Victory In Tenth Circuit Saves

$7.5 Million Verdict

In False Claims Act Case

In a victory in the U.S. Court of Appeals for the Tenth Circuit, RP and its co-counsel, Michael S. Porter and Richard C. LaFond, won an appeal that preserved their client’s $7.5 million trial verdict in a qui tam action brought under the False Claims Act. The client, Bobby Maxwell, brought the action against Kerr-McGee Oil & Gas Corporation for defrauding the federal government for underpaying royalties for federal offshore oil leases. Following a trial in the U.S. District Court for the District of Colorado, a jury awarded Mr. Maxwell a $7.5 million verdict. The district court then reversed a prior ruling it had made and ruled that it did not have subject matter jurisdiction to hear the case. The court determined that the information upon which Mr. Maxwell’s suit was based had been previously disclosed to the public, and that disclosure eliminated the court’s jurisdiction under the False Claims Act, 31 U.S.C. § 3720(e)(4). In United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corporation, __ F.3d ___ (10th Cir. 2008), the Tenth Circuit reversed the district court and held that the transfer of information between a federal employee and a state government auditor who is under a duty of confidentiality is not a public disclosure and therefore does not deprive courts of jurisdiction. Finding that Mr. Maxwell was a proper relator under the False Claims Act, the Tenth Circuit has remanded the case for further proceedings to the district court where Mr. Maxwell’s $7.5 million verdict remains intact.

 

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