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United States ex rel Purcell v. MWI Corp.

October 25, 2006

UNITED STATES OF AMERICA, EX. REL. ROBERT R. PURCELL, PLAINTIFF,
v.
MWI CORPORATION AND DAVID ELLER, DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document Nos.: 192, 193, 182

MEMORANDUM OPINION

ADOPTING IN WHOLE MAGISTRATE JUDGE ROBINSON'S REPORT AND RECOMMENDATION;DENYING THE DEFENDANTS' MOTION FOR RECONSIDERATION

I. INTRODUCTION

This qui tam*fn1 action involving pump equipment sales to Nigeria comes to the court on the plaintiff's and defendants' objections to Magistrate Judge Deborah Robinson's report and recommendation regarding her order limiting discoverable material. The defendants have also filed a motion to reconsider Judge Robinson's order denying the defendants' motion to compel production of certain documents and answers to interrogatories. Robert Purcell (the "relator") brought suit pursuant to the False Claims Act against his former employer, MWI Corporation ("MWI"), a manufacturer of industrial pumps. The government (the "plaintiff") subsequently intervened, bringing suit on its own accord against MWI and its former president, J. David Eller (collectively, the "defendants"). In August 2004, this court referred the case to Magistrate Judge Robinson for resolution of discovery disputes. Subsequently, Judge Robinson resolved a variety of motions regarding the limits of discoverable information. Judge Robinson issued a report and recommendation ("R & R") in which she recommends that this court revise part of her previous order. Both the plaintiff and the defendants have filed objections to this report and recommendation. Because the court wholly accepts Judge Robinson's report and recommendation regarding her prior order, the court denies the parties' objections.

Meanwhile, Judge Robinson denied the defendants' motion to compel the plaintiff to produce statements and communications made by the relator to the United States regarding his allegations against MWI of violations of the False Claims Act. The defendants now ask this court to reconsider that ruling. Because the court finds no clear error in the Magistrate Judge's order, the court denies the defendants' motion for reconsideration.

II. BACKGROUND

A. Factual Background

According to the government, in the early 1990s MWI arranged to sell irrigation pumps and other equipment to seven Nigerian states. Compl. ¶¶ 8, 11. To finance the pump sales, the United States Export-Import Bank ("ExIm") loaned a total of $74.3 million to Nigeria in 1992 in eight separate loans. Id. ¶¶ 12-13. MWI received regular payments through a London bank which was then reimbursed by ExIm. Id. ¶ 14.

Before ExIm would approve the bank reimbursements, however, it required MWI to submit a "supplier's certificate" certifying that MWI had not paid any irregular commissions or other payments in connection with the pump sales. Id. ¶¶ 15-16. Also, before the bank would release each payment to MWI, MWI had to submit an additional supplier's certificate again certifying that it had not paid irregular commissions or made other payments in connection with the pump sales. Id. ¶ 17. Accordingly, MWI submitted supplier's certificates to obtain ExIm approval of the bank reimbursements, and it submitted 48 additional supplier's certificates for each of its payments from the bank. Id. ¶¶ 16, 18. On these supplier's certificates, 43 of which were signed by Eller, MWI certified that it had not paid any irregular commissions or made other payments in connection with the pump sales. Id. ¶¶ 19, 21.

The government alleges that these certifications were false. Id. ¶¶ 24, 35. Specifically, the government claims that the defendants failed to disclose on the supplier's certificates that MWI had paid $28 million in excessive, highly irregular commissions to their Nigerian sales representative, Mr. Alhaji Mohammed Indimi, to obtain the pump sales. Id. ¶¶ 22-27. The defendants also allegedly failed to disclose that their representative subsequently made payments to various Nigerian officials in connection with the pump sales. Id. ¶¶ 28-37. Finally, the government contends that Eller took trips to the Bahamas and Grand Cayman with cash-filled suitcases in an effort to move his assets out of the United States. Id. ¶¶ 38-43.

B. Procedural Background

On July 21, 2005, this court issued a memorandum opinion setting forth the relevant legal standards at play for the various discovery disputes in this case. Mem. Op. (July 21, 2005) at 8-10. With these guiding principles clearly identified, the court recommitted the discovery disputes in this case to Judge Robinson for reconsideration. Id.

Pursuant to that directive, on October 13, 2005, Judge Robinson issued a general discovery order, and on November 14, 2005, Judge Robinson issued a memorandum order denying the defendants' motion to compel production of documents. These two orders are now the focus of the parties' motions for reconsideration.

Because Judge Robinson's October 13, 2005 ruling did not contain her legal reasoning, this court requested that Judge Robinson issue a report and recommendation to this court as to her views on the parties' motions for reconsideration of that order. Order (Feb. 13, 2006). The court turns now to the parties' motions.

III. ANALYSIS

A. The Court Adopts the Magistrate Judge's June 23, 2006 Report ...


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