that Congress cannot eliminate the Constitution's standing
requirement by creating a financial incentive for a plaintiff
that is not the result of an injury to the plaintiff itself.
Defendant argues that the relator lacks standing because it
has no "`personal stake in the outcome of the controversy' .
. . to ensure . . . an adversarial [proceeding] capable of
judicial resolution." Sierra Club v. Morton, 405 U.S. 727, 732,
92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972) (quoting Baker v.
Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663
(1962)). Of course, Article III of the Constitution limits
federal court jurisdiction to the resolution of "cases" or
"controversies," and federal courts thus lack the power to
render advisory opinions, to resolve political questions, or to
entertain friendly suits. See Sierra Club, 405 U.S. at 732 n.
3, 92 S.Ct. at 1365 n. 3.
The standing of a qui tam plaintiff in a False Claims Act
action has been upheld in three cases cited to the court by the
plaintiff. See United States ex rel. Truong v. Northrop Corp.,
728 F. Supp. 615 (C.D.Cal. 1989); United States ex rel. Newsham
v. Lockheed Missiles and Space Co., 722 F. Supp. 607 (N.D.Cal.
1989); United States ex rel. Stillwell v. Hughes Helicopters,
Inc., 714 F. Supp. 1084 (C.D.Cal. 1989). As the court notes in
Stillwell, Congress may create a legal interest and confer
standing to assert that right. Stillwell, 714 F. Supp. at 1096
(citing Trafficante v. Metropolitan Life Insurance Co.,
409 U.S. 205, 208-09, 93 S.Ct. 364, 366-67, 34 L.Ed.2d 415 (1972)).
If Congress does create statutory standing, the normal
requirements of standing — particularly the requirement that
the plaintiff's injury be individualized and particularized —
are not considered by the reviewing court. Stillwell, 714
F. Supp. at 1096 (citing Havens Realty Corp. v. Coleman,
455 U.S. 363, 372, 102 S.Ct. 1114, 1120, 71 L.Ed.2d 214 (1982)).
Nevertheless, "Congress may not confer standing on a plaintiff
who cannot show the constitutional minimum of injury-in-fact."
Stillwell, 714 F. Supp. at 1096 (citing Valley Forge Christian
College v. Americans United for Separation of Church and State,
Inc., 454 U.S. 464, 488 n. 24, 102 S.Ct. 752, 766 n. 24, 70
L.Ed.2d 700 (1982)).
With respect to the injury-in-fact requirement, the courts
in Truong, Newsham and Stillwell note that the various qui tam
statutes passed by Congress have survived constitutional
challenges based on purported lack of standing. In addition,
"[t]here is no constitutional prohibition to the relator's
suing, under a statutory grant of standing, on the injury to
the United States." Stillwell, 714 F. Supp. at 1098. See also
Kingsley Books, Inc. v. Brown, 354 U.S. 436, 441, 77 S.Ct.
1325, 1327, 1 L.Ed.2d 1469 (1957); United States ex rel. Marcus
v. Hess, 317 U.S. 537, 541, 63 S.Ct. 379, 383, 87 L.Ed. 443
(1943); see also 13A C. Wright, A. Miller & E. Cooper, Federal
Practice and Procedure § 3531.13 at 76 (1984) ("if Congress
wishes, indeed, it can enact a qui tam statute to enable a
private party to invoke the standing of the government to
collect a civil penalty"). The court in Truong found that,
"[w]here there is evidence of palpable injury to the entity on
whose behalf and in whose name the suit is brought, it is
superfluous to require that the relator be individually
aggrieved." Truong, 728 F. Supp. at 619. The Truong,
Newsham and Stillwell courts thus held that Congress properly
conferred standing on qui tam relators under the False Claims
Act. Truong, 728 F. Supp. at 618-19; Newsham, 722 F. Supp. at
614-15; Stillwell, 714 F. Supp. at 1098-99. The court finds
the reasoning in these cases persuasive.
