1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
THE UNITED STATES OF AMERICA, ex rel. BRADY FOLLIARD, Plaintiff,

v. COMSTOR CORPORATION, et al. , Defendants. Civil Action No. 11-731 (BAH) Chief Judge Beryl A. Howell

MEMORANDUM OPINION The relator, Brady Folliard, initiated this lawsuit, pursuant t o the qui tam provision of the False Claims Act (“FCA”), 31 U .S.C. § 3730(b)(1), seven years a go, against two defendants, Westcon Group, Inc. (“Westcon”) and one of its wholly-owned sub sidiaries, Comstor Corporation (“Comstor”), allegi ng that the defendants, along wi th another wholly-owned subsidiary of Westcon, Westcon N orth America Inc. (“Westcon NA” ), sold to the U.S. government “thousands of” mostly unspecified products made by C isco Systems, Inc. (“Cisco”) that originated in non-designate d countries in violation of the Trade Agreement Act (“TAA”), 19 U.S.C. §§ 2501 et seq. Rel.’s Third Am. Compl . (“TAC”) ¶¶ 1–2, 143, ECF No. 65. The se allegations were initially predic ated on the relator’s “direct and independent knowledge” gained from his position as a Strategic Account Executive for Insight Public Sector Inc. (“Insight”), a company that partnered with the defendants “on multiple sales.” Compl. ¶ 10, ECF No. 1; TAC ¶ 5. After almost five years of investigation and the defendan ts’ production of data documenting over $123 million in sales, as well as 49 charts, each of which“encompasses hundreds of pages” of Cisco’s product information, see TAC ¶¶ 137–38; see also id. , Ex. 17–17F, Defs.’ Produced Sales Data, ECF Nos. 65-19–24; id. , Ex. 18, Cisco Production Cover Letter (dated Apr. 19,2 2013) (“Cisco Production Letter” ), ECF No. 65-25, the United St ates declined to intervene, see U.S.’s Not. Election Decline Inte rvention (“U.S.’s Not.”) at 1, ECF No. 43. The operative Third Amended Complaint seeks treble da mages and civil penalties of “ not less than $5,500 and not more than $11,000 for each violation of” the FCA by the defendants “from 2005 and continuing to the present.” TAC ¶¶ 1, 182–99; id. 47–48. The defendants have moved to dismiss the Relator’s Third Amended Complai nt, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on grounds that: (1) t he “claims are based on, and su bstantially similar to, prior public disclosures,” for which the rel ator is not an “original source, ” and therefore are barred, under 31 U.S.C. § 3730(e)(4), Defs.’ Mot. D ismiss Rel.’s TAC (“Defs.’ Mo t.”) at 1–2, ECF No. 67; and (2) the Third Amended Complaint f ails to state a plausible clai m for relief under the FCA or satisfy the particularity require ments of Federal Rule of Civil Procedure 9(b), id. at 2–3. For the reasons set forth below, the defe ndants’ motion is granted, and this case is dismissed. 1
I. BACKGROUND The relator alleges that the defendants submitted false claims and false statements to the U.S. government under two Federal Supply Schedule (“FSS”) contr acts awarded to the defendants by the General Servi ce Administration (“GSA”) author izing the defendants’ sale to the federal government of infor mation technology (“IT”) product s. TAC ¶¶ 3, 7, 10, 37. Summarized below is the relevant factual history, as alleged in the Third Amended Complaint and its twenty attachments, follo wed by the proce dural history of this litigation.
A. Factual History 1. The Defendants’ Business with the Federal Government

1 The defendants have requested oral argument on the pending mot ion, Defs.’ Mot. at 4, but given the sufficiency of the parties’ written submissions to resolve the pending motion, this request is denied. See LCvR 7(f) (allowance of oral hearing is “w ithin the discretion of the Court”).3 For over two decades, the defendants have used two FSS contract s to offer for sale to the federal government “thousands of” Cisco products. Id. ¶¶ 7–11, 143. These produc ts are largely unidentified in the Third Amende d Complaint, except for ninetee n “representative” examples of purchase orders, reflecting 46 tra nsactions for items delivered to the federal government between September 29, 2008, and December 12, 2013. Id. ¶¶ 116–35 (discussing two purchase orders), 145–81 (discussing seventeen add itional purchase orders). 2 The first FSS contract at issue, designated as GS-35F-4389G, w as entered in 1996, by defendant C omstor, which is “one of the primary distributors of Cisco products.” Id. ¶ 6, 41; id. , Ex. 1, Comstor Contract GS-35F-4389G (“Comstor Contract”), ECF N o. 65-2. Indeed, “almost all of Com stor’s sales through” this contract “involve[d] Cisco products.” Id. ¶¶ 7–8. Prior to Marc h 17, 2010, Comstor “was the sole authorized FSS contract hol der for Cisco products,” and, t hus, “any GSA sales of Cisco products had to come from Comstor directly” or from a smaller v endor with which Comstor had partnered, or else “an unauthorized source.” Id . ¶¶ 45, 55. In 2010, Comstor “ceased to exist and simply became Westcon.” Id. ¶ 45 n.6. The second FSS contract at issu e, designated as GS-35F-0563U, h as been held by Westcon NA since 2008, and is the vehicle through which the def endants presently sell IT products, including Cis co products, either directly or through partners. Id. ¶¶ 10–11, 45; see also
id. , Ex. 2, Westcon Contract GS-35F- 0563U (“Westcon Contract”), EC F No. 65-3. Based on data from 2006 through 2012 for bot h contracts, nearly $500 mil lion of the defendants’ $600

2 Attached to the Third Amended Co mplaint are approximately 25 s eparate documents, t otaling almost 1000 pages, which documents include purchase orders and apparently related COO information with obscure product codes. See, e.g., TAC, Ex. 14, Purchase Order (dated Sept. 24, 2010), ECF No. 65- 15; id. , Ex. 16, Purchase Order (dated July 28, 2011), ECF No. 65-17); id. Ex. 19, Source Documents (“Rel.’s Sales Source Docs.”), ECF No. 65- 26; id. , Ex. 20, Source Country of Origi n Documents (“Rel.’s COO Sourc e Docs.”), ECF No. 65-27. These voluminous exhibits require considerable digging and cross-refe rencing to be minimally intelligible. Nonetheless, the parties appear to agree that, in the midst of this exhibit mass, are purchase orders for 46 transactions. See Rel.’s Opp’n Defs.’ Mot. Dismiss (“Rel.’s Opp’n”) at 26, ECF No. 69; D efs.’ Reply Supp. Mot. Dismiss (“Defs.’ Reply”) at 10 n.6, ECF No. 71.4 million dollars in GSA sales duri ng the time period were attrib utable to Cisco products. Id. ¶ 12. As noted, those products are not ide ntified in the Third Amende d Complaint, but the “representative” examples include computer related materials an d supplies, such as flash drives, routers, and switch ports. See id. , Ex. 19, Source Documents (“Rel.’s Sales Source Docs.”), ECF No. 65-26; id., Ex. 20, Source Country-of-Origin Doc uments (“Rel.’s COO Source Docs.”), ECF
No. 65-27. The defendants’ contracts a re governed by the TAA, 19 U.S.C. §§ 2501 et seq. , which “implements numerous multilatera l and bilateral international trade agreements and other trade initiatives.” TAC ¶ 58; see also Westcon Contract at 9 (requir ing compliance with TAA); Comstor Contract at 6 (same). U nder the TAA and its implementi ng regulations, the Federal Acquisition Regulations (“FAR”) , items sold through GSA FSS con tracts must be “U.S.-made or designated country end products.” TAC ¶ 58. The FAR defines “ end product” as “those articles, materials, and supplies to be ac quired under the contract for p ublic use.” Id. ¶ 59 (quoting FAR 52.225-5(a)). The FAR also provid es a list of designated count ries, including si gnatories to the World Trade Organization (“WTO”) Government Procurement Agreeme nt (“GPA”) and to bilateral trade agr eements with the U.S. See id. ¶¶ 75–76 (citing FAR 52.225- 5(a)). Countries such as China and Malaysia, whi ch are not on the FAR list, are identified by exclusion as nondesignated countries. Id. ¶¶ 75–76. For the purposes of the TAA, an end product is “U.S. -made” or from a “designated country” wh en the item was completely man ufactured, grown, or produced, or else “substantially transformed” in the U.S. or a designated country. Id. ¶ 77 (citing 19 U.S.C. § 2518(4)(B); 19 C.F.R. § 177.22(a)). The FAR imposes on vendors, such as the defendants, a general o bligation to sell under the FSS contract “only U.S.-made or designated country end prod ucts,” id. ¶ 72 (citing FAR5 52.225–5(b)), and a continuing obligation to certify that each end product sold through a FSS contract is TAA compliant, id. ¶ 67 (citing FAR 52.225-6(a) (“The offeror certifies that each end product, except those listed i n paragraph (b) of this provision , is a U.S.-made or designated country end product, as defined in t he clause of this solicitat ion entitled ‘Trade Agreements.’”)). Should the defendants seek to s ell an end product that is not f rom a designated country, the defendants must identify the ite m to the GSA before offering th e item for sale. Id. ¶ 69 (citing FAR 52.225-6(b) (“The offeror sh all list as other end products those supplies that are not U.S.- made or designated country end products.”)). The defendants may also sell t o the U.S. Government, without vi olating the TAA, “open market” items that are not incl uded on the pricelists accompany ing the FSS contracts, even when those items originate in non-designated countries. Id. ¶¶ 87–88 & n.10; see also Westcon Contract at 12 (allowing for s ale of open market items, “also k nown as incidental items, noncontract items, non-Schedule items, and items not on [an FSS ] contract”); Comstor Contract at 8–9 (same). The FAR permits vendors to procure these non-co ntract, “open-market” items in the interest of “administrati ve convenience,” as long as specif ied requirements under FAR 8.402(f) are met, including requi rements for publicizing propos ed contract actions and engaging in competitive procedures. TAC ¶ 89–94.
2. The Relator’s Business with the Defendants At all times relevant to the ins tant litigation, the relator wo rked as a Strategic Account Executive at Insight, a “Value A dded Reseller” (“VAR”) that has partnered with the defendants to sell IT products to federal agencies. Id. ¶ 5, 101–02. As a VAR, Insight “combine[s], configure[s], and sell[s] comput er products manufactured by oth er companies in specificallydesigned configurations to meet the needs of their customers.” Id. ¶ 103. In essence, VARs are6 “middle-men in the supply chai n between the technology manufact urers and their ultimate
customers.” Id. ¶ 104. The defendants partner w ith VARs and other smaller ven dors to facilitate sales either through prime contr actor/subcontractor agreements, in which the sub-contractor or “authorized dealer” is not required to maintain its own GSA sch edule contract, or through Contractor Team Arrangements (“ CTA”), in which both parties mai ntain GSA schedule contracts, although not necessari ly for the same products. Id. ¶ 46–54. Here, the relator, “on numerous occasions,” sold Cisco products through the defendants ’ FSS contracts, “both as an authorized dealer . . . and through C TAs with Defendants.” Id. ¶ 107. Through his work selling the defe ndants’ products, the relator “routinely accessed” country-of-origin (“COO”) charts , which “Cisco regularly create d,” and “list[ed] product numbers and country-of-origin i nformation for thousands of Cisc o products.” Id. ¶ 108. Cisco provides these charts to vendors , including the relator’s emplo yer, Insight, so that the vendors may “check the Country of Origin to comply with government regu lations in selling products to the government.” Id. ¶ 109. In reviewing such COO charts alongside the defendants’ pricelists and the purchase orders processe d by Insight under the defendan ts’ FSS contracts, the relator began to suspect that the defenda nts were failing to comply wit h the TAA in two ways. Id. ¶ 111–13; see also id. , Ex. 15, Decl. Brady Folli ard, Strategic Account Exec., Insigh t Public Sector (“Folliard Decl.”), ECF No. 65-16 ( explaining review process). First, he found the defendants “were including non-TAA-compliant products on their FSS contrac t pricelists,” and that they “in fact sold” such products “to the United States Government by co ncealing the products’ true COO information.” Id. ¶¶ 111–12. Second, the relator cam e to believe that the defen dants “routinely circumvented their TAA-complianc e obligations by marking certai n end products from non-7 designated countries as ‘open market,’ but then selling those p roducts outside the open market protocol outlined in FAR 8.402.” Id. ¶ 113. To illustrate the relator’s discovery of the defendants’ “misco nduct,” the Third Amended Complaint cites two example purch ase orders that Insight placed under the defendant Weston’s GSA FSS contract in 2010 and 2011. Id. ¶¶ 116–17, 126 (citing id. , Ex. 14, Purchase Order (dated Sept. 24, 2010), ECF No. 65-15; id. , Ex. 16, Purchase Order (dated July 28, 2011), ECF No. 65-17); Folliard Decl. Eight of the nine items identified in the Third Amended Complaint as sold through these two purchase or ders were listed as “open market” items, and one item is described as an “end product.” See id. ¶¶ 117–35. The relator alleg es that he determined, upon review of Cisco COO charts, that the items had always originate d in non-specified nondesignated countries. Id. ¶¶ 122, 127–35. Based on the relat or’s understanding of the F AR’s treatment of “open market” items of certain monet ary values, th e Third Amended Complaint claims that these eight items , along with the one identified en d product, should have been TAAcompliant and that the defendant s engaged in fraudulent activit ies by selling these items from non-compliant countries. Id. ¶¶ 95, 135 (citing FAR 8.405-1(b) (“mic ro-purchase threshold”))

