Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-08-05390/USCOURTS-caDC-08-05390-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 7, 2009 Decided June 22, 2010 

Nos. 08-5390, 08-5391, 08-5392, 08-5393, 08-5394 

UNITED STATES OF AMERICA EX REL. RICHARD F. MILLER AND 

RICHARD F. MILLER, 

APPELLEES

v. 

BILL HARBERT INTERNATIONAL CONSTRUCTION, INC., ET AL., 

APPELLANTS

Appeals from the United States District Court 

for the District of Columbia 

(No. 1:95-cv-01231-RCL) 

Alfred W. Putman, June Ann Sauntry, Barry Coburn, 

Charles C. Murphy Jr., and Charles S. Leeper argued the 

causes for appellants. With them on the briefs were Michael 

R. Miner and Alicia Hickok. Bryan B. Lavine, Stephen P. 

Murphy, and Brian P. Watt entered appearances. 

Steve Frank, Attorney, U.S. Department of Justice, and 

Paul R.Q. Wolfson argued the cause for appellees. With them 

on the brief were Douglas N. Letter, Attorney, U.S. 

Department of Justice, Keith V. Morgan, Assistant U.S. 

Attorney, Robert B. Bell, Jennifer M. O’Connor, and Annie L. 

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Owens. R. Craig Lawrence, Assistant U.S. Attorney, and 

Daniel S. Volchok entered appearances. 

Before: SENTELLE, Chief Judge, GINSBURG and TATEL, 

Circuit Judges. 

Opinion for the Court filed PER CURIAM. 

Separate opinion dissenting from Parts II.A.2 and II.G.4 

filed by Circuit Judge TATEL. 

TABLE OF CONTENTS

I. Background .......................................................................... 3

II. Analysis .............................................................................. 8

A. Statute of Limitations ................................................ 8

1. Relation Back Under the FCA ........................... 10

2. Claims Concerning Contracts 07 and 29 ........... 13

3. Claims Against BIE ........................................... 19

4. Remaining Claims ............................................. 24

B. Preemption ............................................................... 25

C. Personal Jurisdiction over HUK .............................. 27

D. Anderson’s Settlement ............................................. 29

E. BHIC Stipulation ..................................................... 30

F. Precluding BIE from Contesting Liability ............... 33

G. Evidentiary Issues .................................................... 35

1. BIE’s Guilty Plea ............................................... 36

2. Expert Testimony on Cartels ............................. 40

3. Ruggieri’s Testimony ........................................ 45

4. Evidence of HII and HC’s Wealth ..................... 46

H. Sufficiency of the Evidence ..................................... 50

1. Overarching Conspiracy .................................... 51

2. HUK’s Involvement in the Conspiracy ............. 55

3. Damages ............................................................ 62

III. Conclusion ...................................................................... 66

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PER CURIAM: In this False Claims Act case, the jury 

found five companies and one individual liable for rigging the 

bidding on three contracts in Egypt funded by the USAID. 

Trebling the jury’s award, the district court imposed over $90 

million in damages. The defendants appeal, challenging 

several of the district court’s rulings, as well as the 

sufficiency of the evidence adduced against them. For the 

reasons set forth in this opinion, we conclude (1) that the 

plaintiffs’ claims on two of the contracts are barred by the 

applicable statute of limitations, and (2) that certain testimony 

and evidence introduced at trial unfairly prejudiced three 

defendants. In all other respects, we affirm. 

I. Background 

Following the 1978 Camp David Accords, the United 

States agreed to provide economic assistance to Egypt 

through the U.S. Agency for International Development 

(USAID), including funding for improving sewer systems in 

Cairo and Alexandria. The sewer projects were divided into 

numerous construction contracts and put out for bidding by 

contractors prequalified by the USAID. 

In 1995, Richard Miller, then a Vice President of the J.A. 

Jones Construction Company (Jones), the 40% partner in a 

series of identical joint ventures that bid on three of the 

projects, filed a complaint under the False Claims Act (FCA). 

31 U.S.C. § 3729 et seq. Enacted during the Civil War, the 

FCA penalizes knowingly submitting or conspiring to submit 

false or fraudulent claims to the United States Government, 

§ 3729(a)(1)(A), (C), and authorizes private enforcement 

through qui tam actions, which give individuals knowing of 

fraud a monetary incentive to come forward, § 3730(b). In 

his complaint, Miller alleged that in the course of his 

employment, he discovered that the defendants, other 

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contractors, and a variety of related corporate entities and 

individuals were all members of a conspiracy to rig the 

bidding on contracts in Egypt. This so-called Frankfurt Club 

would meet to discuss upcoming contract bids in Frankfurt, 

Germany, the home of the conspiracy’s leader, Jones’s parent 

corporation, Holzmann, A.G. Miller’s complaint focused on 

the bidding for one particular contract, Contract 20A, and 

named Holzmann, Jones, Harbert International, Inc. (HII)—

Jones’s partner on the other side of the joint venture—and 

several related corporations as defendants. 

In accordance with the FCA, Miller filed his complaint 

in camera, and the district court placed it under seal. A qui 

tam relator suing under the FCA brings his case “in the name 

of the Government,” § 3730(b)(1), and his initial complaint 

remains under seal for sixty days. Before the expiration of 

that period, the Government must (1) intervene and “proceed 

with the action, in which case the action shall be conducted 

by the Government,” § 3730(b)(4)(A); (2) “notify the court 

that it declines to take over the action, in which case [the 

relator has] the right to conduct the action,” § 3730(b)(4)(B); 

or (3) petition the court for an extension of the seal period by 

showing “good cause,” § 3730(b)(3). If the Government 

decides to intervene, it typically does so by filing an amended 

complaint. 

In this case, soon after Miller filed his complaint, the 

Government opened a criminal investigation into the alleged 

conspiracy and, fearing that active civil litigation would 

interfere with that investigation, filed successive motions to 

keep Miller’s complaint sealed. In the meantime, the 

Government prosecuted many of the participants in the Cairo 

and Alexandria bid-rigging arrangements, obtaining guilty 

pleas or convictions from at least five U.S. corporations or 

individuals. 

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In February 2001, the Government allowed Miller’s 

complaint to be unsealed and filed its own Complaint in 

Intervention, taking over control of the case. The 

Government’s complaint adopted the claims that Miller had 

asserted on Contract 20A and added claims on two other 

contracts, Contracts 29 and 07, which it characterized as part 

of the same Frankfurt Club conspiracy. It charged all the 

defendants with substantive FCA violations for each of the 

three contracts and with participating in the overarching 

conspiracy. Miller later amended his complaint to do the 

same. In essence, Miller and the United States alleged that 

prior to each contract, some or all of the bidders prequalified 

by the USAID met in Frankfurt to discuss the bidding. At 

these meetings or thereafter, the bidders reached an 

agreement that all but one would either bid high or refrain 

from bidding, and the winning bidder would pay these 

cooperators a “loser’s fee.” 

Contract 20A, the first of the three contracts and the only 

one identified in Miller’s original complaint, covered 

installation of large-diameter, underground sewer pipe in 

densely populated Cairo neighborhoods. The plaintiffs 

alleged that the joint venture between HII and Jones (HarbertJones), one of three prequalified bidders, sought and received 

commitments from the other two companies to either overbid 

or not bid for the contract. Thanks to this agreement, 

Harbert-Jones ultimately won the contract for $115 million, 

subsequently paying the other two bidders $2.2 and $3 

million for their cooperation. The plaintiffs further alleged 

that in order to hide $10 million in excess profits, the joint 

venture engaged in a sale/leaseback transaction with an 

affiliated corporation. 

Contract 29, the second contract, involved the 

construction of a wastewater treatment plant near Cairo. In 

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this instance, Harbert-Jones allegedly met with the only other 

prequalified bidder and agreed to lose the bid in exchange for 

a $4 million loser’s fee. 

The third contract, Contract 07, covered the construction 

of sewers in Alexandria. Because this time Harbert-Jones 

was apparently unable to reach a bid-rigging agreement with 

all other qualified bidders, it entered into a bilateral 

agreement with one other bidder. Under that deal, the party 

that won the contract would compensate the other with a 

loser’s fee. Although the record is unclear on this point, the 

fee would have been either 1.5 million U.S. Dollars or 1.5 

million German Deutschmarks. 

As relevant here, the Government’s Complaint in 

Intervention and Miller’s amended complaint named the 

following defendants: 

 Holzmann, see supra at 4; 

 Jones, see supra at 3; 

 HII, see supra at 4; 

 Harbert Corporation (HC), HII’s parent corporation; 

 Bilhar International Establishment (BIE), to which HII 

assigned the contracts in question after bidding was 

complete. (We hold, infra at 20, that the reference in 

the original complaint to Harbert International 

Establishment, Inc., was intended to refer to BIE); 

 Harbert Construction Services (U.K.), Ltd. (HUK), a 

corporation owned 49% by BIE and 51% by a private 

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individual that provided various financial services in 

connection with the bidding; 

 Bill Harbert International Construction, Inc. (BHIC), a 

corporation which, though inactive at the time of 

bidding, subsequently took partial ownership of BIE 

and allegedly provided support for fraudulent billing 

on inflated invoices as the ill-gotten contracts were 

completed. 

 Bill Harbert, President of HII and a senior executive at 

other corporate defendants; and 

 Roy Anderson, Vice President of HII and President of 

BIE. 

Five years of pleadings, motions, and discovery followed 

Miller’s amended complaint and the Government’s 

Complaint in Intervention. After declaring bankruptcy and 

settling with the plaintiffs, Holzmann and Jones were each 

dismissed from the case. Trial began in March 2007, and 

following seven weeks of testimony, the jury found for the 

plaintiffs on every count. This included conspiracy by all 

defendants, as well as substantive violations by most 

defendants with respect to most of the contracts. (For some 

defendants’ involvement in some contracts, the district court 

held that it lacked subject matter or personal jurisdiction. In 

addition, at the conclusion of testimony, the court found all 

claims against Bill Harbert were barred by the FCA’s statute 

of limitations.) 

The jury found that the United States suffered 

approximately $34 million in damages from the defendants’ 

conduct. As required by the FCA, the district court trebled 

these damages and added statutory penalties. See 31 U.S.C. 

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§ 3729(a). After subtracting amounts previously recovered by 

the United States, it awarded $90.4 million in damages. The 

defendants moved for judgment notwithstanding the jury’s 

verdict on a variety of issues and sought a new trial on others. 

Rejecting the defendants’ legal arguments and finding the 

jury’s verdict amply supported by the evidence, the district 

court denied all of the defendants’ motions in a 125-page 

opinion. Miller v. Holzmann, 563 F. Supp. 2d 54 (D.D.C. 

2008). This appeal followed. 

II. Analysis 

The defendants raise a number of issues. We first 

address two threshold issues—whether the statute of 

limitations bars any claims against the defendants and 

whether the Foreign Assistance Act preempts the False 

Claims Act. We next address personal jurisdiction over 

HUK, the contradiction at trial of a stipulation regarding 

BHIC’s existence, and the district court’s decision to preclude 

BIE from contesting liability. Finally, we address the 

defendants’ arguments concerning four evidentiary issues and 

the sufficiency of the evidence. 

A. Statute of Limitations 

As relevant here, the FCA precludes a civil action filed 

“more than 6 years after the date on which the violation . . . is 

committed.” 31 U.S.C. § 3731(b)(1). The violations at issue 

here occurred in the late 1980s and the 1990s. Miller filed his 

initial complaint in 1995 alleging the defendants violated the 

FCA in their dealings associated with Contract 20A. The 

Government filed its Complaint in Intervention in 2001, 

adopting Miller’s claims concerning Contract 20A and adding 

its own claims concerning Contracts 07 and 29. In his Third 

Amended Complaint, filed in 2006, Miller too added claims 

concerning the latter contracts. 

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The defendants argue the statute of limitations bars all the 

Government’s claims and bars Miller’s claims concerning 

Contracts 07 and 29 because the events giving rise to those 

claims occurred more than six years before the claims were 

brought. The Government and Miller argue the claims relate 

back to Miller’s initial complaint and therefore have the 

benefit of the earlier filing date.1

 BIE argues separately the 

claims against it do not relate back because it was added as a 

defendant after the statute of limitations had run. 

The district court held the Government’s claims 

concerning Contracts 07, 20A, and 29, as well as Miller’s 

claims concerning Contracts 07 and 29, relate back to Miller’s 

initial complaint. See 563 F. Supp. 2d at 139–42. We review 

de novo whether “claims are barred by the statute of 

limitations,” Jung v. Mundy, Holt & Mance, PC, 372 F.3d 

429, 432 (D.C. Cir. 2004), and hold the statute of limitations 

does not bar the Government’s claims concerning Contract 

20A because they relate back to Miller’s timely filed 

complaint but does bar all claims, both the Government’s and 

Miller’s, concerning Contracts 07 and 29. The district court 

also rejected BIE’s separate argument, as do we, because BIE 

 

1

 In a post-argument letter to the court, the Government 

belatedly argues at least one claim concerning Contract 29 was 

timely without regard to relation back because the underlying 

events occurred less than six years before the Government filed its 

Complaint in Intervention. Because the Government failed to raise 

this point in the district court or in its briefs in this court, the point 

is doubly forfeit and we do not consider it. See Bryant v. Gates, 

532 F.3d 888, 898 (D.C. Cir. 2008). With the exception of the 

arguments regarding recent decisions of the Supreme Court, the 

same is true for the other arguments the parties raised in the various 

post-argument letters. See id.; Fed. R. App. P. 28(j). 

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should have known within the required time it was an 

intended defendant. 

1. Relation Back Under the FCA 

At the time of trial the FCA did not by its terms address 

relation back, but the district court held the FCA nonetheless 

implicitly permitted an otherwise untimely claim to relate 

back under what is now Federal Rule of Civil Procedure 

15(c)(1)(B). See 563 F. Supp. 2d at 139–40 n.137 

(interpreting what was then Rule 15(c)(2)). In 2009, after trial 

but before this appeal was briefed, the Congress amended the 

FCA expressly to provide for relation back. The statute now 

reads: 

For statute of limitations purposes, any such Government 

pleading shall relate back to the filing date of the 

complaint of the person who originally brought the 

action, to the extent that the claim of the Government 

arises out of the conduct, transactions, or occurrences set 

forth, or attempted to be set forth, in the prior complaint 

of that person. 

31 U.S.C. § 3731(c). 

The statute as thus amended applies to this case on 

appeal. Although most of the 2009 amendments to the FCA 

apply only “to conduct on or after the date of enactment,” the 

provision permitting relation back was made expressly 

“appl[icable] to cases pending on the date of enactment.” 

Fraud Enforcement and Recovery Act of 2009 (FERA), Pub. 

L. No. 111-21, § 4(f)(2), 123 Stat. 1617, 1625 (emphasis 

added). 

The defendants’ arguments that the amended statute 

cannot constitutionally be applied to this case are 

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unpersuasive. The Ex Post Facto Clause of the Constitution 

applies only to penal legislation. See Calder v. Bull, 3 U.S. (3 

Dall.) 386, 390–91, (1798) (opinion of Chase, J.); see also

Landgraf v. USI Film Prods., 511 U.S. 244, 266 n.19 (1994) 

(citing Calder). The FCA is not penal. See Hudson v. United 

States, 522 U.S. 93, 100–03 (overruling Court’s prior decision 

that a civil FCA proceeding could be criminal under the 

Double Jeopardy Clause). We need not address the 

arguments concerning the Takings and the Due Process 

Clauses of the Constitution because they were raised in only 

two conclusory sentences. See Cablevision Sys. Corp. v. 

FCC, 597 F.3d 1306, 1312 (D.C. Cir. 2010) (“Federal courts 

should not . . . decide [a] constitutional question unless it is 

presented with the clarity needed for effective adjudication.”) 

(brackets in original) (internal quotation marks omitted); 

Cement Kiln Recycling Coalition v. EPA, 255 F.3d 855, 869 

(D.C. Cir. 2001) (“A litigant does not properly raise an issue 

by addressing it in a cursory fashion with only bare-bones 

arguments.”) (internal quotation marks omitted). 

