## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 09

- 3037 U NI T ED S TATE SOF A MERI CA ex rel. D IMITRI Y A NN A CO PO U L OS, Plai nt i f f

-Appe l l ant, v.
G ENERAL D Y NAMI CS, et a l., D efend a nts-A pp ellees.

Appeal from the United States District Court fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No . 03 C3012

—Robert W . G ettleman, Judge .
A RG UE D S EP TE MBE R 21, 2010

— D ECI DE D J UL Y 26, 2011

Befo re B AUER, S YKES, a nd H A MI L T ON, C ircu it Judges. H A MI L T ON, C ircu it Judge. Rel ato r Dim i tr iYannacopou l os b ro u gh t t h is q u it a m sui t under the federa l F al se Cl a i ms Act
. He a l l e g e s tha t de fe nd ants General Dynam i cs Cor pora ti on a nd Lockhee d M ar ti n Corpor ati on vi ol ate d the F al se Clai m s A c t in a num bero fways i n a s al e o fF- 16 fi ghterj ets to G re ece, wh i ch pai d fo r the j ets with m oneybo rr owed fro m the U ni ted S tat es.2 N o. 09

- 3037 The dis tr i ct c ourtgr anted sum m ar y j ud gm ent a gainst Y an n ac op ou los , fin d in g t h at n o re as on ab le jur y c o u ld fi nd in h i s f av o ro n a ny o fhi s cl ai m s. Af te rr ev i ewing th e volum inou s record , w e agree w ith the d istri ct cou rt th at Y an na cop ou los has no t show n t h e existen ce of a g e n u i n e i s s u e o fma t e r i a lf a c t
. We a ffi r m.

I. Bac kgroun d I n J anuary19 87, Genera lDynam i cs a gr eed to se l lto the g ove rnm en t ofGree ce 4 0 F

- 16 fi ghter s, as wellas re l a t e d s er vic es an d eq u ip m en t. T h e in itia l te rm s o f th is sal e were setf or th i n a Lett ero fInt en t dated M ar ch 6, 1985 , to wh i ch w as at ta c h ed a dra ft co ntra ct that r efl ec te d the s tatus o fthe pa r ti es ’ ne g o ti at i o ns a t th e ti m e. The te r m s o fthe Gr ee ks al e wer e se t o uti n “ Con

tr act N um ber5/ 86 f orthe Dir ect Sal e o fF- 16 C/D A i rcr aft” (“C on tr ac t 5 / 8 6” ), ex ec u te d on Jan u ar y 1 2, 19 87, as w ell as i n a num bero fco ntra ct a m endm ents executed o ver th e n ex t s e v e r a l yea rs . Th e t ot al p ric e o f th e G re ek sa le w as setat$6 16, 497, 013, w ith a paym ent s chedule set out i n A nnex A G to Contrac t 5 /8 6. The sa l e byGe ne r alDy na m i cs t o Gr ee ce was c o nd u c te d u n d er th e U n ite d Sta te s’ F or eig nM ilita ry Financi ng ( “FM F”) pro gr am . U nd erthatpro gr am , Gree ce bought the fi ghter s a nd r el ate d serv i ces dir ectly fro m G en er a l D yn am ics, bu t it d id so us ing fun d s tha t w ere l o a n e d b y th e U n i t e d S t a t e s g o v e r n me n t
. Ge n e r a lD y n a mi cs woul d subm i t invoi ces f orpaym ent t o th e Un i ted S ta te s, whi chthe n pai d G en er alDy na m i cs di r ec tly a nd asses sed the a m o u n t of th at p aym en t against Gre ece’sN o. 09

- 3037 3

In 1998, the D epartm en t ofD efense renam ed the DSA A as 1 the Defen s e Se c ur i t y Coo per at i on Agenc y. W e us e he re the or i gi na l DS AA de s i gn a t i oni n the r e c or d. tru st acc ou nt
. Th e d etails ofthis arrang em e n t w ere overs e e n b y th e D e fe n s e Se c u r it y A s s is t a n c e A g e n c y (“ D S A A ”), an ag ency ofthe U ni ted S tat es Dep ar tm ent o fDefense, w h ic h r ev iew ed C on tr ac t 5 /8 6 a n d ga ve th e a p p ro va ls needed to use F M F fund s t o fi nance the Gree k s al e. 1 Se ver alye ar s be f or e the G re ek sal e, Yannacopoul os enter ed i nto an a greem ent t o hel p a Gener alDynam i cs tel eco m m unica ti ons sub sid i ar y m ar ketco m m er ci alte l ephone equi pm ent in Greec e. That co ns ult i ng ar ra ngem ent was m aintained between the parti es unti lOctober1983, w hen GeneralDynam i cs r el eas ed Yannacopoul os f orundiscl ose d rea sons. W hen Yann aco poulo s l ate r l earned th at Greece had agr eed to purchase F- 16s fro m Genera lDynam i cs, h e cl ai m ed that he was enti tl ed to $39 m i l l i on in com m i ssi on s on the sal e, wh i ch GeneralDynam i cs r efused to p ay. Yannacopoul os then s ued G ener al Dynam i cs . A j ury r ej ecte d Ya nn a c o po ul o s ’ c l a i ms, a nd the Ei g hth Ci r c ui ta ffi r med

. Se e Yannac opou l os v. Ge ne r al D ynamic s Corp. , 75 F. 3d 1298 (8th C ir. 1996). R ely i n g , a t le as t in p ar t, on info rm at ion ob ta in ed in the c ours e o fthatl aw sui t against Gener alDynam i cs, Yanna c o po ul o s fi l e d thi s s ui ta g a i ns tGe ne r a lDy na m i cs an d Lo ckhe ed al l eg i ng numer o us vi o l at i o ns of th e Fal se Clai m s A ct i n re l ati on to the Greek sa le. A fter extensi ve disc ov ery, the defe nd ants m ove d fo r parti al4 N o. 09

- 3037

I n 2 0 0 9 , C o n g r e s s a me n d e d th e F a l s e C l a i ms A c t, P u b. L. 2 111- 2 1 , § 4 ( a ) ( 1 ) , m a ki ngtho s e a m e nd m e nt s g e ne r a l l y a pplic able onl y to c ond u ct o cc urring on or afterM ay 20, 2009, Pub. L. 11 1- 21 , § 4( f )
. The on e ex c ept i on i s the am en dm en t to sectio n 3 72 9(a)( 1)(B), w hich ap p lies to cases, such as th is, th a t w er e p en d in g o n o r a fte r Ju n e 7, 20 0 8
. Id. sum m ar y j ud gm ent. The d ist ric t co urt gr anted the defen d an ts ’ m ot ion, U ni t e d St at e s ex r e l
. Yannac opou l os v. G ene ral D ynam ics , 20 07 W L 4 9525 7 ( N
. D. I l l

. Feb. 13 , 2007 ) , but l ate r re consi dered i ts gr an t o fsum m ar y j ud gm en t r eg ar di ngYa nna co po ul o s’ c l ai m b ase d o n the Eco no m i c Pr i ce Adj us tmentc lause pro po se d f o rCo ntr ac t 5 /8 6, U ni t e d S ta tes ex re l
. Yanna co poul os v. Ge ne r al D ynam ics , 2007 W L 1 5 9767 0 (N
. D
. I ll

. M ay 31, 2007). G e n e r a lD y n a mi c s fi l e d a r e ne we d mo t i o n f o rs u mm ar y j ud gm en t on thatcl ai m , and both defe nd ants m ove d fo r sum m ar y j ud gm ent o n the re m ai nd ero f Yanna co po ul o s’ c l ai m s. The di st r i ctc o ur t g r an te d the defe nd ants’ m oti ons i n thei r enti re ty. U nite d States ex rel
. Yanna copou los v. G ene ral D ynam ics , 63 6 F. S up p. 2d 73 9 ( N. D. I l l

. 2 0 0 9 )
. T hi s a pp e a lf o l l o we d.

II. The F a lse C la im s A ct an d th e Sta nd a rd o f R eview T h e F als e C laim s A c t m ak es it u n law fu l to k n ow in gly ( 1) pre sent orcause t o b e present ed to the U ni ted S tat es a fa lse or fra u d u len t c laim for p ay m en t or a p p ro va l, 31 U
. S. C. § 3 729 (a)(1) ( 2006 ) ; ( 2) m ake o r use a f al se r ec o r d o rs ta te m en t m at er i alt o a fal se o rfr au dul en t cl ai m , § 3729 ( a) ( 1) ( B ); o r ( 3) use a f al se re cor d orst ate
2 m ent t o concea lo r decrea se an o bl i gat i on t o pay m oneyN o. 09

- 3037 5 to the Unite d Sta tes , § 3729 ( a) ( 7) ( 2006 )
. U nd erthe A ct, pri vate i nd i vi du al s s uch as Yannacopoul os, r eferr ed to as “r el ato rs , ” m ay file ci vi lact i ons known as q uit am acti ons on be hal fo fthe U ni ted S ta tes to r eco ver m oneythatt h e go ver nm ent pai d as a r esul t o fco nd uct forb id d en u n d er th e A c t. G la ser v. Wo un d C a re C o nsu lta nts, Inc. , 57 0 F
. 3d 907, 91 2 ( 7th Cir. 2 009)
. A s a n i ncenti ve to bring sui t, a p revai l i ng r el ato r m ay col l ect a s ubst an ti alpe r ce nt age ofa ny funds r ec o ve r ed f o rthe b en efitof th e g ov er n m en t. Id. To es tabl i sh ci vi ll i abil i ty und erthe Fal se Clai m s A c t, a r el ato r gener al l y m ust prove ( 1) thatthe defe nd ant m ade a sta tem ent in o rder to re cei ve m oneyfro m the gov er nm ent; ( 2) thatthe sta tem en t was f al se ; a nd ( 3) that t he d efen dan t k ne w the st at em en t w as fals e. E.g
. , U ni t e d Stat e s ex re l
. Gr os s v. AIDS R e s e a r c h A l l i a n c e - Ch i c ago , 41 5 F
. 3d 601, 60 4 ( 7th C ir. 2005). I n th i s appe al, Yanna co po ul o s cl ai m s that the defen dan ts made a numbero ff al se s ta te m en ts t o the Un i t e d S t a t e s to o b t a i n p a y me n t s f o rth e G r e e ks a l e . We consi der them i n turn. Fi rs t, he c onte nd s that Gener al D yn am i cs l i ed ab o uti ts us e o ffunds l o an ed bythe Uni t e d S t a t e s t o c a pi t a l i z e a Gr e e kb us i ne s s de v e l o pm ent c om pany, as requi re d by the ter m s ofContr act 5/ 86. N ext, he s a y s tha t Ge ne r a l Dy na mi c s f a i l e d to di s c l o s e p r o mpt l y t o the Uni t e d S t a t e s i t s de c i si on to del ete the Econom i c Pr ice A dj ustm ent c l ause fro m the dr aft co ntra ct. Yann acopoulo s a l so ar gues that Genera l Dynam i cs m ade m i sr epres entat i ons re l ating to C ont ra c t 5 /8 6 ’s p r o v is io n s c o n c e r n in g s p are p art pu rc h ases and an i l l

- f ate d “depot pro gr am . ” F i nal l y,6 N o. 09

- 3037

The Fa l s e Cl ai m s Actw as enac t ed i n 186 3, in the m i ds tofthe 3 C iv il W ar, in resp on se to flagr an t frau d s com m itted ag ain st the gov ernm ent, s uch as se ll ing def ect ive r ifle s and art il le ry s he l l s fil l e d wi th s a wdus ti ns t e a d o fe x pl os i ve s . S e e J
. Ra nd y B ec k , TheFa l s e Cl a i ms Acta nd t heEngl is h Eradi ca t i o n o f Qui Tam Legisl at i on , 7 8 N
. C
. L. Re v . 5 3 9 , 5 5 5 ( 2 0 0 0 )
. T h e c l a i ms he re , arising fro m a c om pl ex, l ong- t er m c ont ra c ti nvol vi ng m a ny c on t i ng e nc i e s , al l owa nc e s , pr e di c t i on s , a nd a m e nd

m en ts, are c o n sid era b ly m or e d ifficu lt to p ro v e tha n th ose sim p ler frau d s. he cl ai m s that a fterLockhee d assum ed GeneralDynam i cs’ obl i gat i ons und erContr act 5/ 86, Lockhee d m ade a num be ro fmi s r e pr e s e nt a t i o ns i n t wo a men dme nt s to the c ontr act. 3 We r e v i e w d e n o v o th e d i s t r i c tc o u r t ’ s g r a n to fs u mm ar y j ud gm ent aga i nst Yannacopoul os on thes e c l ai m s. O m nicare, Inc. v . U nite dH ealth Group , Inc. , 62 9 F
. 3d 697, 705 ( 7th Ci r. 20 11)
. S um m ar y j ud gm ent i s ap p ro pri ate w he n th e plead ings an d s ub m issi ons i n th e record i nd i c a t e the ab s e nc e o fa nyg e nu i ne i s s ue s o fma t er i al f ac t, s o tha t th e m ovingpa r ti es a r e en ti tl ed to j udg m en t as a m a t t e r o f law

. M i dwe s tIm por t s , Lt d. v. Coval, 71 F. 3d 1 3 1 1 , 1 3 1 7 ( 7 th C i r . 1 9 9 5 )
. A s th e p a r t y o p p o s i n gs u mm ar y jud gm en t, Y an n ac op ou los is en tit led to th e b en efit o fa nyr e a s o nab l e i nfe r e nc e s i n hi s f a v o rtha ta r e s up p or te d by th e re c or d

. Jakub i e c v. Ci t i e s Se r vi ceCo. , 84 4 F
. 2 d 4 7 0 , 4 7 1 ( 7 th Ci r . 1 9 8 8 )
. We maya ffi r m t he di s t ri ct co ur t’ s g r an t o fsum m ary j udg m en t o nl y i f, upo n v i ewing the r eco rd i n thi s l i ght, no re aso nabl e j u ry co uld have re nd er ed a v er dicti n Yannacopoul os’ f avor. Wil s on v. Wi l l i a ms , 997 F.2d 348 , 350 (7th C ir. 1993).N o. 09

- 3037 7 I n op p o s in g s u m m a r y ju d g m e n t , how ever, Y a n n a c op ou los co u ld n ot“re st on th e a lleg at ion s in th e plead ings ,” b ut w as req uired to prese nt “evide nt iary m ate ri alwh i ch, if re du ced to adm i ssibl e e vi dence, m ay al l ow him to car ry h is b urden ofpro of

. ” Ree d v
. AM AXCoal Co. , 971 F.2d 12 9 5 , 1 29 9 (7 th C ir. 19 92 ). In ot h er w o r d s , rev er sa l w ou ld be ap p ro p ria te on ly if Yannacopoul os’ ev i dence i s s uffi ci ent t o enabl e a r easo nabl e j ur y t o thi nki t m o r e l i k el y t ha n no t th atthe defe nd ants vi ol ated the F al se Clai m s Act. W i th that sta nd ar d i n m i nd , we turn t o the m er i ts ofthe cl ai m s.

