PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA ex rel. 

THOMAS M. UBL,

Plaintiff-Appellant,

v.

IIF DATA SOLUTIONS; CHARLES

PATTEN, SR.,

Defendants-Appellees,

and  No. 09-2280

UNITED STATES GENERAL SERVICES

ADMINISTRATION,

Party-in-Interest.

PROJECT ON GOVERNMENT

OVERSIGHT,

Amicus Supporting Appellant. 

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Liam O’Grady, District Judge.

(1:06-cv-00641-LO-TRJ)

Argued: January 25, 2011

Decided: April 19, 2011

Before TRAXLER, Chief Judge, and WILKINSON and

GREGORY, Circuit Judges.
Affirmed in part; reversed in part by published opinion. Chief

Judge Traxler wrote the opinion, in which Judge Wilkinson

and Judge Gregory joined.

COUNSEL

ARGUED: Victor Aronoff Kubli, KUBLI & ASSOCIATES,

PC, Vienna, Virginia, for Appellant. James Joseph Duane,

REGENT UNIVERSITY SCHOOL OF LAW, Virginia

Beach, Virginia, for Appellees. ON BRIEF: Michael S. Lieberman, Stephen Stine, DIMUROGINSBERG, PC, Alexandria, Virginia, for Appellant. Christopher I. Kachouroff,

DOMINION LAW CENTER, PC, Lake Ridge, Virginia;

Jason N. Workmaster, MCKENNA, LONG & ALDRIDGE,

LLP, Washington, D.C.; Robert J. Cynkar, CUNEO, GILBERT & LADUCA, LLP, Alexandria, Virginia, for Appellees. Richard R. Renner, KOHN, KOHN & COLAPINTO,

LLP, Washington, D.C., for Amicus Supporting Appellant.

OPINION

TRAXLER, Chief Judge:

Thomas Ubl brought an action under the False Claims Act

("FCA") against his former employer, IIF Data Solutions,

Inc., and Charles Patten, Sr., IIF’s vice-president (referred to

together as "IIF"). Ubl and IIF reached an agreement to settle

the action for almost nine million dollars, contingent on

approval by the government. The government did not approve

the agreement, the case eventually proceeded to trial, and the

jury found in favor of IIF on all counts. The district court

thereafter determined that the action was "clearly frivolous"

and ordered Ubl to pay IIF approximately $500,000 in attorney’s fees. See 31 U.S.C.A. § 3730(d)(4) (West 2003). Ubl

appeals, arguing that the district court erred by not enforcing

2 UNITED STATES v. IIF DATA SOLUTIONS
the settlement agreement, that the district court made various

errors during trial entitling him to a new trial, and that the district court erred by awarding attorney’s fees to IIF. We conclude that the district court properly refused to enforce the

settlement agreement and committed no reversible error during the course of trial. However, we agree with Ubl that his

action was not clearly frivolous and we therefore reverse the

award of attorney’s fees.

I.

IIF, a small company located in Falls Church, Virginia, was

founded by Charles Patton, Sr., who had served in the Army

National Guard for twenty-eight years before starting the

company. IIF initially worked as a subcontractor for a prime

contractor that was providing information-technology services

to the National Guard Bureau. IIF later sought out and was

awarded its own government contracts, and those contracts

are at the center of this case.

The government contracts awarded to IIF were "multiple

award schedule" ("MAS") contracts. The MAS program provides a simplified process through which government agencies can obtain commercial supplies and services at prices

associated with volume buying. MAS contracts are solicited,

negotiated, and awarded by the General Service Administration ("GSA"). Prospective vendors must provide GSA with

information about their sales practices and their pricing and

discount information. GSA uses this information to negotiate

prices for MAS contracts, seeking to obtain for the government the best price offered to the vendor’s most favored commercial customer. See 48 C.F.R. § 538.270(c). The accuracy

of the pricing information provided to GSA by the prospective vendors is thus critical to the MAS process.

If the negotiations between GSA and the prospective vendor are successful,

UNITED STATES v. IIF DATA SOLUTIONS 3
GSA will list the firm’s product, along with similar

products sold by competing firms (with MAS contracts), in a catalogue. Individual government agencies may place orders for any item listed in the

catalogue (at the price there listed) without the elaborate paperwork that other government procurement

programs require. The GSA’s MAS contract does

not commit the government to buying the product.

Rather, it provides an option for federal government

agencies to buy at a particular price, an option that

individual agencies may, or may not, exercise.

United States v. Data Translation, Inc., 984 F.2d 1256, 1258

(1st Cir. 1992) (citations omitted).

GSA first awarded IIF an MAS contract authorizing IIF to

provide personnel to perform information technology ("IT")

services. The contract included six labor categories (e.g., analyst I, analyst II, programmer, senior programmer, etc.) and

the rates at which employees assigned to each category would

be billed. The labor categories (or position descriptions, as

one witness called them) listed the education, experience, and

skill requirements necessary for the IIF employee to be

assigned to each category. IIF later received MAS contracts

authorizing it to provide certain environmental and business

improvement services.

