UNITED STATES of America ex rel. Roger L. Sanders and Roger L. THACKER, Relators-Appellants, v. ALLISON ENGINE COMPANY, INC., General Motors Corporation, General Tool Company, and Southern Ohio Fabricators, Defendants-Appellees.
No. 05-3502
United States Court of Appeals, Sixth Circuit.
Argued: June 2, 2006. Decided and Filed: Dec. 19, 2006.
471 F.3d 610
GIBBONS, Circuit Judge.
We reverse the district court‘s order granting defendants summary judgment on Baker‘s and Snader‘s state law claims. As discussed above, both Baker and Snader have put forward evidence that Officer Taylor struck Baker gratuitously while arresting them. This evidence is sufficient to establish a genuine issue of material fact as to whether Officer Taylor acted maliciously or in bad faith in striking and arresting them.
Finally, plaintiffs also argue that punitive damages should be available in this case. As defendants note properly, because the district court granted defendants’ motion for summary judgment, it did nоt reach the issue of punitive damages. The issue of punitive damages is therefore not properly before this court, and we do not rule on this issue.
mary judgment in favor of defendant City of Hamilton.
United States Court of Appeals, Sixth Circuit.
Argued: June 2, 2006.
Decided and Filed: Dec. 19, 2006.
V.
For the reasons stated above, we reverse the district court‘s entry of summary judgment in favor of defendant Taylor with respect to plaintiffs’ Fourth Amendment claims of excessive force and plaintiffs’ claims for assault and battery arising under Ohio law, and remand for further proceedings. We affirm the grant of sum-
GIBBONS, J., delivered the opinion of the court, in which COOK, J., joined. BATCHELDER, J. (pp. 627-28), delivered a separate opinion concurring in part and dissenting in part.
GIBBONS, Circuit Judge.
This cаse is the consolidation of two False Claims Act suits alleging fraud in the negotiation and execution of subcontracts relating to the construction of United States Navy Arleigh Burke-class Guided Missile Destroyers. The destroyers are built primarily by two shipyards—Bath Iron Works (“Bath“) and Ingalls Shipbuilding (collectively “the shipyards“). The construction involves hundreds of subcontracts for the components and parts that make up the ships, each of which costs approximately one billion dollars.
Each destroyer contains three generator sets (“Gen-Sets“) that supply all of the electrical power for the ship. The shipyards contracted with defendant-appellee Allison Engine Company (“Allison“), which for a period of time relevant to this lawsuit was a division of defendant-appellee General Motors Corporation, to build approximately ninety Gen-Sets to be used in over fifty destroyers. Allison in turn subcontracted the assembly of each Gen-Set to defendant-appellee General Tool Company (“GTC“), which in turn subcontracted part of its work to defendant-appellee Southern Ohio Fabricators (“SOFCO“). Thus, the shipyards were the prime contractors (сontracting directly with the Navy). Allison was a first-tier subcontractor. GTC was a second-tier subcontractor, and SOFCO was a third-tier subcontractor. Relators-appellants Roger L. Sanders and Roger L. Thacker (“relators“) are former employees of GTC who worked on the Gen-Set assembly teams. Relators brought two separate qui tam actions under the False Claims Act (“FCA“),
The first action (referred to by the parties as the “Quality Case“) alleges that the defendants submitted claims for payment despite knowing that the Gen-Sets did not conform to contract specifications or Navy regulations, in violation of the False Claims Act,
I.
In the Quality Case, relators allege that the defendants knew of a number of defects in the construction of the Gen-Sets and knew that the defects constituted a violation of their respective contracts but nevertheless submitted invoices for payment.2 As a result, these invoices constituted “false or fraudulent claims” that were paid with government funds in violation of the False Claims Act,
The case was tried before a jury, and relators spent five weeks presenting evidence of the various defects. Relators introduced evidence that all of the money used to pay the relevant prime contracts and subcontracts, including all the money paid to the defendants, came from the government. Relators also introduced into evidence hundreds of invoices remitted for payment by the subcontractors (i.e., Allison to the shipyards, GTC to Allison, and SOFCO to GTC). Relators did not, however, present any evidence that the subcontractors or the shipyards ever presented any false or fraudulent claim directly to the United States or the Navy for payment.3 At the close of relators’ case, de-
A.