Some injury-in-fact to the government must be present,
however. See Truong, 728 F. Supp. at 618; Stillwell, 714 F. Supp.
at 1098. Here, the relator alleges that the government has been
damaged by defendant's fraud in concealing its unilateral
design change in the blade fold system. The government has paid
for hundreds of helicopters with this concealed design flaw,
plaintiffs aver. This is sufficient to confer standing on the
relator. The court in Stillwell also recognized other possible
bases for a relator's standing. First, the "statutory bounty"
available under the False
Claims Act creates a personal stake in the outcome on behalf
of the relator, and makes him or her a real party in interest
pursuant to Fed.R.Civ.P. 17. Id. at 1098-99. Second, since the
relator often has access to the information forming the basis
of his claim only through his employment relationship, he or
she faces the prospect of loss of employment and benefits if
the fraud is disclosed. Id. at 1099. Finally, to the extent the
relator is a knowing participant in the fraud and fails to act
on it, he or she may be liable in a False Claims Act
prosecution. Id. Although the second and third reasons are not
applicable to the relator here, since it was not an employee of
the defendant, the statutory bounty creates an additional basis
for relator's standing.
B. STATUTE OF LIMITATIONS
Defendant moves for summary judgment on the ground that the
statute of limitations has run on relator's claim. The
applicable limitations period for a false claims action is six
years from the date of the violation of the False Claims Act,
or three years from the date that the government knew or
should have known of the violation. The Act provides:
A civil action under section 3730 may not be
(1) more than 6 years after the date on which the
violation of section 3729 is committed, or
(2) more than 3 years after the date when facts
material to the right of action are known or
reasonably known or reasonably should have been
known by the official of the United States
charged with responsibility to act in the
circumstances, but in no event more than 10 years
after the date on which the violation is
committed, whichever occurs last.
31 U.S.C. § 3731(b) (1986).
The six-year limitations period begins to run "on the date
the claim is made or, if the claim is paid, on the date of the
payment." Blusal Meats, Inc. v. United States, 638 F. Supp. 824,
829 (S.D.N.Y. 1986), aff'd, 817 F.2d 1007 (2d Cir. 1987). As
the statute states, the three-year limitations period begins to
run from the date "when facts material to the right of action
are known or reasonably should have been known" by the
government official responsible for such information.
UTC maintains that the relator's fraud claims can, at most,
extend to the first 115 Black Hawk helicopters delivered by
UTC, since those were the only aircraft delivered with the
faulty Fafnir bearing design. UTC contends it ceased using the
Fafnir bearing in 1980, and that in 1979 the Army was aware of
this design problem and informed its personnel that they must
disconnect the pitch control rods before folding the rotor
blades. Thus, since 1979, UTC argues, the Army knew of the
facts material to relator's claim, and there was no hidden
defect. Consequently, the defendant contends, since the
government was aware of the alleged defect in 1979, it has no
claim under the False Claims Act, since an essential element
is that the claim be false or fraudulent. See Boisjoly v.
Morton Thiokol, Inc., 706 F. Supp. 795, 808 (D.Utah 1988).
The relator apparently concedes in its responding memorandum
that claims based on the first 115 helicopters are barred by
the six-year statute of limitations, since the last payments
on those aircraft were made in March 1981, and the complaint
was filed December 30, 1987.
The relator maintains, however, that the six-year
limitations period commenced upon payment for each helicopter
delivered to the United States, since the fraud by defendant
— concealing its unilateral abandonment of the blade fold pin
design — continued unknown to the government until the
commencement of this suit. Relator asserts that the government
has continued to purchase Black Hawk helicopters even after the
filing of the complaint in this action. Relator also seeks to
toll the statute of limitations, asserting that the official
with responsibility to act here did not have knowledge of the
fraud. The relator contends that the defendant has failed to
sustain its initial burden of showing the absence of material
issues of fact as to which government official was responsible
for the information in this case, when the government
had knowledge of the facts constituting the alleged fraud, the
nature of the fraudulent claim, and the date the defendant
presented claims for payment with knowledge or reckless
disregard of the facts constituting fraud. See Celotex v.
Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
Relator also claims that it has not had, or was prevented
from conducting, adequate discovery in the case so as to
develop these factual issues. The granting of a motion for
summary judgment assumes that the parties have had ample
opportunity for discovery. Anderson v. Liberty Lobby,
477 U.S. 242, 250 n. 5, 106 S.Ct. 2505, 2511 n. 5, 91 L.Ed.2d 202
(1986). However, the nonmoving party need not be given the
opportunity to complete discovery if it already has had
adequate opportunity for discovery and has not taken advantage
of it. Trebor Sportswear Co. v. The Limited Stores, Inc.,
865 F.2d 506 (2d Cir. 1989).
In Boisjoly v. Morton Thiokol, Inc., 706 F. Supp. 795 (D.Utah
1988), the court considered, among other causes of action, a
qui tam claim under the False Claims Act brought by an employee
of Morton Thiokol, Inc. ("Morton Thiokol"), the manufacturer of
the seal blamed for the 1986 Space Shuttle Challenger
explosion. The relator alleged that defects in the seals that
could result in accidents were known to Morton Thiokol and to
the government, and that during the period Morton Thiokol sold
the seals to the National Aeronautics and Space Administration
("NASA"), Morton Thiokol "made false claims for payments
knowing that the [seals] did not meet contract specifications."
Id. at 809.
The court found that the allegations in relator's complaint
that the government knew of the defects in the seals negated
his False Claims Act claim. The court observed that other
courts have disallowed False Claims Act claims where the
government knew, or was in possession at the time of the
claim, of the facts that make the claim false. Id. (citing
United States v. Fox Lake State Bank, 366 F.2d 962, 965 (7th
Cir. 1966); Woodbury v. United States, 232 F. Supp. 49, 54-55
(D.Or. 1964); United States v. Schmidt, 204 F. Supp. 540 (D.Wis.
1962)). The court stated that "[o]nly if the government gets
something less than or different from that which it expected
can it be said to have suffered the kind of injury necessary to
invoke FCA liability." Id. The court held that the relator
failed to state a claim under the False Claims Act because it
alleged that "the government knew of those very facts or
characteristics which allegedly make the claim false. . . ."
Id. at 810. Further, the court rejected the relator's claim
that Morton Thiokol's request for an incentive award under its
contract terms with NASA was fraudulent because of Morton
Thiokol's "failure to adhere to contract requirements." Id. at
811. This claim was likewise negated by allegations that the
government knew of the alleged defect. Id.
The defendant submits a number of affidavits in support of
its contention that the Army had knowledge of the defect on
which relator's claim was based. Harold G. Heiney, who was
design manager in charge of flight controls on the Black Hawk
helicopter during the development stage from 1974 to 1981,
refers to a number of Army documents attached to his affidavit
which indicate that the Army was aware, in 1979, that if pitch
control rods were not disconnected, limiter bearings could be
damaged. Affidavit of Harold G. Heiney, 10/11/89 ("Heiney
Affidavit"), ¶ 2-3; Exhibits 1-2. The Army revised the
technical manual provisions for the blade folding operations on
the Black Hawk as of May 9, 1980, requiring disconnection of
the pitch control rods. Heiney Affidavit, ¶ 4; Exhibit 3. On
November 6, 1979, defendant initiated an "Engineering Change
Notice" with the Army to change the Fafnir limiter bearing to a
solid roller, since the Fafnir bearing could develop cracks.
The Engineering Change Notice was signed by the Naval Plant
Representative Office ("NAVPRO") representative at defendant's
manufacturing plant. Heiney states the signature of the NAVPRO
representative is the government's approval for the Engineering
Change Notice. Heiney Affidavit, ¶ 5-6; Exhibits 4-5.
