Case Information
*1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES ex rel. LORI MORSELL, :
:
Plaintiff, : Civil Action No.: 12-00800 (RC) :
v. : Re Document Nos.: 46, 54 :
SYMANTEC CORPORATION, :
:
Defendant. :
MEMORANDUM OPINION
G RANTING IN P ART AND D ENYING IN P ART D EFENDANT ’ S M OTION TO D ISMISS ; D ENYING THE
U NITED S TATES ’ M OTION FOR P ARTIAL S UMMARY J UDGMENT
I. INTRODUCTION
In the course of her work at Symantec Corporation, Lori Morsell came to believe that her employer had violated certain contractual obligations to the United States. She subsequently filed this qui tam action as Relator against Symantec under the False Claims Act. The United States, California, and Florida intervened, and Relator elected to assert claims on behalf of New York. All plaintiffs filed a joint complaint. Presently before the Court are Symantec’s motion to dismiss the complaint and the United States’ motion for partial summary judgment. Because the United States adequately pleads all of its claims but California, Florida, and Relator fail to do so, the Court grants in part and denies in part Symantec’s motion to dismiss. Because there are genuine disputes of material fact as to all issues presented in the United States’ motion for partial summary judgment, the Court denies that motion in full.
II. FACTUAL BACKGROUND
A. Negotiation of the Contract
Symantec Corporation provides software and services in the areas of security, storage, and backup. Omnibus and Restated Complaint and Complaint in Intervention (“Omnibus Complaint”) ¶ 20, ECF No. 41. The instant dispute arises out of Symantec’s negotiation and performance of a Multiple Award Schedule (“MAS”) contract for supplying a range of products, licenses, and services to the federal government (the “Contract” or “GSA Contract”). See id. ¶¶ 21, 55, 56.
MAS contracts enable the General Services Administration (“GSA”) to streamline federal government procurement by providing pre-negotiated maximum prices and other terms that govern all subsequent purchases covered by the contract. See id. ¶¶ 33–35. The GSA establishes federal regulations governing solicitations, negotiations, and contracts executed under the MAS program. See id. ¶¶ 39–52. These regulations prescribe standard questions contained in MAS solicitations, in response to which the offeror must disclose certain information in a Commercial Sales Practice Format, known as the offeror’s “CSPs.” See id. ¶¶ 41–42; 48 C.F.R. § 515.408 (MAS Requests for Information); id. § 515.408, fig. § 515.4 (Instructions for the Commercial Sales Practices Format). Additionally, an offeror seeking an MAS contract must provide information that is “current, accurate, and complete” as of fourteen calendar days prior to submission. See id. § 515.408, fig. 515.4. For their part, GSA contracting officers are required *3 to “seek to obtain the offeror’s best price (the best price given to the most favored customer).” Id. § 538.270(a). To this end, contracting officers must “compare the terms and conditions of the [offeror’s response to the] MAS solicitation with the terms and conditions of agreements with the offeror’s commercial customers.” Id. § 538.270(c); see also Omnibus Compl. ¶¶ 31–52 (reviewing MAS regulatory scheme).
In February 2006, in response to the GSA’s solicitation for the Contract, Symantec submitted an initial offer containing its CSPs. See Omnibus Compl. ¶¶ 41, 58. Consistent with applicable regulations, the solicitation asked in Question 3 whether the discounts and concessions offered by Symantec to the Government were “equal to or better than [its] best price . . . offered to any customer acquiring the same items regardless of quantity or terms and conditions.” Omnibus Compl. ¶ 59; CSPs, Def.’s Attach. A, ECF No. 46-1. In response to this question, Symantec checked the box for “NO.” Id.
Question 4(a) directed Symantec to disclose information in the standard CSP format about its discounting practices. See CSPs, Def.’s Attach. A. To comply with this requirement, Symantec attached several charts. Omnibus Compl. ¶ 61. One chart purported to describe the frequency of non-published discounts by magnitude for 2005 sales (“Frequency Chart”). See id. ¶ 64.a. The Frequency Chart showed that in 2005, Symantec offered non-published discounts of over 40% only very rarely—less than 3% of the time. See id. ¶ 65. Moreover, the chart showed that in 0.02% of sales, Symantec offered discounts ranging from 91-100%. CSPs, Def.’s Attach. A.
*4 The Frequency Chart, however, included numerous published discounts, in addition to the non-published discounts it purported to reflect. This erroneous inclusion of published discounts caused Symantec to understate the frequency of discounts above 40% (and, for the same reason, to inflate the frequency of discounts below 40%). See Omnibus Compl. ¶¶ 101, 102. Had the Frequency Chart included only non -published discounts, it would have shown that in 2005, Symantec provided non-published discounts above 40% over 20% of the time—not merely 3%. See id. ¶ 103. Symantec knew of the Frequency Chart’s inclusion of published discounts, among other inaccuracies. See id. ¶¶ 108–12.
A second chart purported to set forth the types of reasons for Symantec’s non-published discounts and the frequency of each type (“Reason Code Chart”). See id. ¶ 64.b. According to the Reason Code Chart, a sizeable plurality (47%) of non-standard discounts resulted from proration of service agreements and adjustments to enterprise license agreements, and Symantec offered non-standard discounts for “other” reasons not specified in the chart relatively infrequently—only 7% of the time. See id. ¶¶ 67, 68; see also CSPs, Def.’s Attach. A. A third chart purported to report the level of management approval required at various discount magnitudes (“Management Approval Chart”). Omnibus Compl. ¶ 64.c. For instance, according to the Management Approval Chart, all discounts greater than 50% required approval by a Regional Vice President. See id. ¶ 69.
In actuality, however, both the Reason Code Chart and Management Approval Chart were inaccurate. The charts were generated using data from “eSPA”—Symantec’s system for approving non-published discounts. See id. ¶¶ 81, 99. In 2005, however, over 9,000 *5 commercial orders receiving non-published discounts were not processed through the eSPA system. See id. ¶ 99. Accordingly, neither the Reason Code Chart nor Management Approval Chart accounted for these orders. Symantec knew at the time that eSPA was an ineffective system for monitoring discounts. See id. ¶¶ 100, 104–07.
Question 4(b) asked whether “any deviations” from Symantec’s disclosed policies and practices “ever result in better discounts (lower prices) or concessions than indicated.” Id. ¶ 59; CSPs, Def.’s Attach. A. Symantec responded “NO.” Id. The February 2006 offer containing the CSPs was signed by Symantec’s Senior Director of Public Sector Business Operations Kim Bradbury. Omnibus Compl. ¶ 56.
During the subsequent MAS contract negotiation, Bradbury submitted various materials to GSA contracting officer Gwen Dixon elaborating on the pricing offered by Symantec. In October 2006, Bradbury emailed Dixon a presentation purporting to give “an overview of new discounting policies and procedures for all products sold by Symantec Corporation” (“October 2006 Presentation”). Id. ¶ 72. The October 2006 Presentation mentioned five buying programs—(a) Express, (b) Government, (c) Academic, (d) Rewards, and (e) Enterprise Options—along with the requirements for purchasing at different pricing levels or “bands” within each program. Id. ¶¶ 73–75. According to the October 2006 Presentation, in order to obtain Rewards program pricing, customers had to accumulate points based on the volume of their purchases and were required to make a minimum initial purchase amounting to 6,000 Compl. ¶ 91. To the extent that the services chart is relevant to the issues addressed in this Memorandum Opinion, the Court herein refers collectively to both charts as the “Management Approval Chart.” Question 4(b) reads in full: “Do any deviations from your written policies or standard
commercial sales practices disclosed in the above chart ever result in better discounts (lower prices) or concession than indicated? YES ___ NO ___. If YES, explain deviations in accordance with the instructions at Figure 515.4-2, which is provided in this solicitation for your convenience.” Omnibus Compl. ¶ 59; CSPs, Def.’s Attach. A.
points. See id. ¶¶ 78, 79. The points, moreover, expired after two years. See id. ¶ 80. Bradbury also provided Dixon with documents stating that Symantec’s “Government buying program” enjoyed a discount of 0% to 16% off of “Commercial MSRP.” Id. ¶ 87. [5] Lastly, Bradbury averred that “[a]ny deviations from published discounts require management approval,” and that “[d]eviations must be documented and approved in accordance with . . . guidelines,” such as meeting competition and market segment penetration. Id. ¶ 90.
These disclosures were allegedly false or incomplete. First, the “Commercial MSRP” that Symantec used as a baseline for communicating the offered discounts was derived solely from the Express program pricelist and did not reflect prices for all of Symantec’s commercial customers. See id. ¶ 88. Symantec further failed to disclose to the GSA that pricing under the Rewards buying program was better than that offered through the Express, Government, and Academic programs. See id. ¶¶ 76–77, 85, 115. Symantec also did not explain how customers accumulated points, or how easily commercial customers could qualify for Rewards pricing by earning at worst one point for every five dollars spent. See id. ¶ 116. Symantec did not disclose documented exceptions to the Rewards program rules—the minimum initial purchase requirement, points needed to enjoy better pricing bands, and the two-year validity period for points. See id. ¶ 118. Lastly, Symantec failed to disclose any information about its rebate programs. See id. ¶¶ 62, 77, 123. Symantec had contemporaneous knowledge of all of these inaccuracies. See id. ¶¶ 119–26.
On January 25, 2007, Symantec sent Dixon its Final Proposal Revision for the Contract. See id. ¶ 93. [6] Symantec stated therein that “all commercial business practices have been fully *7 disclosed and are current, accurate and complete as of the conclusion of the negotiation,” and certified “that the discounts, pricing and/or rates given to the government are either equal to and/or greater than what is granted to any commercial and/or Government customer under similar terms and conditions.” Id. ¶ 94. Symantec also proposed that the GSA receive these discounts off of published pricelists: (i) for hardware appliance, enterprise availability, backup executive, and security products and services, Symantec offered the GSA pricing at between 5% and 35% off of Government End User MSRP; and (ii) for training, professional, managed security, and technical support services, Symantec offered the GSA pricing at between 5% and 10% off of “Commercial MSRP.” Id. ¶ 95. That same day, the GSA accepted Symantec’s offer as revised by the Final Proposal Revision, thereby executing the Contract. See id. ¶ 96.