IIF subsequently received millions of dollars worth of task

orders under the MAS contracts, with the majority of task

orders coming from the National Guard Bureau (the "Bureau"). The Bureau, part of the Department of Defense, is "the

channel of communications on all matters pertaining to the

National Guard, the Army National Guard of the United

States, and the Air National Guard of the United States

between (1) the Department of the Army and Department of

the Air Force, and (2) the several States." 10 U.S.C.A.

§ 10501 (West 2010).

4 UNITED STATES v. IIF DATA SOLUTIONS
According to Ubl, IIF when applying for the MAS contracts made various material false representations about its

prior pricing and discounting practices. For example, Ubl

alleged that IIF fabricated and back-dated a commercial price

list, listed as "market-tested" hourly rates that it had never

charged in any of its contracts with non-governmental customers, and misrepresented the nature of discounts it had

given non-governmental customers. Ubl also alleged that IIF

made false claims when submitting invoices under the individual task orders placed with IIF by the Bureau after IIF

obtained the MAS contracts. According to Ubl, IIF misclassified some of its employees and billed them to the government

at rates higher than warranted by the employees’ education

and experience, billed the government for hours not worked,

and billed the government for administrative activities performed by its employees that should have been absorbed by

IIF as overhead.

The allegations described above formed the core of Ubl’s

FCA action against IIF. We will provide more details as

needed within the discussions of the issues raised by Ubl.

II.

We first consider Ubl’s claim that the district court erred by

refusing to enforce the settlement agreement.

Ubl commenced this action in June 2006. After almost two

years of discovery and typical pre-trial wrangling, the case

was scheduled for trial on May 6, 2008. On the day trial was

to begin, UBL and IIF agreed to settle the case, and they executed a document (the "May 6 Agreement") setting out the

terms of the settlement. Under the May 6 Agreement, IIF was

to pay $8.9 million in settlement of all claims, to be allocated

between Ubl and the government according to a schedule set

out in the agreement; IIF was to make an initial payment of

$1.2 million, with the balance to be paid monthly over the

course of ten years. The May 6 Agreement stated that "[t]his

UNITED STATES v. IIF DATA SOLUTIONS 5
agreement is void without Government approval. If the Government does not approve this agreement, the parties shall

cooperate in good faith to effectuate changes to this Agreement that will be satisfactory to the Government." J.A. 436.

The requirement that the May 6 Agreement be approved by

the government tracks the requirements of the FCA itself,

which provides that the government must consent to a dismissal of an FCA claim brought by a private party. See 31

U.S.C.A. § 3730(b)(1) (West 2003); United States v. Purdue

Pharma L.P., 600 F.3d 319, 328 (4th Cir. 2010) ("Section

3130(b)(1) manifests Congress’ express intent to prohibit a

relator’s unilateral settlement of FCA claims, absent the government’s consent, once a suit has been filed.").

On June 3, 2008, the government notified the parties that

it had several objections to the proposed settlement. Although

the May 6 Agreement called for Ubl to receive his share of

the settlement proceeds first, the government contended that

31 U.S.C.A. § 3713 required the government to be paid before

Ubl. The government stated that since the case had not (at that

point) proceeded to trial, it would not consent to awarding

Ubl 30% of the settlement proceeds, as proposed in the agreement. Noting that Ubl’s complaint did not assert a retaliation

claim under 31 U.S.C.A. § 3730(h) (West Supp. 2010), the

government also objected to the allocation of a portion of the

settlement proceeds to the settlement of what the agreement

characterized as Ubl’s "personal claim." Finally, the government expressed doubt that IIF could fund the $8.9 million settlement and stated its belief that "the settlement is designed to

provide [Ubl] with $1.2 million and to provide the United

States with an uncollectable debt." Defendant’s Opposition to

Relator’s Motion to Enforce Settlement, Exhibit 3.

Negotiations among the parties continued after the government’s letter, but with little success. In an email on July 8,

2008, the government stated that "[t]here is at this point no

settlement because the United States has not consented to the

current arrangement between [Ubl] and defendant and as set

6 UNITED STATES v. IIF DATA SOLUTIONS
forth in our prior communications, we would never consent to

the arrangement as it stands now." Defendant’s Opposition,

Exhibit 4. In an email two days later, the government reiterated its position that it "d[id] not consent to the current proposed settlement." Defendant’s Opposition, Exhibit 5.

Quoting from an earlier email sent by counsel for Ubl, the

government explained that "to state the ‘government has not

yet approved’ the proposed settlement, misstates the status of

the negotiations." Id.

An email sent the same day by counsel for IIF made it clear

that IIF believed the May 6 Agreement was by then a dead

letter:

There is no "settlement agreement." Paragraph 21 of

the May 6 agreement states: "This agreement is void

without Government approval." In her [July 8] email, [counsel for the government] stated that the

Government "would never consent to the agreement

as it stands now." Thus, the May 6 agreement is

void. . . . 

Given all of this, what we are attempting right now

is simply good-faith negotiation of a new settlement

agreement that all parties can agree to . . . . 

Defendant’s Opposition, Exhibit 5 (emphasis added).

