FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN HENDRIX, Relator; ex rel. 

United States of America, 

Plaintiff-Appellant, 

STATE OF NEVADA, 

Plaintiff-Appellant, 

THE COMMONWEALTH OF 

VIRGINIA, 

Plaintiff-Appellant, 

CALLEGUAS MUNICIPAL WATER 

DISTRICT; PALMDALE WATER 

DISTRICT; SOUTH TAHOE 

PUBLIC UTILITY DISTRICT, 

Intervenor-PlaintiffsAppellants, 

and 

UNITED STATES OF AMERICA, 

Plaintiff, 

No. 21-56276 

D.C. No. 

5:06-cv-00055-

GW-PJW 

OPINION
2 HENDRIX V. J-M MANUFACTURING CO., INC.

STATE OF CALIFORNIA, 

Plaintiff, 

STATE OF DELAWARE; STATE OF 

FLORIDA; STATE OF TENNESSEE; 

COMMONWEALTH OF 

MASSACHUSETTS, 

Plaintiffs, 

 v. 

J-M MANUFACTURING 

COMPANY, INC., DBA JM Eagle, 

Defendant-Appellee, 

and 

FORMOSA PLASTICS 

CORPORATION, U.S.A., a Delaware 

corporation, 

Defendant.

JOHN HENDRIX, Relator; ex rel. 

United States of America; THE 

COMMONWEALTH OF VIRGINIA; 

STATE OF NEVADA, 

No. 21-56288 

D.C. No. 

5:06-cv-00055-

GW-PJW 
HENDRIX V. J-M MANUFACTURING CO., INC. 3

Plaintiffs-Appellees, 

CALLEGUAS MUNICIPAL WATER 

DISTRICT; PALMDALE WATER 

DISTRICT; SOUTH TAHOE 

PUBLIC UTILITY DISTRICT, 

Intervenor-PlaintiffsAppellees, 

and 

UNITED STATES OF AMERICA; 

STATE OF CALIFORNIA; STATE 

OF DELAWARE; STATE OF 

FLORIDA; STATE OF TENNESSEE; 

COMMONWEALTH OF 

MASSACHUSETTS, 

Plaintiffs, 

 v. 

J-M MANUFACTURING 

COMPANY, INC., DBA JM Eagle, 

Defendant-Appellant, 

and 

FORMOSA PLASTICS 

CORPORATION, U.S.A., a Delaware 

corporation, 

Defendant.
4 HENDRIX V. J-M MANUFACTURING CO., INC.

Appeal from the United States District Court

for the Central District of California

George H. Wu, District Judge, Presiding

Argued and Submitted June 20, 2023

Seattle, Washington

Filed August 8, 2023

Before: Diarmuid F. O’Scannlain, Andrew D. Hurwitz, 

and Bridget S. Bade, Circuit Judges.

Opinion by Judge Hurwitz

SUMMARY*

False Claims Act

The panel affirmed the district court’s judgment after a 

bifurcated jury trial in a qui tam action brought under the 

federal False Claims Act and various state False Claims Acts 

by relator John Hendrix and five public-agency exemplar 

plaintiffs against J-M Manufacturing Co.

Relator and plaintiffs alleged that J-M violated the False 

Claims Acts by representing that its polyvinyl chloride pipes 

were compliant with industry standards. In Phase One of the 

bifurcated trial, the jury found that J-M knowingly made 

* This summary constitutes no part of the opinion of the court. It has 

been prepared by court staff for the convenience of the reader.
HENDRIX V. J-M MANUFACTURING CO., INC. 5

false claims that were material to the public agencies’ 

decisions to purchase J-M pipe for use in water and sewer 

systems, and thus violated the False Claims Acts. After the 

jury was unable to reach a verdict in Phase Two, the district 

court granted J-M judgment as a matter of law on actual

damages and awarded one statutory penalty for each of the 

twenty-six projects at issue.

The panel held that sufficient evidence of falsity, 

materiality, and scienter supported the Phase One verdict. A 

reasonable jury could conclude that plaintiffs received some 

pipe not meeting industry standards. Further, the jury 

reasonably found that plaintiffs would not have purchased or 

installed J-M pipe had they been told the truth that J-M knew 

it had stopped producing pipes through processes materially 

similar to those used at the time of compliance testing and 

also knew that a significant amount of the pipe later 

produced did not meet industry standards. Plaintiffs’ failure 

to prove that any individual stick of pipe that they received 

was non-compliant did not mean that they failed to establish 

scienter.

As to statutory penalties, plaintiffs conceded that the 

California False Claims Act allows only one penalty per 

project. The panel held that the district court also properly 

awarded only one penalty per project under the Nevada and 

Virginia

False Claims Acts, which, like the federal Act, impose a 

penalty for each act in violation of the statute. The panel 

concluded that the Phase One jury’s finding of falsity and 

materiality did not mean that every stick of pipe was noncompliant, and plaintiffs therefore did not establish that the 

stamp on each piece of pipe indicating compliance should 

give rise to a separate penalty.
6 HENDRIX V. J-M MANUFACTURING CO., INC.

