United States v. Paul B. Murphy

good faith duty a of of claim for breach America, “special a requires of a claim STATES

because such UNITED Plaintiff-Appellee, between relationship” which is absent Thus, the Bank Bank and the Schmuesers. erred in court the district contends MURPHY, B. Paul judgment n.o.v. overruling its motion Defendant-Appellant. question a raises This issue on that issue. de novo. which we review of law No. 90-5648. their claim for asserted The Schmuesers Appeals, Court of United States good faith under sec- duty of

breach of a Circuit. Sixth states: “Ev- UCC, which tion 1.203 of impos- duty this title ery contract within Argued March per- in its good faith obligation es an 19, 1991. Decided June & Tex.Bus. enforcemеnt.” formance or 1968) (em- (Vernon 1.203 Ann. Com.Code § Thus, court’s). the com- while

phasis the requires that a good faith duty law mon relationship” exist between “special Coleman, See, FDIC v. S.W.2d parties, relationship (Tex.1990), a such 708-709 to a cause of action prerequisite is not 1.203. under section argues that sec The Bank further letters of cred apply to tion 1.203 does not too, Initial must fail. argument, it. This stipulated parties had ly, we that the note Bank owed the trial before under duty good faith Schmuesers a Furthermore, 1.203 section section 1.203. contract or applies “[e]very expressly ...”, letters of duty within this title 1 of the Texas Busi credit fall within Title Finаlly, at Code. ness and Commercial that the Texas court has indicated least one imposed by section 1.203 duty good faith See, Travis applies letters credit. State, 660 S.W.2d Bank Trust v. & 1983). (Tex.App. Austin, no writ 852 n. 1 — in the district We find no error therefore overruling the Bank’s motion court’s duty of a judgment n.o.v. on the breach good faith claim. error,

Finding no we affirm district appeal court on all issues raised cross-appeal. Humble, Sonnenberg, Gary

William Asst. Tenn., Attys., Chattanooga, John W. U.S. Gill, Jr., Knoxville, Tenn., Atty., U.S. Caro- Mark, lyn Atty. Argued, Dept, ‍​‌‌‌‌​​‌​‌​​‌​​‌‌‌‌‌‌​‌​​‌‌‌​​‌‌​‌‌​​​​‌​​‌‌​​‌​‍Staff U.S. Justice, Div., D.C., Washington, Civ. for Bode, Boehm, R. Edward N. Miller John Martin, Tenn., Chattanooga, Timothy M. & Hibey, Argued, Broas Richard A. Steven Alderton, Anderson, Hibey, Nauheim & M. Blair, D.C., Washington, defеndant-ap- pellant. MILBURN, MARTIN and

Before ENGEL, Judges, and Senior Circuit Judge. Circuit MILBURN, Judge. Circuit ap- Defendant-appellant Paul B. granted in peals plaintiff-appellee the United States favor of under America in this civil action filed Act, 3729- the False Claims 31 U.S.C. §§ rigging to recover for the of bids on the electrical contractors submitted Bend Wastewater Treatment Moccasin Chattanooga, Tennessee. For project follow, reasons that we reverse.

