## F I LED United States C ourt of Appeals Tenth Circuit 

### O c t ob e r12,2006 Elisab eth A. Shumaker C l erk of C ourt PU BL I SH UNI TED S TATES CO URT O F AP PEALS

T E N T H C IR C U IT U N I T E D ST A T E S O F A M E R I C A , ex re l., A L I B A H R A N I,

P la in tiff-A p p e lla n t,

v. N o. 04- 1407 CONAG RA, I NC. ; CONAG RA F OODS , I NC . ; CO NAGR A HI DE DI VI SI ON ; CO NA GR A B EEF C O M P A N Y ; a n d M O N T F O R T , IN C .,

D efen dan t s- A pp el l ees. UNI T E D S T AT E S OF AM E RI CA ,

A m i cus C ur i ae. AP P E AL F RO M T HE UN I T E D S T AT E S DI S T RI CT CO UR T F OR T HE DI S T RI CT OF CO L OR AD O (D . C . N o . 0 0 -K -10 7 7 (P A C )) G . B r y an U l m er , I I I , T he Spence L aw Fi r m , L L C , J acks on, W y om i ng ( G eor ge H ar ol d Par ker , J r . , D edol ph & Par ker , L L C , For tC ol l i ns , C ol or ado, w i th hi m on th e b rie fs), fo r th e P lain tiff-A p p e llan t. D arr el G . W aas , O t t en, J ohns on, R obi ns on, N eff & R agonett i , P. C . , D enver C o lo ra d o (P a tricia C . C a m p b e ll, O tten , Jo h n so n , R o b in so n , N e ff & R a g o n e tti , P. C . ; E dw ar d G . W ar i n, M cG r ath, N or th, M ul l i n, & K r at z, P. C . , L . L . O . , O m aha, N ebr as ka; and C ar ol C . Payne, V i ns on & E l ki ns , L . L . P, D al l as , T exas , w i th hi m on t he b ri ef), for the D efen dan t s- A pp el l ees.2

P e ter D . K e isle r, A ss ista n t A tto rn e yG e n e ra l, D o u g las N . L e tter, A p p e llate L iti g a tio n C o u n se l, M ich a e l D . G ra n sto n a n d A lan E . K lein b u rd , A tto rn e y s, C iv il D i vi s i on, U ni t ed St at es D epart m entof J us t i ce, W as hi ngt on D . C . , forami cus c u ri a e , th e U n ite d S ta te s o f A m e ri c a . B efor e HENR Y , M c KAY , and TY M KOVI CH , C i rcui tJudg es. HENR Y, C i r cui tJ udge.

A l i B ahr ani fi l ed thi s r ever s e fa l s e cl ai m s act i on agai ns thi s form er empl oy erC onagr a, and i t s r el at ed corpor at i ons , w hi ch ar e enga ged i n export i ng m e a tp r o d u c t s a n d a n i m a l h i d e s . H e a l l e g e d t h a te m p l o ye e s a tC o n a g r a ’ s G r e e l e y, C ol or ado off

i ce r out i nel yal t er ed exportcert i fi cat es i s s ued byt he U ni t ed St at es D epart m entof A gr i cul tur e ( U SD A ) i n or dert o avoi d obt ai ni ng r epl ace m ent cert i fi cat es forw hi ch the companys houl d have pa i d a fe e, i n vi ol at i on of the re v e rs e fa ls e c la im s p ro v is io n o f th e F a ls e C la im s A c t, 3 1 U .S .C . § 3 7 2 9 (a )( 7 ). M r . B ahr ani m ai nt ai ned thatbyal t er i ng the exportcert i fi cat es , C onagr a empl oy ees “us ed . . . a fa l s e r ecor d ors t at ementt o conce al , avoi d, ordecr eas e an obl i gat i on to p a yo r t ra n s m it m o n e yo r p ro p e rt yto th e G o v e rn m e n t.” 3 1 U .S .C . § 3 7 2 9 (a )( 7 ). T he di s t r i ctcour tgr ant ed s um m aryj udgm entt o C onagr a, r eas oni ng that C onagr a’ s al l eged “ obl i gat i on” t o obt ai n the r epl ace m entcert i fi cat es w as not “quant i fi abl e and e xi s t i ng befor e the al l egedl yfr audul entact s t aken t o avoi d i t . ” S e e Un i t e d S t a t e s e x r e l . Ba h r a n i v . Co n a g r a , I n c . , 3 3 8 F . S u p p . 2 d 1 2 0 2 , 1 2 0 7 ( D.3

C ol o. 2004) . W e di s agr ee w i t h t he di s tr i ctcourt ’ s r eas oni ng. T he r ecor d i ndi cat es t hat, as t o a cert ai n clas s of err ors and o m i ssi on s i n ex po rtcert i fi cat es— tho se d e e m e d “ m ajo r” o r “ sig n ifica n t”— th e U S D A re q u ire d C o n a g ra to o b tain r epl ace m entcert i fi cat es and paythe ac company i ng fee . I n ourvi ew , that requi rem ent i s suffi ci ent t o co nst i tute an “ob l i gati on ” un der § 37 29 (a) (7) . B ecause w e ar e notper s uaded byC onagr a’ s ar gum ent s thatw e affi r m on al t ernat i ve gr ounds , w e vac at e the di s t r i ctcour t ’ s gr antof s um m aryj udgm entand r emand for f u rt h e r p ro c e e d in g s . I . BA CKGROUND W e b eg in w ith an o v erv iew o f U S D A reg u lat ion s g o v ern ing ex p o rt c e rtific a tes . T h e n , w e su m m a riz e M r. B a h ra n i’s a lleg a tio n s, th e a p p lica b le pr ovi s i on of the Fal s e C l ai m s A ct , 31 U . S. C . § 3729( a) ( 7) , and the gr ounds fort he di s t r i ctcourt ’ s gr antof s um m aryj udgm entt o C onagr a. W e vi ew t he r ecor d i n t he lig h t m o st fa v o ra b le to M r. B a h ra n i. S e e T e rra V e n tu re , In c . v . JD N R e a l E sta te O v erlan d P ark , L . P . , 4 4 3 F . 3 d 1 2 4 0 , 1 2 4 3 (10 th C ir . 2 0 0 6 ).