The plain language of
Any person who:
(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;
(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; [or]
(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid[,]
...
is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person....
For purposes of this section, “claim” includes any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.
To determine the meaning of a statute, this court first looks to the language of the statute itself. Desert Palace, Inc. v. Costa, 539 U.S. 90, 98 (2003) (citing Conn. Nat‘l Bank v. Germain, 503 U.S. 249, 253-54 (1992)); Cox v. Mayer, 332 F.3d 422, 424 (6th Cir.2003). The plain language of the FCA states that actual presentment of a claim to the government is required under one, but not all, of the statute‘s sections. Only subsection (a)(1) of the statute makes any mention of presenting a claim to the government or Armed Forces. Subsections
The legislative history of the FCA solidifies this interpretation of the statutory language. The committee reports written when Congress restructured
These reports provide strong evidence that Congress intended the 1986 amendments to overrule restrictive judicial interpretations of the FCA and increase the reach of the statute. By rewording the statute and adding subsection (c), Congress accomplished this expansion, including making the FCA applicable to cases in which the government sustains a financial loss, regardless of whether the false claim is actually presented to the government. Reading a presentment requirement into subsections (a)(2) and (a)(3) is contrary to this purpose and contradicts the plain language of the statute.
B.
The district court, relying on the D.C. Circuit‘s decision in Totten, 380 F.3d 488,
We disagree with the Totten court‘s interpretation of the FCA for several reasons. One, the plain language of subsections (a)(2) and (a)(3) simply does not require that a claim must be presented to the government to be actionable. Congress could have chosen to include the presentment language of subsection (a)(1) in other parts of the FCA and did not. The Supreme Court has consistently counseled against attributing the same meaning to different language in the same statute. See Barnhart v. Sigmon Coal Co., 534 U.S. 438, 452 (2002) (“[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.“) (internal quotation marks omitted); Russello v. United States, 464 U.S. 16, 23 (1983) (“We refrain from concluding [] that the differing language in two subsections has the same meaning in each.“). Moreover, reading presentment into subsection (a)(2) would give it almost the same meaning as subsection (a)(1), rendering the latter largely superfluous.4 See Totten, 380 F.3d at 507
The Totten majority reasons that the opposite reading—subsection (a)(2) does not have a presentment requirement—would make the presentment requirement in subsection (a)(1) “largely meaningless.” Totten, 380 F.3d at 501. Why, the Totten majority asks, would any plaintiff bring a claim under subsection (a)(1) when she could just use the more lenient subsection (a)(2) for all claims? Id. The answer is that subsection (a)(2) contains its own more burdensome requirement—the claim must have actually been paid. This is not an element of all FCA actions. As the Supreme Court and other courts have held, an individual can be liable under the FCA for presenting a fraudulent claim to the government, even if the government discovers the fraud in time and does not actually pay out any money. See Rex Trailer Co. v. United States, 350 U.S. 148, 153 & n. 5 (1956); United States v. Rivera, 55 F.3d 703, 709 (1st Cir.1995).5 These claims can be brought under
In holding that
C.
While the plain language of the statute and the legislative history provide a conclusive answer to the question befоre us, we also note that the narrow view of the FCA‘s scope taken by the Totten majority does not comport with the weight of authority interpreting the statute. The Supreme Court has consistently reaffirmed that the FCA is a remedial statute and should be construed broadly. See United States v. Neifert-White Co., 390 U.S. 228, 232 (1968); United States ex rel. Marcus v. Hess, 317 U.S. 537, 541-42 (1943). The purpose of the FCA is to “protect the funds and property of the Government from fraudulent claims, regardless of the particular form, or function, of the government instrumentality upon which such claims were made.” Neifert-White, 390 U.S. at 233 (quoting Rainwater v. United States, 356 U.S. 590, 592 (1958)). Thus, the FCA covers all claims to government money, even if the claimant does not have a direct connection to the government. For instance, in Marcus, the Court held that a collusive bidding process by contractors employed by a local government to work on Public Works Administration projects could give rise to a claim under the FCA. 317 U.S. at 543. Although the workers contracted with the local government rather than the United States and were paid by the local authorities, the fact that the funds for the
The Court reaffirmed this position in Neifert-White, when it held that a “claim” does not merely encompass a claim for payment, but can also include an application for a loan of federal money. 390 U.S. at 231-32. Noting that the case “involves a false statement made with the purpose and effect of inducing the Government immediately to part with money,” the Court ruled that the definition of “claim” within the FCA cannot be so narrowly defined. Id. at 232. “This remedial statute reaches beyond ‘claims’ which might be legally enforced, to all fraudulent attempts to cause the Government to pay out sums of money.” Id. at 233.