The parties continued their efforts to reach a settlement for

many months thereafter. After a settlement conference conducted by a magistrate judge, IIF offered in January 2009 to

settle Ubl’s claims for $2.7 million. Ubl did not accept that

offer, and on March 24, 2009, IIF reiterated its view that the

May 6 Agreement was void, and IIF formally withdrew its

January 2009 settlement offer. See J.A. 395a-c.

Ubl nonetheless continued to seek the government’s

approval of a settlement, and he eventually succeeded. On

UNITED STATES v. IIF DATA SOLUTIONS 7
September 25, 2009, Ubl filed a motion seeking to enforce the

May 6 Agreement. In the motion, Ubl asserted that he and the

government had

resolved in principle between them the issues of the

total Settlement Amount specified in the May 6,

2008 Agreement . . . , the allocation of the Settlement Amount between the United States, [Ubl], and

[Ubl’s] Counsel, and the terms specified in the May

6, 2008 Agreement with respect to the upfront payment and payout terms. Government trial attorneys

are prepared to recommend to officials with authority within the United States Department of Justice

and the relevant agencies approval under such terms,

should the Court grant enforcement of the May 6,

2008 Agreement between [Ubl] and Defendants.

J.A. 424.

The district court denied the motion. The court noted that

government approval of the settlement was required and that

the government clearly rejected the May 6 Agreement. While

Ubl and the government later reached an agreement, IIF had

never consented to the terms of that agreement. The district

court therefore concluded that the parties had never entered

into a binding, enforceable agreement.

On appeal, Ubl contends that the district court erred by

refusing to enforce the May 6 Agreement. Ubl argues that the

May 6 Agreement was a binding contract, with performance

under the contract dependent upon satisfaction of a specified

condition—government approval of the settlement. The May

6 Agreement obligated the parties to work in good faith to

obtain the government’s approval, and Ubl argues that the

government’s approval of a settlement in September 2009

thus made the May 6 Agreement fully enforceable.

The enforceability of an agreement to settle claims under

the FCA is governed by federal common law. See Pinchback

8 UNITED STATES v. IIF DATA SOLUTIONS
v. Armistead Homes Corp., 907 F.2d 1447, 1453 (4th Cir.

1990) ("The effect of the release on Pinchback’s federal

claims against Armistead is a question of federal law."); see

also United States ex rel. Ritchie v. Lockheed Martin Corp.,

558 F.3d 1161, 1168-69 (10th Cir. 2009) (federal common

law determines enforceability of release of FCA claims);

United States ex rel. Green v. Northrop Corp., 59 F.3d 953,

960-61 (9th Cir. 1995) (same). When applying federal common law to contract issues, courts generally look to the

Restatement for guidance. See Bowden v. United States, 106

F.3d 433, 439 (D.C. Cir. 1997) (explaining that the principles

of the Restatement of Contracts "represent the prevailing view

among the states" and are the principles "from which we

would be inclined to fashion a federal common-law rule"

(internal quotation marks omitted)); accord In re Peanut Crop

Ins. Litig., 524 F.3d 458, 471 (4th Cir. 2008); Long Island

Sav. Bank, FSB v. United States, 503 F.3d 1234, 1245 (Fed.

Cir. 2007).

We agree with Ubl that the May 6 Agreement was a binding contract, with the obligations to perform under the contract dependent upon the government’s approval of the

agreement. See Restatement (Second) of Contracts § 59, illus.

2 (1981) ("A makes a written offer to sell B a patent in

exchange for B’s promise to pay $10,000 if B’s adviser X

approves the purchase. B signs the writing in a space labelled

‘Accepted:’ and returns the writing to A. B has made a conditional promise and an unconditional acceptance. There is a

contract, but B’s duty to pay the price is conditional on X’s

approval.").

What Ubl fails to address or even acknowledge, however,

is that the government did not approve the May 6 Agreement.

As noted above, the government stated in its July 8, 2008,

email that there was no settlement because the government

had not approved the agreement and would not approve the

agreement in its then-current form. Two days later, the government reiterated that it did not consent to the proposed setUNITED STATES v. IIF DATA SOLUTIONS 9
tlement. These statements must be understood as a definitive

rejection of the May 6 Agreement that rendered the Agreement void under its own terms. After the rejection, the government no longer had the power to accept the May 6

Agreement, see Restatement § 38(1) ("An offeree’s power of

acceptance is terminated by his rejection of the offer, unless

the offeror has manifested a contrary intention."), and Ubl

could no longer insist on IIF’s performance under the May 6

Agreement, see id. § 225(2) ("Unless it has been excused, the

non-occurrence of a condition discharges the duty when the

condition can no longer occur.").

While Ubl and the government did eventually reach agreement "in principle" on settlement, IIF was not a party to those

negotiations and did not agree to be bound to terms reached

by Ubl and the government. Moreover, by the time Ubl and

the government reached their agreement, IIF had long since

disavowed any interest in settling Ubl’s claims.1 The May 6

Agreement died when the government rejected it, and it was

not revived by the subsequent agreement between Ubl and the

government. Accordingly, the district court properly denied

Ubl’s motion to enforce the May 6 Agreement.

III.

We turn now to Ubl’s challenges to various issues that

arose during trial.

A.