III
. The H B D IC C laim Yanna cop o ul o s’ pr i m ary c l ai m o n a ppea lc o nc erns G en er al D yn am ics ’ inv olv em en t in es ta b lish i n g th e H ell en i c Bus i ne ss De vel o pm en t an d I nv es tmentCo m pan y (“H BD I C”) as part ofthe F- 16 sal e t o Greece
. U nd er A rt i cl e 3 5 o fContr act 5/ 86, Gen er alDynam i cs a gr eed to “es tabl i sh [ H BD I C] in Greec e . . . f orthe pu rp ose o f dev el o pi ng a nd i m pl ement i ngBus i ne ss De ve l o pm en t proj ects
. ” HB DIC was to be i ncor pora ted i n Greec e, w i th Gener al Dynam i cs a s the m aj or i ty shar ehol der an d the G r e e k govern m en t as a m inority shareh older. Once i nc o r po r at ed, HBDI C was t o a cta s a ve nture capi talco m pany, pro vi ding see d m oneyand l oans to new co m panie s in Greec e. Gen er al D ynam i cs a gr eed to capi tal i ze H BD I C w i th a t ota lo f$5 0 m i l l i on o ver t h e cour se ofte n yea rs after the s i gni ng o fCon tr ac t 5/8 6. Genera lDynam i cs a l so8 N o. 09

- 3037 ag r ee d t o pr o vi de th r ee “ i n- cou nt r y mana g ementa nd coo rdi nati on per sonnel ” forthe i ni ti alte n yea rs o f H B D IC ’s e x ist en c e. G en er al D yn am ics a d m its th at it p aid th es e a m ou n ts , at le as t in p a rt, us in g p ro fits it m ade unde rCo nt r ac t 5/ 86
. Af te rfi ve y ea r s o foper at i o n, ha l fo fH BDI C’ s p r o fi t s we r e t o b e p a i d o uta s di v i de nd s to i ts shar ehol ders. A fterfi ftee n yea rs , H BD I C w as to be di ss o l ve d ( unl es s i ts funds r ano utb efo r e t hat ti m e an d abse nt act i on t o the c ontr ar y b y General Dynam i cs and/orGree ce) , atwh i ch ti m e a l lo fi ts re m ai ni ng as set s up to $5 0 m i l l i on, as wellas hal fo fany as sets o ver that am ount, were to re ver t t o Greece
. Befo re the U ni ted S tat es DSA A would r el eas e fund s t o fi nance the Gree k s al e, i t r equi re d G ener alDynam i c s t o execute a “ Contrac tor ’ s Cer ti fi cati on Agree m ent with Defe nse S ecuri ty A ssi sta nce Agency. ” Gener alDy n am i cs ex ec ut ed two s ucha g r ee m en ts wi ththe DS AA , o ne i n F eb r ua r y 1 98 6 r el at i ngt o the d ra ft co nt r ac t, a nd anothe r i n Feb ruar y 1 987 re l ating to Contr act 5/ 86 ( col l ecti vel y, the “Cert i fi cati on Agree m ent” ). I n the Certi fi cati on Agree m ent, Gen er alDynam i cs m ade a num bero f re prese ntati ons re gar ding the Gre ek sal e. W e di scuss th e r e l e v a n to n e s b e l o w. Betw een F ebr uary19 87 and A ugust 1 990, Genera l Dynam i cs s ubm i tte d a num bero fi nvoi ces to the U ni ted St ate s forpaym ent. On each invoi ce, Genera lDynam i cs cer ti fi ed that, “t o the b est o f [ i ts] kno w l edge a nd bel i ef this invoi ce i s i n a cc o r dan ce wi th ” Con tr ac t 5/ 86 a nd the Ce r t i fi c a t i o n Ag r e e men t
. Th e s e c e r t i fi c a t i o ns a r e s i gni fi cant b ecause a m er e br each o fco ntra c t d oes notN o. 09

- 3037 9

Y an na cop ou los also arg u es tha t the A rm s E xp or t C on tro l A ct, 4 22 U
. S. C. § 2751 e ts e q. , as i nt er pre t ed by the DSAA, f orbi ds the us e o fUn i t e d S t a t e s fun ds f ori nd i r e c to ff s e t s such as HBDI C. In hi s reply brie f, how ever, he adm its that General Dy nam ic s “n ev er certified com p lian ce w ith [that statu te].
. . . O f cou rse it did not. ” Bu t if G eneral D ynam ic s never cer ti fie d com plianc e w ith the A rm s Exp ort Co ntrol A ct, then any viol ati ons o f that act w ou ld no t sup p or t a claim un d er t h e Fa lse Cla im s A ct. See U n ited S t a tes ex rel. M ain v. O ak lan d C ity U n iver sity, 426 F .3d 91 4 , 91 7(7t h C ir . 20 0 5 ); U n ited S tates ex r e l. L am ers v . C ity of G reen B ay, 16 8 F .3d 101 3, 102 0 (7th C ir. 19 99 ) (“T he FC A is a f ra ud pre ven t i on s t atut e; vi ol at i ons of

. . . r eg ul at i ons ar e not f ra u d unl es s the vi ol at or kno wingl y l i es t o the gove rn m en t a b o u t th em .”); Un i t e d S t a t e s e x r e l
. Th o mp s o n v . Co l u mb i a /HCA (co n tin u ed ...) gi ve ri se to l i abi l i ty und erthe Fal se Clai m s Act. S ee U nite d S t at e s ex re l
. Gars tv. Lo ckhe e d-M ar t i n Corp. , 32 8 F. 3d 374, 37 8 ( 7th C i r. 20 03)
. I fthe bre achi ng par ty f al sel y c l ai m s t o be in com pli anc e w i th the co ntra ct t o obt ai n paym ent, however, ther e m ay an act i onabl e f al se cl ai m . U ni t e d S t at e s ex re l
. Le m m on v. Envi r oc areof U t ah, Inc. , 6 14 F
. 3d 11 63 , 1 16 8 ( 10 thCi r . 2 01 0) ( des cribi ng such a sta tem ent a s a “l ega l l y fa l se re quest forpaym ent”) , ci ti ng U ni t e d St at e s ex re l
. Conne rv. Sa l i na Reg i onal Health C ent er, Inc. , 543 F.3d 121 1, 1217( 10th Cir. 2008). H ere, Y an na cop ou los argues th at G en eral Dyn am ic’s c er tific at ion s w er e false b ec au se G en er al D yn am ics alleged ly viol ated both ( 1) Con tract 5/86 and ( 2) the C ertif

i cati on Agree m en t when i t “ charg ed the H BD I C cost s as pa rt o fthe [ Contrac t 5 /8 6] pri ce. ” W e a dd re ss each al l eg ed vi o l at i o n in tur n. 410 N o. 09

- 3037

(
. . . c on t i nu e d) 4 Hea l t hcare C orp. , 1 2 5 F .3d 89 9 , 90 2 (5t h C ir . 19 9 7 ); U n i te d S tat es ex re l
. Hopperv. A nto n , 91 F. 3d 1261, 1266 (9t h C ir
. 1996) ( “V iol ation s of law s, ru les, or reg u lation s alo ne d o not crea t e a c au se ofact ion und er the FC A
. It i s the f als e ce rt i f i cat i on ofcom plianc e w h i c h cre ates liab ility w he n ce rtification is a p rere qu isite to ob tain ing a g o v e r n m e n tb e n e fi t .” ). T o th e e x t e n tY a n n a c o p ou los’ cl aim s are bas ed on the theory thatG eneral D ynam ic s vi ol at ed the Arm s Expo rt Cont ro l Act, s um m ar y j udgm en t w as prop er. For e as e ofr eferen ce, we r efert o the HB DIC s t oc k a nd m an- 5 a g em en t p er so n n el co lle ct iv el y as th e “ H B D IC co sts .” A
. Cont r ac t5/86 Yannacopoul os fi rs t a rg ues that Gener alDynam i cs’ certifi cation s of com p lia nc e w ith C ont ract 5/86 w ere f al se because Genera lDynam i cs b re ached that co ntra ct by pas sin go n th e c o s t s o fi t s HB DI C i n v e s t me n tt o the Uni te d S ta te s, a s l en dert o Gr eece . In par ti cul ar, he cl ai m s that Gener alDynam i cs b re ached A rt i cl e 9
. 4 o f the c o nt r a c t, un de r whi c h Ge ne r a lDy na mi c s “ c o nfi r m[ e d] th at th e m ateria l for w hich pa ym en t is requ ested are U ni ted S tat es sour ce e n d p ro du cts. ” Yannacopoul os i nter prets this pro vi si on t o f orbi d G ener alDynam i cs fro m i ncor pora ti ng i ts expend i ture s o n H BD I C stoc k and m anage m ent per sonnelinto the c ontr act pri ce b ecause, h e insi sts , tho se expend i ture s were not f or “U n ite d Sta te s s ou rc e e n d p ro d u c ts .” 5 For the s ake o far gum ent, we w i l las sum e that Yannacopoul os i s co rr ect that th e H BD I C cost s were notN o. 09

- 3037 11 “Uni te d S ta te s so ur ce e nd p rod uct s” wi th i n the mean i ng of A rti cl e 9
. 4. That i s no t e nough, however, to sho w that GeneralDynam i cs b re ac h ed the ter m s o fthatar ti cl e, unde rwhi chGe ne r alDy na m i cs c o nfi r m ed o nl y tha t th e
“ m at e r i al for w h i ch paym ent i s r equeste d” w as i n f act “U ni ted St ate s sour ce end products. ” I n othe r w ords, G e n e r a l D y n a mi c s c o u l d h a v e f a l s e l y c e r t i fi e d c o mpl i an ce wi th th e co nt r ac t o nl y i fthe HBDI C c o st s co nsti tuted “m ate ri al ” withi n the m eani ng o fA rt i cl e 9
. 4. A r t i c l e 9.4 d id n oth av e s u c h a b ro ad rea c h . Th at art icle r equi r ed Gen er alDy na m i cs t o c o nfi r m the U

. S. o r i g i ns o fthe mate r i ali t pr o vi ded o nl y i fGr ee ce fi na nc ed “the pu rchas e o fthe i tem s t o be deli ver ed” with Unite d S ta tes g o ve r nm en t l o an s. “ M at er i al ” i s no t a fr ee st an di ng contr actualte rm . I t r el ate s ba ck to t h e “i tem s” re fer enced inth e p re c ed in g p or tio n of A rt icle 9.4. Se e, e . g. , D el ta M i ni ng Corp
. v. BigRi ve rs E le c. Corp. , 18 F. 3d 1398 , 14 03 ( 7th Ci r . 1 99 4) ( no tingtha t a co ur t i nt er pretinga c o ntr ac tu al t er m sh ou ld ta ke ac c ou n t o f “t h e c on te x t in w hich the w ord i s us ed ”). T h is r e l at ion sh ip be tw ee n “m at er ials ” a n d “it em s” is re i nfo rce d by the o rdi narym ea n i ng o fthe w or d “m ate
ria l.” Se e, e . g. , Rai n v. R ol l s - RoyceCorp. , 62 6 F
. 3d 372, 37 9 (7t h C ir. 20 10 ) (n ot in g t h at co u rt s s h ou l d u se th e “ p lain and o rd i narym eani ng” o fa contr actualte rm wh eneve r possibl e)
. A s co m m onl y defi ned, a “m ate ri al ” i s a “s ubsta nce o r substa nces out ofwh ich a t h ing i s o r can be m ade” o r “so m ethi ng . . . thati s t o be refi ned and m ade or i ncor pora ted i nto a fi ni shed eff or t. ” The Am e r i ca n Her i t age D i ct i onary of t he Engl i sh L angu age, 1 10 9 ( 3d ed. 1 99 2)
. The m ate ri al s co ver ed by A rt i cl e 9
. 4 a re the i nd i vi du al12 N o. 09

- 3037

Schei de m an’ s preci se s tat em ent w as thati t wou ld have been 6 “outsi de th e spir itand intent ” ofContract5/ 86 to add “a sep ara te con tract lin e item
. . . inv oi c i n g G reec e for the cap italiz a tio n co sts to H B D IC .” physi calpart s co m pri si ng o r ot h er w i se used i n the prod u c tio n or provi si on o fthe “i tem s t o be del i ver ed” under Contrac t 5 /8 6

— th e en gines used in the fighter j ets, spare p ar ts , con st ru c tio n m at er ials , e t c . T h u s, ev en if H B D IC coul d b e d eem ed an “i tem to be del i ver ed” under Con tr ac t 5/ 86 ( i ts el fa n un l i k ely a nd s tr aine d r ea di ng of the con tract), H B D I C ’s stock or i ts m an a g e m e n t pe rsonnelw er e no t “ m ate ri al s” as that ter m was used i n A rt i cl e 9
. 4. In o therwords, Genera lDynam i cs, by com ply i ng w i th it s obl i gat i ons re gar ding H BD I C, w as not si m ult aneously v i olat in g i ts obl i gat i ons to the Unite d St ate s g ove rnm ent. Yannacopoul os’ othe r ar gum ents f or a m or e ex p an si ve re ad in g o fA rt i cl e 9
. 4 a re m i spl aced. Fi rs t, he m ake s m uch ofGenera lDynam i cs e xecuti ve Dougl as Sch eid em an ’ s st at ementtha t i t woul d ha ve b ee n “ i nc o nsistent w i th t h e sp i ri t a nd i ntent ofContr act 5/ 86” to pass H B D IC ’s c os ts on to G re ec e. T h e la n gu a g e o fA rt icle 9.4 6 i s cl earo n i ts f ac e, h ow eve r, i n w hi ch cas e “ the intent of the par ti es i s t o be der i ved onl y fro m the express l anguage o fthe c o nt r a c t
. ” B ra tt on v. R oad w ay P acka ge Sys te m , Inc. , 77 F. 3d 168, 1 73 (7th Cir

