Mueller

INTRODUCTION

Qui tam 1 plaintiff Nora Armenta (Armenta), the City of Burbank, the City of Pomona and the Alameda County Water District appeal from summary judgments entered in favor of defendants Mueller Co. (Mueller) and Tyco International (US) Inc. (Tyco). Armenta challenges the propriety of revoking the court’s grant of leave to file her second amended complaint, arguing that the trial court abused its discretion in imposing and enforcing an unfair condition upon Armenta’s ability to file her second amended complaint, which alleges the violation of the California False Claims Act (CFCA) (Gov. *639 Code, § 12650 et seq.) 2 with respect to an additional 130 governmental entities. All of the plaintiffs attack the summary judgments, contending that they raised triable issues of material fact regarding Mueller’s and Tyco’s liability for violation of the CFCA.

We agree that the trial court abused its discretion in conditioning leave to amend and that the abuse requires reversal of the subsequent order partially revoking the court’s grant of leave to amend. We further agree that the summary judgments must be reversed, in that triable issues of fact exist as to Mueller’s and…

I agree that the appeal is timely, and agree that the order revoking Armenia’s leave to file her second amended complaint should be reversed, but I disagree with the majority’s unsupported conclusion that, on these facts, a parent, grandparent, or great-grandparent corporation can be liable for its subsidiary’s alleged violations of the False Claims Act.

A.

James Jones Company, which manufactures and sells waterworks parts for use in municipal drinking water systems, represented in its catalogues and sales literature that all of its products complied with American Water Works Association (AWWA) standards. Under AWWA standard C-800-89, all materials in contact with potable water must be “85 metal” (meaning the materials must contain 85 percent copper and 5 percent each of tin, lead, and zinc).

Nora Armenta was Jones’s purchasing manager. In August 1991, Jones’s president allegedly directed Armenta to purchase raw metal with less copper and more lead and zinc. Although Jones continued to represent in its sales *650 materials that it was using 85 metal, it thereafter allegedly manufactured and sold waterworks using “81 metal” (comprised of 81 percent copper, 9 percent zinc, 3…

Qui tam [1] plaintiff Nora Armenta (Armenta), the City of Burbank, the City of Pomona and the Alameda County Water District appeal from summary judgments entered in favor of defendants Mueller Co. (Mueller) and Tyco International (US) Inc. (Tyco). Armenta challenges the propriety of revoking the court's grant of leave to file her second amended complaint, arguing that the trial court abused its discretion in imposing and enforcing an unfair condition upon Armenta's ab lity to file her second amended complaint, which alleges the violation of the California False Claims Act (CFCA) (Gov. Code, § 12650 et seq.) [2] with respect to an additional 130 governmental entities. All of the plaintiffs attack the summary judgments, contending that they raised triable issues of material fact regarding Mueller's and Tyco's liability for violation of the CFCA.

We agree that the trial court abused its discretion in conditioning leave to amend and that the abuse requires reversal of the subsequent order partially revoking the court's grant of leave to amend. We further agree that the summary judgments must be reversed, in that triable issues of fact exist as to Mueller's and Tyco's…