Incorporated into the Contract is a standard mechanism known as the “Price Reductions Clause,” which helps ensure that the GSA continues to receive favorable pricing and terms during the performance of an MAS contract. The Clause provides:
(a) Before award of a contract, the Contracting Officer and the Offeror will agree upon (1) the customer (or category of customers) which will be the basis of award, and (2) the Government’s price or discount relationship to the identified customer (or category of customers). This relationship shall be maintained through out the contract period. Any change in the Contractor’s commercial pricing or discount arrangement applicable to the identified customer (or category of customers) which disturbs this relationship shall constitute a price reduction.
(b) During the contract period, the Contractor shall report to the Contracting Officer all price reductions to the customer (or category of customers) that was the basis of award. The Contractor’s report shall include an explanation of the conditions under which the reductions were made.
actual document, attached as Exhibit 18 to the United States’ Motion for Partial Summary Judgment. Final Proposal Revision, U.S. Ex. 18, ECF No. 55-19.
(c) (1) A price reduction shall apply to purchases under this contract if, after the date negotiations conclude, the Contractor— (i) Revises the commercial catalog, pricelist, schedule or other document upon which contract award was predicated to reduce prices;
(ii) Grants more favorable discounts or terms and conditions than those contained in the commercial catalog, pricelist, schedule or other documents upon which contract award was predicated; or (iii) Grants special discounts to the customer (or category of customers) that formed the basis of award, and the change disturbs the price/discount relationship of the Government to the customer (or category of customers) that was the basis of award.
(2) The Contractor shall offer the price reduction to the Government with the same effective date, and for the same time period, as extended to the commercial customer (or category of customers)
48 C.F.R. § 552.238–75(a)–(c); see also Omnibus Compl. ¶¶ 48–52. Additionally, the Price Reduction Clause requires contractors to notify the Government of any price reduction “as soon as possible, but not later than 15 calendar days after its effective date,” 48 C.F.R. § 552.238– 75(f), and to modify the contract “to reflect any price reduction which becomes applicable,” id. § 552.238–75(g). In accordance with the Price Reduction Clause, and by the terms of the Final Proposal Revision, Symantec and the GSA agreed that the Contract’s “basis of award” would be Symantec’s “commercial class of customers.” Omnibus Compl. ¶¶ 127–28.
B. Performance of the Contract
The Contract was in effect from January 2007 through September 2012. See id. ¶ 5. During the life of the Contract, Symantec made numerous claims for payment under the Contract or derivative agreements. See id. ¶ 134.
Meanwhile, Symantec extended more favorable pricing to numerous similarly situated commercial customers. This better pricing resulted from non-published discounts, see id. ¶ 135, *9 the Rewards buying program, see id. ¶ 144, exceptions and modifications to Express and Rewards buying program terms, see id. ¶¶ 146–57, and rebates, see id. ¶¶ 158–60. Based on the volume of purchases made, the Government would have qualified for the best pricing under the Rewards program within days of entering into the Contract. See id. ¶¶ 140–43. Symantec neither informed the GSA of the better pricing offered to its commercial customers nor adjusted the Government’s pricing under the Contract to match discounts enjoyed by those commercial customers. See id. ¶¶ 133, 135, 145, 157, 160. Lastly, Symantec’s discounting practices during the life of the Contract departed significantly from the Frequency Chart’s representation. See id. ¶¶ 137–39.
Rather than disclose any of these circumstances to the GSA, Symantec, in the course of requesting modifications to the Contract, repeatedly certified to the GSA that its previously disclosed commercial sales practices “ha[d] not changed.” Id. ¶¶ 182–83. While making these certifications, Symantec’s management knew that Symantec lacked systems for maintaining the relationship between the GSA’s and commercial pricing, that Symantec’s discounting programs were in a state of disarray, that commercial customers were in fact receiving better pricing than Symantec, and that sales representatives received no training on the Contract’s requirements. See id. ¶¶ 161–80, 185. Symantec’s false and inaccurate initial disclosures, violations of the Price Reduction Clause, and certifications that its initial disclosures remained unchanged caused the Government to overpay for Symantec products by millions of dollars on sales directly made by Symantec under the Contract. See id. ¶¶ 186–87.
Additionally, Symantec authorized the GSA and certain independent resellers to use its CSPs and other disclosures in negotiating their own MAS contracts for the sale of Symantec products. See id. ¶¶ 189–96. The resellers subsequently made numerous inflated claims for *10 payment under those MAS contracts. See id. ¶¶ 195–96. Accordingly, Symantec caused the Government to overpay by millions of dollars for Symantec products purchased from the resellers. See id. ¶ 197.
C. State Contracts
1. California To expedite state agencies’ procurement, the California Department of General Services (“DGS”) solicits, negotiates, and awards Leveraged Procurement Agreements (“LPAs”). See id. ¶ 203. Two types of LPAs govern procurement of information technology products and services—(1) California Multiple Award Schedule (“CMAS”) contracts and (2) Software License Program (“SLP”) contracts. Id. ¶ 205. The pricing and terms of CMAS and SLP contracts are not usually negotiated or solicited competitively by California; instead, they are generally based upon previously awarded federal GSA MAS contracts, though agencies may attempt to negotiate better pricing and terms. Id. ¶¶ 207–08, 214–17.
Beginning as early as March 2009, Symantec authorized certain independent resellers to respond to a CMAS solicitation by offering Symantec products covered by the GSA Contract. See id. ¶ 220. Similarly, in as early as December 2009, Symantec submitted an SLP Letter of Offer to DGS to supply Symantec products, through certain resellers, at discounts mirroring those enjoyed by the GSA under the GSA Contract. See id. ¶ 223. Specifically, the SLP Letter of Offer states that, subject to certain conditions, Symantec “will extend to the Authorized Resellers the discount levels identified in Exhibit B,” which lists discounts ranging from 5% to 35%. SLP Letter of Offer, Def.’s Attach. D, ECF No. 46-4. The Letter also states that “[t]he State shall be responsible for independently negotiating the final purchase price and payment terms with its Authorized Resellers.” Id. Ultimately, DGS awarded CMAS and SLP contracts to *11 numerous resellers. Omnibus Compl. ¶¶ 221, 224. Those resellers, in turn, sold Symantec products to various California agencies. See id. ¶¶ 226–37.
2. Florida
In April 2006, the Division of State Purchasing of Florida’s Department of Management Services issued a purchasing memorandum authorizing state agencies to procure products and services under the GSA’s “Schedule 70,” which covers information technology software. See id. ¶ 241; Florida State Purchasing Mem. No. 2 (2005–06), Def.’s Attach. E, ECF No. 46-5. Subsequently, Florida made purchases of Symantec products, and at least into 2011, Symantec failed to disclose the fact that it offered larger discounts to commercial customers than it did for orders placed by Florida. Omnibus Compl. ¶¶ 241–42, 322. Symantec also used or allowed to be used certain records or statements in connection with claims presented to Florida— including its initial disclosures to the GSA, applications to modify the Contract with the GSA, and certain “bills and GSA pricing information.” Id. ¶ 325.
3. New York
In November 2000, Veritas Software, which Symantec acquired between 2005 and 2006, executed a contract with New York for the sale of software licenses and services (“New York Contract”). See id. ¶¶ 54, 243. The New York Contract based its pricing on Veritas’s, and later Symantec’s, “U.S. commercial price lists,” and extended to New York a 22.5% discount on software and a 5.5% discount on related services. See id. ¶ 243. The New York Contract also contained a price reduction clause that required Veritas, and later Symantec, to match price reductions extended to “its customers generally or to similarly situated government customers” and special offers or promotions “generally offer[ed] . . . to other customers . . . for a similar quantity.” Id. In 2006, Veritas assigned the New York Contract to Symantec, which certified *12 that it would maintain the pricing terms. See id. ¶ 244. During the life of the New York Contract, which expired in November 2010, Veritas and Symantec offered to similarly situated commercial customers more favorable pricing than that enjoyed by New York. See id. ¶¶ 245– 47.
D. Procedural History
Lori Morsell has been a Symantec employee since March 2011. See id. ¶ 24. After joining the company, she managed the GSA Contract and relations with business partners that sold Symantec products under their own MAS contracts. Id. In this capacity, she became aware of the above-described conduct and attempted unsuccessfully to change Symantec’s practices. See id. ¶¶ 172, 174–75.
In May 2012, Morsell, as Relator on behalf of the United States, filed her initial complaint against Symantec. See generally Compl., ECF No. 1. Subsequently, the United States and the States of California and Florida elected to intervene. See ECF Nos. 21, 28, 29. Although the State of New York declined to intervene, see ECF No. 27, Relator elected to proceed on its behalf, see ECF No. 40; see also 13 N.Y.C.R.R. § 400.4(c)(1). In October 2014, the United States, California, Florida, and Relator on behalf of New York filed their joint Omnibus Complaint, which superseded all previous complaints. Omnibus Compl. 1.
In the Omnibus Complaint, the United States brings several claims against Symantec under the federal False Claims Act, 31 U.S.C. §§ 3729 et seq. (“FCA”). Count I alleges that Symantec knowingly presented false claims, in violation of § 3729(a)(1)(A). Omnibus Compl. ¶¶ 248–55. Count II alleges that Symantec knowingly made false statements material to its false claims, in violation of § 3729(a)(1)(B). See id. ¶¶ 256–62. In Count III, the United States contends that Symantec caused certain independent resellers to present false claims, in *13 violation of § 3729(a)(1)(A). See id. ¶¶ 263–71. Count IV alleges that Symantec caused independent resellers to make false statements material to false claims, in violation of § 3729(a)(1)(B). See id. ¶¶ 272–79. Lastly, Count V alleges that Symantec concealed its obligations to the United States, in violation of § 3729(a)(1)(G). See id. ¶¶ 280–85. Additionally, the United States asserts against Symantec a series of common-law claims— negligent misrepresentation, id. ¶¶ 286–91 (Count VI), breach of contract, id. ¶¶ 292–97 (Count VII), unjust enrichment, id. ¶¶ 298–300 (Count VIII), and payment by mistake, id. ¶¶ 301–03 (Count IX).
