FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES EX REL. DARRYN 

KELLY,

Plaintiff-Appellant,

v.

SERCO, INC., a New Jersey 

Corporation,

Defendant-Appellee.

No. 14-56769

D.C. No.

3:11-cv-02975-

WQH-RBB

OPINION

Appeal from the United States District Court

for the Southern District of California

William Q. Hayes, District Judge, Presiding

Argued and Submitted October 19, 2016

Pasadena, California

Filed January 12, 2017

Before: Richard C. Tallman, Barrington D. Parker, Jr.,*

and Morgan B. Christen, Circuit Judges.

Opinion by Judge Tallman

 * Senior United States Circuit Judge for the U.S. Court of Appeals 

for the Second Circuit, sitting by designation.
2 UNITED STATES EX REL. KELLY V. SERCO

SUMMARY**

False Claims Act

The panel affirmed the district court’s summary 

judgment in favor of the defendant in an action under the 

False Claims Act.

The plaintiff alleged that his former employer Serco, 

Inc., a technology and project management services 

provider, submitted fraudulent claims for payment to the 

United States for work done under a government contract. 

The Department of Defense, Navy Space and Naval Warfare 

Systems Command (SPAWAR), contracted with Serco for 

work on the Advanced Wireless Systems Spectrum 

Relocation Project, a project to upgrade the wireless 

communications systems situated along the United StatesMexico border for the Department of Homeland Security, 

Customs and Border Protection (DHS). The interagency 

contract between SPAWAR and DHS required SPAWAR to 

implement a cost and progress tracking system known as an 

earned value management (EVM) system. The services 

provided by Serco were covered under its Naval Electronic 

Surveillance Systems contract with SPAWAR.

The panel affirmed the district court’s summary 

judgment on a claim that Serco submitted false or fraudulent 

claims for payment under an implied false certification 

theory of liability under the False Claims Act. The panel 

applied Universal Health Servs., Inc. v. United States ex rel. 

Escobar, 136 S. Ct. 1989 (2016), which held that a 

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

has been prepared by court staff for the convenience of the reader.
UNITED STATES EX REL. KELLY V. SERCO 3

government contract need not expressly designate a 

requirement as a condition of payment in order to trigger 

liability under the theory of implied certification. Instead, 

what matters is whether the defendant knowingly violated a 

requirement that it knew was material to the government’s 

payment decision. To establish liability, the defendant’s 

claim for payment must make specific representations about 

the goods or services provided, and the defendant’s failure 

to disclose material statutory, regulatory, or contractual 

requirements must make those representations misleading 

half-truths. The panel held that the plaintiff did not satisfy 

the standard for materiality set forth in Escobar because 

there was no genuine issue of material fact as to the 

materiality of Serco’s compliance with the American 

National Standards Institute/Electronic Industries Alliance 

Standard 748 (ANSI-748) or its obligation to provide valid 

EVM reports.

The panel also affirmed the district court’s summary 

judgment on claims that Serco violated the False Claims Act 

by making false records material to a false or fraudulent 

claim, conspired to violate the False Claims Act, wrongfully 

retained overpayments, and wrongfully terminated the 

plaintiff in violation of public policy under California state 

law.

COUNSEL

Derek J. Emge (argued), Emge & Associates, San Diego, 

California, for Plaintiff-Appellant.

Francis J. Burke, Jr. (argued), Foley & Lardner LLP, San 

Francisco, California; James M. Harris and Daniel P.
4 UNITED STATES EX REL. KELLY V. SERCO

Wierzba, Seyfarth Shaw LLP, Los Angeles, California; for 

Defendant-Appellee.

OPINION

TALLMAN, Circuit Judge:

Relator Darryn Kelly brought this qui tam action under 

the False Claims Act (FCA), 31 U.S.C. §§ 3729–3733, 

against his former employer, Serco, Inc., a technology and 

project management services provider, alleging that Serco 

submitted fraudulent claims for payment to the United States 

for work done under a government contract. Kelly also 

asserted claims for wrongful termination under California 

law. The district court granted Serco’s motion for summary 

judgment on all of Kelly’s claims. We affirm.

