1 

RECOMMENDED FOR FULL-TEXT PUBLICATION 

Pursuant to Sixth Circuit I.O.P. 32.1(b) 

File Name: 15a0062p.06 

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT 

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UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

UNITED TECHNOLOGIES CORPORATION, 

Defendant-Appellant. 

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No. 13-4057 

Appeal from the United States District Court 

for the Southern District of Ohio at Dayton. 

No. 3:99-cv-00093—Thomas M. Rose, District Judge. 

Argued: December 3, 2014 

Decided and Filed: April 6, 2015 

BEFORE: SILER and SUTTON, Circuit Judges; CLELAND, District Judge.*

_________________ 

COUNSEL 

ARGUED: Gregory G. Garre, LATHAM & WATKINS LLP, Washington, D.C., for Appellant. 

Benjamin M. Shultz, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for 

Appellee. ON BRIEF: Gregory G. Garre, LATHAM & WATKINS LLP, Washington, D.C., 

Jeffrey A. Hall, BARTLIT BECK HERMAN PALENCHAR & SCOTT LLP, Chicago, Illinois, 

David Z. Bodenheimer, CROWELL & MORNING LLP, Washington, D.C., Lori Alvino McGill, 

QUINN EMANUEL URQUHART & SULLIVAN LLP, Washington, D.C., for Appellant. 

Benjamin M. Shultz, Alan S. Gale, Michael S. Raab, UNITED STATES DEPARTMENT OF 

JUSTICE, Washington, D.C., for Appellee. 

 * The Honorable Robert H. Cleland, United States District Judge for the Eastern District of Michigan, 

sitting by designation. 

>
No. 13-4057 United States v. United Technologies Corp. Page 2

_________________ 

OPINION

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 SUTTON, Circuit Judge. In 1983, Pratt & Whitney, now owned by United Technologies, 

made false statements to the Air Force in the course of competing with GE Aircraft to supply the 

Air Force with engines for its F-15 and F-16 fighter jets. The effort failed in two respects: Pratt 

did not achieve its goal of obtaining more business in the first year of the contract, and the fraud 

did not go unnoticed. 

After discovering the fraud, the government filed two actions against Pratt: (1) a 1998 

action before the Armed Services Board of Contract Appeals seeking relief under the Truth in 

Negotiations Act, and (2) a 1999 action in federal court seeking relief under the False Claims Act 

and common law restitution. The government lost the administrative action. Even though 

Pratt’s false statements had violated the truth-in-negotiation requirements of the Act, the Board 

refused to lower the price of the contracts retroactively—the remedy permitted by the Act—

because the Air Force had relied on the competitive bids by Pratt and GE Aircraft, not the 1983 

false statements, in determining a reasonable price for the jet engine contracts with each 

company. The Federal Circuit affirmed. 

The federal court action is now on its second trip to this court. The first appeal 

established that Pratt violated the False Claims Act and that it owed the government $7 million in 

statutory penalties due to the false cost estimates it provided to the government in 1983. The 

first appeal also vacated the district court’s holding that the government suffered no damages 

from the false statements and asked the court to address three discrete flaws that might (but 

might not) affect the damages calculation. On remand, the district court awarded $657 million in 

damages. 

At stake in this sequel are two essential questions. Does issue preclusion bar the 

government from obtaining additional damages under the False Claims Act and common law 

restitution given the Board’s finding in the first action about the role of competition in 

determining the prices that the government paid Pratt and GE Aircraft for the jet engines? And, 
No. 13-4057 United States v. United Technologies Corp. Page 3

even if issue preclusion does not apply, is the district court’s $657 million damages award 

supported by the evidence given the government expert’s refusal to account for the competition 

between GE Aircraft and Pratt in setting a fair market value for the engines that the government 

purchased from Pratt? 

I. 

 Pratt & Whitney makes jet engines. For years, Pratt served as the exclusive supplier of 

engines for the Air Force’s F-15 and F-16 fighter jets. That changed in the early 1980s, when the 

military decided that competition might improve the quality of the engines and lower their 

prices. In 1982, the Air Force invited aerospace manufacturers to submit competitive bids for 

making the next generation of engines. In addition to Pratt, GE Aircraft entered the competition. 

The Air Force touted the prospect of greater competition. As one officer told Congress, the 

bidding put Pratt and GE Aircraft “at each other’s throats.” R. 441-2 at 7. One observer called 

the companies’ high-stakes procurement battle the “Great Engine War.” See Editorial, The 

Lesson of the Great Engine War, N.Y. Times, Feb. 13, 1984, at A20, available at http://nyti.ms/

1EO4T5h. 

In trying to stave off its new competitor, Pratt misstated the projected costs in its 1983 

bid in three ways—its bill of materials, its inflation forecasts, and its expected discounts from 

suppliers—in an effort to discourage the military from dividing the work between Pratt and GE 

Aircraft. After the Air Force identified the problem, Pratt assured the Air Force that it had fixed 

the problems in its initial proposal and falsely certified that its offer prices “reflect[ed its] best 

estimates and/or actual costs.” R. 334 at 7. The deception backfired in two ways. It did not 

work as a business strategy. The Air Force chose to divide the engine orders anyway, and in the 

first year of the new six-year contract it purchased three quarters of the engines from GE Aircraft 

and only a quarter of the engines from the once-dominant Pratt. The deception also was 

uncovered, though not until the end of the contract. 

In the interim, the two jet engine manufacturers continued to compete. In each 

subsequent year, the Air Force issued a “call for improvement” that asked Pratt and GE Aircraft 

to provide more favorable terms than its prior “best and final offer”—a process that allowed each 

contractor to decrease its existing offer prices with the hope of selling more engines. The Air 
No. 13-4057 United States v. United Technologies Corp. Page 4

Force’s goal was to create, and benefit from, “perpetual competition.” See United Techs. Corp., 

ASBCA No. 53349, 05-1 BCA ¶ 32,860, at 162,813, 2005 WL 147601 (Jan. 19, 2005) 

[hereinafter ASBCA II]. Pratt took advantage by responding with lower prices, including by 

extending full-award volume discounts even for split-award contracts. In each year, the Air 

Force certified that Pratt’s and GE Aircraft’s prices were “fair and reasonable” based on the 

“market test between the competitors.” Id. And indeed, as a result of the role of competition in 

setting fair prices, the Air Force did not ask Pratt and GE Aircraft to submit cost and pricing data 

for each of the five outyears of the contract, as the regulations normally require. See 10 U.S.C. 