William E. Gallagher, project manager of special projects at
Sikorsky Aircraft, the division of UTC which developed and
manufactured the Black Hawk, was involved in the development
and testing of the blade folding equipment on the Black Hawk.
Gallagher states that blade fold pins, which the relator
contends were the element in the rotor design unilaterally
eliminated by the defendant, were not used in the prototype
Black Hawk tested and evaluated by the Army in 1976. Affidavit
of William E. Gallagher, 10/3/89 ("Gallagher Affidavit"),
¶ 6. Nor were blade fold pins referred to or employed in the
technical manual for the prototype helicopter submitted to the
Army; in the production contract for the Black Hawk; or the
equipment in the Air Transportability Kit provided by defendant
to the Army as part of the contract. Gallagher Affidavit, ¶
7-10. The technical manual which details the procedures for
blade folding on the production helicopter did not prescribe or
mention blade fold pins. Gallagher Affidavit, ¶ 13; Exhibit 6.
A pin originally used as a blade fold pin in early prototype
models of the Black Hawk was, after 1975, used only as a
"rigging pin" for the rigging of controls, and was unrelated to
blade folding. Gallagher Affidavit, ¶ 12; Exhibit 5.
The Army conducted tests on the Black Hawk at Fort Campbell,
Kentucky on July 11 and July 25, 1979, and addressed, among
Can the Black Hawk aircraft be loaded on a
C-141/C-5A aircraft in specified quantities and
times according to technical manual (TM
55-1520-237-23-4) with organic tools?
The Army's report on these tests, according to Gallagher,
shows that the Army had knowledge of the equipment and
procedures used in blade folding, and it did not involve the
use of blade fold pins. Gallagher Affidavit, ¶ 14; Exhibit 7.
Between November 12-18, 1979, the Army conducted a transport
exercise, which was attended by United Technologies
representatives. During this exercise, the Army and UTC learned
that the Fafnir limiter bearing could crack if pitch control
rods were not disconnected during the blade folding procedure.
Gallagher Affidavit, ¶ 15-16.
Robert E. Hall was chief of the Airframe Branch of the
Technical Management Division of the U.S. Army Black Hawk
Project Manager's Office from 1975 to 1981. The Project
Manager's Office, an arm of the Army Aviation Systems Command
("AVSCOM"), was responsible for supervision of the "technical
configuration" of the Black Hawk helicopter in all respects
except the engine. Affidavit of Robert E. Hall, 5/24/90 ("Hall
Affidavit"), ¶ 1. Hall states that he was the highest level
official at the Project Manager's Office directly involved with
management and supervision of Black Hawk air transportability
issues, "including such issues as the compliance of blade fold
procedures with Army requirements and all components and
equipment used, or proposed by Sikorsky to be used, in blade
fold." Hall Affidavit, ¶ 1.
Hall states he was aware, in his capacity as chief of the
Airframe Branch, and the most senior official in the Project
Manager's Office, that:
during the Black Hawk prototype phase . . .
Sikorsky was considering use of a blade fold pin,
in the Black Hawk prototype helicopter, to block
blade fold loads out of the mixer assembly. I was
also aware during the Black Hawk prototype phase
of the operational difficulties inherent in the
blade fold pin procedure, specifically that it
was difficult to align certain components so that
the holes into which the blade fold pins would
fit would line up properly. . . .
Sikorsky eventually abandoned the blade fold
pin concept. Although I do not remember the
precise date when that occurred, I was
specifically aware, in my capacity as Chief of
the Airframe Branch, of Sikorsky's discarding of
the blade fold pin concept, and Sikorsky's reason
for doing so, by December 1979 at the latest.
Sikorsky did not "secretly" abandon the blade
fold pin concept; the U.S. Army Project Manager's
Office understood by December 1979 at the latest
(1) that the blade fold pin concept was
problematic, (2) that it had been discarded by
Sikorsky, and (3) the reason
it had been discarded by Sikorsky (namely, the
Hall Affidavit, ¶ 2-3 (emphasis added).