I. appeal dis- attempt

After one by this court on November missed timely appeal follow- Murphy perfected a Phillip Mahoney, that he talked to admitted timely motion recon- ing the dеnial of a Commonwealth, counterpart at pro- Murphy’s court. The by the district sideration however, meeting; the Read House Murphy’s employ- prior to ceedings below included Moore, only interest- er, Incorporated Murphy claimed that he was Fischbach (“Fischbach”). determining was Fischbach’s whether Commonwealth Murphy ed in bidding at all times rel- interested in president genuinely division was southern challenged appeal. project. to this When evant Moccasin Bend cross-examination, Murphy admitted on May on granting summary judgment In “Yes, Mahoney stating, he that recalled Murphy and court held the district let why you stay don’t out of that and severally liable. jointly and Fischbach guys any handle ar- job those at the site appealed along with originally Fischbach rangement they going are to have.” J.A. appeal prior to Murphy dismissed its but 717. argument. oral testimony that also indicated by jury a on an was convicted Fischbach Trepte “something ... like whatev- he told charging a to re- indictment going up you there are you er to do in of the Sherman strain trade violation own, in doing your it on I’m not involved Act, 1, arising out of Antitrust 15 U.S.C. § what this statement it.” When asked meeting by representatives of Fischbach a meant, “Well, Murphy responded, we obvi- the Read Electric at and Commonwealth Tennessee, facing there ously were a situation where Chattanooga, in House Hotel bidders, only going to be two or three charged indictment that were June 1980. The rigging companies any thought if there was of bid representatives of the two so on, good to do agreement whereby going an then he has a chance reached Common- it, Murphy admitted suppose.” wealth was to submit the low bid to I J.A. 715. prime Trepte on the Moccasin Bend a in contractor that he saw convention Ha- project Chattanooga in and Fischbach was approximately one week after the bids waii slightly highеr The indict- to submit a bid. that opened. Murphy then learned charged ment that both bids were be of an ac- Trepte had “reached some sort artificially inflated and Fischbach was to be J.A. commodation Commonwealth.” compensated, by monetary payoff or either

by cooperation on fu- from Commonwealth Later, government’s opposition in to the a con- ture bids. Commonwealth secured summary judgment, Murphy motion for contractor, winning prime tract with the asserting his own affidavit submitted Brothers, Inc. Blount (1) Trepte bidding pro- handled the entire trial, damag- particularly At the criminal project Moccasin Bend without cess on the ing against Fischbach came from evidence approval, supervision, or direction from Trepte, Bernard Fischbach’s Atlanta dis- (2) arrangement was Murphy; if the word manager. Trepte acting trict testified that Mahoney, in his conversation with used Fischbach, for the benefit of he met with it refer to Murphy did not understand counterpart his from Commonwealth and (3) agreement illegal rigging; no bid agreement in charged entered into the telephone in reached conversation be- Trepte also testified that the indictment. (4) Mahoney Murphy; and and Mur- tween meeting place knowledge with the and took оwn,” Trepte told that he was “on his phy encouragement supervisor, of his defen- concerns, an rigging not out of bid but as Murphy. dant implicit warning adequate to submit an bid. Murphy deposition

Murphy pro- also testified in the earlier also submitted testimo- (1) knowledge ceedings acknowledged ny to the effect that his and Fischbach participated rigging past regarding went on Bend bid what Moccasin mostly reading personally project and that he had been involved came from the testi- mony specific of others rather than from some of those schemes. also ac- recollection, (2) Trepte (Murphy) knowledged that he had talked with when he used project. Murphy “arrangement” proceedings in earlier about the Moccasin Bend word words, (3) groping he he was be- Government sustains because of the act upon person.... of that lieved reflection that his earlier testi- mony concerning a conversation in Hawaii 3729(a) 31 U.S.C.A. (Supp.1990). § Trepte was inaccurate in that amendments, Prior to the 1986 the stat- did not discuss Moccasin Bend. only double, ute allowed rather than treble support damages

