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Original Complaint And Jury Demand, Filed Under Seal, Civil Action No. 99-11308, dated May 27, 1999, Robert C. Ballew, Plaintiff, vs. United States Department of Justice and United States Coast Guard, Defendants, Filed Under Seal, In the United States District Court, For The Northern District of Texas, Fort Worth Division. PLAINTIFF'S ORIGINAL COMPLAINT AND JURY DEMAND TO THE HONORABLE UNITED STATES DISTRICT COURT: Plaintiff Robert C. Ballew ("Ballew") complains of the actions of Defendants United States Department of Justice ("DOJ") and United States Coast Guard ("USCG") (together, the "Defendants"), and respectfully shows this Court the following: I. PRELIMINARY STATEMENT This action is a Fed. R. Civ. P. 60(b) independent action brought as a result of the Defendants' fraudulent misrepresentations and omissions arising out of (and relating to) the settlement of United States ex rel. Robert C. Ballew v. Aerospatiale Helicopter Corporation and Textron Lycoming Corporation; Civil Action No. CA 4-88-287-E; in the United States District Court for the Northern District of Texas and Robert C. Ballew v. Aerospatiale Helicopter Corporation; Civil Action No. CA 4-90-507-A, in the United States District Court for the Northern District of Texas (together, the "Underlying Qui Tam"). Specifically, the Defendants, on behalf of the United States Government (the "Government"), intervened in the Underlying Qui Tam, negotiated and implemented a settlement of the Underlying Qui Tam without Ballew's involvement and participation, and conspired to misrepresent and conceal (and, in fact, misrepresented and concealed) the true amount of the settlement so as to minimize Ballew's share of the settlement.
II. JURISDICTION AND VENUE 2.1 This action for monetary relief is brought, and jurisdiction lies, pursuant to 28 U.S.C. §§ 1331 and 31 U.S.C. §3732. 2.2 The Underlying Qui Tam was filed, prosecuted and settled in the Northern District of Texas. A substantial part (if not all) of the events giving rise to Ballew's claims occurred in the Northern District of Texas. Accordingly, venue is proper in the Northern District of Texas pursuant to 28 U.S.C. §§ 1391(e); 1402; 31 U.S.C. § 3732; and Fed. R. Civ. P. 60(b).
III. PARTIES 3.1 Plaintiff Ballew is a citizen and resident of Fort Worth, Texas. 3.2 Defendant DOJ is an agency and subdivision of the United States Government. DOJ may be served with Summons by mailing copies of the Summons and Complaint, via certified mail, return receipt requested, to Janet Reno Esq., U.S. Attorney General, Department of Justice, 10th & Constitution Ave., N.W., Room B-324, Washington, D.C. 20530. 3.3 Defendant USCG is an agency and subdivision of the United States Government. USCG may be served with Summons by mailing copies of the Summons and Complaint, via certified mail, return receipt requested, to Admiral James M. Loy, Commandant of the U.S. Coast Guard, 2100 Second Street, S.W., Washington, D.C. 20543. 3.4 On behalf of the Defendants, Summons also must be served on Paul Coggins, Esq., the U.S. Attorney for the Northern District of Texas. The U.S. Attorney for the Northern District of Texas may be served with Summons by mailing copies of the Summons and Complaint, via certified mail, return receipt requested, to the Civil Process Clerk, U.S. Attorney for the Northern District of Texas, 1100 Commerce, 3rd Floor, Dallas, Texas 75242-1699. 3.5 On behalf of the Defendants, Summons also must be served on Janet Reno, Esq., the U.S. Attorney General. The U.S. Attorney General may be served with Summons by mailing copies of the Summons and Complaint, via certified mail, return receipt requested, to Janet Reno, Esq., U.S. Attorney General, Department of Justice, 10th & Constitution Ave., N.W., Room B-324, Washington, D.C. 20530.