At the beginning of trial, Ubl sought to preclude IIF from

presenting evidence that the Bureau could alter the terms of

the MAS contracts awarded by GSA or that the Bureau

approved of the IIF personnel assigned to its contracts and

1Ubl did not argue below and does not argue on appeal that IIF

breached its duty under the May 6 agreement to work in good faith to

obtain the government’s approval. 

10 UNITED STATES v. IIF DATA SOLUTIONS
was satisfied with their work. The district court denied Ubl’s

motion, concluding that the nature of the relationship between

IIF and the Bureau was relevant to Ubl’s fraud claims. Ubl

contends that the IIF personnel assigned to the MAS contracts

were un- or under-qualified according to the labor categories

set forth in those contracts and that the Bureau, as a matter of

law, lacked the authority to change the terms of the MAS contract. Ubl thus argues that the Bureau’s satisfaction with IIF’s

work is irrelevant and that the district court erred by denying

his motion to exclude the evidence. We find no error.

A defendant may be held liable under the FCA for "knowingly" making or presenting a false claim, 31 U.S.C.A.

§ 3729(a)(1)(A) & (B) (West Supp. 2010); the statute is not

intended to "punish honest mistakes or incorrect claims submitted through mere negligence." United States ex rel. Owens

v. First Kuwaiti Gen. Trading & Contracting Co., 612 F.3d

724, 728 (4th Cir. 2010) (internal quotation marks omitted);

see also United States ex rel. Hagood v. Sonoma County

Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991) ("The

requisite intent is the knowing presentation of what is known

to be false."). Evidence that the government knew about the

facts underlying an allegedly false claim can serve to distinguish between the knowing submission of a false claim,

which generally is actionable under the FCA, and the submission of a claim that turned out to be incorrect, which generally

is not actionable under the FCA. That is, "the government’s

knowledge of the facts underlying an allegedly false record or

statement can negate the scienter required for an FCA violation." United States ex rel. Becker v. Westinghouse Savannah

River Co., 305 F.3d 284, 289 (4th Cir. 2002); accord United

States ex rel. Burlbaw v. Orenduff, 548 F.3d 931, 951 (10th

Cir. 2008) ("The ‘government knowledge inference’ helps

distinguish, in FCA cases, between the submission of a false

claim and the knowing submission of a false claim — that is,

between the presence and absence of scienter."); Hagood, 929

F.2d at 1421 ("[T]he knowledge possessed by officials of the

United States may . . . . show that the defendant did not subUNITED STATES v. IIF DATA SOLUTIONS 11
mit its claim in deliberate ignorance or reckless disregard of

the truth."). In our view, the evidence Ubl claims was improperly admitted at trial—for example, testimony from Bureau

officials that they were pleased with the work performed by

specific IIF employees and that they were pleased with IIF’s

work overall—was relevant to the issue of IIF’s intent and fit

sufficiently within the scope of what is generally referred to

as the government-knowledge defense or inference.

Ubl, however, insists that the government-knowledge

defense is unavailable to IIF, because the MAS schedule contracts were with GSA, not the Bureau, and the invoices for

each individual task order awarded to IIF were sent to and

paid by GSA, not the Bureau. Because the contracts were with

GSA, not the Bureau, Ubl contends that the governmentknowledge defense would be available only to the extent that

GSA employees had knowledge of the facts underlying IIF’s

claims. We disagree.

As mentioned above, the government’s knowledge of the

facts underlying a claim is relevant to the question of an FCA

defendant’s intent. For example, if the government with full

knowledge of the relevant facts directed a contractor to file a

claim that was later challenged as false, the fact that the contractor did what the government told it to do would go a long

way towards establishing that the contractor did not knowingly file a claim known to be false. See Becker, 305 F.3d at

288-89. We see no reason why the government’s knowledge

would become irrelevant simply because the employees with

the knowledge do not work for the particular agency that happens to pay the contractor’s invoices. The Bureau, an agency

of the federal government, was IIF’s customer, and IIF

worked closely with Bureau employees when performing

under its various contracts. Because IIF was working so

closely with the Bureau on the very contracts that are the subject of this FCA action, we believe that the Bureau’s knowledge of IIF’s performance under the contracts was relevant to

the question of whether IIF acted with the requisite intent. See

12 UNITED STATES v. IIF DATA SOLUTIONS
Burlbaw, 548 F.3d at 951-54 (in case where FCA defendant’s

contract was with the Department of Defense, court considered knowledge held by Department of Education employees

as part of its analysis of the government-knowledge inference).

Accordingly, because the evidence Ubl sought to exclude

is within the scope of the government-knowledge defense and

was thus relevant to the question of IIF’s intent, we cannot

conclude the district court’s decision to admit the evidence

was arbitrary or irrational. See United States v. Cole, 631 F.3d

146, 153 (4th Cir. 2011) ("We review a trial court’s rulings

on the admissibility of evidence for abuse of discretion, and

we will only overturn an evidentiary ruling that is arbitrary

and irrational." (internal quotation marks omitted)).

