United Technologies Corp. won reversal of a $657 million judgment awarded the U.S. government over alleged overbilling on jet engines for the military.
The U.S. didn’t prove damages from false statements made by the company’s Pratt & Whitney unit, the U.S. Court of Appeals in Cincinnati said Monday. The court sent the case back to the trial judge to give the government another chance to prove its case.
The U.S. sued the Pratt unit in 1999, alleging it knowingly made false claims in a multibillion-dollar contract to produce engines for F-15 and F-16 fighter jets. U.S. District Judge Thomas Rose in Dayton, Ohio, in 2013 determined the government overpaid over six years that it bought the engines and awarded $437 million plus interest.
The U.S. failed to show, despite evidence of false cost estimates, that Pratt’s prices were inflated by fraud, the appeals court said.
“The government had the burden of proving damages, and it never did,” the appeals court said.
The decision was a setback for the Justice Department, which in December 2013 dubbed the initial judgment as the largest “in the history of the False Claims Act” and said it would be “the largest procurement recovery in history” if upheld on appeal.
United Technologies, which acquired Charlotte-based Goodrich in 2012, employs about 300 at its UTC Aerospace Systems headquarters in Charlotte, and about 200 in Monroe.
Nicole Navas, Justice Department spokeswoman, declined to comment on Monday’s ruling.
“UTC has long maintained that the government suffered no actual damages as a result of the statements made in 1983,” John Moran, a spokesman for the Connecticut-based company, said in an e-mailed statement. “We look forward to returning to the district court to finally put an end to this long-running case.”
United Technologies is fighting off a separate false claims lawsuit in Wisconsin, where a whistle-blower alleges that the company’s Sikorsky Aircraft unit overbilled the Navy.
The Pentagon inspector general in October subpoenaed Pratt for what it called the company’s refusal to provide sufficient documentation on more than $1.5 billion of maintenance work on C-17 engines.
In the Ohio lawsuit, the government claimed that it overpaid for the engines in fiscal years 1985 through 1990 because Pratt inflated its estimated costs for some parts and withheld data that would have revealed the overstatements.