I

In 2007, Serco was awarded a $62 million, three-year 

contract by the Department of Defense, Navy Space and 

Naval Warfare Systems Command (SPAWAR) to provide 

project management, engineering design, and installation 

support services for a range of government projects.1 The 

Naval Electronic Surveillance Systems (NESS) Contract 

was a type of contract that “provides for an indefinite 

quantity, within stated limits, of supplies or services during 

a fixed period.” 48 C.F.R. § 16.504(a). Pursuant to the 

NESS Contract, SPAWAR submitted individual Delivery 

 1 SPAWAR is the Navy’s information systems and acquisition 

command. It designs, develops, and sustains communications and 

information systems for the United States military and federal agencies.
UNITED STATES EX REL. KELLY V. SERCO 5

Orders to Serco that detailed the specific work Serco was to 

perform.

In 2008, the Department of Homeland Security, Customs 

and Border Protection (DHS) entered into an interagency 

contract with SPAWAR to upgrade the wireless 

communications systems situated along the United StatesMexico border. This project became known as the 

Advanced Wireless Systems Spectrum Relocation Project 

(AWS Project). The contract required SPAWAR to 

implement a cost and progress tracking system known as an 

earned value management system (EVMS), “a project 

management tool that effectively integrates the project scope 

of work with cost, schedule and performance elements for 

optimum project planning and control.” 48 C.F.R. § 2.101.

SPAWAR, in turn, subcontracted with Serco to purchase 

the necessary equipment, perform non-construction 

upgrades, and provide project management services for the 

AWS Project. Because these services were covered under 

the NESS Contract, SPAWAR issued Delivery Orders 

#0049 and #0054 to Serco under the NESS Contract 

detailing the work that Serco was to perform on the AWS 

Project.2 Delivery Orders 49 and 54 provided for different 

periods of performance from September 2009 to January 

2012, but were nearly identical in all other respects. Each 

Delivery Order contained a Statement of Work (SOW) that 

required Serco to provide project management and cost 

reports to SPAWAR, including EVM reports, “in 

accordance with the attached CDRLs [Contract Data 

Requirements Lists].” The attached CDRLs specified: 

 2 Although Serco worked on the AWS Project under other Delivery 

Orders as well, Delivery Orders 49 and 54 are the only ones at issue in 

this appeal.
6 UNITED STATES EX REL. KELLY V. SERCO

“Contractor [Serco’s] format acceptable. Create reports 

using MS Office Applications.” 

Serco’s employees manually recorded their hours on 

Serco’s internal accounting system using a single charge 

code for all tasks they performed on the AWS Project. Serco 

then compiled the time entries into Microsoft (MS) Excel 

spreadsheets to create monthly cost reports that it sent to 

SPAWAR. In January 2010, Serco informed SPAWAR that 

it could not automate its accounting system or accommodate 

the thousands of AWS Project task line-items that SPAWAR 

used in the reports it sent to DHS under its interagency 

contract. SPAWAR advised Serco that it would accept 

Serco’s monthly cost reports on MS Excel spreadsheets 

using information that Serco employees tracked and 

compiled manually. SPAWAR also advised that DHS was 

aware of Serco’s cost tracking format and had approved it.

Serco hired Kelly as an EVM analyst in October 2009 to 

monitor Serco’s performance on the AWS Project and 

identify any cost or schedule overruns. In April 2011, Kelly 

informed DHS that Serco’s monthly cost reports were 

unreliable because they tracked costs manually and with a 

single charge code in violation of the guidelines in the 

American National Standards Institute/Electronic Industries 

Alliance Standard 748 (ANSI-748). Kelly also informed 

DHS that Serco was falsifying its monthly reports to make 

its actual costs match the expected budget for the AWS 

Project. That same month, DHS and SPAWAR determined 

that EVM reports were no longer necessary or cost-justified 

for the AWS Project. SPAWAR directed Serco to reduce the 

number of EVM analysts working on the AWS Project. 

Kelly’s supervisors at Serco, unaware of his recent report to 

DHS, terminated Kelly in May 2011. Following his 

termination, Kelly’s position no longer existed at Serco.
UNITED STATES EX REL. KELLY V. SERCO 7

Kelly filed suit against Serco as a qui tam relator under 

the FCA, asserting the following claims for relief: 

(1) submitting false claims for payment in violation of the 

FCA under a theory of implied false certification, (2) making 

false records material to a false or fraudulent claim in 

violation of the FCA, (3) conspiring to violate the FCA, 

(4) retention of overpayments in violation of the FCA, and 

(5) unlawful termination in violation of public policy under 

California common law.3

The district court granted summary judgment in favor of 

Serco on all of Kelly’s claims. The district court also denied 

as moot Serco’s motion to strike the opinion and deposition 

testimony of Kelly’s expert, Kevin Martin, on whether 

Serco’s compliance with ANSI-748 was incorporated by 

reference into the Delivery Orders and whether Serco’s 

internal system was capable of complying with ANSI-748. 