The panel held that the district court properly awarded JM judgment as a matter of law on actual damages under the 

federal False Claims Act. Plaintiffs did not establish actual 

damages by showing that they would not have bought the 

pipe had they known the truth. Further, plaintiffs’ pipe had 

not failed to operate as promised, and there was no evidence 

that an actual failure was imminent or even likely. Even if 

the testimony of plaintiffs’ experts were credited, the experts 

did not provide evidence from which a jury could reasonably 

determine the value of the pipe they received. And there was 

no evidence that noncompliance with industry standards 

calculably correlated to a loss of longevity.

COUNSEL

Eric R. Havian (argued), Constantine Cannon LLP, San 

Francisco, California; Kirk D. Dillman, McKool Smith 

Hennigan PC, Los Angeles, California; Elizabeth J. Sher, 

Day Pitney LLP, Parsippany, New Jersey; for PlaintiffsAppellants John Hendrix and Commonwealth of Virginia 

and Intervenor-Plaintiffs-Appellants Calleguas Municipal 

Water District, Palmdale Water District, and South Tahoe 

Public Utility District.

Susan K. Stewart, Deputy Attorney General, Attorney 

General’s Office, Carson City, Nevada, for PlaintiffAppellant State of Nevada.

Paul D. Clement (argued) and Evelyn Blacklock, Clement & 

Murphy PLLC, Alexandria, Virginia; David Bernick, 

George W. Hicks, Jr., C. Harker Rhodes IV, and Mariel A. 

Brookins, Kirkland & Ellis LLP, Washington, D.C.; Paul 

Chan, Marc Masters, Ekwan E. Rhow, Shoshana E. Bannett,
HENDRIX V. J-M MANUFACTURING CO., INC. 7

Bird Marella Boxer Wolpert Nessim Drooks Lincenberg & 

Rhow PC, Los Angeles, California; for Defendant-Appellee 

J-M Manufacturing Company Inc.

David Barrett, Assistant United States Attorney, United 

States Department of Justice, Los Angeles, California, for 

Plaintiff United States of America.

OPINION

HURWITZ, Circuit Judge:

In this qui tam action, relator John Hendrix and five 

public-agency exemplar plaintiffs claim that J-M 

Manufacturing Co. (“J-M”) violated the federal and various 

state False Claims Acts (“FCAs”) by representing that its 

polyvinyl chloride (“PVC”) pipes were compliant with 

industry standards. In Phase One of a bifurcated trial, a jury 

found that J-M knowingly made false claims that were 

material to the public agencies’ decisions to purchase J-M 

pipe. After the jury was unable to reach a verdict in Phase 

Two, the district court granted J-M judgment as a matter of 

law (“JMOL”) on actual damages and awarded one statutory 

penalty for each project involved in plaintiffs’ claims. Both 

sides now appeal, and we affirm.

BACKGROUND

J-M manufactures and sells PVC pipes used in water and 

sewer systems. The plaintiffs bought and installed J-M PVC 

pipe between 1996 and 2006.

Three industry standards for PVC pipe are central to this 

case: American Water Work Association (“AWWA”) C900 
8 HENDRIX V. J-M MANUFACTURING CO., INC.

and C905 and Underwriters Laboratories (“UL”) 1285. The 

bid specifications issued by the plaintiffs for their water and 

sewer projects required use of PVC pipe compliant with 

AWWA C900, AWWA C905, or UL 1285.

1 The successful 

bids indicated that J-M pipe complying with those standards 

would be used.

J-M’s brochures during the relevant period, some of 

which were attached to the successful bids, claimed that its 

PVC pipe “MEETS AWWA C900; UNDERWRITERS 

LABORATORIES” and “MEETS ACCEPTED 

STANDARDS: AWWA C905; Underwriters Laboratories.” 

J-M placed a stamp with an industry standard on each stick 

of its pipe (e.g., “C900”). The exemplar plaintiffs presented 

testimony that their representatives checked each stick of 

pipe before installation and would have rejected any pipe 

without such a stamp.

The AWWA and UL standards allow a manufacturer to 

test its PVC pipe to determine compliance. If the pipe meets 

the standards, the manufacturer can assert compliance and 

can continue to do so for pipe later produced through

materially unchanged processes without further testing.

