VA Whistleblower Suit Revived

By Walter F. Roche Jr.

A federal appeals court has reversed a lower court ruling and given new life to a whistle-blower suit alleging that a company with long time ties to former Veterans Affairs Secretary Anthony J. Principi defrauded the agency under a contract to provide medical exams.
The ruling by a three judge panel of the 9th Circuit Court of Appeals reverses a U.S. District Court ruling dismissing the claims filed by David Vatan, a former employee of the contractor QTC Medical Services.
The lower court had dismissed Vatan's claims contending he failed to provide the court with a detailed copy of QTC Medical's contract with the Veterans Administration.
Formerly a subsidiary of Lockheed Martin, QTC was once headed by Principi. The former VA Secretary subsequently registered as a lobbyist for QTC-Lockheed. QTC was eventually sold to Leidos, Inc
The appeals court ruled that the False Claims Act does not require that Vatan file an exact copy of the VA contract.
"Where, as here, the relevant information is within the defendant's exclusive possession and control such pleading is sufficient," the court said referring to the details in the Vatan complaint.
It added that if the standards set by the district court were to be applied to all False Claims Act suits, it would "vitiate the False Claims Act by excluding many whistle-blowers, who, as here, allege insider knowledge of wrongdoing that few others would be positioned to reveal."
The appeals court also concluded that speculation by the district court on possible elements of the contract was irrelevant.
"The specific contractual language and any contemplated error rate in the contract are immaterial to whether this claim is adequately pleaded," the ruling states.
Vatan "alleges that QTC essentially lied to the government as to whether files were reviewed," it continues.
The court concluded that Vatan's allegations "are specific enough to give defendants notice of the particular misconduct. He therefore successfully alleges that QTC misrepresented what goods or services it provided to the federal government."
Vatan's original suit charged that QTC required its employees to process so many claims for Agent Orange injuries in such a short time, it was impossible for them to complete a thorough examination.
Lawyers for QTC denied the allegations.