§ 2306(f)(2) (1982); A.S.P.R. § 3-807.3(b)(ii) (1976). Pratt beat out GE Aircraft with lower 

prices in some years (and received additional business as a result), and in the fourth year of the 

“call for improvements” Pratt was the “clear winner” overall. R. 441-34 at 2. Air Force 

Secretary Edward Aldridge hailed the “intense competition” as “working to perfection.” Id. In 

response to Pratt’s improvements, the Air Force awarded the company a steadily increasing share 

of engine production. In the final year of the contract, Pratt won nearly two-thirds of the work. 

The government first became concerned that Pratt had overstated its 1983 cost 

projections in a 1989 audit by the Air Force. For reasons that the record does not fully disclose, 

the Air Force review board closed that investigation in 1995. In 1997, Dannie Zacheretti, an 

auditor with the Department of Justice and eventually the damages expert in this case, 

investigated the matter and determined that Pratt did not use its most accurate data in its 1983 

best and final offer. 

The Truth in Negotiation Act litigation. In 1998, the government filed an administrative 

action against Pratt with the Armed Services Board of Contact Appeals under the Truth in 

Negotiations Act. See 10 U.S.C. § 2306(f)(2) (1982). As permitted under the Act, it sought a 

retroactive decrease in the price it should have paid for the six years of jet engines due to the 

initial false cost estimates. The Board rejected the government’s claim. It first determined that 

some of the alleged misstatements—that Pratt had corrected problems in its initial proposal and 

had used the latest and most accurate cost data to develop its 1983 best and final offer prices—

did not amount to “cost or pricing data” covered by the Act. See United Techs. Corp., ASBCA 

No. 51410, 04-1 BCA ¶ 32,556, at 161,024–25, 2004 WL 483216 (Feb. 27, 2004) [hereinafter 
No. 13-4057 United States v. United Technologies Corp. Page 5

ASBCA I]. The Act, the Board noted, covers only misrepresentations about “facts which 

reasonably can be expected to contribute to sound estimates of future costs.” Id. at 161,025 

(quoting D.A.R. § 3-807.1(a)(1)). The Board held that the Truth in Negotiations Act covered 

some of Pratt’s other statements—the inaccurate component-by-component breakdown of its 

expected costs, which is to say the underlying cost data itself. See 10 U.S.C. § 2306(f)(2) 

(1982). But the Board held that these statements did not cause any damages to the Air Force. 

Because the Air Force had relied on “competitive forces, rather than the defective . . . cost or 

pricing data . . .[,] to make the awards and to exercise the options for additional purchases,” it 

reasoned, the prices the Air Force paid for the jet engines were not increased by the fraud. 

ASBCA II, 05-1 BCA at 162,813. The government apparently did not appeal this aspect of the 

Board’s decision. See Brief of Appellant, Wynne v. United Techs. Corp., No. 05-1393, 2005 WL 

3338206 (Fed. Cir. Nov. 14, 2005). It instead argued that it had no obligation to show that the 

Air Force relied on the false cost estimates or that the false statements otherwise caused it 

damages. It claimed that the existence of the fraud allowed it to obtain a one-for-one price 

reduction for every dollar Pratt overstated its costs. The Federal Circuit rejected this argument 

and affirmed. See Wynne v. United Techs. Corp., 463 F.3d 1261, 1267 (Fed. Cir. 2006). 

The False Claims Act / Restitution litigation. In 1999, the United States separately filed 

this lawsuit in federal district court for violations of the False Claims Act and for common law 

restitution. The court found Pratt liable under the False Claims Act and awarded the government 

$7 million in statutory penalties. The government sought additional damages caused by the false 

statements under the False Claims Act and under several equitable restitution theories: unjust 

enrichment, mistake, and quasi-contract. In support of these claims, the government presented 

the testimony of Zacheretti, the DOJ auditor who had uncovered the fraud. Zacheretti calculated 

the government’s damages on a pro rata basis by comparing the prices Pratt offered the 

government with the prices it would have offered the government without the cost 

overstatements. He made two key assumptions: (1) Pratt’s cost misstatements resulted in a 

dollar-for-dollar overcharge to the government, and (2) all other components of Pratt’s prices 

would have stayed proportionally the same with or without the overstatements. Relying on these 

assumptions, Zacharetti estimated Pratt’s material costs and added to them based on the 

company’s percentage adjustments for overhead, labor, profit, and subsequent discounts. The 
No. 13-4057 United States v. United Technologies Corp. Page 6

difference between the resulting prices and what the government actually paid, he concluded, 

amounted to its damages. Zacharetti made no mention of fair market value. 

The district court rejected the government’s claims for additional damages on the ground 

that the false statements did not cause any damages to the government. The court identified 

several flaws in Zacharetti’s analysis. It concluded that the Air Force did not suffer any damages 

because Pratt’s yearly discounts from its best and final offer in the course of the calls for 

improvements process offset any cost overstatements. See United States v. United Techs. Corp., 

No. 3:99-cv-093, 2008 WL 3007997, at *12 (S.D. Ohio Aug. 1, 2008). It also rejected 

Zacharetti’s damages methodology because “it ignore[d] the nature” of Pratt’s scheme, which 

was designed to skew split-award prices relative to those under a full award, and ignored the 

reality that the scheme failed. The Air Force, it observed, declined to give Pratt the full award 

and GE Aircraft indeed received three-quarters of the business in the first year of the contract. 

Id. at *11. The Court then reasoned: 

The Government Calls for Improvement did not request new certifications 

of engine prices broken down part-by-part. Instead, engine prices and warranty 

prices were rebid on the overall price. The new Government approach of 

avoiding sole-source vendors on major acquisitions and creating an atmosphere of 

continual competition succeeded in its goal. Had the Government requested a 

new BAFO [best and final offer], the Court has no doubt that Pratt, chastened by 

its experience of winning just 25% of FEC I, would have certified the lowest 

possible engine prices it could manage. Reducing the Government’s damages on 

a pro-rata basis over the entire parts list in this instance does not fairly estimate 

the Government’s damages. There is no evidence that, had Pratt reduced the parts 

affected by its originally fraudulent statements, that commensurate price 

reductions could have been won for all engine parts. 

Id. at *12 (emphasis added). 

