*3 NYGAARD, Before: STAPLETON and For claim, Cantekin’s remaining qui tam COWEN, Circuit Judges which was based on submit-

ted after the effective date of the 1986 THE amendments, OPINION OF COURT the District Court granted summary judgment favor of Bluestone COWEN, Judge. Circuit and the other defendants because the This case concerns a medical research- Court concluded that Bluestone did not er’s failure to disclose his industry funding knowingly omit his industry funding from on a grant number of applications that he the application. Contrary to the District submitted to the National Institutes of Court, we conclude genuine factual (NIH). Health The funding undisclosed disputes preclude summary judgment on included several million dollars phar- whether Bluestone knowingly submitted companies maceutical making the drugs false claim.1 NIH paid the researcher to evalu- ate. I appeal On this we must determine when Both appellant, Cantekin, Erdem a private party properly can bring a suit appellee, Bluestone, Charles are under the False Claims qui Act’s pro- tam professors of otolaryngology at the Uni- vision, 3730(b), § 31 U.S.C. which allows of versity Pittsburgh’s medical school and an individual to sue on the government’s have together worked on research since behalf damages caused par- another early 1970s. As part their collabo- ty’s Congress false claims. changed has ration, they created the Otitis Media Re- several times rules limiting when a search Center to investigate acute otitis private party bring can a qui tam suit effusion, media otitis media with two under the False Claims Act. We must re- ear diseases common in children. solve which of two versions of the Act Much research conducted apply to the grant various applications that together focused on testing the effective- the researcher submitted to the NIH and antibiotics, ness of various such as amoxi- what effect each version has on the claims cillin, in treating the types different it controls. otitis media. This research particu-

A recent decision, Supreme Court larly significant because while the drugs Hughes Co. v. United used, States ex are widely controversy continues Aircraft Schumer, rel. U.S. 117 S.Ct. about the desirability and effectiveness of (1997), 138 L.Ed.2d 135 discussed the ret- using antibiotics for these conditions. Not University The Pittsburgh and Children’s have throughout referred opinion our to the Hospital Pittsburgh joined Bluestone in Bluestone, against claims analysis ap- but our applying grants for various and were also plies equally to the other named defendants. convenience, named as defendants. For industry- closed to NIH the extent of its worry- medical reasons only are there antibiotics, sponsored research.” at 508. But App. unwarranted use ing about brief, the according Hyatt grant to Cantekin’s that since the in- but also continued dollars over half billion spends ambiguous, were public structions to treat annually buying antibiotics Hyatt reject- excusable. also conduct was otitis media. forms of various ed Cantekin’s claim Bluestone’s re- results search were biased. antibiotics, research on To pursue grant ap- numerous Bluestone submitted 10, 1990, September On the House re- the 1970s throughout to the NIH plications report, leased its which discussed ten cases ap- ultimately was awarded and 1980s recipients engaged where had million. At the same proximately $17.4 101-688, H.R.Rep. misconduct. See No. time, receiving funding began Bluestone *4 Are Misconduct and Scientific Conflict of to companies pharmaceutical from various Health?, Interest Hazardous to Our 19th of them antibiotics test the effectiveness Opera- on Report, Committee Government this in- Collectively, media. treating otitis tions, 10, Cong., (Sept. 101st 2d Sess. funding approximately totaled dustry $3.4 1990). Bluestone’s case was included million. among report the ten. The House excori- 1976, he early claims that as as Cantekin University Pittsburgh’s of ated both the to list his with Bluestone his failure raised investigation Hyatt’s report as well as grant applica- NIH industry funding on his challenged many findings. of their Sever- tions, him allegedly Bluestone brushed but 1990, later, al months in December of the off, tell going that he was not to the saying by report agency’s NIH issued a new the it because was “federal feather merchants” recently Integ- created Office of Scientific of their business” and would “mud- “none (OSI), rity reopened agen- which had the App. waters.” at 523. Cantekin dy up the conduct. Dr. cy’s inquiry into Bluestone’s interpretation of disputed also Bluestone’s Hadley, Acting Deputy then Di- Suzanne results, in the results particular research OSI, charge rector of was in of this second industry-funded studies. of several investigation. NIH Her affidavit ex- to

In wrote May plained report of Cantekin that the OSI NIH about Bluestone’s con- complaining that the Director of NIH recommended action, duct, to take no but the NIH chose place on a require that Dr. Bluestone be investigation an con- deferring instead years of five of administrative period University Pittsburgh. of ducted having for failed to disclose his oversight university announced on June When the company re- private pharmaceutical it cleared of 1987 that had Bluestone analyzed having NIH and search to any wrongdoing, dropped the NIH in a data from NIH-funded research university’s matter. Dissatisfied with the towards the effectiveness manner biased and with the NIH’s reliance investigation had evaluated with of the antibiotics he it, later testified before on Cantekin public monies. Representatives House of United States App. at 481. fraud in investigating scientific hearings federally funded research. failure how Bluestone’s To illuminate industry funding could have disclose his report from the congressional