. B. Procedural History Before filing his original Complaint, on April 15, 2011, the re lator disclosed to the United States the subs tance of his allegati ons that the defendants “are selling products to the United States Government that di d not originate in designated c ountries under the [TAA], and therefore are making material fa lse statements and presenting f alse claims to the United States Government for payment.” Compl. ¶ 9; TAC ¶ 136. While the com plaint remained under seal, the United States investigated t he relator’s allegations, inclu ding by issuing a civil investigative demand (“CID”) to the defendant s to obtain “sales data and supp orting documentation for the relevant time period.” TAC ¶ 136. The government also request ed COO charts from Cisco “for8 all products Cisco offered for sale since January 2000.” Id. ¶ 137. In response, the defendants provided data, from 2008 through 2011, for $123,531,232.29 in s ales under the two GSA contracts, as well as 49 quarter ly COO charts, covering most of the period between January 2000 and September 2012. Id. ¶ 136–37 & n.14. The government shared these materials with the relator, prompting the relator t o amend his complaint for the f irst time on May 30, 2014. Id. ¶ 140; see generally First Am. Compl., ECF No. 27. On January 29, 2016, almost five year s after the re lator initia ted his qui tam suit, the United States filed not ice of its decision t o decline intervent ion. U.S.’s Not. at 1. Thereafter, on March 4, 2016, both the relator’s orig inal Complaint and First Amended Complaint were unsealed. Order at 1, ECF No. 46. A fter the relator filed a S econd Amended Complaint, see Second Am. Compl., ECF No. 48, the defendants moved to dismiss, and their motion was considered at a hearing on January 24, 2017, see Min. Order (dated Jan. 25, 2017). At the close of the hearing, the relator was allowed to amend his complaint a third time, resulting in the denial, as moot, of the defendant s’ then-pending first motion t o dismiss. Id

. The Third Amended Complaint, filed on February 23, 2017, assert s four claims against each defendant for violations of two versions of two provisions of the FCA, both before and after those two provisions were amende d by the Fraud Enforcement Reco very Act (“FERA”), Pub. L. No. 111-21, 123 Stat. 1617 (2009). The first two counts allege in almost identical language that the defendants violated the FCA ’s “presentment provision” by “k nowingly submitt[ing], and caus[ing] to be submitted” to the government “false or fraudule nt claims for payment and reimbursement” that the governme nt paid, “unaware of the falsity of the . . . claims made by the Defendants,” regarding count ry-of-origin information. TAC ¶¶ 182–189. Count I alleges the FCA’s presentment provision, in 3 1 U.S.C. § 3729(a)(1) (2008), was violated by defendants’9 claims submitted “before May 20, 2009,” and Count II alleges th e same for claims submitted “after May 20, 2009,” in viola tion of 31 U.S.C. § 3729(a)(1)(A) (2009). See id. Similarly, the remaining two counts assert virtu ally identical claims under pr e- and post-FERA amendment versions of the FCA’s “false statement clause.” Id. ¶¶ 190–99. Count III alleges that the defendants “knowingly made, used or caused to be made or used, material false statements to obtain” payments from the governme nt for false claims made “bef ore June 7, 2008,” in violation of 31 U.S.C. § 3729(a)(2) (2008), an d Count IV alleges the same for false claims made “after June 7, 2008,” in violation of 31 U .S.C. § 3729(a)(1)(B) (2009)

. Id. ¶¶ 190–99. All four counts are based on allegations that the defendants sold non-TAA compl iant end products, resulting in over $8 million in sales “attributable to fraud.” Id. ¶¶ 143, 184, 188, 193, 198. The relator alleges that the non-compliant pr oducts at issue fall into two categories: (1) products on the defendants’ FSS pricelists for w hich the country-of-origin info rmation was falsified, see id. ¶¶ 56–86; and (2) products incorrectl y marked “open market,” whichwere not and should have been compliant with the TAA, see id. ¶¶ 87–100. The defendants have again m oved to dismiss these claims. 3
II. LEGAL STANDARD
A. Federal Rule of Civil Procedure 12(b)(1) “‘Federal courts are courts of limited jurisdiction,’ possessin g ‘only that power authorized by Constitution and statute.’” Gunn v. Minton , 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377 (1994)). Ind eed, federal courts are “forbidden. . . from ac ting beyond our authority,” NetworkIP, LLC v. FCC , 548 F.3d 116, 120 (D.C. Cir. 2008), and, therefore , have “an affirmative obli gation ‘to consider whether the

3 After the defendants filed their second motion to dismiss, th e case was reassigned to the undersigned on October 24, 2017.10 constitutional and statutory authority exist . . . to hear eachdispute ,’” James Madison Ltd. by Hecht v. Ludwig , 8 2 F.3d 1085, 1092 (D.C. Cir. 1996) (citation omitted). To survive a motion to dismiss under Federal Rule of Civil Proc edure 12(b)(1) for lack of subject matter jurisdiction, the plaintiff bears the burden of establishing the c ourt’s jurisdiction by a preponderance of the evidence. See Lujan v. Defs. of Wildlife , 5 04 U.S. 555, 561 (1992). When considering a motion under Rule 12(b)(1), the court must a ccept as true all uncontroverted material factual allegations cont ained in the complaint and “co nstrue the complaint liberally, granting plaintiff the benefit of all inferences that can be de rived from the facts alleged, . . . and upon such facts determine juri sdictional questions.” Am. Nat’l Ins. Co. v. FDIC , 642 F.3d 1137, 1139 (D.C. Cir. 2011) (internal quotation marks and citations omitted). Although the court is required “to take as true all we ll-pled factual allegations wit hin [the] complaint,” the court must “disregard any legal conclusions , legal contentions couched as factual allegations, and unsupported factual allegati ons within the complaint.” Gulf Coast Mar. Supply, Inc. v. United
States , 867 F.3d 123, 128 (D.C. Cir. 2017) . In evaluating subject matter jurisdiction, the court may look beyond the complaint to “ undisputed facts evidenced inthe record, or the complaint supplemented by undisputed facts pl us the court’s resolution of disputed facts.” Banneker Ventures, LLC v. Graham , 798 F.3d 1119, 1129 (D.C. Cir. 2015) (quoting Herbert v. Nat’l Acad. of Scis. , 974 F.2d 192, 197 (D.C. Cir. 1992)).
B. Federal Rule of Civil Procedure 12(b)(6) To survive a motion to dismiss under Federal Rule of Civil Proc edure 12(b)(6), the “complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Wood v. Moss , 134 S. Ct. 2056, 2067 (2014) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009)). A claim is facially plausible when the plaintiff pleads factual content that is more than “‘merely consis tent with’ a defendant’s liabi lity,” and “allows the court to draw11 the reasonable inference that the defendant is liable for the m isconduct alleged.” Iqbal , 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 556–57 (2007)); see also Rudder v.
Williams , 666 F.3d 790, 794 (D.C. Cir. 2012). Although “detailed factu al allegations” are not required to withstand a Rule 12( b)(6) motion, a complaint must offer “more than labels and conclusions” or “formulaic recita tion of the elements of a caus e of action” to provide “grounds” for “entitle[ment] to relief,” Twombly , 550 U.S. at 555 (alteration in orig inal), and “nudge[ ] [the] claims across the line from conceivable to plausible,” id. at 570; see Banneker Ventures , 798 F.3d at 1129 (“Plausibility require s more than a sheer possibil ity that a defendant has acted unlawfully . . . .”) (internal quot ation marks and citation omi tted). Thus, “a complaint [does not] suffice if it tenders ‘naked asse rtion[s]’ devoid of ‘further f actual enhancement.’” Iqbal , 556 U.S. at 678 (quoting Twombly , 550 U.S. at 557) (second alter ation in original). As when considering a motion to di smiss for lack of subject mat ter jurisdiction, the court must accept all factual allegations in the complaint as true fo r the purposes of the motion, “even if doubtful in fact,” Twombly , 550 U.S. at 555; see also Harris v. D.C. Water & Sewer Auth. , 791 F.3d 65, 68 (D.C. Cir. 2015), “but is not required to accept th e plaintiff’s lega l conclusions as correct,” Sissel v. U.S. Dep’t of Health & Human Servs. , 760 F.3d 1, 4 (D.C. Cir. 2014). In addition, courts “ordinarily examine” other sources “when rulin g on Rule 12(b)(6) motions to dismiss, in particular, documents incorporated into the complai nt by reference, and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322 (2007).
C. Federal Rule of Civil Procedure 9(b) To withstand a motion to dismiss for failure to state a fraud c laim, including a claim under the FCA, the plaintiff mu st meet the pleading standard se t out in Federal Rule of Civil Procedure 9(b), which provides th at “a party must state with pa rticularity the circumstances12 constituting fraud or mistake.” F ED

. R. C IV

. P. 9(b); see also Universal Health Servs., Inc. v.
United States ex rel. Escobar (“ Escobar ”), 136 S. Ct. 1989, 2004 n.6 (2016) (“False Claims Act plaintiffs must also plead the ir claims with plausibility and p articularity under Federal Rules of Civil Procedure 8 and 9(b).”); United States ex rel. To tten v. Bombardier Corp. (“ Totten I ”), 286 F.3d 542, 551–52 (D.C. Cir. 2002) (“[B]ecau se the False Claims Act is self-evidently an antifraud statute, complaints brought under it must comply with Rul e 9(b)

. ”). This heightened pleading standard is designed t o “discourage[] the initiation o f suits brought solely for their nuisance value, and safeguard[] potential defendants from frivo lous accusations of moral turpitude,” as well as “guarantee all defendants sufficient inf ormation to allow for preparation of a response.” United States ex rel. Heath v. AT & T, Inc. (“ Heath ”), 791 F.3d 112, 123 (D.C. Cir. 2015) (first alteration i n original) (quoting United States ex rel. Wi lliams v. Martin–Baker Aircraft Co., Ltd. (“ Williams ”), 389 F.3d 1251, 1256 (D.C. Cir. 2004)). The plaintiff must plead with su fficient particularity “the tim e, place and content of the false misrepresentations, the f act misrepresented and what was retained or given up as a consequence of the fraud.” Williams , 389 F.3d at 1256 (quoting Kowal v. MCI Commc’ns Corp. , 16 F.3d 1271, 1278 (D.C. Cir. 1994)); see also United States ex re l. Shea v. Cellco P’ship (“ Shea ”), 863 F.3d 923, 936 (D.C. Cir. 2017). In other words, the pl aintiff must provide the “who,” “what,” “when,” and “where” with respect to the circumst ances of the fraud, so that the defendant is put on “fair notice of the fraud of w hich it is ac cused.” See Heath , 791 F.3d at 124.
III. DISCUSSION The defendants present three gr ounds for dismissing the relator ’s Third Amended Complaint. First, they argue tha t the Third Amended Complaint is barred, under 31 U.S.C. § 3730(e)(4), because the alleged fraud has been publicly disclos ed previously, and the relator is13 not an original source. Defs.’ Mem. Supp. Mot. Dismiss (“Defs. ’ Mem.”) at 8–17, ECF No. 67- 1. Second, according to the defendants, the Third Amended Comp laint fails to state a claim upon which relief can be granted, un der either the FCA’s presen tment provision or the false statement provision, because the Third Amended Complaint lacks plausible allegations of falsity, materiality, and scienter. Id. at 18–33, 37 n.11. Finally, the defenda nts contend the Third Amended Complaint fails to plead f acts of the alleged fraudulen t scheme with the particularly required to put the defendan ts on notice under Rule 9(b). Id. at 33–40. These challenges are addressed seriatim

. 4
A. The Public Disclosure Bar is Not Triggered The defendants contend that the Third Amended Complaint must be dismissed under the FCA’ public disclosure bar because the allegations of fraud wer e disclosed in the relator’s

