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TEXAS VERDICT DOESN'T BAR PURSUIT OF FALSE CLAIMS ACTION.

A Texas court's verdict against a plaintiff in a wrongful-discharge lawsuit doesn't bar him from pursuing similar allegations in a lawsuit under the federal False Claims Act, the Fifth U.S. Circuit Court of Appeals ruled Aug. 18.

In the two actions brought by James Mayfield, "the remedies sought and the measure of recovery for Mayfield are completely different," Chief Judge Carolyn Dineen King wrote for the three-member panel in United States, ex rel., v. Lockheed Martin Engineering and Science Services Co. (02-40504).

In the state court suit, governed by an at-will employment law, "he wished to be compensated or made whole following what he saw as a wrongful discharge that was personal," she wrote.

"In contrast, in this case, Mayfield sues to recover from Lockheed on behalf of the government for alleged fraud on the government through Lockheed's false submissions to NASA."

James Mayfield began working for Lockheed Martin Engineering in 1989 and claims he became aware in December 1994 that Lockheed was failing to report excessive costs under its contract with the National Aeronautics and Space Administration, as required.

He says he raised questions about the legality of the practice and was fired in March 1995.

Mayfield filed a wrongful-discharge lawsuit under Texas law, arguing his retaliatory termination fell into an exception to the state's doctrine of at-will employment, but a state district judge dismissed the suit and an appellate panel upheld the ruling.

Mayfield then sued under the False Claims Act, a law dating back to the Civil War allowing private citizens to file suit alleging contractor fraud on behalf of the government and to share in any proceeds.

Lockheed invoked the doctrine of res judicata, preventing matters that have been subject to final judgment in one court from being litigated in another, and a federal judge granted the company's motion for summary judgment.

Mayfield appealed, and the Fifth Circuit reinstated his lawsuit.

Besides answering the res judicata inquiry, the ruling clarified when a "relator" bringing suit under the False Claims Act qualifies as the original source of the information on which the allegations are based in cases where the allegations have been publicly disclosed.

Judge King said "for a court in this circuit to have jurisdiction . . . it is not charged with finding 'the' single one true whistleblower."

It's up to the trial court to decide whether the knowledge was derived directly rather than at second hand, she wrote.
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Publication:Liability & Insurance Week
Date:Aug 25, 2003
Words:402
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