federal judge Wednesday dismissed the Department of Justice’s suit against Bollinger Shipyards Inc., Lockport,
La., over the stretching of eight Coast Guard cutters, saying the government
needs to specify where fraud occurred.
The suit filed in 2011
claims Bollinger “made material false statements to the Coast Guard” about the
hull strength of the 110' Patrol Boats (WPBs) that were converted to 123' at a
cost of $78 million. “The first converted cutter, the Matagorda, suffered hull failure when put into service,” the
government said. Efforts to fix it and the other vessels were unsuccessful, and
the cutters have been taken out of service.
The suit sought damages
from Bollinger under the False Claims Act for the loss of the vessels.
government’s allegations “do not add up to a plausible theory of fraud,” said U.S. District Judge Sarah Vance in New Orleans. “The government still has not
said what was false about Bollinger’s section modulus calculations so that an
inference can be drawn that whoever made them had to know they were untrue. The
government has already abandoned one theory of fraud. It is time for it to
plead with particularity what the fraud is.”
The judge said the
government’s complaint “does not even allege that Bollinger made an
intentionally false or recklessly untrue statement, or acted with deliberate
indifference.” Instead, the suit alleges “that Bollinger’s 7,152 cubic inches
statement to the Coast Guard was consistent with an internal statement made by
Bollinger’s chief naval architect, not that Bollinger knew one thing internally
but said something different to the Coast Guard.”
A Bollinger spokesman said the company had no
immediate comment on the judge’s order.
Bollinger, which built the original vessels,
expressed disappointment when the lawsuit was filed. The work was completed in
2006, Bollinger said in a statement, and, “Throughout this process, Bollinger
has been open and cooperative with the government, and we remain committed to
providing the government all necessary information and assistance to bring this
matter to a close. Bollinger has tried to find a way to resolve this matter
short of litigation, but we are fully prepared to defend our good name
aggressively in a court of law.”
Vance gave the Justice Department 20 days to amend its claims.
Department spokesman said Thursday via e-mail, "We’re reviewing the matter
and have no further comment at this time.".
Read the judge’s 40-page
order here: https://ecf.laed.uscourts.gov/doc1/08516287573