4 The parties dispute whether the Expert Report of Neal I. Fox (“ Fox Report”), which is authored by “a former [GSA] Assistant Commissione r for Acquisition,” TAC, Ex. 3, Export Report Neal I. Fox, Principal, Neal Fox Consulting at 1, ECF No. 65-4, and is attached to the Third Ame nded Complaint, should be considered in evaluating the sufficiency of the rel ator’s factual allegations. See Defs.’ Mem. at 7–8; Rel.’s Opp’n at 4–6. This report “provide[s] explanatory informa tion about the [T AA] as related to the GSA Schedules Program,” Fox Report at 1, in the form of the proposed expert’s interpretation of obligati ons under FAR regulations, without mentioning any factual matter pertinent to this case, see id. Consequently, the defendants urge that the “purported expert report [] be disregarded because it contains little more than legal conclusi ons.” Defs.’ Mem. at 7. Indeed, interpreting the relevant law and regulations is the job of the Court. See Burkhart v. Wash. Met ro. Area Transit Auth. , 112 F.3d 1207, 1213 (D.C. Cir. 1997) (“Each courtroom comes equipped wit h a ‘legal expert,’ called a judge[.]”). The relator defends use of this report summarizing a former agency employee ’s interpretation of agency regulations as a “routine” practice, Rel .’s Opp’n at 4, but the three non-bindin g, out-of-circuit cases cited fo r this proposition simply do not show that such a report addressing purely legal matters has been used in evaluating the sufficiency of a complaint’s factual allegations to withstand a motion to dismiss, see id . (citing In re MannKind Sec. Actions , 835 F. Supp. 2d 797, 821 (C.D. Ca. 2011) (denying motion to strike exp ert report, but finding report “not essential to . . . finding that Plaintiffs’ complaint survives Defendants’ motion to dismiss”); Semsroth v. City of Wichita, Kansas , Civ. No. 06-2376 (KHV), 2007 U.S. Dist. LEXIS 25705, at *1 (D. Kan. Apr. 5, 2007) (denying Rule 12(f) motion to strike thirteen paragraphs in the complaint and attached expert report, where, without distinguishing the report, the court concluded “[s]ustaining the motion to strike would reduce the complaint to an absurdity”); Bernstein v. City of New York , 621 F. App’x 56, 58 (2d Cir. 2015) (explaining that “amended complaint and attach ed expert report describ[ing] particular instances of the Park’s alleged inacces sibility,” were considered i n evaluating plaintiff’s standing under the Americans w ith Disabilities A ct, 42 U.S.C. 1 2101 et seq ., because the expert report focused specifically on plaintiff’s disability vis-à-vis the challenged park configuration)). The relator’s proposed e xpert report will not be considered in r esolving the pending motion.14 complaints in prior qui tam lawsuits and in the government’s response to the relator’s FOI A request. Defs.’ Mem. at 9. Furth er, the defendants argue that the relator cannot overcome the bar because he has not demonstrated that he is “an original source.” Id. at 13. As explained below, after describing the fra mework for analyzing the public disclosure bar, the relator’s claims are not barred on this basis.
1. The Public Disclosure Bar Framework “The FCA encourages insiders to expose fraudulent conduct, but does not reward relators who seek to profit by bri nging suits to complain of fr aud that has already been publicly disclosed.” United States ex rel. Oliver v. Philip Morris USA Inc. (“ Oliver I ”), 763 F.3d 36, 39 (D.C. Cir. 2014); see also United States ex rel. Spri ngfield Terminal Ry. Co. v. Quinn (“ Springfield Terminal ”), 14 F.3d 645, 651 (D.C. Cir. 1994) (“The history of the FCA qui tam provisions demonstrates repeate d congressional efforts to walk a fine line between encouraging whistle-blowing and discouraging oppor tunistic behavior.”). To that end, the FCA contains a public disclosure bar, codifie d at 31 U.S.C. § 37 30(e)(4)(A), t hat “limits the ability of a private party to bring a qui tam suit where the fraud is al ready publicly known,” unless the cl aims are brought by the Attorney General or an “original source” of the information underlying the claims. Oliver I, 763 F.3d at 39; Shea , 863 F.3d at 927 (“The bar prohibits private parties from bringing suit based on a fraud alr eady disclosed through identi fied public channels (unless the relator is ‘an original sou rce of the information’).” Thus, “[t]he FCA sets up a two-part test for determining jurisdiction.” United States ex rel. Findley v. FPC-Boron Emps.’ Club , 105 F.3d 675, 681 (D.C. Cir. 1997). First, the court must determine whe ther the information underlying the allegations and transactions has been publicly disclosed th rough enumerated channels. See Springfield Terminal , 14 F.3d at 651. “If—and only if—the answer to the first ques tion is15 affirmative, will the court then proceed to the original source inquiry.” Id. (internal quotation marks and citation omitted); see also Oliver I , 763 F.3d at 39 n.3 (“Because we conclude that the information supporting Oliver's claim had not been publicly dis closed, we do not reach the question whether Oliver was an ‘original source.’”). Section 3730(e)(4)(A) was am ended, effective March 23, 2010, as part of the Patient Protection and Affordable Care Act, see Patient Protection and Affor dable Care Act, Pub. L. No. 111–148, § 10104(j)(2), 124 Stat. 119, 901–02 (2010). The pre- amendment version of § 3730(e)(4)(A), enacted in 1986, provided: No court shall have jurisdiction over an action under this section based upon the public disclosure of alle gations or transactions in a criminal, civil, or administrative heari ng, in a congressional, administr ative, or Government Accounting Office re port, hearing, audit, or investi gation, or from the news media, unless the action is brought by the Attorn ey General or the person bringing the acti on is an original source of the information. 31 U.S.C. § 3730(e)(4)(A) (1986). As amended, section 3730(e)( 4)(A) currently provides: The court shall dismiss an action or claim under this section, unless opposed by the Government, if substa ntially the same allegation s or transactions as alleged in th e action or claim were publicly di sclosed— (i) in a Federal criminal, civil , or administrative hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or o ther Federal report, hearing, a udit, or investigation; or (iii) from the news media, unless the action is brought by the Attorney General or the per son bringing the action is an original s ource of the information. 31 U.S.C. § 3730(e)(4)(A) (2010). As a threshold matter, the part ies agree that the 2010 amendmen t is not retroactive, and thus the alleged conduct o ccurring prior to March 23, 2010, whi ch covers the bulk of the relevant sales, would be subject to the pr e-amendment version of the pub lic disclosure bar, while later16 alleged conduct would be subject to the post-amendment version. See Defs.’ Mem. at 8 n.2; Rel.’s Opp’n Defs.’ Mot. Dismi ss (“Rel.’s Opp’n”) at 9, ECF No. 69; see also TAC ¶ 12 (“[T]he vast majority of those sales o ccurred in the early years . . . 2006 and 2007.”). 5 Among the changes to the public disclosure bar resulting from the amendme nt is that while the pre-2010 public disclosure bar was expr essly jurisdictional, the 2010 am endment omits the jurisdictional language and states only that a c ourt must “dismiss” a case fal ling under the public disclosure bar. “Thus, when the amende d version of § 3730(e)(4)(A) applie s, public disclosure does not deprive the Court of subject m atter jurisdiction, but merely de prives the plaintiff of his claim.” United States ex rel. Shea v. Verizon Commc’ns, Inc. , 160 F. Supp. 3d 16, 24 (D.D.C. 2015), aff’d sub nom. United States ex rel. Shea v. Cellco P’ship , 863 F.3d 923 (D.C. Cir. 2017). 6 Nonetheless, under both the pre- and post-amendment versions of § 3730(e)(4)(A), a court must decide if either “the allegation of fraud itself” or “the transactions that give rise to an inference of fraud” have been publicly disclosed. United States ex rel. Oliver v. Philip Morris
USA Inc. (“ Oliver II ”), 826 F.3d 466, 471 (D.C. Cir. 2016) (emphases added); Shea , 863 F.3d at 933; see also 31 U.S.C. § 3730(e)(4)(A) (1986) (“N o court shall have jurisdi ction over an action

5 The D.C. Circuit has not opined whether the 2010 amendment to § 3730(e)(4)(A) applies retroactively to conduct that occurred prior to March 23, 2010. The most recent D.C. Circuit case on the public disclosure bar, which was issued during the pendency of the defendants’ Motion to Dismiss, see Rel.’s Not. Suppl. Authority (“Rel.’s Not.”), ECF No. 72; Defs.’ Resp. Not. Suppl. Authority (“Defs.’ Resp. Not.”), ECF No. 73, confirms that the question of retroactivity is not settled, see Shea , 863 F.3d at 932–33 (noting “the parties dispute [over] which version of the public disclosure bar governs” because the relat or filed his action in 2009, while his amended complaint was filed in 2010, butconcluding that “[w]e need notresolve the dispute because, even applying the preamendment version to all allegations, we hold in [the relator’s ] favor”). Here, application of either version of the public disclosure bar favors the relator, and thus the issue of retroactivity need n ot be addressed. 6 The defendants posit that the l aw in this circuit is unclear “ whether the public disclosure bar remains jurisdictional following the 2010 amendment,” Defs.’ Mem. at 5 n.1, but the D.C. Circuit explicitly referred to the earlier “jurisdictional” and lat er “non-jurisdictional” version s of the public disclosure bar, and thereby plainly distinguished the two versions of the provision. See 863 F.3d 923, Consistent with this binding authority, the pos tamendment public disclosure bar is considered here to be “non-j urisdictional.” Id

.17 under this section based upon the public disclosure of allegations or transactions . . . .” (emphasis added)). “‘Transacti on’ in this sense ‘refers to two or more elements that, when considered together, give rise t o an inference that fraud has t aken place.’” Oliver II, 826 F.3d at 471 (quoting Oliver I , 763 F.3d at 40). The D.C. Circuit has set out a now familiar formula to assess w hether a transaction was publicly disclosed: “[I]f X + Y = Z, Z represents the allegation of fraud and X and Y represent its essential elements. In order to disclose the transaction publicly, the combination of X and Y must be revealed, from which readers or listeners may infer Z, i.e. , the conclusion that fraud has been committed.” Springfield Terminal , 14 F.3d at 654 (emphases in original); Shea , 863 F.3d at 933 (“If the allegation of fraud ( Z) is not itself in the publi c domain, then the bar applies only if both X and Y are publicly known.”). Applied to the facts of this cas e, the transac tion would be the fact that the defendants were selling TAA non-compliant pr oducts to the government (X), plus the fact that the defendants falsely certified that they were complying with the TAA (Y), which permits the inference that the defe ndants committed fraud (Z). See Oliver II, 826 F.3d at 471; see also Springfield Terminal , 14 F.3d at 655 (“Fraud requires recognition of two elements: a misrepresented state of facts and a true state of facts.” (emphasi s in original)) . If either X and Y, or Z, was in the public domain be fore the relator brought this action, then the plaintiff’s claims, under the applicable ve rsion of the public dis closure bar, cann ot proceed. See Oliver II , 826 F.3d
at 471.
2. The Purported Public Disclosures do not Trigger the Bar The defendants contend, without di stinguishing the analysis for pre- and post-amendment sales under § 3730(e)(4)(A), that th e Z element in this case, i.e. , the fraud alleged, was “‘based18 upon’ and substantially similar’ to the allegations of fraud ra ised in earlier qui tam actions.” Defs.’ Mem. at 10. Since “there is a comparable ‘allegation’ o f fraud in the prior public disclosures,” the defendants rea son that “the D.C. Circuit’s X + Y = Z formulation . . . is not applicable.” Defs.’ Reply Supp. Mot. Dismiss (“Defs.’ Reply”) at 4, ECF No. 71. 7 The relator responds that his earlier qui tam actions “do not implicate these Defendants in any way,” and th e Third Amended Complaint “is base d exclusively on information th at is independent of any FOIA request or response.” Rel.’s Opp’n at 10–17. 8 The Court agrees with t he relator: none of his prior complaints provide the basi s for the allegations in the i nstant matter. 9

7 The defendants focus almost exclusively on the “Z” element, see, e.g., Defs.’ Resp. Not. at 2 (“Defendants have demonstrated in this case that an ‘allegation’ of fraud in volving Defendants appears in the public domain – and thus there is no need to resort to an analysis of whether a mis represented state of facts (X ) and a true state of facts (Y) also appear in the public domain.”), and offer only a brief footnote asserting “even if th e allegations of fraud in Relator’s prior complaints could somehow be construed not to co nstitute publicly-disclosed ‘allegations’ of fraud, then Relator’s prior qui tam complaints nonetheless still trig gered the public disclosure b ar by disclosing both the true state of facts (X: that Cis co products supplied by Defenda nts for sale to the government allegedly were not TAA-compliant) and the allegedly misrepresented state of facts (Y: certifications that the Cisco products were TAAcompliant),” id. at 2 n.1. The defendants provide no further analysis addressi ng how these “essential elements” of the D.C. Circuit’s formulation are actually triggered, see Springfield Terminal , 14 F.3d at 654, let alone, how such an analysis would overcome the obvious hurdle that the prior co mplaints did not contain allegations describing the defendants’ specific sales ac tivities as fraudulent. Thus, thi s opinion examines only whet her the fraud “allegations” in the instant matter, as opposed to any “essential elements,” have already been disclosed in the prior qui tam suits. 8 Based on the conclusion that the amended public disclosure ba r is not jurisdictional, the relator also argues that “Defendants have waived the ir right to move for dismissal under the amended provision, since Defendants could have raised this same defense in response to Relator’s ea rlier qui tam complaints in this case.” Rel.’s Opp’n at 15 n.5. The relator’s waiver arg ument is not persuasive. As s upport, the relator cites two cases, which held only that the defense of improper venue under Rule 12(b)(3) is waived when not raised in an initial mo tion to dismiss or other response to a pleading that is subsequently amended. See id. (citing Nichols v. Vilsack , 183 F. Supp. 3d 39, 41 (D.D.C. 2016); Weber v. Turner , 1980 U.S. Dist. LEXIS 17002, *7 (D.D.C. Oct. 2, 1980)). No s uch waiver rule applies to assertion by defendants of the public disclosure bar . In addition, the relator relies on Hild v. Bank of Am., N.A. , 2015 U.S. Dist. LEXIS 55029 (C.D. Cal. April 21, 2015), for t he proposition that “some courts have held that successive motions to dismiss fo r failure to state a claim are not allowed,” id. at *8–9, but, as that decision acknowledges, “[s]ome courts have held to the contrary,” id. at *9 n.2. The latter rule i s followed by this Court, based upon the plain text of Federal Rule of Civil Procedure 12 (h). See, e.g., Nattah v. Bush , 770 F. Supp. 2d 193, 201 (D.D.C. 2011) (noting that Rul e 12(g), which g enerally bars a moving party from making another motion raising a defense or objections omitted from an earlier motion, “is explicitly limited by R ule 12(h), which exempts from the waiver rule . . . moti ons to dismiss for failure to st ate a claim brought pursuant to Rule 12(b)(6)”); Lindsey v. United States , 448 F. Supp. 2d 37, 55 (D.D.C. 2006), abrogated on other grounds by Ramer v. United States 620 F. Supp. 2d 90 (D.D.C. 2009) (“[A ] defense of failure to state a sustainable claim is not waived simply by the defendant’s failure to include it in an initial 12(b) motion submitted to the Court.”). 9 The defendants also contend that the instant action is “based in large part on another indisputable public disclosure—the government’s respo nse to Relator’s Freedom of In formation Act (“FOIA”) request.” Defs.’ Mem. at 12–13 (citing allegation in original complaint that relator “relied on” response by the government to a FOIA19 At the outset, the defendants s ummarize their understanding of the “core allegation of fraud in the instant suit: “that Comstor — allegedly the sole authorized FSS contract holder for Cisco products prior to Mar ch 17, 2010 — sold Cisco products to the government that were manufactured in non-designated co untries and therefore violated the [TAA].” Defs.’ Mem. at 10. The relator does not dispute this summary of his fraud all egations but contests that he “previously asserted these same allegations relating to the sal e of purportedly non-compliant Cisco products to the gove rnment in [the] earlier qui tam actions in this district against multiple re-sellers.” Id. ; accord Rel.’s Opp’n at 11. 10 The defendants point to th ree prior actions filed by the relator and, yet, provide an alysis of the public disclosure bar as it pertains to only two of those complaints. See Defs.’ Mem. at 10–12 (discussing Defs.’ Mot., Ex. B, Compl. (“ World Wide Technologies Compl.”), ¶¶ 18–19, 21, ECF No. 67-4; id. , Ex. C, Compl. (“ Apptis Compl.”), ¶¶ 18–19, 21, ECF No. 67-5) . Examination of these tw o qui tam complaints, which