. 19 96) ( ci tat i on o m i tte d). Even i fo ne o r m or e o fthe parti es subj ecti vel y in te nd ed to bar Ge ne r a lDy na mi c s fr o m s pe nd i ngUni t e d S t a t e s fun ds onthe HBDI C c o s t s , the l a ngua g e o fCo nt r a c t5 /8 6 si m plyf ai l ed to m ake thati ntent m ani fest
.N o. 09

- 3037 13 Yannacopoul os al so i nsi sts that A rt i cl e 9. 4 m u st forb id th e us e of th e U n ite d St at es loa n fu n d s t o c ap ita lize H B D IC be c au se a c on tr a r y c on st ru c tio n “w ou ld des tr o y the s ta te d c o nt r ac tu alc o ns i der ati o n” o fCo ntr act 5/ 86

— Genera lDynam i cs’ ag re em ent t o capi tal i ze HBDI C

— and w ou ld f a tally un d erm ine A rticl e 35’s st at ed p u rp os e o f p ro vid in g “ n ea r te rm an d lon g t er m d ire c ta nd s ub s t a nt i a lb e ne fi t s t o the He l l e ni c Ind us tr y, eco n om y, and bal ance o fpaym ents. ” W hen General Dynam i cs “ secr etl y” i ncor pora ted the H BD I C cost s into th e pr i c e o fC o n t r a c t5 / 8 6 , h e i n s i s t s , G r e e c e e n d e d up “u nkno wi ng l y pa y [ i ng ] f o ri ts o wn o ff se t c o m pan y . ” But ifGre ece inten d ed to pay for the H B D IC c osts itself, we un de r s t a nd hi m t o a s k, why di d i t no t fi nance the c om pany dir ectly without g oi ng thr ough Gener al Dyna mi c s ? Co nt r a c t 5 / 8 6 c a nn o t b e r e a d, he a r g ue s , to perm i twh a th e c ha r a c t e r i z e s a s a n o ns e ns i c a lr e s ul t
. S ee Fut ure s our ceLL C v. Re ut e rs Lt d. , 31 2 F
. 3d 281, 2 84 ( 7th C ir. 2002). This ar gum ent i s no t per suasi ve. Fo r one thin g, i t was not a secr et that GeneralDynam i cs c harg ed Greec e for the expenses i t i ncurr ed i n capi tal i zi ng H BD I C. A rt i cl e 3 5 ofCo nt r a c t5 / 8 6 e xp l i c i t l y r e qu i r e d G e ne r a lDy na mics an d its tw o m ain su b c on tr ac to rs to c a p i ta lize H B D IC wi th$ 50 , 00 0, 00 0 o ve ra t en - y ea rpe r i o d as p art o fthe Greeksa l e. A nyone w ho read that s i gni fi cant t er m o f Contrac t 5 /8 6 s houl d have real i zed thatthe $50 m i l l i on or m or e i n H BD I C c ost s w oul d b e i ncor pora te d i nto the fi na l a m ou nt char ged to Gree ce. U nl ess the sal e has an elem en t of ch arity, the final am ou nt cha rged f or a14 N o. 09

- 3037

The DSAA provi ded a c ont ro l by e val uat i ng w he the r the 7 price s charged f or the i tem s in Contrac t 5/ 86 w ere reas onab le

. In h is pre v iou s law suit ag ain st G en era l D y na m ics, 8 Yanna c opoul os m ade e s s en t i al l y the s am e ar gum en t, c l ai m i ng tha t H B D I C was “o fde m i ni m i s val ue” an d “va l uel es s t o the G reek g overnm ent” as itw as st ructure d in Con tr act5/ 86. Y annacopo ul os , 75 F. 3d at 1302 & n. 3. p articu lar good or service w illde p en d at l east in p art on the sel l er ’ s expenses. That i s w hy, f or exam p le, a product purchase d fr om an o nl i ne r etai l eri s o ften l e s s e x p e n s i v e th a n th e s a me p r o d u c tp ur c h a s e d fr o m a b ric k-and-m or tarst or e. The pro du cts ar e no di ffer ent, bu t the ph ysical store m us t pa ss on to its c u stom ers a num bero fexpenses noti ncurr ed b y th e o nl i ne r etai l er . There i s no r eas on t o bel iev e th at the Gre ek gov ernm ento rthe Uni te d S ta te s g o ve r nm en t th o ug ht that General Dynam i cs wo uld char i tabl y i nvest m i l l i ons ofdol l ar s in a Gre ek busi ness f orthe benefit o fthe Gr ee kg o ve r nm en t wi th o utsom eh o w re co upi ng that expense. Genera lDynam i cs’ H B DIC- re l ate d charg es w er e no t s ecr et and w er e r equi re d und erthe contr act. 7 Buti fGre ec e k ne w ofa nd was wi l l i ngt o pa y f o rthe H BD I C cost s, Y annacopoul os ask s, wh y di dn ’ t Gre ece j ust pay thos e co sts i tse l f ? The answer i s s i m ple

. Gree ce 8 coul d not hav e obtained a l oan fro m the U n ite d S tat es go ve rn m en t s p ec ifica lly to ca p ita lize H B D IC . B u t if GeneralDynam i cs c api tal i zed H B D I C i tse l fand ro l l ed i ts cos ts f ordoi ng so i nto the pr i ce o fContr act 5/ 86, Greece co uld obtain j ust s uch a l oan fro m the U ni tedN o. 09

- 3037 15 St at es as p ar t o f th e l a r ge r d ea l to a rm a N A T O ally dur i ngthe Col d W ar . Ge ne r alDy na m i cs ’ i nv o l ve m en t effec ti ve l y all ow ed Gr ee ce t o i nv es t i n HBDI C m i l l i o ns ofA m er i can dol lars that would have o ther w i se been un a v a i l ab l e . And the fi na nc i a l b e ne fi t s Gr e e c e ho ped to re alize fro m thi s invest m ent a re cl ear : under Arti cl e 3 5, H BDI C was r equi r ed to b eg i n pa y i ng d iv i den ds to the G re ek gov e rn m en t a fte r five ye ar s o f op er at ion an d , i f H BDI C e ve rdi ss olved , t o tur n o ve rt o the Gr ee kg o ve r nm en t al lo fi ts c o r p orate ass et s up t o $ 50 mil l i o n, pl us hal fo fany ass ets exce edi ng tha t a m ou n t. These be nefi ts ar e in additi on t o the e conom i c be nefits that Greece m ight h a ve reali zed from any n ew econ om ic opp ortuni ti es H BD I C provi ded to Gree ce. Ar t i c l e 9
. 4 o fC o n t r a c t5 / 8 6 s i mply d i d n o tpr ev en t Ge ne r a lDy na mi c s fr o m ca pi t a l i z i ngHBDI C wi th fun ds deri ved fro m the U ni ted S tat es l oans to Greece
. Giv en the fi nanci albene fi ts that Greece would r eali ze fro m su c h a n ar ra ngem ent, such ind i re ct use o fA m er i can fund s t o capi tal i ze H BD I C w as part ofthe consi derat i on Gr e e c e b a r g a i n e d f o ri n C o n t r a c t5 / 8 6 , a n d th e t e r ms that the Unite d Sta tes go ver nm en t a pp ro ved. Because A rticl e 9
. 4 per m i tte d exactl y what Yannacopoul os accuses Genera lDynam i cs o fdoi ng , G ener alDynam i cs di d no t br ea chCo nt r ac t 5/ 86 b y c o m pl y i ngwi ththe sam e con tract an d therefore d id n ot fal sely certify i ts co m pl i an ce wi th th at co nt r ac t. To th e ext en t Y a n n a c o p o u l o s ’ c l a i m tu r n s o n th a ta l l e g e d b r e a c h, s u mm ar y j ud gm ent forGenera lDynam i cs was appro pri ate
.16 N o. 09

- 3037 B. TheCe r t i

f i ca t i on Agr e e m e nt Yannacopoul os ar gues that GeneralDynam i cs a l so f al sel y cer tifi ed i ts com pli ance with the Certi fi cati on A gr eem ent, wh i ch he inter prets to f orbi d G eneralDyna mi c s f ro m ca pi t a l i z i ngHBDI C. In Pa r a g r a ph s 4 a nd 6 of that agreem en t, G en eral Dyn am ics m ad e three certif

i cati on s re levant to thi s a pp eal : ( 1) that“the m ate ri alo r com ponents t o b e pr ovi ded under the Purchas e Agree

m en t a re p re d om in an tly of U .S. m an u fac tu re ;” (2) th at “a ll no n- U. S
. o r i g i n o rno n- U. S
. manuf ac tu r ed item s a nd com ponents, and non- U
. S. se rv i ces procur ed o r to be p rocu red sp e c ifically for th is Purc ha se A greem en t are i denti fi ed” i n a docum ent a tta ched ther eto ; and ( 3) that, as i de fr o m c o m m i ss i o ns a nd c o nt i ng en t fee s, a ny fund s General Dynam i cs re cei ved fro m the U ni ted Sta tes go ve rn m e n t w ou ld “n otbe u se d to p u rc h as e s er vic es . . . ut i l i ze d i n the e xe cut i o n o fthe Pur ch as e Agr ee m en t fro m non- U
. S. co ntra cto rs o r i nd i vi du al s th at ar e no t r es i d en t i n the Uni te d S ta te s o fAm er i ca, unl es s th e fi nanci ng o fsuch s er vi ces i s e xpres sly autho ri zed by the D SA A
. ” Each ce rt i fi cati on, Yannacopoul os ar gues, f orbad e Gener alDynam i cs fro m usi ng Un i ted S tat es fun d s to p a y for th e H B D I C costs w ithou t the DSA A ’s pr i o ra utho r i za ti o n. Be ca us e eac h c er ti fi ca ti o n c o nc erns a di sti nc t su bj ec t m at te r, we addr es s ea chi n tur n. The fi rs t cer ti fi cati on, r efer ring to “m ate ri alo r com pone nt s, ” di d no t ba rGe ne r alDy na m i cs fr o m s pen di ng F M F funds o n the HBD I C c o st s. Nei th ers to ckno rmana g e me n tp e r s o n n e lc a n b e c o n s i d e r e d “ ma t e r i a lo rc o mp o n e n t s , ” a s th e fi r s tc e r t i fi c a t i o n u s e d th o s e t e r ms . AsN o. 09

- 3037 17

Th i s i s c on s i s t e ntwi th the D SAA’ s Oc t ob e r 1 9 8 5 a nd F e b- 9 ruary 1987 “G uideli nes f or FM S Loan Financi ng of D ir ect Co m m erc ial Contract s, ” w hich st ate that “item s pu rchas ed m u s tb e ma n u f a c t u r e d i n th e U. S
. a n d b e c o mpo s e d mai n l y of U
. S. m ade it em s, com pon ents [ , ] and servic es . ” The Febru ary 1989 and Jul y 1 9 9 1 G uideli nes differ onl y in that they fur the r c l ar i fy thatthe i t em s m u s tbe “U. S. m anu f ac t ur ed a nd ass em bled.” w e observe d i n ou r discu s s io n o f A rticl e 9.4, the w ord “m ate ri al ” typi cal l y re fer s to a substa nce or pa rt fr om w hi ch so m ethi ng i s m ade. The te rm “com ponent” a l so does not re ach the H BD I C aspects o fthe c ontr act. S ee The Am e r i ca n He r i t age D i ct i onary of t he Engl i s h L angu age, 387 ( defini ng a “co m pone nt” a s “ a co nsti tuent e l em ent, as ofa sys tem ” o r a “ part of a m ec h ani calo r el ectr i cal orel ectr i calco m ple x”)
. T he fi rs t ce rt i fi cati on i s l i m i ted to “ m at er i ala nd c om po ne nt s” c apabl e o fb eing“ m an uf actur e[ d], ” a descr i p tio n cl ear l y inapp l i cabl e t o sto ck an d m an ag em en t p er so n n el. 9 Yannacopoul os cont en ds the seco nd cer ti fi cati on was f al se b ec au se Ge ne r alDy na m i cs f ai l ed to i den ti fy the H B D I C co sts am ong the “n on-U
. S. ori gin or non -U
. S. m an ufac tu red i tem s and com p on en ts” an d “non -U
. S. se r vi ce s pr o cur ed o r to be pr o cur ed spe ci fi ca l l y f or” C o n t r a c t5 / 8 6
. T u r n i n gt o th e s e c o nd ce r t i fi c a t i o n, we se e th at G en er al D yn am ics d id in fa c t in d ica te th at it had i denti fi ed al lsuch i tem s, co m pone n ts, and ser vi ces i n a docum ent att ached to the Certi fi cati on A gr ee m ent. Gen er alDy na m i cs di d s o b y c he ck i ng a b o x in the18 N o. 09

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se co nd c er ti fi ca ti o n; a b o x in tha t ce r ti fi ca ti o n inf o r m i ngthe DS AA tha t su chi te m s, c o m po ne nt s, a nd se r vi ce s co ul d be found i n Co nt r ac t 5/ 86 was l eft uncheck ed