IV. BACKGROUND FACTS
A. The Underlying Qui Tam.
4.1 On May 5, 1988, Ballew filed the Underlying Qui Tam. 4.2 At that time, Ballew was employed as a Senior Subcontract Administrator by Aerospatiale Helicopter Corporation ("AHC") in Grand Prairie, Texas. 4.3 The allegations in the Underlying Qui Tam arose out of the (i) June 14, 1979 contract between AHC and the USCG for the production and delivery of ninety (90) HH-65A "Dolphin" Short Range Recovery ("SRR") helicopters (the "principal contract"), and (ii) April 1, 1980 subcontract between AHC and the Textron Lycoming Division of AVCO Corporation ("AVCO") under which AVCO would manufacture and deliver one hundred eighty (180) LTS 101-750 engines (the "AVCO engines") for inclusion in the SRR helicopters (i.e., two engines per helicopter). AHC and AVCO also entered into several subsequent follow-up contracts for production engines and aftermarket engines and spare parts that relate to the above two contracts. The USCG also entered into aftermarket contracts with AVCO for the purchase of the same SRR helicopter spare engines, modules, assemblies, parts and components (and the related hardware, software and services) for direct delivery to the USCG. 4.4 After AHC and AVCO entered into the various contracts, Ballew was hired by AHC to coordinate the parts and materials on order with the SRR helicopter production schedule. During the course of his employment with AHC, Ballew discovered that the AVCO engines were grossly deficient in performance (as set forth in greater detail below). Ballew also discovered that production parts and spare parts were being incorporated into the AVCO engines that did not conform to the principal contract between AHC and the USCG. Ballew also discovered that AHC, AVCO and the USCG were aware of many of these defalcations, but were actively concealing the problems. 4.5 As early as early 1986, Ballew disclosed the SRR helicopter defalcations to John Uribe ("Uribe"), USCG Aircraft Program Office, who, in turn, passed the information on to the DOT Office of Inspector General. Immediately prior to filing the Underlying Qui Tam, Ballew also twice met with agents of the Federal Bureau of Investigation to disclose and explain his discoveries and provide supporting documentation. B. Post-filing activity in the Underlying Qui Tam. 4.6 Immediately after filing the Underlying Qui Tam, Ballew and/or his counsel met with Assistant U.S. Attorneys in the Northern District of Texas to further explain the claims and deliver all relevant documents to the Government. From the date of his first disclosure through the conclusion of the litigation, Ballew delivered to the Government approximately 3900 pages of documents on microfiche (which was prepared at Ballew's expense) as well as over 1000 pages of documents and reports in hard copy format. Ballew also granted the Government open and unrestricted access to another three (3) filing cabinets of documents. Ballew and/or his counsel also participated in numerous meetings and telephone conference calls with Government attorneys and representatives explaining the case, reviewing the documents and other evidence produced, rebutting the arguments made by AHC and AVCO, and assisting with the preparation of document and information requests. 4.7 All of the documents and information provided by Ballew to the Government collectively revealed the following specific deficiencies in the AVCO engines installed in the SRR helicopters:
The documents and information provided to the Government by Ballew also confirmed that AHC, AVCO and the USCG were aware of many of these problems, but took no steps to remedy them. 4.8 During May 1989, one year after the Underlying Qui Tam was filed, and unbeknownst to Ballew, Robert L. Vogel ("Vogel"), the first year DOJ lawyer assigned to the case, T.W. Sechler ("Sechler"), representing the USCG, and possibly others, commenced serious settlement discussions with AHC and AVCO. Vogel subsequently revealed the existence of the settlement negotiations to Ballew during September 1989. From September 1989 until the Underlying Qui Tam was settled, Ballew repeatedly asked Vogel for details about the negotiations and offered to assist with the negotiations to ensure that a fair and equitable settlement for all parties was reached. Ballew's requests repeatedly were denied. 4.9 During September 1989, Vogel further told Ballew that the Government had identified "over $500 million of contract claims against AHC and AVCO," but affirmatively represented to Ballew that the contract claims "were not under the qui tam case." Ballew strongly (and repeatedly) disagreed with Vogel's position about the contract claims, because the contract claims did not exist at the time the Underlying Qui Tam was filed and, in fact, clearly arose out of the investigation of the Underlying Qui Tam. 4.10 Settlement negotiations (excluding Ballew), nevertheless, continued. On February 6, 1990, DOJ, the USCG and AVCO entered into a Memorandum of Understanding ("MOU") to settle the case. Ballew was not a party to the MOU. In fact, Ballew purposely was not involved by the parties in negotiating the MOU, provided with drafts of the MOU, or provided with a copy of the executed MOU. (See # EN01) AHC mysteriously was not a party to the MOU even though all Underlying Qui Tam claims against AHC would be dismissed under the proposed settlement. 4.11 The MOU outlined the exact terms of the settlement between AVCO, the DOJ and the USCG. Among other things, AVCO agreed to:
