Court Sides With ConAgra|in False Claims Appeal

(CN) - The 10th Circuit reversed a jury's finding that ConAgra defrauded the government by altering cow hide export certificates in order to avoid paying the fees charged by the government for replacement certificates.

Former ConAgra worker Ali Bahrani sued the company two years after he was downsized, claiming the food company routinely altered thousands of beef and hide export certificates without obtaining or paying for replacement certificates from the U.S. Department of Agriculture.

As a documentation negotiator, Bahrani oversaw the paperwork for exporting raw hides, including export certificates, insurance forms and slaughter date certificates.

He handled mostly hide exports, but knew several people in ConAgra's meat documentation division located on the same floor.

He sued the company under the "reverse false claims" provision of the False Claims Act, and the district court separated his claims into two proceedings, one involving meat export certificates and the other involving hide export certificates.

In April 2008, the first jury ruled against Bahrani on the basis that he was not an "original source" for his meat export certificate claims. The 10th Circuit agreed.

A second jury ruled that ConAgra had knowingly modified only five of the 1,057 disputed hide export certificates in a "major" or "significant" way without obtaining replacements from the government.

A jury found ConAgra liable for $107 in actual damages, which the federal judge tripled and imposed statutory penalties of $5,500 per claim, for a total judgment of about $27,800.

Bahrani sought more than $3.44 million in attorney's fees, but was awarded only about $9,270.

On appeal, he challenged the fee award, the decision to bifurcate his claims and the instructions given to the jury in the first jurisdictional trial.

The 10th Circuit upheld the first jury's verdict, but reversed the second, siding with ConAgra on cross-appeal. Bahrani failed to prove that ConAgra employees intended to conceal, avoid or reduce their payment obligations to the government, the court concluded.

Because the court ruled for ConAgra on the hide export certificate claims, it reversed as moot Bahrani's attorney fee award.

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