California, Florida, and Relator on behalf of New York each allege that Symantec violated their respective state false claims statutes. See id. ¶¶ 304–39 (Counts X–XVI). By way of relief, the United States, California, Florida, and New York (through Relator) each seek damages, treble damages, and civil penalties under the statutes applicable to their claims. See id. at 77–78. Relator seeks a share of the recoveries of the United States and the States under the respective federal and state statutes. See id. at 78.
Symantec subsequently moved to dismiss the Omnibus Complaint in its entirety. See Mot. Dismiss, ECF No. 46. The United States then moved for partial summary judgment on certain elements of its FCA and contractual claims. U.S. Mot. Partial Summ. J., ECF No. 54. Both motions are now fully briefed.
*14 III. LEGAL STANDARDS
A. Rule 12(b)(6)
The Federal Rules of Civil Procedure require that a complaint contain “a short and plain
statement of the claim” in order to give the defendant fair notice of the claim and the grounds
upon which it rests. Fed. R. Civ. P. 8(a)(2);
accord Erickson v. Pardus
,
Nevertheless, “[t]o survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft
v. Iqbal
,
B. Rule 9(b)
Plaintiffs bringing claims under the FCA must satisfy the additional pleading
requirements of Rule 9(b).
See United States ex rel. Totten v. Bombardier Corp.
,
C. Rule 56
A court may grant summary judgment when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A party moving for summary judgment bears the “initial responsibility” of
demonstrating “the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett
, 477
U.S. 317, 323 (1986);
see also
Fed. R. Civ. P. 56(c). In determining whether a genuine issue
exists, a court must refrain from making credibility determinations or weighing the evidence;
rather, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be
drawn in his favor.”
Anderson v. Liberty Lobby, Inc.
,
IV. SYMANTEC’S MOTION TO DISMISS
In its motion to dismiss, Symantec proffers a range of reasons why the Omnibus Complaint’s allegations are deficient. As to all of the Government’s FCA claims, the Court denies the motion to dismiss. See infra Part IV.A. Because California, Florida, and Relator on behalf of New York have failed to state claims under their respective state statutes, the Court *16 dismisses their claims but grants them leave to amend their allegations. See infra Part IV.B. Lastly, the Court denies the motion to dismiss as to the Government’s negligent misrepresentation, breach of contract, unjust enrichment, and payment by mistake claims. See infra Part IV.C, IV.D.
A. United States’ FCA Claims
In Counts I through V, the United States (the “Government”) asserts several claims
against Symantec under the FCA.
See
Omnibus Compl. ¶¶ 248–85. Originally enacted during
the Civil War to combat unscrupulous government contractors, the FCA enables a
qui tam
plaintiff, known as a Relator, to initiate a civil action on behalf of the United States to recover
monies paid on account of false or fraudulent claims.
See
31 U.S.C. § 3730;
United States v.
Kellogg Brown & Root Servs., Inc.
,
*17 1. Presenting or Causing to Be Presented False Claims (Counts I and III) In Count I, the Government alleges that Symantec knowingly presented false claims for payment under the Contract, in violation of 31 U.S.C. § 3729(a)(1)(A). Omnibus Compl. ¶¶ 248–55. In Count III, the Government contends that Symantec caused its independent resellers to make false claims by allowing the resellers to use the false disclosures that it used in its own negotiations with the GSA, in violation of the same FCA provision. See id. ¶¶ 263–71.
Section 3729(a)(1)(A) creates liability for “any person who . . . knowingly presents, or
causes to be presented, a false or fraudulent claim for payment or approval.” 31 U.S.C.
§ 3729(a)(1)(A). Claims under this FCA provision are known as “presentment” claims.
See
United States ex rel. Tran v. Computer Scis. Corp.
,
*18 As the Court explains below, Count I survives Symantec’s motion to dismiss under either the implied certification or fraudulent inducement theory. See infra Part IV.A.1.a. The Court also denies the motion to dismiss Count III given Symantec’s failure to address two elements of this indirect presentment claim—causation and false claims. See infra Part IV.A.1.b.
a. Presentment Claim (Count I)
Although the motion to dismiss is hardly a model of clarity, to the extent that Symantec seeks dismissal of the presentment claim in Count I under both the implied certification and fraudulent inducement theories, the Court rejects Symantec’s arguments as to both theories.
The implied certification theory proceeds from the premise that a defendant can be liable
under § 3729(a)(1)(A) for presenting a claim for payment that “rests on a false representation of
compliance with an applicable federal statute, federal regulation, or contractual term.”
United
States v. Sci. Applications Int’l Corp.
,
The Government has adequately alleged each element of its presentment claim under the
implied certification theory. The Omnibus Complaint alleges that when making claims for
payment under the Contract, Symantec impliedly certified that its pricing continued to comply
with the Price Reduction Clause.
See id.
¶¶ 250–51;
see also
48 C.F.R. § 552.238–75(a)–(c), (f),
(g). But according to the Omnibus Complaint, these implied certifications were false: Symantec
routinely failed to disclose more favorable pricing extended to similarly situated commercial
customers and to adjust the Government’s pricing accordingly. Omnibus Compl. ¶¶ 135–60.
As for materiality, given that the central goal of the MAS program is allegedly to ensure that the
Government receives a reasonable price for products and services, the Omnibus Complaint
supports a plausible inference that compliance with the Price Reduction Clause by maintaining
the agreed-upon “discount relationship” with commercial customers is “material to the
*20
government’s decision to pay.”
SAIC
,
Under the fraudulent inducement theory, liability attaches under § 3729(a)(1)(A) “for
each claim submitted to the Government under a contract which was procured by fraud, even in
the absence of evidence that the claims were fraudulent in themselves.”
United States ex rel.
*21
Bettis v. Odebrecht Contractors of Cal., Inc.
,
The Court has doubts as to whether the Government can press its presentment claim
under the fraudulent inducement theory given an inconsistency in the way courts have described
what this theory requires. In
Bettis
, the D.C. Circuit explained that the theory applies where a
contract was “procured by fraud,” suggesting a causal link between the defendant’s fraud and the
contract’s formation.
Bettis
,
The Court, however, need not resolve this inconsistency in the fraudulent inducement
theory jurisprudence because Symantec does not invoke the “intent” formulation of that theory—
or any formulation, for that matter. Given that Symantec bears the burden to demonstrate that
the Government has failed to state a claim, its deficient briefing provides a sufficient basis for
*22
denying its motion as to the fraudulent inducement theory.
See Intelsat USA Sales Corp. v. Juch-
Tech, Inc.
,
For the foregoing reasons, the Court denies the motion to dismiss as to Count I under the implied certification and fraudulent inducement theories.
b. Indirect Presentment Claim (Count III)
In Count III, the Government alleges that Symantec caused its resellers to submit false claims by providing the resellers with the “false information Symantec provided GSA during negotiation of the Contract” that in turn inflated pricing for Symantec products under the resellers’ own MAS contracts. See Omnibus Compl. ¶¶ 263–71.
Count III asserts an indirect presentment claim under § 3729(a)(1)(A). The elements of such claims are that: “(1) the defendant . . . caused to be submitted a claim to the government, (2) the claim was false, and (3) the defendant knew the claim was false.” See Tran , 53 F. Supp. 3d at 121–22 (citation and alteration omitted). As with Count I, knowledge is adequately alleged. Omnibus Compl. ¶¶ 268–69. Accordingly, the remaining elements that the Government must plead to support Count III are causation and false claims.
The Court declines to dismiss Count III. First, Symantec’s motion contains no discussion
of whether the Omnibus Complaint sufficiently alleges a causal link between Symantec’s actions
*23
and its reseller’s claims.
See United States v. Toyobo Co.
,
Given Symantec’s deficient briefing, the Court denies the motion as to Count III. 2. Making or Causing Resellers to Make False Statements Material to False Claims (Counts II
and IV)
In Count II, the Government alleges that Symantec knowingly made false records or statements material to false claims, in violation of 31 U.S.C. § 3729(a)(1)(B). See Omnibus Compl. ¶¶ 256–62. In Count IV, the Government alleges that Symantec knowingly caused its resellers to make false records or statements material to false claims, in violation of the same FCA provision. See id. ¶¶ 272–79.
*24
Section 3729(a)(1)(B) establishes liability for any person who “knowingly makes, uses,
or causes to be made or used, a false record or statement material to a false or fraudulent claim.”
31 U.S.C. § 3729(a)(1)(B). To state such a “false statements” claim, “a plaintiff must allege that
(1) the defendant made or used [or caused to be made or used] a ‘record or statement;’ (2) the
record or statement was false; (3) the defendant knew it was false; and (4) the record or
statement was ‘material’ to a false or fraudulent claim.”
United States ex rel. Hood v. Satory
Global, Inc.
,
As amended by FERA, the FCA defines “material” to mean “having a natural tendency to
influence, or be capable of influencing, the payment or receipt of money or property.” 31 U.S.C.
§ 3729(b)(4). The D.C. Circuit has concluded that a causal link between the false statement and
false claim would suffice to satisfy this standard.
See Heath
,
In seeking the dismissal of Counts II and IV, Symantec contends that the Omnibus Complaint fails to allege that the company made or caused its resellers to make any “false” records or statements, that the company acted “knowingly,” and that such statements, even if knowingly false, were “material” to a false claim. Mot. Dismiss 14–19; Hood , 946 F. Supp. 2d at 85. At most, in Symantec’s view, the facts alleged represent the sometimes messy “give and take of contract negotiations,” and that “the more plausible interpretation” is that Symantec acted “in good faith.” Mot. Dismiss 16.
