The court’s decision refers to AECOM as the defendant in this qui tam matter. The allegations at issue involve a former AECOM subsidiary that was spun off in 2020 and now operates as Amentum.
The district court denied AECOM’s motion to dismiss a qui tam lawsuit claiming it fraudulently obtained contracts intended for small businesses and violated anti-human trafficking laws. The relators alleged that AECOM and DynCorp formed a joint venture through which it fraudulently obtained small business contracts for linguist services in Kuwait. They also alleged that their employer confiscated their passports and would not allow them to leave the country, even after Kuwaiti officials began efforts to deport them. The court previously dismissed AECOM as a defendant, but in their SAC, the relators plausibly alleged that AECOM and DynCorp exercised such control over the small business entity that the corporate veil should be pierced.
U.S. ex rel. Elgasim Mohamed Fadlalla et al. v. DynCorp International LLC et al.; U.S. District Court for the District of Maryland No. 8:15-cv-01806-PX
AECOM National Security Programs Inc. moved to dismiss a qui tam complaint arising out of the performance of two contracts for linguist services awarded to Global Linguist Solutions LLC. The relators are 29 U.S. citizens who worked for GLS under one or both of the contracts as linguists, translators, and interpreters.
The relators sued multiple defendants—including AECOM, TigerSwan Inc., KMS Solutions LLC, DynCorp International LLC, Global Linguist Solutions LLC, Thomas/Wright Inc., and Shee Atika Languages LLC—and also brought claims under the Trafficking Victims Protection Reauthorization Act against GLS, DynCorp, and AECOM. These proceedings related only to the sufficiency of the claims against AECOM.
The background on the case is available here. In short, the relators alleged that GLS engaged in a subcontractor fraud scheme involving its teaming agreements with KMS, Shee Atika, Thomas/Wright, TigerSwan, and Invizion Inc. GLS’ contracts required it to subcontract a certain percentage of the overall contract value to small businesses, but the relators alleged the small business defendants acted as GLS affiliates and were not bona fide independent small businesses. In effect, GLS performed the work but gave the appearance it had subcontracted work to small businesses.
Previously, the court dismissed AECOM from the suit because the relators failed to plausibly allege that AECOM engaged in a “joint venture” with GLS and DynCorp, such that liability extended to it. The relators asserted that they had cured the defects in their pleadings in their second amended complaint.
The revised complaint
In the SAC, the relators alleged that AECOM, DynCorp, and MTI exercised such total control over GLS that it was merely an instrument for obtaining revenue from military contracts for the other defendant corporations. The SAC alleged that AECOM would find small businesses willing to accept the terms and conditions for inclusion in GLS’s bid and sought out multiple subcontractors that agreed to be under AECOM’s direction and control.
AECOM, with DynCorp, also selected GLS’ Board of Managers; controlled the terms of their employment; set the rates and benefits paid to GLS employees; maintained the exclusive right to appoint GLS’ president, vice president, secretary, and treasurer; and played an active role in crisis management. The relators also alleged that AECOM and DynCorp controlled the day-to-day operations of GLS and exercised joint approval over GLS’ annual budget, staff training, and the decision to add offices overseas.
According to the relators, AECOM knew about and was directly involved in the mistreatment of linguists in Kuwait. Specifically, GLS’ president had sent an email to AECOM and DynCorp stating that the linguists’ passports had been confiscated, subjecting the linguists to potential arrest should they attempt to leave Kuwait. The linguists were later directed to sign false confessions that allowed them to leave the country.
AECOM’s motion to dismiss the alter ego theory
In its motion, AECOM argued that the SAC did not plausibly allege a shared corporate identity among the defendants, such that the court could disregard AECOM’s status as a minority owner in GLS. Alternatively, AECOM argued that the TVPRA claims did not plausibly allege knowledge.
The court disagreed, finding that the relators made a plausible showing of a unity of interest between AECOM and GLS. They noted that AECOM and DynCorp created GLS to compete for military contracts and plausibly alleged they controlled the entity and its day-to-day operations. The court also found enough alleged facts to create the potential that veil piercing would be equitable. The relators alleged that DynCorp and AECOM created GLS to secure subcontracts intended for small businesses. The court found these allegations sufficient to allow the claims to proceed to discovery.
Next, AECOM argued that the relators mischaracterized GLS’ governing documents and its control over GLS. However, the court found those arguments unpersuasive, as well as inappropriate on a motion to dismiss. Accordingly, the court declined to dismiss the alter ego theory of liability.
AECOM’s motion to dismiss the TVPRA claim
Next, AECOM argued the relators failed to show knowledge sufficient to confer liability for the TVPRA claim. The relators argued that AECOM knowingly obtained their labor by means of the abuse or threatened abuse of a law or legal process. Such abuse includes poor living conditions, extreme isolation, and the confiscation of an immigrant’s passport and threats of arrest.
The court found that the relators had adequately pleaded that AECOM was part of GLS’ venture to knowingly benefit from their forced labor in Kuwait. The relators alleged that AECOM knew about the treatment of the linguists in Kuwait and threats of deportation, and directly coordinated the response, including forcing the linguists to sign false confessions as a precondition to leave the country. According to the relators, AECOM had been fully informed that the linguists were no longer working legally and risked imprisonment at any moment. Nonetheless, the defendants kept the linguists in Kuwait, because removing them would jeopardize contract performance. The court found these allegations plausible.
AECOM challenged the complaint on a fact-by-fact basis, which the court found inappropriate for a motion to dismiss. On the merits, however, the court disagreed with AECOM’s arguments. For example, the court found the relators plausibly alleged that the manager responsible for some of these decisions and circumstances was an agent of AECOM and that AECOM was aware of the TVPRA violations, including the fact that the linguists were not free to leave Kuwait. Given the level of control AECOM and DynCorp exercised over GLS and the frequency of communication from GLS managers, the court found it plausible to infer that AECOM knew the linguists’ passports had been taken.
