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RWL Partners Chuck Fax and Liesel Schopler in the News – False Claims Act Case to Move Forward

September 9, 2019 News

Translators Can Move Forward With Army Deal FCA Suit

Law360 (September 6, 2019, 9:34 PM EDT) — A Maryland federal judge has allowed a False Claims Act case accusing a DynCorpAECOM joint venture of lying about being the true employer of workers under multibillion-dollar U.S. Army translation services contracts to move forward, saying most claims had been properly pled.

Elgasim Mohamed Fadlalla and 28 other linguists, translators, and interpreters adequately backed most of their claims that Global Linguist Solutions LLC lied to the government about “leasing” translation services workers from subcontractors when GLS actually controlled those workers, U.S. District Judge Paula Xinis ruled in an opinion released Thursday.

According to the relators, GLS effectively employed nearly all workers it used on a $4.6 billion Army Middle East linguistic, interpretation, and translation services deal.

But the joint venture falsified employment contracts to make it look like the workers were employed by several small businesses, trying to falsely show that it had fulfilled subcontracting clauses in the contract, and that misrepresented work also helped GLS win a slot on a later global multi-award $9.7 billion deal, the relators argue.

The relators also accuse GLS of getting them into trouble with Kuwaiti authorities by trying to game Kuwait’s employment laws and of keeping them in crowded and dangerous living conditions at Middle Eastern military bases.

GLS, its owners — federal services contractor DynCorp International LLC and engineering giant AECOM National Security Programs Inc., both also named as defendants — and the relators’ ostensible employers, KMS Solutions LLC, Shee Atika Languages LLC, Thomas/Wright Inc. and TigerSwan Inc., had all moved to dismiss claims against them.

And the relators had failed to prove any acts by AECOM, in its role as minority owner of GLS, that would put FCA liability on the company, Judge Xinis said, dismissing claims against AECOM without prejudice.

She also dismissed a “reverse” false claim allegation that GLS’ actions meant it avoided paying penalties it would otherwise owe the government under its contracts, saying the ability of the government to pursue overpayments does not create an obligation to pay that would support such a claim.

Judge Xinis also tossed the relators’ Trafficking Victims Protection Reauthorization Act claims against AECOM, KMS, Thomas/Wright, and Shee Atika, based on the relators’ allegations that they were effectively forced to work either by having their passports held or being threatened with possible arrest or deportation if they didn’t. They failed to show any of these companies knew about GLS’ alleged mistreatment, the judge said.

But the relators’ other claims can all move forward, Judge Xinis said.

The relators can continue to pursue claims against DynCorp, having adequately alleged that DynCorp personnel effectively controlled GLS, according to the judge. And the court can exercise personal jurisdiction against TigerSwan and Shee Atika, she said.

Also, although the relators’ fraud allegations were “at least partly” based on testimony from a congressional hearing related to one of the contracts and on media reports stemming from litigation between Shee Atika and GLS, the relators can still be considered “original sources” under the FCA, as they had both direct and independent knowledge of the alleged fraudulent subcontracting practices from their work and the bulk of their case is based on their own experiences, according to the judge.

“Relators’ personal, firsthand experiences with GLS’ subcontracting scheme materially adds to the factual background of the FCA fraud,” Judge Xinis said. “The Amended Complaint paints a vivid picture of each Relator’s personal experience with the fraud scheme, alleging facts that not only corroborate information publicly disclosed, but that also breathe important life into proving the scheme with admissible evidence.”

The relators had also sufficiently shown that the alleged false claims were material to the government’s decision to pay GLS — a key requirement for FCA liability under the U.S. Supreme Court’s landmark 2016 Escobar <image001.png> decision — Judge Xinis said.

She rejected what she called a “restrictive view of materiality” cited by the defendants, which would require that any alleged false claim go to the “essence of the bargain” with the government.

Further, Judge Xinis rejected an argument that claims before June 2009 should be time-barred under a six-year statute of limitations, saying that is an issue for later in the case.

Joseph Hennessey, counsel for the relators, declined to comment on the opinion Friday other than to say that it “speaks for itself.”

Representatives for GLS, DynCorp, and AECOM did not immediately respond to requests for comment late on Friday.

The relators are represented by Joseph A. Hennessey of The Law Office of Joseph Hennessey LLC, Charles S. Fax and Liesel J. Schopler of Rifkin Weiner Livingston LLC, and Timothy Mathews and Steven A. Schwartz of Chimicles Schwartz Kriner & Donaldson-Smith LLP.

Global Linguist Solutions is represented by William F. Stute, David Rhinesmith, and Jonathan A. Direnfeld of Orrick Herrington & Sutcliffe LLP. DynCorp is also represented separately by Jan P. Miller and Claire M. Schenk of Thompson Coburn LLP. AECOM is also represented separately by Craig Smith, Roderick L. Thomas, and P. Nicholas Peterson of Wiley Rein LLP.

KMS is represented by Philip T. Evans and Megan M. Jeschke of Holland & Knight LLP.

Shee Atika Languages is represented by Dawn E. Murphy-Johnson, Marc Gerson, Adam Feinberg, and Preston Pugh of Miller & Chevalier Chtd.

Thomas/Wright is represented by Richard O. Wolf of Moore & Lee LLP.

TigerSwan is represented by Glenn C. Etelson and Lane Hornfeck of Shulman Rogers Gandal Pordy & Ecker PA.

The case is U.S. ex rel. Fadlalla v. DynCorp International LLC, case number 8:15-cv-01806, in the U.S. District Court for the District of Maryland.

–Editing by Peter Rozovsky.