In civil of its motion for forfeiture $2,000. judgment, government presented proof The 1986 amendment also defined “knowingly” pre- purposes inflated Fischbaeh its bid from a statute ‍​‌‌‌‌​​‌​‌​​‌​​‌‌‌‌‌‌​‌​​‌‌‌​​‌‌​‌‌​​​​‌​​‌‌​​‌​‍to include $5,841,684 $1,368,- ignorance “deliberate conspiracy figure of the truth.” 3729(b) (as U.S.C.A. (Supp.1990). figure adjusted by 316 to arrive at a Prior to § amendment, the 1986 sake) $7,160,000. comparison required circuit Blount for showing “actual (as knowledge” of the winning falsity adjusted) Commonwealth’s bid by clear, of the claim unequivocal $6,879,000 $551,780 was evidence. and was inflated United Assoc., States v. Ekelman & 532 by conspiracy. the According to the 545, (6th Cir.1976). F.2d 548 The district government’s proof, conspiracy inflated court determined that the 1986 amend- $1,037,316. injury the cost a total of The ments were applied to be retroactively to alleged by government reрresents sev the acts committed between 1980 and 1985 enty-five percent figure, of the latter or since it would not work a injustice manifest $777,9871. particular in this case. Although government’s complaint The district court persuaded was that the grounded in theory the common law criminal conviction conspiracy established a unjust enrichment addition to violations to submit false claims. As to defendant Act, government’s of the False Claims Murphy, the district court viewed the dis- summary judgment motion and the district positive questions as Murphy “whether court’s solely were based on vio- himself knowingly caused the false or Act, lations of the False Claims 31 U.S.C.A. fraudulent presented claims be and 3729(a)(1) (a)(3). and As amended in § whether Murphy conspired to defraud the 1986, provide those sections recovery to the by United having States the false and government for submission of false claims presented.” fraudulent claims To Mur and conspiracies to submit false claims as phy’s arguments showed, that the evidence follows: most, conscious conspir avoidance of the Any person who— acy participation conspir rather than in the (1) knowingly presents, or causes to acy, Ciambrone, see United States v. 787 presented, be to an employee officer or (2d Cir.), denied, 810 cert. 479 of the United States Government ... a U.S. 93 L.Ed.2d 720 or payment false fraudulent claim for (1986), responded the district court that the approval; [or] evidence merely showed that consciously knowing avoided the details of conspiracy avoiding partic rather than (3) conspires to defraud the Govern- ipation conspiracy. by getting ment a false or fraudulent The district court awarded actual dam- paid; claim allowed or ages of treble the difference in the final adjusted presumably bid Fischbaeh would have submitted absent the is liable to the United States Government winning adjusted Commonwealth's final penalty $5,000 for a $10,- сivil of not less than bid. The district court also awarded a $10,000, and not more than plus 3 thirty-nine times 000 forfeiture for each of the damages the amount of which the by claims submitted Commonwealth under City The federal project. reimbursed the cost of the Chattanooga seventy-five percent for 1036 conduct which Circuit would not provision of statute Sixth claims

