Counts in Northrop Fraud Case Dropped
A federal judge Tuesday threw out several counts of a civil lawsuit against Northrop Corp. that alleged under the federal False Claims Act that the firm defrauded the Air Force on the B-2 bomber program.
Northrop attorneys claimed a substantial victory. But attorneys representing the six current and former Northrop employees who filed the suit said the ruling left intact charges representing $200 million in potential damages.
The employees originally alleged that the entire program was a fraud that cost taxpayers $20 billion. After three years of legal wrangling since the case was filed, the parties have yet to begin legal discovery. Plaintiffs’ attorney Phillip E. Benson lashed out at the judicial system that has prevented the B-2 case from going to trial.
In the ruling Tuesday, Judge Mariana R. Pfaelzer threw out allegations that Northrop collected excessive contract payments by manipulating its so-called cost schedule control system, a military contracting apparatus that attempts to track the cost of weapons programs. In addition, she threw out allegations that the ZSR-62 electronic countermeasures system on the B-2 was deficient.
The ruling left intact claims that Northrop defrauded the government by allowing employees to charge the government for time spent in commuter van pools, overcharging for labor manufacturing technology programs and supplying a defective part of the B-2’s flight control system known as the “actuator remote terminal system.” In addition, wrongful job termination claims in the case were left standing.
“What is left is a substantially diminished complaint,” said P. David Richardson, a Northrop attorney from the Washington law office of Fried, Frank, Harris, Shriver & Jacobson.
Benson acknowledged that the allegations involving the “cost schedule control system” were among the most significant monetary issues in the B-2 case, but he vowed to eventually appeal Pfaelzer’s ruling.
“Getting this case to trial is like walking through a Kuwaiti minefield,” said Benson, a member of the Herbert Hafif law office. “We blame the government for an inept investigation, subject to the forces of politics. And that tone has permeated these proceedings.”
Pfaelzer and Hafif office attorneys have traded acrimonies in the case, and last year Hafif attorneys questioned Pfaelzer’s impartiality in a filing, Benson said.
Last month, Pfaelzer called a filing by Hafif’s office “the most outrageous set of papers I have read in a long time.” That came in response to a filing in which Hafif attorneys said that they missed a court filing deadline because a radiator hose blew out on a car transporting the documents from their Claremont law office.