. The docum ent a tta ched to the Cer ti fi cati on A gr eem ent m ade no m enti on o fthe H BD I C cost s. I n a r gui ngthe f al si tyo fthe s ec o nd c er ti fi ca ti o n, Yanna co po ul o s overl o o k s th e undi spu te d f ac t th atthe DSA A had al re ady be en not i fi ed ofGenera lDynam i cs’ paym ent o fthe H BD I C cost s when itrecei ved C ontr act 5/ 86 f o r r e v i e w. I n l i g h t o f th a t u n d i s p u t e d d i s c l o s ur e, no reason able j ury co uld think G en eral Dy na m ics’ fai lure to c he ckthe pr o perb o x in the Ce r ti fi ca ti o n Agr ee m en t w as a m ate ri alf al se sta tem ent, as r equi re d fo r l i abi l i ty und erthe Fal se Clai m s Act. S ee U ni t e d St at e s ex re l
. Lo ngh i v. U nited Sta tes , 5 75 F
. 3d 45 8, 4 67( 5th Ci r . 2 00 9) ( r equi r i ng that f al se sta tem ent o n w hi ch FCA cl ai m i s ba sed be m at er ial); U ni t e d S t at e s ex re l
. Wi l s on v. Ke l l ogg Brown & R oot, Inc. , 52 5 F
. 3d 370, 37 6 ( 4th Ci r. 20 08) ( sam e); U n i ted St at e s ex r e l
. A+ Hom e ca r e, Inc . v. M e ds hare s M anag e m e nt G roup, Inc. , 400 F
. 3d 428, 44 3 ( 6th Ci r. 20 05) ( sam e) ; se e A lliso n E ng ine C o ., Inc . v. U n i t e d S ta tes ex rel. Sa nd ers , 553 U. S
. 6 6 2 , 6 6 5 ( 2 0 0 8 ) ( r e qu i r i ngtha tde fe nd a nthave i ntended th at fa l se sta tem ent “ be m ate ri alto the Governm en t’s dec isi on to p ay or app rov e t h e fal se claim ”); c f. U ni t e d S t at e s v. Rogan , 517 F.3d 449 , 452 (7th C ir. 2008). The Certi fi cati on Agree m en t rel ating to Contr act 5/ 86 w as si gned by General Dynam i cs i n l ate February19 87, we e k s a ft e rC o n t r a c t5 / 8 6 wa s s u b mi t t e d t o th e D S AA f orr evi ew . That co ntra ct req u ired GeneralDynam i cs t o p ay th e H B D I C costs an d to provid e m an agem en t pe r-N o. 09

- 3037 19

so n n el in G re ec e. T h e b es t t h a t Y an n ac op ou los ca n cla im i s th a t Ge n e r a l Dy n a mi c s , b y n e g l e c t i n g t o r e fe r e xpli ci tl y t o Contrac t 5 /8 6 in the seco nd cer ti fi c at ion , f ai l ed to re m i nd the DSA A o fwh at w as alr eady c l earfro m th e co nt racti ts el f : tha t Gen er alDy na m i cs was pa y i ng a num bero fco sts as soci ate d w i th the es tabl i shm ent o f a for ei gn business devel opm ent c or pora ti on. Genera l Dynam i cs’ failure to re m i nd the DSA A o fi nfo rm ati on se t fo rt h in s om e d et ail in t h e c on tr ac t ith ad j u st rec en tly re cei ved f orr evi ew co uld notr eas onabl y b e d eem ed m ate ri alto the DSA A ’ s deci si on. S ee Rogan , 517 F. 3d at 452. Yanna co po ul o s also ar g ue s th atthe thi r d c er ti fi ca ti o n, i n whi c h Ge ne r a lDy na mi c s c e rt i fi e d tha tthe fun ds i t r ecei ved fro m the U ni ted S tat es gov er nm ent woul d “not be use d to pu rchas e se rv ices .
. . uti l i zed i n the executi on of the Pu rch ase A greem e n t f rom non -U
. S. cont ractors or indiv i du al s that a re notr esi dent i n the U ni ted S tat es,” w as f al se. Thi s l anguage sa ys n othing ab out w hether G en er al D yn am ics c o u l d ex p en d an y fu n d s o n H B D IC st o ck

. Co r po r at e stock is cl ea r l y no t a “s er vi ce ” o fa ny ki nd

. N or can thi s ce rt i fi cati on be r ead to sa y that Gener al D yn am ics w ou ld n ote x p en d an y fu n d s o n th e H B D IC m anage m ent per sonnel

. The thi rd cert i fi cati on r es t r i c t e d G e n e r a lD y n a mi c s ’ u s e o fg o v e r n me n tfu nd s onl y t o pay for se rvi ces “uti l i zed i n the exe cu t i on o fthe Purchase A gr eem ent” ( em phasi s a dd ed). S u ch se rv i ces m igh t incl ud e, f orexam ple , the m anufa cture o fi nd ivi du alco m ponents instal l ed i n the F- 16s sol d to Gree ce, orthe ass em bl y o fF- 16s fro m co m ponents m anufa cture d i n the U ni ted S ta te s o r el sewhere; i n other w or ds,20 N o. 09

- 3037

ser vi ces GeneralDynam ics o btained fo r the purpos e o f fulfi l l i ng the obl i gat i ons i t und er too k und er Contrac t 5 /8 6. Th i s l a ngua g e s i mpl y c a nn o tr e a s o nab l y b e r e a d t o perta i n to any ser vi ces that m ay h ave bee n prov i ded by the HB DIC m anage m ent per sonnel . G ener alDynam i cs w as re quir ed to cer ti fy th at it w as i n com pli ance with Co nt r a c t5 / 8 6 , wh i c h r e qui re d i tt o fun d a nd s up portH BD I C. The thi rd ce rt i fi cati on cannotbe i nter prete d to ha ve r equi r ed Gen er alDy na m i cs t o vi o l at e Con

tract 5/86 i tself. Fo r all of t h es e r e as on s, th e d ist ric t c ou rtco rre c tly gr anted sum m ar y j ud gm ent for Genera lDynam i cs o n a l lo fY a nn a c o po ul o s ’ c l a i ms r e l a t e d t o HBDI C.

I V. The “Econ om ic P ri ceAdjustm entClause” Claim Yannacopoul os next cl ai m s th at GeneralDynam i cs vio lat ed th e F als e C laim s A c t in re lat ion to th e “ E c on om ic Pri ce Ad j ustm ent Cl ause” fo und i n the draft o fwh at ev en tu al l y b ec ame Co nt ract 5 / 86
. Underthe t er m s o fthe Greeksa l e, Genera lDyna m ics w as to re cei ve paym ents w el lbefor e i t pr ovi ded al lo fthe goo ds and ser vices G re ec e p u rc h as ed . B ec au se G e n er al D yn am ics w ou ld deri ve substa nti aleco nom i c be nefi t fro m t h ese advance pa y men t s

— n am el y, i nter esto n the l oan fund s r ecei ved from the U nited States on G r e e c e ’s beha lf

— the parti es i ncl ud ed i n the draft contr act a provi si on enti tl ed “Econom i c Pr i ce A dj ustm ent forA dvance Paym ents. ” Un der thi s dra ft EPA cl ause, t h e to tal contr act pri ce was t o be re du ced “f ori m pu ted i nter esto n exces s co ntra ct pay
-N o. 09

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m en ts” by “s um m ing the p u b li sh ed 90-da y U
. S. Treas ury Bil lyi el d rat e a ver age f orea ch m onth o fa cal en dar ye ar and di vi ding the s um m ati on by12 , ” then m u ltip lyin g t h at n u m b er by “t h e a m ou n t d efin ed in A nnex A C” ofthe draft co ntra ct. A nnex A C, w hi ch wo ul d de fi ne the a mou ntn e e de d t o c a l c ul a t e the a dj u st m en t u n d er th e d ra ft E P A cla u se , w as co n sp icu ou sly abse nt fro m the draft co ntra ct. I n exchange f or General Dynam i cs’ agr eem ent to d eliv er F-1 6s to G re ec e m or e q u i c kly th an w as init ially conte m pla ted, Gree ce a gr eed to del ete the EPA cl ause fro m the draft co ntra ct. On A pri l8, 1 98 6, GeneralDyna mi c s a nd Gr e e c e e xe c ut e d Ad de nd um On e “ t o s up pl e men ta nd a men d” the dr a ftc o nt r a c t
. Ge ne ra l Dyn am ics s en t DS AA a c o py o fAddendum One i n M ay and Jul y o fthatye ar . A l th ou gh tha t add endu m l eft the EPA cl ause i n th e d ra ft co ntra ct, an acc om p an ying d ocu m en t exp lai ne d that, as a “qu id p ro quo f o rthe a cc el er at ed del i ve r y s ch edu l e, ” th e EPA claus e was “ no l o ng era ppl i cabl e” unde rAddendum O ne . A t som e po int th ereafter (the d ispu ted da te is i rre l evantf orr eas ons w e di scuss bel ow), the parti es del et ed th e EPA cl au se fr o m the dr aft co nt r ac t as a c o ndit i on f orGenera lDynam ics ’ acc el er ate d deli ver y o f ai rcr aft. W hen Contrac t 5 /8 6 was exec uted and subm i tte d to the DSA A f orr evi ew o n Feb ruar y 3 , 19 87, i t no l onge r conta i ned the EPA cl ause. By the ti m e i t executed Contr act 5/ 86, however, Genera l Dyn ami cs ha d a l r ea dy subm itt ed $7 0 m i l l i o n in invo i ce s to DS AA f o rpa ym en t i n J une , S ept embe r, a nd22 N o. 09

- 3037 Decem b er 1 98 6. E ac h of thos e invoi ces cer ti fi ed th atGe ne r alDy na m i cs was i n com p l i an ce wi ththe Certi fi cati on A gr eem ent r el ating to the draft co ntra ct. Yannacopoul os conte nd s that these i nter i m cer tifi cati ons w er e f al se because General Dynam i cs f ai l ed to provi de the DSA A “direct unam bi guous noti ce o f del et i o n o fthe EPA Cl au se ” be f o r e it e xe cut ed Con

tr act 5/ 86, and beca use these i nvoi ces f alse l y c er ti fi ed GeneralDynam i cs’ co m pli ance with Paragr aph 10 o f that Certi fi cati on Agree m ent, wh i ch r equ ire d G ener al Dyn ami cs t o “ r epo r t[ ] t o DSA A u p o n e ffec t” a ny “fu tu re ch an ge s t o th e te rm s of th e P u rc h as e A gr ee m en t.” Pa r ag r aph 1 0 r equi r ed Gen er alDy na m i cs t o no ti fy the DSA A o fany changes m ade to the EPA cl ause w hen th ey to ok effe c t. T h e d ele tio n ofa m at er ial c lau se co n st itutes a change to the c ontr act of w h ich the DSA A was to re cei ve noti ce. Th u s, Para gr aph 10 o fthe Certi fi cati on A gr eem ent r equi re d that the DSA A be noti fi ed w hen th e E PA cl ause w as del ete d fr om the draft co ntra ct. Gen er alDy na m i cs do es no t app eart o di spu te tha t th e D SAA was fi rs t info rm ed ofthe EPA cl ause’ s del eti on w hen i t r ecei ved a copy o fCon tr ac t 5 /8 6 forr evi ew i n J an u a r y 1 9 8 7, s o me t i me a ft e rth e i n v o i c e s a ti ss ue here had bee n su bm i tte d fo r paym ent. A ccor dingl y, w e a s s ume f o rthe s a k e o fa r g ume nttha ta nyi nv o i ces subm itt ed f orpaym ent a fterthe parti es re ached a fi nal a g r e e me n t t o d e l e t e th a t c l a u s e , b u t b e f o r e th e DS AA r e c e i v e d a c o p y o fC o n t r a c t5 / 8 6 , f a l s e l y ce r t i fi e d c o mpli ance w i th the Cert i fi cati on Agree m ent. Butwas thi s pr es um ed f al se ho o d m at er i alf o r the pu rpos es ofthe Fal se Clai m s Act? Put m or e pr eci sel y,N o. 09

- 3037 23

Y annacop oulos ar gues that General D ynam ic s’ com m unica- 10 tion s t o the DSAA m er el y “ ex pre s s ed GD’ s ne got i at i ng po s it i on” or “c om m uni c at [ ed] th at Gr ee c e’ s . . . ve rs i on ofthe EPA Cl aus e m odi fi c at i on w as ‘ no l onge r appl i c abl e. ” He c al l s our atten t i o n to no thin g in the reco rd , ho w ev er, that su p p or ts thats t ra i ne d i nt er pre t at i on. c ou ld th is fa lse h oo d h av e in flu en c ed (or n at u ra lly te nde d t o i nfl ue nc e) the DS AA ’ s dec i si o n t o c o ntinue fin an c in g t h e G re ek sa le? See , e . g. , Rog an , 517 F. 3d at 452. T h e u n d isp u te d fac ts sh ow th at it w as n otm at er ial. B ef o r e G en er al D yn am ics su b m itt ed an y of t h e a lleg ed ly fr au dul en t i nt er i m i nv o i ce s f o rpa y m en t, i t sen t th e DSA A a l ett erexpl ai ni ng tha t “ the pr ovi si on f or i m put ed i nt er es t i n Ar ti cl e 11 of the Dr aft Con tr ac t i s no l o n g e ra p p l i c ab l e . ” B y s e n d i n gth i s l e t t e rt o th e D S AA, GeneralDynam i cs no ti fi ed the DSA A that, even tho ugh th e langu age of t h e E P A clause rem ained i n th e d raft c on tract f orthe ti m e be i ng, the parti es no l onge r i ntended fo r that cl ause to have any e ffect. 10 H av i ngb ee n t o l d tha t th e EPA cl au se no l o ng er ha d a ny effect, w h y w ou l d the DSA A have car ed i fthatcl ause w er e l ate r del ete d by th e parti es? I n an at tem pt to answ ert h is questi on, Yannacopoul os re l i es on f or m er DSA A deputy di re cto r H
. Die hl M cK al i p’s w ri tte n decl ar ati on that, “had [ he] bee n aware that the pri c e a dj ustm en t provi si on had bee n del ete d fr om the parti es’ fi nal contr actualm ate ri al s, ” he w oul d have r eco m m ended thatfi na nc i ngo fthe Gr e e ks a l e b e s us pe nd e d i fGe nera l Dyn ami cs di d no t “adj us t[ ] the c o nt r ac t’ s pay m en t24 N o. 09

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I fM c Kal i p ha d bee n abl e t o r ec al l the D SA A ’ s appr ovalof 11 Cont ra c t5/ 86 , he m i ghtha v e re c al l ed, f or i ns t anc e, thatthe DSAA ha d bee n t old thatthe EPA cl aus e was “un der c onsid era tion f or b eing tak en ou t” i n exch an g e for “a ccelerat ed airc raft del iveri es ” w el l befor e th a t c laus e was a ct u a lly d el et ed

. Thi s m ay ex pl ai n why M c Kal ip ’ s d ec l ar at i on does no t 12 addre s s a form er DSAA offi c i al ’ s t es t i m ony that( 1) the EPA c l a u s e h a d n o th i n g t o d o wi th th e DS AA ’ s a p p r o v a l o fthe d raft c o ntr act; and ( 2) that th e D SA A d isliked tha t clau se b eca u se it p ro v id ed f or m on ey to b e retu rn ed d irectly to G reec e, rathe r tha n to the U nited States g ov ern m en t. s c h e d u l e i n v i e w o f th e d e l e t i o n o f th e [ E P A] c l a u s e . ” But M cK al i p coul d not s ay w i th anycer tainty that he w as not aw ar e o fthe EPA cl ause’ s del eti on o r i neffecti venes s i n th e fi rs t pl ace

— M cK ali p read neith er the d raft co nt r ac t no r Con tr ac t 5/ 86 , an d he co ul d no t r ec al l the ac tu alc i r cumst an ce s su r r o undi nghi s r ec o m m endat i o n, ex p lain in g t h at “t h e d ev il .

