We have previously blogged about the long-running Barko qui tam litigation, in which V&E is defending KBR against FCA claims brought by Relator Harry Barko. As our prior post explains, Barko’s complaint centers primarily around an allegation that a KBR procurement employee took kickbacks from a subcontractor in return for purported favorable treatment, including awarding subcontracts with insufficient competition, allowing double-billing for goods and services (without back-charging the subcontractor), concealing poor performance, and other alleged wrongdoing. In March 2017, the district court granted summary judgment to KBR.
On December 27 — while most of us were off enjoying the holidays, and less than four weeks after oral argument — the hard-working D.C. Circuit issued a decision affirming the district court’s judgment in favor of KBR.
Although the D.C. Circuit’s decision is brief and unpublished, it contains helpful language reaffirming fundamental FCA legal principles. Quoting the Supreme Court’s decision in Escobar, the D.C. Circuit emphasized that the FCA “is not an all-purpose antifraud statute, or a vehicle for punishing garden-variety breaches of contract or regulatory violations.” Therefore, to avoid summary judgment, Barko had to present evidence showing “not only that KBR engaged in improper or illegal behavior, but also that this behavior was tied to the submission of claims against the government and was material to the government’s decision to pay.” As the D.C. Circuit explained, Barko “utterly failed to tie” any alleged kickback “to a specific false claim KBR submitted” to the government.
Of particular relevance to future FCA cases, the D.C. Circuit made clear that evidence of alleged contractual irregularities alone is insufficient to overcome summary judgment on a theory that the irregularities are symptomatic of a kickback scheme. The D.C. Circuit held that the alleged irregularities in Barko “were too far removed from any possible kickbacks — and too untethered from any claims for payment KBR filed with the government — to shift the summary judgment scales and produce a reasonable inference that KBR’s claims were infected by an illegal kickback scheme.”
We here at LLB are hopeful that the D.C. Circuit’s decision will finally bring this case, which was originally filed under seal in 2005, to a close.