After the MOU was executed, it became Vogel's task to secure Ballew's buy-in to that portion of the settlement the Defendants chose to disclose to Ballew. The only portion of the settlement disclosed to Ballew by the Defendants was the $17 million cash payment. Ballew's approval of the settlement was critical because pursuant to Paragraph 6(a) of the MOU, the settlement could not be consummated without it. 4.12 Numerous discussions ensued between Ballew and/or his lawyer and Vogel regarding the proposed settlement. Vogel repeatedly told Ballew that Ballew's claims were settled for $17 million (and only $17 million), and he (Vogel) would recommend that Ballew receive 15% of the $17 million if Ballew would agree to the settlement. Although Vogel ultimately revealed to Ballew some aspects of the PBTH contract, (See Endnote # EN03) Vogel repeatedly represented to Ballew that the PBTH contract related solely to contract claims unrelated to Ballew's allegations and the documents and information provided to the Government by Ballew in the Underlying Qui Tam. Ballew repeatedly asked Vogel for detailed information about the PBTH contract, including a copy of the executed MOU, to confirm Vogel's representations, but his requests were refused. 4.13 After numerous communications between Ballew and/or his lawyer and Vogel did not result in Ballew's buy-in to the proposed settlement, a then frustrated Vogel resorted to strong-arm tactics. Notwithstanding the fact that Ballew risked his career and reputation to bring the Government a case that resulted in a highly favorable recovery, Vogel threatened to oppose Ballew's claim for a share of the settlement, and seek Ballew's dismissal as the Relator, if Ballew did not go along with the settlement. Under threat from the federal government, Ballew finally executed his Waiver and Release Agreement on June 29, 1990, and received his 15% share of the $17 million cash payment. 4.14 On July 10, 1990, the Government filed its formal Notice of Intervention and Motion to Dismiss all claims against AHC and AVCO in the Underlying Qui Tam even though AHC, at that time, apparently had not contributed anything to the settlement. The Underlying Qui Tam subsequently was dismissed by the Court.
C. Post-settlement revelations.
4.15 Ballew first learned about both the initial six (6) year term and detailed deal points of the PBTH contract when he first saw a copy of the executed MOU during March 1991. This also is the first time that Ballew became aware of the nature and existence of the Transition Period Agreement. During early 1996, and with knowledge that the PBTH contract was scheduled to expire, Ballew sent a formal request to the USCG for a Contract Closeout Summary ("CCS"), the internal USCG contract recap document, to confirm whether the PBTH contract and Transition Period Agreement, in fact, remedied contract claims unrelated to the Underlying Qui Tam (as the Government repeatedly had represented). The USCG instructed Ballew to send a formal FOIA request for the information, which Ballew sent on April 1, 1996. (See Endnote # EN04) 4.16 On or about July 29, 1996, Ballew received a packet of documents in response to the USCG FOIA Request that revealed, for the first time, that the PBTH contract and Transition Period Agreement directly related to Ballew's claims and allegations in the Underlying Qui Tam as well as being critical (and integral) components of the Underlying Qui Tam settlement. This revelation directly contravened the Government's previous representations. For example, a December 12, 1989 memorandum entitled "Settlement Negotiations with Textron Lycoming," which was authored by Sechler, the lead settlement negotiator for the USCG (the "Sechler Memorandum"), specifically states that: The meat of the settlement for the Coast Guard is the six year, commercial derivative PBTH agreement. ... The Coast Guard specifically requested this arrangement as part of any potential settlement [of the Underlying Qui Tam]. The Sechler Memorandum further details the specific terms and mechanics of the PBTH contract and Transition Period Agreement and how these agreements remedy the very claims and allegations