JM Eagle Press Conference–Qui Tam Investigation!
What is a Qui Tam
• The Federal False Claims act (qui tam) allows civil damages
and penalties for false claims made to the government.!
• A private citizen may ﬁle suit on behalf of the government. !
• Must be ﬁled under seal to allow the federal government time
to investigate. This is called the “Intervention decision.”!
• If the government declines to intervene, the “relater” may
move forward on his own and receive as much as 30 percent
of claims. !
• The relater still moves forward on behalf of the federal
The Federal Investigation!
• Began July 2006.!
• The government requested and JM Eagle provided:
– Random samples for testing.!
– Tens of thousands of pages of documentation.!
• JM Eagle met with investigators four times.!
• The state of California was actively involved.
Complaint was originally ﬁled in California.!
• Additional states joined the investigation:
Delaware, Florida, Nevada, Tennessee,
Massachusetts and Virginia.!
Govt. Agencies Decline
• After more than three years of intensive
investigation, federal government declined
• Statement released Feb. 9, 2010: “… The
Government elects to decline to intervene.”!
• The state of California said it would also not
Florida AGʼs Statement
• Florida Attorney General Bill McCollum announced
his ofﬁce would not intervene.!
• LegalNewsline.com wrote of the Florida case:
“ʻAfter we looked at it, we concluded the same
thing (as the federal government),ʼ McCollum said.
ʻSo we chose not to join in this one.ʼ” !
• Florida was one of the seven original states
involved in the investigation. !
• It is very unusual for a state to proactively declare it
will not intervene. !
States and Municipalities May
• Delaware, Nevada, Tennessee and Virginia
have chosen to intervene, according to the
a press release from the plaintiffʼs law ﬁrm.!
• The release said 43 municipalities also
decided to intervene. !
• Not one has asked JM Eagle for facts. !
• Not one registered a complaint with JM Eagle about
leaking pipes related to these circumstances.!
• JM Eagle invites these municipalities to review evidence.!
States and Municipalities
• There is no evidence that the states and
municipalities intervening have had pipe
failure related to the quality of the pipe,
according to the relaterʼs press release. !
Delaware AG Statement
• Delaware is one of four states
currently involved in the qui tam suit.!
• A spokesman for the Delaware
Attorney Generalʼs ofﬁce told Plastics
News that Delaware has experienced
“no known failures of the pipe.”!
Pipe Failure in Nevada!
• Nevada has also intervened.!
• Gus Nuñez, manager of the Nevada Public works
board, blamed faulty installation on the several
breaks in pipe leading to a prison complex.!
• The New York Times wrote, paraphrasing Nunez:
“Specialists faulted the materials supporting the
pipe and the installers.”!
• CRT Laboratories, an independent company, came
to the conclusion that breaks due to installation
• “The bell and pipe show evidence of
excessive insertion force and
• “Scars on the inside of the bell show
the pipe was inserted with
JM Eagle Integrity!
• JM Eagleʼs gross quality claim rate
never reached one-tenth of 1 percent
between 2005 and 2009. !
• Gross quality claims include any claim
made about the pipe itself. This
includes damages in transportation,
installation and storage.!
• The plaintiff, John Hendrix, was terminated
due to ethical violations.!
• A sworn statement by a contractor declares
that Hendrix proposed:!
– Inﬂating a quality claim against JM Eagle in
order to “stick it” to the company.!
– Receiving a kickback earnings on the inﬂated
claim: “After getting your money and cashing
the check, I will send you my address so you
compensate me for my efforts on your behalf.”!
• JM Eagle cooperated in a thorough qui tam investigation.!
• The U.S. government has declined to intervene, as has
California where original complaint was ﬁled.!
• Four states and 43 municipalities are intervening on “free
• Florida will not intervene.!
• Delaware has experienced no known failure of its pipe.!
• Breaks in Nevada were do to installation errors.!
• JM Eagle adheres to the highest levels of quality and ethics.!
• The integrity of the relater is in question.!