the false criminal, see $10,000 underly- previously have viewed as forfeiture one Assoc., v. & of the defen- United States Ekelman ing Because 532 conspiracy. rigging, (6th Cir.1976), bid prior dants’ involvement imposed 548 imposed the maximum forfei- district court liability, greater Murphy argues that claim. ture eaсh fraudulent applied amendments should not have been retroactively. deciding In the 1986 argued principal issues applied should be retroac improperly ap- district court are that upon tively, the district relied court False plied 1986 amendments Hill, States v. (N.D. Fla. F.Supp. 1158 retroactively and that there Act Claims 1987). See also United States Oakwood fact re- genuine issues of material Center, Med. Downriver F.Supp. Murphy’s knowledge of and his garding (E.D.Mich. 1988); Gravitt General participation conspiracy. in the (S.D. Elec. F.Supp. II. dismissed, Ohio) (following Hill), appeal denied, (6th Cir.), cert. F.2d 190 A. L.Ed.2d grant A district court’s of sum The court in Hill relied Brad (1988). upоn de mary judgment is reviewed novo. Board, ley 696, v. School 416 U.S. 94 S.Ct. Laboratories, Inc., McKee v. Cutter 866 2006, (1974), for “princi 40 L.Ed.2d 476 Cir.1989). review, 219, (6th 220 In our ple apply a court is in effect that to law this court must view all facts and the infer decision, at it the time renders its unless light in most ences drawn therefrom injus in doing so would result a manifest Ivy 60 nonmoving party. favorable to statutory legis tice there is direction or Alexander, 1432, Corp. Street v. 822 Hill, history contrary.” lative to the 676 (6th Cir.1987). Summary judgment 1435 is F.Supp. at 1166. The Hill court found no appropriate only party “moving where the statutory legislative history direction or showing has of burden conclu [carried] against mani applicatiоn retroactive and no sively genuine that no issue material Id. at 1166-68. injustice. fest Id.; 56(c). see fact exists.” Fed.R.Civ.P. Hill, as problem The with counsel every dispute, Not factual how pointed argument,2 is out at oral ever, preclude judgment. will Bradley in in that the broad rule stated is Any dispute in in fact must be material “apparent Supreme tension” it potentially that could affect outcome. v. Bowen Court’s “recent reaffirmation [in Inc., Liberty Lobby, Anderson v. 477 U.S. 204, Hosp., 488 Georgetown Univ. U.S. 242, 2510, 2505, 106 S.Ct. 91 L.Ed.2d 468, 471, 102 493 109 S.Ct. L.Ed.2d (1986). dispute genuine in 202 must be accepted (1988)] generally of the axiom that in favor the evidence allows resolution ‘[r]etroaetivity that not favored in the is Id. nonmоving Thus, party. “sum [Congressional enactments mary will lie ... if the evi law.... not not be a administrative rules will construed jury dence such that reasonable could is nomoving lan party.” return to retroactive effect unless their a verdict have ” Id. Alu this result.’ Kaiser requires guage Bonjorno, 494 Corp. & Chem. v. minum B. 827, 110 S.Ct. 108 L.Ed.2d Bowen, (1990) (quoting 842 488 U.S. at provid Since 1986 471). Kaiser at Because “knowingly” ed a to include definition litigation, application argument stages this of Brad- Murphy’s at oral counsel admitted Kaiser, argu- ley, discovery infra, conceded at oral prior he and the that to his rely Bradley controlling to thought case ment that was entitled to be the given only ‍​‌‌‌‌​​‌​‌​​‌​​‌‌‌‌‌‌​‌​​‌‌‌​​‌‌​‌‌​​​​‌​​‌‌​​‌​‍injusticе argu- circum- pursued laid Fischbach the manifest foundation However, Bradley. last-minute dismissal ment co-de- stances of Fischbach’s under contested, appeal. its vigorously at all fendant Fischbach legisla resolved on the basis of clear easily We followed Bennett rather than Brad intent, tive the Court left unresolved ley Boddie v. American Broadcasting Bradley. tension between Bowen and In Companies, (6th Cir.1989), 881 F.2d 267 — ease, just there language as is no clear denied, U.S.