This timely appeal followed.

II

We have jurisdiction to review the district court’s grant 

of summary judgment under 18 U.S.C. § 1291. Strategic 

Diversity, Inc. v. Alchemix Corp., 666 F.3d 1197, 1205 (9th 

Cir. 2012). “We review de novo the district court’s grant of 

summary judgment.” Id. “Viewing the evidence in the light 

most favorable to the nonmoving party, we must determine 

whether there are genuine issues of material fact and whether 

the district court correctly applied the relevant substantive 

law.” Id. (quotation marks omitted). “[T]he mere existence 

 3 Kelly asserted other state-law claims challenging his termination, 

but they are deemed waived for purposes of this appeal because he failed 

to raise them in his opening brief. See Smith v. Marsh, 194 F.3d 1045, 

1052 (9th Cir. 1999) (“[O]n appeal, arguments not raised by a party in 

its opening brief are deemed waived.”).
8 UNITED STATES EX REL. KELLY V. SERCO

of some alleged factual dispute between the parties will not 

defeat an otherwise properly supported motion for summary 

judgment; the requirement is that there be no genuine issue 

of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 

242, 247–48 (1986). “If the evidence is merely colorable, or 

is not significantly probative, summary judgment may be 

granted.” Id. at 249–50 (citations omitted).

“To survive summary judgment, the relator must 

establish evidence on which a reasonable jury could find for 

the plaintiff.” United States ex rel. Aflatooni v. Kitsap 

Physicians Serv., 314 F.3d 995, 1001 (9th Cir. 2002) 

(citation and alterations omitted). “If the facts make a claim 

‘implausible,’ the non-movant must present ‘more 

persuasive evidence than would otherwise be necessary’ in 

order to defeat a summary judgment motion.” United States 

ex rel. Anderson v. N. Telecom, Inc., 52 F.3d 810, 815 (9th 

Cir. 1995). “The district court’s grant of summary judgment 

may be affirmed if it is supported by any ground in the 

record, whether or not the district court relied upon that 

ground.” Summers v. Teichert & Son, Inc., 127 F.3d 1150, 

1152 (9th Cir. 1997).

“The district court’s exclusion of evidence in a summary 

judgment motion is reviewed for an abuse of discretion.” 

Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 

2002) (citing Gen. Elec. Co. v. Joiner, 522 U.S. 136, 141 

(1997)). Thus, “we must affirm the district court unless its 

evidentiary ruling was manifestly erroneous and

prejudicial.” Id. (citing Joiner, 522 U.S. at 142).

III

Kelly’s principal contention on appeal is that the district 

court erroneously granted summary judgment on his FCA 

claim alleging that Serco submitted false or fraudulent 
UNITED STATES EX REL. KELLY V. SERCO 9

claims for payment under an implied false certification 

theory of liability. See 31 U.S.C. § 3729(a)(1)(A). The 

FCA’s qui tam provision permits a private person (known as 

a “relator”) to bring a civil action on behalf of the United 

States against any individual or company who has 

knowingly presented a false or fraudulent claim for payment

to the United States. Id. § 3730(b); see id. § 3729(a)(1)(A) 

(imposing civil liability on “any person who . . . knowingly 

presents, or causes to be presented, a false or fraudulent 

claim for payment or approval”).4 The FCA encourages 

insiders to disclose fraud by awarding successful qui tam

plaintiffs a portion of any judgment, plus reasonable 

attorneys’ fees and costs. Id. § 3730(d).

Under the implied false certification theory advanced by 

Kelly, a defendant’s act of submitting a claim for payment 

“impliedly certifies compliance with all conditions of 

payment.” Universal Health Servs., Inc. v. United States ex 

rel. Escobar, 136 S. Ct. 1989, 1995 (2016). The district 

court determined that “it is only possible for a claimant to 

implicitly certify compliance with a law, rule, or regulation 

if there is a relevant ‘statute, rule, regulation, or contract’ in 

place that conditions payment of the claim on compliance 

with that underlying law, rule or regulation.” It therefore 

analyzed whether any statute, regulation, or contractual 

provision conditioned Serco’s right to payment on its 

compliance with ANSI-748.

The Federal Acquisition Regulation (FAR) provides that 

government contracts that require a contractor to use an 

 4 “In practice, the phrase [qui tam] means ‘an action under a statute 

that allows a private person to sue for a penalty, part of which the 

government or some specified public institution will receive.’” 