asserted by Ballew in the Underlying Qui Tam. A true copy of the Sechler Memorandum is attached as Exhibit "A." 4.17 In response to the USCG FOIA Request, Ballew also received a March 2, 1990 memorandum entitled "Analysis of Settlement," which was authored by Phillip M. Gillihan, USCG (the "Gillihan Memorandum"). The Gillihan Memorandum further confirms that the PBTH contract and Transition Period Agreement were the USCG's preferred vehicles for settling the Underlying Qui Tam claims and allegations on a going forward basis. These types of settlements were preferred because a simple cash payment would be deposited in the miscellaneous receipts account of the U.S. Treasury while the PBTH contract and Transition Period Agreement would inure directly to the benefit of the USCG. Consistent with the DOJ's analysis of the PBTH contract in its July 10, 1990 Press Release, the Gillihan Memorandum estimated the value of the initial six year period of the PBTH contract to be $30-60 million. The Gillihan Memorandum also values the Transition Period Agreement at $1.5 million. A true copy of the Gillihan Memorandum is attached as Exhibit "B." 4.18 Pursuant to a November 29, 1993 Memorandum authored by Thomas S. Johnson of the USCG (referring to the PBTH contract), and on information and belief, the PBTH contract (or a variation thereof) has been extended an additional twenty-four (24) years (i.e., the balance of the useful life of the SRR helicopters). 4.19 After processing the shocking revelations contained in the Sechler Memorandum and Gillihan Memorandum, Ballew, on September 11, 1996, sent a FOIA request to the DOJ seeking to confirm the corresponding DOJ analysis of the Underlying Qui Tam settlement (the "DOJ FOIA Request"). Although the DOJ refused to produce to Ballew its settlement analysis under a claim of privilege, Ballew, nevertheless, received a packet of documents in response to his DOJ FOIA Request during December 1997. 4.20 The DOJ documents also contained shocking revelations about the nature and extent of the Underlying Qui Tam settlement. Perhaps the most revealing document is the March 15, 1990 Memorandum for File authored by Stuart M. Gerson, Assistant Attorney General, Civil Division (the "Gerson Memorandum"), which addresses, for the first time anywhere, what AHC contributed to the settlement: In addition, authority is granted to accept Textron's [AVCO's] offer to pay the Government $17 million (with interest from November 2, 1989) and other valuable consideration, and to accept Aerospatiale's offer to dismiss administrative claims against and to grant other valuable consideration to the Government, in settlement of the above-referenced suit [the Underlying Qui Tam], and to move to dismiss that suit with prejudice. (emphasis added). A true copy of the Gerson Memorandum is attached as Exhibit "C." 4.21 Pursuant to the agreement referenced in the Gerson Memorandum, AHC and the USCG filed a Joint Motion to Dismiss AHC's administrative claims with the Department of Transportation ("DOT") Board of Contract Appeals. On July 24, 1990, two weeks after the Underlying Qui Tam settlement was announced, the final order dismissing AHC's administrative claims, which totaled over $26,440,130.00 was entered. The Defendants never revealed to Ballew the nature or existence of this component of the Underlying Qui Tam settlement prior to the consummation of the settlement. 4.22 On or about September 15, 1998, Ballew secured a copy of the December 1989 Assessment of the U.S. Coast Guard's HH-65A Helicopter Engine Options (the "Assessment"). The Assessment was prepared for the DOT Assistant Secretary for Administration by the DOT Research and Special Programs Administration Transportation Systems Center. The Assessment is the final piece of the Underlying Qui Tam settlement puzzle since a substantial portion of the Assessment focuses on the LTS 101 [AVCO] Engine Improvement Program (a.k.a. the PBTH contract). The Engine Improvement Program discussion specifically focuses on the very AVCO engine shortcomings identified in the claims, allegations and information provided by Ballew to the Government in the Underlying Qui Tam. In short, the Assessment is the final link between the Underlying Qui Tam settlement and the PBTH contract and Transition Period Agreement as integral components of the settlement. 4.23 The following table summarizes the various components of the Underlying Qui Tam settlement:
4.24 Based on the above post-settlement revelations, which have taken Ballew almost ten years to obtain and assimilate through FOIA requests and FOIA request litigation, Ballew, in good faith, requested payment for his fair share of that portion of the Underlying Qui Tam settlement proceeds intentionally concealed from him. To date, the DOJ has refused Ballew's request. This action has resulted.