. . i s in th e d et ails .” In 11 f act, M cK al i p coul d rem em ber h av ing a pp ro ved Con tr ac t 5/ 86 o nl y b ec au se “ m y s i g na tu r e i s o n the w or ks h ee t . . . so I ob vio u sly h ad ov er sig h t.” 12 A s a ge nera lm at te r, specul ati on l i ke M cK al i p’s i s no t su fficie n t t o d e f e at (or w in ) su m m ar y jud gm en t. Se e, e . g. , C hiaram onte v. Fashion B ed Group, Inc. , 129 F. 3d 39 1, 402 ( 7th Ci r . 1 99 7)
. Tha t i s par ti cul ar l y t r ue her e, wher e th e undi s pu t e d f a c t s s ho w tha t, a ft e rr e c e i v i nga nd r evi ew i ng Contr act 5/ 86, the DSA A nei thersuspended GeneralDynam i cs’ fi n an ci ng norr equi re d that Gener al Dyn am ics a l te rthe pa y m en t sc he dul e to a cc o untf o rtheN o. 09

- 3037 25 abse nce o fthe EPA cl ause fro m thatco ntra ct. In other w or d s, the age ncy f ai l ed to ta ke acti on wh en i t a ctu ally l earned ofthe supp ose d m i sr epres entat ion
. In that ca se , s pec ul at i ve t es ti m o ny abo uth ow thatpa r tymight have acte d i fi t had di sco ver ed t h at m i sr epres entati on e ar l i erca n n ot r ai se a g enui ne i ssue off act as to m ate ri al i ty. S ee A m erica n N a t. Fire Ins. Co . v. Ro se A cre Far m s , Inc . , 1 07F
. 3d 45 1, 4 58 ( 7th Ci r. 1 997) ( affi r m i ng gran t o fs um m ary j udg m en t o n g r o unds tha t defen dan t’ s m isrepres en tation w as no t m aterial)

. I fthatwere not enough, r ecal lthatthe draft EPA cl ause was i nc o m pl et e an d c o ul d no t h ave be eng i ve n a ny speci fi c co ntent. A nnex A C, w hi ch w oul d have be en ne ede d t o c al cul at e an y pr i ce r edu ct i o ns unde rthe d raft contra ct, w as no w he re t o b e f ou nd i n th at d raft c o n t r a c t
. No r e a s o n ab l e j u r o rc o u l d thi nk th a tth e D S AA w ou l d care abo ut the del eti on o fan unenf or ceab ly va gu e c on tr ac t p ro vis ion . G ive n all oft h i s , no rea so n ab le j urorco uld fi nd thatthe D SA A , hav i ng ta ken no act i on wh e n fi r s t t o l d th a t th e E P A c l a u s e wa s “ n o l o ng e r a ppli cabl e, ” a nd having co nti nued to ta ke no a cti on w hen pr o v i de d wi th a fi na lc o nt r a c tl a c k i ngtha tc l a us e, coul d have be en go aded i nto acti on i fo nl y i t had be en to l d a g ain, a nd a l i ttl e m o r e spe ci fi ca l l y, o fthe EPA cl ause’ s del eti on at som e ti m e i n between. To be lieve th is, on e w o u ld h av e t o a ss u m e t h at th e D SA A w ou ld con side r the d eletion of th e E P A c lau se from the d raft co nt r ac t m o r e si g ni fi ca ntt o i ts fi na la ppr oval th anthe ab se n c e o f su c h a c l a u s e fr om th e o u ts et . A rea so n ab le j ur y c o ul d no t ac ce pt su cha n un l i k ely pr o po si ti o n.26 N o. 09

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Y an na cop ou los also arg u es tha t hi s d u e p ro cess righ ts 13 w ere violat ed b ecaus e the dis tr ic t c ourt al lowed G eneral D y na m ics to p resen t ad d ition al e v i d en ce in su p p or t of its ren ew ed m otio n fo r su m m ary jud g m en t on the E P A clau se c l ai m withoutal l owin g hi m t o pre s en taddi t i ona l e vi denc e of hi s own. Yanna c opoul os gi ves no r ea s on , howeve r, thathe was un a bl e t o i nc l ude thi s addi t i on a l e vi de nc e wi th the s ub

stan tial am ou nt o f ev id en ce h e atta ch ed to his o b jection to Gene ra l Dyn am i c s ’ r eques tf or l ea ve t o fi l e i t s r en ewed m oti on. Reg ard le ss , s um m ary j ud gm ent f or General Dy nam ic s on the EPA cl aus e claim w as appr opr i at e eve n i n l i ghtofthe ad d ition al ev id en ce d escrib ed in Y an na cop ou los’ b riefs. U nd erthe evi dence pres ented o n sum m ar y j ud gm ent, a r e a s o nab l e j ur y c o ul d c o nc l ud e o nly tha tthe del eti on ofthe “no longe r appli cabl e” EPA cl ause w as i m m ate ri al to the DS AA ’ s dec i si o n r eg ar di ngi ts fundi ngo fthe Greeksa l e. S u m m ar y j ud gm ent forGenera lDynam i cs on Yannacopoul os’ cl ai m r ega rdi ng the EPA cl ause wa s a p p r o p r i a t e a s a ma t t e ro fl a w. 13

V
. The Spare P arts Claim Yannacopoul os next ar gues that GeneralDynam i cs f al se l y certi fi ed i ts c o m pl i an ce wi ththe t er m s o fthe Certi fi cati on Agree m ent in re lat i on t o the purchas e o f spa r e p a r t s u n d e r C o n t r a c t 5 / 8 6
. O f th e t o t a l p r i c e s eto ut i n Contra ct 5 /8 6, $70 m i l l i on was al l oca ted f or“Ini ti al Support Spar es” o rder ed by Greece
. A rt icle 8. 5 went on to ex pl ain tha t th e “t o ta lpr i ce f o r. . . Ini ti alSup p ort Sp ares, consi s t s of a services elem en t and a hard w areN o. 09

- 3037 27 el em ent. ” W hi l e the se rv i ces el em en t w as “not subj ect to ad j ustm ent forquanti ty changes , ” the har dw ar e e l em ent was “a r efer ence p l anni ng num ber

. . . bas ed on [ Greece ’ s] f or ecas t of thi s value” to be used “o n an i nter i m bas i s” unti lthatvalue co uld be adj usted to re fl e c t t h e o u tc om e o f a “s p ar es se lec tio n co n fer en c e” in J anuary19 87. A fterthatco nfe re nce, any ad j u st m ent t o th e spa r e par ts pr i ce woul d b e i nc o r po r at ed into the contr act “as m ay b e appropri ate pri orto the [ M ar ch 31, 1987 ] paym ent. ” Even then, however, thatpri ce r e maine d a me r e e s ti m ate
. T he fi na lp r i c e o fthe h a r dwar e el ementw as t o b e ca l cul at ed “b y s um m i ng th e p r ices of th e ind ivi d ua l item s of ha rd w are au th or ize d by [G re ec e] d u rin g t h e life o f th e c on tr ac t.” Pri orto the spar es sel ecti on confer ence i n J anuary19 87, Greece deci ded to purchase a num bero fspar e par ts fro m suppli er s o therthan GeneralDynam i cs. Desp ite thi s news, Gree ce a nd Genera lDynam i cs did notadj ust th e spa r e pa rts l i ne i te m i n Co nt r ac t 5/ 86 b efo r e th e M ar ch 31, 19 87 paym ent. GeneralDynam i cs s ubm i tte d a n u m b e r o finv oic es to th e D SA A for p ay m en t in re l ati on t o the spare part s l i ne i tem
. Those i nvoi ces re presente d th at GeneralDynam i cs was in com pli ance w i th the Cert i fi cation A gr eem ent, under wh i ch Genera l D yn am ics had agreed to report to th e D SA A “ an y futu re changes to the ter m s ofthe Purchase A gr eem ent .
. . upon effe c t.” Y an n ac op ou lo s c laim s t h at G en er al D yn am ics fals ely ce r ti fi ed i ts c o m pl i an ce wi ththe Ce r ti fi ca ti o n Agreem en t by fail ing to i nform the D SA A of w ha t he ca ll s “th e pa r-28 N o. 09

- 3037 ti es’ understa nd i ng tha t they woul d not abi de by th e de a dl i ne i n Ar t i c l e 8
. 5 ” wh e n i ts ub mi t t e d these i nvoi ces. Yannac opoul os has no ev i dence ofany f or m al agr eem ent ( w ri tte n oro ther w i se) betw een the par ti es. H i s cl ai m i s that the par ti es re ached an i m plic i t, i nf o r m ala g r ee m en t th atth eywoul d “ di sr eg ar d” th e vio lat ion of A rt icle 8.5 t h at h e s a ys (an d th at w e w ill ass um e, f orthe sak e o far gum ent) r esul ted wh en the y f ai l ed to change the pri ce o fthe spare part s l i ne i tem afterGree ce deci ded to purchase spar e par ts fro m othe r supp l i er s. To succe ed on thi s cl ai m , Yannacopoul os m ust s how th at, whenGe ne r alDy na m i cs fi l ed th e i nv o i ce s r el at i ng to sp ar e par ts, i t knew thati t had f ai l ed to co m plywith A rt i cl e 8
. 5. S ee U ni t e d S t at e s ex re l
. La m e rs v . Ci ty of Gre e n Bay, 1 68 F
. 3d 10 13 , 1 01 8 ( 7th Cir. 19 99 ) ( o bs er ving that “i t i s i m possibl e t o m eaningfull y disc uss f al si ty w i th ou t im pli cating the [ Fal se Clai m s Act’s ] kno w l edge re quir em ent”) . T h e F al se Clai m s Act does not penal i ze al lf ac tu allyi naccurat e s tat em ents, but onl y those st ate
m en ts m ad e w i thkno wl edg e o fthe i rf al si ty
. “ I nno ce nt m ist ak es or n eg lige n c e a re n ot a c t i on ab le u n d er th is sect i on. ” H i ndo v. U ni ve rs i ty of He al t h S ci e nc e s /TheChi cago M e di ca l School, 6 5 F
. 3 d 6 0 8 , 6 1 3 ( 7 th Ci r . 1 9 9 5 ) ; s e e 3 1 U. S
. C. § 3 7 29( a) ( 2 ) ( r e qu i r i ngtha tf a l s e s t a t e men tb e ma de “kno w i ngl y”)
. Fo r GeneralDynam i cs t o have known o f i ts f ai l ure to com plywith Article 8 .5, however, i t a l so ha d t o kn ow that Arti cl e 8
. 5 r equi re d an al ter ati on t o the s pare parts l i ne i tem pri orto th e M ar ch 31, 19 87 p ay m en t. A rt icle 8.5 re q u i r e d s u c h an alt er at ion on ly if the ini ti ales ti m ate r ega rdi ng the pri ce o fthe sp ar es to beN o. 09

- 3037 29 pu rchas ed w as i ncor re ct. I fGenera lDynam i cs di d not k no w tha t Gr ee ce ’ s es ti m at e r eg ar di ngthe pr i ce o fthe sp ar e p ar ts line ite m w a s n o lon ge r c or re c t, th en it co u ld not have known thati t had f ai l ed to co m plywith A rt i cl e 8
. 5 a nd co uld notbe hel d l i abl e under the F al se C laim s A c t. Se e, e . g. , H i ndo , 65 F. 3d at 613. T o a v o i d s u mma r y j u d g me n to n th i s c l a i m, Yanna co po ulos ne ede d t o pr es en t ev i den ce s uffi ci en t to al l ow a re as onabl e j ury to concl ud e that, by M ar ch1 98 7, Ge ne r alDy na m i cs kne w off ac ts c o nc l usi vel y e stabl i shi ng tha t the i ni ti al$7 0 m i l l i on e sti m ate w as i ncor re ct. B y basi ng the i ni ti alspar e par ts l i ne i tem on a fl exib le e sti m ate r atherthan a fi rm pri ce, Genera l Dyn ami cs a nd Gr ee ce a dm i tt ed th ei run certa i nty abo ut whatth a tl i n e i t e m’ s p r i c e s h o u l d b e . F a u l t y c a l c u l a t i o ns ar e n otac tio n ab l e u n d er th e F als e C laim s A c t. La m ers , 168 F. 3d at 1018
. Yannacopoul os needed to offerev i dence that GeneralDynam i cs knew by M ar ch 31, 19 87 that Greec e w ou l d nevero rder$7 0 m i l l i on in spare part s ove r the l ong l ife o fContr act 5/ 86. S ee U nite d States ex rel
. O wen s v. Fi rs tKuw a iti G e n. Tr adi ng & Cont r ac t i ng Co. , 612 F .3d 72 4, 73 3- 34 ( 4th Ci r. 20 10) ( expla i ni ng tha t a n est i m at e is fra ud ule nt f orpurposes o fthe FCA i fthat est i m ate i s m ade byan ind i vi du alwh o knows of“f acts that pre cl udeth at es tim at e” (em p h as is a d d ed )); U n ited State s ex rel
. Siew ic kv . Jam ie son Sci ence& En ginee ri ng, Inc. , 21 4 F .3d 13 72 , 137 8 (D .C . C ir. 20 00 ) (sa m e); U nit e d S ta tes v. Fos t e rW

he e l e rCorp. , 44 7 F
. 2d 100, 10 1 ( 2d Cir

. 19 71) ( “ I nfl a t e d c o s te s t i mat e s a r e qui t e di ffe r e ntfr o m f r a ud

u len t e st im at es .”); cf. La m ers , 1 68 F.3 d a t 10 18 ( no ting th at “p ro m ise s o ffu tu re co m p lian c e” are kn ow in gly30 N o. 09