request the relator submitted to the GSA in 2013). The relator ’s FOIA request sought sale s and transactional data for Cisco products sold by vendors through GSA between 2003 and 2011. Id. at 13. While a FOIA response may constitute a public disclosure, see Schindler Elevator Corp. v. United States ex rel. Kirk , 563 U.S. 401, 404 (2011) (holding written FOIA responses b y the government were consider ed a “report” within the definition of the public disclosure bar), such a response does not trigger the public di sclosure bar if it only provides background information, without a connection to the alleged fraudulent sch eme, which is the case here, see United States ex rel. Purcell v. MWI Corp. , 824 F. Supp. 2d 12, 24 (D.D.C. 2011), rev’d on other grounds and remanded , 807 F.3d 281 (D.C. Cir. 2015) (finding public disclosure bar not triggered w here relator “insists that no documents relating to the allegations and transactions in the Complaint were released by the” government in response to a FOIA request, and “the defendant fails to provide a wisp of testimony or document ary evidence that might cont rovert [the relator’s] assertion”). GSA’s response to the FOIA request provided only sales data without any COO d ata, and the latter data is the critical link to the alle ged fraud. The law is well-est ablished that the public disclosure bar is not triggered where, as here, a relator has “supplied the missing link betwee n the public information and the alleged fraud.” See Shea , 863 F.3d at 935 (citing Springfield , 14 F.3d at 657). Thus, the rel ator’s FOIA response is irrele vant to application of the public disclosure bar here. 10 The defendants argue that only the original complaint may be c onsidered for the purposes of determining whether the public disclosure bar has been triggered. See Defs.’ Reply at 3. This argume nt is a red herring. For the purposes of evaluating the suffici ency of the relator’s allegat ions, the Third Amended Complaint is operative. See United States Telesis, Inc. v. Ende , 297 F.R.D. 159, 162 (D.D.C. 2013) (“The plaintiff's amended c omplaint is now the operative complaint due to its superseding nature.”) (citin g Washer v. Bullitt Cty , 110 U.S. 558, 562 (1884); Bancoult v. McNamara , 214 F.R.D. 5, 13 (D.D.C.2003)); Adams v. Quattlebaum , 219 F.R.D. 195, 197 (D.D.C. 2004) (same)

. To determine whether the allega tions have alread y been disclose d in the public domain, the operative complaint must be reviewed, as w ell as the entire record in thi s case and the complaints in other cases proffered by the defendants.20 were both voluntarily dismissed by the relator shortly after th e government declined intervention,

see Gov’t’s Not. Electio n Decline Intervention, Folliard v. Apptis, In c
. (“ Apptis ”) , Civ. No. 08- 320 (EGS) (D.D.C. Feb. 12, 2010), ECF No. 11; Not. of Voluntary Dismissal, Apptis , (D.D.C. Feb. 23, 2010), ECF No. 13; Gov’t’s No t. Election D ecline Intervention, Folliard v. World Wide Technologies, Inc . (“ World Wide Technologies ”), Civ. No. 08-761 (ESH) (D.D.C. June 1, 2008), ECF No. 10; Not. of Voluntary Dismissal, World Wide Technologies , (D.D.C. June 4, 2010), ECF No. 14, demonstrate the weakness of the defendants’ positio n. 11 The complaints in Apptis and World Wide Technologies use almost identical language to allege that the defendants submitted false claims and made fals e statements to the U.S. government “in connection with imp roper pricing and the selling of non-compliant products,” in violation of the TAA. See Apptis Compl. ¶¶ 4, 22–32; World Wide Technologies Compl. ¶¶ 4, 22–32. Each defendant allegedly sold C isco products as “a cert ified partner of C isco Systems” to the government through Solutions for Enterprise-Wide Procure ment (“SEWP”) contracts that required compliance with the TAA. Apptis Compl. ¶¶ 7, 14; World Wide Technologies Compl. ¶¶ 7, 14. The relator, in prepari ng government proposals for h is employer, Insight, another Cisco partner, “became familiar wit h Cisco products being offered for sale by” each defendant, including the “Cisco products that were produced in non-designa ted countries.” World Wide

11 The third complaint referenced by defendants without analysis , see Defs.’ Mem. at 10–12 (citing Defs.’ Mot., Ex. A, Corrected Second Am. Compl. (“ Insight Compl.”), ECF No. 67-3), is not helpful in supporting application of the public disclosure bar. In that case, again, the government dec lined to intervene, see Gov’t Not. Decline Intervention, Folliard v. Insight Enterprise Inc . (“ Insight ”), Civ. No. 07-719 (RCL) (D.D.C. May 27, 2010), ECF No. 31, and, ultimately, all eight defendants prevailed, see United States ex rel. Folliard v. Synnex Corp. (“ Synnex ”), 798 F. Supp. 2d 66, 77, 81 (D.D.C. 2011) (granting motion t o dismiss as to six defendants under first-tofile bar and, as to one of those six, also on res judicata grounds); United States ex rel. Folliard v. Gov’t Acquisitions, Inc. (“ Gov’t Acquisitions ”), 880 F. Supp. 2d 36, 48–49 (D.D.C. 2012), aff’d , 764 F.3d 19 (D.C. Cir. 2014) (granting summary judgment in favor of one defendant and partial summary judgment to the other defendant); United States ex rel. Folliard v. Govplace (“ Govplace ”), 930 F. Supp. 2d 123, 137 (D.D.C. 2013), aff’d sub nom. United States ex rel. Folliard v. Gov’t Acquisitions, Inc. , 764 F.3d 19 (D.C. Cir. 2014) (granting remaining defendant’s motion for summary judgment and dismissing case with prejudice). The inst ant defendants are not mentioned anywhere in the 61-page Insight complaint, nor does the complain t invite an inference that oth er entities were in volved. Thus, that complaint does not bar the instant qui tam action.21 Technologies Compl. ¶¶ 15, 18; Apptis Compl. ¶¶ 15, 18. “He learned of these products by communicating with his supervis ors who had been in contact withCisco representative about proposals and by communicating direc tly with a Cisco Representa tive about certain products.” World Wide Technologies Compl. ¶ 18; Apptis Compl. ¶ 18. More “specifi cally,” he exchanged emails with Steve Marcellino, the Government Programs Coordinat or for Comstor, which company is described as “a design ated point of sale for Cisco S ystems.” World Wide Technologies Compl. ¶ 19; Apptis Compl. ¶ 19. The relator revie wed the information obtained from the email exchange alongs ide product lists he had obtained through his own work with each company to determine that the def endants were “selling several non-compliant Cisco products through SEWP in violation of the TAA.” World Wide Technologies Compl. ¶ 21; Apptis Compl. ¶ 21. Turning now to the public-disclosur e-bar analysis, the complain ts in Apptis and World
Wide Technology do not actually make any allegations or provide any informatio n about the sales by the instant defendants . Nonetheless, the defendants c ontend that the Third Amended Complaint is barred because the relator’s complaints in Apptis and World Wide Technologies “specifically identified Comstor as the designated point of sal e for the purportedly non-compliant Cisco products,” and “identified C omstor employee Steve Marcell ino as the ‘Cisco Representative’ providing him in formation regarding the alleged sale of Cisco products in violation of the TAA.” Defs.’ Me m. at 11 (emphasis in original ). Thus, in the defendants’ view, the allegations i n the present qui tam lawsuit have previously been disclosed. Id. at 12. The relator counters tha t the public disclosur e bar has not been tr iggered because “while [the] prior qui tam complaints reference the fact that the various named defendant s all sold Cisco products as authorized re-sellers for Westcon and Comstor, Relator did n ot allege that Defendants22 themselves took part in a conspira cy to defraud the Government, or engaged in any other misconduct.” Rel.’s Opp’n at 10. The relator is correct. In considering whether the alleg ations in the instant action ar e “substantially similar to” or “based upon” the allega tions in the three prior qui tam cases, the key question is “whether the publicly disclosed information c ould have formed the basis for a governmental decision on prosecution, or could at least have alerted law-enforcement authorities to the likelihood of wrongdoing.” United States ex rel. Settlemi re v. District of Columbia (“ Settlemire ”), 198 F.3d 913, 918 (D.C. Cir. 1999) (internal quotation marks omitted); see also United States ex rel. Davis v. District of Columbia (“ Davis I ”), 679 F.3d 832, 836 (D.C. Cir. 2012). Here, the defendants contend that law enforcement w ould have been alerted to the wro ngdoings alleged in the instant action because the relator’s “prior qui tam actions identified Comstor by name; alleged that
Comstor’s authorized re-sellers were s elling non-TAA compliant Cisco pro ducts to the government; and that the same Comstor employee confirmed that t he products being sold to the government were non-compliant.” Defs.’ Reply at 6 (emphasis inoriginal). The aspects of the complaint s in the relator’s other qui tam cases highlighted by the defendants obscure the fundament al fact that those prior compla ints assert no allegations against the defendants. First, only two of the qui tam complaints even identify the defendants by name, and, in doing so, they only mention C omstor as “a designated po int of sale for Cisco products.” Apptis Compl. ¶ 19; World Wide Technologies Compl. ¶ 19. The filings say nothing about the defendants’ involvement in the alleged fraudulent scheme. Seco nd, and relatedly, the allegations against the resellers are not di rectly linked to Comstor, espec ially since Comstor is alleged to be

“ a designated point of sale,” Apptis Compl. ¶ 19; World Wide Technologies Compl. ¶ 19, and not
the designated point of sale. Finally , the fact that a Comstor re presentative confirmed the23 products being sold were non-comp liant does not create an infer ence that Comstor participated in any scheme to defraud the government, but rather suggests that the defendants were being helpful in working with a vendor to try t o comply with TAA requirement s. See Rel.’s Opp’n at 11 (“The fact that some Cisco pr oducts are manufactured in non- designated countries was never a secret . . ., [and] Relator aske d the Comstor employee about the TAA-compliance status of certain Cisco products in order ‘to avoid violating the TAA.’”) (quoting Defs. Mem. at 11). To be sure, the defendants nee d not be named in the public disc losures to trigger the bar, see, e.g., United States ex rel. Hockett v. Columbia/HCA Healthcare Corp. , 498 F. Supp. 2d 25, 48 (D.D.C. 2007) (finding where pr ior public disclosures “alleg ed that certain specific Columbia facilities had engaged in certain s pecific techniques for defrauding Medicare,” and “many other facilities, not named therein, ha d engaged in sim ilar fraudulen t practices,” a qui tam suit against a “not named” Columbia facility for Medicare fraud was barred), and the bar can be triggered even when “a qui tam suit [is] ‘even partly base d upon publicly disclosed allegatio ns or transactions.’” United States ex rel. J. Cooper & Assocs., Inc. v. Bernard Hodes Grp. , Inc., 422 F. Supp. 2d 225, 235 n. 10 (D.D.C. 2006) (quoting United States ex rel. Precision Co. v. Koch
Indus. , 971 F.2d 548, 552 (10th Cir. 1992)) (rej ecting “plaintiff’s a rgument that its qui tam claim is not ‘based upon’ information in [a report] merely because th e Report does not mention actual payments or claims for payment.”). Nonetheless, the instant ca se is distinguished from such situations because none of the qui tam complaints previously filed by the relator suggested “other” entities complicit in t he alleged fraud scheme, or, mor e importantly, alleged that the instant defendants were involve d in the alleged fraud. Rel.’s Opp’n at 10. Indeed, contrary to the defendants’ argument that the relator here “ simply ‘provid[ es] “more specific details”’ or ‘reveal[s] specific instances of fraud where the general practi ce has already been publicly24 disclosed,’” Defs. ’ Mem. at 10 (quoting Oliver II , 826 F.3d at 472 (quoting Settlemire , 198 F.3d at 919 (D.C. Cir. 1999))), the Third Amended Complaint targets the defendants for the first time as being involved in fraudulent activity violativ e of the FCA, even though the alleged manner of execution of the fraud scheme allegedly was also used by the de fendants named in the other

cases. 12 Thus, the relator’s earlier filed qui tam actions would not have mean ingfully alerted any government investigator of the fraud presently alleged. See Settlemire , 198 F.3d at 918; see also United States v. CSL Behring, L.L.C. , 855 F.3d 935, 942–44 (8th Cir. 2017) (noting “[i]n order to bar claims against a particular defendant, the public disclosur es relating to the fraud must either explicitly identify that defenda nt as a participant in the alle ged scheme, or provide enough information about the participant s in the scheme such that the defendant is identifiable ” as a participant in that scheme) (a lteration and emphasis in origina l) (internal citation omitted); United States ex rel. Dig. Healthcare, Inc. v. Affiliated Comput. Servs. , Inc., 778 F. Supp. 2d 37, 49–51 (D.D.C. 2011) (explaining that “while the government may be aware of fraud and improper payments being made by participants in the Medicaid pr ogram on a general level, it was not ‘squarely on the trail’ of the defendant,” where the pu rported public disclosures “reveal some important background information,” but do “not rise to the level of ‘allegations or transactions’”) (quoting United States ex rel. Fine v. Sandia Corp. , 70 F.3d 568, 571 (10th

