Raytheon faces billion dollar overbilling lawsuit says appeals court

A U.S. appeals court on Monday revived a $1 billion lawsuit accusing defense contractor Raytheon Co of fraudulently overbilling the federal government under a contract to develop a weather sensor for a costly environmental satellite system.The court said Mateski’s claims went beyond publicly disclosed problems in developing the National Polar-Orbiting Operational Environmental Satellite System, which suffered from delays and cost overruns, including problems outlined in a U.S. Government Accountability Office report from November 2005.

By a 3-0 vote, the 9th U.S. Circuit Court of Appeals in Pasadena, California said the engineer Steven Mateski could pursue claims that Raytheon violated the federal False Claims Act for at least a decade starting in 2002.

Mateski alleged that Raytheon, his employer from 1997 to 2006, mismanaged its subcontract to develop the Visible Infrared Imaging Radiometer Suite sensor for the NPOESS, on which Northrop Grumman Corp held the main contract.

The Court said it would be unfair to the government and whistleblowers to impose a “public disclosure bar” against False Claims Act lawsuits such as Mateski’s that identified “specific instances of fraud,” where public documents such as the GAO report merely described “problems” or even “generalized fraud.”

Monday’s decision overturned U.S. District Judge Otis Wright’s February 2013 dismissal of the lawsuit, and returned the case to his Los Angeles courtroom.

False Claims Act cases let whistleblowers pursue claims on behalf of the government and share in recoveries. The United States in 2012 decided not to help Mateski pursue his case.

Jeffrey Newman represents whistleblowers.