AWWA C900 and C905 require hydrostatic design basis 

(“HDB”) testing on pipe compound samples to measure 

performance under high pressure for 10,000 hours; the 

results are used to extrapolate the compound’s long-term 

hydrostatic strength at 100,000 hours. The HDB test result 

provides “the estimated long-term strength of a plastic pipe 

material” based on a linear regression using individual data 

points from another test. That result is multiplied by one of 

1 A City of Calleguas project required either UL 1285–compliant or 

“Factory Mutual Approved” pipe.
HENDRIX V. J-M MANUFACTURING CO., INC. 9

two design factors “so that the hydrostatic design stress 

obtained provides a service of life for an indefinite period 

beyond the actual test period.” AWWA C900 and C905 also 

require that samples undergo quick burst (“QB”) testing to 

determine whether they can sustain a pressure of 6,400 psi 

before bursting. UL 1285 requires a longitudinal tensile 

strength (“LTS”) test, which involves pulling on the ends of 

a pipe specimen until failure.

At trial, plaintiffs provided evidence that J-M 

(1) continued to assert compliance for its PVC pipe after 

changing its manufacturing process and (2) knew that its

pipe no longer satisfied the three standards. For example, JM’s research and development chief, William Fassler, had 

reported in 2006 that “[i]n recent years, the HDB test success 

rate is below 50%” for J-M pipe. Fassler also noted in a 2003 

internal email that the processing of the pipe “has changed 

dramatically” since it passed UL certification in 1992. J-M’s 

former head of quality assurance, K.C. Yang, had informed 

management since 1998 that much of the PVC pipe 

produced by J-M was not capable of passing the UL 1285 

test. He was told, “[D]on’t worry about it, and don’t tell 

UL.” J-M conducted UL 1285 testing at all its PVC plants 

in 2006 and found that “pipe at all facilities is [now] below 

the desired level” necessary to pass UL requirements.

PROCEDURAL HISTORY

I. Pre-Trial Proceedings and Trial Bifurcation

Relator John Hendrix filed this action in 2006, alleging 

violations of the federal FCA, 31 U.S.C. § 3729, and 

multiple state FCAs. Numerous states and municipalities 

subsequently intervened as plaintiffs.
10 HENDRIX V. J-M MANUFACTURING CO., INC.

The federal FCA provides the government a right of 

action against anyone who “knowingly presents, or causes to 

be presented, a false or fraudulent claim for payment or 

approval” to the government. 31 U.S.C. § 3729(a)(1)(A). 

The statute allows a civil penalty up to $10,000 for each 

violation and an award of “3 times the amount of damages 

which the Government sustains because of the” false claim. 

Id. § 3729(a)(1). “A claim under the FCA requires a 

showing of: (1) a false statement or fraudulent course of 

conduct, (2) made with scienter, (3) that was material, 

causing (4) the government to pay out money or forfeit 

moneys due.” Godecke v. Kinetic Concepts, Inc., 937 F.3d 

1201, 1208 (9th Cir. 2019) (cleaned up).

Plaintiffs designated the State of Nevada by the City of 

Reno, the commonwealth of Virginia by the City of Norfolk, 

the Calleguas Municipal Water District, the City of 

Palmdale, and South Tahoe Public Utility District as 

exemplar plaintiffs. Their claims arise under the Nevada 

False Claims Act, Nev. Rev. Stat. § 357.040 (2007); the 

Virginia Fraud Against Taxpayers Act, Va. Code Ann. 

§ 8.01-216.3 (2007); and the California False Claims Act, 

Cal. Gov’t Code § 12651 (West 2007). The courts in those 

states treat federal FCA cases as precedential because their 

statutes are modeled after the federal law. See, e.g., 

Simonian v. Univ. & Cmty. College Sys. of Nev., 128 P.3d 

1057, 1060 (Nev. 2006); Lewis v. City of Alexandria, 756 

S.E.2d 465, 479 n.4 (Va. 2014); City of Pomona v. Superior 

Court, 107 Cal. Rptr. 2d 710, 716 (Ct. App. 2001). We do 

the same.

The district court bifurcated the trial, with the first phase 

addressing falsity, materiality, and scienter—in short, 

whether J-M violated the FCAs—and the second addressing 

whether the plaintiffs suffered any damages as a result. In
HENDRIX V. J-M MANUFACTURING CO., INC. 11

describing the Phase One issues, the bifurcation order stated 

that plaintiffs had alleged that J-M had represented that “all

(not just some) J-M pipe satisfied . . . the various standards” 

and that “all (not just some) of the pipe was manufactured in 

a substantially identical manner to the pipe that was 

originally determined to comply with the standards,” but that 

J-M “manufactured or tested its pipe in a manner that did not 

comply with the foregoing industry standards,” resulting in 

plaintiffs having “no assurance that the pipe was made and 

tested in the manner represented.”

J-M moved for summary judgment before Phase One, 

arguing that plaintiffs had no evidence that any individual 

stick of pipe they received did not comply with industry 

standards. The district court denied the motion because 

plaintiffs “adduced evidence that, if believed, a rational trier 

of fact could take to indicate that J-M’s practices essentially 

systematically ran afoul of manufacturing and testing 

requirements.”

