for knowingly receiving kickbacks from its subcontractors people because to load all employees received about five thousand dollars in business entertainments over a little more than a year and it did that even know k b r supervisors weren't aware that this was going on and even though both of the employees in question have received annual refresher training every theory k b r is zero tolerance no gifts policy this outcome shows the rest of the government's interpretation of the eight k which leaves to government lawyers to draw the line between business intertainment and kickbacks object companies and individuals through civil penalties and criminal prosecutions fortunately congress is built to limiting principles into the text  adequate back act which present this kind of prevent this kind of overreaching and either one of those i think would be enough to warrant reversal here first in order to avoid a collapsing the distinction between the strict liability provision of the aka and a separate provision requiring proof of corporate knowledge courts cannot infer or impute knowledge based on the acts of low level employees simply based on their apparent up forty and secondly consistent with the sun diamond case from the supreme court and also to prevent penalizing ordinary business going to stop there before you get to sun diamond and what's your basis for what the government what the congress has done to prevent use of apparent authority i thought i understood you to say that you cannot rely on the parent authority to prove the corporation knowingly the corporation knowingly received this kickback because if you are all you're looking for is a parent off already it would collapse the distinction between  that word employee in the strict liability provision does any work except for their statement that well that would be for situations where the person didn't have a parent not already and i think that's kind of a case is kind of a unicorn in that you're never going to give his judge all he said and the pain in his opinion in the first appeal if you're not going to give a kickback to somebody who doesn't have a pair nothing or who doesn't can't do anything to help you and in fact i would question whether that would even  as well as she proport it to i'm sorry well what is her errors pacifically point is that well i think that at a minimum you said at the tail end of your opinion that what she should consider on remand was their job titles their actual responsibilities and their overall place in the company and at a minimum she did not consider the overall place in the company because as the government's own witness said robert bennett was a rather low on the totem pole and his son james had even less off already so you are saying that you accepted kest of authority responsibility but she misapplied it she misapplied it yes that's correct because what she looked to really was not their overall position in the company and was much more like an apparent authority test where she was looking at not what smoot and kastner believe these people could do for them because she didn't s consider the fact that for example that robert which is one of many low level traffic managers and that james was one of even more low level concept contract administrative she did know that she may not have specified it but she did know bad well you should prove she knew that but she was not a basis for her opinion and you know if you have to she irresponsible and insufficient to hold them liable is that what you said that's what i'm saying yes that robert was a low level administrator low level supervisor who literally could not enter contracts for k b r his son james could enter contracts but passed legal muster well as you said in your opinion that she should have considered their overall place in the company there was too much focus on what suit tester would believe them capable of doing for them and not enough on whether it or may be what are we trying to prevent would you try to been to kickbacks when you make the company liable you house you have to factor in their ways for the company to protect themselves it may not be consistent with the policy of on any kickback act which is to push decision making pretty far down the hierarchy it seems to me that it's least relevant which you had grown looked at which is the apparent authority of these individuals actually to help them on what they were trying to get to get perhaps the problems with the subcontract that existed and get those to be overlooked on the continuation is of a renewable newell's of contract so i'm not saying the parents orders the right tests but we do need something that is likely to hold the company accountable that can't avoid just by pushing decision making authority far enough down the hierarchy where we can always say we were oblivious to what was happening oh well in any think that the limited liability actors on such a good analogy because it's a body of law that this court has developed it addresses a situation that is really just like we have here it's a two tier statute that creates one level of liability based on you know strict liability for the employees performance and an enhanced level of liability if there is corporate knowledge and it is exactly the type of situation we have here and i think it makes sense when you're trying to decide how this to church statutory scheme you know that you you know there's no reason to invent the wheel and even if the court doesn't adopt all of the hellenic factors i think it makes sense to adopt the basic inside of that line of cases which is that when you have that two church level of secur y liability scheme you have to have in order to oppose that additional enhanced level you should have some indication of that they really stand for the company that person represents the company for that and in the polemic type of cases you require proof of an ability to make basic business decisions you know hire and fire people enter into contracts you know set prices things of that sort and there's really no question that these individuals would not have that you know as i  cases that's not they haven't applied a parent authority and i don't think it makes sense to use that for this additional layer of liability because you would never have to you would never have to use the strict liability provision if all it took was a parent forty every case you had where somebody was given an opportunity presumably that person would have been given the gratuity because you would think they would help them because otherwise it wouldn't even be a kickback i don't think under