The defendants argue the Congress did not intend that the 

amendment reach cases in which the Government had already 

intervened because it referred to “cases pending” rather than 

to “all pending cases.” In Lindh v. Murphy, 521 U.S. 320 

(1997), upon which the defendants rely, the Supreme Court 

discussed in a footnote the use and omission of “all” and 

“any” in statutory provisions. See id. at 328–29 n.4. There 

the Court interpreted a retroactivity provision that on its face 

applied only to one of several chapters in the statute. See id.

at 326–27 (quoting Antiterrorism and Effective Death Penalty 

Act of 1996, Pub. L. No. 104-132, § 107, 110 Stat. 1214, 

1226 (“Chapter 154 . . . shall apply to cases pending on or 

after the date of enactment of this Act”)); see also Martin v. 

Hadix, 527 U.S. 343, 356 (1999) (explicating Lindh). Unlike 

the statute interpreted in Lindh, the clause in the FERA 

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specifying the effective date of the provision concerning 

relation back is not limited in scope to a particular type of 

case or subset of cases. 

The defendants, citing the Supreme Court’s recent 

decision in Carr v. United States, 560 U.S. __, No. 08-1301 

(June 1, 2010), would also have us infer, from a temporal 

sequence or choice of verb tense, that Congress intended to 

limit the effect of the statute to cases in which the 

Government has not yet intervened. We have no need to draw 

inferences, however, when the statute is clear on its face. See

Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997) (“Our 

first step in interpreting a statute is to determine whether the 

language at issue has a plain and unambiguous meaning with 

regard to the particular dispute in the case. Our inquiry must 

cease if the statutory language is unambiguous and the 

statutory scheme is coherent and consistent.”) (internal 

quotation marks deleted). The amendment “applies to cases 

pending on the date of enactment.” Pub. L. No. 111-21, 

§ 4(f)(2), 123 Stat. 1617, 1625. Because this case was 

pending on the date of enactment, the amendment applies. 

Q.E.D. 

The defendants urge us to adopt an “equitable doctrine of 

relation back” and so not to allow the Government’s claims to 

relate back in this case because it delayed filing its own 

complaint and unsealing Miller’s complaint until several 

years after the statute of limitations had run. We reject this 

argument because the statute, as amended, permits both 

relation back and—if good cause be shown—maintaining the 

relator’s complaint under seal indefinitely beyond the sixty 

days. See 31 U.S.C. § 3730(b)(3). 

Although the Government may take advantage of the 

relator’s filing date, the FCA still does limit the claims it may 

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add. Under the new provision, the Government’s complaint 

can relate back to the original complaint only “to the extent 

that the claim of the Government arises out of the conduct, 

transactions, or occurrences set forth, or attempted to be set 

forth, in the prior complaint.” 31 U.S.C. § 3731(c). The 

defendants do not argue the scope of the Government’s claims 

concerning Contract 20A impermissibly expands beyond that 

of Miller’s. Accordingly we hold the Government’s claims 

concerning Contract 20A are not barred by the statute of 

limitations because they relate back to Miller’s original timely 

complaint. 

2. Claims Concerning Contracts 07 and 29 

In contrast, the Government’s claims concerning 

Contracts 07 and 29 do not meet that standard because they 

have little to do with Miller’s claims concerning Contract 

20A. As we noted in Meijer, Inc. v. Biovail Corp., 533 F.3d 

857 (D.C. Cir. 2008), ordinarily “[t]he underlying question [in 

analyzing relation back] is whether the original complaint 

adequately notified the defendants of the basis for liability the 

plaintiffs would later advance in the amended complaint.” Id.

at 866 (citing 6A Charles Alan Wright, Arthur R. Miller, & 

Mary Kay Kane, Federal Practice & Procedure § 1497 (“if 

the alteration of the original statement is so substantial that it 

cannot be said that defendant was given adequate notice of the 

conduct, transaction, or occurrence that forms the basis of the 

claim . . . then the amendment will not relate back”)). 

This focus upon notice is in tension with the requirement 

that a complaint alleging a violation of the FCA be filed under 

seal and not served “on the defendant until the court so 

orders.” 31 U.S.C. § 3730(b)(2). We have not had occasion 

to address this tension before because in no prior case in this 

circuit had the Government kept the complaint under seal and 

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refrained from serving it on the defendant until after the 

statute of limitations had run.2

 The Second Circuit, however, 

considered this tension when it held the FCA, before it was 

amended, did not implicitly permit relation back: “The 

secrecy required by § 3730(b) is incompatible with Rule 

15(c)(2) [now 15(c)(1)(B)], because (as is well-settled) the 

touchstone for relation back pursuant to [that] Rule[] is 

notice.” United States v. Baylor Univ. Med. Ctr., 469 F.3d 

263, 270 (2006). 

Under the statute as amended to allow relation back, the 

inquiry cannot be whether the defendant had actual notice of 

the claim before the statute of limitations had run because the 

FCA specifically requires that the complaint be filed under 

seal. The timely filed private party’s complaint, however, still 

limits the permissible scope of the Government’s later-filed 

complaint because, as mentioned above, the statute requires 

that in order to relate back a new claim must arise from the 

same conduct, transactions, or occurrences as did the timely 

complaint. 

Cases concerning relation back under Rule 15, despite 

their focus upon notice to the defendant, are useful in 

analyzing relation back under the FCA because the standards 

in the FCA and in Rule 15 are substantively identical. As we 

have seen, the FCA allows relation back only “to the extent 

that the claim of the Government arises out of the conduct, 

transactions, or occurrences set forth, or attempted to be set 

forth, in the prior complaint,” 31 U.S.C. § 3731(c); Rule 

15(c)(1)(B) allows relation back only to the extent the new 

 

2

 Although the defendants were aware of the criminal 

investigation involving the same conduct, they did not have notice 

until 2001 of the precise allegations in the Government’s FCA 

complaint. 

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pleading “asserts a claim or defense that arose out of the 

conduct, transaction, or occurrence set out—or attempted to 

be set out—in the original pleading.” 

Relation back generally is improper when the new 

pleading “asserts a new ground for relief supported by facts 

that differ in both time and type from those the original 

pleading set forth,” Mayle v. Felix, 545 U.S. 644, 650 (2005); 

“attempts to introduce a new legal theory based on facts 

different from those underlying the timely claims,” United 

States v. Hicks, 283 F.3d 380, 388 (D.C. Cir. 2002); or, 

although it “shares ‘some elements and some facts in 

common’ with the original claim . . . its effect is ‘to fault [the 

defendants] for conduct different from that identified in the 

original complaint,’” Jones v. Bernanke, 557 F.3d 670, 674 

(2009) (quoting Meijer, 533 F.3d at 866). 

Courts have refused to relate back “amendments alleging 

the separate publication of a libelous statement, the breach of 

an independent contract, the infringement of a different 

patent, or even a separate violation of the same statute.” 6A 

Wright, Miller, & Kane, supra, § 1497 (footnotes deleted) 

(collecting cases). For example, in United States ex rel. 

Bledsoe v. Community Health Systems, 501 F.3d 493 (2007), 

the Sixth Circuit applied the relation back provisions of Rule 

15 in a qui tam case involving claims for reimbursement from 

Medicare and Medicaid submitted under certain Current 

Procedural Terminology (CPT) codes used for billing medical 

services. The timely documents alleged improper billing 

under Code 94799 for services related to “emergency room” 

and “02 Equip./Daily” but the amended complaint also 

alleged “improper[] billing . . . under that [same] code for a 

‘call back’ charge for which no procedure is associated”; the 

court held the latter allegation did not relate back because the 

former allegation would not have “alert[ed]” the defendant 

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that billing related to call backs was involved. Id. at 518–19. 

The timely documents also made “several allegations of 

improper billing under CPT code 99201,” including 

allegations concerning miscoding of supplies, but the 

amended complaint added allegations of improper billing “for 

cardiopulmonary resuscitation under [that] code”; again the 

court held the latter allegations did not relate back because the 

original documents would not have “alert[ed] [the] 

[d]efendants . . . that cardiopulmonary resuscitation 

procedures were involved.” Id. at 513, 518–19. Although in 

each instance the allegations in the timely documents and in 

the amended complaint addressed improper billing under the 

same billing code, the court held the new allegations did not 

relate back because they did not “arise from the same 

conduct, transaction or occurrence” involved in the timely 

complaint. Id. at 519.

In this case, all three contracts are similar only in that 

each was funded by the USAID and required work related to 

sewer systems in Egypt. The differences among them, 

however, are significant. Based upon the allegations in the 

complaint, the critical facts regarding each contract are the 

work to be performed, who was prequalified to participate in 

the bidding that was allegedly rigged, when the contract was 

awarded, who won the contract, and the amount of the 

winning bid. The following table summarizes these facts for 

each contract and thus shows the important differences. 

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07 29 20A Contract

1990 1989 1988 Awarded

million $44.6 million $114.9 million $114.9 bidWinning 

Alexandria Sewer in plant in Cairo treatment Wastewater Cairo sewer pipe in underground 19 km of Project

Venture Harbert-Jones 07 Joint Grove, Tidewater, and FruCon, Maclean Morrison-Knudsen, Joint Venture and Harbert-Jones 29 At least Sadelmi U.S.A. 20A Joint Venture Co., and Harbert-Jones Fru-Con Construction George A. Fuller Co., Prequalified

Venture Joint Jones 07 HarbertU.S.A. Sadelmi Venture Joint Jones 20A HarbertRecipient

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As reflected in the table, each contract required work to 

be performed on a different project and was awarded in a 

different year to a different winning bidder drawn from a 

different pool of prequalified bidders. Allegations concerning 

Contract 20A do not fairly encompass Contracts 07 or 29 

because each contract is unique and no two involved the same 

“conduct, transaction[], or occurrence[].” 

Miller and the Government argue the use of the plural in 

Miller’s complaint—“conspired to rig the bidding for 

construction contracts paid for by the [USAID]” (emphasis 

added)—together with the allegation there was a “club [] 

organized to control prices” and the contention that 

“discovery in this case will reveal [] other AID contracts,” 

broadened the scope of the complaint beyond Contract 20A. 

As we held in Meijer, however, using the plural form does not 

cause new allegations to relate back when, as here, the new 

allegations do not involve “conduct, transactions, or 

occurrences” common to the timely pleading. See 533 F.3d at 

866. As in Meijer, our decision here is impelled by more than 

the limited relevance of the plural form. Miller’s allegations 

concerning any contracts beyond 20A were nothing more than 

“‘naked assertion[s]’ devoid of ‘further factual 

enhancement,’” viz., the existence of a price-fixing “club,” 

and that discovery would reveal other rigged contracts. 

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell 

Atlantic Corp. v. Twombly, 550 U.S. 544, 557 (2007)) 

(brackets in original). Allowing such broad and vague 

allegations to expand the range of permissible amendments 

after the limitation period has run would circumvent the 

statutory requirement in the FCA that the amendments 

“arise[] out of the conduct, transactions, or occurrences” in 

the original complaint, 31 U.S.C. § 3731(c); it would also, we 

note, circumvent the recent teachings of Iqbal and Twombly

by allowing amendments to relate back to allegations that 

USCA Case #08-5390 Document #1251065 Filed: 06/22/2010 Page 18 of 77
19 

were themselves nothing more than “naked assertions.” That 

potential for abuse is avoided by the relation back provision in 

the FCA, the amendment of which postdates Twombly, 

cabining the scope of otherwise untimely amendments by 

imposing the same “conduct, transactions, or occurrences” 

requirement. 31 U.S.C. § 3731(c). 

Turning to Miller’s claims concerning Contracts 07 and 

29, we hold they are barred by the statute of limitations 

because he added them after the limitation period had run. 

Miller may not take advantage of the relation back provision 

in the FCA, which applies only to the Government’s 

pleadings. See id. If his claims are to relate back then they 

must do so under Rule 15(c)(1)(B), which permits relation 

back for claims “that arose out of the conduct, transaction, or 

occurrence set out . . . in the original pleading.” We need not 

decide whether Rule 15(c)(1)(B) applies to claims made by a 

relator in litigation under the FCA because we have 

determined the claims concerning Contracts 07 and 29 do not 

meet that standard, which for our purposes is substantially the 

same as the standard in the amended FCA. 

3. Claims Against BIE 

Prior to 2006 both Miller’s and the Government’s 

complaints named Harbert International Establishment, Inc. 

(HIE, Inc.) among the defendants; they did not name Bilhar 

International Establishment (BIE). In amended complaints 

filed in 2006, Miller and the Government replaced references 

to “Harbert International Establishment, Inc.” with references 

to “Bilhar International Establishment f/k/a Harbert 

International Establishment.” The statute of limitations bars 

all claims against BIE unless the amended complaints relate 

back to a timely complaint. The district court held the 

amended complaints relate back because BIE should have 

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20 

known it was the intended defendant. Miller v. Holzmann, 

2007 WL 778599, 2007 U.S. Dist. LEXIS 15598 (D.D.C. 

Mar. 6, 2007). We agree with the district court. 

(a) History of the Companies 

A company called Harbert International Establishment 

was formed in Liechtenstein in 1975. At all relevant times 

Bill Harbert owned at least part of that company and at 

various times BHIC and HII owned the remainder. In 

September 1993 Harbert International Establishment changed 

its name to Bilhar International Establishment. The next 

month a new company was formed in Liechtenstein, also 

called Harbert International Establishment. It acquired many 

of the assets of BIE (formerly HIE), including both the name 

Harbert International Establishment and that company’s 

interest in Contract 20A. After transferring its assets to the 

new HIE, the old HIE (by then BIE) ceased operating. In 

1999 Bill Harbert’s son formed Harbert International 

Establishment, Inc. in Alabama. 

(b) Analysis 

Rule 15(c)(1)(C), which for present purposes is 

substantively the same as the version of then-Rule 15(c)(3) 

applied by the district court, provides an amendment relates 

back when: 

the amendment changes the party or the naming of the 

party against whom a claim is asserted . . . if, within the 

[120 days] provided by Rule 4(m) for serving the 

summons and complaint, the party to be brought in by 

amendment: 

(i) received such notice of the action that it will not be 

prejudiced in defending on the merits; and 

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21 

(ii) knew or should have known that the action would 

have been brought against it, but for a mistake 

concerning the proper party’s identity. 

Fed. R. Civ. P. 15(c)(1)(C) (emphasis added). 

Relation back under this provision “is most obviously 

appropriate in cases [such as this] where the plaintiff has sued 

a corporation but misnamed it.” Roberts v. Michaels, 219 

F.3d 775, 778 (8th Cir. 2000). BIE does not claim the 

misnaming prejudiced it and the plaintiffs do not dispute 

BIE’s defense that it did not actually know it was the intended 

defendant; the dispute between the parties is whether BIE 

should have known it was the intended defendant. 

The same attorney represented BIE, HIE, and HIE, Inc. 

That attorney acknowledges she knew the plaintiffs had erred 

in naming HIE, Inc., but as between her two other clients with 

similar names she “felt that it was likely that the Government 

had intended to sue Harbert International Establishment[,] . . . 

not Bilhar International Establishment.” 

In determining what BIE, in the person of its attorney, 

knew or should have known, we consider the allegations in 

Miller’s Second Amended Complaint3

 as follows: 

 

3

 The parties agree this is the complaint to which BIE should 

have referred in order to determine the identity of the intended 

defendant. BIE states, “Similar allegations appear in the 

government’s Complaint in Intervention,” and does not identify any 

significant differences between the complaints for these purposes. 

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22 

Allegation Comment 

(1) BHIC “controls and 

operates” the defendant. 

BHIC owned 79% of BIE but 

none of HIE. 

(2) The defendant is “a 

Liechtenstein corporation 

which, upon information 

and belief, has as its 

principal place of business 

Birmingham, Alabama.” 

This allegation does not advance 

the inquiry because both HIE 

and BIE were organized in 

Liechtenstein and neither has its 

principal place of business in 

Alabama. 

(3) The defendant “holds a 49 

percent share” of HUK. 

This allegation applied, at one 

time or another, to both BIE and 

HIE. By the time the complaint 

was filed BIE had sold its 49% 

interest in HUK to HIE. 