12 As the relator notes, “[i]t is unclear whether Defendants atte mpt to argue that Relator’s prior qui tam actions resulted in an ‘industry-wide’ public disclosure – whic h can trigger the public disclosure bar even when a subsequent defendant was not sp ecifically named.” Rel.’s Opp’nat 11. The relator correctly points out, however, that “[e]ven if Defendants had articulated an ‘industry-wide’ argument, that argument would fail because Relator’s prior lawsuits did not implicate all members of the industry – or even a significant percentage of them – as fraudsters.” Id. at 11–12 (citing United States ex rel. Baltazar v. Warden et al. , 635 F.3d 866, 869 (7th Cir. 2011); In re Nat. Gas Royalties , 562 F3d 1032, 1040–1043 (10th Cir. 2009); Cooper v. Blue Cross & Blue Shield of Fla., Inc. , 19 F.3d 562, 566 (11th Cir. 1994)). Since the defendants do not explicitly raise this “ industry-wide” theory, it will not be considered.25 Cir.1995)); cf. Davis I , 679 F.3d at 836 (applying public dis closure bar where an earl ier “report revealed to the public” an alle gation pertaining specifically t o the defendant “and provided ample reason for the government to investigate further”). 13 For these reasons, the defendant s’ arguments regarding the re lator’s prior qui tam actions provide no basis for dism issing the claims as barred bythe public disclosure bar. 14
B. The Relator Fails to State a Claim for Relief The Third Amended Complaint foc uses on two categories of allege dly non-compliant Cisco products that the defendant s sold to the federal governme nt: products sold through the defendants’ GSA FSS contracts and products “incidental” to the contracts, which the relator argues were improperly identifie d as “open market” items. TAC ¶¶ 9, 11. The relator bases these allegations on his review of 49 quarterly Cisco COO chart s for the period covering January 2000 to September 2012, and data for over $123 million in the d efendants’ sales, which charts

13 Two additional arguments raise d by the relator may be summari ly dispensed as unpersuasive and having no part in the conclusion that his prior qui tam actions did not trigger the pub lic disclosure bar. First, the Relator suggests that his own prior lawsuits cannot operate as a bar be cause the FCA is concerned with preventing “parasitic lawsuits brought by opportunis tic litigants seeking to capitali ze on public disclosures,” Rel.’s Opp’n at 13–14 (internal quotation marks and citation omitted), and the relato r “is not a ‘parasite’ of his own prior court filings,” id. To the contrary, in evaluating application of the public disclo sure bar, courts may and do consider a relator’s prior public disclosures, see Defs.’ Reply at 5 n.1 (citing United States ex rel. Reagan v. E. Tex. Med. Ctr. Reg’l Healthcare Sys., 384 F.3d 168, 174 (5th Cir. 2004) ; United States ex rel. Poteet v. Bahler Med., Inc. (“ Poteet ”) , 619 F.3d 104, 114 (1st Cir. 2010) ; In re Nat. Gas Royalties , 562 F.3d at 1040), and such prior disclosures by a relator may preserve a qui tam lawsuit only if the relator is the “original source,” Poteet , 619 F.3d at 113 (“[T]he ‘original source’ exception already ensures that the most valuable relato rs—typically insiders with direct and independent knowledge of fraud—will not be b arred by prior public disclosur es, whether made by the relators themselves or others.”). Second, the relator contends that “the amended public disclosur e provision makes clear that only ‘a Federal criminal, civil, or admi nistrative hearing in which the Government or its agent i s a party’ will trigger the bar,” and “[s]ince the Government did not intervene in any of R elator’s prior qui tam suits, none of these suits triggered the new public disclosure bar.” Rel.’s Opp’n 14–15. This argument loses sight of the fact that in every qui tam action, the government is th e “real party in interest.” United States ex rel. Landis v. Tailwind Sports Corp. , 98 F. Supp. 3d 8, 11 (D.D .C. 2015) (“[T]he Un ited States is a real party in interest even if it does not control the [FCA] suit.”) (quoting Searcy v. Philips Elecs. N. Am. Corp. , 117 F.3d 154, 156 (5th Cir. 1997) (citing United States ex rel. Milam v. Univ. of Tex. M.D. Anderson Cancer Ctr. , 961 F.2d 46, 48–49 (4th Cir. 1992))). 14 Although the defendants discuss at length whether the relator is an “original source,” see Defs.’ Mem. at 13–18; Defs.’ Reply at 8, the conclusion that the relator's all egations are not based on publicly disclosed information precludes any need to “proceed t o the ‘original source’ inquiry ,” Springfield Terminal , 14 F.3d at 651; see also Rel.’s Opp’n at 16–17 (“[s]ince t he public disclosure bar was n ever triggered, Relator doe s not need to establish original source status.”).26 and data were obtained during the go vernment’s five-year invest igation and provi ded to the relator. See id. ¶¶ 136–40. 15 Although the Third Amended Complaint purports to cover an almost thirteen-year time pe riod of “2005 and continuing to the present” and alleges that “thousands of [Cisco] end products ” were sold, in violation of the TAA, the relator relies on only 46 “representative examples” of transactions from nineteen diff erent purchase orders, covering a five-year period between September 29, 2008, and December 12, 2 013. See id. ¶¶ 1, 116, 143, 145. The defendants assert that th e Third Amended Complaint fa ils to meet the pleading requirements under Rules 12(b)(6) and 9(b). See Defs.’ Reply at 23. The defendants are correct, as explained below.
1. Liability under the FCA The relator has plead claims under both the presentment and fal se statement provisions of the FCA for both pre- and post-FE RA amendment conduct. Specifi cally, the relator alleges, in Counts I and II, violations of the pre-FERA presentment clause for claims submitted prior to May 20, 2009, and of the post-FERA presentment clause for claim s submitted after May 20, 2009, respectively; and, in Counts III and IV, violations of th e pre-FERA false statement clause for statements made prior to June 7, 2008, and of the post-FERA false statement clause for statements made after June 7, 2008, respectively. In its current form, the FCA pr ovides for civil liability for a nyone who: (1) “knowingly presents, or causes to be presen ted, a false or fraudulent clai m for payment or approval,” 31 U.S.C. § 3729(a)(1)(A); or (2) “ knowingly makes, uses, or cause s to be made or used, a false record or statement material t o a false or fraudulent claim,” § 3729(a)(1)(B). The “presentment clause,” in 31 U.S.C. § 3729(a)(1)(A ), and “false statement clause,” § 3729(a)(1)(B), have

15 According to the relator, “Cisco noted that it was unable to l ocate the chart for Janu ary 2003, and that chart was not included in Cisco’s production.” TAC ¶ 137 n.15.27 always been “complementary,” as they were “designed to prevent those who make false records or statements to get claims pa id or approved from escaping liab ility solely on the ground that they did not themselves present a claim for payment or approval.” United States ex rel. Totten v. Bombardier Corp. (“ Totten II ”), 380 F.3d 488, 501 (D.C. Cir. 2004) (em phasis in original). In amending the presentment clause , formerly codified at 31 U.S.C. § 3729(a)(1), FERA removed language requiring that the cla im be presented to an officer or employee of the government or armed forces. FERA § 4(a). The FER A amendment to the false st atement clause, formerly codified at 31 U.S.C. § 3729(a)(2 ), replaced the language of “f alse record or statement to get a false or fraudulent claim pai d or approved by the government” w ith “statement material to a false or fraudulent claim.” FERA § 4( a). The presentment clause was made effective the day of enactment, May 20, 2009, and the false statement amendment clau se was made retroactive to June 7, 2008. FERA § 4(f). In alleg ing claims under these pro visions or any other provision of the FCA, the relator must sati sfy Rule 9(b)’s heightened pleadi ng standard. See Heath , 791 F.3d at 123; Totten I, 286 F.3d at 551–52. Given the similarity of the c onduct prohibited by both provisio ns of the FCA, the parties do not meaningfully distinguish the m in their briefing. For or ganizational clarity, the presentment claims in Counts I a nd II are addressed first befor e turning to the false statement claims in Counts III and IV.
2. Relator’s Presentment Claims To bring a claim under the presentment provision of the FCA, a relator must allege factual allegations plausibly s howing that the defendant submit ted “[1] a claim to the government, [2] that the claim wa s false, and [3] that the defe ndant knew that the claim was false.’” United States ex rel. Davi s v. District of Columbia (“ Davis II ”), 793 F.3d 120, 124 (D.C.28 Cir. 2015) (quoting United States ex rel. Hampton v. Columbia/HCA Healthcare Corp. , 318 F.3d 214, 218 (D.C. Cir.2003)). The falsity must also be material to the government’s decision to pay in order to be actionable under the FCA. See Escobar , 136 S. Ct. at 1996; see also United States v. Sci. Applications Int’l Corp. (“ SAIC ”), 626 F.3d 1257, 1269 (D.C. Cir. 2010). While conceding the first element as to submission of claims to the g overnment, the defendants vigorously dispute the sufficienc y of the allegations as to the other two elements. See generally Defs.’ Mem. at 18–33; Rel.’s Opp’n at 18–19. The Third Amended Complaint sufficiently alleges that the defendants pres ented false claims with respect to certain end products, but the relator has not adequately ple d that the claims presented were material to the federal government’s decision to pay, or tha t the defendants “knowingly ” presented the false claims. Consequently, neither count, as detailed below, survives the de fendants’ dismissal motion. “In the paradigmatic case, a claim is false because it ‘involv es an incorrect description of goods or services provided or a request for reimbursement for g oods or services never provided.’” SAIC , 626 F.3d at 1266 (quoting Mikes v. Straus , 274 F.3d 687, 697 (2d Cir. 2001), abrogated on other grounds by Escobar , 136 S. Ct. 1989)). Alternatively, however, “a plaintiff may proceed under the so-called ‘c ertification’ theory of liabi lity,” under which “the falsity of a claim for payment rests on a false representation of compliance with an applicable federal statute, federal regula tion, or contractual term.” United States ex rel. McBride v. Halliburton Co. (“ McBride ”), 848 F.3d 1027, 1031 (D.C. Cir. 2017) ( internal quotation ma rks and citations omitted). “False certifications can be either express or impli ed.” SAIC , 626 F.3d at 1266. “An expressly false claim is, as th e term suggests, a claim that fa lsely certifies compliance with a particular statute, regulation or contractual term, where compl iance is a prerequisite to payment.”
Mikes , 274 F.3d at 698. An “implied false certification” occurs “[w ]hen . . . a defendant makes29 representations in submitting a claim but omits its violations of statutory, regulatory, or contractual requirements.” McBride , 848 F.3d at 1031 (alteration i n original) (quoting Escobar , 136 S. Ct. at 1999). The Third Amended Complaint alleges that the defendants made “express and implied false certifications of compliance with contractual and regulatory requirements,” TAC ¶ 2; see also id. ¶ 86, but, for the most part, the parties do not discuss the t wo forms of false certification separately. Instea d, the parties’ analysis relie s on the standard for alleging implied false certifications, which there fore is this Court’s focus. The D.C. Circuit has explained that implied false certification claims for the underlying claim for payment at issue nee d not include “express contractua l language specifically linking compliance to eligibility for payment.” SAIC , 626 F.3d at 1269. A showing “that the contractor withheld information about its nonc ompliance with material cont ractual requirements” is sufficient to state such a claim. Id. Both the Supreme Court and the D.C. Circuit, however, have instructed that “courts should c ontinue to police expansive imp lied certification theories ‘through strict enforcement of the Act’s materiality and s cienter requir ements.’” McBride , 848 F.3d at 1031 (quoting Escobar , 136 S. Ct. at 2002 (quoting SAIC , 626 F.3d at 1270)). The sufficiency of the relator’s factual allegations regarding falsity, materialit y and scienter are addressed in that order. a) Falsity The defendants argue broadly tha t the relator has failed to “pl ead facts sufficient to allege falsity” for three reasons: (1) generally, the relator “relied on outdated country-of-origin charts that do not correspond to the dates of the alleged transactions ”; (2) for configurable items, the relator improperly “examined t he origin of individual items rather than the end products into which they were ‘substantially transformed’”; and (3) for “non- contract, open market items,” the30 relator “failed to all ege any factual or legal basis to conclud e that government purchases of [this category of items] from Defenda nts were in any way unlawful or otherwise improper.” Defs.’
Mem. at 18. In response to the defendants’ fi rst argument r egarding the rel ator’s reliance on outdated quarterly COO charts, the relator explains that he used the “mo st reliable and complete COO data available.” Rel.’s Opp’n at 23. 16 Nonetheless, the defendants con tend that the relator’s use of quarterly Cisco charts are “t emporally disconnected” from t he defendants’ sales data and cannot be a reliable source to s how the defendants sold end pro ducts under the GSA FSS contracts from non-designated c ountries, in violation of the TA A. See Defs.’ Reply at 9; Rel.’s Opp’n at 21–22. Although the defendan ts acknowledge that “five transactions, out of 46” refer “to COO charts dated within the sam e quarter as the transaction s,” Defs.’ Reply at 10 n.6, they point out that otherwise the Thir d Amended Complaint relies “onoutdated and inapplicable COO charts for its analysis of virtually all transactions refer enced in the [Third Amended Complaint], including some COO charts that were more than three years removed from the date of the transaction alleged in the [Third Amended Complaint],” id. at 10 (emphasis in original). As support, the defendants provide a helpful chart “summarizing [the] dated nature of countryof-origin charts alleged by Relat or relative to dates of Purcha se Orders at issue.” Defs.’ Mem. at 20 (citing Defs.’ Mot., Ex. D, Chart of Time COO Charts and App licable Purchase Orders, ECF No. 67-6). The relator does not dispute that“a temporal gap exists betwee n the dates of certain transactions and the applicable COO charts for the products inv olved in those tr ansactions,” but

16 The defendants challenge the re lator’s reliance on quarterly C OO charts, in part, because Cisco’s countryof-origin lists are updated weekl y. Defs.’ Mem. at 2. The rela tor, however, only r eceived quarterly COO spreadsheets, which were produced in response to the government ’s CID. Rel.’s Opp’n at 19–20 (citing Cisco Production Letter at 1–2).31 rather argues that “some produc ts did not appear on every quart erly Cisco COO chart” and, in any event, “every COO chart on w hich products involved in sales discussed in the Complaint appeared, those products were always sourced only from non-desi gnated countries.” Rel.’s Opp’n at 20–21 (emphasis in origi nal). He further avers that h is “allegations are substantiated by the most reliable and complete COO data available for the produ cts at issue