Moreover, even if we were to conclude that the district

court erred by admitting the evidence, we would nonetheless

find the error harmless. Ubl argues that the challenged evidence encouraged the jury to reject the claims of fraud against

GSA because the Bureau was satisfied with IIF’s performance, which would be impermissible given that GSA issued

the MAS contracts and paid all invoices submitted under the

MAS contracts. Nothing in the jury instructions or verdict

form, however, would have permitted the jury to reject Ubl’s

claims on that basis. The instructions stated that IIF was liable

for any false or fraudulent claim presented "to an officer or

employee of the United States government," Trial Transcript

at 1269, while the verdict form asked whether IIF had knowingly made a materially false statement to "the Government"

in connection with any of the three MAS schedule contracts

awarded to IIF, J.A. 1650. Because the instructions and verdict form spoke in terms of "the government," without distinguishing between GSA and the Bureau, a jury following these

instructions would have found IIF liable for false statements

knowingly made to GSA, regardless of whether any false

statements were also made to the Bureau or whether the

Bureau was satisfied with IIF’s performance. The instructions

UNITED STATES v. IIF DATA SOLUTIONS 13
thus "did not offer the jurors any means by which to give

effect to the [challenged] evidence," Romano v. Oklahoma,

512 U.S. 1, 13 (1994), and any error in the admission of the

challenged evidence therefore would have been harmless.

B.

Ubl next contends that the district court erred by excluding

certain testimony of his expert witness. We find no reversible

error.

At trial, Ubl tendered Neal Fox as an expert witness. Fox

had held the third-ranking position at GSA for approximately

three years, and his duties included oversight and management of the types of MAS contracts (IT, business improvement services, and environmental services) that IIF was

awarded. One of Ubl’s primary claims was that IIF provided

unqualified or underqualified employees to work on task

orders issued under the IT contract. Ubl intended to have Fox

testify that based on his review of the resumes of IIF employees, many of the employees lacked the education and experience required by the labor categories under which they were

billed, and some were not qualified for any of the labor categories that IIF was authorized to provide. The district court

excluded this testimony, concluding that expert testimony was

not required and that the jury was as capable as Fox of comparing the qualifications of the IIF employees to the requirements of the labor categories.

The testimony of a qualified expert is admissible if the

expert’s "scientific, technical, or other specialized knowledge

will assist the trier of fact to understand the evidence or to

determine a fact in issue." Fed. R. Evid. 702. We review a district court’s decision to admit or exclude expert evidence for

abuse of discretion. See General Elec. Co. v. Joiner, 522 U.S.

136, 138-39 (1997); Cooper v. Smith & Nephew, Inc., 259

F.3d 194, 200 (4th Cir. 2001).

14 UNITED STATES v. IIF DATA SOLUTIONS
Given our deferential standard of review, we cannot say the

district court abused its discretion by excluding Fox’s testimony. Fox was not involved in the awarding or oversight of

IIF’s MAS schedule contracts, and Fox’s duties at GSA did

not include creating labor category requirements for MAS

contracts or making determinations about whether individual

employees met the requirements of a given labor category.

His opinion about the qualifications of the IIF employees was

based on his comparisons of their resumes to the requirements

set out in the contract labor categories. The jury was just as

capable of making that comparison, and the jury was perhaps

in a better position to make that comparison, given that the

jury, but not Fox, had heard IIF employees testify and elaborate on their education and experience. Under these circumstances, we find no abuse of discretion in the district court’s

exclusion of Fox’s testimony as unhelpful to the jury. Cf.

United States v. Dorsey, 45 F.3d 809, 815 (4th Cir. 1995)

(affirming exclusion of expert testimony in part because

"there is no indication that the expert testimony was at all necessary in the instant case; as noted by the district court, the

comparison of photographs is something that can sufficiently

be done by the jury without help from an expert"); United

States v. Stevens, 935 F.3d 1380, 1398-99 (3d Cir. 1991)

(affirming exclusion of one aspect of expert’s testimony as

unhelpful where expert’s point could easily have been drawn

by the jury by reviewing the evidence at issue).2

2Ubl also contends that the district court erred by refusing to allow Fox

to testify with regard to what Ubl characterizes as new defenses asserted

by IIF for the first time during trial and which therefore had not been

addressed by Fox in his report. Because Ubl did not make a proffer of

Fox’s anticipated testimony, the issue is not preserved for appeal. See Fed.

R. Evid. 103(a)(2) ("Error may not be predicated upon a ruling which

admits or excludes evidence unless a substantial right of the party is

affected, and . . . . [i]n case the ruling is one excluding evidence, the substance of the evidence was made known to the court by offer or was apparent from the context within which questions were asked" (emphasis

added)). 

UNITED STATES v. IIF DATA SOLUTIONS 15
C.

Ubl next argues that the district court erred by permitting

Robert Taylor to testify about his understanding of the government contracting process. Ubl contends that Taylor provided what amounted to expert testimony without being

identified or qualified as an expert witness. We disagree.