The district court also determined that claim preclusion barred the government’s 

restitution claims because the Air Force could have, and should have, litigated them before the 

Armed Services Board of Contract Appeals. Id. It did not reach Pratt’s separate issue-preclusion 

argument that the Board’s competition findings in that litigation bound the parties in the federal 

court case. 
No. 13-4057 United States v. United Technologies Corp. Page 7

On appeal, we affirmed Pratt’s liability under the False Claims Act and the $7 million 

fine levied against it under the Act. See United States v. United Techs. Corp., 626 F.3d 313, 

320–21 (6th Cir. 2010). We concluded, however, that the government’s restitution claims were 

not barred by claim preclusion because the Board did not have jurisdiction to hear them. Id. at 

324–25. At the same time, we asked the court on remand to determine whether one of the 

findings by the Board in the administrative action—that the Air Force determined fair and 

reasonable prices for the Pratt and GE Aircraft jet engines based on competition, not the cost 

estimates covered by the Truth in Negotiation Act—precluded the government from obtaining a 

different finding here. 

We vacated the district court’s no-damages determination and asked the court to 

reconsider three aspects of it. One concern was that the district court gave Pratt full credit for 

warranty price reductions without accounting for a corresponding reduction in the extent of the 

warranty coverage. Id. at 322. The second concern was that the district court gave Pratt credit 

for final-year discounts across the entire contract even though the government never benefitted 

from those discounts in prior years. Id. The last concern was that, instead of using “fair market 

value” as the benchmark, the court used the original contract prices. Id. We asked the district 

court on remand to recalculate damages based on what the government paid above “what it 

should have paid for what it received” in terms of “fair market value.” Id. None of this, we 

cautioned, necessarily would lead to a different conclusion. “[T]he government is not entitled to 

damages,” we pointed out, if Pratt’s prices were equal to or below “fair market value.” Id.

On remand, the government received an upgrade. In addition to the $7 million it had 

already obtained in penalties, it was awarded $657 million more in damages—a combination of 

treble damages under the False Claims Act, restitution, and prejudgment interest. In reaching 

this conclusion, the district court rejected Pratt’s issue-preclusion defense, holding that the Board 

and Federal Circuit litigation did not resolve whether Pratt’s three misrepresentations 

accompanying its best and final offer caused the government damages. See United States v. 

United Techs. Corp., No. 3:99-cv-093, 2012 WL 2263280, at *3–4 (S.D. Ohio June 18, 2012). 

The court then adopted the government’s damages calculation in full—premised on Zacharetti’s 

unaltered analysis—and rejected Pratt’s arguments that this calculation did not account for the 
No. 13-4057 United States v. United Technologies Corp. Page 8

impact of competition on fair market value, including comparable prices paid to GE Aircraft for 

its jet engines. United States v. United Techs. Corp., 950 F. Supp. 2d 949, 952–53 (S.D. Ohio 

2013). The court concluded that the fighter jet engine market was insufficiently competitive to 

rely on comparable sales, but simultaneously found a “free market” for the warranties, adopting 

their “arms-length” renegotiated price as their value. Id. at 952, 956. 

II. 

On appeal from a bench trial, we give fresh review to the district court’s legal 

conclusions and defer to its fact findings unless they are clearly erroneous. Pressman v. Franklin 

Nat’l Bank, 384 F.3d 182, 185 (6th Cir. 2004). Under the False Claims Act, the government 

bears the burden to prove its damages by a preponderance of the evidence. See 31 U.S.C. 

§ 3731(c). 

III. 

 When litigation between two parties carries on for seventeen years in two different 

venues, it is only a matter of time before it will implicate a foundational objective of a fair legal 

system: treating like matters alike. That objective underlies three features of a precedent-bound 

system of law—stare decisis, law of the case, and issue and claim preclusion—all of which 

require judges to look backward before they resolve current disputes. Stare decisis requires 

courts to respect prior decisions of the courts that usually concern different parties but similar 

issues. If past is precedent with respect to disputes involving different parties, it follows that past 

is precedent with respect to disputes involving the same parties—whether in the context of prior 

rulings in the same case (law of the case) or prior rulings in different cases (issue and claim 

preclusion). All three doctrines have a role to play in today’s dispute. 

A. 

Issue preclusion. Up first is issue preclusion. In the Truth in Negotiation Act litigation, 

the Board found that the government did not meet its burden of showing that Pratt’s 1983 false 

statements caused higher prices for each of the six years of the Pratt–Air Force jet engine 

contracts. Does the Board’s finding there—that the Air Force relied on competition between GE 
No. 13-4057 United States v. United Technologies Corp. Page 9

Aircraft and Pratt plus the calls-for-improvements process to evaluate the reasonableness of the 

two companies’ engine prices—bind us here? 

A few basics are in order. To establish issue preclusion, a party must show that: (1) the 

question in this case is the same as the one raised in the earlier litigation; (2) the answer given in 

the earlier litigation was necessary to the decision; (3) that decision was a final judgment on the 

merits; and (4) the affected party had a “full and fair opportunity” to litigate the issue in the prior 

litigation. See Kosinski v. C.I.R., 541 F.3d 671, 675 (6th Cir. 2008) (quoting United States v. 

Cinemark USA, Inc., 348 F.3d 569, 583 (6th Cir. 2003)). Issue preclusion applies to issues 

litigated in prior disputes. It thus makes no difference that the earlier no-damages-due-tocompetition ruling arose in a case under the Truth in Negotiation Act and that this dispute arises 

under the False Claims Act and the common law. See Allen v. McCurry, 449 U.S. 90, 94 (1980). 

That is why the doctrine goes by the label issue preclusion, not claim preclusion. So long as the 

preconditions for issue preclusion exist, the Board’s decisions carry the same preclusive effect as 

those of courts and other agencies. See B & B Hardware, Inc. v. Hargis Indus., Inc., No. 13-352, 

2015 WL 1291915, at *7 (U.S. Mar. 24, 2015); United States v. Utah Constr. & Mining Co., 

384 U.S. 394, 422–23 (1966) (giving preclusive effect to decisions of a similar agency board of 

contract appeals). And so long as the losing party in the first litigation has the opportunity 

to appeal the adverse ruling, it matters not whether it does so. See B & B Hardware, 

2015 WL 1291915, at *9. 

Just two of these considerations concern us here. Does the Board’s finding in the Truth 

in Negotiation Act litigation answer the same question presented here? And was the Board’s 

answer necessary to its decision? In considering these issues, it helps to separate the findings 

with respect to year one of the contract (fiscal year 1985) and those with respect to the 

“outyears” of the contract—years two through six of the contract (fiscal years 1986 to 1990). 