Aflatooni, 314 F.3d at 997 n.1 (citation omitted).
10 UNITED STATES EX REL. KELLY V. SERCO

EVMS must include a form clause stating that the EVMS 

shall comply with ANSI-748. 48 C.F.R. §§ 34.203(c), 

52.234-4(a). Similarly, the Defense Federal Acquisition 

Regulation Supplement (DFARS) provides that government 

contracts valued at $20 million or more must include a form 

clause stating that the contractor shall use an EVMS that 

complies with ANSI-748. Id. §§ 234.203(2), 252.234-

7002(b)(1). It is undisputed here that the NESS Contract and 

Delivery Orders 49 and 54 do not contain or incorporate by 

reference the FAR or DFARS form clauses requiring 

compliance with ANSI-748.

Instead, the NESS Contract incorporated the form clause 

in 48 C.F.R. § 52.232-1, which provides that “[t]he 

Government shall pay the Contractor [Serco], upon the 

submission of proper invoices or vouchers, the prices 

stipulated in this contract for supplies delivered and accepted 

or services rendered and accepted.” Although the Delivery 

Orders referenced ANSI-748 under a list of “Applicable 

Documents,” significantly both orders provided that, “[i]n 

the event of a conflict between the text of [the Delivery 

Order] and the applicable document cited herein, the text of 

[the Delivery Order] should take precedence.” The Orders’ 

terms required Serco to deliver its project management 

reports in accordance with the attached CDRLs, which 

provided that Serco’s own format and its use of Microsoft 

Office applications—including Excel spreadsheets—to 

create the reports were acceptable.

In granting summary judgment for Serco, the district 

court concluded that Kelly’s implied false certification claim 

failed as a matter of law because “there is no regulation that 

expressly conditions payment for the vouchers . . . on 

[Serco’s] compliance with ANSI 748,” and “neither the 

NESS Contract nor the Delivery Orders require[d] 
UNITED STATES EX REL. KELLY V. SERCO 11

compliance with ANSI 748 as a condition of payment by the 

government.” It further held that, at best, any implied 

contractual requirement in the Delivery Orders that 

conditions Serco’s payment on compliance with ANSI-748 

“is not a false claim, but a breach of contract.”

Kelly argues on appeal that the district court applied the 

wrong legal standard by analyzing whether the underlying 

regulations or Delivery Orders expressly conditioned 

Serco’s payment on its compliance with ANSI-748. The 

proper analysis, Kelly argues, is whether Serco’s failure to 

disclose that its data was falsified and that its EVM reports 

did not comply with ANSI-748 was material to the 

government’s payment decision.

A

At the time of the district court’s ruling, federal circuits 

were split on whether an implied false certification theory 

under the FCA requires that payment be expressly 

conditioned on a defendant’s compliance with a statutory, 

regulatory, or contractual requirement. See United States ex 

rel. Kelly v. Serco, Inc., Civ. No. 11-2975 WQH RBB, 2015 

WL 1191280, at *3 (S.D. Cal. Mar. 16, 2015). Recently, 

however, the Supreme Court clarified the circumstances 

supporting FCA liability under an implied false certification 

theory. Escobar, 136 S. Ct. at 1996.

In Escobar, the Supreme Court rejected the contention 

that a government contract or regulation must expressly 

designate a requirement as a condition of payment in order 

to trigger liability under the theory of implied certification. 

Id. The Court reasoned that “concerns about fair notice and 

open-ended liability ‘can be effectively addressed through 

strict enforcement of the Act’s materiality and scienter 

requirements,’” which “are rigorous.” Id. at 2002 (quoting 
12 UNITED STATES EX REL. KELLY V. SERCO

United States v. Science Applications Int’l Corp., 626 F.3d 

1257, 1270 (D.C. Cir. 2010) (SAIC)).5 Instead, the Supreme 

Court held:

False Claims Act liability for failing to 

disclose violations of legal requirements does 

not turn upon whether those requirements 

were expressly designated as conditions of 

payment. Defendants can be liable for 

violating requirements even if they were not 

expressly designated as conditions of 

payment. Conversely, even when a 

requirement is expressly designated a 

condition of payment, not every violation of 

such a requirement gives rise to liability. 

What matters is not the label the Government 

attaches to a requirement, but whether the 

defendant knowingly violated a requirement 

that the defendant knows is material to the 

Government’s payment decision.

Id. at 1996.

