Third Circuit Holds Ambiguous Contract Precludes FCA Liability

The Third Circuit recently upheld summary judgment in favor of the defendant in U.S. Dept. of Transp. ex rel. Arnold v. CMC Engineering, a whistleblower suit alleging the defendant overbilled Pennsylvania's Department of Transportation ("PennDOT") in violation of the False Claims Act ("FCA"). The Third Circuit concluded that the defendant's contract with PennDOT was ambiguous, precluding any finding that the defendant knowingly submitted invoices at rates not justified by its employees' credentials. A copy of the court's decision can be found here.

Procedural History

Relator August Arnold worked as an engineer for PennDOT, which engaged defendant CMC Engineering ("CMC") to provide inspectors for highway projects. Relator alleged that CMC misrepresented its employees' qualifications in order to invoice PennDOT at higher rates than the parties' agreement allowed. The district court granted summary judgment for CMC on two grounds. First, ambiguities in the contract