Taylor owns a financial planning and tax accounting business. Taylor had many years of experience in government

contracting, and as part of his business, Taylor advises small

businesses on the process of obtaining MAS contracts. Taylor

provided accounting services to IIF, and he also worked with

IIF on its application to secure the IT MAS contract. Taylor

testified generally about how the GSA contracting process

worked and about his efforts to help IIF obtain the MAS contract. Because Taylor’s testimony was based on his personal

knowledge and understanding of the contracting system that

was derived from his years of experience with government

contracting, his testimony was proper lay testimony, and the

district court properly rejected Ubl’s objection to the testimony. See United States v. Roe, 606 F.3d 180, 185-86 (4th

Cir. 2010) (testimony from officer with state agency in charge

of issuing handgun permits and private detective and security

guard certifications about the authority of those holding such

permits was not expert testimony and was properly admitted

as lay testimony); see also MCI Telecomms. Corp. v. Wanzer,

897 F.2d 703, 706 (4th Cir. 1990).

In his reply brief, Ubl seems to contend that Taylor’s

understanding of the contracting process was wrong as a matter of law and that his testimony should therefore have been

excluded on that basis. Ubl, however, did not make that

objection to Taylor’s testimony at trial, and he argued in his

initial brief to this court only that Taylor’s testimony was

impermissible expert testimony. Under these circumstances,

we decline to consider the argument made by Ubl in his reply

brief. See Cavallo v. Star Enter., 100 F.3d 1150, 1152 n.2 (4th

16 UNITED STATES v. IIF DATA SOLUTIONS
Cir. 1996) (declining to consider claim raised for the first time

in reply brief).

D.

Ubl also contends that the district court erred by restricting

portions of the testimony of two of Ubl’s witnesses. We find

no reversible error. 

The witnesses at issue were Gigi Washington and Barbara

Raine, both of whom had worked for IIF for at least some

portion of the time implicated by Ubl’s complaint. Washington would have testified that while she was working for IIF,

she reviewed the resumes of IIF employees working on the

MAS contracts and concluded that many of the employees did

not satisfy the education and experience requirements set out

in the contracts. Washington would have testified that she

became concerned that IIF was defrauding the government

and that she resigned because of those concerns. This testimony was inconsistent with and more detailed than her deposition testimony. Washington was also prepared to testify that

during the time Ubl worked for IIF, he expressed concern to

her about IIF defrauding the government, testimony that again

would have been inconsistent with her deposition testimony.

Raine, who had been involved in writing the labor categories for the MAS contracts, testified at her deposition that she

could not remember if it was possible under the contracts for

an employee’s experience to make up for the lack of education required by the relevant labor category. But by the time

of trial, Raine was prepared to provide much more specific

testimony about the need to strictly meet the educational

requirements of the labor categories. Raine was also prepared

to testify that Kim Trimble, IIF’s director of operations, who

was billed by IIF as an analyst under the IT contract, performed primarily administrative functions benefitting IIF,

such that Trimble should not have been billed under the conUNITED STATES v. IIF DATA SOLUTIONS 17
tract. At her deposition, however, Raine denied having knowledge of the nature of Trimble’s activities. 

The district court ruled that the obligation to supplement

discovery responses requires a party to notify the opposing

side if a witness remembers additional information after being

deposed. The court concluded that Ubl failed to provide

timely notice of the change in his witnesses’ testimony, and

the court therefore prohibited Ubl from presenting that testimony. As to Washington, the district court also gave additional reasons (such as lack of personal knowledge and

hearsay) for excluding the challenged portions of her testimony.

On appeal, Ubl argues only that the district court erred by

concluding that the obligation to supplement discovery

responses extends to supplementing or correcting deposition

testimony. See Fed. R. Civ. P. 26(e) (imposing a duty to supplement on a "party who has made a disclosure under Rule

26(a)—or who has responded to an interrogatory, request for

production, or request for admission"); id., advisory committee’s notes to 1993 amendments ("[T]he obligation to supplement responses to formal discovery requests applies to

interrogatories, requests for production, and requests for

admissions, but not ordinarily to [non-expert] deposition testimony."). Because Ubl does not challenge the alternate bases

for the district court’s ruling with regard to Washington, Ubl

has waived his challenge to the district court’s ruling precluding those portions of Washington’s testimony. See Rodriguez

v. Hayes, 591 F.3d 1105, 1118 n.6 (9th Cir. 2010) ("[T]he

failure of a party in its opening brief to challenge an alternate

ground for a district court’s ruling given by the district court

waives that challenge." (emphasis omitted)); accord United

States v. Amedeo, 370 F.3d 1305, 1316 (11th Cir. 2004).

As to Raine, we cannot conclude that Ubl was prejudiced

by the district court’s restrictions on her testimony. Raine was

permitted to testify that she believed many of the labor cate18 UNITED STATES v. IIF DATA SOLUTIONS
gories required a college degree and that Patten did not

believe a college degree was important. Other witnesses,

including a contract specialist with GSA, testified about the

need for employees assigned to the contract to meet the education and experience requirements set out in the labor categories. In addition, Washington testified about the nature of

Trimble’s activities, stating that she never saw Trimble perform any kind of work other than "administrative, overhead

type of activities," J.A. 639, and that she never saw anything

suggesting that Trimble was actually working as an analyst

under the IT contract. Because Ubl was able to present

through other witnesses much of the evidence that he sought

to present through Raine, we believe that any error by the district court in excluding the challenged portions of Raines’s

testimony was harmless. See, e.g., Ingram Coal Co. v. Mower

Ltd. P’ship, 892 F.2d 363, 366 (4th Cir. 1989) (finding any

error in the exclusion of evidence harmless because "essentially the same evidence was introduced from other sources").