the government or under the text of the statute because it has to be given for you truck the lawyer loaded have you know exactly something not that exactly but that would be as you indicated in your opinion is the government indicated in the first argument of this case it would be irrational for anyone ever to give of you know basically money that was intended as a kickback to somebody who could help them so it would literally do no good at all it would do no work and it's a basic axiom of statutory construction that you cannot have an interpretation that renders words  use of the government has come up for that word employee in the strict liability provision is for these cases where they don't have a parent off already and that is a unicorn you don't take backs to people who don't have a parent authority i'm sorry well some say and you have indicated that the efforts it to make to try to address this problem or sessions with people in the level of the ones that took the kickbacks here not to take max you mean what k b r can do to prevent that well yes i know you said they went through some kind of training instructions and so on well the kind of kickbacks that were at issue here are particularly hard because it's not like they came to work with you know new b m w s wearing a gold rolex you know they were carrying the  kickback the supposed to kick back in their stomachs when they return to work and it's very hard to do that unless the police that unless you literally are like you know show us your meal receipt for the last week or so i think it's hard to fault k b r too much on this particular type i mean it's not like they have instructions did these particular people have with respect to the any case policy and discouragement on the part of the on route i'm not familiar with the actual education program but i do know that there was a written policy and that they received annual training and i have a copy of the policy here which i could you know hand up who receive daniel's friend both of the employees here and everyone in the government services section of k b r which was one of thirteen units  think the point is that in order to draw a distinction this the standard that the district court applied the standards the government is asking to apply the problem with it is that if you don't type to particular conduct it looks too much like what the point  ordinary business entertainment which is to develop goodwill when you have broken bread with someone they know you better they're more likely to understand you they're more likely to trust you and all of those are legitimate reasons why they should be more likely to give you business but when you say does that mean they're more likely to give you business is it mean you're more likely to overlook performance problems there are legitimate reasons for that but when you take it unless you tie it to particular acts it looks an awful lot like you can punish ordinary business conduct it looks a lot like one thing that the court also overruled and sunday i'm in the spring or overlooked and in some time i'm at page four hundred four of the opinion they overrule this idea that it was enough to find quote intent to reward past past favorable acts or to make future ones more likely and when you have this kind of good luck goodwill when you have a good relationship with your client or when you have a good relationship with the people they're more likely to give it to you but that's for a legitimate reason and one reason why you have to look t particular acts is to avoid avoid a sexually penalizing ordinary business conduct i think it also follows from the language of the statute and from the the legislative history which shows i mean if there were dealing with something else and to apply the same past seems to me to be due to demanding of the any kid back and if you give me something that someone in the media world would be a lesser standard than a specific action official act  it would seem to make more sense to me i think that that's a reason reason why it should be read the same way because otherwise you have the peculiar situation where a kickback behavior or a gratuity between a subcontractor and a contractor can be  criminalized but one rung up the very same conduct would not between the contractor and a government official even though a government official is being compromised and i would think if anything it's more serious when you're compromising a government official than a somebody who's just a government contractor i think that's a reason to apply the the sun damage test if we disagree if released i disagree as are any and immediate standard that you could think of that you have thought of i'm not trying to win that from the only i'm there i have not thought of one but i think that the the important thing is that the government hasn't pointed to one the court below hasn't pointed to one and i don't know exactly what it would be if you don't point to a you know if you don't tie it to a particular act i don't know what it is that would prevent essentially sweeping and good will because after all you know if you have a good will it doesn't make it more likely if you're going to get subcontract that makes about like a lot of stressing the statue limitations issue oh  i only have three so sure sure i mean sat two more minutes ok on the statute limitations issue we presented two arguments out of thirty seven thirty one which is after all a false claims act provision intitled false claims procedure and i think that for two independent reasons within that there is reason to believe that this is untimely the government makes no bones about the fact that they knew about this in january before they didn't file the complaint intervention until august of two thousand is more than six years later and it's only timely if it comes back with it comes within that later about provision now the first clause there's there's two arguments both the idea that their government did not intervene and pursue this and they stop pursuing it when they dismissed a arms or dismissed a false claims act procedure as a naked aka a plan that's all that's going to i did initially have they did initially pursue both false claims ok that's correct but our argument is that it's a present tense the thirty seven thirty one c speaks in the present tense they intervene and pursue and they're not pursuing it now we argue that for this you know it's a very remarkable thing  term claim in the in the statute there's no dispute that that has to refer to a false claims act claim it's the only kind that relate or has standing to bring and