Year one (fiscal year 1985). Here is what the Board said with respect to year one: 

[Pratt] provided evidence—and we so found [in our prior decision]—that neither 

the Defense Contract Audit Agency (DCAA), the [Air Force] price analyst, the 

contracting officer (CO) nor the cost panel reviewed the BAFO cost or pricing 

data prior to award. We believe this evidence rebutted the presumption of 

causation. 
No. 13-4057 United States v. United Technologies Corp. Page 10

. . . . 

We are hard pressed to understand how the [Air Force] could have relied on 

BAFO cost or pricing data—defective or otherwise—that no one reviewed. 

 We are mindful that the [Air Force] price analyst and the CO testified on 

direct examination that they relied on the fact that the BAFO data furnished by 

appellant were current, accurate, and complete. We find that this testimony—

given roughly 17 years after the fact—was lacking in specificity and was 

unpersuasive. 

Upon reconsideration, we conclude that the [Air Force] failed to show that 

it relied upon Pratt’s BAFO cost or pricing data, and that it failed to show that 

[Pratt’s] defective BAFO cost or pricing data caused an increase in contract price 

for the base year of the contract. For this reason, the [Air Force] may not recover 

on its defective pricing claims for FY 85. 

ASBCA II, 15-1 BCA at 162,812–13 (citations omitted). 

The Federal Circuit affirmed. But as noted the government did not appeal the Board’s 

decision on this point, leaving the above ruling as the relevant one for issue preclusion purposes. 

See Guzowski v. Hartman, 849 F.2d 252, 255 (6th Cir. 1988). 

 Issue preclusion does not apply to the Board’s no-reliance finding with respect to the first 

year of the contract. In the truth-in-negotiation litigation, the Board made its no-reliance finding 

based on the fact that no one at the Air Force looked at the cost or pricing data behind Pratt’s 

offer, not on the role of competition in how the Air Force set fair and reasonable prices. 

See ASBCA II, 05-1 BCA at 162,812–13. The Board’s finding in the one case does not exclude 

the possibility in the latter case that the government nevertheless relied on Pratt’s separate 

misrepresentations that it corrected its proposal and that its best and final offer was based on 

accurate cost data. The Board had no authority to review those misstatements because the Act 

does not cover falsities about how a contractor arrives at its prices. See ASBCA I, 04-1 BCA at 

161,024–25. 

Years two through five (fiscal years 1986 to 1990). As to the “outyears” of the 

contract—years two through six—the answer is trickier, indeed quite difficult. Here is what the 

Board found: 

With respect to the awards made, and the options exercised by the [Air 

Force] in the outyears—FY 86 through FY 90—neither party disputes that the 
No. 13-4057 United States v. United Technologies Corp. Page 11

[Air Force] did not exercise these options at the same terms and conditions 

offered by appellant in the BAFO for these options. Rather as we found in our 

decision, the [Air Force] sought different and more advantageous offers each year 

from appellant and GE—described by the [Air Force] as the annual call for 

improvement process—prior to the exercise of each option. Appellant offered 

improvements in terms and conditions from its BAFO each year—in some years 

offering more generous improvements than others—with the hope of obtaining a 

larger share of the work each year. The [Air Force] evaluated the improvements 

offered by both competitors, and those improvements the AF decided to accept 

were considered by the source selection authority to determine the new allocation 

decisions each year. 

For each of the outyears, the CO documented the basis upon which he 

believed the revised offer from appellant was fair and reasonable. This 

determination was made after the [Air Force] had evaluated [Pratt’s] revised offer 

in response to the annual call for improvement. The CO prepared a memorandum 

for the record each year to document the decision to exercise and to fund each 

option. Insofar as pertinent, each memorandum stated as follows: 

By a market test between the competitors . . . the prices set 

forth . . . are considered the most fair and reasonable prices 

available to the Government. 

 We believe this evidence, properly considered, shows that for the outyears 

the [Air Force] relied upon this “market test between the competitors” arising out 

of the calls for improvement to determine the reasonableness of [Pratt’s] revised 

offers, not the defective BAFO cost or pricing data filed by [Pratt] in December, 

1983. A letter from the CO to DCAA dated 10 April 1989 also supports this 

conclusion: 

[T]his contract is very unique in that it is basically a perpetual 

competition using a split award technique decided by the 

[Secretary of the Air Force] annually. In this process, the 

Contractor’s originally submitted certified Cost or Pricing Data 

has been subjected to an annual Call for Improvements letter 

requesting improvements in prices as well as terms and conditions. 

Over the years, dramatic improvements have been experienced in 

almost all areas. [Emphasis added] 

This evidence served to rebut the presumption that appellant’s defective 

BAFO cost or pricing data were relied upon by the [Air Force] and, as such, 

caused an increase in the contract price in the outyears. As we stated earlier, the 

[Air Force] has the burden to prove causation. Based upon our reconsideration of 

all the evidence of record, we believe that the [Air Force] failed to carry its 

burden. The CO in the outyears, Mr. Rhodeback, did not review the December 

1983 BAFO cost or pricing data at any time. He relied on the predecessor CO 

and the RAA for this purpose. However for reasons stated herein, these latter 
No. 13-4057 United States v. United Technologies Corp. Page 12

sources also did not show any review or reliance on the BAFO data, and hence 

Mr. Rhodeback’s reliance upon them was without legal significance. 

Mr. Rhodeback’s statements of reliance on BAFO cost or pricing data at 

trial were unsupported by any contemporaneous project records. Those records of 

the CO that were adduced—and that we discussed above—show that competitive 

forces, rather than the defective 1983 BAFO cost or pricing data[,] were relied 

upon to make the awards and to exercise the options for additional purchases for 

FYs 86–90. In the face of such credible, contemporaneous evidence, we believe 

that Mr. Rhodeback’s unsupported trial statements to the contrary were 

unpersuasive. 

ASBCA II, 15-1 BCA at 162,813 (citations omitted). Because the government did not appeal this 

aspect of the ruling, the Federal Circuit did not reach it, leaving this aspect of the Board’s 

decision untouched. 

In one sense, the Board’s competition finding with respect to the last five years of the 

contract looks like an eminently appropriate setting for the application of issue preclusion. The 

key issue in both cases was nearly identical, and the Board’s relevant finding was necessary to 

the outcome. A contract adjustment under the Truth in Negotiations Act requires proof of 

reliance—causation—to determine whether the contract prices should be retroactively lowered to 

account for any impact that negotiation misstatements had on the final contract price. Wynne, 

463 F.3d at 1265. The same is true for damages under the False Claims Act. See 31 U.S.C. 

§ 3729(a); United States ex rel. Schwedt v. Planning Research Corp., 59 F.3d 196, 200 (D.C. 