(4) Bill Harbert was Chairman 

and Roy Anderson was 

President of the defendant. 

This allegation applied equally 

to BIE and to HIE. 

(5) “In 1991, as a consequence 

of a reorganization of the 

Harbert entities, Contract 

20A was assigned to 

Harbert International 

Establishment, which is 

owned and controlled by 

[BHIC], and these 

companies began 

participating directly in the 

conspiracy.” 

The same paragraph describes 

HII as managing the 20A Joint 

Venture, suggesting the 

referenced assignment of 

Contract 20A came from HII. 

The paragraph better describes 

BIE. As stated above, BHIC 

owned the majority of BIE, not 

of HIE. The assignment of 

Contract 20A did not change in 

1991. In 1989 HII assigned it to 

BIE, which was then known as 

HIE. In 1993, after the new 

company was created and 

named HIE, BIE reassigned 

Contract 20A to the new HIE. 

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23 

Of these five allegations, Nos. 2 and 4 are of no help in 

identifying the correct defendant because they favor neither 

HIE nor BIE. Of the three allegations that better describe one 

company than they do the other, only one more accurately 

applies to HIE: At the time of the complaint, HIE owned 49% 

of HUK. Allegations 1 and 5 indicate BIE was the intended 

defendant: BHIC, not HIE, owned the majority of BIE, and 

HII assigned part of its interest in Contract 20A to the 

company that, at the time, was named HIE and was owned 

primarily by BHIC. Thereafter the assignee participated in 

the conspiracy. This latter datum, which unlike the others 

reaches the intended defendant’s substantive involvement in 

the bid rigging, should have led counsel to the conclusion that 

BIE was the intended defendant. 

This discussion undoubtedly seems obscure to anyone 

unfamiliar with the various companies in the Harbert group of 

companies. When an attorney for several of these companies, 

however, receives a complaint she knows mistakenly names 

as the defendant one company in the group, and she 

represents two other companies in the group with names 

similar to that of the named defendant, it should be obvious 

that she needs to consider the history and corporate structure 

of both companies and to determine which company is the 

intended defendant. 

BIE argues the Government and Miller could have 

determined the correct name because the relevant parts of the 

structure of the Harbert complex were disclosed in certain 

financial documents of which they had copies. The 

appropriate inquiry under Rule 15, however, is what the 

intended defendant “should have known.” Fed. R. Civ. P. 

15(c)(1)(C)(ii). After this case had been submitted the 

Supreme Court clarified the issue in Krupski v. Costa 

Crociere S.p.A., 560 U.S. __, No. 09-337 (June 7, 2010). In 

USCA Case #08-5390 Document #1251065 Filed: 06/22/2010 Page 23 of 77
24 

Krupski the plaintiff sued Costa Cruise Lines N.V. instead of 

the related company Costa Crociere S.p.A.4

 Although the 

plaintiff could have determined the correct identity of the 

intended defendant, the Court explained, 

Rule 15(c)(1)(C)(ii) asks what the prospective defendants

knew or should have known during the Rule 4(m) period, 

not what the plaintiff knew or should have known. . . . 

That a plaintiff knows of a party’s existence does not 

preclude her from making a mistake with respect to that 

party’s identity. 

Id. at __, slip op. at 8–9. 

BIE argues for the first time in a footnote in its brief on 

appeal that the 120-day period in Rule 4(m), referred to in 

Rule 15(c)(1)(C), started to run when the suit was filed in 

1995 rather than when the complaint was unsealed in 2001. 

We do not ordinarily consider an argument made for the first 

time on appeal. In any event, as we stated in Hutchins v. 

District of Columbia, 188 F.3d 531, 539 n.3 (D.C. Cir. 1999) 

(en banc), “[w]e need not consider cursory arguments made 

only in a footnote.” 

4. Remaining Claims 

To summarize, the only claims left standing are Miller’s 

claims concerning Contract 20A, as originally pleaded and 

subsequently amended, and the Government’s claims 

concerning the same contract, which relate back to Miller’s 

claims for purposes of the statute of limitations. All the 

 

4 Crociera means cruise in Italian. See Krupski, 560 U.S. at 

__, slip op. at 17. 

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25 

Government’s and Miller’s claims concerning Contracts 07 

and 29 are time barred. 

B. Preemption 

BIE, HUK, and BHIC alone argue this case should have 

been dismissed because the Foreign Assistance Act (FAA), 22 

U.S.C. § 2151 et seq., preempts the False Claims Act. The 

district court rejected this argument in Miller v. Holzmann, 

2007 WL 710134 at *11, 2007 U.S. Dist. LEXIS 16105 at 

*35–36 (D.D.C. Mar. 6, 2007). We address the question of 

preemption de novo, Bldg. & Constr. Trades Dep’t, AFL-CIO 

v. Allbaugh, 295 F.3d 28, 32 (D.C. Cir. 2002), and affirm. 

The FAA, which governs how the United States provides 

aid to foreign countries, includes its own false claim 

provision. That provision authorizes the President to bring a 

suit on behalf of the United States, but does not authorize a 

private party to bring a qui tam action. See 22 U.S.C. 

§ 2399b(b). In contrast, the FCA allows a private party, in 

addition to the Attorney General, to bring a civil suit. See 31 

U.S.C. § 3730(a), (b). 

The defendants argue the qui tam provision of the FCA 

conflicts with the lack of such a provision in the FAA because 

“a precisely drawn, detailed statute pre-empts more general 

remedies.” Brown v. Gen. Servs. Admin., 425 U.S. 820, 834 

(1976). They assert “[a]llowing a qui tam relator the right to 

file an action against foreign aid contractors . . . would 

effectively nullify the FAA’s more restrictive [remedial] 

provision.” With this argument they suggest that, for fraud 

involving foreign aid, the false claim provision in the FAA, 

enacted in 1968, implicitly displaced the qui tam provision in 

the FCA, which has been around in some form since 1863. 

See Act of March 2, 1863, ch. 67, § 4, 12 Stat. at 698, Rev. 

Stat. § 3491. 

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26 

“[W]hen two statutes are capable of co-existence, it is the 

duty of the courts, absent a clearly expressed congressional 

intention to the contrary, to regard each as effective.” Morton 

v. Mancari, 417 U.S. 535, 551 (1974). The FCA and the FAA 

are surely capable of co-existence. In a case involving 

foreign aid, such as this one, the Government could bring suit 

under either the FCA or the FAA. Indeed, the FCA expressly 

contemplates the possibility the Government will have a 

choice of remedy. See 31 U.S.C. § 3730(c)(5) (“the 

Government may elect to pursue its claim through any 

alternate remedy available to the Government”). A choice 

does not create a conflict, let alone an “irreconcilable 

conflict.” See United States v. Batchelder, 442 U.S. 114, 118, 

122 (1979) (“overlapping statutes” with “partial redundancy” 

“fully capable of coexisting”); cf. EC Term of Years Trust v. 

United States, 550 U.S. 429, 435 (2007) (nine-month 

limitations period for a claim under specific statute conflicts 

with four-year period provided by a more general statute). 

Finally, the Government need not face the prospect posed 

by the defendants of a private plaintiff in a qui tam case 

somehow interfering in a case brought by the Government 

under the FAA. The FCA requires the private plaintiff to 

present his claim to the Government before it is served on the 

defendant. The Government may “proceed with the action, 

. . . dismiss the action notwithstanding the objections of [the 

relator], . . . settle the action . . . notwithstanding the 

objections of [the relator],” or keep the complaint under seal 

during an investigation. 31 U.S.C. §§ 3730(b), (c). Indeed, 

the FCA specifically authorizes the Government to restrict the 

relator’s involvement, such as by limiting his discovery, if his 

involvement otherwise “would interfere with the 

Government’s investigation or [with] a prosecution of a 

criminal or civil matter arising out of the same facts.” 

§ 3730(c)(4). 

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27 

In sum, although the false claims provisions of the FAA 

and the FCA do overlap, the two statutes are fully capable of 

coexisting. Therefore, the FAA does not preempt the FCA. 

C. Personal Jurisdiction over HUK 

HUK challenges the district court’s assertion of personal 

jurisdiction over it. Miller v. Holzmann, 2007 WL 778568, 

2007 U.S. Dist. LEXIS 15599 (D.D.C. Mar. 6, 2007); United 

States ex rel. Miller v. Bill Harbert Int’l Constr., Inc., 501 F. 

Supp. 2d 51, 53 & n.3 (D.D.C. 2007). Reviewing the district 

court’s assertion of personal jurisdiction de novo, McAninch 

v. Wintermute, 491 F.3d 759, 765 (8th Cir. 2007); see also FC 

Inv. Group LC v. IFX Markets, Ltd., 529 F.3d 1087, 1091 

(D.C. Cir. 2008) (reviewing dismissal), we hold HUK had 

sufficient contacts with the United States to subject the 

company to the jurisdiction of its courts. 

A court may exercise personal jurisdiction over a 

defendant not present within the forum if the defendant has 

“certain minimum contacts with [that forum] such that the 

maintenance of the suit does not offend traditional notions of 

fair play and substantial justice.” Int’l Shoe Co. v. 

Washington, 326 U.S. 310, 316 (1945) (internal quotation 

marks deleted). The exercise of personal jurisdiction “must 

have a basis in some act by which the defendant purposefully 

avails itself of the privilege of conducting activities within the 

forum State, thus invoking the benefits and protections of its 

laws.” Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 

U.S. 102, 109 (1987) (internal quotation marks omitted). 

Personal jurisdiction is proper where the defendant has 

“purposefully directed his activities at residents of the forum 

and the litigation results from alleged injuries that arise out of 

or relate to those activities.” Burger King Corp. v. Rudzewicz, 

471 U.S. 462, 472 (1985) (internal quotation marks omitted). 

USCA Case #08-5390 Document #1251065 Filed: 06/22/2010 Page 27 of 77
28 

HUK argues against personal jurisdiction based upon our 

decision in Creighton Ltd. v. Gov’t of State of Qatar, 181 F.3d 

118 (1999). There we held the Government of “Qatar lacks 

the minimum contacts with the United States that would make 

it amenable to suit here” even though it had “entered into a 

contract with a company based in the United States.” Id. at 

127–28. The contract had been “offered, accepted, and 

performed in Qatar.” Id. at 128. In addition, the “contract 

was made subject to the laws of Qatar, payment was made in 

Qatari riyals to Creighton’s bank account in Qatar, and the 

alleged breach occurred in Qatar.” Id. HUK’s contacts with 

the United States were a good deal more substantial than 

those of Qatar. 

At all relevant times HUK was, not surprisingly, based in 

the United Kingdom. It had no office, bank account, real 

property, or employees in the United States. It was not a 

party to Contract 20A, nor was it a member of the joint 

venture that bid for that contract. On the other hand, HUK 

was intimately involved with the Harbert-Jones Joint Venture 

bid for Contract 20A. From 1985 to 1988, fully 50% of 

HUK’s work was on the preparation of the bid for Contract 

20A and one of its employees signed the tender. HUK knew 

that the United States Government was funding the contract 

and that all payments to HUK for work done in connection 

with the contract were funded by payments from the United 

States Government via bank accounts in the United States 

belonging to one of the other Harbert companies. In addition, 

the district court found, and HUK does not dispute, the 

following facts: HUK “was created by American citizens, 

acting as agents for . . . American corporations, for the 

specific purpose of providing services to companies that were 

bidding on projects that were going to be funded by agencies 

of the United States.” Miller v. Holzmann, 2007 WL 39371 at 

USCA Case #08-5390 Document #1251065 Filed: 06/22/2010 Page 28 of 77
29 

*7–8, 2007 U.S. Dist. LEXIS 501, *25–26 (D.D.C. Jan. 8, 

2007). 

Considering these facts, we conclude “the defendant’s 

conduct and connection with the forum State are such that he 

should reasonably anticipate being haled into court there.” 

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 

297 (1980); see McGee v. Int’l Life Ins. Co., 355 U.S. 220, 

223 (1957) (personal jurisdiction over Texas company proper 

in California court “based on a contract which had substantial 

connection with” that state). Accordingly, we hold HUK’s 

contacts with the United States were sufficient to give the 

district court personal jurisdiction over it. 

D. Anderson’s Settlement 

For a time Anderson and the Government tried to settle 

the Government’s case against him. He argues they reached 

an agreement and have an enforceable settlement; the 

Government argues the settlement was never made final and 

should not be enforced. 

The district court dismissed “all of the relator’s claims on 

all contracts against defendant Anderson, and all of the 

Government’s claims but one claim on contract 29 against 

defendant Anderson . . . as untimely under the FCA’s statute 

of limitations.” United States ex rel. Miller v. Bill Harbert 

Int’l Constr., Inc., 505 F. Supp. 2d 1, 19 (D.D.C. 2007). At 

trial Anderson was found liable for $149,615.20 on that one 

claim. 501 F. Supp. 2d 51, 58 (D.D.C. 2007). 

Anderson joined the other defendants’ argument that the 

statute of limitations bars all claims concerning Contract 29. 

Having agreed with the defendants on that point, we have no 

need to reach Anderson’s alternative argument that the 

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30 

Government and he entered into a final and binding 

settlement agreement. 

E. BHIC Stipulation 

Prior to trial, the parties jointly stipulated that BHIC “did 

not exist at the time Contracts 20A, 29, [or] 07 were bid or 

entered into.” This stipulation simplified the more complex, 

but mostly irrelevant, circumstances surrounding the 

formation of BHIC. In 1986, an entity named BLH 

Enterprises, Inc. was formed but had no employees or 

operations for six years. In December 1991, BLH changed its 

name to Bill Harbert International Construction, Inc. Then, in 

1992, more than a year after Harbert-Jones entered into the 

last contract, BHIC acquired employees and began operations. 

At that point, BHIC also became the majority owner of BIE 

and provided support services such as administrative 

accounting to that company. 

During trial, the Government introduced evidence that 

the defendants argue contradicted the joint stipulation of fact 

that BHIC did not exist at the time companies were bidding 

on and entering into the relevant contracts. The evidence 

introduced was a document submitted by BHIC in 1992 for 

prequalification to bid on another contract not at issue in this 

case. That document included the information about BLH’s 

formation and its subsequent name change, indicating that 

BHIC had, in fact, existed when Harbert-Jones and other 

companies bid on and entered into Contracts 20A, 29, and 07. 

The Government emphasized this contradiction with the joint 

stipulation, asking Alf Hill, the project manager for Contract 

20A, to read aloud the part of the document explaining 

BHIC’s history. The Government then asked, “So according 

to this document which was submitted to the Government, 

BHIC existed since 1986, right?” The project manager 

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31 

replied, “Yes.” Over BHIC’s objection that the witness had 

not seen the document before and that the document had not 

been authenticated, the district court allowed the document to 

be submitted into evidence and refused to strike the testimony 

relating to BHIC’s date of incorporation. In closing 

arguments, the Government pointed back to that document, 

saying “Why are we suing BHIC? . . . Take a look at that 

document.” The Government further clarified its point later 

in its closing argument, saying, “BHIC was in existence at the 

time Bill Harbert, Roy Anderson, and Tommy Kitchens were 

doing what they were doing rigging the bids, dealing with the 

profits on Contract[s] 20A, 07 and 29.” 

After trial, BHIC argued in support of a new trial that this 

evidence was contrary to the stipulation, prejudicial, and 

undermined the credibility of BHIC counsel, who relied in 

opening statements on the joint stipulation. The district court 

denied BHIC’s motion for a new trial, and clarified its 

reasoning for allowing the Government to introduce the 

evidence that BHIC had incorporated in 1986: 

[P]laintiffs did not stipulate that neither BHIC nor any 

predecessor company existed ‘at the time Contracts 20A, 

29, 07 were bid or entered into.’ Plaintiffs did not seek to 

disprove the stipulated fact that BHIC did not exist prior 

to 1992. Rather, they sought to prove that BHIC, by its 

own admission, is a direct outgrowth of any entity that 

did exist when the bid-rigging occurred. 

Miller v. Holzmann, 563 F. Supp. 2d 54, 104 n.61 (D.D.C. 

2008). 

