Order Denying Summary Judgment in United States v. J-M Manufacturing Co., Case No. CV06-00055-GW (E.D. Cal. March 4, 2013): On March 4, 2013, the district court denied Defendant J-M Manufacturing Company, Inc.’s (J-M) Motion for Summary Adjudication, and held that the plaintiffs may sustain a false claims act (FCA) action against J-M by showing that J-M did not adequately test its products. The qui tam plaintiff, a former J-M quality assurance engineer, brought the suit in 2006 on behalf of the United States, several states, including California, Delaware, Florida, Illinois, Indiana, Nevada, New Mexico, New York, Massachusetts, Virginia, and the District of Columbia, and various political subdivisions and public water and sewer agencies thereof. The plaintiffs allege that J-M violated the federal and state FCAs by using inadequate manufacturing and testing processes and faulty materials to produce polyvinyl chloride (PVC) pipe that they purchased from J-M. They further allege that the PVC pipe had only a fraction of the strength and endurance J-M represented the pipe had, requiring the plaintiffs to replace the pipe.
J-M moved for summary adjudication on the issue of whether the plaintiffs can establish a false claim without proving that they actually received a substandard product. The district court held that the plaintiffs did not need to prove that they each received a physically defective product. Instead, they could prevail by showing that they received pipe that did not conform to J-M’s manufacturing and testing quality assurance obligations, even if not physically defective.