Louisiana Shipyard Settles ‘False Claims’ Suit for $8.5M

A Louisiana ship-building company will pay $8.5 million to settle a 2011 lawsuit arising from modifications made to ships for the Coast Guard, the U.S. Justice Department said.

The lawsuit alleged that Bollinger Shipyards of Lockport made false statements about the strength of eight patrol boats it had modified as a subcontractor for the Coast Guard. Modifications included lengthening the ships from 110 feet to 123 feet. The lawsuit states that the hull of one of the ships, the Matagorda, buckled at sea in September 2004.

“None of the vessels possessed the longitudinal strength represented by Bollinger,” the lawsuit claimed.

The Coast Guard revoked its acceptance of all eight ships in 2007; the Justice Department sued in 2011 under the federal False Claims Act. The suit did not spell out the total amount of damages, but noted that the Coast Guard had made approximately $78 million in payments for the work.

A copy of the settlement said Bollinger does not admit any liability in the civil case; the government doesn’t concede that its claims were not well-founded.

The settlement ended a see-saw legal battle. A federal judge in New Orleans dismissed the suit in 2013 saying the suit “does not allege facts indicating that Bollinger’s initial representation of the hull strength was knowingly false or made in deliberate ignorance or disregard for the truth.”

But a three-judge panel of the 5th U.S. Circuit Court of Appeals disagreed, reviving the suit last year.

Despite the legal battle, Bollinger Shipyards has continued to provide vessels for the Coast Guard.

Bollinger makes offshore vessels, rigs, push boats, barges and military patrol boats at its 10 shipyards along the Gulf Coast. It also runs 30 dry docks.