II. Phase One

After a seven-week Phase One trial, the jury returned a 

unanimous verdict against J-M. For each of the twenty-six 

projects at issue, the jury was asked: (1) whether J-M 

presented or caused to be presented “a claim for payment or 

approval that was false or fraudulent”; (2) whether J-M 

“made or used a false record or statement in order to get a 

false or fraudulent claim paid or approved by” the plaintiff; 

(3) whether J-M acted “‘knowingly’ in regards to the false 

or fraudulent claim”; (4) whether “the false or fraudulent 

aspect of the claim” was “material to [the plaintiff’s] 

decision-making”; and (5) to “identify/describe why the 

claim was false and/or fraudulent.” The jury answered “yes” 

to the first four questions for each project and described each 
12 HENDRIX V. J-M MANUFACTURING CO., INC.

claim as false because “JM falsely represented uniform 

compliance with AWWA [C900 and C905] and UL 1285.”

J-M moved for JMOL, again arguing that there was no 

evidence that any plaintiff “actually received pipe that 

violated any of [the] standards.”2 The district court denied 

the motion.

III. Phase Two Trial

Before the Phase Two trial, the district court clarified 

that “the Phase One jury found a lack of a compliance based 

on manufacturing and testing shortcomings. The Phase Two 

jury will be charged with determining what effect, if any, this 

lack of compliance had on Plaintiffs apart from influencing 

their decision to buy the pipe in the first place.” The court 

stated that (1) “the Phase One jury determined that [J-M’s] 

piping did not uniformly comply with certain industry 

standards,” (2) J-M’s “representations to that effect were 

false,” and (3) its “misrepresenting compliance with the 

standards was material.” The court stressed, however, that 

“the Phase One jury did not make factual findings as to the 

physical state of the pipe purchased by Plaintiffs, such as 

reduced life span.”

During the Phase Two trial, plaintiffs “attempted to 

establish that the value of the pipe they received from J-M 

during the 1996-2006 period was worth less than what they 

2 Although plaintiffs proffered evidence about various J-M pipe failures

during Phase One, the district court only allowed evidence of a single 

incident in Reno, and plaintiffs do not challenge the court’s exclusion of 

evidence about other failures on appeal. The Reno failure occurred 

immediately after installation during a pressure test of the line. J-M 

offered evidence that the contractor improperly performed postinstallation testing. J-M replaced the entire line of pipe at no cost to 

Reno, and there have been no failures since.
HENDRIX V. J-M MANUFACTURING CO., INC. 13

paid for it because it would not last as long as pipe that was 

compliant with the three standards litigated in the Phase One 

trial.” Because the Phase One jury found “that Plaintiffs 

would not have bought pipe from J-M had they known that 

statements of compliance were false,” plaintiffs also argued 

that they were entitled to recover either the entire “contract 

price” or the “total cost of replacing the offending pipe with 

compliant pipe.” Plaintiffs also sought statutory penalties 

for the stamps on each individual stick of pipe.

To show actual damages, plaintiffs offered expert 

testimony attempting to connect the industry standards with 

expected longevity of PVC pipe. Although plaintiffs’

experts opined generally that the relevant test results “bear a 

relationship to long-term strength and durability,” and that 

any “sort of significant change in the . . . short-term 

mechanical and strength properties is typically going to also 

result in a change in the long-term strength,” none could 

opine about “specific longevity in terms of years of a 

particular pipe,” present a mathematical correlation between 

these tests and longevity, or estimate a failure date for noncompliant pipe.

After the close of evidence, the district court found that 

plaintiffs were not entitled to recover the costs of removing 

and replacing the installed J-M pipes. The court also held 

that the “stamping of each pipe with a C900/C905 mark 

cannot serve as a basis to impose [ ] civil penalties” for each 

stick of pipe under Nevada and Virginia law. The jury was 

unable to reach a verdict on damages, and a mistrial was 

declared.
14 HENDRIX V. J-M MANUFACTURING CO., INC.

IV. Judgment as a Matter of Law

After the mistrial, the district court granted J-M JMOL 

on actual damages. It also granted J-M’s renewed Daubert

motions to strike the opinions of plaintiffs’ experts.

3

The JMOL order rejected plaintiffs’ contention that they 

were entitled to the full purchase price of the pipe because 

that would “impose a strict liability standard for FCA actual 

damages which would mean that, in every case, the losing 

defendant would always be obligated to refund the contract 

price regardless of any evidence of actual damages.” Rather, 

quoting United States v. Science Applications International 

Corp., 626 F.3d 1257, 1279 (D.C. Cir. 2010), the court said

that the full purchase price is the measure of damages “only 

where the government proves that it received no value from 

the product delivered.” The court rejected the contention 

that the received pipe was “valueless,” finding no evidence 

“that [plaintiffs] have removed or contracted for the 

replacement of all (or any portion) of the J-M pipe in the 

ground; and it is undisputed that they have not ceased the use 

of that pipe and thereby have obtained, retained (for many 

years), and continue to receive value from it.”