A . U S D A E x p ort C erti fi cates T o fac i l i t at e and pr om ot e for ei gn tr ade a nd t o pr ot ectt he food s uppl y , t he U S D A provides cer t i fi cat es t o co m pan i es that expo rtanim al produ ct s. T hese expor tcert i fi cat es ar e partof a c om pr ehens i ve s cheme admi ni s t er ed byt he Food4

Safetyand I ns pect i on Ser vi ce ( “the Food I ns pect i on Ser vi ce” ) , w hi ch r egul at es m eatexport s , and the A ni m al Pl antH eal th I ns pect i on SafetySer vi ce ( “the A ni m al I ns pect i on Ser vi ce” ) , w hi ch r egul at es hi de export s . See 9 C . F. R . §§ 130, 156, 307, 322. 2, 350, 351, 390. T he r egul at i ons ar e author i zed bythe Feder al M eat I ns pect i on A ct , 21 U . S. C . §§ 601- 695, the Poul tryPr oduct s I ns pect i on A ct , 21 U .S .C . § § 4 5 1 -4 7 1 , a n d th e A g ri c u ltu ra l M a rk e tin g A c t, 7 U .S .C .§ § 1 6 2 1 -2 7 . U n d e r th e F o o d In sp e c tio n S e rv ice re g u latio n s, e x p o rte rs a re re q u ire d to obt ai n cert i fi cat es fr om U SD A i ns pect or s foreac h s hi pm ent . E ach c er t i fi cat e has a uni que s er i al num berand s t at es the s hi pm ent ’ s des t i nat i on, the export er , the c o n s ig n e e , a n d th e n u m b e r a n d k in d s o f p ro d u c ts it c o n ta in s . 9 C .F .R . § 3 2 2 .2 . T h e d esti n ati o n m ayaffe ct th e c o n tent o f th e c erti fica tes: so m e c o u n tr ies req u ir e m ore i nfo rm at i on t han t he F oo d Inspecti on S ervi ce do es, and , i n those i nst ances, t he U SD A pr ovi des export er s w i t h cert i fi cat es thatcompl yw i th thos e other c o u n tr ie s ’ r e q u ir e m e n ts . T he A ni m al I ns pect i on Ser vi ce r egul at i ons cont ai n a s i m i l arpr ovi s i on add res si ng cert i fi cat es for expo rt s of an i m al hides. 9 C . F . R . § 1 56 . 3. In contr ast t o t he Food I ns pect i on Ser vi ce r egul at i ons , the A ni m al I ns pect i on Ser vi ce r egul at i ons do notr equi r e a c ert i fi cat e foreverys hi pm ent . H ow ever , s om e for ei gn countr i es do r equi r e ce r t i fi cat es , and the A ni m al I ns pect i on Ser vi ce r egul at i ons p ro v id e th a t ex p o rte rs s h ip p in g h id e s to th o se c o u n tries m a yo b tain a c e rtific a te f ro m a n in s p e c to r.5

T he Food I ns pect i on Ser vi ce a nd the A ni m al I ns pect i on Ser vi ce both char ge fe e s fo r th e c e rtific a tes . T h e F o o d In sp e c tio n S e rv ice ’s e x p o rt c e rtific a te fe e is bas ed upon the t i m e expe nded byi t s i ns pect or s forpr ovi di ng i nform at i on overand above the mi ni m um cert i fi cat i on r equi r ement s s etfor th byfede r al l aw . See 9 C . F. R . §§ 307. 4–307. 6, 322. 2, 391. 1–391. 3. I n contr as t , the A ni m al I ns pect i on Ser vi ce c har ges a fl atfee ( curr ent l y$32) . See i d. § 130. 20. T he purpos e of the fe e is to re im b u rs e th e g o v e rn m e n t fo r t h e c o s ts in c u rr e d . O c c a sio n a lly , an e x p o rte r m a yd isc o v e r in a c c u ra c ies in a n e x p o rt c e rtific a te af ter i t has b ee n issue d b ya U S D A insp ec tor. T h ere m ayb e typ o g rap h ical errors orm or e s ubs t ant i ve def i ci enci es i nvol vi ng m at t er s s uch as the gr ade of beef ort he des t i nat i on of the pr oduct . I n t hos e i ns t ance s , the i ns pect or s ’ pr act i ce ha s been t o m ake c or r ect i ons on t he or i gi nal cert i fi cat e themsel ves , author i ze thos e corr ect i ons t o be made byt he export er s , ort o i s s ue a ne w cert i fi cat e. T he Food I ns pect i on S e rv ic e ’s re g u la tio n s e x p re s s ly p ro v id e fo r s u c h n e w c e rt ific a te s . S e e id . § 322. 2( c) ( s et t i ng for t h t he r equi r ement s for“i n l i eu of” cert i fi cat es ) . T he A ni m al I ns pect i on Ser vi ce’ s r egul at i ons do notcont ai n a s i m i l arpr ovi s i on. H ow ever , t he r ecor d i ndi cat es t hat , i n cert ai n i ns t ance s , i t s i ns pect or s do i s s ue r epl ace m ent c e rtific a tes w h e n th e o rig in a l ce rtific a tes a re in a c c u ra te. A lth o u g h th e re is n o t a s epar at e pr ovi s i on addr es s i ng t he paym entof fe es forthes e “i n l i eu of” and r epl ace m entcert i fi cat es , t he part i es do notdi s put e thatthe r egul at i ons author i ze t he Food I ns pect i on Ser vi ce a nd t he A ni m al I ns pect i on Ser vi ce t o char ge fe es for6