While the approval grants, of his affected the NIH’s NIH decided to hearings pending, following overview provided Cantekin Bluestone’s inquiry conduct its own into process. Applications resulting report by Howard conduct. The insti- assigned to one of several are first the NIH’s Division Hyatt, then director of case, Review, the NIH. tutes within Survey and con- Management National were sent to the applications and the Otitis Media cluded that Bluestone Neurological, Institute for Communication generally had “not dis- Research Center Stroke, Disorders, 1,1,1,1, ple, which then for- votes of yield priority and 5 to the 180; warded them Communication Disor- 2, 1, 1, score of and votes of and 3 (CDRC), Committee ders Review one yield 1, 1,1, a score of 160. Even .votes within committees the institute. review 1, and place applicant 3 could on the body is the primarily A review committee edge rejection priority score of evaluating responsible merits of 140. applications like Bluestone’s. Each review vote, priority After the an executive sec- composed experts committee is who are retary, who functions as a staff member paid not NIH and are employees per diem committee, for the report writes a describ- evaluating applications. Frequent- ing the review committee’s deliberations ly, the review committee members have report submits the to the Council of grants themselves received NIH in con- the Institute. The appli- council receives their own ducting research. cations from the various review commit- The review committee takes two votes tees within the institute and makes the application. on an The first vote is to final determination of which applications “approve” “disapprove” requested members, will funded. be Council like the grant; receiving approval at stage, this members, review committee are not NIH however, does not assure that applica- employees and are *5 exper- chosen for their application tion will be funded. The may in their tise field. Unlike the review com- rejected vote, still be based on the second members, however, mittee council mem- “priority which establishes a score.” To appointed bers are four-year to serve for score, priority determine the each member terms. of the review committee gives proposal 1, highest score between for the priority, a multi-year grant Once ap- has been and 5 for the lowest. Each member’s proved funding, assigns NIH score is then together, added the total is administrator,” “program to a who inis members, divided by the number of and charge administering grant. Each the resulting average multiplied by is year grant’s principal investigator, Thus, yielding priority the final score. case, Bluestone in our and grantee highest priority score possible is 100 and institution special must submit a continu- the lowest 500. ing application, progress report. These In Bluestone and Children’s Hos- progress reports “noncompetitive” are pital of Pittsburgh submitted an applica- that funding during the allotted time has tion to extend grant by an earlier five already approved. been purpose The years. Their first request for an extension the progress reports is to informed the

received a priority score of 154 and was NIH of how the research advancing, is funded, but later Bluestone and the identify the amount of the budget for the Otitis Media Research Center submitted a year, next provide and information about revised application that priority received a key personnel engaged in the research. score of good which was enough to receive funding. Two of the five members of an NIH review committee that approve voted to

If we combine the NIH’s method of one of grants Bluestone’s stated in affida- calculating priority score and the they vits that if had rough known about his in- guideline application that an with a dustry funding, score of it higher 154 or would not would have affected receive Perkell, funding, at their decision. Dr. least around the time that one of the considered, members, application review was committee said that can see that one or two industry members can Bluestone’s undisclosed funds easily applicant’s raise an priority score were not “common knowledge.” He con- above the cut-off for funding. For exam- tinued: A experimenter perform bias can still that had Dr. Bluestone my opinion

[I]t work, experiments be relationships pri- valid but must disclosed com- industry, carefully designed pa- so that enrolled pharmaceutical vate randomly of NS 16337 to different assigned renewal tients are peting objective came the Review Commit- criteria for groups, which before test meas- used, have I was a member would are and uring tee of which function both sub- critically with re- more ject been evaluated and observer are blinded as to time, (i.e. investigator demands on gards experimental to: which condition new interest, the effects possible drug, drug, conflicts current standard or other substance) proposed the value of the applied particular of bias on control to a studies, study design in the safeguards subject. Appropriate statistical tests interpretation unbiased applied to ensure must be to the data to assure proposed the results of the interpretations efficacy evaluation of more critical evaluation drugs studies. The test are valid. on the recom- impact would have had Id. prior- and on the approval mendation for The other three members of review priority ity impact score. The on the committee, Miller, Meyerhoff, Drs. material gave score I would have been Goode, all affidavits saying submitted based on negative. my opinion, industiy were aware of Bluestone’s past my behavior of my knowledge Miller, funding. example, Dr. stated of the Review Commit- fellow members “I fully that was aware that Dr. Bluestone evaluating assigning priority tee receiving very support was substantial applica- to several hundred other scores companies to private pharmaceutical priority on the overall impact tions I not at drug efficacy do studies.... would have been material funding score Dr. all troubled the fact that Bluestone *6 negative. and receiving funding.” App. such 1104- at 473-74.