-, cert. history forbidding or legislative retroactive (1990), 107 L.Ed.2d reject argu application, language there is no clear or ment that Bradley “established ‘strong legislative history requiring it. See Kelsoe presumption’ in favor of retroactive appli Crop Corp., F.Supp. v. Federal Ins. cation.” Id. at 269. We stated: (E.D.Tex.1988); States ex decisions, More however, recent make Corp., rel. Boisvert FMC 86-20613 No. clear that Bradley represents a relative- (N.D. 8, 1987) Sept. (unpublished Cal. or ly exception narrow general to the “prin- der); McCoy United States ex rel. v. Cali ciple operate only statutes prospec- Review, Inc., F.Supp. Med. fornia tively,” a notion every “familiar to law (N.D.Cal.1989); 1367-68 Oakwood student.” These post-Bradley cases Downriver, Hill, F.Supp. 307; have reaffirmed the “vеnerable rule ... F.Supp. at 1166-68. But see United States affecting statutes substantive rights Bekhrad, (S.D. F.Supp. presumed liabilities are to have 1987) (finding suggestion prospec Iowa prospective effect.” tive a letter budget intent in from office Id. at 270. Although some circuits have committee). judiciary Thus, we must concluded Bradley and Bowen choose between the broad statement of the conflict irreconcilable and have chosen to law Bradley and the recent reaffirma Bowen, follow (DeVargas v. Mason & general against tion in Bowen of the rule Hanger-Silas Mason 911 F.2d application. retroactive We in mind bear — (10th Cir.1990), denied, 1390 cert. U.S. that Bradley frequently has been cited as --, 799,112 111 (1991); S.Ct. L.Ed.2d 860 controlling authority in this circuit. E.g., States, Sargisson 918, v. United 913 F.2d Harper-Grace Hosps. Schweiker, v. 691 (Fed.Cir.1990)) 922-23 the Eleventh Circuit 808, (6th Cir.1982); F.2d 811 Bush v. State stopped has rejecting of Bradley short out Indus., 780, (6th Cir.1979). 599 F.2d 786 right by refusing application retroactive of Bowen, before Supreme Even the Court a statute which would interfere with ante declined to Bradley follow in Bennett v. Director, rights. FEMA, cedent Wright v. Jersey, 632, 1555, New 470 U.S. 105 S.Ct. 1566, (11th Cir.1990). 913 Thus, 1573 (1985). 84 Bennett, L.Ed.2d 572 In extent, at least to Wright some is consist question was whether amendments to Title supports ent with and Boddie. United I applied be retroactively should to validate Inc., 1497, Meyer, States v. R. 889 F.2d W. of in way use funds a which would not — (6th Cir.1989), denied, 1505 cert. U.S. legal have been before the amendments. -, 1527, 110 S.Ct. 108 L.Ed.2d 767 The distinguished Bennett court Bradley (1990), and Wellington Exempt v. Ratliff ground on the that “the Government’s ed Village Education, Schools Board of right to any recover preced- misused funds (6th Cir.1987), 820 F.2d by 797 cited ed 1978 placed Amendments” and government, are not to the contrary. case the rule that a within court should not In Meyer appellant conceded the appli “apply intervening change an pending to a cability of Bradley, and involved a Ratliff action where it has concluded that to do so change in decisional rather statutory than infringe uрon deprive person would a of law. right that had matured or become uncon- ditional.” 470 U.S. at contends 105 S.Ct. at amendments in principle Bennett found the latter at issue this case are mere- ly consistent “with another remedial rule of do not affect venerable substantive statutory interpretation, i.e., rights and that statutes liabilities. There is considerable affecting rights support substantive and liabilities the lower proposi- courts presumed only See, to have prospective ef- tion. e.g., Downriver, Oakwood 687 (citations omitted). fect.” Id. (definition F.Supp. at “knowing” 306

