DOJ Dismisses Lawsuit Against Lindsay Concluding Claims ‘Lacked Merit’
Statement:
After nearly five years of investigations, the United States District Court for the Northern District of New York dismissed the civil False Claims Act lawsuit against Lindsay Corporation related to the X-LITE guardrail end terminal after the U.S. Attorney’s Office found that the claims made against Lindsay lacked merit and did not warrant the federal government’s resources to pursue. The twelve states also included as plaintiffs in the lawsuit did not object to the dismissal. The federal government’s investigation and decision support what we have always known about the integrity of our company and our product.
Background:
In June 2019 the Department of Justice, Civil Division and the U.S. Attorney’s Office for the Northern District of New York, with the assistance of the Department of Transportation, Office of Inspector General, informed Lindsay Corporation (the “Company”) that they were conducting an investigation of the Company relating to the Company’s X-Lite end terminal and potential violations of the federal civil False Claims Act (the “Investigation”).
Lifting of Seal
The Investigation was initiated following the March 2019 filing of a sealed qui tam lawsuit in the United States District Court for the Northern District of New York (the “Court”). The qui tam complaint was further amended in September 2021 (as amended “The Lawsuit”). The existence of the seal prevented the Company from disclosing certain information regarding the Lawsuit and the Investigation, including the origins of both.
Pursuant to an October 26, 2023 order of the Court, the seal was lifted on key filings, motions, orders, and documents relating to the Lawsuit and the Investigation.
Background of False Claims Act Lawsuit and Investigation
Pursuant to the False Claims Act, lawsuits to enforce the False Claims Act may be brought either by the Attorney General or by a private person who files suit for the person and for the United States Government in the name of the United States. A private person who brings such a lawsuit is known as a “relator” and the lawsuit is referred to as a qui tam lawsuit. After a relator has filed a qui tam action, the Attorney General diligently shall investigate to determine whether there has been a False Claims Act violation.
As a result of the lifting of the seal, it has been disclosed that a private person initiated the Lawsuit in 2019 on behalf of the United States and twelve individual states, after which the Department of Justice, Civil Division and the U.S. Attorney’s Office for the Northern District of New York proceeded to initiate their Investigation into the relator’s allegations relating to the Company’s X-Lite end terminal and potential violations of the False Claims Act.
Investigation Concludes That Claims Lack Merit; False Claims Act Lawsuit Dismissed Without Prejudice
On September 28, 2023 and after nearly five years of investigation, the U.S. Attorney’s Office for the Northern District of New York submitted a letter motion informing the Court that the United States had investigated the relator’s allegations and now sought to move to dismiss the Lawsuit. The U.S. Attorney’s Office “determined that dismissal is commensurate with the public interest because the claims lack merit and the matter does not warrant the continued expenditure of resources to pursue or monitor the action.” The U.S. Attorney’s Office also noted that it had “been advised by counsel for the twelve states that the states [had] no objection to the Court declining to exercise supplemental jurisdiction over the remaining state claims and to dismissing those claims without prejudice to the states.” On October 2, 2023, the Court granted the Letter Motion and indicated that a motion to dismiss could be filed without further order or pre-motion conference.
On October 12, 2023, after the relator proceeded to file his own notice of voluntary dismissal, the U.S. Attorney’s Office filed its notice of consent (the “Consent”) to the relator’s voluntary dismissal “based on its determination that such a dismissal is commensurate with the public interest and that the matter does not warrant the continued expenditure of government resources to pursue or monitor the action based on currently available information.” In its Consent, the U.S. Attorney’s Office also indicated it had been authorized by counsel for each of the twelve state plaintiffs to represent to the Court that all twelve states do not object to dismissal of the state claims without prejudice.
On October 26, 2023, the Court ordered the dismissal of the lawsuit without prejudice as to the relator, the United States, and each of the twelve state plaintiffs.