E.

In his final trial-related challenge, Ubl contends that the

district court erred by permitting IIF to present evidence that

the government was aware of the lawsuit against IIF but had

not cancelled any contracts or requested a return of any government funds paid to IIF. The court had previously granted

Ubl’s motion in limine to preclude IIF from presenting evidence or arguing to the jury that the government had elected

not to intervene in Ubl’s FCA action, and Ubl argues that the

admission of that evidence was inconsistent with the court’s

ruling on the motion in limine. Again we disagree.

Preliminarily, we note that evidence of the ongoing contractual relationship between IIF and the government is simply not the same as evidence that the government declined to

intervene in the FCA action. Given its limited time and

resources, the government cannot intervene in every FCA

action, nor can the government pursue every meritorious FCA

UNITED STATES v. IIF DATA SOLUTIONS 19
claim. See United States ex rel. Berge v. Board of Trustees,

104 F.3d 1453, 1458 (4th Cir. 1997) ("[T]he plain language

of the [FCA] clearly anticipates that even after the Attorney

General has diligently investigated . . . , the Government will

not necessarily pursue all meritorious claims; otherwise there

is little purpose to the qui tam provision permitting private

attorneys general." (internal quotation marks omitted)). The

government’s decision not to intervene in an FCA action does

not mean that the government believes the claims are without

merit, see United States ex rel. Atkins v. McInteer, 470 F.3d

1350, 1360 n.17 (11th Cir. 2006), and the government’s decision not to intervene therefore is not relevant in an FCA

action brought by a private party. The evidence about which

Ubl complains, however, has nothing to do with the government’s decision not to intervene in the action, and the admission of that evidence is in no way inconsistent with the

exclusion of evidence related to the decision not to intervene.

While Ubl asserts that the evidence of the ongoing contractual relationship was "extraordinarily prejudicial," Brief of

Appellant at 55, he does not develop the argument or offer

any explanation for or analysis of his position in his initial

brief. Given the absence of any substantive argument on this

point, we need not consider Ubl’s claim further. See Coleman

v. Community Trust Bank (In re Coleman), 426 F.3d 719, 729

n.8 (4th Cir. 2005) ("In its initial brief, the Bank twice alludes

to this proposition, each time in a single sentence with no

argument in favor of the position. Because the brief contains

no argument supporting this claim, we do not consider it.").

IV.

Finally, we turn to Ubl’s claim that the district court erred

by awarding attorney’s fees to IIF.

In cases where the government declines to intervene, the

FCA authorizes an award of attorney’s fees and expenses to

a prevailing defendant if "the court finds that the claim of the

20 UNITED STATES v. IIF DATA SOLUTIONS
person bringing the action was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment." 31

U.S.C.A. § 3730(d)(4). The district court determined that

Ubl’s claims "were sufficiently baseless to warrant an award

of attorneys’ fees" to IIF, J.A. 1986, and the court ultimately

awarded IIF fees in the amount of $501,546.3 On appeal, Ubl

contends that his action was not "clearly frivolous" and that

the district court therefore erred by awarding fees to IIF. We

review the district court’s decision to award fees under

§ 3730(d)(4) for abuse of discretion. See United States ex rel.

Vuyyuru v. Jadhav, 555 F.3d 337, 356 (4th Cir. 2009).

"[B]ecause a district court has close and intimate knowledge

of the efforts expended and the value of services rendered, the

fee award must not be overturned unless it is clearly wrong."

Id. (internal quotation marks omitted).

The FCA does not define "clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment."

Courts, often looking to cases considering fee awards under

42 U.S.C.A. § 1988 for guidance, have given somewhat varying definitions of the phrase. See United States ex rel. Rafizadeh v. Continental Common, Inc., 553 F.3d 869, 875 (5th

Cir. 2008) ("An action is not frivolous if existing law or a reasonable suggestion for its extension, modification, or reversal

supports the action."); Pfingston v. Ronan Eng’g Co., 284

F.3d 999, 1006 (9th Cir. 2002) ("An action is clearly frivolous

when the result is obvious or the appellant’s arguments of

error are wholly without merit." (internal quotation marks

omitted)); Mikes v. Straus, 274 F.3d 687, 705 (2d Cir. 2001)

("A claim is frivolous when, viewed objectively, it may be

said to have no reasonable chance of success, and present no

3The district court concluded that IIF was not entitled to fees incurred

during the period when the parties were attempting to settle the case. The

court therefore limited the award to fees incurred after March 24, 2009,

the date that IIF "clearly disavowed the validity of any settlement" and the

point after which IIF "indicated a renewed opposition to the action and at

which Ubl should have carefully reevaluated his claims." J.A. 1952. 

UNITED STATES v. IIF DATA SOLUTIONS 21
valid argument to modify present law."); United States ex rel.

Grynberg v. Praxair, Inc., 389 F.3d 1038, 1058 (10th Cir.