–the COO data directly from manufacturer Cisco ,” and he “has matched this COO data to sales and invoice data provided by Defendants – another presumably reliable s ource of data.” Rel.’s Opp’n at 2 3. Accepting that the relator conducted the COO analysis using the best source documents made available to him supports a plausi ble inference that the defend ants sold at least some noncompliant end products through their GSA FSS contracts with imp lied false certifications. See Iqbal , 556 U.S at 678. This conclusion is consistent wit h that of other cases, in whic h the relator in this case and another relator have used the s ame methodology of cross-referen cing COO charts with sales data or product lists to all ege the defendants in those cases sold n on-compliant end products. See,

e.g. , United States ex rel. Folliard v. Synnex Corp. (“ Synnex ”), 798 F. Supp. 2d 66, 80 (D.D.C. 2011) (finding that “facts create a strong inference that a fal se claim was submitted” where relator compared product and c ountry-of-origin lists); United States ex rel. Folliard v. CDW
Tech. Servs. , Inc., 722 F. Supp. 2d 20, 23, 29 (D.D.C. 2010) (determining that the relator had sufficiently alleged the existence of a false claim where his c omplaint was based on a review of vendor products lists , indicating countr y of origin, alongside a list of 140 end products allegedly sold by defendants); United States ex rel. Berkowitz v. Automation Aids (“ Berkowitz ”), No. 13 C 08185, 2017 WL 1036575, at *6 (N.D. I ll. Mar. 16, 2017) (where relator “put[] t ogether his suit by combining product lists (specif ying the origin of the produc ts) received in t he course of his32 ordinary business with data re garding products sold by the Defe ndants,” the court found it could “reasonably infer . . . that the De fendants sold supplies made in non-designated countries to the government”) (internal quotat ion marks and citation omitted). Despite the temporal disconnect of some, or even the majority, of the COO charts, the periods o verlap with some purchase orders, as the defendants concede, to suppo rt a finding that the relato r has plausibly alleged that the instant defendants sold some non-compliant end products, partic ularly when granting the relator “the benefit of all inferences that can be derived from the fac ts alleged.” Synnex , 798 F. Supp. 2d at 81 (quoting Kowal , 16 F.3d at 1271). With respect to the defendants’ s econd falsity arg ument, the re lator has not created such a plausible inference with respect to items Cisco labeled as “con figurable options,” as opposed to “end products.” The parties agree that the defendants sold at least some configurable option items from non-designated countri es, but also that the TAA is c oncerned with the country-oforigin information of “end products ,” as distinct from “configu rable options.” See Defs.’ Mem. at 21 (citing FAR 52.225-6; 19 U .S.C. § 2518(4)(B); 19 C.F.R. § 177.22(a)); Rel.’s Opp’n at 25;
see also Westcon Contract ¶ 8 (requiri ng TAA compliance for end products ); Comstor Contract ¶ 8 (same). The distinction between “end product” and “configu rable option” product is relevant in assessing falsity. Cisco’s C OO charts, which are attached t o the Third Amended Complaint, highlight this distinction and s tate that Cisco defines a “conf igurable option” as an item that “is not orderable by itself and may be considered a configurable op tion of an end product,” in which “case, the country of origin of the corresponding end product w ould apply.” Defs.’ Mem. at 22 (citing, e.g. , Rel.’s COO Source Docs. at 14–16) . In other words, “configur able options” are items that have not yet been “subs tantially transformed” into e nd products and thus need not individually, for the purposes of government procurement, origi nate in a designated country.33 The defendants provide another helpful chart identifying 22 “co nfigurable option” products included within the Thir d Amended Complaint’s example purchase orders. See Defs.’ Mot., Ex. E, Chart of Alleged T ransactions Involving Configurab le Options at 1–2, ECF No. 67- 7 (providing chart of 22 products ). This list was compiled by reviewing the re lator’s exhibits, including the Cisco COO charts, a nd identifying those items marked by Cisco with a “Note 1 designation,” which the Cisco COO charts explain were sold as “ configurable options.” See Defs.’ Mem. at 22–23. As to these configurable option i tems, the relator unpersuasive ly contends that these items were line items in the defe ndants’ purchase orders, refle cting their sale “on an a la carte basis” and “before being incor porated into end products.” Rel. ’s Opp’n at 25 (emphasis in original). As such, according to the relator, “the items were never ‘transformed into a new and different article of commerce, ’ and therefore, had not been sub stantially transformed.” Id

. (quoting 19 U.S.C. § 2518(4)(B)). Ye t, the relator provides no additional information to support the allegations that the defenda nts were selling configurable o ptions as end products on an individual basis, and he ignores t he possibility, as raised by the defendants, that the government ordered the items “solely for incorporation by Cisco into Cisco end products prior to delivery to the government.” Defs.’ Reply at 12. The relator’s own exhibits state t hat a configurable option’s c ountry of origin is determined by the end product, see, e.g. , Rel.’s COO Source Docs. at 14–16, not the configurable item itself. Without any other factual allegation s to show the configurable options items sold by the defendants were ne ver “transformed,” the rela tor has not created an inference that these items needed to com ply with the TAA. Thus, with res pect to such configurable options items, which may have or iginated in non-designated coun tries and appear as individual34 line items on the defendants’ purc hase orders, the relator fail s to sufficiently plead the existence of a false claim due to these i tems originating in a non-design ated country. Finally, the defendants’ last challenge to the falsity prong of the relator’s false certification allegations relat es to sixteen pr oducts that the defendants sold as “open market” items on the purchase orders attach ed to the Third Amended Comp laint, which items originated in non-designated countries a nd were valued as high as $96,321. 96, with some valued at a fraction of that amount, at only afew thousand dollars or less

. See Defs.’ Mem. at 25–28; see also Defs.’ Mot., Ex. G, Chart of Alleg ed Open Market Acquisitions ( “Chart of Alleged OM Acquisitions”) at 1, ECF No. 67- 9 (providing chart of 16 items compiled from TAC ¶¶ 120, 127– 130, 160, 164, 168, 174 nn.22–23, 176). 17 The parties dispute the monetary threshold that would require t he vendor to ensure TAAcompliance for these open market items. While the relator argu es, based on his understanding of the FAR’s “micro-purchase thres hold,” that the value of fourtee n of the sixteen items required TAA-compliance, Rel.’s Opp’n at 27, the defendants posit that t he relator has not alleged falsity with respect to any of these open market items because “[n]one of the transactions . . . meet or exceed” the applicable “TAA Threshold,” and therefore “do not trigger applicability of the TAA’s country-of-origin requi rements.” Defs.’ Mem. at 25–26. The relator contends that the FAR’s “micro purchase limit, w hich has ranged between $2,500 an d $3,500 for the relevant time period,” applies to the open m arket items underlying his claims . TAC ¶ 95. The defendants, on the other hand, contend that “[t]he dollar threshold necessary to make the TAA applicable to

17 Two of the sixteen open market transactions identified in the defendants’ chart, as underlying the relator’s claims, are valued below the micr o-purchase threshold, which th e relator claims tri ggers TAA compliance obligations, and, thus, no dispute should exist over whether th ese two products needed t o comply with the TAA. See Chart of Alleged OM Acquisitions at 1 (listing value of product PWR-RPS2300 at “$696.00 and the value of product CVR-X2-SFP at “$0”); Rel .’s Opp’n at 27 (“All but two o f these sales exceed the micro-purchase limit.”). Thus, the falsity of claims submi tted for only fo urteen of the sixteen open market ite ms are even at issue.35 open market items . . . range d from $191,000 to $204,000 throug hout the time period alleged in the [Third Amended Complaint]. ” Defs.’ Mem. at 25 (relying on FAR 25.402(b)), which states “[t]he value of the acquisition is a determining factor in the applicability of trade agreements,” as set out in a table summarizing t he values triggering various tr ade agreements); see also Defs.’ Reply at 15 (citing FAR 25.402(b)); Defs.’ Reply at 15 (citing FAR 25.1101(c)(1) for the proposition that the TAA requireme nt must be inserted “into sol icitations and contracts valued at $191,000 or more”). Putting aside this debate about w hich values trigger TAA-compli ance obligations for open market items, the relator’s a llegations that these open ma rket items needed to comply with TAA country-of-origin requireme nts fall far short of plausibly establishing falsity. The relator relies for his open market item allegations on specific regulat ions that are silent regarding TAAcompliance for open market items. For example, the “FAR’s onlydiscussion of ‘open market’ sales appears in FAR 8.402,” TAC ¶ 88, which, in a single subse ction, permits the government to procure open market items th at are “not on the [FSS]” for “admi nistrative convenience ... “only if” certain requirements are me t, including that “[a]ll applica ble acquisition regulations pertaining to the purch ase of the items not on the Federal Supp ly Schedule have been followed (e.g., publicizing (Part 5), competitio n requirements (Part 6), acquisition of c ommercial items (Part 12), contracting met hods (Parts 13, 14, and 15), and smal l business programs (Part 19)).” FAR 8.402(f)(1). FAR 8.402(f) does not directly refer to the T AA, and nor do any of the other pertinent FAR regulations cite d by the relator in the Third Ame nded Complaint. See TAC ¶ 95 (citing FAR 8.405-1(b), which state s that “[o]rdering activitie s may place orders at, or below, the micro-purchase threshold with a ny [FSS] contractor that can mee t the agency’s needs.”); id

. (citing FAR 2.101, which “defines the micro purchase limit, whi ch has ranged between $2,50036 and $3,500 for the relevant time period.”); see also FAR 8.401 (defining “ordering activity” as entities that place orders through GSA Schedule contracts). To be sure, the regulations cit ed by the relator clearly impose rigorous obligations vendors of open market items that exceed the micro purchase thr eshold. See FAR 8.402(f) (discussing obligations, includ ing those related to publicationand competition). Nonetheless, none of these provisions specifically discuss imposing TAA requ irements for sales of open market items, which by definition are outside the FSS contract. By contrast, the defendants rely on FAR regulations that explicit ly discuss the application of the TAA when the items sold have a value over $191,000 (“TAA-threshold”), see Defs.’ Mem. at 25 (citing FAR 25.402(b); FAR 25.1101(c)(1)); see also Defs.’ Reply at 9 (citing FAR 25.402–03), and none of the open market items at issue in the Third Ame nded Complaint meet or exceed th at value. Thus, the legal predicate for the relator’s c laim—that any products with values over the micro-purchase threshold, set out in FAR 2.101, mustoriginate from designated countries—is legally unsupportable, when FAR 25.402(b) expr essly makes acquisitions of open market items subject to the TAA only when the value is over the TAA-threshold. 18 Consequently, the defendants’ sale of open market items valued be low the TAA-threshold from n on-designated countries does not plausibly support the relato r’s alleged false claims.

18 Similarly, although the relator cites GSA documents and bid pr otests discussing vendor obligations triggered when items exceed the m icro-purchase th reshold, none of these documents explicitly link such obligations to TAA compliance, but instead r efers to other requirements, su ch as surveying contractors and determining price reductions. See TAC ¶ 96 (citing id. , Ex. 12, GSA Schedules v. Open Market at 13, ECF No. 65-13 (ex plaining when value of item to be ordered through GSA FSS schedule excee ds micro-purchase threshold but is less than another threshold of $150,000, t he entity must take certain act ions with respect to surveying contractors and determining if price reduction should be sought)); Rel.’s Opp’nat 26–27 (citing bid protest decisions, none of which mention TAA, for proposition that “The Government Accountability Office – which, among other thing, adjudicates bid protests on federal procurem ent contracts . . . has repeate dly determined that open market sales must be within the micro-purchase threshold, which has ranged from $2500 to $3 500 during the relevant time period”).37 In sum, the relator has sufficien tly alleged falsity as to end products sold by the defendants through their GSA FSS contracts, but falls short in alleging the existence of false claims with respect to configurab le options or open market item s. b) Materiality Even though the relator has cro ssed the false certification hur dle with respect to end products sold by the defendants, he fails to plead materiality adequately under an FCA presentment claim. The Supreme Court, in Escobar , 136 S. Ct. at 2003, clarified that the standard for pleading material ity under the FCA is “demanding.” There, the Supreme Court considered an appeal from the First Circuit in a qui tam suit alleging that the defendant healthcare provider had violate d the FCA “under an implied fals e certification theory of liability” by submitting “reimbursement claims that made representations a bout the specific services provided by specific types of prof essionals,” while “fail[ing] to disclose serious violations of regulations pertaining to sta ff qualifications and licensing re quirements for these services.” Id. at 1998. The First Circuit had held, inter alia , that the healthcare provi der’s noncompliance with conditions of payment was “suffici ent to establish the falsity of a claim for reimbursement,” and also that the relator had “pr operly pleaded that the condition of payment at issue was a material one” because “[t]he express and absolute language of the regula tion in question, in conjunction with the repeated references t o supervision throughout the regu latory scheme, constitute dispositive evidence of materiality.” United States v. Universal Health Servs., Inc., 780 F.3d 504, 514–517 (1st Cir. 2015), vacated and remanded , 136 S. Ct. 1989 (2016) (internal quotation marks and citations omitted). On appeal, the Supreme Court conf irmed “that, at least in certa in circumstances, the implied false certification the ory can be a basis for liability ,” but stressed that enforcement of the38 “rigorous materiality requireme nt” for alleging liability under the FCA requires an evaluation of multiple factors. Escobar , 136 S. Ct. at 1995–96, 2003. The FCA de fines materiality as “having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.” Escobar , 136 S. Ct. at 2002 (quoting 31 U.S .C. § 3729(b)(4)). This de finition is derived from “common-law antecedents,” id. (quoting Kungys v. United States , 485 U.S. 759, 769 (1988)), such that, under both th e FCA and the common law, “materiality look[s] to the effect on the likely or actual be havior of the recipient of the alleged misrepresentation,” id. at 2002–03 (quoting 26 R. L ORD , W ILLISTON ON C ONTRACTS § 69:12, p. 549 (4th ed. 2003)). This “materiality standard is demanding,” as the FCA is not “‘an all -purpose antifraud s tatute’ or a vehicle for punishing garden-variety breaches of contract or re gulatory violations.” Id. at 2003 (quoting Allison Engine Co., Inc. v. United States ex rel. Sanders (“ Allison Engine ”), 553 U.S. 662, 672 (2008)). Consequently, materiality “cannot be found w here noncompliance is minor or insubstantial.” Escobar , 136 S. Ct. at 2003. Moreover, it is not “su fficient for a finding of materiality that the Governme nt would have the option to declin e to pay if it knew of the defendant’s noncompliance.” Id.
In Escobar , the Supreme Court enumerated s everal pertinent factors in det ermining materiality, stressing that “m ateriality cannot rest on ‘a sing le fact or occurrence as always determinative.’” Id. at 2001 (quoting Matrixx Initiatives, Inc. v. Siracusano , 563 U.S. 27, 39 (2011)). First, “the Government ’s decision to expressly identi fy a provision as a condition of payment is relevant, but not a utomatically dispositive.” Id. at 2003. Second, “evidence that the defendant knows that the Governme nt consistently refuses to pay claims in the mine run of cases based on noncompliance with the particular statutory, regulator y, or contractual requirement” supports a finding that the requirement is material. Id. Third, and “[c]onversely, if the39 Government pays a particular cla im in full despite its actual k nowledge that certain requirements were violated, that is very strong e vidence that those requirem ents are not material.” Id. Fourth, “if the Government regularly pays a particular type of claim infull despite actual knowledge that certain requirements were vi olated, and has signaled no change in position, that is strong evidence that the requireme nts are not material.” Id. at 2003–04. In short, the Supreme Court’s decision “makes clear that court s are to conduct a holistic approach to determining mate riality in connection with a paymen t decision, with no one factor being necessarily dispositive.” United States ex rel. Escobar v. Universal Health Servs., Inc. , 842 F.3d 103, 109 (1st Cir. 2016). 19 Courts have recognized this approach as requiring a heightened standard for pleading materiality. See United States ex rel. Petratos v. Genentech
Inc. (“ Petratos ”), 855 F.3d 481, 492 (3d Cir. 2017) (“I n holding that [relator ] did not sufficiently plead materiality, we now join the many other federal courts th at have recognized the heightened materiality standard after [ Escobar ].”); McBride , 848 F.3d 1027, 1032 (D.C. Cir. 2017) (recognizing “demanding” standard and affirming grant of summar y judgment for defendants on materiality issue (quoting Escobar , 136 S. Ct. at 2003)); United States ex rel. Kelly v. Serco, Inc. , 846 F. 3d 325, 333 (9th Cir. 2017) (affirm ing grant of summary judgment to defendants where relator’s FCA claim “fail[ed] to meet the rigorous standard for materiality”). 20

