Wireless Carriers – Government Contracting Fraud ($138.7 million)
Constantine Cannon represented whistleblower OnTheGo Wireless, LLC, in state False Claims Act litigation against the four largest U.S. wireless carriers, AT&T Mobility, Verizon Wireless, Sprint, and T-Mobile, that resulted in the recovery of $138.7 million for the states of California, Nevada, and other jurisdictions, including political subdivisions in those states. The whistleblower, an industry expert but not an insider at any of the carriers, alleged that the carriers knowingly failed to comply with contractual promises to deliver service “at the lowest cost available,” and provide rate plan “optimization” reports each quarter. The contracts in questions were cooperative purchasing contracts that allowed different government entities to purchase under the terms and conditions of a master contract negotiated by a lead government agency. For the carriers, becoming providers under the cooperative purchasing agreements gave them access to a multi-billion dollar market and, eager to have that access, the carriers agreed to provide rate plan optimization, but then, according to the whistleblower, failed to provide it. The contracts were long-standing and the terms highly specialized. And, many government agencies agreed to purchase under the contracts based solely on the fact they were put together by the Western States Contracting Alliance (“WSCA”). This created an opportunity, OnTheGo alleged, that the carriers knowingly exploited to breach their promise to deliver low cost service and rate plan optimization, resulting in hundreds of millions of overcharges to government entities. Over 30 California political subdivisions intervened in the California action and were also represented by Constantine Cannon; the State of Nevada intervened in the Nevada action. Plaintiffs ultimately recovered $138.7 million, and the whistleblower received a relator share of nearly 40%. See Press Release and Whistleblower Insider for more.