Fourth Circuit affirms judgment in favor of Blackwater subsidiary in whistleblowers' suit

by Ben Vernia | December 10th, 2012

On December 6, the Fourth Circuit Court of Appeals, in an unpublished opinion in U.S. ex rel. Davis v. U.S. Training Center, Inc., affirmed a district judge’s grant of partial summary judgment and denial of a new trial, against a husband and wife formerly employed by a Blackwater subsidiary. The couple alleged that the company had committed fraud in several respects in government contracts for security services in Louisiana after Katrina (for Homeland Security) and in Iraq and Afghanistan under State and Defense contracts.

The trial judge had granted summary judgment on one claim (alleging worthless services) prior to discovery, but had permitted others to go to trial. The relators lost at trial, and sought a new trial, a motion partly grounded in an allegation that the company’s CEO had perjured herself regarding whether she had provided a report to a government official. The Fourth Circuit affirmed the Eastern District of Virginia in all respects:

  • Affirmed summary judgment on the worthless services claim on the grounds that the Katrina contract did not assign to the company responsibility for managing personnel, monitoring the distribution of weapons, and ensuring that convicted persons did not receive weapons, as the relators had alleged;
  • Affirmed several decisions by the trial judge to limit the relators’ admission of evidence, including evidence of a death threat made by a company employee against a State Department contract reviewer (reasoning that it was inherently sensational and only marginally relevant to the relators’ claims)
  • Affirmed the denial of a new trial on grounds of perjury by the defendant’s CEO, concluding that a State Department contractor’s affidavit contradicting the CEO merely established differing recollections by the two persons, not the CEO’s perjury.

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