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U n d er th e F C A , a d efe n d a n t l a c k i n g ac tu a l k n o w le d g e o f a 14 f al s eh ood w i l l st i l l be dee m ed t o h ave kno wn ofthatf al s eh ood ifhe ac ted i n ( 1) deliberate ignorance; or (2 ) r eckles s disr egard ofthat fa lse hood

. 31 U.S
. C. § 3729( b). H ere, how ever, Yanna c opoul os ar gue s on l y thatGene ra l Dynam i c s an d G reec e actu ally kn ew of the ina ccu rac y of their initia l estim ate and agreed to dis regar d the provisi ons ofContract5/ 86 that pu r po r t e dl y r e q ui r ed the m t o r e c t i fy tha ti na c c ur a c y by M arch 1987. f al se o nl y i fthe pa r tym aking tha t pr o m i se “ ne ve ri nten d ed to com p ly”). 14 Yannacopoul os’ theo ryi s that be cause General Dynam i cs knew thatGree ce had d ec id ed to purchase at l eas t s om e s pares fro m o thersuppli ers, i t a l so had to k no w tha t a r e du c t i o n i n the o r i g i na l s pa r e part s est i m ate was neces sar y. Thi s a ssum p ti on, cr uci alto Yanna co po ul o s’ c l ai m , i s si m pl y no t bo r ne o utb y the re c or d . G re ec e d id n otba se its init ial $ 70 m illion es tim at e “o n a s etqua nt i tyo fs pares” to b e pur ch as ed, b ut m er el y pr ovi ded that esti m ate witho ut any expla nati on. U naw ar e o fthe basi s for G re ece’ s ini ti ales ti m ate , GeneralD yn am i cs woul d have be en har d press ed to know h ow that e sti m ate was affecte d, i fatal l, by Greece ’ s deci si on to pu rchas e som e spare parts fro m ot h er su p p liers . On ly c om p lica tin g m a t t er s is th e e ar ly date

— M ar ch 198 7

— b y w h i c h Y a n n a c o p o u l o s c l a i ms GeneralDynam i cs m ust hav e know n that th e $70 m i l l i on est i m ate was i ncor re ct. So ear l y i n the par ti es’ co ntra ctual re l ati onshi p, Genera lDynam ics coul d onl y s pecula te a b ou t a n y e ffec t t h e e ve n ts of th e n ex t d ec ad e w ou ldN o. 09

- 3037 31

I n f ac t, i tt ook s eve ra l ye ars b efore the fi nalpr i c e ofthe 15 s par e par t s l i ne i t em was ag re ed upo n, with a n u m berof p r i ce ad justm en ts takin g p lace d u ring tha t tim e. Th e first adjust m ent to that l ine it em occurr ed in 1988, when the pric e of the sp are s w as red u c e d t o $ 69 ,000,00 0. It w as ag ain re duce d t o $ 30 , 28 8, 09 7 i n 1 99 0. Ul t i m at el y, the s par es l i ne it em w as reduced to the final pric e of$24, 359, 722 i n 1996. have on the to talvalue o fspar e par ts Greece would w i sh to pu rchas e. Further, i t i s hard to see how G en er al 15 Dynam i cs c oul d have know n tha t the ini ti ales ti m ate w as i ncor re ct a fterGree ce s ai d t h at i t wanted to “ke ep th e p r i c e o ft h e s p a r e s l i n e i t e m r o u g h l y a tth e s a me level it w as initi all y ,” d esp ite pu rch asing som e sp are parts fro m o thersuppli er s. Give n thi s e vi dence, no re aso nab le j ury coul d have concl ud ed that GeneralDynam i cs knew thatGree ce w oul d neverpurchase $7 0 m i l l i on o fspar e par ts ove r the l i feti m e o fContr act 5/ 86. W e ca n ass um e that GeneralDynam i cs, upon l earni ng tha t G reece i ntended to pu rchas e s pares fro m o th ersuppli er s, suspect ed that Greece m i ght purchas e few erspar e par ts fro m G en er al D yn am ics t h an init ially es tim at ed . B u t e sp ec ially w h er e th e init ial es tim at e w as so arb itr ar y, a s u s p ici on i s a f arcr y from a c tualkno w l edge that the i ni ti al arbi tr ar y e sti m ate was n o l onge r re l i abl e. To pr ove th is cl ai m , Yannacopoul os had to com e for w ar d w i th evi dence thatGenera lDynam ics knew the es ti m ate was i ncor re ct b efo re the M ar ch 31, 19 87, paym ent, near l y a decade befor e the fi nalpric e fo r the s pare parts was dec i ded. He h as f ai l ed to do s o . Su m m ar y j udg m en t32 N o. 09

- 3037 aga i nst Yannaco poulo s o n hi s s p ar e par ts cl ai m was appropri ate
.
V I. The D epot Claim Yannacopoul os also cl ai m s that Gener alDynam i cs f al se l y c er tif ie d i ts c o m pl i an ce wi ththe t er m s o fthe C ertification A greem en t in rel atio n to C ont ract 5/86’s de po tp r o g r a m. Ar t i c l e 8
. 2 o fCo nt r a c t5/86 c o nt a i ne d a $4 9, 88 7, 43 5 l i ne i te m f o r a “de po t pr o g r am , ” r el at i ng to mate r i al s and e qui pm en t f o rus e i n r epa i r i nga nd m aint aini ngthe F

- 16 s. Art i cl e 8. 11 e xpl aine d tha t th e depo t p ro gr am was “subj ect to re ass ess m ent” by Greece un til no l ater th an 12 m ont hs after C ont ra c t 5 /86’s effe c tiv e d at e. D u rin g t h e t im e p er iod for “ re as se ss m en t,” Ge ne r a l D y na mi c s a g r e e d t o “ l i mi tthe c o s t [ s ] i nc ur r e d” for th e d ep otp ro gr am to th os e “ re q u ire d to m ain ta in the c ontr act del i ver y s chedule, ” which were “anti ci pated t o i n c l u de t h e d e p o ts i t e s u r v e y, p r e p a r a t i o n o fr e c o mm end ed l i st s an d s ch edu l es a nd pr epa r at i o n fo ra nd supp or t o fthe depot workin g confer ence( s)
. ” Gre ece ne ve ra utho r i ze d Ge ne r alDy na m i cs to be g i n wor ko n the depot pro gr am , and the parti es ult i m ate ly cancel l ed that prog ra m i n J uly19 95. GeneralDynam i cs s ubm i tte d a n um bero fi nvoi ces re l ating to the depot pro gr am , ea ch ofwh i ch cer ti fi ed Gen er alDy na m i cs ’ c o m pl i an ce w i thCo nt r ac t 5/ 86 a nd the C e r t i fi c a t i o n A g r e e me n t
. A s i n h i s s p a r e p a r t s c l a i m, Y an na cop ou los conten d s tha t the se certifi cation s w e re f al se because G en er alDynam i cs “ f ai l ed to r epor t t o [the] DS AA
. . . tha t i t ha d r ea ch ed an[ i m pl i ci t] und er-N o. 09

- 3037 33 sta nd i ng with Greece to di sr eg ard the ti m etabl e i m posed b y A rti cl e 8
. 11. ” Un der thi s “ ti m etabl e, ” he say s, Gree ce had untilA pri l25 , 19 87 “to ei ther‘ del ete ’ the depot p rogram i n w hole or i n p art, or [ t o ] select th e d ep ot w ork it w an te d an d au th or ize G D to be gin p er for m an c e.” W e di sag re e with th i s s tr ai ned i nter preta ti on o f A rt i cl e 8
. 11, w h i ch r est s o n a r eadi ng o fse l ect l anguage fro m thatar ti cl e wit h ou t r ega rd f ori ts conte xt. A l though A rt i cl e 8
. 11 p ro vid ed a l i m i ted per i od ofti m e in w hi ch G r e e c e c o u l d “ r e a s s e s s ” th e d e p o tp r o g r a m, th a tt i me l i m i t m ust be r ead i n conj uncti on with th e co ntra ctuall angu ag e fo und i m m edi ate l y there after
. S ee D el ta M i ni ng Corp
. , 18 F. 3d at 1403
. That l anguage r equi re d GeneralDynam i cs t o “l i m i t the c os t[s] i ncurr ed” on that depot pro gram d uri ng “the per i od ofti m e a l l owed f or r ea ss es sment
. ” Art i cl e 8. 11 di d no th i ngt o l i m i t th e Greekgo ver nm ent’ s ab ility to “r eas ses s” i ts i nter est inth e d ep otp ro gr am atan y t im e. R at h er , th at art icle ga ve t h e G r ee k g ov er n m en t a ye ar in w h ich it co u ld re ass ess i ts i nter esti n that prog ra m witho ut having to w or ryab ou t incur ring unnecess ar y c ost s fora prog ra m th at i t h ad d ec id ed n otto p u rc h as e. G re ec e c ou ld re ass ess i ts i nter esti n buyi ng the depot pr ogr am after the Ar t i c l e 8
. 1 1 de a dl i ne had p a s s e d, b uti two ul d d o so at i ts own r i sk. A fterthatdeadl i ne passe d , Gener al Dyn ami cs w as no l o ng erpr o hibi te d fr o m i nc ur r i ng cos ts beyo nd thos e speci fi cal l y del i neate d in that arti cl e, cos ts that w e presum e were ass ess ed aga i nst Gre ece l i ke any o therco sts under Contr act 5/ 86. Because Yannaco poulo s’ cl ai m rega rdi ng the d epot progr am r est s o n an i ncor re ct inter preta ti on o fA rt i cl e 8
. 11,34 N o. 09

- 3037 th e claim f ail s as a m att e r ofl aw . Th e d istri ct cou rt w as cor re ct t o gr ant s um m ar y j ud gm ent forGenera l D y n a mi c s o n th a tc l a i m.

V II. Th eMo d i

f i c a t i o n s F i v ea n d S ix C l a i ms I n M ar ch 199 3, defendant L oc kheed ac quir ed General Dynam i cs’ F or t W or th Di vi si on a nd as sum ed al lo f Gen er alDy na m i cs ’ r i g ht s an d o bl i g at i o ns unde rCo ntr a c t 5 /8 6. Fo llow in g its as su m p tio n of th os e re sp on sibi l i ti es, Lockhee d and G re ece execute d tw o m odi fi cati ons to Contrac t 5 /8 6, bo th o fwh i ch Y an nacopoul os n ow co n te n d s w er e “ re ve rs e fa lse cla im s.”

A. The M odific ation FiveClaim Y an naco po ul o s’ fi r stc l ai m a g ains t Lo ckhe ed co nc erns A m endm ent H0005 t o Contrac t 5 /8 6 ( “M odi fi cati on Fi ve”), e x ec uted on M ar ch 17, 19 93. In Feb ruar y 1 987, Gr ee ce ha d exe rci se d i ts o pti o n un derArt i cl e 35 o fCo ntr ac t5 / 8 6 t o p a r t i c i pa t e i n a c o - pr o du c t i o n pr o gr am w i th Genera lDynam i cs. U nd erthatp ro gr am , Genera l D yn am ics w as to p ro vid e te c h n ica l s u p p or t an d m at er ials to H el l eni c Aeros pace In d u st ry. The pri ce o fthe co- product ion p r o g r am was ba se d o n a pr oj ec ti o n r eg ar di ng the a m ount o fsupport w or k the H el l eni c Aeros pace I n d u s t r y w o u l d r e q u i r e o v e rth e c o u r s e o fth e p r o g r a m. Each yea r afterthe fi rs t four yea rs o f that prog ra m , Gree ce and G ener alDynam ics were to “r evi ew the l eve lo f c op ro d u c tio n s u p p or t t o b e p ro vid ed ” t o th e H elle n ic A er ospace I nd ustr y. The contr act provi ded that , i fN o. 09

- 3037 35 H el l eni c Aeros pace Ind ustr y’s “actual per f or m ance” w as “su ch that the level of[ G en eral Dyn am ics’] sup p ort [ co ul d] b e red uc ed, the s uppo r t wi l lb e r edu ce d a nd the co pr o duct i o n pr i ce . . . wi l lb e reduce d a cc o r di ng l y . ” The p ar ti es agr eed to “worko ut the detai l s forthe i m ple

m entat i on o f[ thi s a rt i cl e] duri ng the f ourth yea r after th e s ign at u re of [th e] C on tr ac t.” The agr eed pri ce forthe co- prod u c tio n prog ra m was $53, 693, 555. Because H el l eni c Aeros pace Ind us try pr od u c ed few er F