t h e m. T h e re g u latio n s d o n o t se t fo rth a sta n d a rd fo r d e ter m in in g w h e n th e se “ in l i eu of” and r epl ace m entcert i fi cat es ar e r equi r ed. H ow ever , both par t i es have s ubm i tt ed affi davi t s — fr om U SD A offi ci al s and a Conagr a empl oy ee— agr eei ng t hatt hes e ce r t i fi cat es ar e r equi r ed w hen the or i gi nal cert i fi cat e cont ai ns s i gni fi cant e r r o r s o ro mi s s i o n s . Se e Apl t ’ s App . v o l . I , a t1 0 1 ( a ffi d a v i to f Dr . M a r k T. M ina, M r. B ah ran i’ s ex p ert, stat ing that n ew ce rt ifi ca tes are re q u ir ed fo r “m ajor” ch an g es); A p le’s S u p p . A p p . v o l. II, at 37 5 (affid av ito f B rad S ch m eh , C o n ag ra’s expert , s t at i ng t hatnew cert i fi cat es ar e r equi r ed i n “s i tuat i ons w her e the cus t om er n ee d s an en ti relyd iffe ren t shipm en t or i f th e w eigh ts use d fo r th e h ides are compl et el yw r ong as oppos ed t o one di gi tbei ng i ncorr ectortr ans pos ed”) ; i d. at 385 ( aff i davi tof M ar i ana Lam bert , C onagr a’ s L et t erof C r edi tM anage r , s t at i ng t hatnew cert i fi cat es ar e r equi r ed for“cha nges t o the pr oducti nform at i on, w hi ch w oul d i ncl ude cha nges t o t he numberof pel t s orpi ece s , the type of hi de, orthe w ei ght. . . [or ] s i gni fi cantchange s t o the i dent i fi cat i on i nform at i on, i ncl udi ng ent i r el ydi ffe r entcont ai nernum ber s ors i gni fi cantchange s t o the portof l oadi ng o r po rto f d isch arg e” ); id., at 47 5 (affid av ito f D r. C laud e N elso n , C o n ag ra’s expert , s t at i ng t hatnew cert i fi cat es ar e r equi r ed w hen “the cus t om erneeds an e n tirelyd iffe re n t sh ip m e n t, or if th e w e ig h ts u se d fo r th e h id e s a re c o m p lete ly w ro n g o r th e c o n sig n e e is d iffe re n t f ro m o n th e o rig in a l ce rtific a te, a s o p p o se d to o n e d igitb eing inco rrect or tran sp o sed ”); i d . at 27 8 (affid av ito f D r. R o b ert7

Fet zner , C onagr a’ s expert , s t at i ng thatnew cert i fi cat es ar e notr equi r ed i f the c h a n g e s a re “ m in o r” ).

B . M r. B ah ran i ’s A l l ega ti on s F ro m 1 9 9 6 to 1 9 9 8 , M r. B a h ra n i w o rk e d a s a d o c u m e n t co o rd in a to r a t C o n ag ra’s G ree ley , C o lorad o fa cil ity . A cc o rdin g to M r. B ah ran i, w h en C o n ag ra e m p lo y e e s d isc o v e re d e rro rs a n d o m iss io n s in e x p o rt c e rtific a tes , the yro u tin e ly a ltere d th e o rig in a l ce rtific a tes o r fo rg e d n e w c e rtific a tes , rath e r th a n o b tain in g “ in l i eu of” orr epl ace m entcert i fi cat es . B as ed on hi s per s onal exper i ence and i nform at i on fr om co- w or ker s , M r . B ahr ani m ai nt ai ned thatC onagr a empl oy ees a ltere d m o re th a n 2 0 0 e x p o rt c e rtific a tes p e r w e e k , an d th a t th e yfo llo w e d th is pr act i ce a tt he company ’ s G r eel eyfac i l i tyand atotherl ocat i ons foratl eas tt en y ear s pr ece di ng t he comm ence m entof thi s act i on. A ccor di ng t o M r . B ahr ani , by al t er i ng t he or i gi nal cert i fi cat es , C onagr a empl oy ees avoi ded the fe es t hatt he companyw oul d have be en r equi r ed t o payfornew cert i fi cat es . T hus , he as s er t ed, he w as ent i t l ed to dam ages un der the reverse fal se cl ai m s provi si on of the F al se C la im s A c t, 3 1 U .S .C . § 3 7 2 9 (a )( 7 ).

