United Technologies Corporation (NYSE:UTX) has won its appeal of the government charge that it overcharged for Pratt & Whitney jet engines. The Department of Justice had accused Pratt & Whitney of violating the False Claims Act, resulting in alleged overpayments for jet engines from mid-eighties to 1990.
The U.S. Circuit Judge Jeffrey Sutton of the 6th Circuit U.S Court of Appeals in Ohio said that the Government had the burden of proving the damages which it did not do. The case was remanded back to the trail court that had ordered that United Technology pay a compensation of $657 million in damages.
The government had accused United Technologies subsidiary Pratt & Whitney of inflating the estimated costs for some parts and for withholding data that would have disclosed the overstatements. The case goes back to 1980’s when Pratt & Whitney was in the fray over a contract for the supply of F-15 and F-16.
The Monday’s decision has returned the case back to U.S. District Court in Dayton, Ohio. The judge, in 2013, had awarded damages for the alleged overcharges to the government. The government will now have to restate its case.
John Moran, a spokesman for United Technologies Corporation (NYSE:UTX), said that the company was very pleased with the decision. He further iterated that the government did not suffer any real damages as a result of the filings made in 1983. According to Moran, the will now go to the district court to finally see an end to the long-running case.
The Original suit was filed in 1999 by the government. In 2008, the trail court had fined Pratt $7 million for making false claims, but did not find any actual damages due to price concessions given to the government.
The 6th Circuit Court reversed the damages but upheld the fine in 2010 leading to the subsequent award and damages and United Technologies latest appeal.