App. 05. Schwartz, chair review Dr. the of the three, however, None of the informed committee, in an affidavit that also stated of Drs. Perkell or Schwartz this outside industry she was unaware of Bluestone’s funding. Dr. affidavit notes Schwartz’s known, it funding and that had she would committee members did not that the other effect negative” have had a “material and funding undisclosed at mention Bluestone’s of application. on her evaluation the She meetings, committee nor did the review a researcher who receives explained that possible the issue of conflicts “raise a funding pharmaceutical substantial from safeguards the adequacy interest or of subtly in favor of company can be biased in against interpretation to control bias the company’s drugs that the are effec- finding App. ...” at 1125. study results potential tive. Disclosure of this source if the important bias is to reviewers even II ultimately since grant might approved be jurisdiction pursuant to might approve committee not We have the review 1291, plenary § and we exercise until certain additional 28 U.S.C. bias, of sum review of a district court’s safeguards implemented. are “When bias, v. American To mary judgment. disclo- Barnes potential are revealed (3d Cir.1998). Co., 127, 138 funding a source with a vested bacco 161 F.3d sure of research, judgment, a summary a motion for in outcome of the On interest the evi in determine whether are alerted to look for defects court must reviewers genuine no com- shows that “there is design which could dence experimental that the any as to material fact and proposed.” App. work at issue promise the a Elsewhere, judgment is entitled to as explained: moving party she 1125. 408 56(c). government

matter of law.” Fed.R.Civ.P. Fac when the has information re- (2) fraud; summary vealing to resist a disputes government tual invoked official in who is deemed to “have” the judgment must be both material information may recognize on an not the connection bearing sense of essential element of between in plaintiffs genuine particular claim and the information and a (3) claim; jury may sense that a reasonable could find official have an interest Anderson nonmoving party. bringing to light favor of the fraud for a Inc., reasons, Lobby, Liberty number of such as an U.S. 248- interest 2510-12, protecting agency’s the official’s or 106 S.Ct. L.Ed.2d (1986). (4) mechanisms, prevent reputation; A court should not a other being presented jury directly to the sim more focused on the a case merits of suit, ply filtering because the court favors one of several are available for out spurious evidence, Congress of the claims. reasonable views “the was also concerned that law, under judge’s weigh function is not himself to old whistleblowers who the truth came exposed evidence and determine of the forward and fraud to gov- matter to determine whether ernment filing but there is officials before suit were Anderson, a qui genuine being bringing issue for trial.” 477 later barred from tam 249, 106 Indeed, at U.S. S.Ct. suit. as our discussion below clear,

makes Cantekin’s case illus- itself Ill trates this consequence pre-1986 law. threshold begin issue of We grant applications subject

which can be Grassley With the enactment of the qui tam suit. Prior Amendments, to the 1986 amend- Congress generally gave Act, to the False Claims a private ments qui tam suits. greater scope Among a qui tam party bringing was barred from changes, other as increasing such the dam- suit if the action was “based on evidence or ages from double to treble the harm caused, information the Government had when the increasing the percentage that brought.” action was 31 U.S.C. a qui tam plaintiff received of those dam- 3730(b)(4) (1982 ed.). § government 3730(a) (c) The compare 31 U.S.C. ages, §§ itself, course, (1982 ed.) 3730(d)(1) could still bring suit for with 31 U.S.C. §§ violation; only private parties (2), such a were the amendments also eliminated the seeking recovery. barred from The im- qui tam suits. old law’s bar to *7 plicit logic pre-1986 the law if was that qui tam suits prohibiting Instead of all government the had the relevant informa- that are based on govern- information the suit, plaintiff tion before the initiated then ment “has” when the is brought, suit the government the must be aware of the false Grassley Amendments introduced a new claims and didn’t need the assistance of qui tam suit will be barred standard: a private parties to ferret them out. And if only if it is based on information that was government the knew about the informa- “publicly disclosed” at various in hearings, yet tion nothing, government did then the certain types reports, the media. probably meritless, thought the suit 3730(e)(4)(A). § 31 U.S.C. Information any private apt spurious, action was to be “has,” government that the but that was only by driven the lure of the Act’s sizable disclosed, qui publicly never does not bar a damages. tam suit. Even if “public there is disclo- Despite the pre-1986 legitimate law’s meaning Grassley sure” within the of the suits, aim preventing spurious Amendments, a qui tam suit can still its bar go for qui tam suits imperfectly plaintiff original achieved its forward if the anis source (1) purposes variety for a of reasons: the publicly that disclosed information. 31 government 3730(e)(4)(B). § lacks the resources to investi- An original U.S.C. source gate all prosecute 'false claims even is defined as someone who has “direct and Hughes not in knowledge” of the information Court did reach independent expressly “voluntarily provided” the has retroactivity and who whether is determined based information before with the government on the submission date or the disclosure was initiated. Id. the suit date, analysis strongly sup- the Court’s former, i.e., ports using the the date the part suits are addressed Groundless qui tam requiring allegedly that all false claim was submitted. And by provisions information to the plaintiffs submit sealed once we use the submission date and apply proceeds. suit Af- government before the pre-1986 grant the law to all applications information, reviewing govern- this the ter 27, prior submitted to the October suit, join the ment can decide whether date, effective there can be no doubt that alone, private party allow the to continue qui tam suit, began before Cantekin or, significantly, n most dismiss the suit. government the “had” the information 3730(b)(2) (c)(2)(A). §§ See 31 U.S.C. it upon which was based. Hughes Co. United States In Aircraft Schumer, 939, 117 ex rel. 520 U.S. S.Ct. By the time Cantekin filed his com 1871, (1997), Supreme 138 L.Ed.2d 135 plaint April the District Court on held that the 1986 amendments did Court 1991, the House had conducted its hear occur apply retroactively to conduct ings report, and issued its and the NIH to the amendment’s effective ring prior Hyatt’s had both memo and issued footnote, in a date. The Court stated how report by later the Office of Scientific In Hughes ever, both the “false since tegrity. unquestionably These events es claim and the “disclosure to submission” tablish that the had the government infor fraud government” of the occurred be mation on which Cantekin’s suit was amend fore the effective date Thus, only why live based.2 issue ments, the Court did not have to address date for should use the submission deter used for which of the two events should be mining retroactivity. retroactivity. 520 determining U.S. 4, 117 1876,n. 4. n. S.Ct. at Supreme When the Court concluded in Hughes Grassley Amendments applying Hughes, District Court applied retroactively, that for all of Bluestone’s not be concluded should prior to the 1986 applications submitted recognized knowingly submit- Court date, effective the date of “disclosure to illegal claim is under both ting government” also occurred before Oc- versions of the statute. The Court also Thus, the District Court tober noted that under both the amended statute that, Hughes, as in it did not have decided statute, the total amount previous to resolve whether the disclosure date or liability depend of a defendant’s does not the date of submission controls. sued; pay must on who the defendant regardless same amount of whether Although sharply dis parties *8 qui tam relator brought government or a pute whether there was “disclosure to the Nonetheless, the Supreme the action. government” prior to the 1986 effective reasoned that the amendment’s date, Court not the issue. we need resolve We tam suits can be qui though Supreme change that even the when conclude noting rejected argument, that un- objects that when District Court the Cantekin the against give granted summary judgment der Rose a failure to notice can be ex- Court claims, we evaluate pre-1986 by erred cused if "harmless." Id. Since the Court convert- date, 12(b)(6) retroactivity ing a based on the submission a motion into motion for sum- giving adequate undisputed that Cantekin’s suit mary judgment without first and since it is See, Congressional opportunity respond. an was filed after the NIH notice and Bartle, (3d any error e.g., investigations, we conclude that Rose v. 871 F.2d 342 Cir.1989). stemming the motion point in a from the conversion of Cantekin raised this reconsideration, but the District was indeed harmless. motion for 410 impose penalties problem using does new on de- Another with the

