United States ex rel. Adams v. Dell Computer Corp.

United States ex rel. Adams v. Dell Computer Corp.

Opinion

 [*94]  MEMORANDUM OPINION

Plaintiff-Relator Phillip [**2]  M. Adams brings this qui tam lawsuit on behalf of himself and the United States of America against Dell Computer Corporation and fifteen other Dell entities (collectively, Dell or Defendants). Mr. Adams alleges that Dell violated the False Claims Act (FCA), 31 U.S.C. § 3729, et seq., by knowingly selling hundreds of millions of dollars of computer systems to the United States government that contained undisclosed security vulnerabilities. Mr. Adams labels those vulnerabilities as a "Hardware Trojan." The United States declined to intervene in the litigation and Dell moved to dismiss for failure to state a claim under Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). For the following reasons, the Court will grant Defendants' motion and dismiss the amended complaint.

I. BACKGROUND

Dell is a "multinational company that delivers worldwide innovative technology, business solutions and services." Mot. to Dismiss First Am. Compl. (Mot.) [Dkt. 59] at 10.¹ Mr. Adams is "an internationally-recognized expert in computer hardware and software systems" who "has published numerous books and articles concerning operating systems and computer architecture and has been awarded numerous patents and patents pending from the United States Patent and Trademark Office for inventions and breakthroughs in the computer area." [**3]  Am. Compl. [Dkt. 49] ¶ 5(a). Mr. Adams alleges that he conducted an "independent investigation" into the existence  [*95]  of Hardware Trojans² in computer systems sold by Dell to the United States government. Id. ¶¶ 5(b), 22. During his investigation, he allegedly created "unique methods and tools" to identify the Hardware Trojans. Id. ¶ 5(b). The Hardware Trojan is a "cybersecurity hardware vulnerability [that] can be (1) exploited maliciously to deny the Government use of the Affected Computer Systems based on criteria selected by those exploiting the vulnerability; or (2) triggered unwittingly by users or software developers with the same denial-of-use effect." Id. ¶ 9.

According to Mr. Adams, Dell "directly or indirectly presented false claims for payment to the Government for Dell Defendants' Affected Computer Systems . . . and made and used false records and statements in support of their false claims for payment." Id. ¶ 7. Specifically, the Affected Computer Systems sold by Dell included system control chips that included legacy functions, which the United States government did not want or need the system control chip to contain. Id. ¶ 12. An example of a legacy system is programing [**4]  to recognize a floppy disk drive. Even though government computers no longer contain or have the need to connect to floppy disk drives, the system control chip includes a legacy floppy disk controller. That legacy floppy disk controller is accessible and functional, but not used by the Affected Computer System because no floppy disk is present. Mr. Adams contends that these unused, but available, functions permit exploitation of the Affected Computer System. Id. ¶ 15.

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