- 1 6 co m p on en ts th an orig in ally an tic ipated, howe ve r, le ss supp or t was r equi re d to produce tho s e c o mpo ne nt s t ha n wa s i ni t i a l l y a nt i c i pa t e d. By l ate S eptem bero r October19 90, Genera lDynam i cs h ad co l l ecte d $47, 693, 487 f ori ts co- producti on work, though Gre ece had author i zed onl y about $24 m i l l i on w or th o fco - producti on w or k by that ti m e. In M ar ch 199 3, Greece and Lockhee d executed M odi fi cati on F i ve to Contrac t 5 /8 6, wh i ch m ai ntaine d the pri ce o fthe coproducti on prog ra m l i ne i tem at$5 3, 693, 555. Lockhee d m a d e n o re fu n d to th e U n ite d Sta te s u n til 19 96 , w h en it m ade a re fund o f$7, 042, 940 re l ate d t o the c o- producti on charg es. U nd er the Fal se Clai m s A ct, a “r eve rs e f al se claim ” is a f al se s ta te m en t us ed no t to o bt ain pa y m en ts fr o m the gov er nm ent, but to “co nceal, avo i d, ordecr eas e a n obl i g at i o n t o pa y o rtr an smi t m o ne y o rpr o per tyt o the Gover nm ent. ” 3 1 U.S
. C. § 3 729( a) ( 7) ( 2006 ) ; se e U nited State s ex re l. B ahrani v
. C ona gra, Inc. , 465 F. 3d 1189 , 11 94- 9536 N o. 09

- 3037

T he 20 09 am en dm en t s t o the Fal s e Cl ai m s Act m ak e it 16 u nla w ful to “k no w ing ly co nc eal[ ] or k no w ing ly a nd i m pro p erly avoid [ ] o r d ec re ase [ ] an obligat ion t o pay or t ransm itm oney or pr ope rty t o the Gover nm en t, ” a ppar en t l y r eg ar d l es s of w hethers uch act ions i n v o lv e an a f als ehood

. Pub

. L. 111- 21, § 4( a) ( 1)
. T h is a m endm ent do es not apply here, how ever, because i t appli es only t o condu ctoccurr ing on or afterM ay 20, 2 0 0 9 . Se e P u b . L . 11 1 -2 1 , § 4 (f). ( 10th Cir
. 20 06)
. Yannacopoul os conte nd s that M odi fi ca- 16 tio n Fi ve “w as a r eve rs e f al se cl ai m bec ause i t co nceal ed and avoi ded [ Lockheed’ s] co ntra ctualo bl i gat i on t o m ake a co producti on- re l ate d refund bym ai ntai ni ng the pri ce of th e c op ro d u c tio n line ite m u n c h an ge d at$5 3, 6 9 3 ,5 55 .” I n tr ying to pro ve thi s, Yannacopoul os ar gues that, because Genera lDynam i cs had be en o ver pai d fo r i ts w or k o n the co- producti on l i ne i tem , it had an obl i gat i on to pay the am ount o fthato ver paym ent to t h e Un i ted St ate s g ove rnm ent, an obl i gat i on he say s Lockheed c o nceal ed w hen i t s ubm itt ed M odi fi cati on F i ve to the g over nm ent without m enti oni ng tha t o ver paym ent. A ssu m ing tha t suc h an obli g a t ion existed , how ever, and ass um i ng tha t M odi fi cati on F i ve concea l ed that ob liga t ion, Ya n n ac op ou los ’ cla im ca n su c c ee d on ly if M od ifica tio n Fiv e w as fals e. Se e, e .g. , G ross , 41 5 F
. 3d at 604; 31 U
. S. C. § 3 729( a) ( 7) ( 2006 )
. Despi te thi s, Yannacop ou los f ai l ed to ar gue the f al si ty ofM odi fi cati on Fi ve i n hi s o pening bri ef

. OnlyafterLockhee d poi nted out thi s o m i ssi on in i ts re sponse bri ef did Yannacopoul os offeran e xplanat i on a s t o how a m er e c on tr act m odi fi cati o n

— an ag re em en t b et w ee n tw o p ar tie s a lte rin g t h eirN o. 09

- 3037 37

W e reject L ock he ed ’ s arg u m en t tha t, b eca u se an y am ou nts 17 thats hould h a ve been refund ed in M od ific ati on Five w ere a l l e g e dl y l a t e r r e fu n de d i n Mo di fi c a t i o n S i x , d i s c u s s e d b e l o w, Yanna c opoul os has no s t andi ng t o bri ng hi s c l ai m reg ar di ng M odi fi c at i on Fi ve. Eveni fthos e funds wer e l at err etu rn ed, the Uni t ed S t at es was pr es um abl y ha rm ed whe n i twas den i ed the oppor t uni t y t o c ol l ec ti nt er es ton the funds i n i t s pos s es s i on. And eve n i fthe Uni t ed Sta t es was no tac t ual l y ha rm ed by the l o ss o f an y such intere st fu nd s, w e m ay no t d ism iss a suit f orl a c k ofs t a nd i ng“ j us tbe c a us e the pl a i nt i fff a i l s t o pr ov e inju ry .” S ee , e. g. , M ai n st ree t O rgan izati on of R eal tors v. C al u m et C ity, 50 5 F .3d 74 2 , 74 5 (7t h C ir . 20 0 7 ). co nt r ac tu alo bl i g at i o ns t o o ne a no th er

— could be f al se. Fi rs t, he c l ai m s that M odi fi cati on F i ve’ s $ 53, 69 3,5 55 pr i ce t agf o r th e co - pr o duct i o n l i ne i te m was “ f al se a nd i nfl at ed

. ” S eco nd , he a rgues that M odi fi cati on F i ve was f al se b ecau se “the U. S
. Go ve r nm en t r ec o upm en t l in e ite m ” in that M odi fi cati on was pri ced at $29, 047, 706, whe n ne a r l y $ 2 3 mi l l i o n o ftha ta mou nth a d a l r e a dy been repa id to th e U nited States. W e ad d re s s i n tu rn th ese al l eg ed f al se ho o ds, ne i th ero fwhi chi s su ffi ci en t to gi ve ri se to l i abi l i ty und erthe Fal se Clai m s Act. 17

1. M o dif ica tio n F ive’s C o -pro du ctio n P rog ram Lin e Item Sh ow in g t h e o bj ec tiv e fa l s ity of th e p ric e c on ta in ed in Mo d i fi c a t i o n F i v e ’ s c o - p r o d u c t i o n p r o g r a m l i n e i t e m, ho wever, i s no t as s i m pl e a ta ska s es tabl i sh i ngthe f al si ty ofa sta tem ent o fhi sto ri calf act. A st ate m en t m ay be dee m ed “f al se” f orpurposes o fthe Fal se Clai m s Act38 N o. 09

- 3037

E v en ifhe co u ld m eet this b u rd en , Y an na cop ou los w ou ld 18 al s o h a v e t o s h o w th a tL o c k h e e d k n e w th a tGr e e c e d i d n ot re al l y a gr ee to pay the am ounts etouti n the c o- pro duct i on li ne i tem , despit e the f actthatG reec e s pecific all y sai d as m uch by s igning M od ific ati on Five. only i fthe sta tem ent r epres ents “an obj ecti ve f al seho od .” Wi ls on , 52 5 F
. 3d at 376, ci ti ng La m ers , 16 8 F
. 3d at 1018
. A l though a breache d contr actualte rm m ay be c onsi dered a f al seho od i n a l oo serse nse

— a f al se prom i se

— a m ere br ea ch o f a co nt r ac tu al duty do es no t sa ti sfy th is sta ndard. S ee U ni t e d S t at e s ex rel
. Gars tv. Lo ckhe e dM ar t i n Corp. , 3 28 F
. 3d 3 74, 3 78 ( 7th Ci r . 2 00 3) ( o bs er ving tha t a mer e “ f a i l [ ur e ] t o k e e p o ne ’ s pr o mi s e i s j ust b r e a ch of con tract,” not frau d ); Ha rrison v. Westing ho use Sava nna h Ri ve rCo. , 176 F.3d 776 , 789 (4th C ir. 1999) (af

f i rmi ngdi s mi s s a lwh e r e a l l e g a t i o ns s ho we d o nly “ po or and i neffi ci ent m anage m ent of c ontr actualduti es” )
. N or d o m ere “d ifferenc es in i nt erp retation grow ing o u t of a di spu te d l eg alque st i o n” i nv o l vingthe te rm s o fa c o ntr act. S ee La m ers , 1 68 F
. 3d at1 01 8. To establ i shthe obj ecti ve f al si ty of the co- producti on l i ne i tem price in M o di fi cat i o n F i ve , Ya nna co po ul o s ne ede d t o pr es en t evi dence showing t h at G re ece did noti n f act agr ee “to pay [ that am ount] f orthe i tem s a nd se rv i ces to be del i v e r e d ” u n d e rth e c o - p r o d u c t i o n l i n e i t e m. 18 N one o fthe evi dence on w hi ch Yannacopoul os re l i es i s s uffi ci ent t o show ei therthe fals ity ofthe coproducti on l i ne i tem pri ce in M odi fi cati on F i ve or L oc kh ee d ’s k n ow led ge of th at fals ity . M u c h of th at ev i-N o. 09

- 3037 39 dence shows, atbes t, that G ener alDynam i cs a nd Gree ce re ached other agr eem ents re gar ding the c o- produc tio n pr o g r am be f o r e M o di fi ca ti o n F i ve was exe cut ed. But nothi ng ab out thos e a gr eem ents p revente d Lockheed and Gr e e c e fr o m r e a c hing a ne w a g r e e men t whe n they ne g o ti at ed th e fi na lt er m s o fM o di fi ca ti o n Fi ve. T he parti es to the o ri gi nalag re em ent w ere no t bo und to follo w th at ag re em en t e ve n aft er bo th ag re e d t h at it w as not i n thei r b es t int er est s t o do so

. Yannacopoul os al so cl ai m s that Gener alDynam i cs coll ecte d m i l l i ons of dol l ar s forwork on the co

- producti on pro gr am thatwas not yetco m ple ted a t the ti m e M odi fi cati on F i ve w as si gned, but w e fa i lto see how thi s g oes to sho w thatGree ce did notact u ally ag re e t o pay the pri ce s et f or th i n that m odi fi cation
. The r em ai nd ero fthe evi dence on w hi ch h e reli es

— th e d e c r e a s e i n d e ma n d f o r F

- 1 6 p a r t s a nd Gen er al Dyn ami cs ’ dec i si o n to no l o ng er su bm it inv o i c e s i n r e l a t i o n t o th e c o - p r o d u c t i o n p r o g r a m

— suffer fro m thatsa m e f ai l i ng. N on e o fi t co uld e nabl e a r easonab l e j ury to concl ud e that the pri ce ofth e co- productio n prog ra m l i ne i tem i n M odi fi cati on F i ve w as obj ecti vel y f al se, i n the sense t h at G re ece did not a c t u a l l y a g r e e t o p a y th e p r i c e s e tf o r th i n th a tl i n e i t e m.

2. Governm entRecoupm entLineI te m Price I n h i s r eply b r i ef, Ya nna co po ul o s ta k es i ss ue wi ththe f ac t th ata $ 29 , 04 7, 706 l i ne i te m f o r“ U. S
. Go ve r nm en t re coupm ent” w as i n c lu d ed i n the tot alco ntra ct pr i ce40 N o. 09

- 3037

Gover nm en tr ec oupm ent w as des c ribed by one depo ne nt 19 as e nc om pas s i ng s uc h thi ngs a s the c os tt o the U. S. Gover nm ent f or developing the F- 16. By c ont ra s t, the f acts al l eg edl y s howi ng the f al s i t y ofthe c o- 20 p ro d u c t i on line item w ere a ll discu ssed in Y an na cop ou los’ open in g b ri ef

. H e f ail ed to connectthe dots adequatel y in that (co n tin u ed ...) set f o r th i n M o di fi c a t i o n F i v e . Th i s wa s f a l s e , he sa ys, 19 because a l ate r am endm ent to Contrac t 5/ 86 state s t hat m o s to fth i s mo n e y h a d a l r e a d y b e e n r e p a i d t o the U n it e d S t at es . M or eo ve r, h e c laim s t h at A rt icle 8.7 o fC o n t r a c t5 / 8 6 p r o h ib i t s th i s l i n e i t e m

— acc urate o r not

— fr o m b eingi nc l ud ed i n the c o nt r ac t pr i ce i n the fi rs t pl ace. By pl aci ng an in accura te pri ce forthe gov er nm ent r eco up m ent l i ne i tem i nto the t otal p ric e o f Co nt r a c t5 / 8 6 , Y a nn a c o po ul o s s a y s , Lo c k he e d “ i nfl a t [ e d] the c ontr act’ s t ota lpri ce a nd co nceal [ ed] the f act that [ i t had ret ained] m i l l i ons ofdol l ar s o f[ l oan] fund s that defe nd ants had b ee n p ai d fo r the v al ue o fwork they n ev er p er for m ed .” Yannacopoul os w ai ved thi s a rgum ent forpu rp ose s ofthi s a pp eal

. U nl i ke h i s a rgum ent r ega rdi ng the co pr o du c t i o n p r o g r a m l i n e i t e m

— the f a l si ty of w h ich Y an n ac op ou los als o a rg u ed on ly in h i s rep ly brief

— Ya nna co po ul o s f ai l ed to p r es en t an y f acts o r ar gum en t reg ar di ngthe g o ve r nm en t r ec o upm en t l i ne i tem anywhere i n hi s o pening bri ef’ s di scussi on o f M od ifica tio n Fiv e. T h e a r gu m en t w as w aiv ed

. E.g
. , U ni t e d S t at e s v. D i az , 533 F.3d 574 , 577 (7th C ir. 2008). 20N o. 09

- 3037 41

(
. . . c on t i nu e d) 20 br i e f, bu ta fi nd i ngo fwa i ve r o n tha ti ss ue wou l d n otbe app ropriat e. See Her nandez v. C ook C ounty Sherif f’s O f f i ce, 634 F. 3d 9 06 , 91 3 ( 7th Ci r. 20 11 ) ( “W hi l e ar gum en t s m ade f or the first tim e in a re p ly b rief ar e g en era lly trea ted as w aiv ed , it do es n o t neces sar il y f oll ow thatargum ents thatare bette r de v e l o p e d i n a r e p l y b r i e fa r e wa i v e d. ”)
. O n t h i s i s s u e , h o wever, w e s im p ly had no dots t o connectuntilw e re cei ved Y annacop oulos’ r ep ly bri ef, too l ate to have given Lockheed n o t i c e i tmi g h tn e e d t o j u s t i fy th e r e c o u p me n tl i n e i t e m. B. The M odific ation Six C laim Yannac o po ul o s ’ fi na lc l a i m o n a pp e a li s tha tAmen dm ent H0006 to Contrac t 5 /8 6 ( “M odi fi cati on S i x”) , execut e d o n F e b r ua r y 2 6 , 1 9 9 6 , wa s a l s o a r e v e r s e f al se cl ai m . I n M od i fi ca ti o n S i x, Lo ckhe ed ag r ee d t o r efund to Greece $2 9, 926, 515. Of that am ount, $2 2, 883, 575 re l ate d direc tly to the ai rcr aft s al e a nd $7, 042, 940 re l ate d t o th e c o - pr o d u c t i o n p r o g r a m