it's a ordinary principle of statutory construction that every time a word appears there thereafter in a statute that has the same meaning and i think it's not for nothing makes an issue just one sentence only there's it's not for nothing if the very following clause thirty seven thirty one uses an entirely different term cause of action and i think it's consistent you can say that as a legal theory and up here these are different factual theories and in any event we thought it was a clear question which is why didn't trouble accord with it until i was asked about it thank you very much money was used directly for a specific purpose and you're claiming that k b r didn't raise that question only in district court yes your honor i'd like the k b r did raise it in opposition to the government's motion for a partial summary judgment it was an across motion they weren't saying we win on this basis they were only saying the government doesn't win on this basis for only a subset of claims that ultimately went to trial so they in the partial separate judgment ruling she had not adopted that view but she did not explicitly reject it and let's know this was not even for all of the claims that ultimately were going to trial and i point this court to the signing case from the circuit where the notice of the factual and legal basis on which you intend to litigate this case so having said nothing about it after raising it in their opposition to partial summary judgment the united states and the district court was not unfair notice that they i'm not taking them up on that and here's why but again at the pretrial conference i urge the court to look at the pages from the pretrial and post trial filing from k b r that they point too that's page eight hundred seventy two pages twenty eight eighty four they say that's where we raised and that's where we put the government in the court on notice that this was a factual and legal basis that we think we went on and if you look at those pages the only way they're citing sun diamond the only argument they're making is that we have to show knowledge on both the part of the recipient and the giver the district court took them up on that she agreed with them she said yes you do have to prove knowledge she specifically said in her district court opinion that's on appeal now to the extent that what i'm saying now conflicts with what i said before the prior order is overruled so when they had said we disagree with something your honor has said about the definition of a kickback and we want to litigate the case on that basis the district court and gauge no your honor i'm unaware let me put it this way i'm unaware of anything where they said what is this specifically and they certainly had put us on notice that we needed if we wanted to preserve liability on at least some of these claims that we needed to provide a very specific act that each person had in mind when they gave in when they took these things of value so again even if there were some questions about it and i'm not sure what i'm unaware of any specific ones we weren't on notice that they thought the reason they would win this case is because we had shown a specific a particular act as opposed to improper favorable treatment which is of course what the statute refers to i'd like to turn to the proper interpretation of eighty seven zero six unless there are further questions about waiver i think there the primary argument k b r is making here is that our reading of the statute by urging an apparent authority or knowledge imputation standard is that we don't give meaning to the word employees and eighty two and i think the facts of this case as they developed at trial give the lie to that supposition there were other lower level k b r employees here james americas melissa page the woman named needa who were also the subject of eagles kickbacks they were under bob bennett supervision and we did not even try to make out a case that they had the apparent authority to give kate eagle the favorable treatment that they were that that they were trying to get i don't think this is a rational your honor though and just a common sense way about how kickbacks work if you want your contract performance to be evaluated not on the basis of your actual performance but because people like you you say sure let's take the whole lot as i want to bring the people who are your friends and coworkers and take them to dinner and take them to golf so even if those are not the decision makers because we could only make out a case for the decision makers here james and bob bennett those are very much kickbacks that absolutely were being passed along that were being paid by eagle inflating the price and corrupting the kickback process so you put a lot in that final phrase and back it development kind of expenditures that go along traditionally across the board and law firms private businesses that those are taking somebody for business development purposes without any specific contractor of contract in mind is prohibited if you have to write well of k b r i think that's a little overbroad your honor at the at first as a baseline the idea that because something is ordinary course of business in the private that absolutely does not make it ok congress has made clear that anything of value if you're giving and here's where i think the hypothetical got a little overbroad your honor in order to improperly obtain favorable treatment on a subcontract so here the district that they had a specific policy for their government contracts group that you couldn't take anything even the nominal things of value that you were allowed such a not callous policy i'm asking you where is the statutory law and i think you are using the line if you can take nothing that you cannot be entertained your honor that the word improperly does some work here and you are asking about an intermediate standard the district court gave real meaning to the word improperly by saying the government has to show that these were not incidental or innocent favors that is our standard of proof and we met it here that was at k b r urging and that phrase is drawn directly from the legislative history so if the government can't show these weren't innocent these weren't designed to improperly influence the subcontracting process the evaluation of the award if we can't make that showing we don't get liability so the word improperly does real work the district court gave it real contact content at k b r urging and we met the standard that was set out there but returning to the work that the word employees does we chose not to pursue an a to