brought date government” “disclosure to the to deter- fendants. retroactivity mine is that it is not clear acknowledge that the mone- While we test should applied what be to determine by faced defendant tary liability FCA Supreme that date. The Court’s phrase whether the action is is the same government,” “disclosure to the straddles by brought by qui the Government or a “public the 1986 amendment’s disclosure” relator, tam the 1986 amendment elimi- language pre-1986 and the standard of qui to a tam prior nates a defense suit— government By “information the had.” the disclosure to Government —and speaking govern- of disclosure “to” the changes therefore the substance of the ment, “by” rather than disclosure the gov- existing qui cause of action for tam de- ernment, Supreme the Court’s language by “attach[ing] disability, fendants a new may suggest referring the Court was respect to transactions or consider- pre-1986 “government to the knowledge” already past.” ations “government knowledge” test. The test is (citations 948, 117 520 U.S. at S.Ct. primarily focused on what people other omitted). noting 'After the 1986 government release to the while the defense, amendments eliminate a the “public amendment’s disclosure” test has Court commented that the amendments emphasis substantial on information re- also in create a new cause of effect action hand, by government. leased theOn other open expand because the courts are to an Supreme the phrase, Court’s “disclosure to plaintiffs. ed class government,” accurately cap- does not pre-1986 ture the govern- law since the reasoning We think this would be in ment could “have” the tension, conflict, information within outright if not deep meaning pre-1986 of the test based on using the date of disclosure instead of the government what the learned from its own determining date of submission for retro- investigative by efforts. And speaking of activity. primary very Our rationale is “disclosure,” and not gov- information the' If invoked the simple. disclosure date “has,” ernment Supreme Court’s lan- apply the amendments to a claim guage suggestive is “public disclo- before the submitted amendment’s effec- sure” test. date, penalties tive then the new listed i.e., Court, the loss of a defense and Regardless parses of how one the lan- action, the creation of a new cause of however, guage, problem real is that after the imposed would be defendant act- choosing pre post between the using ed. The reason disclosure injects standards of circularity kind into date would have this effect is that retroactivity analysis. To determine ends with submitting defendant’s conduct the date of government,” “disclosure to the claims; the false the defendant is not the apply we must either pre-or post one, usually, or at who least makes the test in order to decide whether we will government. disclosure to the Since the apply pre or post-1986 to the test rejected Hughes Court an application of alleged false claim. This awkward need to Grassley Amendments that al- would stipulate at the outset what analysis our low the law to “attach new disabilities” to supposed to decide reinforces our conclu- conduct prior committed to the amend- sion that the date the claim was submitted passage, ment’s we think the implic- Court retroactivity should determine the of itly using foreclosed the disclosure Grassley date. Amendments.3 *9 1985, It apply pre-1986 3. is true that a court plaintiff could submitted a false claim in the assign law to a date government to the “disclosure to the the informed of the fraud in 1987, government” 1988, yet post-1986 qui still find that quali- filed a tam suit in law ultimately should original applied control the claim. For fied anas source. Even if we example, suppose pre-1986 that the after defendant the law to date the “disclosure to