C . T he F al s e C l ai m s A ct C ongr es s pas s ed the or i gi nal Fal s e C l ai m s A cti n 1863 “t o combatr ampant fr aud i n C i vi l W ardefe ns e contr act s . ” S. R ep. N o. 99- 345, at8, r epr i nt ed i n 19868

U . S. C . C . A . N . 5266, 5273 ( 1986) . “The Supre m e C our thas gi ven the s t atut e an expans i ve r eadi ng, ” A m . T ext i l e M fr s . I ns t . , I nc. v. T he Li m i t ed, I nc. , 190 F. 3d 72 9, 73 3 (6t h C i r. 19 99 ), ob serving t hat i t“cov ers al l fraudu l ent att em pts t o cau se th e G o v e rn m e n t to p a yo u t s u m s o f m o n e y .” U n ite d S ta te s v . N e ife rt -W h ite C o ., 3 9 0 U . S . 2 2 8 , 2 3 2 -33 (19 6 8 ). I n or der“t o enhanc e the G overnm ent ’ s abi l i tyt o r ecove rl os s es s us t ai ned as a re s u lt o f

f ra u d a g a in s t th e G o v e rn m e n t,” S . R e p . N o . 9 9 -3 4 5 , a t 1 (1 9 8 6 ), r epr i nt ed i n 1986 U . S. C . C . A . N . 5266, the A ctw as amended i n 1986. T he “g row ing p erv asiv en ess o f f rau d n ec essitat e[ d ] m o d ern izati o n o f th e G o v ern m en t’ s p ri m a ry litig a tiv e to o l.” Id . a t 2 , 1 9 8 6 U .S .C .C .A .N . a t 5 2 6 6 . S e c tio n 3 7 2 9 (a )(7 ), th e re v e rse fa lse c laim s p ro v isio n a t issu e in th is c a se , is one of thes e new “l i t i gat i ve t ool [s ] . ” I tpr ovi des thatanyper s on w ho

k n o w in g ly m a k e s , u s e s , o r c a u s e s to b e m a d e o r u s e d , a fal s e r ecor d ors t at em entt o conce al , avoi d, ordecr eas e an obl i gat i on t o payortr ansm itm oneyorpr opertyt o the G o v e rn m e n t, is liab le to th e U n ited S tate s G o v e rn m e n t fo r a c iv il p e n a lty of n ot l ess t h a n $5 , 00 0 an d n ot m ore than $1 0, 00 0, plus 3 t i m es t he amountof damages w hi ch the G overnm ent s u s ta in s b e c a u s e o f

th e a c t o f

th a t p e rs o n [ .] 31 U . S. C . § 3729( a) ( 7) ( emphasi s added) . T hi s s ect i on w as added “ t o pr ovi de that an i ndi vi dual w ho m akes a mat er i al m i s r epr es ent at i on t o avoi d pay i ng m oney ow ed the G overnm entw oul d be equa l l yl i abl e underthe A ctas i f he ha d s ubm i t t ed a fa l s e cl ai m t o r ece i ve money . ” S. R ep. N o. 99- 345, at18, 1986 U . S. C . C . A . N . at9

5283. Sect i on 3729( a) ( 7) i s des cr i bed as a “r ever s e fa l s e cl ai m s ” pr ovi s i on “bec aus e the fi nanci al obl i gat i on thati s the s ubj ectof the fr aud fl ow s i n the oppos i t e of the us ual di r ect i on. ” U ni t ed St at es ex r el . H uangy an I m p. & E xp. C o rp . v . N a tu re ’s F a rm P ro d s ., In c ., 3 7 0 F . S u p p . 2 d 9 9 3 , 9 9 8 (N .D . C a l. 2 0 0 5 ). T he pr ovi s i on m aybe enfor ced e i therbythe A t t or neyG ener al orbya pr i vat e qui ta m relator su ing o n the g o v ern m en t’ s b eh alf. 31 U . S . C . § 3 7 3 0 (a), (b)(1 ). C o n g re s s d id n o t p ro v id e a d e fin itio n o f a n “ o b lig a tio n ” u n d e r § 3 7 2 9 (a )( 7 ). H ow ever , des pi t e the fa ctt hat“[i ] n the abs tr act , an obl i gat i on can be l egal , m or al ors oc i a l , ” s e e U ni t e d St a t e s e x r e l . S. Pr a w e r& Co. v. V e rr i l l & D a na , 94 6 F. S u p p . 8 7 , 9 3 -9 4 (D . M e . 1 9 9 6 ), co u rts h a v e d e fin e d th e ter m m o re n a rro w ly . T h is ci r cui thas s t at ed thatt he pl ai nt i ff i s r equi r ed t o al l ege thatthe defendant“had ‘ an exi s t i ng l egal obl i gat i on t o payortr ans m i tm oneyorpr opertyt o the governm ent . ’ ” K ennar d v. C ons t ock R es . I nc. , 363 F. 3d 1039, 1048 ( 10th C i r . 2004) ( quot i ng U n it ed S tat es v . P em co A ero p lex, Inc . , 1 9 5 F . 3 d 1 2 3 4 , 1 2 3 6 -37 (11 th C ir . 1 9 9 9 )) (e m p h a s is a d d e d ) ( o th e r i n te rn a l q u o ta tio n m a rk s o m itte d ). T h ere is w ides p rea d ag ree m en t th at th e m ak ing o r usin g o f th e false rec o rd o r s ta te m e n t is n o t s u ffic ie n t in its e lf to c re a te a n o b lig a tio n u n d e r § 3 7 2 9 (a )( 7 ). A m . T e x til e M f

rs., 1 9 0 F .3 d a t 7 3 6 (sta tin g th a t “[ w ]h e re a n o b lig a tio n a rise s if and onl yi f a de fenda ntm akes a fa l s e s t at ementorfi l es a fa l s e cl ai m . . . an ac t i on undert he Fal s e C l ai m s A ctw i l l notl i e”) . I ns t ead, the obl i gat i on m us tar i s e fr om som e i nd epen den tl egal dut y . S ee i d. (“[W ]hat ever the scop e of the ph ras e10

