Professional whistleblower Brady Folliard’s most recent False Claims Act suit against technology vendors alleging violations of the Trade Agreements Act (“TAA”) has survived a motion to dismiss with respect to two defendants (GovPlace and Government Acquisitions, Inc.), but otherwise has been dismissed for the other six defendants (which include Hewlett Packard and GTSI Corporation).

In this case, Mr. Folliard alleged that the defendants violated the False Claims Act by listing Hewlett Packard and Cisco products on their respective GSA Schedule and NASA Solution for Enterprise-Wide Procurement (“SEWP”) contracts that were manufactured in TAA non-compliant countries, that the defendants were aware that the products were not compliant and consciously misrepresented that fact to the Government, and that they submitted claims for money from the Government based on that misrepresentation. 

The district court dismissed the complaint against six of the defendants based on the False Claims Act’s “first-to-file” bar, finding that essentially the same allegations were leveled against the six defendants in United States ex rel. Crennen v. Dell Marketing L.P., 711 F. Supp. 3d 157 (D. Mass. 2010), which was filed prior to this case (and was subsequently dismissed). The court also determined that Mr. Folliard’s complaint was precluded on res judicata grounds as to defendant Hewlett Packard by a previous False Claims Act case Mr. Folliard had filed against that company, which was dismissed for failure to state a claim and failure to plead fraud with particularity (United States ex rel. Folliard v. Hewlett-Packard Company, 272 F.R.D. 21 (D.D.C. 2011).

Defendants GovPlace and Government Acquisitions, Inc. were the only defendants in this case who had not previously been sued by Mr. Folliard or another whistleblower alleging the same violations as in this case. While these defendants argued that the complaint should be dismissed against them based on Mr. Folliard’s failure to plead fraud with particularity, the court determined that the complaint contained sufficient information to meet the pleading requirements for a fraud case. Unlike other cases filed by Mr. Folliard, including the case against Hewlett Packard and United States ex re. Folliard v. CDW Technology Services, Inc., 722 F. Supp. 2d 20 (D.D.C. 2010), the court here determined that the complaint contained sufficient detail about the alleged misrepresentations of product compliance and identified specific procurement orders for non-compliant products.

This latest Folliard case is yet another reminder of the importance of ensuring from the outset that products listed for sale on GSA Schedule contracts as well as other government contracts are compliant with the Trade Agreements Act, putting measures in place to routinely re-affirm the country of origin during contract performance, and promptly removing non-compliant products. It is also a reminder that individuals beyond those who meet the typical whistleblower profile(i.e., disgruntled employees or ex-employees) are on the lookout for any indication of possible TAA non-compliance and could seize upon such information and file a False Claims Act case against you.