Cir. 1995). And the same is true for the common law restitution claims. See Restatement (Third) 

of Restitution and Unjust Enrichment §§ 5(2)(a) & cmt. e, 13 cmt. c (2011); Cleary v. Philip 

Morris Inc., 656 F.3d 511, 518–19 (7th Cir. 2011). 

The role of competition in the Air Force’s assessment of reasonable prices also was 

squarely before the Board and central to its finding of no reliance over the last five years of the 

contract. According to the Board, “th[e] evidence . . . shows that for the outyears the [Air Force] 

relied upon th[e] ‘market test between the competitors’ arising out of the calls for improvement 

to determine the reasonableness of [Pratt’s] revised offers.” ASBCA II, 05-1 BCA at 162,813. 

No doubt, the Board might have been clearer on this point. In view of the calls for improvement, 

the significant reductions in each company’s offer prices over time, and the vigorous competition 

between the two jet engine manufacturers, the Board might have said that competition between 
No. 13-4057 United States v. United Technologies Corp. Page 13

the companies exclusively determined the reasonableness of Pratt’s revised offers in the outyears. 

Had the Board been this clear, that, it seems to us, would have been that. The competition 

finding in the one case would bind us in the other. Nor would it have made a difference that 

today’s case concerns false cost estimates not covered by the Truth in Negotiations Act, or that 

the government has introduced additional evidence of causation/reliance in this case. Issue 

preclusion does not disappear merely because the losing party puts on a better case the second 

time around. See, e.g., Yamaha Corp. v. United States, 961 F.2d 245, 254–55 (D.C. Cir. 1992) 

(“Preclusion cannot be avoided simply by offering evidence in the second proceeding that could 

have been admitted, but was not, in the first.”); Cory v. C.I.R., 159 F.2d 391, 392 (3d Cir. 1947) 

(“[P]arties are not entitled to have a question considered on its merits a second time merely 

because they failed to produce all the facts the first time.”); Falconer v. Meehan, 804 F.2d 72, 76 

(7th Cir. 1986) (explaining that issue preclusion applies “even if in the prior action a different 

legal theory was argued” and prevents the second court from “deciding the same factual issues 

that were decided earlier”); see also Akron Presform Mold Co. v. McNeil Corp., 496 F.2d 230, 

234–35 (6th Cir. 1974) (rejecting new evidence to establish violation of antitrust laws in second 

action).

But the Board was not that clear—and indeed less clear than the above language read by 

itself suggests. The quoted language does not appear by itself. The full sentence is comparative 

in nature: It says that the evidence “shows that for the outyears the [Air Force] relied upon th[e] 

‘market test between the competitors’ arising out of the calls for improvement to determine the 

reasonableness of [Pratt’s] revised offers, not the defective BAFO cost or pricing data filed by 

[Pratt] in December, 1983.” ASBCA II, 05-1 BCA at 162,813 (emphasis added). A few 

sentences down, the Board states its competition finding in comparative terms again: It says that 

“competitive forces, rather than the defective [December] 1983 BAFO cost or pricing data[,] 

were relied upon to make the awards and to exercise the options for additional purchases.” Id. 

(emphasis added). Nor can we rely on a sentence in the first Board decision that describes a 

1984 letter from the Air Force saying that the contracts were awarded “solely” on a competitive 

basis. ASBCA I, 04-1 BCA at 161,013. In neither its first decision nor its reconsideration 

decision did the Board rely on this letter as a ground for decision. The letter at most would relate 
No. 13-4057 United States v. United Technologies Corp. Page 14

to damages for year one, moreover, and the Board (as shown) plainly did not rely on this letter in 

discussing damages for year one. 

As this case comes to us, then, it is not clear whether the Board meant to say that 

competition together with the calls for improvement process exclusively drove prices or merely 

whether those competitive forces eliminated any damages caused only by the December 1983 

false cost data. In the first setting, issue preclusion would apply. In the second setting, it would 

not, for it would remain possible that other types of falsities at other times could have affected an 

assessment of reasonable prices even in the face of these competitive forces. Because issue 

preclusion forever precludes litigation with respect to a covered finding, courts err on the side of 

construing prior ambiguous findings or holdings narrowly. See, e.g., Connors v. Tanoma Mining 

Co., 953 F.2d 682, 684 (D.C. Cir. 1992) (“If the basis of [a] decision is unclear, and it is thus 

uncertain whether the issue was actually and necessarily decided in that litigation, then 

relitigation of the issue is not precluded.”); In re Braniff Airways, Inc., 783 F.2d 1283, 1289 (5th 

Cir. 1986) (“[I]f reasonable doubt exists as to what was decided in the first action, the doctrine of 

res judicata should not be applied.”); Harris v. Jacobs, 621 F.2d 341, 343 (9th Cir. 1980) (“If 

there is doubt on this score, collateral estoppel will not be applied.”). That, it seems to us, is a 

sensible way to resolve this difficult question here. We thus affirm the district court’s conclusion 

that issue preclusion does not bar the government’s damages claims under the False Claims Act 

and common law restitution. 

B. 

False Claims Act and Restitution. That the Board’s competition finding does not bind us 

here does not mean that the competition between GE Aircraft and Pratt and the calls for 

improvement process were irrelevant to the government’s claim for damages under the False 

Claims Act and common law restitution based on a similar set of misstatements. Yet that, at the 

government’s urging, is just what the district court held. The court relied exclusively on 

Zacharetti’s price estimates as the value of Pratt’s engines and yet Zacharetti, an auditor and not 

a pricing expert, refused to consider either the role that competition between Pratt and GE 

Aircraft (among other factors) played in determining reasonable and fair prices, or whether that 

competition and the prices that resulted from it eliminated any damages to the government. 
No. 13-4057 United States v. United Technologies Corp. Page 15

That was wrong for several reasons. In the first place, it misreads our prior opinion. We 

asked the district court after the last appeal to redo its damages calculations to address three

discrete flaws in its analysis that the government suffered no damages, and to determine the “fair 

market value” of the engines independent of the fraud: 

On remand, the district court should calculate what the government eventually 

paid each year . . . , what it should have paid each year based on what the 

government received, then take the difference between the two. If the court 

concludes that Pratt’s prices . . . represent the fair market value of the fighter jet 

engine contract—or were below fair market value—the government is not entitled 

to damages. 