For the reasons given below, the Court concludes that the Omnibus Complaint’s allegations are sufficient as to all of the records or statements at issue. First, the Omnibus Complaint sufficiently alleges the falsity of numerous records or statements concerning discounting practices that Symantec used or caused its resellers to use. In response to Question 4(b) of the initial MAS contract solicitation, which asked whether “any deviations” from Symantec’s disclosed policies and practices “ever result in better discounts (lower prices) or concessions than indicated,” Symantec answered “NO,” when in fact deviations did enable *26 Symantec to extend discounts on a more frequent and flexible basis than indicated. Omnibus Compl. ¶ 59; CSPs, Def.’s Attach. A. As for the Frequency Chart, the Government alleges that the inclusion of numerous published discounts understated the frequency of discounts exceeding 40%. Omnibus Compl. ¶¶ 101, 102. Symantec averred in the Final Proposal Revision to the Contract that it had disclosed in up-to-date, accurate form “all commercial business practices” and certified that the Government’s discounts and pricing are “equal to and/or greater than what is granted to any commercial and/or Government customer under similar terms and conditions.” Id. ¶ 94. But these statements were allegedly false because Symantec misrepresented comparative pricing among its standard buying programs, id. ¶¶ 75–77, failed to disclose the full terms of its Rewards buying program (and their generous, flexible exceptions) and rebate policies, see id. ¶¶ 78–80, 83, 92, 115–18, 123–26, and failed to explain that the GSA’s 16% discount off of “Commercial MSRP” was actually a discount off of only the Express program pricelist, see id. ¶ 88. Lastly, the Omnibus Complaint alleges that when requesting various modifications to the Contract, Symantec repeatedly certified to the GSA that its previously disclosed commercial sales practices “ha[d] not changed,” when in fact those initial disclosures were false from the start. Id. ¶¶ 182–83.
The Omnibus Complaint also plausibly alleges falsity as to records or statements concerning Symantec’s discount controls—the Reason Code Chart, the Management Approval Chart, and Symantec’s statement that “[a]ny deviations from published discounts require *27 management approval.” Id. ¶ 90. According to the Omnibus Complaint, although the two charts purported to provide data for all non-published discounts in 2005, they actually reflected only those non-published discounts approved through Symantec’s eSPA system, see id. ¶ 81, and in 2005, over 9,000 commercial orders were not processed through that system, see id. ¶ 99. Additionally, the fact that several large non-published discounts received no management approval at all renders false both the Management Approval Chart and Symantec’s statement that all non-published discounts required such approval. See id. ¶ 90. [18]
Second, the Omnibus Complaint adequately alleges that each of these false records or
statements was “material” to Symantec’s false claims. Because the GSA contracting officer
must reach decisions by “compar[ing] the terms and conditions of the [offeror’s response to the]
MAS solicitation with the terms and conditions of agreements with the offeror’s commercial
customers,” 48 C.F.R. § 538.270(c), the records or statements bearing on Symantec’s pricing and
discount practices have the potential to impact a GSA contracting officer’s ability to “seek to
obtain the offeror’s best price,”
id.
§ 538.270(a);
see also Shemesh I
,
Likewise, the Omnibus Complaint sufficiently alleges that the inaccuracies in the records
or statements concerning Symantec’s discount controls were “material” to false claims. To be
sure, as Symantec emphasizes, the Government does not allege that discount controls were
expressly required by the Contract or applicable regulations, or that the GSA inquired into the
robustness of such systems. But the Omnibus Complaint does allege that the Price Reduction
Clause obligated Symantec to monitor its discounting practices closely. Omnibus Compl. ¶¶
48–52. Given that the Government plainly would be reluctant to contract with a party unable to
comply with contractual terms, the Omnibus Complaint permits a plausible inference that the
inaccurate representations concerning Symantec’s discount controls could have “a natural
tendency to influence, or be capable of influencing” the GSA’s decision. 31 U.S.C. §
3729(b)(4);
cf. SAIC
,
Because the Omnibus Complaint adequately alleges that Symantec knowingly used or caused to be used records or statements that were false and material to false claims, the Court denies the motion to dismiss Counts II and IV. [21]
3. Concealing Obligations (Count V)
Count V alleges that Symantec concealed its obligations to the United States, in violation of 31 U.S.C. § 3729(a)(1)(G). Omnibus Compl. ¶¶ 280–85.
Section 3729(a)(1)(G) establishes a cause of action for “reverse” false claims, creating
liability for any person who “knowingly conceals or knowingly and improperly avoids or
decreases an obligation to pay or transmit money or property to the Government.” 31 U.S.C.
§ 3729(a)(1)(G);
see also Si v. Laogai Research Found.
,
The Government has plausibly alleged liability for a “reverse” false claim, on the basis that Symantec knowingly failed to adjust the Contract’s pricing terms as required by the Price Reduction Clause. The Complaint alleges that internal audits in 2010 and 2011 put Symantec executives on notice that the company’s undisciplined discounting practices could have led to violations of its Price Reduction Clause commitments. Omnibus Compl. ¶¶ 165, 281. Nonetheless, Symantec allegedly concealed this knowledge and shirked its contractual duties to disclose violations and to adjust the Government’s pricing upon any triggering price reduction. See id. ¶¶ 282–83; see also 48 C.F.R. § 552.238–75(a)–(c). In sum, the Omnibus Complaint adequately alleges that Symantec “knowingly conceal[ed] or knowingly and improperly avoid[ed]” an “obligation to pay or transmit money” to the Government “arising from an express *30 . . . contractual . . . relationship, . . . or from the retention of any overpayment.” 31 U.S.C. §§ 3729(a)(1)(G), 3729(b)(3).
Accordingly, the Court denies Symantec’s motion to dismiss Count V.
B. State-Law Claims
In Counts X through XVI, California, Florida, and Relator on behalf of New York each allege that Symantec violated their respective state false claims statutes. See Omnibus Compl. ¶¶ 304–39. Symantec has moved to dismiss all of these claims. Mot. Dismiss 39–43.
The Court concludes that California, Florida, and Relator have failed to state any claims. These plaintiffs each imply in cursory fashion that Symantec’s alleged fraud against them is a consequence of the company’s fraud against the GSA without sufficient factual allegations that support such a connection. Accordingly, the Court grants the motion to dismiss all of the state- law claims.
The Court also, however,
sua sponte
grants California, Florida, and Relator leave to
amend their respective portions of the Omnibus Complaint.
Cf. Jones v. Horne
,
1. California
In Count X, California asserts that Symantec knowingly caused its independent resellers to make false claims under CMAS and SLP contracts by providing false information that it knew the resellers and DGS would use in negotiating the CMAS and SLP contracts, in violation of the California False Claims Act (“CFCA”), Cal. Gov’t Code § 12651(a)(1). Omnibus Compl. ¶¶ 304–12. Based on the same facts, in Count XI, California alleges that Symantec knowingly caused its resellers to use false statements material to their false claims under CMAS and SLP contracts, in violation of the CFCA, Cal. Gov’t Code § 12651(a)(2). See id. ¶¶ 313–20.
The CFCA creates liability for “[a]ny person who . . . (1) [k]nowingly presents or causes
to be presented a false or fraudulent claim for payment or approval . . . [or] (2) [k]nowingly
makes, uses, or causes to be made or used a false record or statement material to a false or
fraudulent claim.” Cal. Gov’t Code § 12651(a)(1), (2). Because the CFCA was patterned after
the federal FCA, federal decisions are “persuasive authority” in adjudicating CFCA claims.
See
United States v. Shasta Servs., Inc.
,
With respect to both the CMAS and SLP contracts, California has failed to state either a
presentment or false statements claim. As to the presentment claim, California alleges only that
Symantec authorized its resellers to respond to CMAS solicitations and that the CMAS contracts
ultimately incorporated the pricing and terms of the GSA Contract. Omnibus Compl.
¶¶ 220, 222. Similarly, with respect to the SLP contracts, the Omnibus Complaint alleges that
Symantec submitted an SLP Letter of Offer to DGS to supply Symantec products through its
resellers at discounts mirroring those enjoyed by the GSA under the GSA Contract and that the
resellers ultimately sold Symantec products to state agencies under SLP contracts with the same
pricing and terms as the GSA Contract.
See id.
¶¶ 223–37. Lacking, however, is any allegation
*32
that Symantec had the requisite
scienter
—that it “knowingly” caused its resellers to present false
claims. Cal. Gov’t Code § 12651(a)(1). Indeed, there is no allegation that Symantec knew the
precise pricing and terms that its resellers would offer in response to the CMAS or SLP
solicitations or knew that it was causing the resellers to submit “false” claims (under any theory
of falsity). Mot. Dismiss 39–40;
cf. Tran
,
Accordingly, the Court dismisses Counts X and XI of the Omnibus Complaint as to both the CMAS and SLP contracts.
2. Florida
In Count XII, Florida asserts that Symantec presented the state with false claims, in violation of the Florida False Claims Act, Fla. Stat. § 68.082(2)(a) (“FFCA”). Omnibus Compl. ¶¶ 321–23. In Count XIII, Florida alleges that Symantec made or used, or caused to be made or used, false records or statements material to false claims, in violation of the FFCA, Fla. Stat. § 68.082(2)(b). See id. ¶¶ 324–26. The Court concludes that Florida’s allegations do not state any claims under the FFCA.
The FFCA creates liability for “[a]ny person who . . . (a) [k]nowingly presents or causes
to be presented a false or fraudulent claim for payment or approval . . . [or] (b) [k]nowingly
makes, uses, or causes to be made or used a false record or statement material to a false or
fraudulent claim.” Fla. Stat. § 68.082(2)(a), (b). The definitions of “knowingly” and “material”
are consistent with those of the federal FCA,
see id.
§ 68.082(1)(c), (d), and the standards for
FFCA liability mirror those under the federal FCA,
see United States ex rel. Schubert v. All
Children’s Health Sys., Inc.
