On July 8, 2022, the U.S. Department of Justice (the "DOJ") announced that Aerojet Rocketdyne ("Aerojet"), a California-based aerospace and defense contractor, agreed to pay $9 million to resolve allegations that it violated the False Claims Act (the "FCA") by misrepresenting its compliance with cybersecurity requirements in federal government contracts. The DOJ's announcement follows the court's approval of a tentative settlement reached on April 27, 2022 by Aerojet and the whistleblower who filed the claims. This is the second settlement of cybersecurity-related FCA claims since the DOJ's announcement of its new Civil Cyber-Fraud Initiative in October 2021, although the claims were brought against Aerojet well before the initiative was launched.
The Aerojet Settlement
The July 2022 Aerojet settlement resolved claims first filed in 2015 by a senior cybersecurity official at Aerojet who alleged that the company entered into contracts with the Department of Defense ("DoD") and NASA despite knowing that it did not meet the regulatory cybersecurity requirements. The whistleblower claimed to have filed the action after his attempts to raise the issue through internal channels proved unsuccessful.
Specifically, the whistleblower alleged that Aerojet failed to comply with (and materially misrepresented the extent to which it complied with) DoD and NASA regulations requiring it to safeguard certain unclassified information from cybersecurity threats. Aerojet argued that it had...
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