United Techs., 626 F.3d at 322. At the same time, we cautioned the district court that its second 

assessment of the government’s claims, after correcting for the three identified flaws, might well 

lead to its first conclusion in this area (and the Board’s conclusion to boot): that no damages 

resulted in view of the critical role that competition played in setting prices. For law of the case 

purposes, our prior decision did not require the district court to find damages; did not require the 

district court to use (much less follow) Zacharetti’s analysis; did not require the court to exclude 

expert testimony from Pratt about reasonable and fair prices in this context; indeed did not 

require the court to abandon any part of its earlier conclusion save to consider how the three 

identified flaws might affect whether the government suffered any damages. 

 In the second place, our opinion did not undermine several factual findings in the district 

court’s initial opinion. In that opinion, it found, as the Board had found, that competition 

affected prices due to the significant discounts Pratt offered each year of the contract from its 

best and final offer in the course of the calls for improvements process. See United Techs., 2008 

WL 3007997, at *12. It found that Zacharetti’s damages methodology, in addition to failing to 

account for the role of competition in pricing, “ignore[d] the nature” of Pratt’s scheme—to skew 

split-award prices relative to those under a full award—which failed. Id. at *11. Not only did 

the Air Force decline to give Pratt the full award, but GE Aircraft received three-quarters of the 

business in the first year of the contract. Id. And it found “no doubt that Pratt, chastened by” its 

failure to obtain a full award, had offered the lowest prices it possibly could from then on—

namely the last five years of the contract—because the government had successfully “creat[ed] 

an atmosphere of continual competition.” Id. at *12. We are hard pressed to understand how 
No. 13-4057 United States v. United Technologies Corp. Page 16

these findings—all about the role of competition and the calls for improvement process—were 

altered by our opinion or remain any less true today. 

In the third place, our opinion broke no new ground in asking the court to consider the 

“fair market value” of the Pratt engines after accounting for the three flaws in its prior analysis. 

When the government gets what it paid for despite a contractor’s misstatements, it has suffered 

no “actual damages.” See United States v. Bornstein, 423 U.S. 303, 316 n.13 (1976) (collecting 

cases); see also United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 

908, 923 (4th Cir. 2003). That is not just the law of the False Claims Act; it is also the blackletter law of fraud and restitution (putting aside disgorgement of profits, which the government 

does not seek here). See Restatement (Second) of Torts § 549(1)(a) (1977); Restatement (Third) 

of Restitution and Unjust Enrichment §§ 49 cmt. f, 54 cmts. g–h (2011). The only benchmark 

consistent with this benefit-of-the-bargain theory of damages is “fair market value,” by which we 

meant (and still mean) “what a willing buyer would pay in cash to a willing seller at the time.” 

United States v. 564.54 Acres of Land, 441 U.S. 506, 511 (1979) (internal quotation marks 

omitted). 

With that traditional definition comes the traditional rules for proving value. “A 

‘comparable sales’ analysis has long been and remains the preferred method of 

establishing . . . ‘fair market value.’” United States v. 103.38 Acres of Land, 660 F.2d 208, 211 

(6th Cir. 1981). Indeed, the government itself has relied on that analysis to prove damages in 

False Claims Act cases. See, e.g., United States v. Killough, 848 F.2d 1523, 1531 (11th Cir. 

1988). The comparable sales valuation method applies even though the market for fighter jet 

engines is heavily regulated (many markets are), it has two sellers, and it results in few sales per 

year. Restatement (Second) of Torts § 911 cmt. f (1979). Fighter engine sales are hardly so rare 

that they fall into the narrow exception for public goods like “roads or sewers.” United States v. 

50 Acres of Land, 469 U.S. 24, 30 n.12 (1984) (quoting 564.54 Acres of Land, 441 U.S. at 513); 

see Northrop Corp. v. McDonnell Douglas Corp., 705 F.2d 1030, 1055 (9th Cir. 1983) (noting 

“the competitive nature of the military aircraft industry”). GE Aircraft’s engine prices are thus a 

natural place to look for evidence of the value the government received. The only question is 

whether those engines are adequately comparable to Pratt’s. 
No. 13-4057 United States v. United Technologies Corp. Page 17

The Air Force’s procurement strategy in this instance proves they are. The premise of the 

“head to head” competition was that the two companies’ engines were similar. R. 441-3 at 18. 

That is why the Air Force directly compared the engine prices side-by-side, put on the table splitaward bids and full-volume bids, and judged those prices “fair and reasonable” based on the 

“market test between the competitors.” ASBCA II, 05-1 BCA at 162,811. And—as we noted the 

last time around, as the district court noted the last time around, and as we think remains highly 

relevant this time around—the Air Force never requested new cost and pricing data during the 

annual calls for improvements. United Techs., 626 F.3d at 321; United Techs., 2008 WL 

3007997, at *12. For such high-dollar and otherwise significant contract modifications, only 

“adequate price competition” could excuse that failure—as the government’s own regulations 

explain. See 10 U.S.C. § 2306(f)(2) (1982); A.S.P.R. § 3-807.3(b)(ii) (1976). 

What happened each year of the procurement process confirms as much. In the opening 

year of this multi-year contract, the rival companies made “best and final offers” to the Air Force 

for their jet engines. Those offers, as it turns out, were neither the “best” nor the “final” offers 

made by either company. The government ultimately never paid any of them. In each 

subsequent year, the Air Force issued “calls for improvements” to each competitor, a pencilsharpening exercise that allowed the rivals to lower prices (Pratt did so every year) in return for 

the hope of obtaining a larger share of the Air Force’s business (Pratt gained more business in 

some years, and GE Aircraft gained more in other years). Nor did the calls for improvement lead 

to marginal improvements. Pratt made substantial decreases to its best and final offer prices. 

According to the district court’s uncontested numbers, Pratt’s combined engine and warranty 

price discounts were as follows: $101 million (1986), $100.5 million (1987), $106.7 million 

(1988), $114.5 million (1989), and $63.4 million (1990). See United Techs., 2008 WL 3007997, 

at *8. Pratt even applied some discounts retroactively to first year prices. ASBCA I, 04-1 BCA 

at 161,014–15. While these decreases do not account for other terms of the offers (including 

reduced warranty coverage in some years), they make it crystal clear that this was not 

competition in the abstract but competition in fact. All of this reliance on price competition—

echoing the Board’s prior finding in the context of the same sales, the same competition, the 

same procurement process, and the same types of inaccurate data from 1983—belies any claim 

that GE Aircraft’s engines are so dissimilar they cannot serve as comparable sales for purposes 
No. 13-4057 United States v. United Technologies Corp. Page 18

of calculating damages. The district court accordingly erred by “presum[ing] that the amount 

overpaid is equal to the fraudulent amount quoted.” United Techs., 950 F. Supp. 2d at 952. 