, No. 8:11-CV-01687-T-27,
The Court concludes that Florida’s FFCA claims must be dismissed. Florida’s claims rest on the purchasing memorandum issued by a state agency in 2006. Florida State Purchasing Mem. No. 2 (2005–06), Def.’s Attach. E. But as Symantec explains, this internal memorandum does not mention Symantec or establish that any “legal obligation” between Florida and Symantec existed. Mot. Dismiss 42. Nor is the conclusory allegation that Symantec submitted “bills and GSA pricing information” sufficient. Omnibus Compl. ¶ 325. At bottom, Florida has failed to allege the existence of any “claims”—let alone “false claims.” And without alleged false claims, Florida cannot maintain presentment or false statements claims under the FFCA.
Because Florida has failed to plead plausible claims under the FFCA, the Court dismisses Counts XII and XIII of the Omnibus Complaint.
3. New York
Relator on behalf of New York asserts in Counts XIV and XV that Symantec presented false claims under various contracts, see Omnibus Compl. ¶¶ 327–35, and in Count XVI that Symantec made and used, or caused to be made and used, false records and statements material *34 to false claims, all in violation of the New York False Claims Act, N.Y. St. Fin. Law § 189(1)(a), (b) (“NYFCA”), see id. ¶¶ 336–39.
The NYFCA establishes penalties for “any person who . . . (a) knowingly presents, or
causes to be presented a false or fraudulent claim for payment or approval . . . [or] (b)
knowingly makes, uses, or causes to be made or used, a false record or statement material to a
false or fraudulent claim.” N.Y. St. Fin. Law § 189(1)(a), (b). “The NYFCA follows the federal
[FCA] and therefore it is appropriate to look toward federal law when interpreting the New York
act.”
State of New York ex rel. Seiden v. Utica First Ins. Co.
,
The Court concludes that New York has not plausibly pleaded falsity of any claims—
whether facial or legal.
See SAIC
,
Because Relator on behalf of New York has failed to plead plausible presentment or false statements claims under the NYFCA, the Court dismisses Counts XIV, XV, and XVI of the Omnibus Complaint.
C. United States’ Negligent Misrepresentation and Breach of Contract Claims In Counts VI and VII, the Government asserts against Symantec common-law negligent misrepresentation and breach of contract claims, respectively. See Omnibus Compl. ¶¶ 286–97. In its motion to dismiss, Symantec contends that this Court lacks jurisdiction to hear these claims. Mot. Dismiss 43.
The Court readily concludes that dismissal of these claims would be improper at this
juncture. In its motion to dismiss, Symantec first contends that the Contract Disputes Act, 41
U.S.C. § 7101
et seq.
, provides the exclusive remedy for claims arising from government
contracts. Mot. Dismiss 43. Symantec then candidly concedes that actions “involving
fraud” are excepted from the Contract Disputes Act’s exclusivity before going on to argue that
dismissal of Counts VI and VII is still proper because the Government has failed to allege
plausible claims under the FCA.
See id.
(citing 41 U.S.C. § 7103(a)(4)(B));
see also United
States v. First Choice Armor & Equip.
,
D. United States’ Unjust Enrichment and Payment By Mistake Claims In Count VIII, the Government alleges that Symantec was unjustly enriched “[b]y directly or indirectly obtaining Government funds to which it was not entitled.” Omnibus Compl. ¶ 300. Similarly, in Count IX, the Government claims that Symantec received mistaken payments for its products, having led the Government to believe that its disclosures were accurate and that it was complying with the Price Reduction Clause. See id. ¶¶ 301–03. In its motion to dismiss, Symantec contends that both claims are foreclosed by the Government’s allegation of the Contract’s existence. Mot. Dismiss 44–45.
As a general rule, a valid contract’s existence precludes a plaintiff from asserting unjust
enrichment and payment by mistake claims, which are based on quasi-contract theories.
See
First Choice Armor & Equip.
,
The Court denies the motion as to the unjust enrichment and payment by mistake claims
insofar as those claims are based on payments “directly” paid to Symantec under the Contract.
*37
Omnibus Compl. ¶ 300. To be sure, throughout the Omnibus Complaint, the Government
alleges that the Contract was valid.
See id.
¶¶ 5, 96, 127–88. But in Counts VIII and IX, the
Government does not squarely allege such validity, instead alleging that Symantec “obtain[ed]
Government funds to which it was not entitled” and “caused the United States to make payments
for Symantec products based upon . . . mistaken beliefs” concerning Symantec’s disclosures and
contractual compliance.
Id.
¶¶ 300, 302. Additionally, Symantec’s argument that the Contract
was not validly formed (in opposition to the Government’s motion for partial summary
judgment) makes the Government’s alternative quasi-contract claims all the more reasonable.
See Purcell
,
In addition to the Government’s direct purchases from Symantec, the Omnibus
Complaint also alleges that the Government purchased Symantec products through independent
resellers at prices inflated by Symantec’s false disclosures. Omnibus Compl. ¶¶ 189, 197.
These indirect reseller purchases also underlie the Government’s unjust enrichment and payment
by mistake claims.
See id.
¶ 300 (expressly referencing “indirec[t]” payments to Symantec), ¶
302 (“Symantec caused the United States to make payments for Symantec products . . . .”).
Moreover, the Omnibus Complaint does not allege the existence of any contract between the
Government and Symantec governing these indirect purchases. Accordingly, the Court will deny
the motion to dismiss the Government’s quasi-contract claims as to the purchases of Symantec
products through independent resellers.
See First Choice Armor & Equip.
,
Accordingly, with respect to Symantec’s motion to dismiss the unjust enrichment and payment by mistake claims in Counts VIII and IX, the Court denies the motion both as to the Government’s direct purchases from Symantec under the (allegedly invalid) Contract and as to the Government’s indirect purchases through independent resellers.
V. THE UNITED STATES’ MOTION FOR PARTIAL SUMMARY JUDGMENT The Government has moved for partial summary judgment on certain issues in an effort to streamline future proceedings. U.S. Mot. Partial Summ. J. 1, ECF No. 54; see also United States ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester Cnty., N.Y. , 668 F. Supp. 2d 548, 570–71 (S.D.N.Y. 2009) (granting partial summary judgment as to certain elements of FCA claim). Specifically, the Government seeks summary judgment on its positions that the Contract was a valid, enforceable agreement; that Symantec’s CSPs and other disclosures were false and breached the Contract in several respects; that Symantec made false statements to the GSA when it directed the GSA to use its CSPs and disclosures in negotiations with resellers; that Symantec breached the Price Reduction Clause; and that Symantec’s periodic *39 certifications that the CSPs and disclosures remained accurate were false. See U.S. Mot. Partial Summ. J. 1–2. [24]
For the reasons given below, the Court denies the United States’ motion for partial summary judgment as to all issues.
A. Validity of the Contract
The Government seeks judgment on the issue that the Contract is a “valid and enforceable written agreement.” U.S. Mot. Partial Summ. J. 1. According to the Government, the Contract’s validity is relevant to many aspects of its FCA claims as well as its breach of contract claim. See U.S. Mem. Supp. Mot. Partial Summ. J. 37. [25]
“The party alleging a contract must show a mutual intent to contract including an offer,
an acceptance, and consideration passing between the parties.”
Thermalon Indus., Ltd. v. United
States
,
*40
The Government has not carried its initial burden at summary judgment to show the
absence of a genuine issue of material fact.
See Celotex
,
Because the Government has failed to demonstrate that the undisputed record evidence shows that it is entitled to summary judgment on the issue of the Contract’s formation, the Court denies the Government’s motion as to this issue.
B. Falsity of CSPs and Other Disclosures
The Government moves for partial summary judgment on the issue that Symantec’s CSPs and other disclosures were false in three respects—the Frequency Chart was inaccurate, Symantec falsely stated that all non-published discounts must be approved through eSPA, and applying D.C. law. Def.’s Mem. Opp’n 20 (citing RDP Techs., Inc. v. Cambi AS , 800 F. Supp. 2d 127, 140 (2011)). The Court need not decide today whether federal or D.C. law governs: Even if the Government’s position were correct, it has still failed to carry its initial summary judgment burden. Because the Court concludes that the Government has failed to carry its initial
summary judgment burden on the formation issue, it expresses no opinion on the Government’s additional submission that because the Contract is valid, then there can also be no dispute as to the meaning of two of Symantec’s obligations under the Contract—the obligations to disclose truthful CSPs and to report any single discounts larger than those enjoyed by the GSA or deviations from the Frequency Chart. U.S. Mem. Supp. Mot. Partial Summ. J. 38–39. Moreover, the Court notes that a decision on whether a valid and enforceable written agreement exists would not result in the streamlining of future proceedings. Accordingly, no renewed motion for summary judgment on this issue will be entertained by the Court until the conclusion of discovery.
Symantec failed to disclose back-end reseller rebate programs notwithstanding its certification that its disclosures were complete. See U.S. Mot. Partial Summ. J. 1–2. Findings on these issues, the Government contends, will resolve, in part, the falsity elements of its false statements and negligent misrepresentation claims. See U.S. Mem. Supp. Mot. Partial Summ. J. 39. [28]
For the reasons given below, the Court denies the Government’s motion for partial summary judgment as to all issues related to the falsity of the CSPs and other disclosures.
1. Frequency Chart
The Government seeks judgment as to the falsity of the Frequency Chart submitted by
Symantec as part of its CSPs.
See
U.S. Mot. Partial Summ. J. 1. The Government proffers
evidence that purports to show that, in 2005, over 20% of non-standard discounts extended by
Symantec—not less than 3%, as represented in the Frequency Chart—exceeded 40% in
magnitude.
See
U.S. Mem. Supp. Mot. Partial Summ. J. 16–18. For the reasons that follow, the
Court concludes that the Government has not carried its initial burden of showing “the absence
of a genuine issue of material fact.”
Celotex
,
In attempting to establish the Frequency Chart’s falsity, the Government relies solely on the declaration of Relator’s counsel Lance Robinson. See U.S. Mem. Supp. Mot. Partial Summ. J. 16–18. [29] In his declaration, Robinson describes the methodology by which he and his *42 colleagues analyzed certain data used by Symantec in generating the Frequency Chart. Using these data, Robinson derived a set of discount distribution figures for 2005 and ultimately concluded that the Frequency Chart falsely overstated the frequency of non-published discounts below 40%.