A number of courts, including this circuit, have followed the Supreme Court‘s lead in avoiding an overly-narrow construction of the FCA. See United States ex rel. A+ Homecare, Inc. v. Medshares Mgmt. Group, Inc., 400 F.3d 428, 445 (6th Cir.2005) (establishing a broad test for whether a claim is “material” under the FCA). Citing Marcus and Neifert-White, the Fourth Circuit set forth a test for FCA liability contrary to the one established in Totten. Harrisоn v. Westinghouse Savannah River Co., 176 F.3d 776, 788 (4th Cir.1999). After noting that the FCA should be broadly construed, id. at 786, the court held that “any time a false statement is made in a transaction involving a call on the U.S. fisc, False Claims Act liability may attach.” Id. at 788. The court set out a four-factor test: “(1) whether there was a false statement or fraudulent course of conduct; (2) made or carried out with the requisite scienter; (3) that was material; and (4) that caused the government to pay out money or forfeit moneys due (i.e., that involved a ‘claim‘).” Id. So long as it can be shown that the government paid out money in response to a claim, no evidence is needed under this test that a claim was presented to the government. This test appears to more accurately reflect the view of the FCA taken by the Supreme Court and Congress.
Other courts, while not directly ruling on the presentment issue, have also broadly construed the FCA. The First Circuit has held that liability under the FCA turns not on whether money was paid out, but on whether “the [false] statement has the practical purpose and effect, and poses the attendant risk, of inducing wrongful payment.” Rivera, 55 F.3d at 709-10.6 The Ninth Circuit has also taken a broad view of the FCA, stating that a plaintiff does not even have to bring forth evidence of a false claim, so long as she presents “evidence sufficient to identify such a claim.” Kitsap, 314 F.3d at 1003. The Third Circuit has come the closest to holding that presentment is not required under the statute. In United States v. Lagerbusch,
Turning to the precise issue in this case, the cases cited by the district court and defendants do not support a reading of the FCA to require presentment of a claim to the government. Several discuss the necessity of showing that a “false claim” be made but do not speak as to whether such a claim must be presented to the government. See Rivera, 55 F.3d at 709-10; United States ex rel. Schmidt v. Zimmer, Inc., 386 F.3d 235, 243-44 (3d Cir.2004); United States ex rel. Quinn v. Omniсare, Inc., 382 F.3d 432, 438-39 (3d Cir.2004); Costner v. URS Consultants, Inc., 153 F.3d 667, 677 (8th Cir.1998) (distinguishing between claims made against government funds and claims made against private funds). Other cited cases specifically contradict the defendants’ argument by stating or implying that presentment to the government is not required. See United States v. Southland Mgmt. Corp., 326 F.3d 669, 674 (5th Cir.2003) (defining a claim as a request for money “which is made to someone—including the government itself—who will at least in part use government money or property to pay it“); Harrison, 176 F.3d at 788; Kitsap, 314 F.3d at 1003.
In addition to Totten, defendants primarily rely on a group of cases dealing with the pleading requirements of
This court relied partially on Clausen in finding an FCA complaint insufficient under Rule 9(b). See Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 564 (6th Cir.2003). The Yuhasz court, however, did not read a presentment requirement into the FCA. Rather, the complaint in that case was deemed insufficient because it could not identify any specific parties or specific fraudulent acts that supposedly violated the FCA. Id. at 563-64. Although Yuhasz quotes cases that imply that a presentment requirement exists in the FCA, the opinion contains no holding or other language that would bind us in this case.
