The Eastern District of Virginia dismissed a False Claims Act complaint brought by the government and a whistleblower, finding that the government failed to adequately plead that it relied on allegedly false marksmanship tests when it paid a government contractor. U.S. ex rel. Badr v. Triple Canopy, Inc., Case No. 1:11-cv-288 (E.D. Va. June 19, 2013).
Triple Canopy had a contract with the government to provide security services at United States military bases in Al Asad, Iraq. As part of the contract, Triple Canopy was required to ensure that all of its personnel maintained certain weapons qualifications. Triple Canopy brought 332 guards from Uganda to work at the bases. According to the allegations of the complaint, it quickly became clear to Triple Canopy that the guards could not meet the minimum weapons qualification requirements. As a result, the complaint alleges, Triple Canopy began to falsify the guards’ scorecards.
U.S. District Judge Gerald Bruce Lee dismissed the False Claims Act claim, holding that because the invoices Triple Canopy submitted for payment did not, themselves, contain false statements, they could not be considered “false claims” for purposes of FCA liability. Distinguishing the case from those involving defective products, the court explained that there could “be some inherent value retained in a service that is provided by an unqualified employee compared to a complete inability to use a product that is rendered defective.” The court held that the government had failed to sufficiently allege that the guards’ services were “entirely devoid of value or that the noncompliance with the weapons qualification requirement caused any injury to the government such that the guards effectively provided no service at all.”
The government also asserted that Triple Canopy’s submission of invoices to the government constituted a “false implicit certification” of compliance with the requirements of the contract. Judge Lee, however, recognized that the Fourth Circuit has not adopted an “implied certification theory” of liability under the False Claims Act. Even if it had, the court held that the government’s failure to plead that weapons qualification certification forms were a precondition for payment undermined their implied certification theory of liability.