Qui tam case against FMC for false claimsresults in huge fine

April 14, 1998 -- A federal jury today agreed with a whistleblower (qui tam) lawsuit that FMC Corp. had defrauded the federal government in its production of the Bradley Fighting Vehicle, a decision that could require the company to pay as much as $350 million to $387 million in damages and fines under the False Claims Act.

The case was one of the rare instances in which a qui tam lawsuit brought under the False Claims Act has gone to trial. Even more unusual is that the qui tam case was pursued through trial and was successful even though the Justice Department declined to join it.

Henry Boisvert, a former FMC employee, filed the qui tam lawsuit in 1986. He charged that FMC had lied to the government about the Bradley Fighting Vehicle's safety flaws.

The jury actually awarded $125 million in damages, but the amount was multiplied under a formula laid out in the False Claims Act. Boisvert is entitled to 30 percent of whatever the government recovers.

"Contractors need to be honest in dealing with the government," jury foreman Francisco Nazario told the San Jose Mercury News. "They are going to accountable if they don't do that."

Boisvert and his counsel pursued the case for 12 years despite many obstacles, including the Justice Department's decision to not intervene in the lawsuit.

The odds are much smaller that a false claims case will succeed without the government than when the government joins it. The Justice Department has intervened in roughly one out of six qui tam lawsuits filed. Those lawsuits that have continued without government support had resulted in the U.S. Treasury recovering only a total of $31 million before the FMC verdict. Qui tam cases the government has decided have merit and has joined have resulted in recoveries totaling more than $2.1 billion.

The 10-member jury in San Jose, Calif., deliberated for 12 days before it reached a unanimous verdict that FMC had made 13,000 false billing claims over 10 years. FMC said it would appeal the jury verdict. The case could be tied up for years before there's a final resolution.

Last year, FMC paid $13 million to settle a different qui tam case that was brought by a whistleblower that Phillips & Cohen represented. That lawsuit charged that FMC had over billed the government by deliberately inflating by millions of dollars costs for which it was entitled to be reimbursed by the U.S. Army.

For more information, see the following news stories:

  • "San Jose jury finds against Army contractor," Manny Fernandez, San Francisco Chronicle, 4/16/98.
  • "Jury levies $310m fine against FMC," Los Angeles Times, 4/15/98.