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Baldi Bros. Constructors v. United States

Citation: 32 ELR 20638
No. No. 98-326C, 52 Fed. Cl. 78/(Fed. Cl., 03/29/2002)

The court affirms a district court's grant of summary judgment in favor of a transit authority that was sued in a qui tam action under the False Claims Act (FCA) by an employee of one of its subcontractors, but vacates the district court's award of attorney fees to be paid by the employee's attorney. The employee alleged that the transit authority failed to disclose to the United States that a federally funded underground storage tank project suffered from a serious design defect in its leak detection system. The court first holds that the district court properly granted summary judgment in favor of the transit authority. The employee failed to show that statements made by a project supervisor admitting the authority's failure to disclose were admissible under the statement against interest exception to the hearsay rule. The statement against interest exception requires that the declarant be unavailable, and the employee made no showing as to why the supervisor was unavailable. Moreover, the employee's observations alone were insufficient to show a violation of the FCA. The court, however, holds that the district court erred in ordering the employee's attorney to pay the transit authority's attorney fees. The FCA does not authorize an award of attorneys fees against another attorney. In addition, the award of attorney fees under the FCA is reserved for rare and special circumstances. On remand, the district court must reconsider whether attorney fees are warranted.

The full text of this decision is available from ELR (14 pp., ELR Order No. L-498).

Counsel for Plaintiff
Gary R. Carlin
Law Offices of Gary R. Carlin
555 E. Ocean Blvd., Long Beach CA 90802
(562) 432-8933

Counsel for Defendants
Richard P. Chastang, Principal Deputy Attorney
County Counsel's Office
321 E. Second St., Los Angeles CA 90012
(213) 580-8777