At most, the cases cited by the defendants imply that the FCA contains a presentment requirement. None of the cases, however, address the precise issue before this court, and we find them unpersuasive in the present case.
D.
The dissent faults our analysis of the statutory language first by reading subsection (a)(2) as creating a causal connection between the claim and the payment and then by concluding that payment of a claim by the government presupposes that the claim has been presented to the government. We agree that the statute requires a causal сonnection between the making or use of a false statement and the government‘s payment or approval of the claim. This causal connection requirement arises from use of the word “get.” The false statement‘s use must result in obtaining or getting payment or approval of the claim. We disagree however that the causal connection requirement suggests that presentment to the government is required under subsection (a)(2) as a matter of law. The elements of subsection (a)(2) can be met without presentment to the government.
In the dissent‘s own first example of a prime contractor and sub-contractor, if the subcontractor submits a false bill to the prime contractor which the prime contractor uses to obtain payment of a presented claim (which would itself be false by virtue of the false bill included in it), the subcontractor can be liable under either subsection (a)(1) or (a)(2). To impose liability on the sub-contractor under subsection (a)(1), the government would have to prove that the sub-contractor caused presentment by the prime contractor. For liability of the subcontractor under subsection (a)(2), the govеrnment could omit the proof of presentment but would have to present sufficient evidence from which the trier of fact could conclude that the sub-contractor‘s use of the false statement resulted in the payment of the claim by the government. The dissent‘s second example in which the government bankrolls the prime contractor may well present a situation in which the government is unable to establish the required causal connection because it cannot prove presentment. But that inability to prove a particular type of claim factually without proof of presentment does not mean that as a matter of law presentment is required as an element of all claims under subsection (a)(2). And in the second example, the payment with government funds (although already in the hands of the prime contractor) might per-
The dissent has essentially characterized what we see as a problеm of adequacy of proof in various hypothetical contexts as a question of statutory interpretation. We prefer to accord the statute the meaning expressed by its clear language and to leave the thorny problems of whether a relator has presented sufficient proof of causal connection for resolution in the context of future cases, based on the factual record in those cases. Our analysis of the statutory construction issue can and should end with a determination that presentment is not required as a matter of law to establish a violation of subsection (a)(2) or (a)(3).
E.
The plain language of the statute, the legislative history, and the decisions of the Supreme Court and other courts lead us to conclude that the district court and the Totten court erred in reading a presentment requirement into all subsections of the False Claims Act. We hold that while liability under
We note that there will doubtless be cases pursued under subsections (a)(2) and (a)(3) where relators choose to introduce evidence that false claims were presented to the government. Evidence of presentment of a false claim is highly relevant to establishing the requisite intent under subsections (a)(2) and (a)(3). Moreover, claims under subsections (a)(2) and (a)(3) which involve requests for payment by prime contractors rather than subcontractors may perhaps be more easily proved by showing presentment of a false claim to the government. Thus, evidence of presentment may have practical importance in claims under subsections (a)(2) and (a)(3). Our ruling here determines only that presentment evidence is not required for subsection (a)(2) and (a)(3) claims as a matter of law.
Having found that the district court erred in interpreting subsections (a)(2) and (a)(3), we turn to consideration of whether relators presented sufficient proof to avoid judgment as a matter of law. Having reviewed the evidence, a reasonable jury could find for relators despite the lack of evidence of presentment to the government. During trial, relators put forth evidence that all of the money paid to the defendants came from the United States government. Chris Krohne, a program manager at Allison, testified that all of the money for the project “flows from the taxpayers to the Congress to the Department of Navy to Bath, then [to Allison].” He clarified that all of the money paid to Allison, GTC, and SOFCO came from the United States government. Relators also produced the invoices submitted for payment by Allison, GTC, and SOFCO and put forth evidence of knowledge on the part of the contractors that the Gen-Sets did not conform to Navy regulations and that the invoices were paid using government funds. If accepted by a jury, this evidence is sufficient to find that the defendants used a “false record or statement to get a false or fraudulent claim paid by
II.
