‘Whistle-Blowers’ Can Press Claims in Northrop Suit

A federal judge Monday allowed two former Northrop Corp. employees to proceed with portions of their lawsuit against the defense firm that the Justice Department had declined to include when joining the suit.

U.S. District Judge David V. Kenyon’s ruling means former Northrop manager David Peterson and engineer Jeff Kroll can pursue claims that could net them as much as $60 million in damages, said attorney Philip E. Benson.

“It’s a novel issue . . . and precedent-setting,” said Benson.

Peterson and Kroll allege in their suit that Northrop committed more than $100 million in fraud in the production of the MX missile guidance systems.

The suit accuses the firm of falsifying tests and mischarging the government for tests and parts used in the inertial measurement units on the missile, which are vital parts in the guidance systems for the Peacekeeper missile.

The Justice Department announced last year that it was picking up what it called “substantial portions” of the suit, and Northrop sought to dismiss the remaining claims missing from the government action. Those remaining claims involved specific instances of alleged mischarging and test falsification.

Northrop attorneys declined to comment.