1038 knowledge showing of actual upon a clear сon- to address procedural, intended circuits); were sub claims that falsity of the law between flicting decisional (no right Ekelman, 548. After matured F.2d at Hill, 1169 532 F.Supp. at mitted. 676 liability). But amendment, if he particular standard he could be liable to a FMC viz., rel. Boisvert v. see, ex falsity, States knowledge United constructive (N.D.Cal. Sept. Thus, No. 86-20613 Corp., ignorance of the truth.” “deliberate order) (amendments 1987) (unpublished Boddie, af the amendments analogy to retroactively to cut off applied may not be liabilities, at rights substantive fected Northrup defense); Hyatt existing an Kaiser, 110 in this circuit. See also least 86-6437-KN, WL 156739 No. Corp., (fixed pre expectation thаt 1988) (unpublished or- (C.D.Cal. March as be determined interest would Boisvert); States v. der) (following Northern judgment); of date of Winfree (S.D.Iowa Bekhrad, F.Supp. 296, 302, Co., Ry. Pac. are re- 1987) (recognizing (1913) (refusing to L.Ed. retroactively apply refusing to medial but a statute retroactively a civil case apply create new penalties because the increased defenses”); away material “takes which v. Green Const. States liability); United Health Dept. v. United States Griffon 1987) (D.Ak. Nov. A86-263 No. (5th Servs., Human Bradley order) (applying but (unpublished applications Cir.1986) (refusing retroactive injustice because “Con- finding manifest “enlarged penalties provision which of civil game changed the rules of gress ... liability [by] allow scope of substantive ended”). game years after the four ‘had reason who ing prosecutions those recent Su- However, and the Boddie ”); Babcock & Fossen v. to know’ Van us not convince preme cases Court 100, 109, 522 Co., 36 Ohio St.3d Wilcox narrowly, but to be read Bradley is change in (1988)(statutory N.E.2d rights phrase “substantive also that intentional tort law definition common broadly construed is to be and liabilities” applied change not to be was substantive Boddie, time of at the In this context. retroactively). action, the statute at underlying acts Moreover, in this case the amendments liability a communica- provided where issue liability an the to increase applied were purpose for the “intercepted tion was Thus, $1,000,000. by more than individual or tortious act ... committing any criminal “create a used to the amendments committing any other purpose the or for past with a liability in new connection (quoting F.2d at 268 injurious act.” 881 Bekhrad, F.Supp. at transaction.” 2511(2)(d)). the case Before was U.S.C. § that it was Accordingly, we hold court, Congress de- by the district decided apply to court error for the district language. purpose “injurious” leted retroactively. We held: 2511(2) to section The 1986 amendment rights and clеarly affected “substantive C. amendment, to the Prior