V. FRAUD, CONSTRUCTIVE FRAUD, AND FRAUDULENT CONCEALMENT, (COUNT I AGAINST ALL DEFENDANTS)
5.1 The preceding factual statements and allegations are incorporated herein by reference. 5.2 By virtue of Ballew's relationship with the Defendants as the Relator in the Underlying Qui Tam, the Defendants' superior and unrestrained power to control all aspects of the prosecution and settlement of the Underlying Qui Tam (including the flow of information to Ballew), and Ballew's resulting reliance on the Defendants, the Defendants entered into special and confidential relationships, relationships of trust, and fiduciary relationships with Ballew. As such, and at the very least, the Defendants had an affirmative duty to disclose to Ballew and to the Court all of the components of the Underlying Qui Tam settlement, and pay Ballew his fair share of the total settlement. 5.3 Ballew risked his career and reputation to bring to the Government a case that resulted in a highly favorable recovery. In fact, if only the $17 million cash payment is considered, the Underlying Qui Tam settlement was the largest qui tam settlement in history at that time. The Defendants, however, rewarded Ballew's patriotism by intentionally misrepresenting and failing to disclose material aspects of the Underlying Qui Tam settlement as set forth above. 5.4 The Defendants' misrepresentations and omissions were made intentionally, or made recklessly without any knowledge of their truth. The Defendants made the above misrepresentations and omissions with the intent to conceal from Ballew the full value of the Underlying Qui Tam settlement so as to minimize Ballew's share of the settlement. The Defendants further made the above misrepresentations and omissions, in conjunction with their strong arm tactics, with the intent that Ballew act (or not act) upon them. Ballew, in fact, relied upon the Defendants' misrepresentations and omissions to his detriment. Had the Defendants disclosed to Ballew the full value of the Underlying Qui Tam settlement, Ballew, at the very least, would not have settled for just 15% of the $17 million cash portion of the settlement. 5.5 The Defendants' (i) covert settlement negotiations with AHC and AVCO commencing in May 1989, (ii) affirmative misrepresentations, (iii) silence (when they had a duty to disclose) (iv) failure to pay Ballew his fair share of the total Underlying Qui Tam settlement, and (iv) enjoyment and retention of the resulting financial benefits constitute fraud, constructive fraud and fraudulent concealment at common law.
VI. NEGLIGENT MISREPRESENTATION. (COUNT II AGAINST ALL DEFENDANTS)
6.1 The preceding factual statements and allegations are incorporated herein by reference. 6.2 By virtue of Ballew's relationship with the Defendants as the Relator in the Underlying Qui Tam, the Defendants' superior and unrestrained power to control all aspects of the prosecution and settlement of the Underlying Qui Tam (including the flow of information to Ballew), and Ballew's resulting reliance on the Defendants, the Defendants entered into special and confidential relationships, relationships of trust, and fiduciary relationships with Ballew. As such, and at the very least, the Defendants had an affirmative duty to disclose to Ballew and to the Court all of the components of the Underlying Qui Tam settlement, and pay Ballew his fair share of the total settlement. 6.3 Ballew risked his career and reputation to bring to the Government a case that resulted in a highly favorable recovery. In fact, if only the $17 million cash payment is considered, the Underlying Qui Tam settlement was the largest qui tam settlement in history at that time. The Defendants, however, rewarded Ballew's patriotism by negligently misrepresenting and failing to disclose material aspects of the Underlying Qui Tam settlement as set forth above. 6.4 The Defendants' negligent misrepresentations and omissions were made recklessly without any knowledge of their truth. The Defendants' negligent misrepresentations and omissions concealed from Ballew the full value of the Underlying Qui Tam settlement and, as a result, Ballew was not paid his fair share of the settlement. Ballew relied upon the Defendants' negligent misrepresentations and omissions to his detriment. Had the Defendants disclosed to Ballew the full value of the Underlying Qui Tam settlement, Ballew, at the very least, would not have settled for just 15% of the $17 million cash portion of the settlement. 6.5 The Defendants' (i) above wrongful actions, (ii) failure to pay Ballew his fair share of the total Underlying Qui Tam settlement, and (iii) enjoyment and retention of the resulting financial benefits constitute negligent misrepresentations and omissions at common law. VII. VIOLATION OF THE FALSE CLAIMS ACT. (COUNT III AGAINST ALL DEFENDANTS)
7.1 The preceding factual statements and allegations are incorporated herein by reference. 7.2 By paying Ballew 15% of the cash portion of the Underlying Qui Tam settlement, the Government confirmed Ballew's status as a qualified Relator under the False Claims Act, 31 U.S.C. §§ 3729-3733, for purposes of the Underlying Qui Tam. As such, and pursuant to 31 U.S.C. § 3730(d), Ballew should have received at least 15% (but not more than 25%) of the total proceeds from the settlement of the Underlying Qui Tam. 7.3 The total Underlying Qui Tam settlement proceeds included the $17 million cash payment plus the value to the Government of the PBTH contract, extended PBTH contract, Transition Period Agreement, dismissed administrative claims and other valuable consideration provided by AHC and AVCO. The Defendants' failure to pay Ballew his fair (and mandatory) share of the total Underlying Qui Tam settlement proceeds constitutes a violation of the False Claims Act.