One other flaw in the district court’s analysis bears mention. It miscalculated the fairmarket value of the newly capped warranties by finding their value precisely equal to their 

renegotiated prices, resulting in no damages offset for its price reductions. See id. at 955–56. 

Because Pratt’s original scheme was to offset engine cost overstatements with artificially low 

warranty prices under a full award, see United Techs., 2008 WL 3007997, at *11, the district 

court’s methodology does not fit the fraud. One premise of the scheme was to sell the engines 

and warranties as a package. Valuing the warranties in isolation thus does not work. The 

government argued the last time around that the district court had erred by “treat[ing] the 

separate warranty prices and engine prices as if they were one combined price.” See Brief of 

Appellant, United States v. United Techs. Corp., Nos. 08-4256/4257, 2008 WL 5707433 (6th Cir. 

Feb. 25, 2009). We rejected that argument and affirmed the district court’s analysis, for 

otherwise it would have made no sense for us to instruct the court to account for the value of the 

corresponding decrease in coverage. And that is why we remanded for the district court to 

recalculate “the fair market value of the fighter jet engine contract”—as a whole—not merely the 

engines. United Techs., 626 F.3d at 322 (emphasis added). The proper course was to measure 

fair market value of the contract as a bundle, beginning with GE Aircraft’s prices and adjusting 

for material differences. 

The government seeks to uphold the district court’s decision in several ways. First, it 

defends the district court’s presumption that, when someone defrauds the government, each 

dollar of overstated costs translates into a dollar of damages. See United States ex rel. Taxpayers 

Against Fraud v. Singer Co., 889 F.2d 1327, 1333 (4th Cir. 1989); Universal Restoration, Inc. v. 

United States, 798 F.2d 1400, 1403 (Fed. Cir. 1986). But the district court never applied any 

such presumption in its first decision—in rejecting Zacharetti’s damages calculation—and we 

did not reverse that part of its decision in the first appeal. How the presumption suddenly 

appeared on remand is something of a mystery. 

Be that as it may, we do not see how the presumption, even if we were to accept it in the 

context of a competitive, as opposed to sole source, contract, see Singer, 889 F.2d at 1333, 
No. 13-4057 United States v. United Technologies Corp. Page 19

justifies the district court’s decision on remand. The cases permit a party to rebut the inference 

of damages. Three steps, not one, describe the process: (1) The government starts with the 

presumption; (2) the private party may rebut it; and (3) if the private party succeeds in rebutting 

the presumption, the burden returns to the government to show by a preponderance of the 

evidence that it was injured by the false statements. See Sylvania Elec. Prods., Inc. v. United 

States, 479 F.2d 1342, 1349 (Ct. Cl. 1973). If that sounds familiar, that is because it is what the 

Federal Circuit held in rejecting the government’s claim for damages against Pratt under the 

Truth in Negotiation Act in the administrative action. Wynne, 463 F.3d at 1267 (“[T]he Air 

Force has not demonstrated that the Board erred in finding that UTech successfully rebutted the 

presumption of causation.”). Just as Pratt rebutted the presumption there by showing that no one 

relied on the relevant false statements and that competition controlled prices, so Pratt has 

rebutted that presumption here. As the above evidence shows, the Air Force’s reliance on 

competition to determine a reasonable price readily rebuts any such presumption. 

One other point on this score. Zacharetti’s damages analysis was before us in the last 

appeal. See Brief of Appellant, United States v. United Techs. Corp., Nos. 08-4256/4257, 2008 

WL 5707433 (6th Cir. Feb. 25, 2009). In concluding that the government had suffered no 

damages under any of its federal-court claims in the first instance, the district court rejected 

Zacharetti’s damages assessment. United Techs., 2008 WL 3007997, at *11. Nothing in our 

prior opinion contradicted that analysis. To the contrary, we cautioned that the reassessment of 

damages after correcting for three targeted mistakes might still lead to a zero-damages 

conclusion. See United Techs., 626 F.3d at 322. That possibility could not co-exist with a 

wholesale acceptance of the Zacharetti analysis, the dollar-for-dollar premise of which would 

never lead to zero damages. 

Second, the government argues that Pratt forfeited any objection to the district court’s 

“factual finding” that GE Aircraft’s engines are not comparable. Appellee Supplemental Br. at 

2. Whether forfeited or not, the government adds, that finding is entitled to deference. See 

United States v. 2,635.04 Acres of Land, 336 F.2d 646, 649 (6th Cir. 1964). But the district court 

made no such finding. Nowhere did it compare the characteristics of the two engines. The court 

instead rejected GE Aircraft’s prices as a matter of law—a decision deserving no deference—
No. 13-4057 United States v. United Technologies Corp. Page 20

based on the limited number of players in the market, infrequent sales, and GE Aircraft’s costs of 

market entry, all legally irrelevant to comparability. United Techs., 950 F. Supp. 2d at 952; see 

VFB LLC v. Campbell Soup Co., 482 F.3d 624, 632 (3d Cir. 2007) (“[T]he proper method of 

valuation in a particular factual context is a legal question.” (emphasis omitted)). Pratt 

repeatedly argued in its opening brief that the district court erred by ignoring “conventional 

measures of value” such as “comparable sales.” See Appellant Br. at 3, 27–29, 39. And in its 

reply, Pratt properly responded to the government’s contention that GE Aircraft’s engines were 

insufficiently comparable. Compare Appellee Br. at 32, with Reply Br. at 17–19. No forfeiture 

occurred. 