The Court further held that “the implied certification 

theory can be a basis for liability, at least where two 

conditions are satisfied: first, the claim does not merely 

 5 The FCA’s scienter requirement defines “knowing” and 

“knowingly” to mean that a person has “actual knowledge of the 

information,” “acts in deliberate ignorance of the truth or falsity of the 

information,” or “acts in reckless disregard of the truth or falsity of the 

information.” 31 U.S.C. § 3729(b)(1)(A). We need not analyze scienter 

here because Kelly’s implied false certification claim fails on other 

grounds. Nevertheless, “[f]or a qui tam action to survive summary 

judgment, the relator must produce sufficient evidence to support an 

inference of knowing fraud.” N. Telecom, Inc., 52 F.3d at 815.
UNITED STATES EX REL. KELLY V. SERCO 13

request payment, but also makes specific representations 

about the goods or services provided; and second, the 

defendant’s failure to disclose noncompliance with material

statutory, regulatory, or contractual requirements makes 

those representations misleading half-truths”—i.e., 

“representations that state the truth only so far as it goes, 

while omitting critical qualifying information.” Id. at 2000–

01 (emphasis added).

B

Kelly argues that Serco’s compliance with ANSI-748 

was an implied condition of its right to payment under 

Delivery Orders 49 and 54 because the Delivery Orders 

required Serco to deliver EVM reports, ANSI-748 is the only 

industry standard for EVM reporting, and the Delivery 

Orders referenced ANSI-748 under “Applicable 

Documents.” Thus, Kelly contends, Serco’s submission of 

its public vouchers for the Delivery Orders constituted an 

implied false certification that its deliverables met ANSI748 guidelines and were not falsified.

Even assuming that Serco’s compliance with ANSI-748 

was a condition of payment for its work under Delivery 

Orders 49 and 54, Kelly’s implied false certification claim 

nonetheless fails as a matter of law. First, there is no 

evidence that Serco’s public vouchers made any specific 

representations about Serco’s performance. See Escobar, 

136 S. Ct. at 2001. Serco submitted forty-seven public 

vouchers totaling over $5.5 million to the Department of 

Defense for its work under Delivery Orders 49 and 54. Each 

voucher was submitted on U.S. Standard Form 1034 and 

provided the period of performance, total costs incurred 

during that period, and Serco’s fee applicable to that work. 

Each voucher also included a continuation sheet listing 

the dollar amounts for Serco’s costs for labor, travel, 
14 UNITED STATES EX REL. KELLY V. SERCO

and materials. Serco additionally submitted backup 

documentation for each voucher, which included its internal 

project status reports containing even more detailed lineitem descriptions of its services and total hours and costs.

Serco’s vouchers each contained a single express 

certification that the services listed in them were performed 

during the time periods stated. Contrary to Kelly’s 

contention that “Serco was paid predominately for its work 

delivering what the government thought was a valid EVM 

rather than for work [upgrading] the 85 border towers,” most 

of the costs for which Serco’s vouchers sought payment 

were for the software and hardware needed to upgrade the 

AWS, for travel to the cell towers to perform the upgrades, 

and for the labor costs of at least thirty employees. There is 

no evidence that these employees failed to do the work for 

which SPAWAR had contracted.

Second, there is no evidence that Serco’s public 

vouchers contained any false or inaccurate statements. 

Kelly’s dispute here is over the format that Serco used to 

report costs incurred. Even viewing Kelly’s evidence of 

Serco’s allegedly fraudulent cost reporting in the light most 

favorable to Kelly, his FCA claim fails because the FCA 

“attaches liability, not to the underlying fraudulent activity 

or to the government’s wrongful payment, but to the ‘claim 

for payment’”—here, Serco’s public vouchers. Cafasso v. 

Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 

2011) (citation omitted); see Aflatooni, 314 F.3d at 1002 

(“The False Claims Act . . . focuses on the submission of a 

claim, and does not concern itself with whether or to what 

extent there exists a menacing underlying scheme.”); United 

States ex rel. Hendow v. Univ. of Phx., 461 F.3d 1166, 1173 

(9th Cir. 2006) (“[F]or a false statement or course of action 

to be actionable . . ., it is necessary that it involve an actual 
UNITED STATES EX REL. KELLY V. SERCO 15

claim . . . .”). As we have previously stated, “an actual false 

claim is the sine qua non of an FCA violation.” Cafasso, 

637 F.3d at 1055 (citation and alterations omitted).

Finally, “[a] misrepresentation about compliance with a 

statutory, regulatory, or contractual requirement must be 

material to the Government’s payment decision in order to 

be actionable under the False Claims Act.” Escobar, 136 S. 

