On June 9, 2011, the District Court of Massachusetts in United States ex rel. Saltzman v. Textron Systems Corp., et al., Civil Action No. 09-cv-11985-RGS (D. Mass. June 9, 2011), dismissed a federal False Claims Act lawsuit alleging that Textron Systems, a defense contractor, submitted false claims for reimbursement for workers’ compensation insurance premiums.  The court held that even if the insurance costs were not in fact reimbursable, the defendant “is not culpable, as the FCA is not a strict liability statute.” The lawsuit was brought by a former employee of the defendant.  The United States declined to intervene.

Textron entered into a contract with the United States Air Force to provide special weapons systems, and the contract contained a provision requiring Textron to provide workers’ compensation insurance until performance of the contract was completed.  Textron inquired internally as to whether the insurance premiums could be passed along to the government and subsequently presented claims for reimbursement for those costs.  The relator contended that these claims were false because the contract in question required the defendant to provide insurance “at its own expense.”  However, the court found no allegations in the complaint of any actual knowledge of falsity.  Rather, the defendant’s internal inquiry suggested to the court that the defendant did not know that the insurance premiums were not reimbursable.  Moreover, the court observed that the same internal inquiry undercut any contention that there was any willful blindness on the defendant’s part.