. United States v. Northrop Corporation

258 F.3d 1004, 2001 Cal. Daily Op. Serv. 6639, 2001 Daily Journal DAR 8133, 2001 U.S. App. LEXIS 17255, 2001 WL 872820
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 3, 2001
Docket99-55599
StatusPublished
Cited by41 cases

This text of 258 F.3d 1004 (United States of America, Ex Rel. Leocadio Barajas v. United States v. Northrop Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States of America, Ex Rel. Leocadio Barajas v. United States v. Northrop Corporation, 258 F.3d 1004, 2001 Cal. Daily Op. Serv. 6639, 2001 Daily Journal DAR 8133, 2001 U.S. App. LEXIS 17255, 2001 WL 872820 (9th Cir. 2001).

Opinions

Opinion by Judge WILLIAM A. FLETCHER; Dissent by Judge GOULD

WILLIAM A. FLETCHER, Circuit Judge:

Under the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733, private individuals may bring qui tam civil actions against entities that have defrauded the government. If an FCA suit is brought by a private individual (“relator”) as a qui tam action, the United States may choose to intervene. 31 U.S.C. § 3730(b)(2). Whether or not the government inter[1006]*1006venes, the relator is entitled to a share of any recovery in the action. 31 U.S.C. §§ 3730(b)(4), (d). If the government declines to intervene but instead “pursue[s] its claim through any alternate remedy,” the relator remains entitled to the same share of the recovery to which she would have been entitled had the government pursued its claim by intervening in the relator’s qui tam action. 31 U.S.C. § 3730(c)(5). This appeal turns on the proper construction of the phrase “pur-suels] its claim through any alternate remedy.” 31 U.S.C. § 3730(c)(5). We hold, in the circumstances of this case, that a suspension or debarment proceeding is an “alternate remedy” within the meaning of the FCA.

I

In brief, the events leading to this appeal are as follows. Appellant Leocadio Barajas (“Barajas”) brought a qui tam action under the FCA against his former employer, Northrop Corporation (“Northrop”), based on its falsified and incomplete testing of flight data transmitters (“FDTs”). The United States intervened in that action. When the government settled the action with Northrop, Barajas received his relator’s share of the recovery.

After Barajas filed his qui tam action based on the falsified and incomplete testing, the United States filed a criminal action against Northrop. The indictment charged not only falsified and incomplete testing of the FDTs, but also delivery of FDTs containing “damping fluid” that did not comply with contractual specifications. Northrop pled guilty to some of the charges in the criminal action.

After Northrop’s guilty plea, Barajas filed another qui tam action, pursuant to a First Amended and Severed Complaint (“Severed Complaint”), in the same district court as his already-pending qui tam action. The Severed Complaint was based on the damping fluid allegations, which were contained in the government’s criminal complaint but not in Barajas’ complaint in his first qui tam action. Although the government had intervened in Barajas’ first qui tam action, it declined to do so in the second action.

After the government declined to intervene in Barajas’ second action, the Air Force entered into an agreement (“Air Force Agreement” or “Agreement”) with Northrop. The Agreement arose out of administrative proceedings in which the government had threatened to suspend or disbar Northrop from entering into contracts with the Department of Defense. See 48 C.F.R. § 9.407-1 et seq. Under the Agreement, Northrop agreed to provide FDTs containing damping fluid that met the contractual specifications, and to provide certain cash payments. The total value provided by Northrop to the government under the Agreement was probably in the millions of dollars.

Barajas contended in the district court, and contends here, that the Air Force Agreement is an “alternate remedy” to his second qui tam action, and that he is entitled to a relator’s share of the proceeds of that remedy. The district court denied Barajas’ motion for an order directing the government to give him a share of the proceeds from the Air Force Agreement, holding that the Agreement was not an “alternate remedy” under the FCA within the meaning of 31 U.S.C. § 3730(c)(5). For the reasons that follow, we disagree with the district court and reverse and remand for further proceedings.

II

This is the fourth time that this court has reviewed various aspects of Barajas’ FCA claims. See United States ex rel. Barajas v. Northrop Corp., 5 F.3d 407 (9th Cir.1993) (Barajas I); United States ex [1007]*1007rel. Barajas v. Northrop Corp., 26 F.3d 135 (9th Cir.1994) (unpublished opinion); United States ex rel. Barajas v. Northrop Corp., 147 F.3d 905 (9th Cir.1998) (Barajas II). The following detailed narrative puts in proper context the legal issues in the appeal now before us.

Barajas’ FCA actions arise from fraudulent and allegedly fraudulent acts committed by Northrop in the 1980s. The United States Air Force had contracted with Boeing Aerospace Corporation to manufacture nuclear Air Launched Cruise Missiles (“ALCMs”), and Boeing in turn had subcontracted with Northrop to manufacture flight data transmitters “FDTs” for the ALCMs. ALCMs are launched from planes at high altitudes, often in arctic regions. Because the ALCMs must function in extremely low temperatures, Northrop’s contract required that the FDTs be able to withstand temperatures as low as sixty-five degrees below zero Fahrenheit. Northrop, however, used damping fluid (a fluid that restricts but does not prevent movement) that solidified at temperatures significantly warmer than contractually required, causing the FDTs to fail. Northrop was responsible not only for manufacturing but also for testing the FDTs. It concealed the FDTs’ failure by falsifying the results of some tests and by failing to perform other tests.

Barajas was a test technician employed by Northrop in its Western Services Division plant in California. In early 1987, Barajas met with federal investigators and informed them of test falsifications in which he had been involved.1 Later in 1987, Barajas and a colleague2 filed a qui tarn action against Northrop under the FCA. See 31 U.S.C. § 3729(a). Their complaint sought recovery, on behalf of the government, for the falsified and incom-píete testing, but it did not seek recovery for the defective damping fluid. The United States intervened in the action under 31 U.S.C. § 3730(b)(2). The government’s complaint in intervention, like that of Ba-rajas and his colleague, sought recovery for the false testing but not for the defective damping fluid.

In 1989, the United States initiated criminal proceedings against Northrop, alleging that Northrop had (1) falsified some test results and failed to perform other tests, and (2) used damping fluid that solidified at temperatures above those required by the contract.

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258 F.3d 1004, 2001 Cal. Daily Op. Serv. 6639, 2001 Daily Journal DAR 8133, 2001 U.S. App. LEXIS 17255, 2001 WL 872820, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-of-america-ex-rel-leocadio-barajas-v-united-states-v-ca9-2001.