4H that The False Claims Act passing District Court noted defines The the decided before opinion, “knowing” “knowingly” including a Ninth Circuit as a opinion Hughes, relied Supreme knowledge,” Court’s defendant’s “actual “deliber determining the ignorance,” the disclosure date for disregard” on ate or “reckless Grassley Amendments. retroactivity of the falsity the truth or of information in the States ex rel. Anderson See United government. defendant’s claim to the 810, Telecom., Inc., 3729(b). Northern 52 F.3d § The U.S.C. statute adds that Cir.1995). (9th problem The main proof specific “no intent to defraud is reasoning Anderson is that its rested required.” Id. In applying these stan point the that “the 1986 amend heavily on us, dards to the record before we must change legal ment did not the conse heed the that a basic rule defendant’s state Tele- quences of Northern [defendant] of mind typically should not be decided on . 52 F.3d at 814 Since com’s conduct.” See, summary judgment. e.g., Hunt v. Hughes rejected position empha that Cromartie, 541, 1545, 526 U.S. 119 S.Ct. Grassley Amendments do sized that (1999). 1552, 143 L.Ed.2d 731 “attach to a defendant’s new disabilities” conduct, we think that Anderson’s

past The District Court’s ratio primary short, been undermined. In authority granting summary judgment has nale for was that we use the date grant we conclude should that the application and instructions determining the claim was submitted for were unclear. Before we address whether retroactivity Grassley Amend ambiguous, instructions are or more “public qui ment’s disclosure” bar to tarn properly genuine whether there is no dis are, suits. pute we note that Cantekin specifically stated his affidavit that he knowingly Did Bluestone submit informed Bluestone that he should disclose claims? private funding. his Not all of Cantekin’s claims were based 1976, prior on submitted to when Dr. Bluestone and I were applications 28, 1987, January applying grants, 1986. On for various NIH I October a grant applica- question Bluestone submitted new raised with Dr. Bluestone the he, listing industry funding, tion without whether principal investigator, as again disclosing and he failed to disclose when he should not be to NIH his oth- May support, especially revised the on 1987. er research companies. Dr. pharmaceutical The District Court dismissed Cantekin’s Blue- qui appli- replied tam claim based on this revised that it was “none of their stone business,” going cation because the Court concluded on and that he was not summary judgment the evidence tell the “federal feather merchants” be- permit finding “muddy up “does not that Dr. Blue- cause it would the waters.” ‘knowingly’ stone submitted false or fraud- Dr. Bluestone added that “idiots like Ranney ulent claims to would not under- government.” App. Buckminster Ranney Dr. stand.” Buckminster government,” plaintiffs using we would not bar the because in a certain class of cases pre-1986 assign suit. This follows because the date that the law to a date to disclosure fraud, i.e., government apply post-1986 learned of the some- We still leads us to law. justification applying pre-1986 time in was after the effective date of need a applied we may many the 1986 amendments. And once law at the outset when it foreclose law, we post-1986 amended would see claims that disclosure test could, course, plaintiff go could forward with suit since appeal would not. We source, plaintiff original is an and no Hughes using the considerations cited in public disclosure occurred aside from the pre-1986 adopt law. But those once plaintiff's suit. arguments, we have reason to abandon the pre- altogether way circularity presupposing The our "date of disclosure” as eliminated, however, determining retroactivity. really just 1986 law isn’t *10 (3) NIH-employee working pending funding; ap-

an with the Na- review and/or Neurological, Institute of Commu- plications planned being tional or prepared Disorders, and Federal, nicative Stroke submission. Include all non- (“NINCDS”) Federal, with whom Dr. Bluestone grant and institutional and con- none, dealt. had tract support. If state “NONE.” each give sup- For item the source of only at 523. This affidavit not cre- App. number, title, port, identifying project genuine dispute that Bluestone ates principal name of investigator program / “knowingly” industry funding, omitted his director, percent time or of effort on the provides evidence but it also that Blue- named, project by professional annual defraud, specific had the intent stone costs, direct period sup- and entire proof required of which is not for a viola- (If port. part larger project, pro- of a False Act. tion of the Claims vide the titles of both parent grant apart Even from the evidence that subproject give and the the annual specifically Bluestone was informed that each.) Briefly direct costs for describe industry funding, he should disclose we any contents of each item listed. If ample conclude that there is evidence that of these overlap, duplicate, or are being the instructions are clear. Other members replaced supplemented pres- of Bluestone’s Otitis Media Research Cen application, ent justify and delineate the correctly ter followed the instructions and nature and extent of the scientific and disclosed their outside research funding, budgetary overlaps and boundaries. including private App. sources. at 38. NIH Similarly, one of the review commit App. at 1196 (emphasis original). The members, Schwartz, tee stated her affi specifically instructions request davit that: applicant list “all... ... sup- nonFederal helped I have written or to write numer- port” give detailed information about grant applications ous NIH for fellow- each grant. grants, program projects research ships, In concluding that the instructions were training grants. principal As inves- ambiguous, the District Court relied on tigator grant I have held an R01 Hyatt’s report, which cited earlier ver- NIH been continuously which has fund- sion the instructions and said that involving ed since 1972 seven competing “many institutions were found interpret

