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U.S. wins large sum from United Technologies

Earlier this month, a U.S. judge handed down a ruling ordering United Technologies Corp to pay $473 million in damages to the U.S. Department of Justice plus interest. $109 million of the damages were in common law damages and $364 million were because UTX violated the False Claims Act. This ruling comes five years after the initial ruling where the judge found the company liable under the Act. The case was then appealed to the U.S. Court of Appeals in 2010 where the ruling was upheld and then remanded back to the judge to determine damages. UTX plans to file an appeal.

UTX was found liable under the False Claims Act for inflating costs under U.S. Air Force jet engine contracts it had with the Department of Justice. The False Claims Act provides relief to the government when a person provides false claims to the government to receive payment. Under this Act, damages can include a civil penalty plus three times the damages caused to the government because of the person's actions. Damages can, however, be reduced if there is cooperation from the person who caused the harm prior to any investigation, formal charges, or civil action taken against the person.

It is highly likely that UTX will pay hundreds of millions of dollars in interest in addition to the judgement amount. This is because some of the interest will be calculated based on some costs from as far back as 1986.

Business litigation with the government can be very complex. In fact, any business or commercial litigation can be complex, involving numerous court proceedings and taking several years to complete. Hiring a commercial litigation attorney to assist with your case may be very beneficial to its outcome.

Source: 31 U.S.C. 3729

Source: Nasdaq, "United Technologies Ordered to Pay U.S. Over Jet Contracts", June 18, 2013

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