theory in this case we were speeding silly under a one and so we could only go after kickbacks where we could establish that the recipient had apparent authority the district court found and that finding is unchallenged on appeal that james and robert do think the district court did more than it had to again we were urging that appear in authority for both the acts and the mental state while committing those acts is the appropriate standard but even if even if there is some sort of standalone separate knowledge imputation that doesn't use the usual rule of apparent authority that standard was amply satisfied here the district court expressly adopted judge jolly's concurrence and applied it the pitch on appeal was that the district court was obliged to run through the eight factor in re hellenic test from the limited liability context and that the district court committed legal err by not running through all eight of those factors but the district court did put judge dolly set on his concurrence and so whether you think that apparent authority is the appropriate standard or whether you think it's a separate knowledge imputation standard under judge dolly's concurrence we've met that standard here in this court should affirm either way the only way i think that k b r is gets a reversal here is if you find legal air that the district court did not apply those eight specific factors from in  part there's not your honor but of course that app ellie's can urge a firm and on any ground fairly presented in the record we very specifically preserve this question at record on appeal twenty one ninety one to say we understand the district court is going to adopt judge dolly's regime for knowledge imputation but we think apparent authority is the right way to go and if i could just say a few words when it went when did you say you did this in the in the bench trial yes your honor how did you know the judge was going to use we call it the dolly standard that you know the judge would go you that it her and her order on the partial summary judgment motion she ran through the various options the kind of three different fact tests that were been put forward and while they certainly are going to be fact intensive and all of the cases about this talk about how you have to look at the particular circumstances of the case i think courts are able to use as a touchstone is it fair given what the corporation you this employ the kind of responsibilities the kind of authority that they had is it fair to the corporation to impute that employees knowledge if i could say of just a few words about why we think that that view of knowledge  that the cases that the restatement that the sections of fletcher that are about knowledge as a standalone fact is is not the right way to look at this why we think approach apparent authority is the right way and i would direct this court to the hydra level decision and the they specifically sided with approval a number of cases that involved imputing torts that require a specific knowledge that require a state of mind so they pointed to the krebs case that imputed again just using the same apparent authority knowing participation in a securities fraud scheme just any participation unknowing participation would have violated the securities act but knowing participation did and the supreme court didn't suggest that you you don't take the knowledge that you've engaged separate and apart from the knowing engagement in the conduct similarly with common law fraud in common law fraud you have to have a certain c enter but nowhere in the rules of the carious liability do we walk through the elements of common law fraud and say well the misrepresentation the act of misrepresenting something to an innocent third party that's imputed that act is but the represents the enter that you knew that you were deceiving them that goes up under a separate standard so that's why we think that appeared authority is the right way to look at imputing under imputing to a corporation both knowledge and mental states but i do want to emphasize that that is just district court did faithfully hi the test from judge dolly's concurrence and there's no reason to to reverse on that basis let me move to some of the other issues even one that may be waived would do you say to the argument you just heard or otherwise to where this must be tied to some more specific conduct on the part of the kickback or i think not of the three rationales that the supreme court set out in sendai and about that particular statute section two a one apply here first the text of the statute has actually moved away from a specific act requirement before the one nine hundred eighty six amendments you would have had to show a specific act you would have to show the actual award of a subcontract or an order and congress deliberately changed that to the much more generalized phrase trying to obtain improper favorable treatment and there is no separate specific definition of improper favorable treatment in the act the way there is in section two zero one second the sort of contract maybe being issued over the line between what properties improper is invisible matter how do you apply this that you this standard statute in the real world your honor i think i discern well again you're under the government has the burden to show we have to prove that this wasn't incidental or innocent and we met that standard he seems circular it's either improper or is innocent and that's all part of the definition of  about policing the line they impose that because of a specific statutory problem and we don't have that statutory problem here moreover the snares for the unwary that the court was troubled by there was not some not under the i can't back act your honor it has to only be given an order in it with the intent to improperly obtain favorable treatment on a sub contract but again the snares for the unwary were that in the gift giving context to government officials there are statutes that the supreme court pointed to that say under certain dollar value or for specific purposes it's ok to get gifts and the supreme court said we think the government's theory and send diamond would mean that you might be held criminally liable under two a one for conduct that was specifically okayed in a separate statute but there are no statutes that say it's ok to take low level things from your subcontractors in order to develop goodwill let alone the two hundred dollars dinner after four hundred dollars dinner after three hundred fifty dollars round of golf that are two hundred dollars lunch that we have here so this case