United States ex. rel. Grupp v. DHL Express, Inc.

In this qui tam suit, Kevin Grupp and Robert Moll appealed the district court’s decision to dismiss their action for failure to satisfy a statutory notice requirement. Grupp and Moll, appellants, brought this action against DHL Express, Inc. (“DHL”) under the False Claims Act (“FCA”), alleging that DHL billed the United States jet-fuel surcharges on shipments that were transported exclusively by ground transportation.

From 2003 to 2008, DHL provided delivery services to the General Services Administration, the Department of Homeland Security, and the Department of Defense. During this time, DHL offered Air Express Services—Same Day, Next Day, Second Day—and a Ground Delivery Service. Customers who purchased one of the Air Express Services were charged a jet-fuel surcharge, and those who purchased the Ground Delivery Service were charged a diesel-fuel surcharge. Appellants alleged that the government was charged a jet-fuel surcharge, even though the shipment was transported exclusively by ground transportation. They also alleged that DHL knowingly defrauded the U.S. government because they included the jet-fuel surcharge for Air Express Services as a matter of common practice, regardless of the actual means of transportation used.

The district court dismissed the suit for failing to satisfy the statutory notice requirement which provides that a shipper must request the Surface Transportation Board to review disputed charges within 180 days of receipt. However, such a claim can also be brought under the FCA. The issue before the court was whether a failure to comply with the statutory notice requirement of 49 U.S.C. section 13710 (b) (3) (B) also bars a shipping-rate challenge before a federal court when brought pursuant to the FCA.

The FCA allows an individual, known as a relator, to bring a civil qui tam action alleging that the defendant presented a false or fraudulent claim for payment against the United States. The court agreed with the government that application of the 180-day rule to qui tam actions would undermine both the FCA’s privacy provisions and statute of limitations. When Congress amended the FCA to include the tolling provision with a three-year statute of limitations, it said that fraud was deceptive by nature and such tolling was necessary to ensure the government’s rights are not lost through a wrongdoer’s successful deception. The circuit court vacated the district court’s ruling on the ground that the 180-day rule cannot apply to a qui tam action under the FCA and remanded the case to the district court.
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742 F.3d 51 (2d Cir. 2014)

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