Federal False Claims Act lawsuit dismissed

U.S. District Court Judge Lawrence J. Vilardo has approved a request to voluntarily dismiss a False Claims Act (FCA) lawsuit filed against a western New York electronics firm: Buffalo-based PCB Piezotronics Inc.

In a July 9 text order, Vilardo wrote that, before PCB filed an answer to the complaint or moved for summary judgment, plaintiff Nathan Paul asked him to dismiss the action, “with prejudice as to (Paul’s) rights … and without prejudice as to the rights of the United States.”

In an Aug. 20 filing, Paul’s attorney, David B. Harrison, wrote: “After discussions with the defendant, and consideration of the ongoing dispute, (Paul) agreed with defendant to settle only (Paul’s) retaliation claim.”

“That dismissal is with prejudice to (Paul) but without prejudice to the United States. The United States did not participate in the settlement and is not releasing any claims, and therefore is not entitled to, nor did it, receive a percentage of the settlement proceeds,” Harrison wrote.

In a separate filing, assistant U.S. Attorney David M. Coriell wrote: “The United States consents to (Paul’s) decision to voluntarily dismiss the claims based on the United States’ determination that such a dismissal is commensurate with the public interest and that the matter does not warrant the continued expenditure of government resources to pursue or monitor the action based on currently available information.”

In October 2022, Paul filed a claim against PCB “to recover treble damages and civil penalties on behalf of the United States of America in connection with a scheme by PCB designed to circumvent contractual obligations,” according to court documents.

The complaint was filed under a provision of the FCA allowing whistleblowers to report fraud on behalf of the government and receive a share of the recovered funds.

PCB makes parts for the aeronautics industry which are often sold through federal contractors to the U.S. military under contracts that include strict compliance requirements.

The dismissed complaint made several allegations about PCB’s work both before Paul’s employment and after he started working for PCB in March 2017 as an internal auditor.

The suit claimed that when Paul went to company officials to register his concerns, he was met with hostility and reprimanded. In October 2019, Paul was fired “because he continued to try to point out” his concerns, according to the complaint.

Penalties for violating the FCA are $5,000 to $11,000 for each false claim, plus three times the amount of damages the government sustains.

PCB has been a subcontractor for numerous government primary contractors, including Northrup Grumman, Lockheed Martin, Raytheon, and SpaceX.