liabilities.” by proving could recover plaintiff ... applied Even if the amendments acted with either a the defendant that not, and even they do retroactively, which injuri- or an purpose, tortious or criminal conclusively established if it were limited re- the amendment purpose; ous requisite constructive Murphy had the plaintiff where the can covery to cases decide, we knowledge, need not which we it altered sub- prove the Since former. government would that the are convinced liabilities, rights the amend- stantive summary judg to have not been entitled ‍​‌‌‌‌​​‌​‌​​‌​​‌‌‌‌‌‌​‌​​‌‌‌​​‌‌​‌‌​​​​‌​​‌‌​​‌​‍only prоspec- apply to presumed ment is knowledge that some ment. Constructive tively. offing in the is thing illegal may been have Id. at 270. government’s case. enough prove to not knowledge to amendment The constructive only Murphy could have In this circuit applies to the False Claims Act held to the amendments prior been liable information submitted. 31 U.S.C.A. ance of knowledge See of the conspiracy was 3729(b) (Supp.1990). It does not elimi inconsistent participation § in the con (a)(1) nate the spiracy. need under subsection Ciambrone, See 787 F.2d at 809- by some action 10. After whereby carefully defendant reviewing the record briefs, presented claim is presented. hearing or caused to be the arguments of counsel, C Bornstein, we are of States v. the view that a reason f. 303, 313, able trier of fact could L.Ed.2d that Mur conclude (1976))(under (a)(1) phy participant was not a court conspiracy. must look to specific “the We do not person government’s conduct of doubt that from proof allows collect”). whom the the inference Government seeks to was a Nor does member the conspiracy; however, knowledge constructive it does not compel that amendment to the Act conclusion. This is eliminate the need еspecially given true that resolution (a)(3) under of this subsection for proving that a requires case a determination person is a alleged member of the conspir mind, viz., state of whether he shared the acy. As we opin read the district court’s conspiratorial objective. See ion, Canderm conduct for which has Pharmacal, Ltd. v. Elder Pharmaceuti been held liable is the submission of claims cals, Inc., (6th Cir.1988) 862 F.2d by alleged his co-conspirator Common (questions of prone intent are less to sum wealth permissible Electric. This would be mary judgment). emphasize We only if Murphy truly a member of the reviewing summary judgment granted conspirаcy. Cripps, See United States v. by the against district court Murphy, we F.Supp. (E.D.Mich.1978) 975-76 must view proof inferences from the in the C.J.). (Kennedy, light most However, favorable to him. we A recent statement authoritative are in no wise suggesting or implying what required prove what is to civil the eventual outcome of this should case is Hooks, found Hooks v. 771 F.2d be. (6th Cir.1985): 943-44 points inconsist A civil conspiracy agreement is an be- in Murphy’s encies testimony and relies on persons tween two or injure more an- litigant rules that a cannot create a by other unlawful Express action. material issue of fact contrary affidavit agreement among conspirators all the is testimony, to earlier Gagne see v. North not necessary to find the existence of a western Nat’l Ins. 881 F.2d civil conspiracy. Each conspirator need (6th Cir.1989),and that discredited testimo not have known all of the details of the ny normally will not furnish sufficient evi illegal plan or all participants in- dence to withstand a volved. All that must be shown is that motion. Liberty Inc., Anderson v. Lobby, single plan, there was a that alleged the 242, 256-57, 477 U.S. 2514- coconspirator shared in general the con- 15, (1986). However, 91 L.Ed.2d 202 these spiratorial objective, and that an overt dispositive rules become govern if the act was committed in furtherance of the proof compelled ment’s a conclusion that conspiracy that injury caused to the com- Murphy was a member of the conspiracy. plainant. Moreover, Murphy while admitted that his The question of whether a person was a testimony in proceedings earlier was not participant conspiracy in a question is a of consistently truthful, the witness who fur fact. See United States v. August, 745 nishes the against bulk the of ease Murphy, (6th Cir.1984)(criminal F.2d case); i.e., Trepte, has also admitted his testi that Ghandi Police Dept. Detroit, v. 747 mony Cf. has not been consistently of truthful. (6th Cir.1984) (recognizing See J.A. 1002-1004. that cases involving conspiracy allegations

