United Technologies wins reversal of $657 million award over engine prices

Reuters News
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Posted: Apr 06, 2015 6:52 PM

By Jonathan Stempel

(Reuters) - United Technologies Corp on Monday won the reversal of a $657 million judgment imposed over decades-old claims accusing its Pratt & Whitney unit of overcharging the federal government on jet engines for the military.

The 6th U.S. Circuit Court of Appeals in Cincinnati said the government did not prove damages from false statements allegedly made by Pratt when it competed in 1983 with GE Aircraft for a contract to supply engines for the F-15 and F-16 fighter jets.

Writing for a three-judge panel, Circuit Judge Jeffrey Sutton said the government had "every opportunity" to present expert testimony to show damages, but never took advantage.

"The government had the burden of proving damages, and it never did," Sutton wrote.

Monday's decision returned the case to U.S. District Judge Thomas Rose in Dayton, Ohio, who in June 2013 awarded damages for what the government said was six years of overcharges. The government now has another chance to provide damages.

The U.S. Department of Justice had no immediate comment.

United Technologies spokesman John Moran said the Hartford, Connecticut-based company is "very pleased" with the decision.

"UTC has long maintained that the government suffered no actual damages as a result of the statements made in 1983," he said. "We look forward to returning to the district court to finally put an end to this long-running case."

The government originally sued Pratt in 1999.

Nine years later, Rose fined Pratt $7 million for violations of the federal False Claims Act, but found no actual damages because Pratt had given the government price concessions.

The 6th Circuit upheld the fine but reversed the damages finding in 2010, leading to the subsequent award of damages and United Technologies' latest appeal.

In Monday's decision, Sutton suggested that the case has gone on long enough.

"We are tempted to say that, after seventeen years of litigation about a fraud that occurred thirty-two years ago, the time has come to end this dispute," he wrote.

According to court papers, the government sued in Dayton because some of Pratt's alleged improper activity occurred at the nearby Wright-Patterson Air Force Base.

United Technologies shares closed up 73 cents at $117.86 in Monday trading.

The case is U.S. v. United Technologies Corp, 6th U.S. Circuit Court of Appeals, No. 13-4057.

(Reporting by Jonathan Stempel in New York; Editing by Bernard Orr)