## Facts

- Curtis J. Lusby worked as an engineer for Rolls-Royce (formerly Allison Engine) on the T56 turboprop engine program from 1992 to 2001.
- After the Air Force rejected certain turbine blades as substandard in 1991, Lusby concluded Rolls-Royce continued delivering T56 blades and other parts that did not meet contractual or military specifications.
- Lusby alleged Rolls-Royce knowingly supplied nonconforming parts while certifying that the parts and its quality-assurance obligations complied with contract requirements, thereby inducing government payment.
- Lusby raised concerns inside the company and alleged he was terminated in response.
- In 2002, Lusby filed an FCA retaliation action under 31 U.S.C. § 3730(h) based on his discharge; that suit was later dismissed by stipulation.
- In May 2003, Lusby filed a separate FCA qui tam action under seal on behalf of the United States, alleging false claims and false certifications tied to T56 parts.
- The United States declined to intervene; the complaint was later unsealed and served on Rolls-Royce.
- Lusby did not possess government invoices but alleged the relevant contracts/specifications, the nature of the defects, and the certifications accompanying deliveries.

## Issues

1. Whether claim preclusion barred a relator’s qui tam FCA action because the relator previously brought (and dismissed) a personal FCA retaliation suit under § 3730(h).
2. Whether an FCA relator must plead invoice-level billing details to satisfy Fed. R. Civ. P. 9(b), or whether detailed allegations of a fraudulent scheme and certifications tied to government payment suffice.

## Decision

- The Seventh Circuit reversed the district court’s claim-preclusion ruling and held the qui tam action was not barred by the earlier retaliation suit.
- The court held Lusby’s proposed amended complaint satisfied Rule 9(b) despite not identifying specific invoices.
- The court concluded the district court should have allowed amendment and that dismissal for lack of particularity was improper.
- The case was remanded for further proceedings.

## Legal Principles

- Claim preclusion generally requires the same parties (or privity) and the same claim; a relator’s personal retaliation claim under § 3730(h) is distinct from the United States’ FCA damages claim pursued through a qui tam action.
- In a qui tam FCA action, the United States is the real party in interest for the fraud claim; the government is not bound by a judgment in a relator’s prior personal employment/retaliation case when it was not a party and did not control that litigation.
- Rule 9(b) requires pleading fraud with particularity sufficient to give fair notice and deter speculative accusations, but it does not require allegations of billing details that are typically inaccessible to a former employee.
- An FCA complaint can satisfy Rule 9(b) by identifying the specific products, contracts/specifications, the alleged nonconformities, and the false certifications tied to submissions for government payment, even without invoice numbers or dates.

## Conclusion

The Seventh Circuit held that Lusby’s earlier FCA retaliation suit did not preclude a later qui tam action because the government’s fraud claim involves different parties and interests, and it also held that an FCA relator may meet Rule 9(b) through detailed allegations of nonconforming goods and false certifications in the contractual payment context without pleading invoice-level specifics.


United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849 (7th Cir. 2009)