renewals and several revised resubmis- those improperly.” instructions App. at ... always sions I have found directions Hyatt explained the NIH completing support” “other changed the instructions to ambigui- avoid grant NIH pages applications to be ties. unambiguous. The District Hyatt’s Court’s reliance on App. at Another 439^10. member of the memo problematic for a number of rea- committee, Perkell, review submitted a First, post-1986 sons. saying similar that he applied affidavit had applications used improved instruc- for and received a number NIH grants Second, tions. if potential even confusion support” found the “other section to relevant, from the applications earlier be unambiguous. perhaps because the earlier instructions A review instructions themselves gave Bluestone expectations, erroneous suggests they clearly indicate that seriously question whether the earlier in- industry funding should be disclosed. On structions ambiguous. were The instruc- page that instructs applicants to list Hyatt tions that ambiguous claimed were support,” provides: their “other the form in part: read professionals For each of the named on 2, list, page in three List all research separate groups: support for each indi- (1) (2) support; active applications including requests vidual being now con- *11 support, all of both federal and being sources sidered, any proposals as well as non-federal. this to of relevance regardless planned, current Include also

application. at 482. App. awards, program career research Bluestone, can that a Finally, one infer of awards, regardless training grants, would have highly-educated professional, support. of the source might that be inter- been aware the NIH agency in when the industry his ties ested believed Hyatt apparently at 509. App. him whether to award substantial decided ambiguous be- instructions were that these in a half-billion funding key drug to test a instructions, cause, improved unlike out, industry. points As Cantekin dollar “non- refer to specifically did not much likely give greater are to people did, The instructions sources. Federal” NIH than to the find- weight to research “all” re- however, to list applicants direct companies making drugs ings of and of source” support “regardless search in greater public Given this trust issue. claimed Hyatt of relevance.” “regardless research, government-funded the results of incorrectly had “many” institutions that bias, gov- undeniable risks of and the instructions, but the earlier interpreted interest in clearly strong ernment has testified that of the NIH forms the drafter impartial that inves- ensuring it acts as case, any except specific not recall he could especially investigating when tigator, course, a researcher where efficacy a disputed treatments that have required by the what was misunderstood can high aggregate cost. Bluestone and question. support” “other of the reasonably expected be know criti- Third, report sharply the House in avoid- heightened interest government’s explained Hyatt’s cized conclusions scientist, fully must be ing bias. As a he that: rooting potential out sources of aware that in describ- were incorrect NIH officials empirical interpretations in our bias forms; of the NIH ing the content inquiry. data is central to scientific was Support” regarding section “Other the appel The District Court forms, revised in late 1979 and revised in materials is that argument lees’ next explicit language more containing the applica of Bluestone’s accompanying some in 1980 or applicants available to were tions, industry to his there were references applica- type on the depending were no funding. These references tion. grants of the complete disclosures means at 38. App. pharmaceutical receiving was he Fourth, Acting Deputy Hadley, Dr. include nor did the references companies, information, NIH’s of Scientific the amount of Director of the Office such as the full that in requested in her affidavit she funding, asserted that was Integrity, grant appli any Support” evidence section had not encountered “Other Furthermore, many be am- of the refer found the instructions to cation. applicants rely upon were appellees ences biguous. which reports,” “progress included with my [prior] on my opinion based ap was- after a were submitted Secretary as an Executive experience important point But the most proved. with review committees works [who buried volumi that scattered references ... there evaluating grant applications,] do not com accompanying materials nous ambiguity any problem never re disclosure application’s with the ply complete on how to in PHS instructions quirements. of a PHS Support” section “Other complex is faced with Appli- a reviewer Application or Continuation When Grant ac- large masses of Fall, on, that include proposals the instruc- cation. From information, it makes sense companying the disclosure explicitly required tions must disclose in submitted applicants Bluestone Jan- insist that applicant’s grants May other place uary important, but more one *12 impose of conflicts interests may only raise the letter was sent after he was under applicant’s on the demands competing only Given Bluestone investigation. reading appli- who is an A time. reviewer sent the letter after Cantekin made his journal may article accompanying cant’s allegations university, to the NIH and the notice, engrossed in the details of not while reinforce, timing the letter to of tends issue, fleeting a ref- specialized undermine, scientific allegations not Cantekin’s and think of funding its private erence to supposed Bluestone knew that he was to inter- potential for conflicts of significance industry funding. disclose his can One organize in- distill Applications est. easily infer that an letter was not for a reason. formation expression oversight, of an honest but an attempt up prior to cover misconduct and in the record bears out Evidence this limit damage. its review committee mem- One of the point. Perkell, bers, in that: stated his affidavit alleges that program Cantekin adminis- and evaluator I As a reviewer trators’ are more closely interests allied always Sup have looked to the “Other grant applicants’ any with than other NIH form an estimate of the port” pages to official, noteworthy so it is that Bluestone Principal of effort the Inves percentage Elkins, alone, notify chose to and Elkins tigator investigators and other have the NIH. in Reading light the evidence work, proposed to do the available nonmoving party, most favorable to the overlap pro between possible look for that if note Bluestone calculated that dis- posed already and others fund projects closure to Elkins would be the least dam- identify and to pending, possible ed or take, aging he could step judgment his possible interest or conflicts of sources apparently proved correct since the letter experiments. of bias These fac he sent to Elkins was never forwarded important evaluating are to me tors beyond the program-administration offices. as a and in assign whole problem relying Another with on Blue- ing priority it a score. way stone’s letter to Elkins as a of exoner- Schwartz, App. at 472. another review him ating submitting a false claim is member, committee likewise stated in her that the False Claims Act has a specific Sup- affidavit that she relies on the “Other provision dealing with someone who comes port” gauge section to how much time the forward and discloses his or her research, applicant spend has to on the provides claims. The statute that: proposal duplicative, whether the the court that— [I]f finds the applicant

