Historic Ruling in D.C. Circuit Reverses Order that Requires False Claims Act Plaintiffs to Pay Discovery Costs

On Friday, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) reversed an order that had required a qui tam whistleblower to pay over $58,000 in e-discovery court costs to the multinational defense contractor KBR. The precedent-setting decision barred defendants in civil litigation from billing whistleblowers tens of thousands of dollars for discovery costs.

In a unanimous decision made in the case of U.S. ex rel. Harry Barko v. KBR et al., the D.C. Circuit ruled, “Congress ‘allowed only for the taxation of the costs of making copies.’” And held that “identifying stacks of potentially relevant materials, culling those materials for documents containing specific keywords, screening those culled documents for potential privilege issues, Bates-stamping each screened document, and mailing discovery materials to opposing counsel” are “untaxable now.”

Barko’s case initially brought under the qui tam provisions of the False Claims Act in 2005, alleged Halliburton subsidiary KBR of fraudulently billing tens of millions of dollars in illegal construction activity during the Iraq War.

“If plaintiffs were required to pay defendants costs incurred for e-discovery, a simple wrongful discharge case could trigger thousands of dollars in court costs if the plaintiff did not prevail,” said whistleblower attorney Michael D. Kohn, partner at Kohn, Kohn & Colapinto and lead counsel for Harry Barko. “This burden would have a chilling effect on the willingness of whistleblowers and victims of civil rights abuses to bring cases in federal court. Today’s ruling puts an end to this dangerous practice and ensures that federal courts will remain open to the rich and the poor.”

Read the opinion: United States of America, ex rel. Harry Barko, Appellant v. Halliburton Company, et al., Appellees, Decided March 27, 2020

Read the orders:

– United States of America, ex rel. Harry Barko, Appellant v. Halliburton Company, et al., Appellees, March 27, 2020, Appeal from the United States District Court for the District of Columbia

– SEC Enforcement Action Against KBR for Non-Disclosure Agreements

– United States of America, ex rel. Harry Barko, and Harry Barko, Appellant v. Halliburton Company, et al., Appellees (Clerk Order)