VIII. BREACH OF FIDUCIARY DUTY (COUNT IV AGAINST ALL DEFENDANTS)
8.1 The preceding factual statements and allegations are incorporated herein by reference. 8.2 As set forth above, the relationships between Ballew and the Defendants were special and confidential relationships, relationships of trust and fiduciary relationships at common law. 8.3 Certain fiduciary obligations arose from these relationships as a matter of law. As fiduciaries, the Defendants owed Ballew (i) the commitment to deal fairly and honestly, (ii) the duty of loyalty and good faith, and (iii) integrity of the strictest kind. The Defendants were obligated to exercise the highest degree of care in carrying out their actual and implied obligations to Ballew under their respective relationships with Ballew. 8.4 The Defendants, however, breached their fiduciary duties to Ballew by, inter alia:
The Defendants willfully and wantonly breached the fiduciary duties they owed to Ballew or, at the very least, committed these breaches with conscious indifference and reckless disregard of Ballew's rights and interests.
IX. BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING, (COUNT V AGAINST ALL DEFENDANTS)
9.1 The preceding factual statements and allegations are incorporated herein by reference. 9.2 The Defendants' above wrongful actions were committed during the time that they were engaged in fiduciary and special relationships with Ballew. As such, the Defendants' wrongful actions also constitute breaches of the common law duty of good faith and fair dealing owed by the Defendants to Ballew.
X. VIOLATION OF THE FIFTH AMENDMENT TO THE UNITED STATES CONSTITUTION. (COUNT VI AGAINST ALL DEFENDANTS)
10.1 The preceding factual statements and allegations are incorporated herein by reference. 10.2 The documents and information obtained, organized, evaluated, analyzed and delivered by Ballew to the Government in support of the Underlying Qui Tam were the intellectual property of Ballew. The Defendants utilized Ballew's intellectual property to secure a highly favorable settlement in the Underlying Qui Tam ostensibly for the beneficial use and enjoyment of the public. Ballew, however, was not justly compensated for the public use of his intellectual property (as mandated by the False Claims Act) principally because the Defendants affirmatively misrepresented and concealed the total Underlying Qui Tam settlement proceeds. The Defendants' wrongful actions violated the "just compensation" clause of the Fifth Amendment to the United States Constitution. XI. CONVERSION. (COUNT VII AGAINST ALL DEFENDANTS)
11.1 The preceding factual statements and allegations are incorporated herein by reference. 11.2 As set forth above, Ballew is rightfully entitled to his fair share of the total proceeds of the Underlying Qui Tam settlement proceeds. By their fraudulent concealment of the total Underlying Qui Tam settlement proceeds, and refusal to pay Ballew his fair share of such proceeds, the Defendants are unlawfully and wrongfully exercising dominion and control over Ballew's fair share of the total settlement proceeds to the exclusion and defiance of Ballew's right to receive and possess such funds. The Defendants' wrongful acts, therefore, constitute conversion and fraudulent conversion at common law.