Ct. at 1996. Courts can properly dismiss an FCA claim on 

summary judgment based on a claimant’s failure to meet the 

rigorous standard for materiality under the FCA. Id. at 2004 

n.6. In Escobar, a unanimous Supreme Court clarified how 

rigorously the FCA’s materiality requirement must be 

enforced:

The materiality standard is demanding. The 

False Claims Act is not “an all-purpose 

antifraud statute” or a vehicle for punishing 

garden-variety breaches of contract or 

regulatory violations. A misrepresentation 

cannot be deemed material merely because 

the Government designates compliance with 

a particular statutory, regulatory, or 

contractual requirement as a condition of 

payment. Nor is it sufficient for a finding of 

materiality that the Government would have 

the option to decline to pay if it knew of the 

defendant’s noncompliance. Materiality, in 

addition, cannot be found where 

noncompliance is minor or insubstantial.

Id. at 2003 (citation omitted); see also SAIC, 626 F.3d at 

1271 (“By enforcing [the materiality] requirement 

rigorously, courts will ensure that government contractors 

will not face ‘onerous and unforeseen FCA liability’ as the 
16 UNITED STATES EX REL. KELLY V. SERCO

result of noncompliance with any of ‘potentially hundreds of 

legal requirements’ established by contract. Payment 

requests by a contractor who has violated minor contractual 

provisions that are merely ancillary to the parties’ bargain 

are neither false nor fraudulent.”). We think Kelly’s theory 

of liability falters on these shoals.

C

Kelly nonetheless argues that Serco’s omissions were 

material because the government relied on Serco’s reports to 

manage the AWS Project and its budget. Kelly states that, 

“[i]f Serco had disclossed [sic] that it did not have a 

compliant EVMS or that its EVM reports were fraudulent, it 

is doubtful Serco’s payment vouchers would have been 

paid.” In Escobar, the Supreme Court rejected a view that 

the test for materiality “is whether the person knew that the 

government could lawfully withhold payment.” Escobar, 

136 S. Ct. at 2004 (citation omitted). The Supreme Court 

held that “[t]he False Claims Act does not adopt such an 

extraordinarily expansive view of liability,” and evidence 

that the government “would be entitled to refuse payment 

were it aware of the violation” is insufficient by itself to 

support a finding that the violation is material to the 

government’s payment decision. Id. Likewise, here, the 

possibility that the government would be entitled to refuse 

payment if it were aware of Serco’s alleged violations is 

insufficient by itself to support a finding of materiality.

Further, the Supreme Court held that, “if the Government 

pays a particular claim in full despite its actual knowledge 

that certain requirements were violated, that is very strong 

evidence that those requirements are not material.” Id. at 

2003. “Or, if the Government regularly pays a particular 

type of claim in full despite actual knowledge that certain 

requirements were violated, and has signaled no change in 
UNITED STATES EX REL. KELLY V. SERCO 17

position, that is strong evidence that the requirements are not 

material.” Id. at 2003–04.

Here, it is undisputed that compliance with ANSI-748 

was not an express term in Delivery Orders 49 and 54. It is 

also undisputed that the CDRLs governing Serco’s 

performance under those Delivery Orders provided for EVM 

reports in “contractor format” using Microsoft Office 

applications, which is what Serco delivered. It is further 

undisputed that SPAWAR—through its AWS Project 

Manager, John Mitchell, who in turn received DHS’s 

agreement—agreed that Serco could provide its reporting on 

MS Excel spreadsheets using manually tracked and 

compiled data rather than an EVM system. And it is 

undisputed that SPAWAR accepted monthly cost reports 

from Serco that utilized a single task charge code. In 

addition, it is undisputed that Serco periodically submitted 

public vouchers and received payment for its work on the 

AWS Project under both Delivery Orders.

Of particular importance here, it is undisputed that 

SPAWAR did not find Serco’s EVM reports helpful and did 

not use them to manage the AWS Project. SPAWAR 

considered EVM “very hard to manage and hard to do,” and 

requiring a lot of work, time, and money. In April 2011, 

DHS and SPAWAR eliminated the EVM requirement 

because it provided minimal benefit and was not costjustified. In addition, DHS and SPAWAR recognized that 

the Department of Defense’s 2005 Revision to its EVM 

Policy discouraged EVM for “level of effort” work, which 

was the type of work that Serco’s reporting team did here. 

On those grounds, SPAWAR directed Serco to reduce the 

number of EVM analysts working on the AWS Project, 

resulting in Kelly’s layoff.
18 UNITED STATES EX REL. KELLY V. SERCO

Kelly has failed to establish a genuine issue of material 

fact regarding the materiality of Serco’s obligations to 

comply with ANSI-748 or provide valid EVM reports. 