Even if the stipulation is read so narrowly, the 

Government violated it. The Government elicited testimony 

and claimed in closing argument that BHIC itself existed 

since 1986, not that a BHIC predecessor existed since then. 

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32 

Not only that, but the evidence establishes BLH was not in 

fact a predecessor to BHIC, but actually the same company. 

The only difference was a change in name. The document 

introduced by the Government included the articles of 

incorporation for BLH and the amendment to those articles 

that change its name to BHIC. The evidence did not seek to 

prove BHIC was an “outgrowth” of another entity. It 

established that BHIC existed at the time of the contract 

bidding. 

Stipulations of fact bind the court and parties. Gander v. 

Livoti, 250 F.3d 606, 609 (8th Cir. 2001); see also 

Verkouteren v. District of Columbia, 346 F.2d 842, 844 n.2 

(D.C. Cir. 1965). This is their very purpose, their “vital 

feature.” 9 Wigmore, Evidence § 2590 (Chadbourn rev. 

1981). Once a stipulation of fact is made, “the one party need 

offer no evidence to prove it and the other is not allowed to 

disprove it.” Id. § 2588. When the Government claimed that 

BHIC existed since 1986, it directly contradicted the joint 

stipulation that BHIC did not exist until after the bidding for 

the three contracts. 

The contradictory statements constitute substantial 

prejudice to BHIC. In his opening argument, BHIC’s counsel 

emphasized the stipulated fact, saying, “[I]f you remember 

those key events, the last of those was in May 1991, more 

than a year before BHIC begins its operations in July of 1992. 

The plaintiffs do not and will not contest that BHIC did not 

even come into existence, it didn’t even exist at the time that 

Contracts 20A, 29 and 07 were bid and entered into.” We 

agree with BHIC that allowing the Government to contradict 

the stipulation called into question the credibility of BHIC’s 

counsel, severely impeding counsel’s ability to effectively 

advocate for his client. The district court recognized this 

problem, but stated that it had “confidence that after hearing 

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33 

testimony concerning the complex corporate restructuring 

from which most of these defendants emerged, the jury was 

able to appreciate the distinction between plaintiffs’ argument 

[that BLH ultimately became BHIC] and the stipulated fact.” 

563 F. Supp. 2d at 104 n.61. But we do not immediately see 

what distinction separates the Government’s assertion that 

“BHIC existed since 1986,” and the stipulated fact that 

“BHIC did not exist at the time Contracts 20A, 29, 07 were 

bid or entered into.” We therefore cannot conclude that the 

jury made such a distinction. The district court abused its 

discretion when it allowed the Government to contradict the 

stipulation and thereby undermine BHIC’s defense. We 

remand for a new trial for BHIC. 

F. Precluding BIE from Contesting Liability 

The district court held that BIE was estopped from 

contesting liability under the FCA as to Contracts 20A and 29 

because of its guilty plea in a separate criminal proceeding. 

United States ex rel. Miller v. Bill Harbert Int’l Constr., Inc.,

2007 WL 851857, 2007 U.S. Dist. LEXIS 17667 (D.D.C. 

Mar. 14, 2007). In February 2002, BIE pleaded guilty to an 

indictment charging violations of the Sherman Act, 15 U.S.C. 

§ 1, by its involvement in the bid-rigging conspiracy from 

1988 to 1996. BIE contends that it was error to preclude it, 

based on the doctrine of collateral estoppel, from contesting 

liability under the FCA because a Sherman Act conspiracy 

does not require an overt act, while an FCA conspiracy does. 

Therefore, BIE argues, it might have been able to show that 

although it was guilty of a Sherman Act violation, it was not 

liable under the FCA. As BIE sees it, because collateral 

estoppel affects only issues that were actually litigated and 

necessarily decided in the first action, Jack Faucett Assocs. v. 

Am. Tel. & Tel. Co., 744 F.2d 118, 125 (D.C. Cir. 1984), 

issues relating to the overt acts necessary for the FCA 

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34 

conspiracy were not precluded by the guilty plea in the 

Sherman Act prosecution, which did not require the proof of 

such acts. The district court disagreed, reasoning that the 

overt acts BIE admitted in its guilty plea and accompanying 

memorandum were essential to its Sherman Act plea because 

they supplied the factual basis for the plea. Miller v. 

Holzmann, 563 F. Supp. 2d 54, 80–81 (D.D.C. 2008). The 

district court reasoned that the preclusive effects of a guilty 

plea in a prior criminal proceeding extend not only to the 

essential elements of the crime charged, but also to the facts 

admitted in the accompanying Rule 11 proceeding. As the 

court explained, Rule 11 “mandates that before entering 

judgment on a guilty plea, a court must ‘mak[e] such inquiry 

as shall satisfy it that there is a factual basis for the plea.’” Id.

at 79 (quoting Fed. R. Crim. P. 11(f) (brackets in the district 

court opinion)). Thus, because the facts admitted in the Rule 

11 proceeding are essential to the entry of judgment, it is 

consistent with the underpinnings of the collateral estoppel 

doctrine that a defendant should be precluded from 

relitigating those facts as well as those related to the essential 

elements of the crime. Therefore, the court concluded that 

having admitted liability with respect to Contracts 20A and 29 

in the previous proceeding, BIE was properly precluded from 

contesting its liability for conspiracy with respect to those 

contracts. Id. at 81. 

We need not ultimately decide this issue. The district 

court relied not only on collateral estoppel, but also on the 

equitable doctrine of judicial estoppel, which states that if a 

party successfully assumes a certain legal position in one 

proceeding, “he may not thereafter, simply because his 

interests have changed, assume a contrary position.” Id. at 81 

n.14 (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)). 

As applied to BIE’s circumstances, the court found that BIE 

was advancing a position contrary to the one the criminal 

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35 

court relied on when it accepted BIE’s guilty plea, and that 

judicial estoppel was therefore appropriate. Id.

Before this court, BIE has not asserted any error in this 

alternative reason for estopping BIE. Because BIE has 

forfeited the argument that the judicial estoppel was 

erroneous, we need go no further in our analysis. Even if we 

were to reject the district court’s reasoning on the collateral 

estoppel theory, we would nonetheless affirm its ruling 

precluding BIE from contesting liability. See Kauthar SDN 

BHD v. Sternberg, 149 F.3d 659 (7th Cir. 1998) (“in 

situations in which there is one or more alternative holdings 

on an issue, . . . failure to address one of the holdings results 

in a waiver of any claim of error with respect to the court’s 

decision on that issue”). 

G. Evidentiary Issues 

The defendants argue the district court committed 

reversible error in four evidentiary rulings: (1) admitting into 

evidence against all defendants BIE’s prior guilty plea; 

(2) allowing the Government to present expert testimony on 

the economics of generic cartels; (3) allowing Luigi Ruggieri, 

an officer of the company that received Contract 29, to testify 

about his subordinate’s meeting with Peter Schmidt, a 

Holzmann executive in Frankfurt; and (4) permitting the 

Government to question a witness about the wealth of HII, 

HC, and a related management company that was not a 

defendant in this case. We review for abuse of discretion the 

district court’s decisions to admit evidence. United States v. 

Watson, 409 F.3d 458, 462 (D.C. Cir. 2005). However, to the 

extent the defendants argue the district court misinterpreted 

the Federal Rules of Evidence, we review those 

interpretations de novo. United States v. Gewin, 471 F.3d 

197, 200 (D.C. Cir. 2006). Applying those standards, we hold 

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36 

that the district court did not err in the first two decisions. We 

also hold that Ruggieri’s testimony was irrelevant to the 

remaining Contract 20A claims, and therefore that claim is 

moot. We do, however, hold that allowing the Government to 

elicit evidence of HII and HC’s wealth constituted an abuse of 

discretion. Therefore, claims against HII and HC must be 

remanded for new trial. 

1.BIE’s Guilty Plea 

As explained above, see supra at 33, BIE pleaded guilty 

to violating the Sherman Act, 15 U.S.C. § 1, by engaging in 

the bid-rigging conspiracy. Pursuant to Rule 11 of the 

Federal Rules of Criminal Procedure, BIE also submitted a 

memorandum describing the conspiracy and BIE’s role. This 

guilty plea and accompanying memorandum explained that 

BIE and others rigged bids by “submitting bids on USAIDfunded Contracts 20A, 29 and 07” and “making payments to 

co-conspirators who agreed to not compete for USAIDfunded contracts 20A and 08 pursuant to the bid-rigging 

conspiracy.” Pl. Ex. 562A, at Joint App’x Pl. Exs. 568–69 

(Joint Rule 11 Memorandum, United States v. Bill Harbert 

Int’l, No. 01–00302 (N.D. Ala. Feb. 4, 2002), as redacted). 

When the Government sought to introduce evidence of 

BIE’s guilty plea in the district court, the defendants argued 

that admitting the guilty plea and accompanying Rule 11 

memorandum into evidence would improperly impute BIE’s 

involvement to the remaining defendants. The district court 

disagreed, concluding that the plea and accompanying 

memorandum were evidence of the factual admissions 

therein, and were therefore “relevant pieces of evidence that 

are admissible against all defendants.” United States ex rel. 

Miller v. Bill Harbert Int’l Constr., Inc., Civ. No. 95-1231, 

slip op. at 4 (D.D.C. Mar. 21, 2007) (Mem. Op. & Order Den. 

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37 

Mot. to Sever). Of course, the plaintiffs would “still bear the 

burden of establishing a link between the ‘others’ who BIE 

allegedly conspired with, and specific defendants in this 

case.” Id. at 4 n.3. The court therefore allowed the 

Government to use the plea in its opening statement and again 

at the end of its case-in-chief, when counsel read the text of 

the memorandum to the jury. 

The defendants contend that this use of BIE’s guilty plea 

should have been excluded as hearsay. They dispute the 

plaintiffs’ contention that it is admissible under the hearsay 

exception set forth in Federal Rule of Evidence 803(22). 

They further argue that the danger of unfair prejudice 

substantially outweighed its probative value. See Fed. R. 

Evid. 403. We disagree. 

Rule 803(22) permits a judge to admit “[e]vidence of a 

final judgment, entered after a trial or upon a plea of guilty 

. . . to prove any fact essential to sustain the judgment, but not 

including, when offered by the Government in a criminal 

prosecution for purposes other than impeachment, judgments 

against persons other than the accused.” First, we note that 

the exception to Rule 803(22)—the clause beginning “but not 

including”—does not apply. Because this case is not a 

criminal prosecution, the rule does not preclude introduction 

of the plea documents as evidence of the judgment “against 

persons other than the accused” (i.e., the other defendants) for 

reasons other than impeachment. That is, because this is a 

civil case, BIE’s guilty plea may be admitted under Rule 

803(22) against all the defendants as long as the plea was 

admitted “to prove any fact essential to sustain the judgment.”

The defendants argue the guilty plea was not admitted to 

establish any fact. Instead, they assert, BIE’s guilty plea was 

submitted only as evidence of the legal conclusion that BIE 

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38 

was guilty of conspiracy. But the Rule 11 memorandum 

clearly states more than the bare conclusion that BIE was 

guilty. Instead, it asserts the several facts already mentioned: 

that BIE and others submitted bids and made payments as part 

of a bid-rigging conspiracy involving Contracts 20A, 29, and 

07. Each of those facts is essential to sustain the legal 

conclusion of BIE’s guilt under Section 1 of the Sherman Act, 

and therefore fell within the scope of the rule. Other facts that 

were not essential to that conclusion—such as specific 

references to the defendants—were redacted by the district 

court. See United States ex rel. Miller v. Bill Harbert Int’l 

Constr., Inc., 2007 WL 842079, 2007 U.S. Dist. LEXIS 

18560, at 3 (D.D.C. Mar. 16, 2007). We hold therefore that 

the district court properly interpreted the scope of Rule 

803(22) and properly admitted BIE’s guilty plea and Rule 11 

memorandum under that rule. 

Nor was the admission of BIE’s guilty plea improper 

under Rule 403. Rule 403 states that relevant evidence may 

be excluded if, inter alia, the evidence’s “probative value is 

substantially outweighed by the danger of unfair prejudice, 

confusion of the issues, or misleading the jury.” Fed. R. Evid. 

403. But to quote the district court, “properly admitted but 

potentially incriminating evidence does not equate to unfairly 

prejudicial evidence that must be excluded.” United States ex 

rel. Miller v. Bill Harbert Int’l Constr., Inc., Civ. No. 95-

1231, slip op. at 4–5 (D.D.C. March 21, 2007) (Mem. Op. & 

Order Den. Mot. to Sever). In assessing prejudice and 

probativeness, the district court, not this court, “is in the best 

position to perform this subjective balancing.” United States 

v. Cassell, 292 F.3d 788, 795–96 (D.C. Cir. 2002) (quoting

United States v. Washington, 969 F.2d 1073, 1081 (D.C. Cir. 

1992)). We are therefore “extremely wary of secondguessing” the district court, United States v. Law, 528 F.3d 

888, 898 (D.C. Cir. 2008) (quoting Henderson v. George 

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39 

Wash. Univ., 449 F.3d 127, 133 (D.C. Cir. 2006)), and review 

its decision “only for ‘grave abuse,’” Cassell, 292 F.3d at 796 

(quoting Washington, 969 F.2d at 1081). 

BIE’s guilty plea did carry with it the potential to cause 

prejudice or confuse the jury—it might have presumed that 

the “co-conspirators” referred to in the plea were the other 

defendants in the case. The district court recognized that 

potential, acknowledging that the “documents pose certain 

problems insofar as they refer to other parties who are 

defendants here,” United States ex rel. Miller v. Bill Harbert 

Int’l Constr., Inc., 2007 WL 842079, 2007 U.S. Dist. LEXIS 

18560, at 3 (D.D.C. March 16, 2007), and that a jury might 

assume the other parties were also guilty under BIE’s plea just 

because the case caption listed them. Therefore, the court 

struck any names other than BIE’s in the case caption and 

elsewhere on the document. See id. With that redaction, the 

court held that “the recitation of facts admitted to by BIE is 

highly probative, and, under these conditions [of redaction], 

poses relatively little risk of undue prejudice.” Id. at 3–4. 

The court further mitigated the potential problem by twice 

instructing the jury that “[t]he fact that BIE pleaded guilty 

may not in any respect be considered against any other 

defendants, nor may any inference be drawn against them by 

reason of BIE’s plea of guilty.” Given these protective 

measures against undue prejudice, the district court clearly 

did not abuse its discretion in admitting against all defendants 

the evidence of BIE’s guilty plea. 

HII separately argues the guilty plea was particularly 

prejudicial to it because the Government implied in its 

opening statement that HII was trying to avoid responsibility. 

According to HII, this implication would look particularly 

reprehensible when juxtaposed with BIE’s guilty plea. The 

jury, HII asserts, might have seen the guilty plea as evidence 

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40 

of BIE “taking responsibility” while HII avoided doing the 

same. Again, we disagree. HII’s argument rests on a short 

passage from the Government’s opening statement, in which 

counsel argued that “just because [HII] assigned [the 

contracts] out to Harbert International Establishment, they 

don’t assign away their responsibilities.” As the plaintiffs 

argue, that brief comment did not suggest that HII had been 

implicated in the earlier criminal case against BIE, but instead 

noted only “that HII did not escape liability for its own 

actions when it assigned Contracts 20A and 07 to BIE.” 

Thus, the Government’s comment does not disturb our 

holding that the district court did not abuse its discretion in 

admitting against all defendants the evidence of BIE’s guilty 

plea. 

2. Expert Testimony on Cartels 

Preston McAfee, a professor of economics and business 

strategy at California Institute of Technology, testified for the 

Government as an expert witness on how bid-rigging cartels 

work. McAfee had no direct knowledge of the facts in this 

case, and testified that he had not examined the evidence to 

conclude whether there actually was any bid rigging in this 

case. Instead, he testified about “how auction and bidding 

work, how collusion in auctions work[s], and the incentives 

that are created for seeking cost-reducing technologies.” For 

example, he explained that an economically rational member 

of a cartel must factor into its calculation of costs the risks 

associated with bid rigging (i.e., being found out and 

prosecuted). The cartel member’s bid must be higher than 

that of a competitive bidder in order to cover those costs. 