19 On remand, the First Circuit ag ain decided that the defendant ’s “alleged misrepresentations were material.” United States ex rel. Escobar v. Universal Health Servs., Inc. , 842 F.3d 103, 112 (1st Cir. 2016). 20 Escobar only considered the post-FERA version of the FCA, without deci ding if pre-amendment conduct should be treated differently. Escobar , 136 S. Ct. at 1998 n.1 (“Alt hough Universal Health submitted some of the claims at issue before 2009, we assume—as the parties have done —that the 2009 amendments to the False Claims Act apply here. Universal Health does not argue, and we thus do not consider, whether pre–2009 conduct should be treated differently.”) . While the D.C. Circuit has not express ly resolved this issue, see McBride , 848 F.3d at 1031 n. 5 (assuming “that [ Escobar’s ] materiality standard applies to the instant dispute,” which i nvolved pre-FERA conduct), the Third Circuit has concluded that the Escobar materiality standard applie s to conduct that occurred before FERA’s 2009 amendments, see United States ex rel. Spay v. CVS Caremark Corp. , 875 F.3d 746, 763 (3d Cir. 2017) (finding Escobar ’s analysis demonstrates that: “(1) Section [3279](a)(1) has a materiality requirement, even though that requirement has never been expressed in the st atute, and (2) the standard used to measure materiality did not change in 2009 when Congress amended the FC A to include a definition of ‘material.’”). The40 The defendants contend the relat or “fails to plead facts plausi bly showing that any alleged false claim was ‘materi al’ to the government’s decision to accept and pay for products it purchased.” Defs.’ Mem. at 31. I n particular, the relator’s “ exclusive reliance on contractual, statutory, or regulatory obligati ons does not satisfy the appli cable pleading standard for materiality.” Defs.’ Reply at 22 (citing Escobar , 136 S. Ct. at 2001). The requirement of demonstrating materiality would s eem especially crucial here wh ere the government declined to intervene after almost five y ears of investigation, and has als o declined to intervene in similar cases brought by this relator alle ging similar fraudulent activ ity by other companies selling products under GSA contracts to the government. See Petratos , 855 F.3d 481, 490 (noting, in decision dismissing claims on mate riality grounds, that in the “six years” since the relator disclosed evidence of the defenda nts’ “misinformation” to the g overnment, “the Department of Justice has taken no action again st [the defendants] and declin ed to intervene in this suit”). In defense of the materiality element of his claims, the relato r primarily relies on
Escobar’s first factor—the government’s e xpress condition of payment—eve n though Escobar emphasized that “statutory, re gulatory, and contractual require ments are not automatically material, even if they are lab eled conditions of payment,” 136 S. Ct. at 2001, and that this factor is “not automatically dispositive,” id . at 2003. The relator contends t hat “[t]he entire regulatory framework contemplates that, aft er the initial offers and Trade Agreements Certifications are made, government contracting office rs will continue to ‘rely onthe offeror’s certification of end product origin,’ unless the offero r says otherwise.” Rel.’s Op p’n at 32 (citing FAR 25.501(b)). He bolsters this argument wit h citations to various regulatory provisions, including: (1) FAR 52.225-6, which requires defendants “to complete the Trade Agre ements Certificate” “[b]efore

parties appear to assume that the Escobar materiality standard applies to the relator’s pre- and post-FE RA presentment claims, and that is the assumption applied here.41 being permitted to contract with t he Government,” Rel.’s Opp’n at 31; (2) FAR 52-225-5(b), which requires the defendants c ontinually to certi fy compliance with the TAA and list noncompliant end products sold to the government, id. at 32; and (3) FAR 25.502(b), which requires “government contracting officers” to “generally reject deliveri es that include any products from non-designated countries,” id. at 33. Other than these regulatory requi rements, the relator provides no factual allegations that the “Government consistently refuses to pay claims in the mine run of cases based on noncompliance with the particul ar statutory, regulatory, or con tractual requirement,” as set out in
Escobar’s second factor. Escobar , 136 S. Ct. at 2003. Instead, the T hird Amended Complaint, which was filed after the governme nt was fully informed for yea rs about the relator’s allegations regarding the defendants’ purporte d role in the fraudulent sche me, is silent as to whether the government took any action whatsoeve r against the defendants, o r took steps to cancel the FSS contracts at issue upon finding out about submission of claims for non-TAA compliant items, or even sent notices regarding TAA non -compliance to the defendant s. Any of those steps by the government could have supported a pla usible claim that complian ce with regulatory or contractual obligations is mate rial to the government’s decisio n to pay in this case. Cf., e.g. , United States v. Triple Canopy, Inc. , 857 F.3d 174, 178–79 (4th Cir.), cert. dismissed , 138 S. Ct. 370 (2017) (finding, based on allegations of false claims submi tted, along with the defendants’ “own actions in covering up noncompliance,” and the Government’ s decision “not [to] renew its contract” with the defendant, t hat the requirements for pleadin g materiality had been met); United States ex rel. Scutellaro v. Capitol Supply, Inc. (“ Scutellaro ”), Civ. No. 10-1094 (BAH), 2017 WL 1422364, at *23 (D.D.C . Apr. 19, 2017) (denying defenda nt’s motion for summary judgment because, inter alia , GSA notices to defendant regar ding listing of TAA non-complia nt42 products for sale sufficed to rai se a genuine issue on material ity as to relator and intervenor government’s fraud claims). Simply put, the relator provide s no allegation that meets the e xamples described by the Supreme Court, including whether “the Government pays a particu lar claim in full despite its actual knowledge that certain req uirements were violated,” or “ regularly pays a particular type of claim in full despite actual know ledge that certain requirement s were violated,” Escobar 136 S. Ct. at 2003–04, as showing the mater iality of “the particular s tatutory, regulatory, or contractual requirement” underlying the relator’s claims, id. at 2003. Moreover, the relator “acknowledge s that ‘exceptions to the rul es requiring TAA compliance exist.’” Defs.’ Re ply. at 22 (quoting Rel.’s Opp’n a t 33). Indeed, the Third Amended Complaint quotes a GSAnewsletter advising vendors to “ ensure your company is compliant with the TAA requirements ,” and stating: “ If problems exist, we will work with you to address compliance issues .” TAC ¶ 83 (emphasis in original) (quoting id. , Ex. 11, GSA Steps Issue No. 10 (dated Mar. 2006) (“G SA Steps”) at 2, ECF No. 65-1 2). GSA’s expressed willingness to “work with,” vendors in order to address compliance issues ins tead of outright rejecting claims, see id. (quoting GSA Steps at 2), certa inly shows that the government may continue to make payments eve n when TAA violations are known. 21
Without more than citations to the regulatory framework, the re lator has failed to show that any alleged false claim was material to the government’s d ecision to pay. See Escobar , 136 S. Ct. at 2003 (“A misrepresenta tion cannot be deemed material merely because the Government designates compliance with a particular statutory, regulatory, or contractual requirement as a

21 To be clear, the mere existen ce of exceptions in a statutory or regulatory scheme cannot defeat the materiality of the scheme’s requirements as a matter of course, since that would mean the exceptions swallow the whole, but the extent of such exceptions is probative of the ma teriality of specific requirements.43 condition of payment.”); see also Knudsen v. Sprint Commc’n. Co. , Civ. No. 13-04476 (CRB), 2016 U.S. Dist. LEXIS 118438, at *44 (N.D. Cal. Sep. 1, 2016) ( finding relator’s Second Amended Complaints “only point to the regulations,” which “is n ot sufficient to meet the rigorous standard for pleading materiality”); United States ex rel. Poehling v. Unitedhealth Grp.,
Inc. et al. , Civ. No. 1608697 (MWF) (SSx), 2018 WL 1363487, at *9–10 (C.D. Cal. Feb. 12, 2018) (finding government failed “t o adequately plead the mater iality requirement of the FCA, as described in Escobar ,” where the government merely a lleged “that Defendants were ob ligated by various regulations and contract s to comply with the Attesta tion requirements” under Medicare). In sum, the relator has not alle ged sufficient facts to show th at any sales of non-TAA compliant products by the defendant s were material to the gover nment’s decision to pay for Cisco products. c) Scienter While failure to plead sufficientl y the materiality of the fals e certifications underlying the relator’s claims warrants dismi ssal of the presentment claims a ltogether, this conclusion is also supported by the relator’s failure to provide sufficient factua l allegations to show scienter, the third element of an FCA presentment claim. See 31 U.S.C. § 3729(a)(1)(A). L iability attaches to one who “ knowingly presents . . . a false or fraudulent claim for payment or appr oval.” Id. (emphasis added). For implied false certification c laims, the plaintiff must showthat the defendant must have known both “(1) that it violat ed a contractual obligation, and (2) that its compliance with that obligation was material t o the government’s decision to pa y.” SAIC , 626 F.3d at 1271. The FCA defines “knowingly” to mea n “actual knowledge,” “deliberate ignorance of the truth or44 falsity of the information,” or “r eckless disregard of the trut h or falsity of the information.” 31 U.S.C. § 3729(b)(1)(A); see also Escobar , 136 S. Ct. 1989 at 1996; SAIC , 626 F.3d at 1266. “Although Congress defined ‘knowingl y’ to include some forms of constructive knowledge, its definition of that term imposes liability for mistakenly false claims only when the defendant deliberately avoided learning the truth or engaged in aggravate d gross negligence. ” SAIC , F.3d at 1274–75. Indeed, under the FCA, “ reckless disregard is simp ly a linear extension of gross negligence,” United States v. Krizek , 111 F.3d 934, 941 (D.C. Cir. 1997) ( internal quotation marks and citation omitted), “an extreme version of ordinary ne gligence,” or “‘gross negligenceplus,’” id. at 942–43 (D.C. Cir. 1997); see also United States ex rel. Folliard v. Gov’t Acquisitions, Inc. , 764 F.3d 19, 29 (D.C. Cir. 2014); SAIC , 626 F.3d at 1269; United States ex rel. K & R Ltd. P’ship v. Massachusetts Hous. Fin. Agency, 530 F.3d 980, 983 (D.C. Cir. 2008). For that reason, “innocent mistak es and negligence remain defen ses under the Act.” SAIC , 626 F.3d at 1266 (internal quotation m arks and citation omitted). As with all elements of an FCA cla im, allegations of scienter a re subject to the particularity require ments of Rule 9(b). Totten I , 286 F.3d 542, 551–52. Rule 9(b) permits scienter to be averred generall y, but courts require “plaintiff s to plead the factual basis which gives rise to a strong infere nce of fraudulent intent.” United States ex rel. Tessler v. City of New
York (“ Tessler ”), 712 F. App’x 27, 29 (2d Cir. 2017) (quoting O’Brien v. Nat’l Prop. Analysts
Partners , 936 F.2d 674, 676 (2d Cir. 1991)). Ind eed, the scienter requ irement under the FCA, along with the materiality requi rement, is “addressed through s trict enforcement,” SAIC , 626 F.3d at 127071, and is “rigorous,” in order to allay “concerns about fair notice and open-ended liability.” Escobar , 136 S. Ct. 1989 at 2002.45 The Third Amended Complaint allege s that the defendants “knowin gly” made both express and implied f alse certifications. See TAC ¶¶ 3, 9, 11, 86, 184, 188, 193, 198. The defendants argue that such “conc lusory allegations” fail to mee t the standards for pleading scienter because the relato r has not pled “plausible facts from which the Court may reasonably infer knowledge of the falsity