But this battle over percentages is illustrative of many: The devil is in the denominator. Symantec’s Frequency Chart is based on 129,630 product-specific transactions, whereas Robinson’s version captures only 14,681 transactions—a mere 11% of Symantec’s sample. Compare Bradbury Aff. ¶ 22.h, Def.’s Ex. A, ECF No. 59-2, with Robinson Decl. ¶ 10.g, U.S. Ex. 20, ECF No. 55-21. Of course, a smaller sample size alone would not be fatal for the Government, if the correctness of its smaller sample were factually undisputed.
Rather than show the lack of a genuine dispute of fact about this smaller sample, however, Robinson’s declaration all but creates such a dispute. At the outset, there seems to be no dispute over how non-published discounts are generally defined and calculated (in theory): Non-published discounts are reductions off of Standard Buy Price, which in turn reflects published discounts off of MSRP. Pricing waterfall, Ex. B to McGee Aff., Def.’s Ex. M, ECF No. 59-14; Robinson Decl. ¶¶ 8–10, U.S. Ex. 20. The parties diverge, however, in their calculation of non-published discounts for purposes of this motion. Bradbury calculated such discounts by subtracting from MSRP the final sales prices (found in monthly price lists)—a methodology that Symantec appears to concede wrongly caused its calculated non-published discounts to include published discounts. Bradbury Aff. ¶ 22, Def.’s Ex. A; U.S. Reply 17 Robinson declaration were admissible, the Government has still failed to show the absence of a genuine dispute of material fact. Robinson’s declaration refers to “line items” in Symantec’s sales records. Each line
item represents a specific product purchased as part of a particular order. Here, the Court uses the term “product-specific transaction.”
(citing Def.’s Mem. Opp’n 27–28). Robinson, recognizing that the monthly price lists contained no Standard Buy Prices, opted to begin his analysis by extracting Standard Buy Prices from a table containing records of orders approved through the eSPA system. Robinson Decl. ¶10.b–d, U.S. Ex. 20; id. ¶ 8 (“By comparing Standard Buy Price to the actual selling price . . . , we are able to calculate the true non-published discount—i.e., the discount provided by Symantec to customers above and beyond published discounts . . . .”). But the problem with Robinson’s approach is that many transactions were apparently not processed through the eSPA system (as the Government itself alleges); ultimately, cross-referencing the eSPA data enabled Robinson to retrieve a Standard Buy Price for only 195,617 out of the total 331,562 transactions in Symantec’s 2005 sales records. See id. ¶ 10.d. Put differently, Robinson excluded over 40% of Symantec’s 2005 product-specific transactions at the first step of his analysis for no reason other than the fact that Symantec’s eSPA database did not happen to contain the Standard Buy Price for those transactions. Moreover, the number of transactions excluded by Robinson— 135,945—exceeds the difference between Symantec’s and Robinson’s sample size—114,949. Whether the inclusion of an additional 114,949 transactions in Robinson’s calculations (if Standard Buy Prices for those transactions had been available from another source) would have shown the Frequency Chart to be “true” is anyone’s guess, and on the Government’s motion for partial summary judgment, this Court must draw inferences in Symantec’s favor. The Government’s attempt to demonstrate the Frequency Chart’s falsity is thus flawed from the start.
*44
To be sure, Symantec does not seem to dispute the fact that because it relied on the 2005
monthly price lists, it wrongly calculated the magnitude of non-published discounts based off of
MSRP, instead of Standard Buy Price—a methodology that potentially caused Symantec to
overstate the magnitude of all non-published discounts in the Frequency Chart by the size of any
published discounts. U.S. Reply 17 (“Symantec’s own Opposition confirms that it included
published discounts as well.”). But because the FCA does not penalize mathematical errors, the
Government must do more than poke holes in Symantec’s
calculations
.
See id.
(“A correct
calculation
would necessarily be different than the erroneous one used by Symantec.” (emphasis
added)). Rather, it must show a lack of genuine dispute as to the falsity of the resulting
record
or statement
—
i.e.
, the Frequency Chart itself. 31 U.S.C. § 3729(a)(1)(B). Here, the
Government fails to proffer any evidence showing that the use of MSRP necessarily rendered the
Frequency Chart false: That is, even if all of the discounts in the Frequency Chart were indeed
inflated by the amount of Symantec’s published discounts, the discount distribution presented
therein could still be true, because no record evidence establishes the magnitude of the
erroneously included published discounts. Given that a reasonable jury could still find the
entirely misses the point: Symantec must show that the Government’s method is factually
wrong
—and thus an inaccurate benchmark for assessing the Frequency Chart’s truth or falsity—
not merely different.
Id.
But because the Government has not discharged its initial burden to
show the absence of a dispute of fact, the Court will conclude that a genuine dispute of material
fact remains.
See Celotex
,
At bottom, both the Government’s and Symantec’s Frequency Chart analyses suffer from
significant shortcomings. Even if the Government’s approach were superior to Symantec’s in
certain respects and even if data limitations do not enable a perfect analysis, at summary
judgment, in particular prior to any discovery being had, the Government cannot prevail by
showing merely that it opted for a better, but still materially limited, approach. Because the
Government moves for summary judgment as the party that would bear the burden of proof at
trial on the
falsity
of the Frequency Chart, it must introduce evidence that precludes a contrary
finding by a reasonable jury.
Cf. Celotex
,
Frequency Chart in fact exceeded 10%. Certain record evidence suggests that Symantec actually extended published discounts upwards of 30% to certain resellers, see Morsell letter of Sept. 8, 2011, U.S. Ex. 33b, ECF No. 55-35, but the record does not show that these transactions would not have been excluded from the Frequency Chart for reasons upon which the parties seem to agree ( e.g. , international sales), see Robinson Decl. ¶ 10.f, U.S. Ex. 20; Bradbury Aff. ¶ 22.g, Def.’s Ex. A. Furthermore, even if the Court did not have the above-referenced reservations about
Robinson’s analysis, it would be disinclined to grant summary judgment based on such analysis without giving Symantec the opportunity to take discovery about it and, ultimately, depose the person providing the opinion.
2. Statement Concerning eSPA
The Government also seeks judgment as to the falsity of Symantec’s disclosures insofar as they “inaccurately stated that non-published discounts given by Symantec to commercial customers were approved by management through a tool known as eSPA.” U.S. Mot. Partial Summ. J. 1–2; see also U.S. Mem. Supp. Mot. Partial Summ. J. 40. Again, the Court concludes that the Government is not entitled to summary judgment.
At the outset, the Court construes the Government’s motion as seeking judgment only on the falsity of Symantec’s representation that all non-published discounts must be approved through eSPA, not on the falsity of the Reason Code Chart or Management Approval Chart. To the extent that the Government does seek judgment as to the falsity of the charts, the Court readily denies the motion: The charts do not represent that all discounts were approved through eSPA; indeed, the term “eSPA” appears nowhere in the charts. Additionally, on their face, the charts—which appear under the heading “Non-Published Discounts” and respective sub- headings “Discount Reason Codes” and “Management Discount Approval Levels”—do not purport to represent all of Symantec’s non-published discounts, though they could be interpreted in this way. CSPs, U.S. Ex. 10, ECF No. 55-11.
Turning to the statement at issue, the Court concludes that Symantec has created a genuine dispute of material fact as to whether the company even represented in the first place that all non-published discounts must be approved through eSPA. The representation at issue *47 appears in the below paragraph, part of Bradbury’s October 9, 2006, response to various inquiries from Dixon:
Does Symantec Corporation offer better rates and/or terms and conditions to other customers? If yes, please provide pricing information.
Symantec Response: Information regarding deviations from existing discounting policies was provided in Symantec’s original proposal submission. Any deviations from published discounts require management approval. Deviations must be documented and approved in accordance with the following guidelines: As previously disclosed to GSA as part of Symantec’s established discounting policies, the Worldwide Sales discounting tool referred to as “eSPA” was established to allow Symantec the flexibility to respond to competition . This process provides non-standard competitive pricing to strategic accounts by requiring commitments from the identified account for annual quantity purchases, or to meet one of the following guidelines; which are provided as examples:
1. To meet market competition or displace a named competitor at a customer site;
2. Customers who agree to standardize on Symantec products and services;
3. New market or market segment penetration;
4. Educational, including prime contractors, or [c]haritable organizations or institutes;
5. Introduction of a new product and services through more aggressive discounts and in exchange for press or customer references.
Oct. 9, 2006 Response, U.S. Ex. 16, ECF No. 55-17 (emphasis added). As Symantec explains in opposition, although the explanation quoted above states that all deviations from published discounts “require management approval,” a reasonable juror could conclude that the company did not aver that such approval must happen through the eSPA system, which is described only as a “Worldwide Sales discounting tool” that provides “the flexibility to respond to competition.” Id. Moreover, the mandatory “guidelines” in accordance with which all “[d]eviations must be *48 documented and approved” could be interpreted as referring not to eSPA, but to the five enumerated “guidelines” below the umbrella paragraph. Id. [35]
Given that a dispute of fact exists as to whether Symantec actually represented that all non-published discounts must be approved through eSPA, there is necessarily a dispute of fact as to the falsity of any such representation. Accordingly, the Court denies the Government’s motion for partial summary judgment as to this issue.
3. Disclosure of Rebate Programs
The Government further moves for judgment on the falsity of Symantec’s CSPs and disclosures, on the grounds that Symantec failed to disclose certain back-end reseller rebate programs. U.S. Mot. Partial Summ. J. 2. [36] The Court concludes that Symantec has created a dispute of material fact that precludes summary judgment.