Given the demanding standard required for materiality under 

the FCA, the government’s acceptance of Serco’s reports 

despite their non-compliance with ANSI-748, and the 

government’s payment of Serco’s public vouchers for its 

work under Delivery Orders 49 and 54, we conclude that no 

reasonable jury could return a verdict for Kelly on his 

implied false certification claim. See N. Telecom, Inc., 

52 F.3d at 815–17 (“There is evidence that, when installed, 

the Letterkenny switch did not work properly. But no 

reasonable jury could draw an inference of presentation of a 

false or fraudulent claim from that [because the] Army knew 

the switch was unsatisfactory . . . .”).

Accordingly, we affirm the district court’s grant of 

summary judgment on Kelly’s FCA claim for submitting 

false or fraudulent claims for payment under an implied false 

certification theory of liability.

IV

Kelly also challenges the district court’s grant of 

summary judgment on his FCA claim alleging that Serco 

made false records material to a false or fraudulent claim in 

violation of 31 U.S.C. § 3729(a)(1)(B). “[T]o establish a 

cause of action under § 3729(a)(1)(B), the United States or a 

relator must show that defendants knowingly made, used, or 

caused to be made or used, a false record or statement 

material to a false or fraudulent claim.” Hooper v. Lockheed 

Martin Corp., 688 F.3d 1037, 1048 (9th Cir. 2012). The 

existence of a false or fraudulent claim is therefore an 

essential element of a false records claim under 

§ 3729(a)(1)(B). Because Kelly has failed to raise a genuine 

issue of material fact regarding the submission of a false or 
UNITED STATES EX REL. KELLY V. SERCO 19

fraudulent claim, his false records claim fails as a matter of 

law. Accordingly, we affirm the district court’s grant of 

summary judgment on Kelly’s false records claim.

V

Kelly also argues that, in granting summary judgment on 

his conspiracy claim, the district court “did not address or 

evaluate the additional evidence that Mr. Mitchell [the AWS 

Project Manager at SPAWAR] conspired with Serco to 

produce fraudulent EVM reports on a monthly basis.” The 

district court, however, considered “Mitchell’s 

uncontroverted testimony . . . that he informed DHS of 

[Serco’s] modified hours tracking and DHS approved the 

change,” and found “no evidence of an agreement between 

John Mitchell and Serco personnel to submit a false claim.” 

The district court also rejected Kelly’s “unsubstantiated 

assertion of a secret agreement” between Mitchell and Serco 

to submit a false claim.

Kelly does not identify the “additional evidence” that the 

district court failed to consider; nor does he explain why 

failing to consider such evidence resulted in error here. We 

have noted previously that we will not “consider matters on 

appeal that are not specifically and distinctly argued in 

appellant’s opening brief,” are argued only in passing, or that 

constitute bare assertions without supporting argument. 

Christian Legal Soc. Chapter of Univ. of Cal. v. Wu, 

626 F.3d 483, 487–88 (9th Cir. 2010) (citations omitted). 

Because Kelly failed to argue this issue specifically and 

distinctly in his opening brief, we decline to consider it here. 

See id. at 487; In re Online DVD-Rental Antitrust Litig., 

779 F.3d 914, 930 (9th Cir. 2015) (“Because these matters 

were not ‘specifically and distinctly argued’ in the open 

briefing, we will not consider them.” (citation omitted)).
20 UNITED STATES EX REL. KELLY V. SERCO

VI

Further, Kelly challenges the district court’s grant of 

summary judgment on his FCA claim for wrongful retention 

of overpayments in violation of 31 U.S.C. § 3729(a)(1)(G). 

That FCA provision, known as the “reverse false claims” 

provision, creates liability for one who “knowingly makes, 

uses, or causes to be made or used, a false record or 

statement material to an obligation to pay or transmit money 

or property to the Government, or knowingly conceals or 

knowingly and improperly avoids or decreases an obligation 

to pay or transmit money or property to the Government.” 

Id. “The ‘reverse false claims’ provision does not eliminate 

or supplant the FCA’s false claim requirement . . . .” 

Cafasso, 637 F.3d at 1056. Because Kelly’s cause of action 

for submitting false or fraudulent claims for payment fails as 

a matter of law, so too does his “reverse false claims” cause 

of action.

