Government Admonished For Failing To Prove Damages In False Claims Act Case

In its review of a case that goes back to a contract dispute originating in the 1980s, the Court of Appeals for the Sixth Circuit admonished the government for failing to prove damages in a False Claims Act case. In 1999, the government sued United Technologies under the Act, for allegedly submitting false cost and pricing data. In a remand, a district court awarded the government $657 million, but in a recent decision the Sixth Circuit said the government never proved that the company’s conduct resulted in actual damages, a proof the court said would have required a look at the market and a comparable-sales analysis. “For contractors,” write attorneys from Wiley Rein, “the decision is a reminder of the significant incentive to challenge damages calculations as vigorously as underlying liability.”