The Court prefaces its analysis by explaining the Government’s theory of falsity as it applies to Symantec’s alleged failure to disclose its back-end reseller rebates. The Government does not allege that this non-disclosure itself was “false.” Rather, the Government claims that Symantec’s omission renders false the company’s other representations about its disclosures’ completeness . For instance, Symantec averred in its Final Proposal Revision that “all commercial business practices have been fully disclosed and are current, accurate and complete as of the conclusion of [the] negotiation.” Final Proposal Revision SYM00396765, Def.’s Ex. G, ECF No. 59-8 (emphasis added); see also U.S. Reply 24 (pointing to this “unequivocal statement *49 made in [Symantec’s] FPR” and arguing that, on account of Symantec’s failure to disclose the back-end rebates, “[t]here exists no genuine issue of material fact that this statement was false and that Symantec’s Periodic Certifications (which verified the continuing veracity of its FPR) were false” (emphasis added)). Accordingly, in order for the Government to obtain summary judgment under its theory of falsity, it must demonstrate the absence of any dispute that a “complete” disclosure necessarily would have included information about the back-end reseller rebates at issue.
The Court concludes that Symantec has created such a dispute by pointing to record
evidence suggesting that back-end reseller rebates did not in fact fall within the scope of its
disclosures or of the parties’ negotiation. Bradbury’s affidavit states that she was told by Dixon
in October 2006 that “GSA does not purchase as a distributor or reseller and that programs or
discounts targeted specifically at distributors or resellers (such as Symantec’s ‘rebate’ programs
used to incentivize Partner sales) were no longer applicable to GSA.” Bradbury Aff. ¶ 37, Def.’s
Ex. A. Similarly, Dixon’s own notes, viewed in the light most favorable to Symantec, indicate
that she understood the relevant comparator customers to be “Commercial End Users” rather
than resellers or distributors. Price Negotiation Memorandum 5, Def.’s Ex. F, ECF No. 59-7. If
reseller back-end rebates were in fact outside the scope of the Contract negotiations, a jury could
find that Symantec’s failure to disclose such rebates did not render false the company’s statement
in its Final Proposal Revision that its disclosures were “current, accurate and complete”—or any
other similar statement claiming that its disclosures were complete. Final Proposal Revision
SYM00396765, Def.’s Ex. G;
cf. Hindo v. Univ. of Health Sciences/The Chicago Med. Sch.
, 65
F.3d 608, 613 (7th Cir. 1995) (explaining, with respect to false claims, that the “claim must be a
lie”);
accord United States ex rel. Bettis v. Odebrecht Contractors of Cal., Inc.
, 297 F. Supp. 2d
*50
272, 277 (D.D.C. 2004),
aff'd
,
Because Symantec has created a dispute of fact as to whether its failure to disclose reseller back-end rebates rendered its CSPs and other disclosures false, the Court denies the Government’s motion for partial summary judgment as to this issue. [37]
C. Violation of Price Reduction Clause
The Government seeks judgment that Symantec violated the Price Reduction Clause by failing to disclose discounts either larger than those extended to the GSA or that departed from the Frequency Chart’s distribution, and to adjust the GSA’s pricing under the Contract accordingly. U.S. Mot. Partial Summ. J. 2. Such a finding, according to the Government, would resolve part of its breach of contract claim. U.S. Mem. Supp. Mot. Partial Summ. J. 41–42. [38]
For the reasons given below, the Court concludes that Symantec has created a genuine dispute of material fact both as to the parties’ contemporaneous understanding of the Price Reduction Clause when the Contract was concluded and as to the extent of Symantec’s compliance with that Clause (even under the Government’s interpretation).
*51
In interpreting a contract, courts must “begin with the plain language” and “give the
words of the agreement their ordinary meaning unless the parties mutually intended and agreed
to an alternative meaning.”
Armour of Am. v. United States
,
Here, based on the incomplete, pre-discovery record before it, the Court concludes that
there is a dispute of material fact as to whether the parties “mutually intended and agreed” to the
Government’s preferred construction of the Price Reduction Clause.
Armour of Am.
, 96 Fed. Cl.
at 737. At the outset, the Court finds that the Price Reduction Clause’s language is ambiguous
because it is “susceptible to more than one reasonable interpretation.”
Id.
The parties have
advanced reasonable interpretations of (at least) two ambiguous terms under the Clause—
“commercial class of customers,” who served as the basis of award, and, relatedly, the “discount
relationship” that Symantec was obligated to maintain with those customers. The Government
reads “commercial class of customers” to mean all parties to which Symantec sells its products
and services including resellers and distributors, and contends that the “discount relationship” is
*52
altered (thereby triggering the Price Reduction Clause) whenever a single customer receives
better pricing than the GSA under similar terms and conditions or when the discount distribution
departs from the Frequency Chart’s representations. U.S. Mem. Supp. Mot. Partial Summ. J.
20–21, 23–26. Symantec maintains that “commercial class of customers” excludes resellers and
distributors, Def.’s Mem. Opp’n 34, and that changes in the “discount relationship” cannot be
effected by any non-published discounts given that Symantec disclosed the existence of certain
such discounts,
see id.
22–23. Because the Clause is ambiguous in these respects, extrinsic
evidence serves to give its terms meaning.
See Armour of Am.
,
Even if the Government were correct that the Price Reduction Clause at least obligated
Symantec to disclose a pattern of discounts that deviated from the Frequency Chart, there
remains a dispute of material fact as to whether Symantec actually failed to do so. In its motion
for partial summary judgment, the Government again relies on Robinson’s declaration. U.S.
Mem. Supp. Mot. Partial Summ. J. 23–24. In relevant part, Robinson explains how he generated
*53
charts purporting to show the frequency of Symantec’s discounts at various magnitudes from
2007 to 2011 and then compared these charts to the Frequency Chart.
See
Robinson Decl. ¶¶
14–18, U.S. Ex. 20. Again, however, the Government fails to show the lack of a dispute of
material fact.
See Celotex
,
Because, based on the current record, there are factual disputes both as to the parties’ contemporaneous understanding of the Price Reduction Clause and as to whether Symantec complied with that Clause (even as the Government would prefer to construe it) at least at this pre-discovery stage of the case, the Court denies the Government’s motion insofar as it seeks judgment that Symantec violated the Clause.
*54 D. Falsity of Certifications and Falsity of Statements Whose Usage Was Authorized by
Symantec
The Government moves for partial summary judgment on two final issues—the falsity of the disclosures that Symantec authorized the GSA to use in negotiations with resellers, and the falsity of Symantec’s certifications that its disclosures remained accurate. See U.S. Mot. Partial Summ. J. 2. According to the Government, the former issue would resolve the “making or using” element and, in part, the falsity element of the Government’s false statement FCA claims based on the reseller contracts, see U.S. Mem. Supp. Mot. Partial Summ. J. 41, while the latter issue would resolve the falsity element of the Government’s false statement claim based on the certifications and its negligent misrepresentation claim, see id. at 42–43.
The parties agree that both of these issues, as presented at this juncture in the Government’s motion, are premised on the falsity of Symantec’s disclosures—the Frequency Chart, its representation about eSPA, and its failure to disclose certain back-end rebates. See U.S. Mem. Supp. Mot. Partial Summ. J. 41–42; Def.’s Mem. Opp’n 34. The Court has already concluded there are genuine disputes of material fact concerning the falsity of these disclosures. See supra Part V.B. Accordingly, the Court denies the Government’s motion for partial summary judgment on the falsity of the disclosures that Symantec authorized the GSA to use in negotiations with resellers, and the falsity of Symantec’s certifications that its disclosures remained accurate.
VI. CONCLUSION
For the foregoing reasons, Symantec’s motion to dismiss (ECF No. 46) is GRANTED IN PART and DENIED IN PART , and the Government’s motion for partial summary judgment *55 (ECF No. 54) is DENIED . An Order consistent with this Memorandum Opinion is separately and contemporaneously issued.
Dated: September 10, 2015 RUDOLPH CONTRERAS
United States District Judge
Notes
[1] Because the majority of the Court’s analysis concerns Symantec’s motion to dismiss,
see infra
Part IV, the Court’s factual background assumes the truth of the well-pleaded factual
allegations in the Omnibus Complaint,
see Ashcroft v. Iqbal
,
[2] Question 3 reads in full: “Based on your written discounting policies (standard commercial sales practices in the event you do not have written discounting policies), are the discounts and any concessions which you offer the Government equal to or better than your best price (discount and concessions in any combination) offered to any customer acquiring the same items regardless of quantity or terms and conditions? YES ___ NO ___.” Omnibus Compl. ¶ 59; CSPs, Def.’s Attach. A.
[3] The Omnibus Complaint also alleges that Symantec submitted a separate chart explaining management approval for non-published discounts for services , similar to the Management Approval Chart, which covered only products and other items. Omnibus
[5] “MSRP” stands for “manufacturer’s suggested retail price.”
[6] The Omnibus Complaint refers to this document as the “Final Proposed Revision.” Omnibus Compl. ¶ 93. The Court uses the title “Final Proposal Revision,” which appears in the
[7] Additionally, after the parties briefed both motions, the United States filed a notice of supplemental authority, which the Court has considered. ECF No. 63.
[8] This Memorandum Opinion’s analysis is governed throughout by the FCA as amended by the Fraud Enforcement and Recovery Act of 2009 (“FERA”). FERA, Pub. L. No. 111– 21, 123 Stat. 1617 (2009). The Government expressly invokes the post-FERA FCA as to Count V, which alleges that Symantec unlawfully concealed its obligations to the Government. See Omnibus Compl. ¶ 67. The Government also asserts that the post-FERA “false statements” provision, codified at 31 U.S.C. § 3729(a)(1)(B), applies retroactively to all conduct in this case, and that for other FCA provisions, FERA did not materially change any element of liability. See id. ¶ 30. For purposes of this motion, the Court assumes that the post-FERA version of the FCA governs all claims in this action because Symantec has not moved to dismiss any claims on the basis that the FERA amendments do not apply. Mot. Dismiss 12, 38 (citing post-FERA FCA).
[9] “Claim” means “any request or demand . . . for money or property” that is presented to an officer or agent of the United States. 31 U.S.C. § 3729(b)(2)(A). Here, the parties do not dispute that the Omnibus Complaint adequately alleges that Symantec submitted numerous “claims” to the Government under the Contract or that Symantec’s resellers did the same under their own contracts. Omnibus Compl. ¶¶ 134, 195–96.
