United States District Court, D. Massachusetts
MEMORANDUM & ORDER
INDIRA TALWANI, District Judge.
This qui tam action involves allegations that a government contractor defrauded the United States and other government contractors when it sold to them electronic components known as thyratrons that were either defective or not properly tested in accordance with certain specifications and standards. Presently before the court are Defendant Excelitas Technologies, Corp.'s ("Excelitas") Motion to Dismiss [#57] and Defendant PerkinElmer, Inc.'s ("PerkinElmer") Motion to Dismiss [#69]. For the reasons provided below, Excelitas' motion is DENIED and PerkinElmer's motion is ALLOWED.
Plaintiff-Relator Rodwell was employed by Excelitas from April 2011 until January 2012 as a temporary worker to assemble thyratrons. Compl. ¶¶ 14, 46. A thyratron is a gas-filled tube which functions as a high speed electrical switch that is commonly used in high-power pulsed radar equipment, high-energy lasers, x-ray machines, radiation therapy devices, and other military and scientific applications. Id . ¶¶ 5-6. A basic thyratron has an anode at the top and a cathode at the bottom. Id . § 39. In between the anode and cathode is a grid which uses gas, in this case hydrogen, "as [a] switching medium to open or close an electrical circuit." Id . § 38-39. When a charge is applied to the grid, the hydrogen is ionized and plasma is created, which allows electrons to flow from the anode to the cathode, thereby completing the circuit. Id . § 41. Modern thyratrons may contain multiple grids and are capable of switching tens of thousands of volts. Id . § 44-45. Defendants allegedly sold thyratrons to the United States (hereinafter also referred to as the "Government") for use, among others, in military aircraft and x-ray scanners. Id . ¶ 7.
A. Contracts to Sell Thyratrons
During the last six years, Rodwell alleges that Defendants sold approximately 4, 859 thyratrons directly to the Government at a cost of $6, 000 per thyratron and a total value of over $4 million. Id . § 21, 34. These thyratrons were sold through contracts awarded through the Government's competitive bidding program. Id . § 22. Rodwell lists some of these contracts by number in his complaint. See id. § 33.
Rodwell alleges that in soliciting contractors to fulfill these contracts, "[t]he solicitations published by the Government generally request a certain quantity of a particular model of thyratrons identified by its National Stock Number ("NSN")." Id . § 23. A NSN is the official label applied to a supply item, which standardizes items repeatedly purchased and used throughout the federal supply system. Id . §§ 24-27. When an NSN number is assigned, certain data such as the items name, manufacturer's part number, and physical and performance characteristics are recorded. Id . § 26. Rodwell alleges that "NSNs are cross referenced by the Government and frequently also refer to Mil-Spec [military specification] requirements or industry standards, such as those published by the international Electronic Industries Alliance EIA' standards." Id . § 28. Rodwell asserts that all of the thyratrons that Defendants sold to the Government have NSNs, and that "most also have Mil-Spec or are also subject to EIA standards." Id . § 29.
Mil-Spec standards for thyratrons, Rodwell alleges, "contain mandatory testing processes as well as mandatory holding periods between testing stages." Id . § 30. Rodwell also alleges that while exploring information made available on a company computer, he came across several contract documents and other specifications "requiring 100 percent quality control testing." Id . § 115. Rodwell was "able to read enough information to determine that there is no flexibility in the testing and aging requirements, " id., and he also verified the testing requirements with his coworkers, id. § 116.
In response to the Government's solicitations for bids, Rodwell alleges that Defendants "actually or implicitly certified that the thyratrons that the Defendants would supply... complied with NSN, Mil-Spec, or EIA standards." Id . § 31. Allegedly relying on these certifications, the Government awarded numerous contracts to Defendants or exercised options to extend indefinite quantity contracts. Id . § 32, 36. Rodwell also alleges that the Government made payments to Defendants based on their false certifications that the products delivered under the contracts were compliant with these standards. Id . § 37.
B. Fraudulent Conduct
Rodwell alleges that Defendants defrauded the Government by intentionally selling the Government thyratrons that were assembled with wrong parts, were defective, failed quality control testing, and were not properly tested and aged. Id . ¶¶ 10-11. Rodwell alleges, for instance, that his supervisors instructed him and other employees to assemble thyratrons with substitute, non-compliant parts, which resulted in defective products being shipped to the Government. Id . §§66-84. He recounts in the complaint how a certain batch of thyratrons contained plasma fields that appeared abnormal and malfunctioned at 18 kV despite the router specifications which required that particular batch of thyratrons to function up to 25 kV. Id . § 72-74. When Rodwell reported these issues to his supervisor, his supervisor told him to "do what you can to get them out the door." Id . § 75. After he reported the issue up his reporting line, a supervisor inspected the thyratron and remarked that it had been assembled with an incorrect grid cup. Id . § 82. Despite these issues, Defendants shipped these defective thyratrons and told Rodwell that they would "deal with the tubes if they come back' or something to that effect." Id . § 84.
Rodwell also alleges that Defendants intentionally sold thyratrons that failed to meet certain requirements. According to Rodwell, thyratrons require a multi-stage burn-in, aging, and testing process to test the product's dependability-requirements that "are spelled out in detail in Mil-Spec and other publications." Id . § 43. First, Rodwell describes how Defendants sold thyratrons that failed the first step in testing, known as DC Modulation. Id . § 87. During DC Modulation, voltage is applied to the cathode, heater, and anode parts of the thyratrons, but the grid is left unpowered. Id . § 88. As more power is applied, contaminates and impurities inside the thryratron burn and conduct electrons between the anode and cathode without ionizing the gas, causing current to pass through the tube without charging the grid. Id . § 89. On several occasions, Rodwell tested tubes that could not be burned out and which exhibited a condition called "self conducting." Id . § 91. Despite these results, Rodwell was instructed to pass these self-conducting thyratrons "despite their failure to meet contractual, mil-spec, and industry standard requirements." Id . § 92.
Rodwell also details the latching issues that occurred at the DC Modulation stage. Latching occurs when a thyratron becomes stuck in either an open or closed state. Id . § 102. In October 2011, after several thyratrons exhibited latching, Rodwell brought the issue to the attention of his supervisor. Id . § 104-106. According to Rodwell, his supervisor copied testing data from an old batch of thyratrons onto the documents for the new batch and made him sign off on the testing as complete. Id . § 107. Rodwell alleges that "Excelitas subsequently submitted the false testing data" and delivered the defective thyratrons to the Government. Id . § 108.
Rodwell alleges further deficiencies in the thyratrons delivered pursuant to Excelitas' contracts with the Government. For instance, Excelitas allegedly shipped thyratrons containing insufficient volumes of hydrogen. See id. §§ 110-113. In another allegation, Rodwell claims that he was instructed to approve thyratrons that failed to operate at certain prescribed voltages for prescribed time periods. Id . § 126-129. He also alleges that Excelitas skipped mandatory testing to avoid paying overtime. Id . § 130-131. As described above, Defendants allegedly concealed these ...