The Pricing Case stems from a redesign of the Gen-Sets in the early 1990s. Although some confusion exists as to who initiated the discussions, the parties agree that the Navy, the shipyards, and Allison wanted to redesign the Gen-Sets to improve maintenance and increase reliability. The issue in the case is whether Allison and GTC failed to disclose pertinent “cost and pricing data” relating to anticipated cost decreases with Bath and the Navy during the negotiation of the redesign.8 Any such omission would violate the Truth in Negotiations Act,
A.
The facts of the Pricing Case are as follows. In June 1992, a meeting was held to discuss “possible alternatives” for redesigning the existing AG9130 Gen-Sets. The Navy was concerned about the problems with the AG9130 Gen-Sets and wanted Allison “to do it right this time.” After this meeting, Allison began developing a conceptual redesign, which would be model AG9140. In July 1992, GTC informed Allison that after reviewing the preliminary drawings, GTC “does not anticipate any circumstances which would necessitate a request for an increase in the negotiated price ....” In the fall of 1992, Allison began constructing a mock-up of the AG9140 to present to the Navy and the shipyards. In December, Allison‘s program manager summarized a site visit and meeting with Navy and Bath personnel regarding the redesign (“December 1992 memo“). The memo states that the contract modifications will be “no cost” and that the price paid by Bath for each Gen-Set will not increase. The memo also outlined a “long term strategy to reduce the cost of the generator set.”
This reduction will result as the redesign eliminates many parts. We need this reduction to make us more competitive on new programs. Eventually, we are obligated to identify the cost impact of the redesign. Most of the impact is to General Tool. We need to have GTC closely account for hours and material in the first unit of the redesign. After we
The new AG9140 design was approved at a January 1993 design review. At that point, the Navy requested that the first AG9140 Gen-Set be delivered in April 1994 and that the redesign be a “no-cost” change (i.e., no price increase). In the spring of 1993, Allison met with GTC, and GTC agreed to accept the no-cost modification. Allison then issued an experimental procurement authority form (“EPA Form“) requesting a purchase order be issued to GTC for three Gen-Sets. The request stated that the change to the AG9140 design “shall not result in a price increase. A price reduction is anticipated subject to negotiation prior to completion of the order.”
In May 1993, Allison submitted its formal Engineering Change Proposal (“ECP“) for the AG9140 redesign. The ECP again stated that this is a “no cost” change and that “[t]he recurring costs of the AG9140 remain unchanged from those of the AG9130.” It is important to note that for the purposes of the ECP, “cost” is defined as “cost to the Government.” See U.S. Dep‘t of Defense, Configuration Control—Engineering Changes, Deviations and Waivers, DOD-STD-480A, ¶ 110. 14 (April 12, 1978). In June 1993, Allison submitted an amendment to its purchase order with GTC, formally changing the order to model AG9140 (“June 1993 Purchase Order Amendment“). The document also states, “A price reduction is anticipated. This reduction is subject to negotiation once redesign is finalized and prior to completion of order.”
On behalf of the Navy, Bath proceeded to negotiate a price for the proposed ECP. The two parties reached an agreement in November 1993 that the price for the AG9140 model would remain the same as for the AG9130 model. At this time, Allison and GTC had not reached any agreement (or even begun negotiations) on a price for the assembly of the redesigned Gen-Sets. Such an agreement was not reached until December 1994, when the two parties contracted to reduce the amount paid by Allison to GTC by $74,000 per unit. Allison never specifically informed the Navy of these savings, although it did inform Bath in both 1995 and 1996 that “[m]anufacturing cost at General Tool is less” for the new design. Along with this statement, Allison averred that “other areas such as engineering, technical publications, and product support are over the original budgets. Without a new proposal, the net value of these changes is not known.” Neither the Navy nor Bath requested a complete proposal, including cost information, from Allison, because it would have taken months to complete and would have delayed construction of the destroyers. Allison fully divulged its new agreement with GTC when it renegotiated its full contract with Bath in late 1996.
The parties cross-moved for summary judgment on the issue of whether the defendants’ failure to disclose its plans to lower its costs for the Gen-Sets violated TINA. Disagreeing with the magistrate judge‘s recommendations, the district court denied summary judgment to relators and granted the defendants’ motions for summary judgment. In ruling for the defendants, the court found that Allison did not make a false claim in the May 1993 ECP because “cost” is unambiguously defined as “cost to the government.” The court also held that Allison had no duty to disclose its plans to lower costs on the
B.
