NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

 FOR THE NINTH CIRCUIT

UNITED STATES ex rel. MARK

MCGRATH, 

Plaintiff-Appellant,

 v.

MICROSEMI CORPORATION; WHITE

ELECTRONIC DESIGNS

CORPORATION, DBA Microsemi Power

and Electronics Group, 

Defendants-Appellees.

No. 15-17206

D.C. No. 2:13-cv-00864-DJH

MEMORANDUM*

MARK MCGRATH, ex rel. United States

of America,

Plaintiff-Appellant,

 v.

MICROSEMI CORPORATION; WHITE

ELECTRONIC DESIGNS

CORPORATION, DBA Microsemi Power

and Electronics Group, 

Defendants-Appellees.

No. 15-17478

D.C. No. 2:13-cv-00864-DJH

FILED

MAY 05 2017

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

* This disposition is not appropriate for publication and is not precedent

except as provided by Ninth Circuit Rule 36-3.
Appeal from the United States District Court

for the District of Arizona

Diane J. Humetewa, District Judge, Presiding

Argued and Submitted April 18, 2017

San Francisco, California

Before: D.W. NELSON and IKUTA, Circuit Judges, and BURGESS,** Chief

District Judge.

 

Mark McGrath, on behalf of the United States of America, appeals the

district court’s order dismissing his qui tam complaint under Rules 8(a) and 9(b) of

the Federal Rules of Civil Procedure and denying leave to amend. We have

jurisdiction under 28 U.S.C. § 1291.

McGrath’s complaint failed to state a false certification claim under the

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

plead facts plausibly alleging that compliance with the International Traffic in

Arms Regulations (ITAR) was material to the Government’s decision to pay White

Electronic Designs Corporation and Microsemi Corporation (collectively,

“Microsemi”). Universal Health Servs., Inc. v. United States ex rel. Escobar, 136

S. Ct. 1989, 2002–03 (2016). Moreover, even assuming that the statement “ITAR

controlled” on Microsemi’s receipts constituted a false representation that

** The Honorable Timothy M. Burgess, United States Chief District

Judge for the District of Alaska, sitting by designation.

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Microsemi was in compliance with ITAR, the complaint cannot plead facts

sufficient to support an inference that Microsemi knew it had failed to comply with

ITAR at the time of the representation because Microsemi’s good faith

interpretation of the term “disclose” in 22 C.F.R. § 120.17 at that time was

reasonable. See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 70 n.20 (2007). 

Because McGrath cannot establish Microsemi’s scienter as a matter of law, and has

not indicated what facts he could add to the complaint to establish that

Microsemi’s alleged ITAR violation was material to the Government’s payment

decision, the district court did not err in denying leave to amend. See id.; Hildes v.

Arthur Andersen LLP, 734 F.3d 854, 859 (9th Cir. 2013). 

Finally, McGrath waived his argument that Microsemi provided the

Government worthless products by failing to raise it in his opening brief. 

Martinez-Serrano v. I.N.S., 94 F.3d 1256, 1259 (9th Cir. 1996). To the extent

McGrath is now raising the modified argument that Microsemi knowingly

demanded payment for products that had lost value due to Microsemi’s failure to

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comply with ITAR, such a claim fails for the same reasons as his false certification

claim.

1

AFFIRMED.

1

 McGrath failed to raise his FCA claim for fraud in the inducement before

the district court. We therefore decline to address this issue on appeal. Bolker v.

Comm’r of Internal Revenue, 760 F.2d 1039, 1042 (9th Cir. 1985).

4