‘ obl i gat i on t o payort r ans m i tm oneyorpr opertyt o the G overnm ent , ’ a pl ai nt i ff m ayn o t st ate a rev erse fa lse claim u n less the p erti n en t ob li g ati o n att ac h ed b efo re t he defendantm ade orus ed the fa l s e r ecor d ors t at ement . ”) ( i nt ernal ci t at i on om i t t ed) ; U ni t ed St at es v. Q I nt ’ l C our i er , I nc. , 131 F. 3d 770, 773 ( 8th C i r . 1997) (“To recover und er the F al se C l ai m s A ct , w e beli eve thatthe U nit ed S t at es m ust demonstr at e thati tw as ow ed a s peci fi c, l egal obl i gat i on atthe t i m e thatthe a lleg e d fa lse re c o rd o r sta tem e n t w a s m a d e , u se d , o r c a u se d to b e m a d e o r u se d .”); H uangy an I m p. & E xp. , 370 F. Supp. 2d at1000 ( char act er i zi ng § 3729( a) ( 7) obl i gat i ons as “exi s t i ng debt s ” and a ddi ng that , underthe Si xth C i r cui t ’ s r eas oni ng i n A m er i can Text i l e M anufa ctur er s , “the emphas i s i s nots o m uch on the t i m i ngof t he o bli gati on as on it s s our ce ” ). M o reo v er, th e fac t th at th e m ak ing o r usin g o f a fa lse stat em en t or reco rd m i ghtr es ul ti n a fi ne ora pena l t yi s i ns uffi ci entt o es t abl i s h a § 3729( a) ( 7) obl i gat i on. U ni t ed St at es ex r el . B ai n v. G eor gi a G ul f C orp. , 386 F. 3d 648, 657 ( 5t h C i r . 2004) ( s t at i ng t hat§ 3729( a) ( 7) “does notext end t o the pot ent i al or cont i ngentobl i gat i ons t o payt he governm entfi nes orpenal t i es w hi ch have not been l evi ed oras s es s ed ( and as t o w hi ch no form al pr ocee di ngs t o do s o have be en i ns t i tut ed) and w hi ch do notar i s e outof an e conomi c r el at i ons hi p betw een the g o v e r n me n ta n d t h e d e fe n d a n t( s u c h a s a l e a s e o ra c o n tr a c to rth e l i k e ” ) ) ; Am. T e x til e M f

rs., 1 9 0 F .3 d a t 7 3 8 (sta tin g th a t § 3 7 2 9 (a )(7 ) d o e s n o t ap p lyto “cont i ngentobl i gat i ons [, ] i ncl ud[i ng] thos e ar i s i ng fr om ci vi l and cr i m i nal11

p e n a lti e s th a t im p o se m o n e tar yfin e s a f ter a fin d in g o f

w ro n g d o in g : as o p p o se d to quas i - contr actual obl i gat i ons cr eat ed bys t atut e orr egul at i on” and thos e that “att ach onl yaft ert he exe r ci s e of a dm i ni s tr at i ve orpr os ecut or i al di s cr et i on, and oft en af t era s el ect i on fr om a r ange of penal t i es ”) ; Q I nt ’ l , 131 F. 2d at773 ( s t at i ng t hat§ 3729( a) ( 7) does notappl yt o “att empt s t o avoi d pot ent i al fi nes or s anct i ons ”) ; H uangy an I m p. & E xp. , 370 F. Supp. 2d at1000 ( s t at i ng that “pot ent i al obl i gat i ons - - fi nes , penal t i es and the l i ke- - thatar e cont i ngentupon t he e x e rc ise o f

so m e d isc re tio n o r in ter v e n in g a c t b yth e g o v e rn m e n t ar e n o t p ro p e rly th e s u bje c t o f

a s u it u n d e r [ § 3 7 2 9 (a )( 7 )] ” ). T h e re a re tw o p rim a ryre a so n s w h yp o ten tial fin e s a n d p e n a lti e s a re n o t § 3 7 2 9 (a )(7 ) o b lig a tio n s. F irst, to a p p lyth e sta tu te in th a t co n tex t w o u ld u n d u ly br oaden i t . See A m . T ext i l e M fr s . , 190 F. 3d at739 ( not i ng the “i ncr edi bl e s cope” of “pe r m i t t i ng s ui t s agai ns tanyper s on w ho m akes a fa l s e s t at ementt o the fe der al governm entt hathe di d notcomm i ta s t atut oryorr egul at oryvi ol at i on thatm i ght have l ed t o t he i m pos i t i on of a f i ne, paym entof l i qui dat ed damages , i m pos i t i on of a t ax, orfor fei tur e of pr opert y ”) . Second, the di s cr et i on ves t ed i n pr os ecut or s and o ther g o v ern m en t officials t o d eterm ine w h ethe r t o see k fin es o r pe n alt ies ren d ers t he al l eged “ obl i gat i on” cont i ngentand thus bey ond the r eac h of the s t atut e. See B a in , 3 8 6 F .3 d a t 6 5 7 ; A m . T e x tile M f rs ., 1 9 0 F .3 d a t 7 3 9 . Q I nt ernat i onal i l l us t r at es t he ki nd of obl i gat i on thati s notencompas s ed by § 3729( a) ( 7) . T o t ake a dvant age of di ffe r ence s betw een domes t i c and12