are not well summary suited to judgment). III. Murphy argued court, before the district stated, For the judgment reasons the of here, as he does that his conscious avoid- the district court is REVERSED and this Elec. Matsushita fact. issue of genuine proceed- further REMANDED

case is 475 U.S. Corp., Zenith Radio Indus. Co. opinion. this with ings consistent 89 L.Ed.2d 574, 586, 106 S.Ct. (1986). Judge, ENGEL, Circuit Senior part. dissenting in and concurring part in majority that we agree with the IWhile judg- grant to be hesitant must that majority’s conclusion the in I concur state of his party when against a ment Claims to the False the 1986 issue, discredited at or intent is mind 3729-3733, not should Act, 31 U.S.C. §§ to cre- testimony is insufficient incredible case. retroactively in this applied been have regard- material fact of genuine issue ate a majority’s the agree with I also Corp. v. mind. Bose or state ing intent fact existed of material issues genuine that 485, 512, 104 Union, Consumers fa- summary judgment precluded which (1984). L.Ed.2d 502 I of the on Count of the vor Mur- found that below district court “actual the apply When we complaint. inconsistent, implau- were statements phy’s States of United knowledge” standard reason- A perjurious. and sometimes sible (6th Assoc., & Ekelman that he was only conclude jury could able lawof say as a matter Cir.1976),we cannot rig the bids conspiracy to in a participant details Murphy knew the that defеndant project. Moccasin Bend on the his subor- which bid-rigging scheme Moore, Inc., em- Murphy’s & Fischbach arranged. Trepte dinate in feder- convicted already been ployer, has count However, on the second I believe rig conspiracy to entering into a al court of defen- against claim government’s competitor on Moccasin with its bids conspiracy count—the dant to Bernard According —the project. Bend summary judg- to government was entitled manager and Trepte, a Fischbach district majority’s ment, from the I dissent Murphy authorized Murphy, subordinate re- factual issues genuine that admittedly took conclusion rigging which the bid I believe question. han- concerning Trepte to main sent Though place. details, clearly concluded aware properly Murphy was court the district dle inflate the cost conspiracy artificially in a participate plan Murphy did first stage. He bidding project. at the project Moccasin Bend rig on the the bids “vague had recollections he in the testified that bury head attempts to his Elec- Trepte told [National [him] bid-rigging process, during the sand convention Association] trical Contractors’ self-serving affidavits presentation of his that he Honolulu, in June Hawaii testimony of other conflict with which ” ‘an accommodation’ reached [Trepte] insuffi- conspiracy, in the participants on contractor competing electrical issues genuine to create my mind cient Before project. Bend the Moccasin govern- II Count fact on of material inflated, which the bids meeting at him, af- I would against ment’s claim Mahoney, his coun- Phillip Murphy called summary judgment granting of firm the Mur- competing company. terpart at count. Mahoney suggested phy testified drawn in must be inferences Though all it”, their and that “stay out of supervisors party a court nonmoving when favor of subordinates, Wil- Trepte and respeсtive summary judgment, a motion considers arrangement” on Kale, any “handle liam Inc., Linden-Alimak, 799 F.2d Kochins v. explain kind to what asked the bids. When Cir.1986), nonmoving (6th 1128, 1133 “[t]he to understood “arrangement” he merely on the a trial to party not entitled is there that since mean, Murphy explained probative significant allegations; for the competitors basis of three two or support the rig the presented good to chance Trepte must be had a to job, evidence Trepte, v. Allen- that he Gregg Murphy admits told position].” bid. [nonmovant’s up there 859, (6th going to do you Cir. [in “whatever F.2d 861 801 Bradley doing your it on Chattanooga], you are to doubt as 1986). “metаphysical Mere in it.” own, I’m not involved to create a insufficient facts” is material 1041 Murphy’s is that rigged defense he had no on the project, bids later inform- ing Murphy that knowledge prior “an to the accommodation” submission had been reached on the bid. Certainly there illegal bids that an arrangement been was an agreement to an commit unlawful reached. Yet conspiracy Count II is a act, Murphy conspiratorial shared in that count, long and as Murphy agreed as with objective, and other members of the con- Trepte’s plan rig meeting to the bid ‍​‌‌‌‌​​‌​‌​​‌​​‌‌‌‌‌‌​‌​​‌‌‌​​‌‌​‌‌​​​​‌​​‌‌​​‌​‍at his spiracy committed overt acts in furtherance Kale, with Murphy is liable even under the of the agreement. Hooks, See 771 F.2d at pre-1986 version of the False Claims Act 944. These facts are sufficient to find applicable to this ease. He need not have Murphy liable on the conspiracy count aas every known arrangement, detail of the nor matter of law. participated in the meeting actual to be “One of the principal purposes of the liable conspirator. as a summary judgment rule is to isolate and dispose factually unsupported Although claims or the essence of conspiracy is defenses, and we think it should be inter- agreement, an express agreement is not preted way in a accomplish allows it to necessary prove to a civil conspiracy. Hob purpose.” Corp. Catrett, Celotex Wilson, 1, (D.C.Cir.1984); son v. 787 F.2d 317, 323-24, 2548, ard v. Argento, 699 F.2d Len (1986) (footnote L.Ed.2d omitted). (7th Cir.1983). Tacit understanding, inability current to recall the sub- time, created and executed over is enough stance of Trepte conversations with agreement to an constitute even absent Mahoney fails to convince me that he was personal communication. Direct Sales Co. part not of the Trepte which States, 703, 714, v. United 319 U.S. 63 and Kale described in legal proceed- eаrlier (1943). 87 L.Ed. 1674 ings. join I in Parts I and II-A and B of Once the existence of a conspiracy has the majority’s opinion, but dissent from established, slight been evidence is needed Part Murphy clearly II—C. conspired rig particular connect a participant bids project, to the Moccasin Bend I would affirm the district conspiracy. granting court’s Braasch, United States v. judgment against him on the (7th Cir.1974). conspir Each conspiracy count. ator is liable for the overt acts committed by any member of the conspiracy, even if

the defendant did not personally commit the acts. States, v. United Poliafico (6th Cir.1956). majori As the

ty’s opinion indicates, conspirator “[e]ach America, UNITED STATES of need not have all known of the details of Plaintiff-Appellee, illegal plan all participants or Hooks, involved”. Hooks v. 771 F.2d DAVERN, P. John (6th Cir.1985). Defendant-Appellant. I genuine find no issues of fact material No. 90-3681. remaining question on the conspir- States Court Appeals, acy’s existence Murphy’s actual knowl- Sixth Circuit. edge of agreement its existence Argued Feb. 1991. participants. its That he tried to insulate Decided June 1991. liability by himself from delegating respon- sibility to his subordinate Rehearing Granted; does not make En Banc any culpable. Judgment him Decision and less He Vacated Trepte told Sept. (Murphy) he “help would with Common- (the wealth” competitor) Trepte if any

problems with the bid. After this conver-

sation, Trepte went Chattanooga

Case Details

Case Name: United States v. Paul B. Murphy

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Jun 19, 1991

Citation: 937 F.2d 1032

Docket Number: 90-5648

Court Abbreviation: 6th Cir.