United States ex rel. Barajas v. Northrop Corp.

This is a qui tam case raising a question of whether the relator can proceed after the government has settled.

FACTS

The government bought cruise missiles from Boeing. A division of Northrop was at relevant times manufacturing a navigational guidance device for the missiles. The missiles are designed to be carried under the wings of B-52 or B-l bombers, dropped from the wings as the planes fly, and then to fly independently toward their targets at low altitudes. The part at issue, a “flight data transmitter” manufactured by Northrop, consisted substantially of three gyroscopes, an accelerometer, and electronic components enclosed in a box. Fluid is used to damp movement inside the box. The fluid is supposed to stay sufficiently liquid to perform its damping function down to 65 degrees below zero Fahrenheit, according to the contract specifications. The missiles were of course manufactured for supply to the United States, which paid for them.

Two things are alleged to have been false about Northrop’s claims for payment for the flight data transmitters. One is that the required tests were not performed, and the certifications that they had been were false. That has been…

dissenting:

I respectfully dissent. The majority interprets the settlement agreement between Northrop and the Government to embrace Barajas’s cold fluid claim. On its face, the Government’s release of “any and all ... claims under the False Claims Act” may extend to the cold fluid claim, but this language must be interpreted against the background of the Government’s civil suit against Northrop. See Miller v. Fairchild Indus., Inc., 797 F.2d 727 , 734-35 (9th Cir.1986). The Government did not adopt the cold fluid claim in its civil complaint, alleging only that Northrop falsified its testing records. Throughout the litigation, both Northrop and the Government maintained the cold fluid claim was distinct from the falsification claim. Moreover, in the negotiations leading to the settlement agreement, both parties acknowledged that the cold fluid claim was not covered by the settlement.

Because the surrounding circumstances show Northrop and the Government did not intend their settlement to dispose of the cold fluid claim, the settlement agreement does not preclude Barajas’s qui tam action based on that claim, irrespective of whether res judicata principles apply. If, as the…