i nt ernat i onal pos t age r at es , t he defendantcorpor at i on tr ans ferr ed bul k m ai l fr om th e U n ited S tate s to B a rb a d o s fo r th e p u rp o se o f re m a ili n g th e lette rs in d iv id u a lly back i nt o t he U ni t ed St at es ( a pr act i ce know n as “A B A r emai l ”) . T he U ni t ed St at es Post al Ser vi ce c har ged B arbados ’ s pos t al s ervi ce a s l i t t l e as one- t enth of the amount t hati tchar ged fort he s ame fi r s t - cl as s del i veryof m ai l w i thi n the U ni t ed S ta te s . T h e E ig h th C ir c u it h e ld th a t n o a c tio n a b le “ o b lig a tio n ” w a s in v o lv e d .

“ [ T ]h e sta tu tes a n d re g u latio n s th a t th e U n ited S tate s c ites m ig h t w e ll su p p o rt a j udgm entt hatone orm or e of the defendant s engage d i n i l l egal and fr audul ent act i vi t y , butt hos e s t atut es and r egul at i ons do notcr eat e a l egal dutyforthe defe ndant s t o paydom es t i c pos t age. ” Q I nt ’ l , 131 F. 3d at773. Si m i l ar l y , i n A m er i can Text i l e M anufa ctur er s , a nat i onal tr ade a s s oci at i on al l eged thata corpor at i on had mi s l abel ed C hi nes e pr oduct s as comi ng fr om H ong K ong orM aca u. T he pl ai nt i ff c ont ended thatthe mi s l abel i ng vi ol at ed s ever al s t atut es pr ohi bi t i ng t he us e of fal s e document s and i m pos i ng penal t i es . A ccor di ng t o t he pl ai nt i ff, “ea ch cus t om s vi ol at i on cr eat ed an obl i gat i on t o paym oneyt o t he governm ent ” and “ t he al l egedl y - fal s e entrydocument s s erved t o ‘ conce al , avoi d, o r d e c re a s e ’ t h e o b lig a tio n s .” 1 9 0 F .3 d a t 7 3 4 (q u o tin g § 3 7 2 9 (a )( 7 )) . I n r ej ect i ng t he pl ai nt i ff’ s as s er t i on that , bym i s l abel i ng the goods , the defe ndantcorpor at i on avoi ded an “ obl i gat i on, ” the Si xth C i r cui tfi r s tnot ed that t he all eged ob l i gati on did not exi stbefo re the d efen dan tm ade the al l eged l yfal se13

s t at ement s . T he courtal s o char act er i zed the al l eged vi ol at i ons of the s t atut es at i ssue as “[c] on t i ng ent obl i gati on s”— tho se that “w i l l ari se onlyaft er the ex erci se o f d isc re tio n b yg o v e rn m e n t ac to rs.” Id . at 7 3 8 . N e v e rth e les s, th e S ix th C irc u it d id s u g g e s t th a t a s ta tu te o r a re g u la tio n m ig h t c re a te a § 3 7 2 9 (a )( 7 ) “ o b lig a tio n ,”

“ a t lea st w h e re th e sta tu te o r re g u latio n im p o se s a n o b lig a tio n e ss e n tially contr actual i n natur e, s uch as t he i m pos i t i on of the r equi r ementthatthos e us i ng t he Pos t al Ser vi ce pa yt he appr opr i at e r at e. ” I d. at737- 38 ( i nt ernal quot at i on m a rk s o m itte d ). I n contr as tt o Q I nt ernat i onal and A m er i can Text i l e M anufa ctur er s , U ni t ed St at es v. Pem co A er opl ex, I nc. , 195 F. 3d 1234 ( 11th C i r . 1999) ( en banc ) , i nvol ves an “obl i gat i on” s uffi ci entt o s uppor ta r ever s e fa l s e cl ai m act i on. A contr act betw een the governm entand an a i r cr aftm ai nt enanc e companyr equi r ed the companyt o advi s e the governm entw hen i tw as hol di ng pr opertyi n exce s s of the r equi r ement s of the contr actand t o m ake appr opr i at e arr angement s t o di s pos e of i t

— forexampl e byagr eei ng t o pur chas e the pr opertyort o r etur n i tt o the governm ent . I n a r ever s e fa l s e cl ai m s act i on, the governm ental l eged thatthe m ai nt enanc e companyhad s ubm i t t ed an i nvent or ys heetw i th fal s e i nform at i on t hat l ed the governm entt o underval ue the pur chas e pr i ce thatthe companys houl d pay forai rpl ane w i ngs . R ever s i ng a pane l deci s i on, the en ba nc courthel d thatthe com pan yhad “a con t ractual obl i gati on t o acco un tfor the fu l l value of an yexcess g o v ern m en t pro p erty ” su ffici en t t o su p p o rta re v erse fa lse claim ac ti o n u n d er §14

