Ruling Clears Way for Trial in Litton Suit
A federal judge has refused to dismiss a whistle-blower lawsuit filed against Litton Industries over allegedly fraudulent repairs made on military navigation systems, thus clearing the way for a trial next year.
The case was filed in 1993 by Herbert “Casey” Shoupp, 62, a former Litton repair technician who worked on navigation systems made by the firm for the U.S. military.
Shoupp, a 30-year veteran of the aerospace industry, alleged that Litton routinely put in used, and sometimes defective, parts to repair inertial navigation systems that are used to help guide planes on oceanic flights. These navigation units rely on special gyroscopes to help track a plane’s route.
But Shoupp contends that Litton charged the government full price for used gyroscopes, as if they were new ones.
All told, Litton overbilled the government by about $25 million, said Phillip Benson, Shoupp’s attorney.
Litton, the big defense contractor based in Woodland Hills, said it has dutifully followed terms of its military contract, and last spring it asked a federal court to dismiss Shoupp’s case.
But last week U.S. District Court Judge Consuelo B. Marshall denied Litton’s motion for a summary judgment.
“It’s the right ruling,” Benson said. Litton’s government repair contract does not allow the company “to go ahead and use old stuff and charge as if they are new.”
On Monday, Litton spokesman Robert Knapp said, “Obviously we’re disappointed” by the judge’s decision, because Shoupp’s allegations “are totally wrong.”
Litton keeps a rotating parts inventory, he said, and it is allowed to install repaired or used parts “to save money and shorten repair time,” and Litton then bills the government accordingly. “We are in complete compliance with our contract,” he said.
Shoupp quit Litton after filing his suit, saying he’d been ground down by management. Since then, he’s scraped by working as a night watchman in Las Vegas for $6.50 an hour.
On Monday, Shoupp said he was looking forward to his trial. “These guys deserve a severe spanking,” he said of Litton.
Litton faces treble damages--perhaps $75 million--plus $5,000 for each false claim, if found guilty. Shoupp and his attorneys would share up to 30% of any penalties and fines, with the federal government taking the rest.
Shoupp’s case was filed under the federal False Claims Act, which dates to the Civil War, but was amended a decade ago to encourage citizens to file whistle-blower suits.