Third, the government maintains that regulations promulgated under the Truth in 

Negotiations Act establish that cost plus a reasonable profit is the way prices necessarily work in 

this area. Zacheretti’s method thus honors this requirement better than a comparable-sales 

analysis, the argument goes, because it simply removes the overstatement. Not true. This 

argument overstates the force of the regulations. Pratt remained free to charge whatever it 

wanted. The Air Force did not conduct a “cost-plus” procurement for the engines, with prices set 

by Pratt’s eventual costs and a predetermined profit margin. “[N]o case or regulation” required 

any party to base prices on Pratt’s cost data. United States ex rel. Williams v. Martin-Baker 

Aircraft Co., 389 F.3d 1251, 1257 (D.C. Cir. 2004). Had this been a cost-plus-reasonable-profit 

contract, Pratt would have been required to submit new cost data for the outyears, but the Air 

Force never asked for it. The Truth in Negotiation Act’s disclosure requirements no doubt gave 

the government the upper hand in negotiations by providing a window into a contractor’s cost 

structure. Hence Pratt’s acknowledgment that its prices could be no higher than “expected cost, 

plus a reasonable profit.” R. 344 at 146–47; R. 397 at 4. But this merely prompts—it does not 

answer—the question of what profit margin the market could reasonably support, which requires 

looking at GE Aircraft’s comparable prices, among other things. And those prices internalize the 

regulations, as is true in every regulated market. A comparable sales approach hardly involves a 

fictional market free of regulation, as the government suggests. No case says otherwise. In 

United States v. Commodities Trading Corp., 339 U.S. 121 (1950), and United States v. 

Cartwright, 411 U.S. 546 (1973), the Supreme Court adopted prices directly set by regulation as 
No. 13-4057 United States v. United Technologies Corp. Page 21

the measure of value. No such regulations exist here. Prices turned on negotiation, and as such a 

comparison between GE Aircraft’s and Pratt’s prices was the place to start. 

Fourth, the government argues that GE Aircraft’s engine sales are not comparable 

because its prices too were tainted by Pratt’s fraud. The taint argument works only if the 

evidence shows that Pratt’s prices were inflated by fraud. That of course is the question that, 

after two rounds of appeals and counting, we are still trying to figure out. The answer begins 

with comparable sales, if not potentially other indicators of value as well: the government’s own 

price estimates at the time; prior sales by Pratt; and foreign resales of the engines. So far, the 

government has come up short with evidence that meets its burden of proof of showing that, after 

considering comparable sales (among other factors), it suffered any damages. 

Amen v. City of Dearborn, 718 F.2d 789 (6th Cir. 1983), says nothing to the contrary. 

We held that the City could not prove the value of a taking by using prices of comparable 

property that its own takings had depressed. Id. 799–800. That decision makes sense because 

the City’s actions unquestionably diminished the property’s inherent value. Put another way, the 

resulting sales were not truly “arms length” transactions, Welch v. Tenn. Valley Auth., 108 F.2d 

95, 101 (6th Cir. 1939), because the City’s actions were “designed to force residents . . . to sell 

their property to the City.” Amen, 718 F.2d at 795. Here, the impact of Pratt’s fraud on the 

prices of its jet engines is hardly self-evident—just ask the Armed Services Board—making it 

appropriate to consider comparable sales, here GE Aircraft’s prices, if not other factors as well. 

Fifth, the government argues that GE Aircraft had unique costs of market entry, and its 

engines were physically different from Pratt’s—making a comparable-sales analysis unhelpful. 

The notion that GE Aircraft’s market entry costs defeat comparability proves too much. Why 

then set prices based on competition, as the Air Force plainly did? “The proper test” of 

comparability “is the similarity in character” of the engines—and that similarity was the premise 

of the Air Force’s company-to-company competition. Knollman v. United States, 214 F.2d 106, 

109 (6th Cir. 1954). This unclothed assertion about GE Aircraft’s market entry costs at any rate 

may reveal less than one might expect. After all, GE Aircraft Engines was not a start-up making 

a debut in constructing jet engines, but rather had been producing engines (albeit different 

models) for years. 
No. 13-4057 United States v. United Technologies Corp. Page 22

The engines’ physical differences do not warrant ignoring GE Aircraft’s global prices 

either. The two engine models had differences, to be sure. Modifications to the F-15 would 

have been necessary to install the GE Aircraft engines. And the manufacturers’ engines had 

“different thrusts,” “airflows,” and “weights.” R. 330 at 149. But “comparable” in this context 

“does not mean identi[cal].” 103.38 Acres, 660 F.2d at 211 (quoting Fairfield Gardens, Inc. v. 

United States, 306 F.2d 167, 172–73 (9th Cir. 1962)). “Completely comparable sales are not 

likely to be found. Sales that have some different characteristics must be considered. . . . [The 

court] should not dismiss fairly comparable sales out of hand because of certain incomparable 

qualities.” Piney Woods Country Life Sch. v. Shell Oil Co., 726 F.2d 225, 239 (5th Cir. 1984) 

(footnote omitted). These differences do not make GE Aircraft’s sales irrelevant for purposes of 

calculating damages, as the Air Force has acknowledged from 1983 on. Before Congress, Col. 

Jim Nelson testified that Pratt’s and GE Aircraft’s engines have “essentially equal capabilities 

and either engine will satisfy system requirements.” R. 441-3 at 6. An internal Air Force memo 

likewise confirmed that “[b]oth engines are being developed and tested to the same basic 

requirements.” R. 446-5 at 2. And the 1984 source selection touted that “both [are] excellent 

engines and are fully acceptable for both the F-15 and F-16 aircraft. There are no overriding 

technical advantages to either engine in [terms of] overall capability.” R. 443-25 at 1. Most 

importantly, the Air Force’s direct comparison of the engine prices proves GE Aircraft’s sales 

were comparable. Otherwise, the comparison does not make sense. The proper approach was to 

start with GE Aircraft’s prices and make adjustments for any material differences between the 

engines. 

* * * 

What now? We are tempted to say that, after seventeen years of litigation about a fraud 

that occurred thirty-two years ago, the time has come to end this dispute. The government 

proved its case under the False Claims Act and will be $7 million richer as a result, as we 

established in the last appeal. After we remanded the case, the government had every 

opportunity to put on an expert to show whether competition affected its damages. It not only 

refused to do so, but it also successfully objected to Pratt’s own efforts to put on a pricing expert. 

On this record, there is something to be said for leaving it at that. The government had the 
No. 13-4057 United States v. United Technologies Corp. Page 23

burden of proving damages, and it never did. At the same time, we are a court of review, not 

first view. See 28 U.S.C. § 1291. The district court presided over the remand litigation, and it is 

in the best position to decide in the first instance whether the government should have another 

opportunity to prove that it suffered damages even after accounting for the role of competition in 

setting prices for Pratt’s engines. 

For these reasons, we reverse the district court’s judgment and remand the case for 

further proceedings consistent with this opinion.