2004) ("[T]he plaintiff’s action must be meritless in the sense

that it is groundless or without foundation." (internal quotation marks omitted)).

This court in Vuyyuru considered the circumstances under

which a prevailing FCA defendant is entitled to a fee award.

For purposes of resolving that appeal only, see 555 F.3d at

356, the Vuyyuru court accepted the plaintiff’s definition of

frivolous—whether the relator’s claim, when viewed objectively, clearly had "no reasonable chance of success." Id. The

standard applied in Vuyyuru is functionally identical to the

standards applied in other circuits, and we believe it provides

the proper framework for evaluating fee awards under

§ 3730(b)(4).

Accordingly, the question before us is whether Ubl’s FCA

claims objectively had any reasonable chance of success. We

believe that question must be answered in the affirmative, and

we therefore conclude that district court abused its discretion

by awarding attorney’s fees to IIF.

As an initial matter, we find it significant that the district

court repeatedly rejected IIF’s pre-trial efforts to dismiss the

case—the court twice denied IIF’s motions to dismiss Ubl’s

amended complaint and likewise denied IIF’s motion for summary judgment. This fact is not necessarily dispositive, of

course, because "[c]ases that are ultimately viewed as frivolous may well survive motions for summary judgment in

which the evidence may be presented in sketchy fashion and

credibility may not be taken into account." Blue v. United

States Dep’t of the Army, 914 F.2d 525, 535 (4th Cir. 1990)

(internal quotation marks and alteration omitted). In this case,

however, the evidence Ubl presented at trial was not significantly different from the evidence presented at the summary

judgment stage.

22 UNITED STATES v. IIF DATA SOLUTIONS
IIF disagrees with this assessment, arguing that frivolousness of Ubl’s claims became apparent at trial, when Ubl was

exposed as a liar. The district court apparently shared IIF’s

view of the case. At the hearing on IIF’s request for fees, the

district court stated that Ubl at trial was "inherently unbelievable" and that the jury rejected his testimony as "wholly

incredible." J.A. 464. The district court was in a position to

determine the persuasiveness of Ubl’s testimony and the

effectiveness of IIF’s cross-examination, and we thus defer to

the district court’s view that the jury found Ubl inherently

unbelievable. FCA claims, however, generally are based on

and proven by documentary evidence, such that problems

with the plaintiff’s credibility would not necessarily prevent

the plaintiff from prevailing. And in our view, Ubl presented

evidence that could have supported a verdict in his favor even

if the jury did not find Ubl himself to be at all credible.

For example, one of Ubl’s claims was that IIF staffed the

MAS contracts with unqualified and underqualified employees and thus billed the employees at rates higher than they

were entitled to under the contracts. Ubl presented evidence

showing that IIF billed Charles Patten, Jr., the son of IIF’s

owner, as an "analyst II" under the IT contract, a position that

required the employee to have a bachelor’s degree or four

years of pertinent experience. At the time of trial, however,

the younger Patten was a recent high school graduate with no

college degree and only five months of IT experience. Similarly, Ubl presented evidence, through the testimony of Gigi

Washington, that IIF was improperly billing Kim Trimble,

IIF’s director of operations, as an Analyst II under the IT contract even though she did not actually perform any IT work

for the Bureau. This evidence was sufficient to survive IIF’s

motion for summary judgment, and it remained sufficient at

trial to support at least a partial verdict in favor of Ubl. And

because this evidence came from IIF records and from witnesses unconnected to Ubl, problems with Ubl’s personal

credibility would not have prevented the jury from relying on

this evidence to conclude that IIF violated the FCA. 

UNITED STATES v. IIF DATA SOLUTIONS 23
The jury, of course, did not find for Ubl on any of his

claims. From our review of the record, we think it likely that

IIF convinced the jury that any mistakes it may have made

were not intentional and that the jury determined that IIF

lacked the scienter necessary to violate the FCA. Nonetheless,

the jury’s acceptance of IIF’s trial argument over Ubl’s does

not mean that Ubl’s action was clearly frivolous or that he had

no reasonable chance of success. Cf. Christiansburg Garment

Co. v. EEOC, 434 U.S. 412, 421 (1978) ("[T]he term ‘meritless’ is to be understood as meaning groundless or without

foundation, rather than simply that the plaintiff has ultimately

lost his case . . . ."). Because Ubl presented evidence unaffected by his personal credibility problem that was sufficient

to support a verdict in his favor, we are constrained to conclude that the district court was clearly wrong when it concluded that Ubl’s claims had no reasonable chance of success.

See Vuyyuru, 555 F.3d at 356. We therefore reverse the district court’s order awarding attorney’s fees to IIF.

V.

To summarize, we conclude that the district court properly

refused to enforce the settlement agreement and that the court

committed no reversible error during trial, and we therefore

affirm the jury’s verdict in favor of IIF. However, we conclude that Ubl’s claims were not clearly frivolous, and we

therefore reverse the district court’s order awarding attorney’s

fees to IIF.

AFFIRMED IN PART; 

REVERSED IN PART

24 UNITED STATES v. IIF DATA SOLUTIONS