The court also rejected plaintiffs’ argument that noncompliant pipe was less valuable than compliant pipe 

because it would “fail early,” noting that plaintiffs failed to 

establish a “usable longevity figure” for either compliant 

pipe or non-compliant pipe. The court also noted the 

absence of industry consensus on how long PVC pipe is 

expected to last and concluded that compliance with the 

3 J-M’s pre-trial challenges under Daubert v. Merrell Dow 

Pharmaceuticals, Inc., 509 U.S. 579 (1993), to the proposed expert 

testimony were denied.
HENDRIX V. J-M MANUFACTURING CO., INC. 15

AWWA and UL standards does not “result in any specific 

longevity figures for the compliant PVC pipe.” The court 

held that, even if their testimony were credited, plaintiffs’ 

experts “still failed to proffer sufficient evidence” to show a 

measurable reduction in pipe longevity. Absent evidence to 

“show the difference in terms of longevity between 

compliant PVC pipe and non-compliant PVC pipe,” the

court saw “no way for a reasonable jury to reach an amount 

for actual damages in this case.”

But the court also struck the expert testimony concerning 

longevity, focusing on the four Daubert factors concerning 

the reliability of a methodology: (1) “whether it can be (and 

has been) tested”; (2) “whether the theory or technique has 

been subjected to peer review and publication”; (3) “the 

known or potential rate of error and the existence and 

maintenance of standards controlling the technique’s 

operation”; and (4) “general acceptance,” noting that “a 

known technique which has been able to attract only 

minimal support within the community may properly be 

viewed with skepticism.” Daubert, 509 U.S. at 593–94 

(cleaned up).

JURISDICTION AND STANDARD OF REVIEW

The district court had jurisdiction over the federal claims 

in the operative fifth amended complaint under 28 U.S.C. 

§ 1331 and over the state claims under 31 U.S.C. § 3732(b). 

The district court’s final judgment was timely appealed by 

plaintiffs, and cross-appealed by J-M. We have jurisdiction 

under 28 U.S.C. § 1291. We “review de novo the granting 

of a motion for JMOL” and “must review all of the evidence 

in the record, drawing all reasonable inferences in favor of 

the non-moving party.” City Sols. Inc. v. Clear Channel 

Commc’ns, Inc., 365 F.3d 835, 839 (9th Cir. 2004).
16 HENDRIX V. J-M MANUFACTURING CO., INC.

DISCUSSION

I. Phase One Verdict

J-M argues that the Phase One verdict cannot stand 

because plaintiffs failed to show that any individual stick of 

pipe that they received did not comply with industry 

standards. J-M also asserts that the industry standards do not 

require “that all J-M pipe had to be exactly the same as the 

pipe material submitted for testing” and that it was “not 

uncommon” for some certified pipe manufactured after 

initial testing to fail to meet industry standards.

The district court correctly rejected these arguments. As 

an initial matter, given the evidence that J-M’s success rate 

on the HDB test for AWWA certification was below 50% 

and that by 2006, none of its facilities was producing pipe 

that met UL standards, a reasonable jury could surely 

conclude that plaintiffs received some pipe not meeting 

industry standards.

But more importantly, J-M misconstrues plaintiffs’ 

claim. It is not that J-M occasionally produced pipe that was 

not “exactly the same” as the pipe originally tested. Rather, 

plaintiffs assert that J-M knew that it had stopped producing 

pipes through processes materially similar to those used at 

the time of compliance testing—something required by 

industry standards to claim continued compliance—and also 

knew that a significant amount of the pipe later produced did 

not in fact meet industry standards. And they contend that 

they would not have purchased or installed J-M pipe had 

they been told the truth. Plaintiffs’ representatives so 

testified, and the Phase One jury reasonably so found.

J-M’s argument about scienter is similar: because 

plaintiffs could not prove that any individual stick of pipe 
HENDRIX V. J-M MANUFACTURING CO., INC. 17

that they received was non-compliant, they also cannot show 

that J-M knowingly lied. J-M also argues that because the 

industry standards do not forbid “occasional noncompliance,” its claims of compliance therefore could not 

have been knowingly false.

These arguments fail for the same reason as J-M’s 

contentions about falsity. The industry standards do not 

require that every stick of pipe be tested to ensure 

compliance, but they do require manufacturers to continue 

producing product with materially similar processes as those 

used when the pipe was first certified before claiming 

continued compliance. There was ample evidence not only 

that J-M knew that its processes had materially changed but 

also that its pipe could no longer pass the tests.

II. Statutory Penalties

For each violation of the state FCAs, the district court 

was authorized to impose a statutory penalty. See Nev. Rev. 