XII. UNJUST ENRICHMENT. (COUNT VIII AGAINST ALL DEFENDANTS)
12.1 The preceding factual statements and allegations are incorporated herein by reference. 12.2 The Defendants have been unjustly enriched by their above wrongful actions. The Defendants, at the very least, have been (and continue to be) unjustly enriched by the Defendants' unlawful retention of Ballew's fair share of the total Underlying Qui Tam settlement proceeds (and the corresponding time value of money). Accordingly, Ballew seeks to impose a constructive trust over (and recover) all amounts by which the Defendants have been unjustly enriched. XIII. RELIEF REQUESTED
13.1 The preceding factual statements and allegations are incorporated herein by reference. 13.2 Minimum damages based on the total Underlying Qui Tam settlement proceeds. As a direct and proximate result of the Defendants' wrongful actions, Ballew was intentionally and/or negligently misinformed about the total Underlying Qui Tam settlement proceeds and, as a result, not paid his fair share of the total settlement proceeds. At the very least, Ballew should be paid 15% of the total value to the Government of the PBTH contract, extended PBTH contract, Transition Period Agreement, dismissed administrative claims and other valuable consideration received. Under this calculation, and at the very least, Ballew should be paid $49,191,020 (i.e., $327,940,130 times 15%) plus an appropriate factor for the time value of money. Ballew's (unpaid to date) share of the total Underlying Qui Tam settlement proceeds were reasonably foreseeable by the Defendants, and exceed the minimum jurisdictional limits of this Court. 13.3 Increased Relator's percentage of the total Underlying Qui Tam settlement proceeds. Ballew further asserts that his percentage share of the total Underlying Qui Tam settlement proceeds should be increased from 15% to 25%. The documents and information obtained, organized, evaluated, analyzed and delivered by Ballew to the Government in support of the Underlying Qui Tam were the intellectual property of Ballew. The Government willingly took Ballew's intellectual property and used it to generate a substantially larger settlement than what the Defendants previously have disclosed. As such, the documents, information and analyses provided by Ballew to the Government had greater value to the Government than originally reported. Ballew, therefore, should receive 25% of the total Underlying Qui Tam settlement proceeds as compensation for the true value of his intellectual property, Defendants' intentional misinformation and concealment of the total value of the Underlying Qui Tam settlement, and Ballew's efforts over the last decade to confirm and disclose the Defendants' wrongful actions to the Court. 13.4 Attorneys' fees and litigation expenses. Ballew also is entitled to recover his reasonable and necessary attorneys' fees, litigation expenses and court costs in prosecuting this action pursuant to, inter alia, 28 U.S.C. § 2412. 13.5 Jury Demand. Ballew respectfully demands a trial by jury on all of his claims and causes of action.
WHEREFORE, Plaintiff Robert C. Ballew requests that the Defendants be cited to appear and answer this lawsuit and, upon final trial or hearing, judgment be awarded against the Defendants, jointly and severally for:
(i) Ballew's fair share of the total Underlying Qui Tam settlement proceeds as determined by the trier of fact;
Respectfully submitted, RICHARD L. COFFMAN, P.C. By: (Signature), Richard L. Coffman, State Bar No. 04497460, 550 Fannin Street, Suite 1212, Beaumont, TX 77701, (409) 832-9422, (409) 832-9901 fax, ATTORNEY-IN-CHARGE FOR PLAINTIFF ROBERT C. BALLEW ENDNOTES: EN01 - Ballew first saw an unofficial copy of the MOU on March 12, 1991, over a year after it was executed and nine (9) months after the Underlying Qui Tam was settled. During July 1996, and in response to a Ballew Freedom of Information Act ("FOIA") request sent to the USCG, Ballew finally secured an official copy of the executed MOU. EN02 - See July 10, 1990 DOJ press release. EN03 - The Defendants, however, never revealed to Ballew the nature or existence of the Transition Period Agreement prior to the Underlying Qui Tam settlement. EN04 - The April 1, 1996 FOIA request was lost in the mail and resent by Ballew on May 2, 1996. The combined April 1/May 2, 1996 FOIA request to the USCG hereafter will be referred to as the "USCG FOIA Request."
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