Lockheed Martin Agrees to Pay $5 Million to Settle Alleged Violations of the FCA and the Resource Conservation and Recovery Act

On Monday, February 29, 2016, the Justice Department announced that the Lockheed Martin Corporation and its subsidiaries Lockheed Martin Energy Systems and Lockheed Martin Utility Services (collectively, Lockheed Martin) agreed to pay the United States $5 million to resolve allegations that they violated the Resource Conservation and Recovery Act (RCRA).  By misrepresenting their compliance with RCRA to the Department of Energy (DOE), Lockheed Martin knowingly submitted false claims for payment under its contracts with DOE to operate the Paducah Gaseous Diffusion Plant in Paducah, Kentucky.  Lockheed Martin is a global security, aerospace, and information technology corporation that provides environmental services to the government and commercial customers.

The RCRA is a statute that establishes how hazardous wastes are managed.  The government’s lawsuit alleged that Lockheed Martin violated the RCRA by failing to identify and report hazardous waste produced and stored at the facility, and failing to properly handle and dispose of the waste.  Furthermore, the government alleged that this conduct resulted in false claims for payment under Lockheed Martin’s contracts with the DOE.

Of the $5 million settlement, Lockheed Martin will pay $4 million to resolve the government’s False Claims Act allegations and its subsidiaries will pay $500,000 each in RCRA civil penalties.

From 1984 to 1999, Lockheed Martin operated the Paducah Gaseous Diffusion Plant under contracts with the DOE and a government corporation, the U.S. Enrichment Corporation.  Lockheed was responsible for the facility’s uranium enrichment operations.  Uranium enrichment, through a process called “gaseous diffusion,” increases the proportion of uranium atoms that can be used to produce nuclear fuel for weapons and civilian energy production.

In addition to uranium enrichment, Lockheed Martin was responsible for the environmental restoration, waste management, and custodial care of the site, which operates 3,500 acres in McCracken County, Kentucky.  Uranium operations concluded at the plant in 2013.  The government is working to remediate any contamination at and near the site consistent with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The lawsuit resolves two lawsuits filed under the qui tam provision of the False Claims Act.  The lawsuits were filed by the Natural Resources Defense Council, Inc. and several former employees of Lockheed Martin who worked at the Paducah facility. The United States partially intervened in the lawsuits, which were then consolidated into one action.  The whistleblowers will collectively receive $920,000 from the United States’ portion of the settlement.

The case was a coordination effort between the U.S. Attorney’s Office for the Western District of Kentucky, the Civil Division’s Commercial Litigation Branch, the Environment and Natural Resources Division’s Environmental Enforcement Section, the U.S. Environmental Protection Agency, the Department of Energy and the Department of Energy Office of the Inspector General.

The case caption is: United States, ex rel. John David Tillson, Natural Resources Defense Council, Inc., et al. v. Lockheed Martin Corp., et al., Civil Action No. 5:99CV00170-GNS (W.D. Ky.).  The claims resolved in this settlement are allegations only; there has been no determination of liability.