An interesting and unusual conclusion to a qui tam case…
As regular readers know, false claims act cases are usually hard-fought battles when they are litigated. This is true regardless of whether the government intervenes in the case or not. I attribute this to several factors.
First, cases involving qui tam relators do not present a level playing field for defendants. Very few, if any, false claims act cases involving a qui tam relator involve factual disputes.
No big surprise there — that is why the government has a qui tam provision in the false claims act in the first place. The qui tam relator is an insider who knows where all the bodies are buried, so to speak. Think of the Henry Hill character in the movie Goodfellas — especially the court scenes at the end of the movie.
The presence of an insider reduces the opportunity for defendants to weave a story line that incorporates the kinds of facts a civil litigant normally knows prior to initiating litigation but explains those facts in an innocent manner.
Second, while there are usually very few facts in dispute, the subject matter of qui tam cases tends to be extremely technical and complicated. This means there are lots of technical issues for the lawyers to master and plenty of technical jargon to learn. Those technical issues present plenty of opportunities for obfuscation, and woe unto the lawyer that doesn’t learn that early on.
Finally, it is just human nature to pull out all the stops when you get caught with your hand in the cookie jar.
For these reasons among others, it is rare for a defendant to default in false claims act litigation, but that is exactly what happened this week in the U.S. District Court for the District of Texas. The judgment is a total of $40.4 million dollars; the case is captioned United States ex rel. Becker v. Tools & Metals Inc. and Todd Loftis. You can check out the default judgment Beaumont Federal Correctional Facility in Beaumont Texas.
Congratulations to Phil Benson and his team on this win! 