McAfee also explained what could be inferred from the 

assumption that a cartel existed. For example, he testified that 

if a cartel existed, one could infer that members of the cartel 

must be able to successfully influence the bidding process if 

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41 

they are to succeed in the object of the conspiracy—that is, 

rigging the bids. But the individual who prepares the bid need 

not know about the cartel, as long as that person is 

“influenced by somebody who knows about the cartel.” In 

sum, the professor explained that “[c]artels are formed . . . to 

subvert competition and increase prices” and testified how a 

cartel member achieves that purpose. 

Rule 702 of the Federal Rules of Evidence provides that 

“[i]f scientific, technical, or other specialized knowledge will 

assist the trier of fact to understand the evidence or to 

determine a fact in issue, a witness qualified as an expert by 

knowledge, skill, experience, training, or education, may 

testify thereto in the form of an opinion or otherwise.” Fed. 

R. Evid. 702. However, not all scientific testimony is created 

equal; some expert opinions are more helpful or more valid 

than others. Recognizing this fact, in 1993, the Supreme 

Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 

U.S. 579 (1993), held that trial judges must act as gatekeepers 

to exclude unreliable expert testimony. Under Daubert and 

the Court’s further clarification in Kumho Tire Co. v. 

Carmichael, 526 U.S. 137 (1999), testimony admitted under 

Rule 702 must be both reliable and relevant. Id. at 152. In 

2000, the Supreme Court amended Rule 702 to reflect the 

Daubert line of cases, outlining general standards that the trial 

court must use to assess the reliability and relevance of 

testimony. An expert witness may therefore testify only “if 

(1) the testimony is based upon sufficient facts or data, (2) the 

testimony is the product of reliable principles and methods, 

and (3) the witness has applied the principles and methods 

reliably to the facts of the case.” Fed. R. Evid. 702. 

The defendants moved in limine to exclude McAfee’s 

testimony, arguing the testimony did not meet the standards of 

Rule 702 because it was too broad, too generic, and based too 

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42 

heavily on assumptions rather than analysis of the actual 

evidence. They argued that McAfee’s testimony was not 

related to the facts of the case. Instead, McAfee simply 

assumed that a cartel actually existed between the defendants 

and other companies in order to make his testimony relevant. 

The defendants also stressed that McAfee had not tried to 

determine whether a cartel existed in this case, even though 

there are economics-based strategies to identify whether bids 

are in fact collusive. Because of these weaknesses, McAfee’s 

testimony would not assist the jury in understanding the 

evidence as required by Rule 702. 

The district court denied the motions, and reaffirmed and 

explained its decision when it denied motions for a new trial. 

In its opinion denying a new trial, the court explicitly held 

that McAfee’s testimony satisfied the requirements of 

Daubert and Rule 702. Miller v. Holzmann, 563 F. Supp. 2d 

54, 96 (D.D.C. 2008). Quoting the advisory committee’s note 

to Rule 702, the court stated that in some cases an expert may 

give valuable testimony to the factfinder by explaining 

general principles “without ever attempting to apply these 

principles to the specific facts of the case.” Id. at 90 (quoting 

Fed. R. Evid. 702 advisory committee’s note) (emphasis 

omitted). According to the advisory committee’s note, “[f]or 

this kind of generalized testimony, Rule 702 simply requires 

that: (1) the expert be qualified; (2) the testimony address a 

subject matter on which the factfinder can be assisted by an 

expert; (3) the testimony be reliable; and (4) the testimony 

‘fit’ the facts of the case.” Fed. R. Evid. 702 advisory 

committee’s note. The district court initially held that 

McAfee was a qualified expert. 563 F. Supp. 2d at 92 & n.40; 

see also id. at 96 (listing McAfee’s credentials as evidence 

that he was “well-qualified to testify on generally-accepted 

economics principles”). The court then proceeded to analyze 

McAfee’s testimony under the rest of the advisory 

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43 

committee’s note’s rubric, first assessing relevance (addressed 

by the second and fourth criteria), then reliability (addressed 

by the third). 

First, the district court held McAfee’s testimony to be 

relevant. The testimony addressed a subject matter 

appropriate for expert testimony—the second criterion under 

the Rule 702 advisory committee’s note—because McAfee 

explained complex processes and economic theory such as the 

federal government’s procurement process, auction 

incentives, and the effect of collusion on auctions. Id. at 92. 

These topics “are precisely the sort of specialized, technical 

matter concerning which a lay jury may benefit from a 

qualified expert’s tutelage.” Id. The testimony also “‘fit’ the 

facts of the case” as required by the fourth criterion. The 

defendants argued that the assumptions on which McAfee 

based his testimony were not based in the facts of the case, 

and therefore did not “fit.” But the district court disagreed. 

The court pointed out that, contrary to the defendants’ 

assertions, “McAfee never assumed that a cartel existed in 

this case.” Id. at 94. Instead, McAfee made it clear he was 

describing generic circumstances, “leaving the jury to 

determine which scenario best ‘fit’ the facts in this case.” Id.; 

see also id. at 94 n.45 (holding that McAfee’s testimony also 

did not create unfair prejudice under Rule 403 because he 

“repeatedly” explained he was not familiar with the facts, and 

that he did not know whether collusion occurred here). His 

testimony, while not derived from the facts in the case, was 

sufficiently connected to the facts to be relevant and helpful to 

the jury. Id. at 95. 

Last, the district court turned to the third criterion—

reliability—noting that “the law grants a district court the 

same broad latitude when it decides how to determine 

reliability as it enjoys in respect to its ultimate reliability 

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44 

determination.” Id. at 95 (quoting Kumho, 526 U.S. at 141–

42). Citing Daubert’s observations about how to determine 

whether expert testimony is reliable—from whether a theory 

has been subjected to peer review, to its potential rate of error, 

to whether a theory is generally accepted in the relevant 

field—the court determined that McAfee’s testimony was 

reliable. Id. at 96. McAfee has published over twenty peerreviewed articles on his theories about the nature of auctions 

and bidding. His testimony on economics “embodied basic 

principles” that are “taught in undergraduate economics 

courses” and “generally accepted in the field of economics.” 

Id. Therefore, concluded the district court, McAfee’s 

testimony satisfied the reliability criterion. 

As the preceding summary of the court’s reasoning 

demonstrates, the district court thoroughly and thoughtfully 

analyzed the application of Rule 702 to McAfee’s testimony. 

We also note that district courts have “broad discretion in 

determining whether to admit or exclude expert testimony.” 

United States v. Gatling, 96 F.3d 1511, 1523 (D.C. Cir. 1996). 

The court clearly did not abuse that discretion. 

The defendants also argue that McAfee’s testimony 

should have been excluded under Rule 403 because the 

professor used “highly charged terms” such as “cartel 

member” and “colluders,” and even once made an analogy to 

bank robbers. As Daubert explained, Rule 403 exclusion 

based on unfair prejudice is particularly important in the case 

of expert evidence, which “can be both powerful and quite 

misleading because of the difficulty in evaluating it.” 509 

U.S. at 595 (quoting Jack B. Weinstein, Rule 702 of the 

Federal Rules of Evidence Is Sound; It Should Not Be 

Amended, 138 F.R.D. 631, 632 (1991)). But, as explained 

above, see supra at 38, the district court is best able to apply 

the balancing test of Rule 403 and determine whether 

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45 

evidence’s potential for undue prejudice substantially 

outweighs its probative value. This is true for expert 

testimony as well as for other types of evidence. Mindful, 

therefore, of our responsibility not to second-guess the district 

court’s application of the Rule 403 balancing test, we 

conclude the district court did not improperly apply the rule 

here. McAfee used terms descriptive of the theories he 

explained, but he also repeatedly emphasized that he was not 

applying the terms to the facts in this case or these defendants. 

The district court did not abuse its discretion when it 

determined that McAfee’s use of terms like “cartel members” 

and “colluders” did not make his testimony’s potential for 

undue prejudice substantially outweigh its probative value. 

Indeed, it is difficult to conceive of expert testimony relevant 

to the issues of this case in which the witness would not 

employ terms like “cartel members” and “colluders.” We 

note that Rule 403 provides the exclusion of evidence if its 

“probative value is substantially outweighed by the danger of 

unfair prejudice,” not simply “prejudice.” In some sense, any 

evidence that is probative might be arguably prejudicial. That 

is, the purpose of offering evidence is to influence the 

decision of the jury. We can hardly say that the district court 

abused its discretion by admitting expert testimony that used 

terms entirely relevant to the issues at trial. 

3. Ruggieri’s Testimony 

Luigi Ruggieri was an officer of Asea Brown Boveri 

Ltd., the parent company of Sadelmi U.S.A., Inc. (SUSA), the 

company that received Contract 29. Over the objection of the 

defendants, the district court allowed Ruggieri to testify about 

a conversation he had with his subordinate, Giovanni 

Greselin, about a meeting between Greselin and Peter 

Schmidt, the Holzmann executive who hosted the conspiracy 

meetings in Frankfurt. In his testimony, Ruggieri stated that 

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46 

Schmidt met with Greselin and a “gentleman from Harbert” in 

Frankfurt. There, Schmidt proposed to Greselin that they 

agree on which of their companies would bid lower for 

Contract 29, with compensation going to the losing bidder. 

Ruggieri also testified, without objection from the defendants, 

to his personal involvement in the conspiracy. He said that he 

saw, then shredded, a document signed by Greselin outlining 

the bid rigging between Harbert-Jones and SUSA. Ruggieri 

then authorized Greselin to go ahead with the agreement and 

pay Harbert-Jones a loser’s fee in cash. 

Ruggieri’s testimony dealt only with the bid rigging of 

Contract 29. We have already dismissed all the claims 

against the defendants regarding Contract 29 for violation of 

the statute of limitations. See supra at 24–25. The defendants 

do not argue that the part of Ruggieri’s testimony to which 

they object—his testimony about the conversation between 

Greselin and Schmidt—tainted the jury’s consideration of the 

remaining claims under Contract 20A or provided the only 

link between any one of the defendants and the conspiracy 

involving 20A. Therefore the defendants’ arguments 

regarding the admissibility of Ruggieri’s testimony under Fed. 

R. Evid. 801(d)(2)(E) are moot. We need not address them 

here. 

4. Evidence of HII and HC’s Wealth 

Raymond Harbert is Bill Harbert’s nephew and CEO of 

Harbert Management Company, a company formed in 1993 

(after most of the underlying events in this case) that manages 

assets for third parties, including HC. When Raymond 

Harbert testified, Miller’s counsel asked him about the assets 

of HII, HC, and Harbert Management Company. From the 

exchange, counsel elicited that HII currently owns or is 

associated with seven or eight power plants in California, 

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47 

owns various cash assets, and makes approximately $40 to 

$50 million in annual revenues. Raymond Harbert also 

confirmed that between approximately 1990 and 1993, HII 

sold somewhere between $250 million and $500 million in 

assets, including selling its 50% ownership in BIE. Raymond 

Harbert also testified that HC was a holding company with 

assets in the form of stock in subsidiary companies, and that 

Harbert Management Company currently manages over $100 

million in assets for HC. He also testified that Harbert 

Management Company manages assets for other Harbert 

entities, including individuals of the Harbert family, for a total 

of around $9 billion in assets. In its closing, the Government 

recalled this testimony and juxtaposed the wealth of all the 

Harbert companies with the relative poverty of those in 

countries benefitting from projects funded by the USAID, 

saying that the excess money the Government paid to the 

conspirators “could have [been] used for less fortunate people 

in other countries.” 

Counsel for HII and HC objected to this testimony on the 

grounds that information about the companies’ wealth was 

both irrelevant and prejudicial, and reiterate this argument on 

appeal. We agree. To be admitted, evidence must be 

relevant. Fed. R. Evid. 402. That is, the evidence must have 

a “tendency to make the existence of any fact that is of 

consequence to the determination of the action more probable 

or less probable than it would be without the evidence.” Fed. 

R. Evid. 401. None of Raymond Harbert’s testimony 

described above satisfies this definition. No fact concerning 

the present size and scope of Harbert Management Company 

was of consequence to the determination of the action. The 

present size and scope of Harbert Management Company, a 

company that was not a defendant and manages assets for 

many non-defendants, including Raymond Harbert, his 

mother, and other members of the Harbert family, had nothing 

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to do with the liability of any of the defendants or the measure 

of damages. Indeed, the district court recognized this 

irrelevance in its opinion denying a new trial, though it 

deemed the irrelevant evidence not prejudicial. 563 F. Supp. 

2d at 111 n.73. However, arguments to the jury about a 

defendant’s wealth are grounds for new trial. Koufakis v. 

Carvel, 425 F.2d 892, 902 (2d Cir. 1970) (“Remarks . . . 

which can be taken as suggesting that the defendant should 

respond in damages because he is rich and the plaintiff is 

poor, are grounds for a new trial.”) (citing Washington 

Annapolis Hotel Co. v. Riddle, 171 F.2d 732, 740 (D.C. Cir. 

1948) (“A mistrial should have been declared on account of 

these remarks [suggesting that the defendant should respond 

in damages because it was rich and the plaintiff poor].”)). 

 Nor was evidence of the wealth of HII and of HC 

relevant. The district court said the testimony concerning HII 

and HC was properly admitted because it could help the jury 

decide whether one company was the alter ego of the other, a 

theory presented by the Government as a way to implicate HC 

in the conspiracy. 563 F. Supp. 2d at 111. “Under the alter 

ego theory, the court may ignore the existence of the 

corporate form whenever an individual so dominates an 

organization ‘as in reality to negate its separate personality.’” 

Founding Church of Scientology of Wash., D.C., Inc. v. 

Webster, 802 F.2d 1448, 1452 (D.C. Cir. 1986) (quoting 

Quinn v. Butz, 510 F.2d 743, 758 (D.C. Cir. 1975)). Applied 

to this case, HII would be the alter ego of HC: if the jury had 

decided HII was part of the conspiracy, and that it was the 

alter ego of HC, the jury could have found HC liable for the 

conspiracy even if there was no direct evidence that HC had 

itself joined the conspiracy. But the evidence described above 

does not help establish whether HII was the alter ego of HC. 

Instead, Raymond Harbert testified only as to how much 

money HII made from selling assets in the 1990s, how much 

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money HII makes now, and how many assets HC now has. 

Under Rule 401’s terms, the evidence made it no “more 

probable or less probable” that one corporation was the alter 

ego of the other. The only way the information could have 

affected the jury was to prejudice it. 

 The Government and Miller argue before us that all the 

testimony at issue was nonetheless admissible because the 

counsel for HII and HC brought up the subject of its wealth 

first, and in any case “the amount of wealth evidence elicited 

and referred to at trial was not large and was not significant 

enough” to warrant a new trial. We disagree on both points. 

First, the plaintiffs cite only two references to support their 

“But they started it!” argument: counsel’s opening and closing 

statements.5

 Neither reference is convincing. The first time 

HII and HC’s counsel referenced the corporations’ money 

was to point out Miller’s monetary interest in the case. This 

is a perfectly acceptable point for counsel to make. Cf. United 

States v. Smith, 232 F.3d 236, 242 (D.C. Cir. 2000) 

(“Routinely, defense counsel cross-examines government 

witness about an informant’s bias—whether it be a plea 

 

5

 In a footnote, the plaintiffs also cite two other statements to 

support their assertion that HII and HC brought up their wealth 

“throughout trial.” The first reference only obliquely touches on 

those companies’ wealth when counsel asked Miller about wealthy 

corporations in general. Nothing was said about HII or HC in 

particular. The second reference is even less pertinent. There, 

counsel asked a witness if she thought John Harbert, Bill Harbert’s 

nephew who was also involved in the Harbert companies, ever “felt 

that he needed to investigate or look over the shoulder of Mr. Bill 

Harbert.” In response, the witness testified the two might have been 

a little suspicious of each other and recalled that John Harbert spent 

a lot of money on his hunting dogs. Whatever insight that 

testimony gave into the relationship between those two men, it had 

nothing to do with HII and HC’s wealth. 

