Fifth Circuit Affirms Summary Judgment for RJO Client Northrop Grumman Corp. in False Claims Act Case

In a unanimous precedential opinion filed on December 19, 2017, the U.S. Court of Appeals for the Fifth Circuit affirmed the U.S. District Court for the Northern District of Texas’ grant of summary judgment for Northrop Grumman Corp. in the False Claims Act case U.S. ex rel. Paul J. Solomon v. Lockheed Martin Corp. and Northrop Grumman Corp.

In the mid-2000s, Mr. Solomon, the putative whistleblower, was a Northrop Grumman auditor of the company’s cost performance system on its $4 billion portion of the F-35 System Development and Demonstration (SDD) contract.  As set forth in a 2012 lawsuit, Mr. Solomon alleged that Northrop Grumman and Lockheed Martin had misused budgets in a way that artificially improved the contractors’ seeming cost performance measures to wrongfully entitle the companies to higher award fees.

In pre-discovery dispositive motions – first a motion to dismiss and then a motion for summary judgment – RJO argued that Mr. Solomon’s complaint failed to clear the False Claims Act’s “public disclosure bar” because the essence of the allegations had been disclosed in published government audits and reports, and in the SDD model contract that was posted on a Defense Department website, and because Mr. Solomon was not an “original source” of the allegations.

The Fifth Circuit’s affirmance of the District Court’s judgment that the complaint failed the jurisdictional bar effectively disposes of the case on preliminary motions.  RJO attorneys Neil H. O’Donnell, and Dennis J. Callahan, defended Northrop Grumman Corp. in this matter.