Daily Dicta: Sanford Heisler Sitting Pretty in $1.28B Whistleblower Suit

Posted December 5th, 2019.

As It Appeared On
publication logo

The 55-lawyer firm has been on a roll of late, making appearances in a slew of high profile cases.

By Jenna Greene

It’s bad luck to count your chickens—or your contingency fees—before they hatch, but lawyers at Sanford Heisler Sharp should be feeling pretty good about their prospects in a $1.28 billion whistleblower suit against Navistar Defense and Navistar International.

Six years ago, firm lawyers filed the qui tam complaint in U.S. District Court for the District of Columbia on behalf of Duquoin Burgess, a former contract director at Navistar.

Burgess alleged that Navistar forged invoices, catalogue prices, and other data during the negotiations of a multi-billion-dollar defense contract for Mine Resistant, Ambush-Protected vehicles used in Iraq and Afghanistan.

On Tuesday, U.S. District Judge Tanya S. Chutkan of the District of Columbia unsealed the complaint. The newly-public docket revealed a very good omen for the firm: The U.S. government elected to partially intervene.

“Specifically, the United States intervenes in that part of the action that alleges Navistar defense inflated the government price for independent suspension system, in part through the submission of fraudulent sales history,” wrote AUSA Darrell Valdez. “The United States declines to intervene in that part of the action that alleges the government did not receive appropriate preferred customer volume discounts for vehicles purchased from Navistar Defense.”

The government intervenes in about 20% of False Claims Act cases. When the feds get involved, they prevail about 95% of the time, according to a 2015 article by Catholic University law professor Joel D. Hesch. In the cases without government intervention, relators recover just 5% of the time.

Last year, for example, the feds netted $2.1. billion from qui tam cases, according to a report by Gibson, Dunn & Crutcher. All but $119 million of that total came from cases where the government intervened.

Considering that whistleblowers are entitled to 15% to 30% of any recovery, Sanford Heisler is in a nice spot right now.

Indeed, the 55-lawyer firm has been on a roll, making appearances in a slew of high profile cases. They’re representing attorneys in the ‘Mommy track’ lawsuit against Morrison & Foerster, claiming that the firm discriminates against pregnant women and mothers.

And they’re suing Jones Day on behalf of former associates who allege widespread gender discrimination, claiming the firm’s “black box” compensation model, leadership structure and culture deny women equal pay and opportunity for advancement.

Proskauer Rose and Ogletree, Deakins, Nash, Smoak & Stewart have been in Sanford Heisler’s crosshairs for alleged gender discrimination as well.

That’s not all. Partner Ed Chapin just wrapped up a three-month-long bench trial in San Diego, where he represented 22 former adult film models suing GirlsDoPorn.com. The women say they were duped into believing their X-rated videos would only be released overseas on DVD, but instead found them “blasted all over the internet,” Chapin said in his closing.

The Navistar whistleblower suit is being litigated by lead counsel H. Vincent McKnight, who is the managing partner of Sanford Heisler’s Washington, D.C. office and co-chair of the firm’s whistleblower practice, and former U.S. District Judge for the Middle District of Tennessee Kevin Sharp, managing partner of the firm’s Nashville office.

The amended complaint—679 pages, including exhibits—details a “pervasive and long-running scheme to charge the U.S. government wildly inflated prices.”

According to the Sanford Heisler team, Illinois-based Navistar, which employs 16,500 people, gave the government fake documents to support the “commercial prices” of various components of the armored vehicles, including the chassis, engine, and suspension systems.

“The forged and fraudulent documents presented to the government served to mask that these components either had no commercial sales history at all, or when they did, that the true commercial price was as little as half the price that defendants charged the government,” they allege.

McKnight in an interview said that tampering with sales history information is a “heinous violation” in the world of government contracting.

“From my view, this is an egregious set of facts,” he said. “It’s shocking.”

Moreover, he said, there is evidence that those at the very top of the company were aware of what was being done.

Navistar is represented by Anne Robinson of Latham & Watkins, who referred a request for comment to the company.

A spokeswoman in an email said, “We do not believe the relator’s unsealed complaint is well founded in fact or law. We believe our pricing was fair, reasonable and competitive, and we are disappointed the government has chosen to partially intervene in this matter. The company intends to defend itself as necessary and appropriate.”

She added, “There is nothing more important than the safety of those serving our country, and we take tremendous pride in the vehicles we manufacture. We value our long-standing partnership with the military and are proud to provide safe, reliable military vehicles of superior quality.”

In litigating the case, Sanford Heisler lawyers will work alongside the DOJ team, led by Valdez and trial attorney Gary Newkirk. The firm will have primary responsibility for the portions of the complaint where the government declined to intervene.

“I’ve worked with Mr. Valdez before and I think we’ll have a smooth partnership,” McKnight said. “We’re prepared to take this all the way through to the end.”

Share this News Article

Back to Top