We agree with the district court. TINA requires subcontractors to make available “cost or pricing data” prior to “the pricing of a change or modification to the subcontract” if the “price adjustment is expected to exceed $100,000.”
“Cost or pricing data” under TINA includes “all facts that, as of the date of agreement on the price of a contract (or the price of a contract modification),... a prudent buyer or seller would reasonably expect to affect price negotiations significantly.”
Relators argue that Allison had a duty to disclose the “fact” that it had an “agreement to negotiate a price reduction” with GTC prior to November 1993. If such an agreement had existed, it would likely be a “fact” that one “would reasonably expect to affect price negotiations significantly.” The evidence to support this purported agreement, however, is lacking. Two of the documents put forth by relators do not even insinuate that a price reduction will occur, much less prove that an agreement to negotiate one has been reached. The first, a letter from GTC to Allison on July 31, 1992, states only that GTC anticipates no increase in cost from the redesign. The second, an Allison memo dated May 4, 1993, deals primarily with GTC‘s acceptance of the no-cost modification and that the AG9140 will have “less material cost” than the AG9130. These documents do not discuss price or the Allison-GTC agreement in any way.
Relators also rely on the December 1992 memo, the EPA Form and the June 1993 Purchase Order Amendment. These documents give some indication that a price reduction will occur but offer no evidence that an agreement has been reached to do so. The December 1992 memo states only that “[o]ur long term strategy is to reduce the cost of the generator set” before providing one estimate of how costs could be reduced. Both the EPA Form and the June 1993 Purchase Order Amendment state that a price reduction is “anticipated” but that such a reduction is “subject to negotiation.” None of these documents gives any indication that an agreement has been reached with GTC to negotiate any
Allison did not hаve a duty to relay its expectation or hope that it would have lower costs to Bath during the contract negotiations. The only thing that Allison knew as a fact prior to November 1993 was that it wanted to negotiate a lower price. There is no evidence that GTC would even agree to such a renegotiation or how much Allison could save in the renegotiation. The two sides did not begin negotiations until the first Gen-Sets had been constructed, a year after the contract with Bath had been finalized. At this point, Allison had no duty to disclose under TINA because the negotiations with Bath were complete and a “price adjustment” was not “expected.”
The cases cited by relators do not alter our analysis. In Aerojet Solid Propulsion Co. v. White, 291 F.3d 1328 (Fed.Cir.2002), the contractor failed to disclose to the Air Force that it had solicited sealed bids from a potential supplier during the final stages of the two parties’ price negotiations. Aerojet argued that possession of the bids was not “cost or pricing data” because it had not opened the sealed bids and thus did not know the amounts of the bids. The court rejected this argument, ruling that “cost or pricing data is not any less cost and pricing data because it has been selectively disseminated or not actually used.” Id. at 1332. Unlike the contractor in Aerojet, Allison did not have concrete information in its possession during its negotiations with Bath. Allison did not choose to keep itself ignorant from new cost data; it had no new data. Allison had only a hope that the price it paid GTC would decrease. In Cutler-Hammer, Inc. v. United States, 189 Ct.Cl. 76, 416 F.2d 1306 (1969), the court found a TINA violation because the contractor knew the exact amount of the lower bid, and the court found there was a “definite possibility” that such a bid would be accepted. Id. at 1314. Again, however, Allison did not possess such definite information. Finally, the court in United States ex rel. Campbell v. Lockheed Martin Corp., 282 F.Supp.2d 1324 (M.D.Fla.2003), ruled that preliminary findings made by a contractor must be reported because they are still findings and could influence the outcome of the negotiations. Id. at 1334-35. No findings, preliminary or otherwise, existed in the present case. Allison merely speculated that it would be able to lower costs, and we will not extend TINA to require the disclosure of every cost projection or forecast memo.