— an a m ount that Lock

he ed l at erpa i d t o the Uni te d S ta tes t o b e cr edi te d t o the Greektr ust fund acc ount. On app eal, Yanna copoul os conte nd s that M odi fi cati on S i x const i tuted a re ver se f al se cl ai m desi gned to co ncealLockhee d’s pu rpor ted “obl i gat i on to r efund te ns o fm i l l i ons of

. . . unear ned [ l o an ] funds ” to the Uni te d S ta te s gove r nm en t, a m o ng othe r thi ngs. To es tabl i sh a re ver se f al se cl ai m , Yannacopoul os m u st firstsh ow t h a t M od ifica tio n Six w as ob j ec tiv ely f al se i n so m e way. S ee Wi l s on , 52 5 F
. 3d at 376. H e a sse rt s that M odi fi cati on S i x w as f al se i n two separ ate r espect s. Fir st, he cla im s t h at A n n ex A K to M od ifica tio n Six42 N o. 09

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Loc khe ed a rg ued i n i t s r es pons e bri efthatM odi fi c at i on 21 Si x c ont ai ne d no obj ec t i v ely fals e s t at em en t s . I n h i s r epl y, Y an na cop ou los co u ld articu late o nly tw o a llege d f alseh oo d s. T o th e exten t he m ay b e l i e v e tha t M od ifi catio n S ix w as false i n s om e othe r respec t s , Yanna c opoul os ha s wai ved a ny a rg um en t on tho se p oin ts. w as fals e b ec au se it “s ta te s t h at [th e] d efe n d an ts p aid to the Go v e r nme nt
. . . $ 2 9 , 0 4 7, 7 0 6 GD c o l l e c ted f ro m Greece f orr ec ou pm ent, ” despi te the f act that $1, 891, 146 i n “addit i onalf aci l i ti es re ntalr eco up m ent” charg es i ncl ud ed i n that am ount was al l ege dlyunpaid bythat ti m e. S eco nd , he a rgues that An nex A G to M odi fi cati on Six w as fals e b e c a u se it “d id n ot
. . . t r uthf ul l y re c on c ile th e pay m en ts r ec ei ve d b y [ th e] de fend an ts wi ththe val ue o fthe w or k t h ey per f or m ed. ” Rathe r, i t s et f or th “n ew pa y m ents ch edu l es . . . t o c o l l ec t addi ti o na l[ l o an ] fun d s fo rthe r emai ni ngc o nt r ac t wor ka s i f[ th e defen dants’ ] had re tained no advance paym ents. ” W e a dd re ss ea cho fthe se c l aim s in tur n, fi ndi ngne i th ers uffi ci en t to defe at sum m ar y j ud gm ent. 21

1. Th eA n n ex A KC l a i m

—Addi t i onal Fa ci l i t i e s Re nt al I n A rt i cl e 8. 3 of M odi fi cati on Si x, Lockheed an d G reece ag r ee d tha t l i ne i te m 1 4, en tit l ed “U. S
. Go ve r nm en t Re c ou p m ents, ” would be i n the am ount o f$6 , 097, 706. ( A. 4 08 )
. As e xpl aine d i n Ar ti cl e 8. 7 o fM o di fi cation S i x, th is li ne i te m r epr es en te d “ th e amoun t o fr ec o upm en t that the U. S. Governm ent h as d i re cted t o be c ol l ecte d b y” L oc kh ee d fro m G re ec e. T h is am ou n t w as to b e “ c oll ec te d b y [ Lo ckhe ed] a nd pa i d t o the U. S
. Go ve r nm en tN o. 09

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an d i s n o t i n c l u d e d i n th e C o n t r a c t P r i c e n o r . . . i n t he Pa y m en t S ch edu l e. ” Art i cl e 8. 7 wento n t o s ayth at th e “metho d o fpa y m en t, the fr eque nc y o fpa y m en t[ , ] a nd ot h e r p ay m en t t er m s a n d info rm at ion are inc lu d ed in ANNE X AK

— U .S. G O V E R N M E N T R E C O U P M E N T S.” Turningto A nnex A K o f M od ificat i on S i x, o ne fi nd s, as of Sep te m be r3 0, 1 99 1, a t o ta lr ec o upm en t amoun t o f$ 2 9 , 0 4 7, 7 0 6
. T h i s a mo u n twa s c o m p r i s e d o ft wo disc re te com ponents: ( 1) $1 , 891, 146 f orwh at A nnex AK c al l s “Addi ti o nalF ac i l i tyRe nt alRe co upm en t” ; a nd ( 2 ) $ 2 7, 1 5 6 , 5 6 0 f o r “ I t e m D e l i v e r y R e c o u p me n t
. ” At i ss ue h e r e i s the a mou ntf o r“ Addi t i o na lF a c i l i t y R e nt al Recoupm ent, ” which was a ch ar ge o w ed to the U ni ted States govern m en t for us e of th e U ni t e d Sta tes’ Fort W or th f aci l i ty to produce F

- 16 ai rcr aft forGree ce. Yannacopoul os ar gues that, bec ause A rt i cl e 8
. 7 di scussed A nnex A K i n ter m s of “paym ent” ra th er than “co l l ecti on, ” we m ust r ead thatA nnex as a r epres entati on tha tthe de fe nd a nt s h a d p a i d the e nt i r e $ 2 9 , 0 4 7, 7 06 re coupm ent a m ount t o the Unit ed S tat es Gover nm ent b y the t i m e the par ti es executed M odi fi cati on S i x. But see La m ers , 16 8 F
. 3d at 1018 ( noting tha t “ im p re c i se sta tem ents” ar e no t a cti onabl e f al se sta tem ents)
. Because GeneralDynam i cs a l l ege dly n ev erpai d the $1 , 891, 146 am ou n t fo r “A d d itio n al F ac ilitie s R en ta l R ec ou p m en t,” Yannacopoul os i nsi sts thatA nnex A K was f al se. Yannacopoul os m i sr eads the l anguage o fM odi fi cati on Si x. W hi l e An nex A K sa ys that , between M ar ch 31, 1989 and Se ptem ber30 , 199 1, GeneralDynam i cs had col l ecte d fr om Gree ce $ 29, 047, 706 i n fund s desi gnated44 N o. 09

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Thi s i s c ons i s t en twith the m i nut es ofGre ec e’ s an d Loc k- 22 heed’ s J une 1995 negotiat ions regarding M od ific ati on Six , w hic h s t at e thatthe m odi fi c at i on “c re di t s $2 2, 95 0, 00 0 a gai nst Anne x AK an d [l i ne i t em ] 14 ” whi l e the “r em ai ni ng a m ountof U
. S. $6, 097, 706 cons is ts of$4, 206, 560 i n res erve and U

. S. $1, 891, 146 co mm i t t e d f o rpa yme ntt o the U. S. Gover nm en tf or fa ci lit y re n ta l.” (E m p h a sis ad d ed .) for recou p m en t, it cann ot be read to say th a t t his en tire am ou n t had al re ady be en r epai d to the Unite d Sta tes gov er nm ent. Foo tnot e 4 to thatA nnex stat es that, o ut o f that am ount, “$ 22, 950, 000 [ w as] r efu nd ed to the Greece com m er ci alsa l es acco unt ofthe [FM F] tr ust fund o n [ M ay 17, 1991 ]
. ” That am ount re l ate d s ol el y to “ Ite m D e l i ve ry R ec ou p m en t,” th ou gh , an d n otth e “ A d d iti onalF acil i ty Rental ” a m ount that Yannacopoul os say s was neve r pai d. Foo tnot e 5 to A n n ex A K w ent o n to e xpl ain that th e r emai ni ng$ 6, 09 7, 70 6 r ec o upm en t am ount

— $1 ,8 9 1 ,14 6 fo r “A d d itio n al F ac ility R en ta l” and $4, 206, 560 f or“I tem Del i ver y Recou pm ent”

— “has b ee n p aid an d m ov ed be low th e lin e un d er [lin e item ] 14 .” F o o tno te 5

— the cruci alpro vi si on o fM odi fi cati on S i x

— cannotr eas onabl y b e underst oo d to say , fa l sel y o r o the r wi se, thatthe $ 6 , 0 9 7, 7 0 6 i n l i ne i t e m 1 4 h a d a l r e a dy b e e n r e p a i d t o th e Un i t e d S t a t e s g o v e r n me n t by t he ti m e M odi fi cati on S i x w as execu te d . Li ne i tem 14 was t h e a m ou n t d es ign at ed by th e U n ite d Sta te s fo r c oll ecti on fro m Gree ce. By sa ying that thi s a m ount “ has been pai d,” f oo tnot e 5 i nd i cate s that thi s desi gnate d am ount has al re ady be en pai d by Gre ece, notby Loc k he e d. Be c a us e Mo di fi c a t i o n S i x ne v e rs a y s tha t

22 th e $ 1,8 91 ,14 6 fo r fac ility r e n t a l h ad alre ad y b ee n p aidN o. 09

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Thi s $2 9, 92 6, 51 5 r efund s hould no t be c onfus ed wi th the 23 $ 2 9 , 0 4 7, 7 0 6 r e c o u p me n ta mou n ts e to u ti n An n e x AK
. to the Unite d Sta tes , it i s i rr el evantwh ethersuch a st ate
m ent woul d have be en f al se i fi t had ac tual l y b een m ade.

2. Th eA n n ex A G C l a i m

—Reconcil iati on of Pa ym ents Fin ally , Ya n n ac op ou los arg u es th at A n n ex A G of M od ific a t i o n S i x “ i mpl i c i t l y r e pr e s e nt e d” tha ta n a g r e e dupo n r efund o f$ 29 , 926,515 t o the Uni te d S ta te s g o ve r nm ent “ w as the tot alit y of[ the l oan] fund s that [ the] defen d an ts h ad bee n pai d fo r the v al ue o f

. . . work that th ey nev erpe r f o r m ed. ” Thi s “i m pl i ci t” r epr es en ta ti o n, 23 he sa ys, w as fal se because Lockhee d “secr etl y r eta i ned ove r $2 1 m i l l i on in advance pay m ents f orthe val ue o f w or k it n ev er p er for m ed .” A s no ted above, a cl ai m under the Fa l se Clai m s Act re quir es proo fo fan obj ecti ve f al seho od. S ee Wi l s on , 525 F. 3d at 376. In the c on te x t ofa contr actualag re em ent s uch as M odi fi cati on S i x, an obj ecti ve f al sehood r equi re s pro ofthatthe parti es did notactual l y r each the a gr eem ent s et f or th th er ein. Yannacopoul os does not cl ai m thatLockhee d and G re ec e d id notactual l y a gr ee to the refund s set forth in M od ification Six, how ever. I nstea d, he sa ys onl y that they “ i m p l i ci tl y” re prese nted th at th e refun d s p rovide d f or i n th at m od ification w ere th e only fund s tha t L ockh eed had b e e n p aid for w ork i t had notco m ple ted. But see Lam ers , 1 68 F. 3d at 1018 ( n ot in g t h at “im p re c ise st at em en ts ” a re n otac tio n ab le f al se s ta te m en ts )
. Ya nna co po ul o s pr o vi des no e viden-46 N o. 09

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B eca u se w e c o nc lud e tha t Y an na cop ou los ha s f ailed to 24 a ddu c e s uf f ic i e nte vi de nc e s ho wi ngtha tModi fi c a t i on s F i ve and S i x were f al s e, we do n otr ea c h th e U ni t ed S t at es ’ ar gum ent thatthe def endan ts had an “o b ligati on” to re turn m oney t o th e U n i t e d S t a t e s a s r e q u i r e d f o r a r e v e r s e f a l s e c l a i m.

7- 26- 11 ti ary s uppo r t f o rs ucha s tr aine d r ea di ngb etwee n the l i nes o fM odi fi cati on S i x, apparent l y b el i eving tha t a b ald as se rt i o n ab ou t t h at m od ifica tio n ’s m ea n in g s h ou ld su ffice . I t d oe s n ot . See , e . g. , D r akev. M inn
. M i n. & M f g. Co. , 1 3 4 F
. 3 d 8 7 8 , 8 8 7( 7 th C i r . 1 9 9 8 ) ( “ R u l e 5 6 d e man ds som ethi ng m or e than the bal d asse rt i on o fthe gener al tr u th of a p ar tic u lar m at te r, r a t h er it req u ire s . . . sp ec ific concr ete f acts es tabl i shi ng the exi stence o fthe tr uth of th e m atter ass erted

. ”) ( qu otation om itted ). A t i ts cor e, Yan n ac opoul os’ co m pla i nt i s that Lock

heed and Gree ce r eached an agr eem ent that a l l owed Loc k he e d “ t o c o l l e c t a ddi t i o na l [ l o a n] fun ds f o r the r em ai ni ng co ntra ct workas i fi t had r eta i ned no advance pay m en ts
. ” Butthi s i s no th i ngmor e th ana n a r g um en t tha tthe p a r t i e s s ho ul d h a v e a g r e e d in M o di fi c a t i on Si x to refu n d m or e than a m er e $ 29, 926, 515. Even i fthat m ay be tru e a s a m at te r o fc o n t ra c t la w an d so u n d p u b lic po l i cy, tha t woul d not m ak e M o di fi ca ti o n S i x f al se . And abse nt ev i dence ofa know i ng f al seho od, Yannacopoul os’ fi nalcl ai m stum bl es ri ght o ut o fthe gat e. 24 The j ud gm ent o fthe dist ri ct c ourti s A FFI RMED .