Third Circuit rules against PennDOT whistleblower

By John O'Brien | Jun 4, 2014

A whistleblower has lost his appeal that claimed CMC Engineering submitted false claims for repayment while working on highway projects for the Pennsylvania Department of Transportation.

On Monday, the U.S. Court of Appeals for the Third Circuit ruled against August Arnold, a former PennDOT assistant construction engineer who filed his False Claims Act lawsuit in 2003. He claimed CMC Engineering’s inspectors did not have the proper qualifications that entitled them to the pay rates claimed.

“(T)he contracts themselves are ambiguous concerning the credentials required for particular positions that justify particular pay rates,” the decision says.

“As a result of that ambiguity, there is no evidence from which a reasonable jury could find CMC ‘knowingly’ made a factually false claim or false certification, as defined under the FCA, by requesting reimbursement for inspectors at rates for which Arnold contends they were unqualified.”

Arnold helped oversee the selection of private engineering firms that performed inspection services on PennDOT’s federally funded highway projects.

Pay rates were based on inspectors’ experience, training and certifications. Eventually, Arnold conducted a review of the qualifications of the firms’ inspectors, believing some of them lacked or overstated the necessary credentials.

Represented by James A. Ashton, W.J. Heizlsouer and Jon Pushinsky, he filed his lawsuit in 2003 against several business in U.S. District Court for the Western District of Pennsylvania and filed an amended complaint on Jan. 6, 2006.

Though the federal government has the option to join whistleblower suits, it declined to join Arnold’s.

The district court found that Arnold failed to present evidence sufficient to show CMC had actual knowledge or that it had acted with deliberate indifference or reckless disregard with respect to the alleged deficiencies of its inspectors’ qualifications.

Arnold reported his findings to several government offices, leading to a $61,064.10 settlement between CMC and PennDOT, which stated that CMC had submitted complete and accurate information to PennDOT.

As for his whistleblower suit, the Third Circuit ruled the language of the contracts provide inconsistent sets of qualifications and are ambiguous.

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