Stat. § 357.040(2) (2007); Va. Code Ann. § 8.01-216.3(A) 

(2007); Cal. Gov’t Code § 12651(a) (West 2007). The 

district court awarded one penalty for each of the twenty-six 

projects at issue. Plaintiffs concede that the California FCA 

allows only one penalty per project. Cal. Gov’t Code 

§ 12651(a) (West 2007). But they argue that because the 

Nevada and Virginia FCAs—like the federal FCA, 31 

U.S.C. § 3729(a)(1)—impose a penalty for each act in 

violation of the statute, see Nev. Rev. Stat. § 357.040(2) 

(2007); Va. Code Ann. § 8.01-216.3(A) (2007), the stamp on 

each piece of pipe indicating compliance should give rise to 

a separate penalty. Plaintiffs also argue that because the 

Phase One jury found that J-M made false statements in its 

brochures and those statements were materially identical to 
18 HENDRIX V. J-M MANUFACTURING CO., INC.

the stamps, it necessarily found that each of the stamps were 

false.

The district court did not err in awarding only one 

penalty per project. The Phase One jury’s finding of falsity 

and materiality did not mean that every stick of pipe was 

non-compliant. That jury found only that J-M did not 

uniformly comply with industry standards and could have 

delivered some non-compliant pipe. Plaintiffs did not 

establish how much non-compliant pipe they received nor 

were they able to identify any specific piece of noncompliant pipe.

The Supreme Court has held that collusive bidding on 

fifty-six projects gave rise to only fifty-six FCA penalties, 

not one “for every form submitted by respondents in the 

course of their enterprise.” United States ex rel. Marcus v. 

Hess, 317 U.S. 537, 552 (1943), superseded by statute on 

other grounds, Act of Dec. 23, 1943, 57 Stat. 609. Our cases 

are in accord. See United States v. Woodbury, 359 F.2d 370, 

378 (9th Cir. 1966) (holding that documents attached to 

applications for funds do not give rise to separate penalties); 

United States v. Nat’l Wholesalers, 236 F.2d 944, 950 (9th 

Cir. 1956) (holding that when seventeen invoices were 

attached to ten vouchers for payment, “the number of claims 

should be computed on the number of vouchers rather than 

the number of invoices”).4 Similarly, when determining 

4 Numerous out-of-Circuit cases are to the same effect. See, e.g., United 

States v. Grannis, 172 F.2d 507, 515–16 (4th Cir. 1949) (holding that 

only the “ten vouchers covering the fictitious claims” constituted 

violations and not the 130 schedules attached to the vouchers); United 

States v. Rohleder, 157 F.2d 126, 127, 130–31 (3d Cir. 1946) (holding 

that a penalty was appropriate for the fraud associated with respect to 

each of sixteen contracts but not for each of the ninety purchase orders 

submitted with the contracts); Miller v. United States, 550 F.2d 17, 23–
HENDRIX V. J-M MANUFACTURING CO., INC. 19

penalties for false claims associated with goods, courts 

applying the federal FCA have awarded penalties based on 

the number of contracts or invoices but not on each good. 

See, e.g., United States v. Bornstein, 423 U.S. 303, 311–13 

(1976) (awarding three penalties for three separately 

invoiced shipments rather than a penalty for each falsely 

marked tube); see also United States v. Aerodex, Inc., 469 

F.2d 1003, 1011 (5th Cir. 1972) (awarding a penalty for each 

of three invoices but not for each of the mislabeled bearings). 

The district court thus did not err in declining to award a 

statutory penalty for the stamp on each piece of pipe.5

24 (Ct. Cl. 1977) (agreeing with the Ninth Circuit’s decision in 

Woodbury); BMY—Combat Sys. Div. of Harsco Corp. v. United States, 

44 Fed. Cl. 141, 150 & n.4 (1998) (holding that “false records in support 

of [ ] false claims. . . do not equate to separate penalties when the records 

and the claim support the same false demand for money” (cleaned up)).

5 It has long been settled that a statutory penalty may be imposed for 

violation of the federal FCA even absent proof of actual damages. See, 

e.g., Rex Trailer Co. v. United States, 350 U.S. 148, 152–53 (1956) 

(citing United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943)); BlyMagee v. California, 236 F.3d 1014, 1017 (9th Cir. 2001) (“[A] qui tam 

plaintiff need not prove that the federal government will suffer monetary 

harm to state a claim under the FCA.”); United States ex rel. Hagood v. 

Sonoma Cnty. Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991) (“No 

damages need be shown in order to recover the penalty.”); see also

Rohleder, 157 F.2d at 127 (affirming the award of penalties where “[t]he 

government offered no evidence of actual damage at the trial and sought 

only to recover the statutory forfeitures”).

FCA plaintiffs who cannot prove actual damages do not lack 

Article III standing under the rule in TransUnion LLC. v. Ramirez, 141 

S. Ct. 2190 (2021). The common law provides a cause of action for fraud 

to the target of a material misrepresentation made with scienter. There 

is an obvious close relationship between a FCA cause of action and 

common law fraud. See id. at 2208; see also Vt. Agency of Nat. Res. v. 