i think i understand your concern about the standard generally i don't think any of the factors that were  but i think this case does not represent any form of government overreach as the district court found there was a prolonged course of frequent gift giving by e g l to these k honor i think it's helpful just to turn to the head to that text at thirty seven thirty one which makes it clear that the government can come in and file an entirely new complaint an ad any claims and then any such pleading relief back in its entirety and i think that that language to add the tale to the claims for which the government is intervening i are they can do so quote to add detail to the claims in which the government is intervening even though the government can file and you complain but it's to add detail to the claims in which the government is intervening in the claims the government was in was a false claims act you are but that is not the only thing that the government can do the ad to tell does not control that's not the limit on what the government can do it says it can to clarify or add t amend the complaint as opposed to swooping in with an entirely new complaint about read it that way but you're under the just as a pragmatic matter the only claims that are relator can bring are under the false claims act of course conduct gives rise to false claims act liability is often going to properly be the subject of of many other statutory violations criminal ones like the ones happened here and i kicked back ect liability as well as false claims act  things your honor that the us congress specifically acted to overturn a second circuit's ruling that said we think the notice underpinnings of rule fifteen we think the kind of judicial glottal that it has to give fair notice that's the wrong way to think about this and in this statutory context we want the government to be treated as if it had filed that related complaint way back in two thousand and four second the in order to keep something under seal which would deprive them of notice the united states has to go to a court every sixty days and establish that there is good cause for this remaining under seal and the united states satisfied that burden so it's not just that we get to sit on these complaints for years on our own say so we have to go to a court and establish that there were good reasons for keeping this under wraps and we satisfied that here see i'm out of time identified at the outset that is they haven't given any meaning to the word employee in the strict liability provision they said they all they could point to was again employees without apparent authority and they haven't given any limiting principle to the word improper with respect stays and whatever to a going to lunch if you want to gamble go ahead but i think you know that is at least a clear standard i don't think it's a standard that congress intended because even if you don't put a lot of truck in legislative history they legislative history was fairly senate and the house reports on the legislation and this court in addition and i can actually provide a cite for that this court in addition has said that it didn't mean to address ordinary business practices and more as a diesel vs it's not this court of the federal claims it's a court battle claims but more so the source of united states sixty six but claims seven eighty eight eight hundred and the the site is practices that are normal in business settings a senate report at eleven on that  but it is not the standard that they take the congress meant to give and they put the word i think improper in there for a reason and i think the best mean you can give to it is the meaning that they essentially gave in sun diamond which is the idea is that general efforts to obtain goodwill are not wrongful the government said that this was a dress that the eighty six legislation i'm sorry that sun diamond was to address specific obtain reward are pretty much like the four because of the word improper the fact that that's in there suggest that if anything as they say it's more reason to appoint some diamond because that identified the general efforts at goodwill are not  what about that it doesn't mean congress has given some signal by removing what would have been a little clearer standard and we're now back to the fuzziness that we have well i think the i mean there is there's a i'll try if you'll start over again i think that the legislative history is to borrow a phrase from sun diamond pregnant with the idea that it has to be a particular act because if you look at it they may have said not an inducement but they they did say they did identify particular already in the act they had a list both of the reports had a list of eleven different examples of particular acts and all of those are you know way more specificity than what we have here things like quote being allowed to bid after a deadline has passed obtaining normally unavailable information about a competitors bid improperly obtaining a reward all of those are very specific particular acts are not talking about you know we hope that will get better treatment in the future or we hope that we'll get a subcontract some day it's about specific acts and with my remaining time i want to do is point out one thing about the preservation issue this court has said there's no bright line rule she admits the government admits that we raised it in our most percentage judgment  what was it and also was it developed during trial with question and answer and by that point we thought we had lost because remember we raised this in the summary judgment right and she said i find that there is no issue of material fact with respect to whether these were kickbacks so that point we thought would already last issue on our pretrial and post trial motions were all based on this idea that we thought we'd already lost this issue which as she says we presented occasional eye witness was never a question about did this have a specific purpose and no specific illegal purpose or anything like that there was motive element of that is during the bench trial no but i would like to i mean not that i know of but two points about that first the government had plenty of opportunity raised in our brief they haven't pointed to they've made generic descriptions of prejudice but they haven't pointed any evidence they would have brought in even though these are older witnesses and then secondly the simon case they cite for the idea that some reason motion is insufficient there it specifically said the government did that we don't claim in the statute applied to the case