United States ex rel. Lindenthal v. General Dynamics Corp.

These appeals arise out of an action under the False Claims Act (FCA). 1 The relators prosecuted the action on their own after the government declined to intervene.

The relators’ theory of the case is as follows: General Dynamics (GD) contracted with the Air Force (AF) to produce, and provide engineering drawings for, an elaborate radar system called MUTES. MUTES is a mobile system used to train pilots by simulating the signals of various enemy radar. After a period of years, the AF solicited bids on a competitive basis from other companies who wanted to build MUTES. The AF awarded this follow-on contract to Aydin Corporation. The drawings GD had supplied to the AF proved inadequate for Aydin to produce MUTES according to its contract, and the AF was therefore forced to renegotiate the terms of its contract with Aydin at a cost of over $20 million.

The relators, who are insiders at Aydin, claim that GD knowingly provided inadequate drawings to the AF, and that this “fraud” actually damaged the United States in the amount the AF had to pay to alter the terms of the follow-on contract.

The district court held a bench trial to determine whether jurisdiction lay under the FCA. It…