United States ex rel. Stevens, 529 U.S. 765, 781 n.10 (2000) (noting “that 
20 HENDRIX V. J-M MANUFACTURING CO., INC.

III. Actual Damages

The federal FCA imposes not only penalties but also

liability for “the amount of damages which the Government 

sustains because of the” false claim. 31 U.S.C. § 3729(a)(1). 

FCA plaintiffs must “prove all essential elements of the 

cause of action, including damages, by a preponderance of 

the evidence.” 31 U.S.C. § 3731(d). The proper measure of 

damages when a “defendant agreed to provide goods or 

services to the government, . . . is the difference between the 

value of the goods or services actually provided by the 

contractor and the value the goods or services would have 

had to the government had they been delivered as promised.” 

Sci. Applications Int’l Corp., 626 F.3d at 1278.

A.

Plaintiffs contend that because they would not have 

bought the pipe had they known the truth, their damages are

the “entire amount paid.” The district court correctly 

rejected this theory because it would “impose a strict liability 

standard” under which J-M would “be obligated to refund 

the contract price regardless of any evidence of actual 

damages” and because it conflates “the materiality element 

of the FCA claim” with “actual damages.”

Plaintiffs also argue that they “bargained for the 

confidence that comes from compliance with industry 

standards; they did not receive it, and so they did not receive 

what they bargained for at all.” But in the cases that they 

cite, the goods were either plainly unusable, not used, or 

returned.

the FCA was intended to cover all types of fraud” (emphasis omitted)). 

And, both the common law and statutory actions are designed to address 

the same injury: reliance on an intentional, material misrepresentation.
HENDRIX V. J-M MANUFACTURING CO., INC. 21

United States ex rel. Compton v. Midwest Specialties, 

Inc., 142 F.3d 296 (6th Cir. 1998), involved a contract 

between Midwest and the U.S. Army for jeep brake-shoe kits 

that had undergone specified quality-assurance testing, 

which Midwest failed to conduct. Id. at 297–98. When the 

brakes failed, the Army tested a sample of the kits and found 

that 78% and 60% of the brake shoes failed the contractedfor quality-assurance tests. Id. at 298. In response, the Army 

removed all Midwest brake shoes from its jeeps. Id. The 

court awarded the full contract price as damages, finding that 

the “the brake shoe kits delivered . . . were completely 

valueless” and stressing that “all Midwest-manufactured 

jeep brake shoes were taken out of service and placed in 

storage.” Id. at 304.

In United States v. Aerodex, Inc., 469 F.2d 1003 (5th Cir. 

1972), the Fifth Circuit held that the proper measure of 

damages was the full contract price, $27,000, when Aerodex 

contracted to sell one type of bearing, P/N 171815, to the 

Navy and instead delivered an interchangeable bearing, 

which it had reworked to be indistinguishable from the P/N 

171815. Id. at 1007, 1011. Upon learning about the deceit, 

the Navy removed and replaced the installed bearings. Id. at 

1006.6

Here, plaintiffs’ pipe has not failed to operate as 

promised, and there is no evidence that an actual failure is 

6 Similarly, in FTC v. Figgie International, Inc., 994 F.2d 595 (9th Cir. 

1993) (per curiam), a case brought under the Federal Trade Commission 

Act, the Court held that consumers could either keep the products at issue 

or “return[ ] them for refunds.” Id. at 606.
22 HENDRIX V. J-M MANUFACTURING CO., INC.

imminent or even likely.7 Nor has the pipe been returned; 

indeed, it remains in use today.

Plaintiffs also cite United States v. Mackby, 339 F.3d 

1013 (9th Cir. 2003), to argue that when the evidence shows 

that the defendant lied about a fact that would have 

prevented the government from paying for a product or 

service had it known the truth, the damages include the entire 

amount paid even if the defendant provided a valuable 

product or service. See id. at 1018–19. But that case is easily 

distinguished. In Mackby, a layperson who ran a physical 

therapy clinic used his father’s Medicare personal 

identification number to charge the government for services. 

Id. at 1015. However, Medicare can pay for physical therapy 

only if provided by a certified therapist. Id. at 1014 (citing 

42 C.F.R. § 410.60(a) (1996)). Because Mackby lacked 

such certification, the United States was legally barred from

paying anything for his service. Id. at 1017.8 In contrast, 

plaintiffs were not legally constrained from paying for noncompliant pipe.

B.

Plaintiffs also contend that the pipe they received had no 

value, or indeed a “negative value,” because “the risk of 

7 Although Reno experienced a failure immediately after installation, it 

occurred during testing—not during normal operation—and the pipe was 

replaced. See supra n.2.