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50 

agreement, a financial arrangement, or both.”); 3 Federal Jury 

Practice and Instructions § 101.43 (5th ed.) (jury instruction 

stating that, in assessing the credibility of a witness, jury may 

consider whether the witness has any bias or prejudice). It is 

unrelated to the testimony later elicited by the plaintiffs about 

the various Harbert companies’ wealth. Even less convincing 

is the plaintiffs’ reliance on counsel’s closing statements, 

which of course came after the plaintiffs had already elicited 

Raymond Harbert’s testimony. 

As for the argument that there was not enough prejudice 

to warrant a new trial, again we disagree. Evidence need not 

be reinforced and reiterated again and again for it to be 

prejudicial enough to warrant a new trial. Here, it is enough 

that there were several inappropriate references to multiple 

different companies’ wealth, especially given that the 

Government’s counsel emphasized the wealth of the Harbert 

companies in his closing statement and insinuated that the 

money would be in better hands if it were taken from the 

defendants. We therefore vacate the judgments with respect 

to HII and HC and remand for a new trial for those two 

defendants. 

H. Sufficiency of the Evidence 

Finally, the defendants argue that the evidence was 

insufficient to support the jury verdict. Given our resolution 

of the foregoing issues, however, we need address only the 

arguments made by HUK and BIE. See Part II.D (claims 

against Anderson, which were limited to Contract 29, are 

time-barred); Part II.E (Government’s contradiction of 

stipulation regarding BHIC requires new trial); Part II.G.4 

(evidence of HII and HC’s wealth requires new trial). 

The jury found HUK liable for conspiracy, as well as for 

substantive FCA violations with respect to Contract 20A. To 

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hold HUK liable for conspiracy, the jury must have found (1) 

that an agreement existed to have false or fraudulent claims 

allowed or paid by the United States; (2) that HUK willfully 

joined that agreement, either at the conspiracy’s inception or 

afterwards; and (3) that one or more conspirators knowingly 

committed one or more overt acts in furtherance of the object 

of the conspiracy. See Miller v. Holzmann, 563 F. Supp. 2d 

54, 114 n.83 (D.D.C. 2008); see also, e.g., Halberstam v. 

Welch, 705 F.2d 472, 478 (D.C. Cir. 1983) (describing the 

elements of common law civil conspiracy). HUK challenges 

all three findings. Although estopped from challenging its 

liability, see Part II.F, BIE joins HUK in contending that the 

jury erred in its calculation of damages. 

The district court denied the defendants’ motion for 

judgment as a matter of law with respect to the sufficiency of 

the evidence. Although we review that decision de novo, we 

“do not . . . lightly disturb a jury verdict.” McGill v. Muñoz, 

203 F.3d 843, 845 (D.C. Cir. 2000). We “draw all reasonable 

inferences in favor of the nonmoving party and . . . may not 

make credibility determinations or weigh the evidence.” 

Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 

150 (2000). We “disregard all evidence favorable to the 

moving party [here, the defendants] that the jury is not 

required to believe,” id. at 151, and will reverse a jury’s 

decision “only if the evidence and all reasonable inferences 

that can be drawn therefrom are so one-sided that reasonable 

men and women could not have reached a verdict in 

plaintiff[s’] favor.” McGill, 204 F.3d at 845 (internal 

quotation marks omitted). 

1. Overarching Conspiracy 

The plaintiffs alleged and the jury found an overarching 

conspiracy spanning Contracts 20A, 29, and 07. HUK 

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contends that the evidence does not support this finding and 

that we must therefore reverse both the conspiracy and 

substantive verdicts against it. We must reverse the 

conspiracy verdict, HUK urges, because record evidence 

shows only that Peter Schmidt “was involved in three separate 

and distinct episodes of discussing bid-rigging.” Citing 

Kotteakos v. United States, 328 U.S. 750, 774 (1946), the 

defendants also argue that we must reverse the substantive 

verdict because the overarching conspiracy theory created 

“dangers of transference of guilt from one [defendant] to 

another.” In other words, HUK argues, the jury may well 

have relied on its conspiracy verdict to hold HUK liable for 

substantive FCA violations based on the actions of its coconspirators. See Halberstam, 705 F.2d at 481. 

As we explained in United States v. Tarantino, 846 F.2d 

1384, 1393 (D.C. Cir. 1988), a jury must consider three 

factors to determine whether potentially connected conduct 

constitutes an overarching conspiracy: (1) “whether the 

conspirators share[d] a common goal”; (2) “the degree of 

dependence inherent in the conspiracy”; and (3) “the overlap 

of participants” between the arguably separate schemes. 

Pointing out that Tarantino involved a drug conspiracy, HUK 

argues that this framework is inapplicable, or at least more 

demanding, where, as here, the conspiracy is of a commercial 

nature. But we have repeatedly applied this three-part inquiry 

to non-drug conspiracies without altering its contours. See, 

e.g., United States v. Hemphill, 514 F.3d 1350, 1363–64 (D.C. 

Cir. 2008) (single conspiracy to steal from Washington 

Teachers Union); United States v. Gatling, 96 F.3d 1511, 

1520 (D.C. Cir. 1996) (single conspiracy to commit bribery in 

connection with illegal issuance of section 8 housing 

subsidies); cf. United States v. Anderson, 326 F.3d 1319, 

1327–28 (11th Cir. 2003) (applying this three-part framework 

and upholding a jury finding of an overarching conspiracy in 

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Anderson’s criminal case on the same facts as in the case 

before us). To apply that test to the overarching conspiracy 

the jury found in this case, we must consider testimony and 

evidence regarding the bidding on each contract even though, 

as explained in Part II.A.2, Contracts 29 and 07, by 

themselves, cannot give rise to substantive liability against 

any defendant. Cf. Hemphill, 514 F.3d at 1363–64 

(considering evidence relating to multiple schemes as proof of 

one overarching conspiracy). 

In assessing the first factor—whether defendants 

involved in allegedly conspiratorial conduct shared a common 

goal—“a conspiracy’s purpose should not be defined in too 

narrow or specific terms.” Gatling, 96 F.3d at 1520. Thus, 

we have found “obtaining money in exchange for 

[government] subsidies,” id., and “steal[ing] money from [a] 

union,” Hemphill, 514 F.3d at 1364, to be sufficiently specific 

common purposes. Reviewing the evidence, the district court 

determined that the jury could have reasonably found an 

overarching conspiracy with a common purpose of “limiting 

competition” in bidding on projects in Egypt funded by the 

USAID. Miller, 563 F. Supp. 2d at 138–139 & n.131. We 

agree. 

The jury heard testimony revealing just such a common 

purpose, including for example Anderson’s statement that all 

prequalified contractors working in Egypt were part of a 

“Frankfurt Club” that “set up” the bids on Egyptian contracts. 

John Ollis, Vice President of Holzmann, inferred from 

Anderson’s comments that “the jobs that we were bidding, 

there had been some kind of arrangements made among the 

bidders to collaborate on how much would be bid. In the 

vernacular, bid-rigging.” The defendants contend that even if 

the other participants shared the common goal of limiting 

competition in Egypt, “Schmidt had a separate goal—pursing 

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Holzmann’s interests in Europe.” In support, they point to 

testimony that Schmidt offered to make a trade with SUSA, a 

prequalified bidder on Contract 29, under which SUSA would 

win that contract in exchange for Harbert-Jones winning a 

later contract in Europe. During the second Contract 29 

meeting, however, Schmidt abandoned this plan, and in any 

event, Schmidt’s fleeting desire to use the conspiracy to 

accomplish an additional goal is insufficient to undermine the 

jury’s finding of a common purpose across all three contracts. 

The second factor, interdependence, requires that each 

defendant’s actions “facilitate the endeavors of other alleged 

coconspirators or facilitate the venture as a whole.” United 

States v. Carnagie, 533 F.3d 1231, 1238 (10th Cir. 2008) 

(internal quotation marks omitted); see also Tarantino, 846 

F.2d at 1392–93. We have upheld a jury’s finding of 

interdependence where “the assistance one branch of a 

conspiracy provides to another is fairly minimal” and where 

“given the overlap in participation and timing . . . accusations 

relating to one of the schemes could trigger an investigation 

that would lead to exposure” of the others. Gatling, 96 F.3d 

at 1522. This standard is clearly satisfied here. For one thing, 

a written bid-rigging agreement between Holzmann and 

Archirodon (Fuller’s parent company) regarding Contract 

20A expressly contemplated future collusion on Contract 29. 

Similarly, a SUSA manager testified that Schmidt offered 

SUSA a deal in which “the loser” on Contract 29 would bid 

high on that contract and “the winner” would compensate “the 

loser” “in kind,” by bidding high on another “contract[] to be 

bid in Egypt similar to [Contract 29].” The jury could also 

have reasonably inferred interdependence from financial 

statements for the “Harbert-Jones Egypt Joint Venture,” 

which included Contract 20A, Contract 07, and other projects. 

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The third factor—overlap among participants—is “less 

significant” than the others, requiring “only that the main 

conspirators work with all the participants.” Hemphill, 514 

F.3d at 1363 (citing United States v. Mathis, 216 F.3d 18, 23–

24 (D.C. Cir. 2000)). Again, record evidence satisfies this 

standard. The defendants concede that Schmidt, on behalf of 

Jones and its parent company, Holzmann, was involved in all 

three contracts. The jury also heard evidence (1) that another 

prequalified bidder, Fru-Con (through its parent company, 

Bilfinger & Berger), received payoffs for cooperating on 

Contracts 20A and 07; (2) that BIE admitted conspiring to rig 

bids on Contracts 20A and 29; and (3) that Anderson 

participated in meetings on Contracts 20A and 07, may well 

have participated in a meeting on Contract 29, and had 

authority over all three contracts. Thus, the jury could have 

reasonably concluded that Schmidt and possibly Anderson 

worked with all participants and that BIE and HII (through 

Anderson) were directly involved in rigging bids on multiple 

contracts. The defendants respond that with the exception of 

Schmidt and Anderson, each individual met with competitors 

to discuss but one contract. True enough, but because the 

conspiracy was between corporations, the identity of the 

individuals representing those corporations at bid-rigging 

meetings is irrelevant. In sum, then, sufficient evidence 

supports the jury’s finding of an overarching conspiracy. 

2. HUK’s Involvement in the Conspiracy 

Even if a reasonable jury could have found an 

overarching conspiracy, HUK insists that the evidence is 

insufficient to show that it willfully joined that conspiracy. In 

evaluating this argument, we note that “in most civil 

conspiracy cases,” the jury “ha[s] to infer an agreement from 

indirect evidence.” Halberstam, 705 F.2d at 486. A jury may 

infer that a defendant willfully joined the conspiracy if he 

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understood the scheme’s “essential nature and general scope.” 

Hobson v. Wilson, 737 F.2d 1, 52 (D.C. Cir. 1984) (internal 

quotation marks omitted), overruled in part on other grounds 

by Leatherman v. Tarrant County Narcotics Intelligence & 

Coordination Unit, 507 U.S. 163 (1993). Under basic 

principles of agency law, corporate defendants are charged 

with constructive knowledge of all material facts that their 

agents and officers learn in the scope of their employment. 

See 2 William Fletcher, Cyclopedia of the Law of 

Corporations § 790 (2010); see also BCCI Holdings 

(Luxembourg), S.A. v. Clifford, 964 F. Supp. 468, 478 (D.D.C. 

1997). Thus, to uphold the jury’s finding that HUK joined the 

conspiracy, we must be sure that the record contains sufficient 

evidence for the jury to have reasonably found that (1) an 

HUK employee, officer, or director knowingly joined the 

conspiracy and (2) in so doing, acted within the scope of his 

HUK duties. 

At trial, the plaintiffs presented testimony and evidence 

that revealed HUK’s involvement in bidding on Contract 

20A. In April 1988, the USAID and an Egyptian government 

agency called the Cairo Wastewater Organization solicited 

bids on Contract 20A from three prequalified contractors: 

George A. Fuller Co. (Fuller); Fru-Con Construction 

Company; and the Harbert-Jones 20A Joint Venture. 

A month later, Schmidt invited a group of prequalified 

contractors to meet in Frankfurt. Schmidt suggested that the 

others bid high on Contract 20A in exchange for a payoff. 

Although no agreement was reached at that meeting, several 

weeks later Schmidt and an executive of Bilfinger & Berger 

(B&B) (Fru-Con’s parent company) agreed that Fru-Con 

would submit a high bid in exchange for a payoff equivalent 

to 2–3% of the contract value. 

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The Harbert-Jones joint venture convened a bid 

reconciliation meeting in June. Jones’s estimator, Carl Nagel, 

proposed that Harbert-Jones bid $95.2 million. Ian Young, 

HUK’s lead estimator, represented Harbert at the meeting, 

where the Harbert team suggested to the Jones team that they 

include more conservative estimates. Based in part on these 

suggestions, the two sides initially agreed to bid $103 million. 

After Anderson arrived at the meeting and once additional 

“philosophy changes,” including more expensive methods of 

construction, were incorporated into the bid, the joint proposal 

increased to $130 million. Shortly thereafter, Harbert-Jones 

submitted a $125 million bid, which Young signed. 

On August 3, the final day to submit bids, Schmidt and 

an officer of Fuller’s parent, Archirodon, signed a written 

agreement stipulating that Fuller would refrain from bidding 

on Contract 20A in exchange for Archirodon receiving either 

5% of the contract value or 3% and a subcontract. In 

addition, Holzmann committed to “caus[ing]” Harbert-Jones 

to “reciprocate” by helping Fuller obtain another contract of 

similar value from the USAID, such as Contract 29. On the 

same day, Young directed that the Harbert-Jones bid be 

increased by 3.5%, to $129 million. 

The bids were opened the next day. Fru-Con had bid 

$152 million, Harbert-Jones had bid $129 million, and Fuller 

had not bid at all. Although the lower of the bids, HarbertJones’s was substantially higher than the project’s consultant 

had expected. As a result, the Cairo Wastewater Organization 

and the USAID opted to scale down the contract and solicit 

re-bids. 

In December, Anderson, Schmidt, and Archirodon 

representatives met to discuss the new round of bidding. In a 

handwritten addendum to the August agreement, they agreed 

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that Fuller would receive a subcontract worth at least $2.5 

million plus $500,000 cash. Later that month, Fru-Con bid 

$139 million for the scaled-down version of Contract 20A, 

and Harbert-Jones bid $115 million. Harbert-Jones won the 

contract, eventually submitting 33 invoices totaling over $107 

million. 

In January 1990, Schmidt, Anderson, and a representative 

from Archirodon negotiated a payment schedule for the 

agreed-upon $3 million payoff. Holzmann made payments to 

Archirodon over the next year. Testimony and other evidence 

suggest that Harbert-Jones funneled money for these payoffs 

through HUK. For example, Holzmann billed HUK for 

services it never requested nor received, and HUK paid those 

invoices. 

According to HUK, this evidence is insufficient to 

support the jury’s finding that the company agreed to join the 

overarching conspiracy. We disagree. The jury could have 

reasonably concluded that Ian Young, HUK’s lead estimator, 

knowingly joined the conspiracy on behalf of HUK. 

Specifically, Young’s interactions with Roy Anderson, his 

behavior at the Harbert-Jones bid-reconciliation meeting, and 

his involvement in increasing the bid on the same day that 

Schmidt secured Archirodon’s no-bid promise all suggest he 

knowingly joined the conspiracy while acting within the 

scope of his employment for HUK. 

The jury had reason to believe that Anderson knew of the 

conspiracy by the time of the June 1988 bid-reconciliation 

meeting. Specifically, it heard testimony and viewed 

evidence that Anderson was the Vice President of HII, the 

60% partner in the joint venture; that he was the “lead man” 

on the Egypt jobs; that he held powers of attorney from the 

President of HII, Bill Harbert, authorizing him “without 

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reservation” to represent HII in the bidding; and that he may 

have been present at the May 1988 meeting in which Schmidt 

proposed the bid-rigging scheme, see Miller, 563 F. Supp. 2d 

at 116 n.87 (“In light of Anderson’s explicit status as HII’s 

point-man in Europe for international contracting and his 

attendance at the December 1988 renegotiation with Fuller, it 

would be reasonable to infer that if a HII representative 

attended the May meeting, it would have been Anderson.”). 

