D.C. District Judge reconsiders retroactivity of False Claims Act amendments but refuses to dismiss body armor suit

by Ben Vernia | May 17th, 2010

On May 4, District Judge Richard Roberts ruled on a motion to reconsider a motion to dismiss previously filed by Toyoba, a Japanese manufacturer of Zylon, used in bulletproof vests. In February, Judge Roberts had denied the company’s motion – which had been brought on grounds that the government’s complaint failed to state a cause of action for using a false document to get a claim paid or approved in violation of 31 U.S.C § 3729(a)(2), as interpreted by the Supreme Court in Allison Engine Co., Inc. v. United States ex rel. Sanders, 128 S.Ct. 2123 (2008). In that ruling, he stated that the 2009 amendments to the False Claims Act applied to the case, because it was pending on June 7, 2008, the date to which the Fraud Enforcement and Recovery Act (FERA) was retroactive.

Judge Roberts agreed with Toyoba on reconsideration that FERA’s retroactivity only applied to “claims” for payment that were pending as of June 7, 2008, but he nevertheless concluded that the government’s complaint pleaded a valid cause of action. Judge Roberts recited communications between Second Chance, which manufactured the body armor, with Toyoba regarding the accelerated degradation of Zylon fibers and Toyoba’s failure to disclose this information. Read in the light most favorable to the government, he reasoned, the complaint alleged that Toyoba’s purpose in failing to bring the defect to the government’s attention was to get the government to pay for the defective vests.

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