VII

Kelly further argues that the district court erred in 

granting summary judgment against him on his Tameny 

claim for wrongful termination in violation of public policy.6 

“[W]rongful termination cases involving a Tameny cause of 

action are limited to those claims finding support in an 

important public policy based on a statutory or constitutional

provision.” Green v. Ralee Eng’g Co., 19 Cal. 4th 66, 79 

(1998) (emphasis added). “This limitation recognizes an 

employer’s general discretion to discharge an at-will 

employee without cause under [the California Labor Code].” 

 6 A claim for wrongful termination in violation of public policy is a 

California common-law claim created by Tameny v. Atlantic Richfield 

Co., 27 Cal. 3d 167 (1980).
UNITED STATES EX REL. KELLY V. SERCO 21

Id. Kelly argues that he was fired in violation of the 

fundamental public policy reflected in Labor Code § 1102.5, 

which prohibits employers from “retaliat[ing] against an 

employee for disclosing information . . . to a government or 

law enforcement agency.” Cal. Lab. Code § 1102.5(b).

The district court here granted summary judgment in 

favor of Serco on Kelly’s claim for unlawful retaliatory 

discharge in violation of Labor Code § 1102.5, but Kelly did 

not challenge that ruling on appeal. Because “arguments not 

raised by a party in its opening brief are deemed waived,” 

Marsh, 194 F.3d at 1052, the district court’s determination 

that Serco did not violate Labor Code § 1102.5 forecloses 

Kelly’s Tameny claim based on a violation of § 1102.5 as a 

matter of law.

Kelly also premises his wrongful termination argument 

on the fact that he was terminated after he reported Serco’s 

time-charging practices to DHS. It is undisputed, however, 

that nobody at Serco knew Kelly had spoken to DHS prior 

to his termination: Tom Helman, Kelly’s supervisor, and 

Denise Ellison, Helman’s supervisor, both testified that they 

were not aware of Kelly’s reporting activities before he was 

terminated. Kelly has not controverted this testimony. Nor 

has he presented any evidence that would permit a 

reasonable inference that someone at Serco knew about his 

reporting activities before he was terminated.

In addition, Kelly acknowledges that he was an at-will 

employee for Serco. And it is undisputed that DHS and 

SPAWAR no longer needed an EVM analyst in Kelly’s 

position for the AWS Project. Kelly admits that he was 

provided this reason when he was laid off, and it is 

undisputed that Kelly’s position no longer existed after his 

termination. Accordingly, because it is undisputed that 

Serco employees were unaware that Kelly spoke to DHS 
22 UNITED STATES EX REL. KELLY V. SERCO

prior to his termination, we affirm the district court’s grant 

of summary judgment on Kelly’s Tameny claim.

VIII

Kelly lastly contends that the district court erred in 

striking as moot the deposition testimony of his expert, 

Kevin Martin, because it consisted of (1) improper legal 

conclusions on whether ANSI-748 was incorporated by 

reference into the Delivery Orders, and (2) irrelevant 

testimony concerning whether Serco had in fact complied 

with ANSI-748. “Under Federal Rule of Evidence 702, 

matters of law are inappropriate subjects for expert 

testimony.” Hooper, 688 F.3d at 1052. Even if expert 

testimony “may assist the trier of fact, the trial court has 

broad discretion to admit or exclude it.” Id. (quoting Beech 

Aircraft Corp. v. United States, 51 F.3d 834, 842 (9th Cir. 

1995) (per curiam)).

Here, the district court was in the best position to 

determine whether Kevin Martin’s deposition testimony 

would be helpful to its analysis. Because the district court 

had concluded that Serco’s right to payment under the 

Delivery Orders was not conditioned on its compliance with 

ANSI-748, Martin’s testimony regarding the various ways 

Serco failed to comply with ANSI-748 was irrelevant to the 

court’s analysis. As such, the district court’s exclusion of 

Martin’s testimony was not manifestly erroneous or 

prejudicial, and it must therefore be affirmed. See Orr, 

285 F.3d at 773.

IX

For Kelly to prevail on his implied false certification 

theory, the gravamen of his claim here, Kelly must satisfy 

the “rigorous” and “demanding” standard for materiality set 
UNITED STATES EX REL. KELLY V. SERCO 23

forth in Escobar. He has failed to do so. Because Kelly’s 

implied false certification claim fails, his remaining FCA 

claims also fail as a matter of law. Nor has Kelly established 

a predicate for his Tameny claim. Lastly, the district court’s 

exclusion of Martin’s testimony was not an abuse of 

discretion, and Kelly has failed to show any prejudicial error.

AFFIRMED.