I wanted to talk for a minute on the recent developments of the AECOM, Xavier University qui tam case in New Orleans. I’ve been tracking this case for a while, as it has been a fairly high-profile case in the A&E world. To recap, in 2016, the qui tam Plaintiff-Relator filed a case against AECOM, Xavier University, and the Archdiocese of New Orleans under the False Claims Act. The plaintiff was an AECOM employee at the time and alleged that AECOM misused the FEMA Public Assistance Program funds it received after Hurricane Katrina. He specifically alleged that the defendants submitted false information to FEMA, to qualify ineligible buildings for post-Katrina replacement funding. As to Xavier, the claims center around the FEMA assistance received for its gymnasium and electrical distribution system.
Xavier settled in 2020 for $12M and the case is still pending against AECOM. In August of 2022, AECOM served a subpoena on Xavier, seeking information about Xavier’s settlement with the United States and settlement negotiations between Xavier and the United States. In response, Xavier filed a motion to quash and argued that the information concerning Xavier’s settlement with the United States was privileged and/or irrelevant and, the magistrate judge assigned to the case agreed it was irrelevant.
AECOM asked for review by the District Court Judge who reversed and found that the information was relevant. Federal Rule of Evidence 408 provides that conduct or a statement made during compromise negotiations are generally inadmissible. However, there are exceptions to Rule 408, one of which being that a court may admit this evidence to prove a witness’s bias or prejudice. AECOM argued that the settlement information it sought was relevant because Xavier and its representatives are expected to testify at trial, and that this information may tend to reveal bias in those witnesses.
AECOM’s counsel pointed out that “information concerning the conditions of Xavier’s settlement with the United States is relevant … if it tends to show potential bias or prejudice on the part of the Xavier witnesses: for example, if Xavier received a discount on the settlement for providing testimony against AECOM in this matter, AECOM is entitled to discover those facts and thereby test the bias of Xavier and its representatives.” As a result, it appears that AECOM will have the opportunity to review the settlement documents.