3 7 2 9 (a )(7 ). Id . at 1 2 3 7 . T h e fa c t th a t th e p a rties h a d n o t ag re e d o n a sp e c ific p u rc h a s e p ri c e fo r t h e w in g s w a s n o t d is p o s itiv e . Id . T h ese d ec isi o n s estab li sh a d icho tom yb etw ee n “e x ist ing d eb ts, ” w h ich a re cover ed byt he s t atut e, and “c ont i ngentpenal t i es , ” w hi ch ar e not . See H uangy an I mp . & Ex p . , 3 7 0 F . S u p p . 2 d a t1 0 0 0 . He r e , i n M r . Ba h r a n i ’ s r e v e r s e fa l s e c l a i ms ac ti o n ag ains t C o n ag ra, w e m u st de cide h o w to ch ara cterize a n ex p o rt er’s obt ai ni ng “i n l i eu of” and r epl ace m entcert i fi cat es and pay i ng the ac company i ng fee . D . The D i s t r i c t C our t ’ s D e c i s i on I n gr ant i ng s um m aryj udgm entt o C onagr a, t he di s tr i ctcourtconcl uded that t he s t atut es and r egul at i ons i nvoked byM r . B ahr ani di d notes t abl i s h thatt he companyw as obl i gat ed t o payfor“i n l i eu of” orr epl ace m entcert i fi cat es : “N one o f th e sta tu to ryo r re g u lato ryp ro v isio n s c ited in B a h ra n i’s a rg u m e n t o r in h is s uppl ement al fi l i ngs . . . es t abl i s hes t hatan export eri s r equi r ed t o obt ai n a r epl ace m entcert i fi cat e eve r yt i m e a c hange t o an exi s t i ng cert i fi cat e i s m ade. ” B ahr ani , 338 F. Supp. 2d at1207. M or eover , t he courts ai d, even i f the reg u lat ion s req u ir ed C o n ag ra to o b tai n n ew ce rt ifi ca tes w h en itd isco v ere d erro rs and omi s s i ons , “the ac tof al t er i ng the ce r t i fi cat e ( r athert han r eques t i ng a r epl ace m ent ) i s notan ac t i onabl e r ever s e fa l s e cl ai m beca us e thatobl i gat i on ar i s es o n ly as a re s u lt o f

th a t a c t a n d d id n o t e x is t b e fo re .” Id . (c itin g A m . T e x tile M f rs .,15

1 9 0 F .3 d a t 7 3 8 -3 9 ). F in a lly , the fa c t th a t U S D A in sp e c to rs c o u ld e x e rc ise th e ir di s cr et i on nott o r equi r e “i n l i eu of” orr epl ace m entcert i fi cat es i ndi cat ed that C o n a g r a ’ s “ o b l i g a t i o n ” w a s a c o n t i n g e n to n e , a n d th u s n o tc o v e r e d b y § 3 7 2 9 (a )( 7 ). I d . a t 1 2 0 7 -0 8 . I I . DI S CUS S I ON O n appea l , M r . B ahr ani chal l enges the di s tr i ctcourt ’ s concl us i on that C onagr a’ s fai l ur e t o obt ai n “i n l i eu of” and r epl ace m entcert i fi cat es di d not cons t i tut e an “ obl i gat i on” under§ 3729( a) ( 7) . H e al s o ar gues t hatt he di s tr i ct cou rterr ed b yno tcon si deri ng on e of h i s al l egati on s. C onagr a defends t he di s t r i ctcourt ’ s anal y s i s of w hatcons t i tut es a § 3729( a) ( 7) obl i gat i on and ar gues i n the al t ernat i ve thatt he court ’ s gr antof s um m aryj udgm ents houl d be affi r m ed bec aus e ( 1) i t s empl oy ees m er el ycorr ect ed cert i fi cat es and di d notm ake fal s e s t at ement s ; ( 2) t he al l egedl yfal s e ce r t i fi cat es w er e notpr es ent ed t o t he governm ent ; and ( 3) M r . B ahr ani w as notan “or i gi nal s o u rc e ” o f

th e a lle g a tio n s a g a in s t C o n a g ra . W e r evi ew t he gr antof s um m aryj udgm entde novo. H ol tv. G r and Lake M ent al H eal t h C t r . , I nc. , 443 F. 3d 762, 765 ( 10th C i r . 2006) . Sum m aryj udgm ent i s appr opr i at e w hen ther e i s no genui ne i s s ue of mat er i al fac tand the m o v in g p a rt yis e n title d to ju d g m e n t a s a m a tte r o f la w . F e d . R . C iv . P . 5 6 (c ). T he courtm us texami ne the r ecor d t o det erm i ne w hetheranygenui ne i s s ue of16

m at er i al fac ti s i n di s put e, and mustcons true the fa ct s and r eas onabl e i nfer ence s dr aw n t her efr om i n t he l i ghtm os tfavor abl e t o the nonmovi ng party . H ol t , 443 F. 3d at765. “I f ther e i s no genui ne i s s ue of mat er i al fac ti n di s put e, w e det erm i ne w hethert he di s t r i ctcour tcorr ect l yappl i ed the s ubs t ant i ve l aw . ” Si m m s v. O kl a. ex r el . D ep’ tof M ent al H eal t h & Subst ance A bus e Servs . , 165 F. 3d 1321, 1326 (10 th C ir . 1 9 9 9 ).