The jury also heard evidence suggesting that Anderson could 

have passed his knowledge along to Young: Colin Towsey, 

the Managing Director of HUK, testified that Anderson and 

Young “had interactions . . . with respect to the bidding on 

Contract 20A,” and “had discussions about what the 

estimating work would be.” 

In addition, the jury could have reasonably inferred that 

Young knew of the conspiracy based on evidence that he 

sought to increase the bid at the Harbert-Jones bid 

reconciliation meeting. Nagel, Jones’s estimator, testified that 

although Jones’s pre-meeting proposal was $95.2 million, 

Young’s “arm twist[ing]” “pressured” the Jones team to 

include more expensive methods of construction, thus 

significantly increasing the bid, first to $103 million and later, 

after Anderson’s arrival, to $130 million. Nagel testified that 

he thought that even the $103 million figure was “inflated.” 

According to Nagel, the Jones team deferred to Young 

because Harbert was the majority owner of the joint venture, 

giving Harbert “the hammer” in the negotiations. Similarly, 

Young’s August 3 order to increase the bid by 3.5%—the 

same day Schmidt secured a no-bid agreement from 

Archirodon—could also lead a reasonable jury to conclude 

that he knew about the bid rigging. Reinforcing these 

inferences, the plaintiffs’ expert explained that in order to 

make collusive agreements profitable, managers must exert 

influence on the prices their companies set. 

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HUK challenges this view of the evidence, arguing that 

an innocent explanation supports Young’s actions and that 

“[c]onduct that is as consistent with other equally plausible 

explanations as with illegal conspiracy, without more, does 

not support an inference of conspiracy.” See Matsushita Elec. 

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); 

Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 

(1984). According to HUK, at the bid-reconciliation meeting 

Young simply believed that more conservative construction 

techniques should be used. This explanation is bolstered, 

HUK tells us, by Nagel’s statement on cross-examination that 

reasonable and experienced estimators could disagree about 

the need for such methods. Similarly, HUK contends that 

Young’s August 3 order to increase the bid by 3.5% was 

completely innocent—the letter was one of two prepared in 

advance to deal with volatile steel prices. As the district court 

observed, however, these arguments largely ignore the 

standard of review for sufficiency challenges: “In essence, 

HUK merely posits that another—in its opinion, better—

explanation of the facts exists. But at this stage in the 

litigation, the relevant question is whether the view adopted 

by the jury in reaching its verdict was at all reasonable.” 

Miller, 563 F. Supp. 2d at 121 n.98 (citing Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)). Here the jury 

had sufficient evidence to conclude that Young’s efforts to 

increase the bid were motivated by knowledge of a bidrigging conspiracy. Moreover, in crediting the plaintiffs’ 

version of the facts over HUK’s more innocent explanation, 

the jury would have had no need to speculate, as HUK claims 

it did. Testimony regarding Young’s interactions with 

Anderson, the existence of a bid-rigging agreement between 

Harbert-Jones and Fru-Con, the timing of Young’s actions, 

and the expert testimony about collusive agreements all 

support the jury’s inference that Young knowingly joined the 

conspiracy. Cf. Matsushita, 475 U.S. at 596–97 (where 

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plaintiffs fail to show that defendants had any plausible 

motive to engage in conspiracy, conduct consistent with other, 

equally plausible explanations does not give rise to an 

inference of conspiracy). 

Sufficient evidence also supports the jury’s finding that 

Young acquired knowledge of the conspiracy while acting 

within the scope of his employment for HUK. Not only was 

Young an HUK employee when Contract 20A was bid, but in 

his testimony, Colin Towsey, HUK’s Managing Director, 

revealed that Young worked on the bid as part of his HUK 

employment. HUK counters that Towsey’s testimony 

suggests that during the relevant period Young was actually 

working for BIE, HUK’s 49% owner. But Towsey’s 

testimony establishes only that HUK “provide[d] some 

engineering and estimating support” to BIE. Towsey never 

said that Young worked primarily or exclusively for BIE; in 

fact, Towsey indicated that Young worked in HUK’s London 

office during this time, that he remained on HUK’s payroll, 

and that “[h]e was certainly the head of [HUK’s] estimating 

team” in connection with Contract 20A. Thus, based on 

Towsey’s testimony the jury could have reasonably found that 

Young learned of the conspiracy and contributed to it in his 

capacity as an HUK employee. In sum, then, Young’s actions 

provided sufficient evidence for the jury to conclude that 

HUK knowingly joined the conspiracy. 

HUK next challenges the jury’s finding that it committed 

substantive FCA violations, i.e., that it “knowingly 

present[ed], or cause[d] to be presented, a false or fraudulent 

claim” and “knowingly ma[de], use[d], or cause[d] to be 

made or used, a false record or statement material to a false or 

fraudulent claim” with respect to Contract 20A. 31 U.S.C. 

§ 3729(a). We have no need to address this argument. 

Because the jury had sufficient evidence to find that HUK 

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conspired to submit false bids, supra at 58, HUK was liable 

for its co-conspirators’ foreseeable actions in support of the 

conspiracy. See, e.g., Halberstam, 705 F.2d at 481. And as 

explained in Part II.G.1, BIE’s admission that it both 

conspired to and did submit false claims with respect to 

Contract 20A was properly admitted against all of the 

defendants. That admission thus provides sufficient evidence 

for the jury to have found HUK liable for false claims 

submitted on Contract 20A. We therefore turn to the 

defendants’ challenges to the jury’s calculation of damages. 

3. Damages 

As the parties agree, the measure of damages is the 

difference between what the United States paid and what it 

would have paid had there been no bid-rigging agreement. 

Because the plaintiffs’ claims on Contracts 29 and 07 are 

barred by the statute of limitations, see Part II.A.2, we need 

consider damages only as to Contract 20A. After being 

instructed on the proper standard, the jury awarded damages 

of $29.9 million on that contract. HUK and BIE challenge the 

award on two independent grounds. First, they contend that 

the plaintiffs presented insufficient evidence to support the 

jury’s finding. Second, they argue that the district court 

permitted the plaintiffs to argue an improper damages theory 

to the jury and that this error requires a new trial. 

Regarding the sufficiency of the evidence, the defendants 

assert that “plaintiffs failed altogether to prove that USAID 

incurred [any] loss” from the bid rigging on Contract 20A. 

This claim rests on the contention that no defendant attended 

the bid-rigging meetings led by Schmidt on behalf of 

Holzmann—indeed, that no defendant even knew about the 

meetings—and that Harbert-Jones therefore could not have 

raised its bid based on Schmidt’s agreements with the other 

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Contract 20A bidders. Our earlier discussion explains why 

this argument fails: a reasonable jury could have concluded 

that Anderson and Young, representing the Harbert side of the 

Harbert-Jones venture, knew about the bid-rigging plan when 

they attended the venture’s June 1988 bid-reconciliation 

meeting and that, based on that knowledge, they aggressively 

advocated a higher bid. 

Moreover, the jury heard substantial evidence that the 

payment Harbert-Jones ultimately received for its work on 

Contract 20A was well above what it could have obtained 

through a competitive bidding process. Although the joint 

venture’s bid rose and fell several times between the June 

1988 bid reconciliation meeting and the final award of the 

contract, in the end, executives at Jones described their profits 

as “exorbitantly wonderful.” Indeed, the plaintiffs’ expert 

testified that Harbert-Jones reaped profits of 52%; other 

witnesses testified that the norm for construction jobs of this 

type is 7 to 15%. The plaintiffs’ expert also detailed several 

complicated financial transactions that BIE undertook to hide 

$25 million of this profit. Contrary to the defendants’ 

argument, it required no speculation for the jury to conclude 

that the defendants overcharged on Contract 20A. 

As to the amount of the award, the defendants argue that 

even if the plaintiffs successfully proved some degree of bid 

inflation, “there is no correlation between the $29,920,000 

jury award and any of the various amounts plaintiffs urged the 

jury to assess.” When considering a sufficiency of the 

evidence challenge to a jury’s damages award, “[o]ur inquiry 

ends once we are satisfied that the award is within a 

reasonable range and that the jury did not engage in 

speculation or other improper activity.” Carter v. DuncanHuggins, Ltd., 727 F.2d 1225, 1239 (D.C. Cir. 1984). 

Especially in a case like this, “[w]here the jury finds a 

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particular quantum of damages and the trial judge refuses to 

disturb its findings,” we must be “certain indeed that the 

award is contrary to all reason” before reversing the jury and 

the district court. Id. (internal quotation marks omitted). And 

in determining what constitutes a “reasonable range” for the 

jury’s award, we make allowances for the fact that the 

defendants’ own misconduct has foreclosed any exact 

calculation of what a competitive bid would have been on 

Contract 20A. See Bigelow v. RKO Radio Pictures, Inc., 327 

U.S. 251, 264 (1946) (“[W]here the defendant by his own 

wrong has prevented a more precise computation, the jury 

may not render a verdict based on speculation or guesswork[,] 

[b]ut [it] may make a just and reasonable estimate of the 

damage based on relevant data.”). 

At trial, the plaintiffs suggested several methods for 

estimating the extent of the bid inflation on Contract 20A. 

We highlight two, each of which demonstrates that the jury’s 

award falls “within a reasonable range.” Carter, 727 F.2d at 

1239. 

First, the plaintiffs urged the jury to begin with the 

defendants’ actual final costs on Contract 20A of $52 million, 

and then add a generous 25% profit margin (as described 

above, the jury heard testimony that profit on a contract like 

20A would normally have been 7 to 15%), thus yielding a 

final bid of $65 million. Since Harbert-Jones ultimately 

submitted invoices totaling $107 million, this calculation 

suggested damages of $42 million ($107 million minus $65 

million), comfortably above the jury’s actual $29.9 million 

award. 

Alternatively, the plaintiffs suggested that the jury could 

estimate the competitive bid amount for the final Contract 

20A specification by starting with either of two “free of 

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65 

influence” estimates for the original, larger version of the 

contract, and then discounting whichever estimate it chose for 

the subsequent scope of work changes. The two estimates the 

plaintiffs suggested as a baseline were: (1) $95 million, the 

bid proposal prepared by Jones before its June 1988 

reconciliation meeting with the Harbert side of the venture, 

and (2) $80 million, the bid amount apparently considered by 

Fuller before deciding not to bid on Contract 20A. 

Proportionately reduced for the subsequent changes to 

Contract 20A that led Harbert-Jones to lower its bid from 

$129 to $115 million (an 11% reduction), these estimates 

suggest that the competitive bid amount on the final contract 

would have been between $71 and $85 million, indicating 

damages of $22 to $36 million. The jury’s actual award—

$29.9 million—falls squarely within this range. The jury’s 

award thus easily survives our deferential standard of review. 

Finally, the defendants argue that the district court 

allowed the plaintiffs to present an improper damages theory 

to the jury. Specifically, they contend that by allowing the 

plaintiffs’ counsel to refer occasionally to the proper measure 

of damages as what the Government “should” have paid 

rather than what it “would” have paid absent the bid rigging, 

the district court allowed the plaintiffs to suggest that the jury 

calculate damages by disgorging the defendants’ Contract 

20A profits. Cf. United States ex rel. Harrison v. 

Westinghouse Savanna River Co., 352 F.3d 908, 923 (4th Cir. 

2003) (finding disgorgement of all government payments on a 

fraudulently obtained contract to be an inappropriate remedy 

under the FCA). “[W]here a jury was permitted to consider 

an improper standard of damages,” the defendants argue, “the 

reviewing court must reverse unless it can be assured that the 

verdict was not based on [the] erroneous standard.” In its 

post-trial order, however, the district court pointed out that its 

jury instructions set out the proper damages standard and 

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found that these instructions “eliminated any confusion 

engendered by plaintiffs’ counsel[].” 563 F. Supp. 2d at 108 

n.68. 

Reviewing the district court’s denial of a new trial for 

abuse of discretion, we find none. To begin with, we doubt 

very much that the few offhand references to what the 

Government “should have paid” could have misled the jury. 

As the plaintiffs point out, “what the Government ‘should 

have paid’ can readily be understood as what the Government 

ought to have paid on the contracts absent Defendants’ 

wrongdoing.” Indeed, in describing the proper measure of 

damages in his closing argument, the plaintiffs’ counsel used 

the phrase “should have paid” in just this way: “[T]he 

measure of the damage will be . . . that difference between 

what [the Government] paid and what [it] should have paid if 

the bidding had not been rigged and the competition had been 

free, robust, and vibrant.” But even if these scattered “should 

have paid” references may have confused the jury, we agree 

with the district court that its instructions eliminated any 

prejudice. The court explained to the jurors that “the measure 

of damages to the United States is the difference between 

what the United States paid and what it would have paid had 

there been no bid-rigging agreement.” As the district court 

was entitled to presume that the jurors “follow[ed] the 

instructions they [were] given,” United States v. Mouling, 557 

F.3d 658, 665 (D.C. Cir. 2009), its denial of the defendants’ 

motion for a new trial was well within its discretion. 

III. Conclusion 

For the foregoing reasons we (1) vacate the judgment of 

the district court, pursuant to the statute of limitations, with 

respect to the claims concerning Contracts 07 and 29; (2) 

vacate the judgment against the defendants HII, HC, and 

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67 

BHIC and remand the matter for a new trial because the 

district court erred in admitting testimony about the wealth of 

HII and HC and statements contrary to the stipulation about 

BHIC’s existence; and (3) affirm the judgment with respect to 

the claims concerning Contract 20A against the remaining 

defendants, namely BIE and HUK. 

So ordered. 

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TATEL, Circuit Judge, dissenting from Parts II.A.2 and 

II.G.4: In Part II.A.2 the court finds the Government‘s claims 

on Contracts 29 and 07 barred by the False Claims Act‘s 

statute of limitations, and in Part II.G.4 it rules that testimony 

and evidence regarding the defendants‘ wealth was so 

prejudicial as to require a new trial for HII and HC. I 

respectfully dissent from both rulings. 

I.

Under the False Claims Act (FCA) as recently amended, 

the Government‘s complaint in intervention inherits the filing 

date of the qui tam relator‘s complaint that initiated the action 

―to the extent that the claim of the Government arises out of 

the conduct, transactions, or occurrences set forth, or 

attempted to be set forth, in the prior complaint.‖ 31 U.S.C.

§ 3731(c). In this case, the ―conduct, transactions, or 

occurrences set forth, or attempted to be set forth‖ in Richard 

Miller‘s 1995 complaint involved a Frankfurt-based 

conspiracy to rig bidding for multiple USAID contracts in 

Egypt. This court denies relation back of much of the 

Government‘s complaint in intervention because two 

contracts the Government alleges were part of that 

conspiracy, Contracts 29 and 07, were not mentioned in 

Miller‘s original complaint. Yet in the very first sentence in 

which Miller described the conduct at issue, he left no doubt 

that he was accusing the defendants of fraud spanning more 

than one USAID project: ―Defendants conspired to rig the 

bidding for construction contracts paid for by the United 

States Agency for International Development.‖ Miller 

Compl. ¶ 1 (emphasis added). Emphasizing that he was 

alleging fraud involving more than one contract, he continued, 

―The particular transaction about which most is known is 

Contract 20A.‖ Id. (emphasis added). After detailing the bid 

rigging on Contract 20A, id. ¶¶ 1, 15–30, Miller again made 

clear that the conspiracy he was alleging was not limited to 

that particular contract: ―Plaintiff has received information 

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2

that there was a  ̳club‘ in Frankfurt, Germany of contractors 

qualified to perform AID contracts in Egypt; the club was 

organized to control prices in what should have been full and 

open competition for AID contracts.‖ Id. at ¶ 33. Indeed, 

Miller predicted that discovery would uncover additional 

rigged contracts: ―Upon information and belief, discovery in 

this case will reveal that other AID contracts in Egypt were 

subject to similar and related collusive agreements on price 

that resulted in the submission of other false or fraudulent 

claims to the U.S. Government.‖ Id. Finally, in the 

complaint‘s formal counts, Miller neither mentioned Contract 

20A nor limited his claim for damages to the allegedly false 

claims on that contract (estimated earlier in the complaint at 

$40 million). Instead, he ―incorporate[d] the allegations of‖ 

the preceding paragraphs by reference, id. ¶¶ 34, 37, including 

the allegation of ―other false or fraudulent claims‖ arising 

from ―other AID contracts in Egypt,‖ id. at ¶ 33, and sought 

―actual damages in an amount to be proven at trial,‖ id. ¶¶ 

36, 39.