[10] Symantec’s motion cites in passing both the implied certification and fraudulent inducement theories but neglects to analyze either of the two theories with any amount of structure or clarity. Mot. Dismiss 34, 37 (referencing implied certification theory); id. at 4, 14, 19 (referencing fraudulent inducement theory). This deficient briefing alone is grounds for denying Symantec’s motion, though the Court below explains why the Omnibus Complaint’s allegations are sufficient under both theories.
[11] The parties assume, as will this Court, that, at least for purposes of this motion, the
question of whether a contractual or regulatory requirement is “material” to a decision to pay
under the implied certification theory mirrors the inquiry into whether a statement is “material”
to a false claim under § 3729(a)(1)(B).
See SAIC
,
[12] Symantec makes four arguments that seem to address the implied certification theory:
Symantec challenges the Government’s allegations that its certifications of compliance with the
Price Reduction Clause were (1) false and (2) made knowingly; (3) argues that the Omnibus
Complaint does not satisfy the particularity requirement of Rule 9(b); and (4) asserts that liability
is negated by the allegation that the Government was aware of the falsity. The Court rejects all
of these arguments as meritless—whether they pertain to the implied certification theory or any
other FCA claim or theory of liability.
See United States ex rel. Shemesh v. CA, Inc.
, No. 09-cv-
1600,
[13] In reply, Symantec asserts that the fraudulent inducement theory requires “prompt non-
performance” of the contract at issue, and that the Omnibus Complaint contains no such
allegation. Def.’s Reply to U.S. 11;
see also Tran
,
[14] In reply, Symantec contends that the Government has failed to adequately allege
causation under § 3729(a)(1)(A), (B), and (G). Def.’s Reply to U.S. 1, 3, 6. Because new
arguments asserted in reply are waived, the Court declines to consider Symantec’s causation
argument.
See Walker
,
[15] The plaintiff must also allege that the defendant knew that the record or statement was
material
to a false claim.
Cf. SAIC
,
[16] In
Moore
, the D.C. Circuit interpreted “material” under 18 U.S.C. § 1001. In contrast
to the FCA, 18 U.S.C. § 1001 does not expressly define material, but the courts had adopted the
same definition as that codified in the FCA—that “a statement is material if it has a natural
tendency to influence, or is capable of influencing” an agency’s action.
Moore
,
[17] Regarding Question 4(b), Symantec explains that the discounts and concessions “indicated” in the Frequency Chart included discounts ranging up to 100%; by Symantec’s logic, then, it was perfectly truthful to state that deviations from policies never resulted in discounts exceeding 100% . Mot. Dismiss 8. While Symantec’s reading of Question 4(b) may ultimately be accepted by a finder of fact, the Government has advanced a reasonable reading, which suffices on this motion to dismiss. Cf. supra Part IV.A.1.a (finding that Government advanced reasonable reading of Price Reduction Clause).
[18] The Omnibus Complaint’s allegations as to management approval are imprecise. With respect to five discounts not processed through eSPA ranging from 45% to 96% off list price, the Government contends both that Symantec did not “maintai[n] . . . a record of management approval,” Omnibus Compl. ¶ 99, and that those transactions “did not receive management approvals” at all, id. ¶ 100. Under either allegation, the Court’s analysis would be the same.
[19] Given that the Omnibus Complaint adequately alleges each of these regulatory obligations, Symantec’s contention that the Omnibus Complaint “makes no allegations concerning how Ms. Dixon determined fairness to Symantec” is completely unfounded. See Mot. Dismiss 18.
[20] As to Count IV, Symantec does not contend that the Omnibus Complaint fails to allege that any records or statements were material to the resellers ’ false claims. The Court thus has no occasion to consider materiality in this context.
[21] As explained above, because knowledge “may be alleged generally” at this stage in the litigation, Fed. R. Civ. P. 9(b), the Omnibus Complaint’s general allegations of knowledge as to each Count are sufficient, see Omnibus Compl. ¶¶ 260 (Count II), 277 (Count IV). Indeed, the Government has gone beyond what is required of it at this stage, alleging a factual basis for inferring that Symantec executives either had actual knowledge or acted in reckless disregard of the falsity of their statements. See, e.g. , Omnibus Compl. ¶¶ 109–12, 123–26.
[22] Of the state-law plaintiffs, only California mentions the possibility of an amendment, but California does not expressly seek leave to amend. States’ Opp’n 2 n.7.
[23] Although the Government asserts a presentment claim under the fraudulent inducement
theory,
see supra
Part IV.A.1.a, fraudulent inducement generally renders a contract voidable, not
void.
See, e.g.
,
Flynn v. Thibodeaux Masonry, Inc.
,
[24] The Government’s motion for partial summary judgment rests only on “certain theories of falsity” and reserves other falsity arguments for future proceedings. U.S. Mem. Supp. Mot. Partial Summ. J. 2 n.2. For instance, not at issue in the motion for partial summary judgment are the Omnibus Complaint’s allegations that the Frequency Chart, while purporting to reflect all sales made in 2005, was limited to Symantec Security products and services, see Omnibus Compl. ¶ 109, to products that remained on Symantec’s 2006 pricelist, see id. ¶ 110, and primarily to the last three quarters of 2005, see id. ¶ 111. Additionally, the Government does not seek judgment on materiality or knowledge, or that Symantec failed to disclose its Rewards program. U.S. Mem. Supp. Mot. Partial Summ. J. 13 n.6.
[25] For purposes of providing context, the Court here and below sets forth the Government’s explanations of the relevance of the issues on which it seeks judgment. The Court, however, expresses no opinion as to the correctness of those explanations.
[26] The Government contends that federal law “generally” governs disputes arising out of
contracts to which the United States is a party. U.S. Mem. Supp. Mot. Partial Summ. J. 33 n.14
(citing
Clearfield Trust Co. v. United States
,
[28] The Government also asserts that the disclosures’ falsity is relevant to its breach of contract claim. U.S. Mem. Supp. Mot. Partial Summ. J. 39. This assertion is premised on an interpretation of the Contract (specifically, the Final Proposal Revision) that the Court declines to adopt at this stage in the proceedings, as discussed above. See supra note 27.
[29] Symantec contends that the Robinson declaration is inadmissible evidence on the basis that Robinson relies on hearsay and lacks personal knowledge of the content of his declaration. Def.’s Mem. Opp’n 24–26. The Court declines to consider this argument; even if the
[31] Symantec’s critique of Robinson’s analysis consists primarily of vague, conclusory suggestions of inaccuracies. See, e.g. , Def.’s Mem. Opp’n 27 (assailing Relator’s counsel’s declaration as “premised on an inaccurate understanding of the underlying data upon which his conclusions are based”). In particular, Symantec’s contention that the Government relies on “a method [for deriving the Frequency Chart] far different from that employed by Symantec”
[34] Certain language in the motion could suggest that the Government seeks judgment as to the falsity of the Reason Code Chart and Management Approval Chart. See, e.g. , U.S. Mem. Supp. Mot. Partial Summ. J. 40 (arguing that Symantec’s “express representation” was false and explaining it was “facially important to provide GSA comfort that . . . Symantec’s non-standard discounts were controlled, reported, and confined to the remote occasions and specific circumstances disclosed on the Frequency Chart and Reason Code Chart”); id. at 18 (attacking truth of Symantec’s “representations” regarding its discount controls); id. at 11–12 (explaining Reason Code Chart and Management Approval Chart).
[35] In further support of its reading, Symantec cites its draft best and final offer, which contains similar language. Symantec Best and Final Offer Letter SYM00370748, Def.’s Ex. E, ECF No. 59-6.
[36] The Omnibus Complaint repeatedly alleges that Symantec failed to disclose any information about rebates, and that this total omission rendered the disclosures false. See Omnibus Compl. ¶¶ 62, 77, 123, 126. But elsewhere, the Omnibus Complaint alleges that Symantec’s rebate-related disclosures were “inaccurate and incomplete.” Id. ¶¶ 251, 258. The Court’s analysis proceeds under the latter, broader allegation.
[37] Because the Court concludes that Symantec has created a dispute of fact as to whether back-end reseller rebates were relevant at all to its CSPs, the Court has no occasion to consider whether there is a dispute of fact over the nature of certain rebates disclosed by Symantec— i.e. , whether the disclosed rebates were back-end or front-end rebates. See U.S. Reply 23–24.
[38] Summary judgment on a Price Reduction Clause violation would presumably also support the Government’s presentment claim under the implied certification theory. See supra Part IV.A.1.a.
[39] The Government is correct that contract interpretation is a “question of law.” U.S.
Mem. Supp. Mot. Partial Summ. J. 39 (quoting
Greco v. Dep’t of the Army
,
[40] Compare Bradbury email of Jan. 24, 2007 at 8–9, U.S. Ex. 17 (confirming definitions of “Commercial MSRP” and “Government End User Discount Off Commercial MSRP” without limitations related to resellers or disclosed non-published discounts); Bradbury email of Feb. 2, 2006, U.S. Reply Ex. 53, ECF No. 62-3 (“Commercial is defined as any entity other than the Federal Government.”), with Symantec Best and Final Offer Letter SYM00370749, Def.’s Ex. E (listing exclusions from Price Reduction Clause including “[n]on-standard discounts offered to commercial customers”); Bradbury Aff. ¶ 50, Def.’s Ex. A (explaining understanding that under the Price Reduction Clause, Symantec would “retain the commercial flexibility to offer ‘non- standard competitive pricing to strategic accounts’”); Pre-Negotiation Memorandum 9, Def.’s Ex. D, ECF No. 59-5 (indicating that at least certain “Commercial End Users” receive discounts that “equa[l] or excee[d]” those offered to the GSA).
[41] The Government contends that incorporating both published and non-published discounts into its 2007–2011 sales analysis is justified because the Frequency Chart, too, encompassed both published and non-published discounts. U.S. Mem. Supp. Mot. Partial Summ. J. 23 n.11. The problem with the Government’s theory, however, is that it rests on an assumption for which there is no record evidence—that is, that the relative magnitude of published and non-published discounts remained constant between 2005 (the year to which Symantec’s initial disclosures pertained) and 2007–2011 (the life of the Contract).