A primary objective of TINA is to put the government and contractors on roughly equal footing during price negotiations. See Aerojet, 291 F.3d at 1330 (citing Unisys Corp. v. United States, 888 F.2d 841, 844 (Fed.Cir.1989)). Allison‘s failure to disclose its plan to lower its own costs did not put the government at an unfair disadvantage in the negotiations because the plan has not been shown to be anything more than pure speculation as of November 1993. As relators have put forth no additional evidence of any “cost or pricing data” possessed by Allison that was not furnished to Bath or the government, summary judgment is appropriate.
The decision of the district court in the Quality Case is REVERSED and the case is REMANDED for proceedings not inconsistent with this opinion. The decision of the district court in the Pricing Case is AFFIRMED.
BATCHELDER, Circuit Judge, Concurring in part and Dissenting in part.
CONCURRING IN PART, DISSENTING IN PART
I respectfully dissent from that portion of the majority opinion reversing the district court‘s judgment in favor of the defendants in the “Quality Case.” I cannot agree with the majority‘s interpretation of
Consider a case in which the government contracts for a specific project with a prime contractor, which in turn contracts with a sub-contractor. In the ordinary course, the government pays the prime contractor in response to the bills submitted by the prime contractor. Those bills will include the bills submitted to the prime by the sub-contractor. So when a sub-contractor submits a false statement to the prime contractor, it is using that false statement to get its fraudulent claim paid by the government, albeit through the prime contractor. And the prime contractor is not merely paying the sub with government funds; rаther, the prime contractor uses the sub‘s claim to induce the government to pay the prime contractor‘s bill, which includes the false claim. Critically, the government determines whether to approve or deny the payment, or to provide or withhold the funds. Alternatively, suppose the prime contractor has been bankrolled by the government and given full authority to pay claims without resort to government approval. The sub-contractor‘s claim is actually paid “by the prime contractor,” albeit with government funds. But, in bankrolling the prime contractor, the government did not act in response to the claim. The government may not even know that the subcontractor made a claim. The subcontractor‘s false statement did not induce the government to do anything. For purposes of inducing a response, presentment of the claim to the government is necessary to initiate a causal relationship that is completed with an act (payment or approval) “by the Government.”
This distinction was explained—correctly, in my view—in Totten v. Bombardier Corporation, 380 F.3d 488, 497-502 (D.C.Cir.2004). In Totten, the claimant submitted the false claim to Amtrak, a non-governmental entity. Id. at 498-99. Amtrak was not an intermediary—Amtrak was bankrоlled by the government, but had autonomy to pay whatever claims it liked without government involvement or approval. The Totten majority explained
As the above example should make evident, I also disagree with the majority‘s statement that “reading presentment into (a)(2) would give it almost the same meaning as section (a)(1), rendering the latter largely superfluous.” Section (a)(1) addresses false claims presented directly to the government, while Section (a)(2) addresses false claims submitted through a messenger, despite a lack of scienter on the part of the messenger. Section (a)(3) addresses conspiracy, but I believe the previous analysis would apply as well to its particular language, which also creates an implicit causal connection between the claim and the government payment.
Finally, I disagree with the majority‘s proрosition that, under Section (a)(2), “the claim must have actually been paid.” To begin with, the plain language of Section (a)(2) applies to one who “knowingly makes, uses or causes to be made or used, a false record or statement.” All of those verbs are in the present tense. Section (a)(2)‘s infinitive phrase “to get a ... claim paid” is simply an adverbial phrase modifying those verbs. That phrase explains the motive or reason for the making, using, or causing, and an ordinary reading of this language reasonably encompasses even an attempt to get a claim paid. The majority cites no authority to support the proposition that this section requires that the claim has already been paid or that mere submission of a false claim is insufficient, and in fact cites authority to the contrary. See, e.g., Rex Trailer Co. v. United States, 350 U.S. 148, 153 & n. 5 (1956); United States v. Rivera, 55 F.3d 703, 709 (1st Cir.1995) (“Indeed, a contractor who submits a false claim for payment may still be liable under the FCA for statutory penalties, even if it did not actually induce the government to pay out funds or to suffer any loss.“).
I would find the present case subject to the Totten distinction discussed above. If payment of the fraudulent claim was made by the shipyards (i.e., prime contractors) rather than “by the Government,” then Section (a)(2) imposes no liability. See Totten, 380 F.3d at 502;
I concur in the remainder of the opinion.