Hewlett-Packard Nixes False Claims Act Suit

WASHINGTON (CN) - A federal judge dismissed claims that Hewlett-Packard and five other IT companies illegally bought products from sanctioned countries like China and then lied to the government about those products' origin. Two other companies still face claims, however.

The U.S. government intervened in the whistleblower complaint filed by Insight Public Services employee Brady Folliard against HP, Synnex, GovConnection, Force 3, GTSI, Emtech, GovPlace and Govt. Acq. Folliard claimed that HP and Cisco products listed on the companies' General Services Administration schedules came from countries not designated by the Trade Agreements Act.

This law prohibits the government from buying products originating in China, Malaysia, Thailand and the Philippines.

U.S. District Chief Judge Royce Lamberth tossed the claim against every company except for GovPlace and Govt. Acq., finding that complaint lacked subject-matter jurisdiction, failed to plead fraud with particularity and failed to state a claim upon which relief can be granted.

GovPlace and Govt. Acq. had argued "that Folliard's complaint is fatally flawed on ... grounds because he has failed to plead fraud with particularity." Lamberth ruled, however, that Folliard's claims against the two companies were not vague, clearly defining the fraud allegedly committed.

"If GovPlace and Govt. Acq. are right in suggesting that Folliard's allegations are spurious, it should not be difficult to proffer evidence and promptly file for summary judgment," Lamberth wrote in the 23-page decision. "Though the government has not intervened, Folliard deserves his bite at the apple, and this Court will not deny him that opportunity where his allegations so strongly suggest that something questionable may be afoot."

Folliard's complaint is related to a similar suit brought by Christopher Crennen in 2006. Crennen accused various IT vendors of misrepresenting and falsely certifying their products as compliant with the Trade Agreements Act.

Folliard filed his case in 2007, while Crennen's case was still under seal.

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