what conflicts interest (A) person committing violation might Despite have. the references Blue- of this subsection furnished officials of materials, accompanying stone cites the United responsible States for inves- nor Perkell was aware neither Schwartz tigating false claims with all violations industry funding, Bluestone’s and both n person information known to such about have their said it would affected evaluation the violation within days after the application. his date on which the defendant first ob- The District Court’s last reason information; tained concluding that Bluestone did not (B) person fully such cooperated with knowingly submit false claim is that he any investigation Government of such Elkins, sent a letter on June 1987 to violation; and administrator, program listing his in (C) dustry funding. find the District person We at the time such furnished Court’s on unconvinc reliance this letter the United States the information violation, ing. Not only prosecu- was it written months after about the no criminal reject the District Court’s Although we action, action tion, or administrative civil the Court’s remark reading Hopper, this title with under had commenced violation, suggests violations” two person “technical about to such respect objections: knowledge slightly different have actual did not material, if investigation into such and even of an omissions were existence violation; were, any damages they did not cause consider first government. We will than not less may assess the court materiality objection. damages which the amount times of the act because sustains Government *13 un have held that claims Courts violating this person A person. a subject False Act are to der the Claims to the be liable shall also subsection judicially imposed materiality requirement. for the costs Government United States See, Westinghouse Sa e.g., Harrison v. any to recover brought action of a civil (4th Co., River 176 F.3d vannah damages. or penalty such Cir.1999). Supreme And the Court re 3729(a)(7). § 31 U.S.C. — States, in Neder v. cently held United noting is that this worth point The first U.S. —, 1827, 144 L.Ed.2d 35 119 S.Ct. the defendant’s merely provision reduces (1999) materiality require is a that there damages; it treble to double liability from mail-fraud, the federal wire- under ment for a viola- a does not exonerate defendant fraud, In a foot and bank-fraud statutes. Second, of June 23 letter Bluestone’s tion. indicated, note, howev Supreme Court days after the date he than 30 was more statement,” er, unlike the term “false that Third, Blue- made his false statements. statement,” a imply does not “fraudulent he was under sent after stone’s letter was Neder, 119 S.Ct. materiality requirement. arguably cannot and thus he investigation, n. 7. that the False Claims at 1840 Given (C). may It be also satisfy subsection making knowingly a merely prohibits Act “fully co- he has dispute to whether open specific require not a claim and does false “all information” provided or operated” defraud, argues perhaps Neder to intent the violation. he knew about any In materiality requirement. a against event, whether there is we need not decide issue, the Taking up a different False under the materiality requirement a rel. States ex cited United District Court is, Act, if there Anton, because even 1266-67 Claims 91 F.3d Hopper Cir.1996) failure to (9th that a it is clear that proposition for the think readily funding would regulations industry of rules “technical violation disclose Neder, under the the Su agency not as material. of an is actionable qualify the Ninth Cir at 1627. the Restatement App. quoted FCA.” What Court preme however, (Second) that not Torts, in two al Hopper, provides cuit held which to is tantamount a matter every regulatory showing violation ternatives statement to making knowingly a material: regulatory viola government. Since (a) im- man attach a reasonable would making a did not involve Hopper tion in or nonexistence to its existence portance in a claim sub

knowingly false statement in the determining his choice of action in the court held government, to the mitted or question: transaction the False Claims was no violation of there (b) representation the maker Thus, for the not stand Hopper Act. does its to know knows or has reason a court allows that before proposition regard to likely or is recipient regards under the False Claims proceed suit to determining important as the matter Act, it thinks a serious weigh it must how action, although a reason- his choice of was in a knowing particular falsehood it. regard not man would so able to the government. claim submitted Neder, (quoting disputes. at 1840 n. 5 factual want point 119 S.Ct. We also out (Second) § of Torts Restatement that even if the committee and review (1976)). approved applica- council would have they industry tion once knew about the above, industry funding is As recounted funding, they might imposed still have ad- interest, assessing conflicts relevant safeguards requirements. ditional Hav- applicant an has to devote how much time informed, ing not been did not have grant, NIH and how the requested to the in- opportunity to consider these other a broader fits within research research steps. termediate specifically the NIH Because program. form, information on its requests the may It seem unfair to hold Bluestone of this information is the value because accountable for the decision made we think that the readily apparent, infor- program-administration pass offices a reasonable NIH mation is material: above, along Bluestone’s letter. As noted would know that the NIH grant applicant however, expressly provides the statute important. as

