IBJNews

Rolls-Royce must face whistle-blowers’ lawsuit

Back to TopCommentsE-mailPrintBookmark and Share

Rolls-Royce Corp. lost a bid Monday for dismissal of a whistle-blower lawsuit pressed by two former quality-control officers claiming the company cheated the United States by failing to report defense-contract product defects.

U.S. District Judge William T. Lawrence in Indianapolis ruled plaintiffs Thomas McArtor and Keith Ramsey could proceed on two of their four theories of liability.

McArtor and Ramsey claim Rolls-Royce induced the U.S. to enter into about 180 aircraft engine contracts from 2003 to 2006 by hiding its failure to comply with a required quality-assurance plan, failing to disclose defects and concealing those practices to maintain a third-party certification needed to keep existing contracts and obtain new ones.

“As a result of RRC’s concealment efforts,” Lawrence said, citing the McArtor-Ramsey allegations, “the recertification auditor did not discover most of the violations.”

The suit was filed in 2008 and unsealed after the U.S. declined to intervene in 2010.

Lawrence rejected the plaintiffs’ theory that the company could be liable for reverse false claims for allegedly failing to tell the U.S. of defects to avoid having to pay refunds or issue replacement parts. The men hadn’t shown such claims were anything more than conjectural, he said.

“RRC is required to pay the government or otherwise make concessions if and only if the government so chooses,” the judge said.

Joel Reuter, a spokesman for the Indianapolis-based unit of Rolls-Royce Holdings Plc, said he couldn’t immediately comment on the court’s decision. Rolls-Royce has more than 2,000 employees in Indianapolis. The parent company is based in London.

“Thousand of engines in military aircraft are potentially affected,” according to a revised complaint filed in November 2011, including the F-35 joint-strike fighter plane, C-130 Hercules transports and the V-22 Osprey, a plane capable of vertical lift-off.

The men, who are suing on behalf of the U.S., seek an $11,000 penalty for each false claim and each false statement the company made to the Defense Department, plus three times the amount of payments received or costs avoided. McArtor and Ramsey are seeking 30 percent of any such recovery for themselves.

McArtor, who filed the initial complaint, worked for the company from 1994 to 2006, serving as a senior quality assurance manager and airworthiness coordinator when he was allegedly forced out for reporting fraudulent conduct.

Ramsey, who joined the case after it was unsealed, served as a quality engineer from August 2002 to March 2006 when, he said, he was fired for refusing to cooperate with quality-control plan deviations.

The men said in an amended complaint filed in November that they didn’t know each other before to the litigation.

“Rolls-Royce is finally out of options for avoiding these serious, safety-related allegations,” plaintiffs’ lawyer Michael Kanovitz of Chicago-based Loevy & Loevy said in a press statement issued after Lawrence released his ruling.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. President Obama has referred to the ACA as "Obamacare" any number of times; one thing it is not, if you don't qualify for a subsidy, is "affordable".

  2. One important correction, Indiana does not have an ag-gag law, it was soundly defeated, or at least changed. It was stripped of everything to do with undercover pictures and video on farms. There is NO WAY on earth that ag gag laws will survive a constitutional challenge. None. Period. Also, the reason they are trying to keep you out, isn't so we don't show the blatant abuse like slamming pigs heads into the ground, it's show we don't show you the legal stuf... the anal electroctions, the cutting off of genitals without anesthesia, the tail docking, the cutting off of beaks, the baby male chicks getting thrown alive into a grinder, the deplorable conditions, downed animals, animals sitting in their own excrement, the throat slitting, the bolt guns. It is all deplorable behavior that doesn't belong in a civilized society. The meat, dairy and egg industries are running scared right now, which is why they are trying to pass these ridiculous laws. What a losing battle.

  3. Eating there years ago the food was decent, nothing to write home about. Weird thing was Javier tried to pass off the story the way he ended up in Indy was he took a bus he thought was going to Minneapolis. This seems to be the same story from the founder of Acapulco Joe's. Stopped going as I never really did trust him after that or the quality of what being served.

  4. Indianapolis...the city of cricket, chains, crime and call centers!

  5. "In real life, a farmer wants his livestock as happy and health as possible. Such treatment give the best financial return." I have to disagree. What's in the farmer's best interest is to raise as many animals as possible as quickly as possible as cheaply as possible. There is a reason grass-fed beef is more expensive than corn-fed beef: it costs more to raise. Since consumers often want more food for lower prices, the incentive is for farmers to maximize their production while minimizing their costs. Obviously, having very sick or dead animals does not help the farmer, however, so there is a line somewhere. Where that line is drawn is the question.

ADVERTISEMENT