8 The same is true for the other Medicare cases plaintiffs cite. See Yates 

v. Pinellas Hematology & Oncology, P.A., 21 F.4th 1288, 1295 (11th 

Cir. 2021); United States ex rel. Drakeford v. Tuomey, 792 F.3d 364, 

370–71 (4th Cir. 2015); United States v. Rogan, 517 F.3d 449, 451–53 

(7th Cir. 2008).
HENDRIX V. J-M MANUFACTURING CO., INC. 23

premature pipe failure and the cost of replacement dwarfed 

any value obtained through some period of use of that pipe.”

In general, a “jury may make a just and reasonable 

estimate of the damage based on relevant data” and is 

“allowed to act on probable and inferential as well as (upon) 

direct and positive proof.” Bigelow v. RKO Radio Pictures, 

Inc., 327 U.S. 251, 264 (1946) (cleaned up). However, “the 

jury may not render a verdict based on speculation or 

guesswork,” “even where the defendant by his own wrong 

has prevented a more precise computation.” Id. And, 

although FCA damages “need not be calculated by 

mathematical precision,” United States v. Killough, 848 F.2d 

1523, 1531 (11th Cir. 1988), FCA plaintiffs must still 

present some evidence to establish the difference in value 

between the goods as actually provided and as promised, see

Sci. Applications Int’l Corp., 626 F.3d at 1278. See also

United States v. Collyer Insulated Wire Co., 94 F. Supp. 493,

498–99 (D.R.I. 1950) (awarding only statutory damages 

when the rate of non-compliance was established for less 

than one-third of the contracted-for wire, none of the wire 

was returned, and there were no complaints as to its quality).

Even if the testimony of their experts is credited,

plaintiffs did not provide evidence from which a jury could 

reasonably determine the value of the pipe that they 

received. The district court correctly noted that the pipe 

clearly had value because plaintiffs have received years, if 

not decades, of use from it. And to establish damages based 

on a “risk of premature pipe failure,” plaintiffs were required 

to provide at least an approximation of how much noncompliant pipe was received, whether that pipe was in fact 

inferior in longevity to compliant pipe, and some measure of 

its longevity. They failed to do so.
24 HENDRIX V. J-M MANUFACTURING CO., INC.

Nor do any of the plaintiffs’ contracts have a 

specification about longevity. The AWWA and UL 

standards do not contain any estimate of longevity, and the 

certification tests are not intended to measure long-term 

performance. Plaintiffs assumed that there was an industry 

expectation that PVC pipe will last at least 100 years, 

although they also presented estimates of 50 and 150 years. 

But J-M’s express warranty for its pipe was one year, the 

industry standard at the time. And PVC pipes have only 

been used in civic water systems since the 1950s, and 

industry standards were not developed until the 1960s, so no 

PVC pipes—compliant or not—have yet been in use for 100 

years. More importantly, as the district court noted, 

plaintiffs’ experts “merely assume [100 years] for purposes 

of this litigation.”

Even accepting 100 years as the expected longevity of 

compliant pipe, there was no evidence that noncompliance 

with industry standards calculably correlated to a loss of 

longevity. Plaintiffs’ experts conducted no experiments or 

studies to ascertain the relationship between the standards 

and longevity, nor could they point to studies or reports by 

others. Nor did they articulate any damages figure arising 

from non-compliance with the three standards at issue.

In any event, plaintiffs do not challenge on appeal the 

district court’s eventual Daubert ruling excluding their 

experts’ opinions. Absent that testimony, there was no basis 

at all for a finding as to decreased longevity.

C.

Plaintiffs are also not entitled to seek recovery for the 

cost of replacing all their J-M pipe. We need not today 

resolve the parties’ debate about whether replacement costs 
HENDRIX V. J-M MANUFACTURING CO., INC. 25

are recoverable under the FCA.

9 Plaintiffs have not replaced 

any pipe nor provided sufficient evidence that any of the pipe 

that they received will not last as long as compliant pipe, so 

no matter how replacement costs are categorized, the district 

court was correct not to award them.

D.

We also reject plaintiffs’ argument that the district 

court’s JMOL on actual damages conflicts with the Phase 

One jury’s findings. As the district court correctly noted, 

“the Phase One jury did not make factual findings as to the 

physical state of the pipe purchased by Plaintiffs, such as 

reduced life span.”

CONCLUSION

The district court did not err in finding that J-M violated 

the relevant state FCAs and in awarding only one statutory 

penalty for each project at issue. We therefore AFFIRM.

9 Compare Bornstein, 423 U.S. at 313–14 (permitting recovery for “the 

per unit cost to replace” the misrepresented good), with Cook County v. 

United States ex rel. Chandler, 538 U.S. 119, 131 & n.9 (2003) (noting 

that the FCA does not “provide for the consequential damages that 

typically come with recovery for fraud” because the “treble damages 

provision” serves “as a substitute for consequential damages” (emphasis 

added)).