regards the information dealing mechanism for with a defendant *14 now to the of dam We turn issue who reveals his false claim. Since this ages. Even if the letter to Elkins does provision merely reduces the defendant’s claim that little to undermine Cantekin’s caused, liability damages actually for the claims, knowingly Bluestone submit false since, event, any and may Bluestone not that the letter still appellees argue satisfy the prerequisites, Bluestone re- shows that his earlier failure to disclose mains liable for harm that in fact was harm. Bluestone sent letter caused no government caused to the as a result of his 23,1987, pending to Elkins on June but his false statements. post-1986 application finally ap was not 4, 1988, proved February until when he principle It is a basic of tort law $321,137. appellees was awarded The ar tort, that once a defendant in motion a sets therefore, gue, that no harm could have the defendant generally is liable for the been caused because Bluestone disclosed caused, damages ultimately unless there industry funding any grant his before See, intervening are e.g., causes. W. Kee money dispensed post-1986 for his ton, Dobbs, Keeton, Owen, D. R. & D. grant application. § Prosser and Keeton on Law of Torts 44 (5th ed.1984). Analysis of intervening problem argument The first this is causes is often that, above, way evaluating used as as noted the letter to Elkins assigning and responsibility for harm program never left the administration of- fices, only caused. Id. Given that Bluestone so the information about Bluestone’s sent his letter after he was industry funding never reached the review under the pressure of any investigation, in- his letter does committee or other decisionmaker little to approving grant. culpability, volved lessen his and there fore, Thus, we do not know whether the review the fact that the letter was not for or the council of the warded is not plausibly committee institute treated as an inter approved grant would have if had vening analysis cause. To the that extent known about the information included in of intervening causes on focuses the fore seeability cause, the letter. Given that two putative committee of a intervening appli- members who reviewed Bluestone’s think it significant that Bluestone Elkins, cation in and 1984 1985 would have as- chose to send the letter to administrator, signed applica- lower priority program scores to his who did decide tion, given that one member’s vote can whether he would receive funding for his effectively not, deny funding, application. we think whether in Bluestone did stance, approved would have been submit another revised what damages short, were genuine spring. incurred raise as he did earlier in the In dated September party fact that the letter was not forwarded 1998. Each to assumed when bear its own costs. was a risk that Bluestone the claims. he submitted STAPLETON, Judge, Circuit have our atten- appellees The directed concurring: discussing

tion to several cases causation (1) Because, view, my the uncontra- Act. requirements under the False Claims dicted that responsi- evidence establishes In v. First Nat’l United States Bank of government employees ble knew of the (7th Cir.1992) Cicero, 957 F.2d private funding alleged conflict of in- government only court held that the need- prior terest to the effective date of the that it would not have made a ed show (2) Amendments; Grassley the instruc- statement. payment “but for” applicants unambigu- tions to are clear and reaching holding, the Seventh Circuit face; (3) ous on their Dr. Cantekin’s expressly disagreed with United States dispute affidavit alone establishes a of fact (3d Hibbs, Cir.1977), which, F.2d 347 as to whether Dr. knowingly Bluestone Cicero, a more strin- according imposed claims, join submitted false I the judgment requirement. Specifically, gent causation of the Court. requiring in addition to Cicero said paid have government that the would not statement, for the false

the claim but “subject effectively

Hibbs held ...

matter of the false statement be the government’s

source of the loss.” 957 *15 Hibbs, (citing

F.2d at 1373 568 F.2d at 351).

349, need not decide either We JONES, Plaintiff-Appellant, Robert E. imposing read as whether Hibbs should be requirement, such a or whether Hibbs is changes consistent with the made in the AMERICAN POSTAL WORKERS UN- False Act since that Claims decision. We NATIONAL; ION, American Postal point think it suffices to out that both Union, 4755, Workers Local Number standards can be satisfied: as we conclud- Defendants-Appellees, damages, ed our discussion of Cantekin presented has evidence that Bluestone’s

grant not have but might approved been Butts, Patricia Fern Defendant. industry his false statements about his (or funding grant that the been would have Equal Employment Opportunity approved with additional or re- restrictions Commission, Amicus quirements). And the content of Blue- Curiae. industry stone’s omissions about his fund- No. 97-2584. ing could have made the difference not, approved whether his so Appeals, United States Court of even under the reading Seventh Circuit’s Fourth Circuit. Hibbs, “subject matter of the false Argued: June statement” could have been source of government’s loss. Sept. Decided: IV reasons, foregoing

For we will af-

firm order of the dated District Court

February 1998 and reverse the order