. ” Defs.’ Mem. at 29–30 (emphasis in original). In response, t he relator emphasizes that “scienter may be pled generally,” Rel.’ s Opp’n at 28, and, in any event, that the Third Amended Complain t “adequately alleges the scient er element by describing multiple occasions on which Defendants, at the very least, reck lessly disregarded the fact that a multitude of products they listed for sale, and sold, to the Un ited States could never be sourced from designated countries, as required,” id. at 30. Specifically, the rel ator points out that the Third Amended Complaint “alleges that Defendants violated their TAA obligations for more than a decade; of the $123 million in sales Defendants turned o ver to the Government, nearly $9 million – more than 7% – involved products that were never TAA-compliant,” and “[g]iven the quantities of products Defendant s sold in violation of the TAA, the notion that Defendants did not even have reason to know that these products originated in non-designated countries strains credulity.” Rel.’s Opp’n at 30 (emphasis in original). At the outset, the allegations r egarding the volume of the prod ucts offered for sale by the defendants that were not TAA-co mpliant appear to include far mo re than just non-compliant end products, confusingly including bo th configurable option and op en market items for which the relator has failed to pl ausibly allege falsity. See supra Part III.B.2.A. More importantly, the relator mi sconstrues the applicable stand ard. As noted, scienter may be “averred generally” but that does not obviate pleading the underlying facts with particularity. See Tessler , 712 F. App’x at 29. Under Rule 9(b), to show scienter by a c ompany,46 the relator must plead with part icularity facts demonstrating “ how the company itself institutionalized and enforce d its fraudulent scheme.” Heath , 791 F.3d at 125. The complaint must “make[] clear, in other words , that corporate levers were pulled . . .” Id . In Heath , the D.C. Circuit found that the relator ha d sufficiently alleged that th e defendant telecommunications company had “fraudulently overbille d the [Federal CommunicationCommission’s] Universal Service Fund from 1997 through 2009.” Id. at 117. To demonstrate that the company had “knowingly” engaged in the fraud, t he relator’s complaint alleg ed that the company had engaged “in institutionalize d training and enforcement failures, . . . compounded by efforts at concealment,” id . at 122, including by “chos[ing] not to train its employees,” id . at 117, so that “employees remained ignorant of the requirement” for proper bil ling, id . at 124, despite the company being made aware of the problem and entering a consent decree that required “train[ing of] its employees,” id . at 125. The Circuit concluded the relator “provides factual specificity concerning the type of fraud, how it was implemente d, and the training materials used, all of which is then corr oborated by the concrete example of [an] audit documenting the very type of overbilling that fo llows the complaint’s pattern.” Id. at 126. Thus, Heath illuminates the type of factual allegations necessary to plead that a corporate entity “knowingly” engaged in f raud. The relator, here, has no t plead such facts. Merely alleging a time period, the volume of items sold and total sale s value involved in the underlying alleged fraud scheme, see Rel.’s Opp’n at 30, is not enough t o show scienter. Rather, fo r scienter to be sufficiently plead, the re lator must provide details abou t specific actions taken by the defendant to facilitate and further the alleged fraudulent sche me. See, e.g., United States ex rel. Groat v. Boston Heart Diagnostics Corp. , Civ. No. 15-487 (RBW) , 2017 WL 6327540, at *8 (D.D.C. Dec. 11, 2017) (finding relat or sufficiently plead “kno wing violation of [defendant’s]47 ‘legal duty to ensure that it is not submitting false or incorr ect claims to Government’” where she alleged facts to show that the defendant “engaged in a scheme t o encourage non-cardiology physicians to order medically unn ecessary tests through a false marketing campaign and preprinted test requisition forms”); United States v. DynCorp Int’l , LLC, 253 F. Supp. 3d 89, 103 (D.D.C. 2017) (finding government a dequately alleged scienter f or an implied false certification claim based on, inter alia , statements by high-level employ ees of the defendant regarding knowledge of a contractual a nd regulatory violation). 22 In addition, the defendants conte nd that scienter is not suffic iently shown because the defendants “reasonably rel[ied] on Cisco’s country-of-origin an d ‘configurable option’ designations when processing orders for government sales.” Def s.’ Mem. at 30. As support, the defendants rely on United States ex rel. Folliard v. Govplace (“ Govplace ”), 930 F. Supp. 2d 123, 137 (D.D.C. 2013), aff’d sub nom. United States ex rel. Folliard v. Gov’ t Acquisitions, Inc. , 764 F.3d 19 (D.C. Cir. 2014), where the same relator alleged anothe r company had knowingly submitted false claims in viola tion of the TAA. There, the cou rt emphasized the “gross negligence-plus” standard in gr anting summary judgment to the d efendant, after determining the relator could not “convince a re asonable jury that [the defenda nt] ‘knowingly’ submitted false claims” where the defendants had “reasonably relied on represen tations made by its IT partner . .

22 The defendants rely on an out-of-circuit case, Defs.’ Mem. at 30 (citing Berkowitz , 2017 WL 1036575, at *7 (N.D. Ill. Mar. 16, 2017)), in which a relator’s complaint w as dismissed, under Rules 12(b)(6) and 9(b), upon finding, inter alia , the relator’s allegations of scienter deficient because “[e]ven if the products sold by the Defendants were made in non-designated countries, there are no particularized allegations on specifically who engaged in the fraud, and what they did to execute it,” and “[m]ost impor tant of all, there a re no specific allegations from which to reasonably infer that someone in each company knew that the company was selling non-compliant products to the government; that the same someone also knew that the [TAA] required th at the products be made only in certain countries; and that the same someone knew that the submitted claims amounted to an implied certification that the goods wer e in compliance with all statut ory and regulatory requirements,” Berkowitz , 2017 WL 1036575, at *7 (emphasis in original). In this Circuit, howeve r, FCA claims “need not always allege the specific identity of the natural persons w ithin the defendant corporatio n,” Heath , 791 F.3d at 125 (quoting United States ex rel. Bledsoe v. Community Health Systems, Inc. , 501 F.3d 493, 509 (6th Cir. 2007)).48 . that the products in question w ere made in TAA-compliant coun tries,” even if the products, in fact, had originated in non- designated countries. Id. at 126, 134–37. Govplace provides only limited help to the defendants here because, in that case, the issue was whether the defenda nts had reasonably relied on infor mation from a third party regarding country of origin. Id. at 134–37. In the instant matter , reasonable reliance only ai ds the defendants with respect to th e open market items and “confi gurable option” items. The former, by definition and at the values indicated, did not need to originate in a designated country, and the latter, as refl ected in Cisco’s COO charts, al so did not need to originate in a designated country because only “th e country of origin of the c orresponding end product” applies. See, e.g., Rel.’s COO Source Docs. at 14–16. With respect to the alleged TAA noncompliant end products sold by the defendants, Govplace does not support the defendants’ position because the Cisco COO charts, as provided by the relat or, demonstrate that items sold by the defendants originated i n non-designated countries. The relator meanwhile argues w ith respect to all the items, the defendants “cannot rely on Cisco to negate the scienter element” because “Cisco never indi cated to Defendants that any of the products at issue was TAA- compliant or would become TAA-com pliant if/when it was substantially transformed.” Rel.’s Opp’n at 29. In support of this proposition, the relator cites
Scutellaro , 2017 WL 1422364, at *23. That case, however, is only of limi ted help to the relator given the distingui shable facts. In Scutellaro , the relator and intervenor government alleged that the defendants had, at a minimum , acted with deliberate indiffe rence and reckless disregard by selling TAA non-compliant end produc ts after the GSA had sent t he defendant specific caution notices about this conduct, plus asupplier’s country-of-origindata showed certain items originated from a non- designated country. Id. at *23. At the same time, however, the defendant49 was “receiving high marks” from G SA on its compliance operation s. Id. Given these mixed signals, summary judgment was denied to both parties on the iss ue of scienter and “whether any reliance on supplier information was not just unreasonable but was ‘gross negligence-plus.’” Id. Thus, neither Govplace nor Scutellaro has any particular bearing on thi s Court’s conclusion that the Third Amended Complaint does not meet the rigorous requirem ents for pleading scienter. 23 For the reasons provided above, t he realtor has failed to plea d the elements required to allege a presentment claim unde r the FCA, and, thus, Counts I a nd II must be dismissed.
C. Relator’s False Statement Claims In addition to alleging violations of the presentmen t provisionof the FCA, the relator alleges in Counts III and IV tha t the defendants violated the F CA’s false statement provision.
See TAC ¶¶ 190–99. Prior to May 20, 2009, t he false statement pro vision created liability for anyone who “knowingly makes, uses , or causes to be made or used , a false record or statement to get a false or fraudulent clai m paid or approved by the Governm ent.” 31 U.S.C. § 3729(a)(2) (2008). The Supreme Court constr ued the provision’s language “ to get” as denoting purpose, requiring a showing that a defenda nt intended that the governme nt pay the false claim to be held liable under section 3729(a)(2). Allison Engine , 553 U.S. at 668–69. In response to the Suprem e Court’s decision in Allison Engine , Congress enacted the FERA on May 20, 2009. FERA amended and recodified section 3729 (a)(2) as section 3729(a)(1)(B), which now creates liability for anyone who “know ingly makes, uses, or causes to be made or used, a false record o r statement material to a fals e or fraudulent claim.” § 3729(a)(1)(B). FERA “amend[ed] t he FCA to clarify and correct erroneous interpretations of the law” decided in Allison Engine , including by eliminating the false statement provision’s inte nt

23 Similarly, the relator has not plead any facts to demonstrate the defendants were knowingly selling noncompliant items by disregarding open market regulations.50 requirement. S. Rep. No. 111-10, at 10 (2009), as reprinted in 2009 U.S.C.C.A.N. 430, 438. This amended provision was given r etroactive effect as if enact ed on June 7, 2008, and so applies to all “claims” under the FCA that are pending on or after that date. Pub. L. No. 111-21, 123 Stat. at 1625 (codifie d as 31 U.S.C. § 3729 note). Here, the relator alleges that the defendants violated the fals e statement provisions by “falsely represent[ing] the c ountry of origin of the products t hat it sold and offered for sale to the United States Government,” both before and after June 7, 2008, in violation of the TAA, TAC ¶¶ 193, 198, and supports these claims w ith the same underlying fa cts for the presentment clause claims. The defendants address Co unts III and IV in a single f ootnote, see Defs.’ Mem. at 37 n.11, arguing, first, that Counts III and IV should be dismisse d pursuant to Rule 12(b)(6) and Rule 9(b) because, as in Counts I and II, the relator has faile d to allege or oth erwise specify any documents constituting “false” records or statements. Id. Second, the defendants argue that the relator’s claim in Count III under the pre-amendment false stat ement provision fails to show that that the false representations were made with the intention tha t it would result in the government’s payment of a claim. Id. Finally, the defendants argue t hat the relator’s claim in Count IV, under the post-amendment false statement provision, f ails to allege that the false statement was “material” to the government’s decision to pay a false claim. Id. With respect to Count III, the relator has provided no particul arized allegations regarding purported fraudulent transact ions from before June 7, 2008. In deed, the Third Amended Complaint expressly states that the relator’s “an alysis begins with sales from 2008” because the defendants “did not provide suffici ent sales data from the earl iest years requested.” TAC ¶ 145 n.16. This is after the governme nt conducted an investigation lasting almost five years. Moreover, among the 46 example transactions that the relator ha s presented to allege the51 defendants violated the FCA, the earliest took place in Septemb er 2008. See TAC ¶ 150. While a relator may sufficiently plead a “fraudulent scheme with part icularity,” by “provid[ing] examples of specific false claims submitted to the government p ursuant to that scheme,” United
States ex rel. Tessler v. City of New York , Civ. No. 14-6455 (JMF), 2016 WL 7335654, at *2 (S.D.N.Y. Dec. 16, 2016), aff’d , 712 F. App’x 27 (2d Cir. 2017) (quoting United States ex rel. Bledsoe v. Cmty. Health Sys., Inc. , 501 F.3d 493, 510 (6th Cir. 2007)), the specific examples should cover the relevant time pe riod in order to “ensure that defendants have adequate notice of the charges against them to prepare a defense,” see United States v. Toyobo Co. , 811 F. Supp. 2d 37, 44 (D.D.C. 2011) (quoting United States ex rel. McCready v. Columbia/HCA Healthcare Corp. , 251 F.Supp.2d 114, 116 (D.D.C. 2003)). Thus, with no additio nal information on sales from before September 2008, Count III fails to meet the particu larity requirements of Rule 9(b) and must be dismissed. Count IV also does not survive for the same reasons that Counts I and II are dismissed. To state a material false stat ement claim under the post-FERA f alse statement provision in section 3729(a)(1)(B), “aplaintiff must alleg e that (1) the de fendant made or used a ‘record or statement; (2) the record or state ment was false; (3) the defen dant knew it was false; and (4) the record or statement was ‘materia l’ to a false or fraudulent cla im.” United States ex rel. Keaveney v. SRA Int’l, Inc. , 219 F. Supp. 3d 129, 153 (D.D.C. 2016) (quoting United States ex rel. Hood v. Satory Global, Inc. , 946 F. Supp. 2d 69, 85 (D.D.C. 2013)). As detailed, supra in Part III.B.2, the relator has failed to meet t he standards for pleading mater iality and scienter under the FCA, and, thus, Count IV must likewise be dismissed.52 IV. CONCLUSION For the foregoing reasons, the defendants’ Motion to Dismiss is GRANTED , and the case is dismissed. A separate Order consistent wit h this Memorandum Opinion will b e filed contemporaneously.

Date: March 31, 2018

__________________________ BERYL A. HOWELL Chief Judge