From the face of Miller‘s complaint, it is thus clear that 

the ―conduct, transactions, or occurrences set forth, or 

attempted to be set forth‖ encompassed bid-rigging not just on 

Contract 20A (identified by Miller in his original complaint) 

but also on Contracts 29 and 07 (later added by the 

Government in its complaint in intervention). The 

Government‘s claims on Contracts 29 and 07 ―arise[] out of‖ 

the Frankfurt-based bid rigging conspiracy originally alleged 

by Miller—indeed, the ―collusive agreements‖ on these 

contracts were precisely what Miller predicted discovery 

would unearth. Id. ¶ 33. For this reason, the Government‘s 

claims relate back to Miller‘s original complaint and are 

therefore not barred by the FCA‘s statute of limitations. As 

we have said, ―an amendment offered for the purpose of 

adding to or amplifying the facts already alleged in support of 

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3

a particular claim may relate back.‖ United States v. Hicks, 

283 F.3d 380, 388 (D.C. Cir. 2002). 

According to the court, ―[a]llegations concerning 

Contract 20A do not fairly encompass Contracts 07 or 29 

because each contract is unique.‖ Ct. Op. at 18. In support, it 

says that ―each contract required work to be performed on a 

different project and was awarded in a different year to a 

different winning bidder drawn from a different pool of 

prequalified bidders.‖ Id. This misses the point. Of course 

the three contracts were different. As is typical in 

government contracting, USAID and the Egyptian 

government divided the sewer improvements into multiple 

contracts signed on different dates. What matters for relation 

back purposes is that the three contracts were all part of the 

―conduct,‖ i.e., the Frankfurt-based bid-rigging conspiracy, 

alleged in Miller‘s original complaint. 

The three contracts, moreover, are not nearly as different 

as the court suggests. Although each contract was awarded to 

a ―different winning bidder,‖ id., the winners on Contracts 

20A and 07 were identical in structure—each was owned 60% 

by HII and 40% by Jones—and the defendants‘ financial 

statements treated them as a single entity, the ―Harbert-Jones 

Egypt Joint Venture.‖ Indeed, had Holzmann not agreed that 

Harbert-Jones would overbid the contract in exchange for a 

$4 million loser‘s fee from its competitor, HII and Jones 

might have won Contract 29 as well. Moreover, while it is 

true that the pool of bidders varied among contracts, there 

were important overlaps: HII and Jones, through their joint 

ventures, were prequalified to bid on all three, and Fru-Con 

was prequalified for Contracts 20A and 07. Indeed, ―Fru-Con 

(through its parent company, Bilfinger & Berger), received 

payoffs for cooperating on Contracts 20A and 07,‖ Ct. Op. at 

55. In addition, Fuller, which was prequalified for Contract 

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20A, also submitted prequalification information on Contract 

29 but was ultimately found ineligible. And when Fuller‘s 

parent corporation and Holzmann rigged the bidding on 

Contract 20A, they signed an agreement ―expressly 

contemplat[ing] future collusion on Contract 29.‖ Id. at 54.

The court relies on Meijer, Inc. v. Biovail Corp., 533 F.3d 

857 (D.C. Cir. 2008), but that case is very different from this 

one. There, a group of wholesale drug purchasers alleged that 

Biovail, a drug manufacturer, misused a patent it owned to 

keep ―generic versions‖ of one of its brand name drugs off the 

market. The complaint named one particular generic 

competitor, developed by a company called Andrx, that 

Biovail had blocked. Id. at 866. In their amended complaint, 

the plaintiffs alleged for the first time that Biovail, along with 

its exclusive distributor, Forest Laboratories, also violated the 

antitrust laws through their ―decision not to sell their own

generic.‖ Id. (emphasis added). We disallowed relation back 

of this new allegation even though the original complaint 

accused the defendants of blocking ―generic versions‖ of the 

drug. Id. (emphasis added). According to my colleagues, 

Miller‘s use of the plural—―Defendants conspired to rig the 

bidding for construction contracts,‖ Miller Compl. ¶ 1—

likewise cannot support relation back of the Government‘s 

subsequent allegations. 

Our decision in Meijer, however, rested on the fact that 

―the whole thrust of the amendments [was] to fault both 

Biovail and Forest . . . for conduct different from that 

identified in the original complaint.‖ Meijer, 533 F.3d at 866. 

As we interpreted the plaintiffs‘ original complaint, it alleged 

that Biovail, acting alone through misuse of its patent, was 

―bent upon preventing the FDA from granting final approval 

of the generic drug proposed by Andrx (and perhaps others).‖ 

Id. The plaintiffs‘ amended complaint, however, differed in 

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5

two important respects. First, it added claims against Forest, 

―alleg[ing] for the first time that Biovail and Forest 

unlawfully conspired to extend their lawful monopoly.‖ Id. 

Second, it alleged an entirely different means of unlawful 

monopolization, i.e., that Biovail and Forest ―planned 

preemptively to introduce their own generic Diltiazem HCl, 

and that they unlawfully abandoned that plan.‖ Id. Thus, our 

decision in Meijer flowed from the well established principle 

that ―an amendment . . . that attempts to introduce a new legal 

theory based on facts different from those underlying the 

timely claims may not‖ relate back. Hicks, 283 F.3d at 388.

 

Here by contrast the Government‘s theory of liability on 

Contracts 29 and 07 is identical to that first pleaded by Miller, 

namely that the defendants entered into a Frankfurt-based 

conspiracy to rig the bidding on USAID contracts in Egypt, 

and that through that conspiracy, the defendants rigged the 

bidding not just on Contract 20A, but also on Contracts 29 

and 07. Indeed, in Meijer we suggested that relation back 

may well have been appropriate had the plaintiffs there—like 

the Government here—simply added additional examples of 

the unlawful conduct alleged in the original complaint. 533 

F.3d at 866 (describing plaintiffs‘ original allegations 

regarding ―generic versions‖ of Biovail‘s drug as 

encompassing ―the generic drug proposed by Andrx (and 

perhaps others)‖ (emphasis added)).

My colleagues also rely on Bell Atlantic Corp. v. 

Twombly, 550 U.S. 544, 557 (2007), and Ashcroft v. Iqbal, 

129 S. Ct. 1937 (2009), in which the Supreme Court held that 

to survive a motion to dismiss, a complaint must provide 

more than ― ̳naked assertion[s]‘ devoid of  ̳further factual 

enhancement.‘‖ Id. at 1949 (quoting Twombly, 550 U.S. at 

557). Characterizing Miller‘s conspiracy allegation as such 

an assertion, the court concludes that it cannot support 

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relation back of the Government‘s claims on Contracts 29 and 

07. This argument suffers from two fundamental defects. To 

begin with, the defendants raised it neither here nor in the 

district court, and as we have repeatedly said, ―appellate 

courts do not sit as self-directed boards of legal inquiry and 

research, but essentially as arbiters of legal questions 

presented and argued by the parties before them.‖ Carducci 

v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983). Second, and 

setting aside the fact that the allegations in Miller‘s original 

complaint, which identified the conspiracy as based in 

Frankfurt, described the scope of its operations (USAID 

contracts in Egypt), and detailed its bid-rigging on Contract 

20A, are a far cry from the ―naked assertions‖ that doomed 

the complaints in Twombly and Iqbal, those two cases have no 

applicability to the question before us. In Twombly and Iqbal

the Supreme Court interpreted Federal Rule of Civil 

Procedure 8(a)(2), which sets the standard that a complaint 

must satisfy to survive a motion to dismiss. Nothing in either 

case even hints that the Supreme Court intended Rule 8(a)‘s 

standards to apply to relation back, which is governed by the 

entirely different language of Rule 15(c), now incorporated 

into the FCA. In fact, my colleagues‘ invocation of Twombly

and Iqbal contradicts the FCA‘s plain text, which provides 

that claims relate back not only to ―conduct, transactions, or 

occurrences set forth,‖ in an earlier complaint, but also to 

―conduct, transactions, or occurrences . . . attempted to be set 

forth.‖ 31 U.S.C. § 3731(c) (emphasis added); cf. Krupski v. 

Costa Crociere S.p.A., 560 U.S. __, No. 09-337, slip op. at 13 

(June 7, 2010) (emphasizing, with respect to relation back of 

parties, that Rule 15 ―plainly sets forth an exclusive list of 

requirements for relation back,‖ and ―mandates relation back 

once the Rule‘s requirements are satisfied‖ (emphasis 

added)). Indeed, two other circuits have expressly held, in 

language we have cited with approval, that an ―amended 

claim arises from the same conduct and occurrences upon 

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7

which the original claim was based,‖ and therefore relates 

back, even if (unlike here) ―the original claim contained 

insufficient facts to support it.‖ Dean v. United States, 278 

F.3d 1218, 1222 (11th Cir. 2002); see also id. (―One purpose 

of an amended claim is to fill in facts missing from the 

original claim.‖); United States v. Thomas, 221 F.3d 430, 436 

(3d Cir. 2000) (an amendment that ―seeks to correct a 

pleading deficiency by expanding the facts but not the claims 

alleged‖ in an earlier filing ―would clearly fall within Rule 

15(c)‖); Hicks, 283 F.3d at 388 (quoting Dean and Thomas). 

In FCA cases, the time for defendants to file Iqbal motions, 

and thus to ensure that Rule 8(a)‘s pleading standards are not 

―circumvent[ed],‖ Ct. Op. 18, is when the relator‘s complaint 

is unsealed. And where, as here, the Government files a 

complaint in intervention and the relator an amended 

complaint, it is those two complaints, not the relator‘s initial, 

sealed complaint, that are tested against the Iqbal standard.

When Miller filed his 1995 complaint, he knew that 

contracts other than 20A were involved in the Frankfurt Club 

conspiracy. Congress added the relation back provision to the 

FCA precisely for situations like this—to allow ―a complete 

and thorough investigation of the merits of a qui tam relators‘ 

allegations.‖ S. Rep. No. 110-507, at 28–29 (2008) (report on 

the False Claims Correction Act of 2008, a FERA 

predecessor). By interpreting Miller‘s complaint as limited to 

the one contract he was able to identify by number when he 

first filed, and by applying Twombly and Iqbal to Miller‘s 

original, sealed complaint, this court deprives the Government 

of the fruits of just such an investigation and frustrates 

congressional intent.

II.

After the jury returned its verdict, HII and HC sought a 

new trial, arguing that the plaintiffs‘ counsel‘s questioning of 

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one witness, together with his closing argument, introduced 

unfairly prejudicial evidence about the defendants‘ wealth. 

The district court found that much of the wealth evidence was 

relevant and that in any event, it was not so prejudicial as to 

require a new trial. Miller v. Holzmann, 563 F. Supp. 2d 54, 

110–13; see Fed. R. Civ. P. 61 (all trial errors are harmless 

unless they affect ―substantial rights‖). This court now finds 

that the district court abused its discretion in failing to order a 

new trial for HII and HC. I cannot agree. Faced with ―only a 

cold record,‖ Edwards v. Sears, Roebuck & Co., 512 F.2d 

276, 281 (5th Cir. 1975), I would defer to the judgment of the 

experienced district judge who conducted this seven-week 

trial and observed the witnesses. 

The plaintiffs‘ counsel elicited information from 

Raymond Harbert about the assets and structure of HII, HC, 

and non-party Harbert Management Company. The district 

court found this testimony—at least with respect to HII and 

HC—relevant to the Government‘s alter ego theory, i.e., its 

argument that as HII‘s parent, HC completely controlled HII 

and ignored its separate corporate existence, making it 

responsible for HII‘s actions. The district court grounded its 

relevance finding in circuit precedent establishing that the 

undercapitalization of a subsidiary corporation may suggest 

the existence of just such an improper relationship. Miller, 

563 F. Supp. 2d at 111 (discussing Labadie Coal Co. v. Black, 

672 F.2d 92 (D.C. Cir. 1982)). In other words, according to 

the district court, Raymond Harbert‘s testimony was relevant 

because it could have suggested to the jury that adherence to 

the corporate form might have permitted HC ―to evade the 

impact of a judgment against an inadequately capitalized 

HII.‖ Id. 

Having found some of Raymond Harbert‘s testimony 

relevant, the district court applied Federal Rule of Evidence 

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403, asking whether the testimony presented a risk of unfair 

prejudice that substantially outweighed its probative value. 

Although recognizing that ―knowledge that a defendant has 

the resources to pay a judgment may increase jurors‘ comfort 

level in making a large damages award,‖ the district court 

found that ―a bare handful of remarks in the course of a 

seven-week trial‖ fell short of ―creat[ing] such unfair 

prejudice as to substantially outweigh the significant 

probative value‖ of the evidence. Id. at 112. A new trial was 

unnecessary, the district court explained, because ―plaintiffs 

here never even approached the sort of egregious misconduct 

and overt pandering that have compelled reversal or a new 

trial in other cases.‖ Id. 

With little explanation, this court now rejects the district 

court‘s relevance analysis. Ct. Op. at 48–49. More troubling, 

the court disregards the district court‘s determination of 

prejudice. But even if, as this court finds, much of the wealth 

testimony was in fact irrelevant, we owe substantial deference 

to the district court‘s determination that the testimony was not 

so prejudicial as to ―affect . . . substantial rights.‖ Fed. R. 

Civ. P. 61. Indeed, because we have long recognized that the 

district court‘s proximity to the trial places it in a far better 

position to determine prejudice, ―[w]e review a trial court's 

evidentiary rulings for abuse of discretion . . . [and] [e]ven if 

we find error, we will not reverse an otherwise valid judgment 

unless appellant demonstrates that such error affected her 

 ̳substantial rights.‘‖ Whitbeck v. Vital Signs, Inc., 159 F.3d 

1369, 1372 (D.C. Cir. 1998) (citations omitted). 

Given that the trial lasted for seven weeks, that the 

evidence was hardly close, and that the court points to only 

one series of questions and a single comment in which the 

defendants‘ wealth was raised, I cannot say that the district 

court abused its discretion in refusing to order a new trial. 

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See, e.g., United States v. Mejia, 597 F.3d 1329, 1342 (D.C. 

Cir. 2010) (―embellishment‖ in prosecutor‘s closing argument 

did not require a new trial ―where the statement was isolated 

and the case was not close‖). Although my colleagues may 

well be correct that ―[e]vidence need not be reinforced and 

reiterated again and again for it to be prejudicial enough to 

warrant a new trial,‖ Ct. Op. at 50, such limited evidence does 

tend to suggest limited prejudice. Cf. Koufakis v. Carvel, 425 

F.2d 892, 901–05 (2d Cir. 1970) (district court‘s refusal to 

order a new trial constituted an abuse of discretion where 

counsel made inappropriate comments ―[t]hroughout his 

presentation at trial and in summation,‖ including ―many 

references‖ likening defendant to a Mafia boss; engaged in 

―repeated name-calling, such as referring to [defendant] . . . as 

 ̳liar,‘  ̳faker,‘  ̳phony,‘ and  ̳perjurious‘‖; and made it a 

―theme[]‖ throughout trial ―that the case was one which pitted 

a  ̳little‘ and virtuous man of modest resources against a 

powerful and unscrupulous man with untold wealth.‖). 

Because the district court was in a far better position than we 

to weigh the evidence and determine its effect on substantial 

rights, I would defer to its judgment.

III.

For the foregoing reasons, I would affirm the district 

court‘s ruling that the Government‘s claims on Contracts 29 

and 07 relate back to Miller‘s 1995 complaint, as well as its 

finding that the plaintiffs‘ references to wealth do not require 

a new trial. And because I agree with the remainder of the 

district court‘s rulings, substantially for the reasons given, I 

would affirm as to all three contracts and, except for BHIC, 

see Ct. Op. at 30–33, as to all defendants.

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