A . M r. B a h ra n i’ s A rg u m en ts W e begi n w i t h M r . B ahr ani ’ s chal l enges t o the di s tr i ctcourt ’ s gr antof su m m aryjud g m en t. H e m aintains that: ( 1 ) th e U S D A reg u lat ion s req u ir e expor t er s t o obt ai n new cert i fi cat es and payt he ac company i ng fee s w hen cha nges m us tbe made aft ert he ce r t i fi cat es ar e s i gned; ( 2) bym aki ng change s t o the o ri g inal ce rt ifi ca tes, C o n ag ra e m p loy ee s av o ided an ex ist ing “o b li g ati o n ” u n d er § 3729( a) ( 7) ; and ( 3) contr aryt o t he di s tr i ctcourt ’ s r eas oni ng, t he di s cr et i on ves t ed in U S D A o ffici als d o es n o t est ab li sh that the fee s fo r ne w ce rt ifi ca tes are cont i ngentobl i gat i ons out s i de the s cope of § 3729( a) ( 7) . M r . B ahr ani al s o ar gues that (4) the d istri ct co u rtfa il ed to co n side r his ind ep en d en t cl aim that C o n ag ra’s e m p lo y e e s a lso v io late d § 3 7 2 9 (a )(7 ) b yfa ili n g to re tu rn o rig in a l ce rtific a tes to t he U SD A w hen cha nges w er e nec es s ary . W e cons i dereac h ar gum enti n tur n.17

1. The U SD A r e gul at i ons M r . Ba h r a n i fi r s tc h a l l e n g e s t h e d i s tr i c tc o u rt ’ s c o n c l u s i o n t h a tt h e US DA reg u lat ion s d o n o t create a § 3 7 2 9 (a)(7) o b li g ati o n to o b tai n “in lieu o f” o r r epl ace m entcert i fi cat es . H e mai nt ai ns t hat“eve ryt i m e C onagr a al t er s , change s or co rrects U S D A ex p o rtce rt ifi ca tes i t avo ids p ay ing set an d estab li sh ed m o n etary fee s t o t he governm ent . ” A pl t ’ s B r . at47 ( emphasi s i n or i gi nal ) . I n s uppor tof t hi s ar gum ent , he r el i es on Food I ns pect i on Ser vi ce D i r ect i ve 9000. 1 and the aff i davi tof a for m erU SD A vet er i nar i an, D r . M ark M i na. A ccor di ng t o M r . B ahr ani , D i r ect i ve 9000. 1 pr ovi des t hat“a c er t i fy i ng offi ci al can onl yi ni t i al m i norer as ur es oral t er at i ons befor e s i gni ng the cert i fi cat e. ” I d. at42. ( i nt ernal quot at i on m arks om i t t ed) . H e cont i nues , “The cert i fy i ng offi ci al has onl yt hi s one oppor tuni tyt o appr ove mi noral t er at i ons aft er w h ic h a n yd is c re tio n h e m a yh a v e h a d to a p p ro v e c h a n g e s is fo re v e r e x tin g u is h e d . T her e ar e no pr ovi s i ons al l ow i ng t he ce r t i fy i ng offi ci al t o appr ove and i ni t i al change s aft ert he ce r t i fi cat e i s s i gned. ” I d. at42- 43. L i ke the di s t r i ctcour t , w e ar e notper s uaded byM r . B ahr ani ’ s r eadi ng of the D i r ect i ve. T he r el evants ect i ons pr ovi de: I X . E xpor tC ert i fi cat es A . T he ce r t ify ing offi ci al r ece i ves the appr opr i at e compl et ed expor t ce r t i fi cat e and a copyof the ce r t i fi ed appl i cat i on fr om the expor t er . T he ce r t i fy i ng offi ci al ver i fi es that th e infor m at i on on the cert i fi cat e i s t he s ame as the i nform at i on on t he appl i cat i on. I f the cert i fy i ng offi ci al has conce rns about the i nform at i on on t he appl i cat i on18

ort he ce r t i fi cat e, he or sh e co nt act s the i ns pect i on pr ogr am em pl oy ee w ho si gn ed the app l i cat i on or the ex po rt er t o ad dress anycon cerns. B . B e fo re sig n in g th e c e rtific a te, th e c e rtifyi n g o fficia l: 1. C heck s the cert i fi cat e for accuracyand corr ect i on s. 2 . C he c k s fo r a t t a c h me nt s and l i nes - out any unus ed s pace . 3. U nles s not accep t able t o a fo rei gn cou ntry , i nit i al s m in o r e ra s u re s o r a lte ra tio n s . . . . X . R epl ace m entC ert i fi cat es A . A cert ifi ca te repl aci ng an or i gi nal cert i fi cat e i s a r ecert i fi cat i on of the produc t ’ s condi t i on atthe t i m e of the init ial ex p o rt c e rti fica ti o n . A rep lace m en t certi fica te fo r a l o t d o e s n o t r e p re s e n t th e lo t’ s c u rr e n t c o n d itio n . A repl acem ent cert i fi cat e m ay be i ssued i n si tuati on s, such as, butnotl i m i t ed t o: 1. T he or i gi nal cert i fi cat e di d notcarry the re qui r ed i nform at i on. 2. T he or i gi nal cert i fi cat e ca rr i ed i ncorr ecti nform at i on. 3. T he name of the cons i gnee orexport erhas change d. 4 . T h e c e rtific a te h a s b e e n lo st. B. Th e r e p l a c e me n tc e r t i fi c a t e mu s tb e d a t e d wi th th e s a me dat e as t hats how n on the or i gi nal cert i fi cat e.

. . . . A pl t ’ s A pp. vol . I , at53- 54. A l t hough D i r ect i ve 9000. 1 pr ovi des a nonexc l us i ve l i s tof ci r cumst ance s i n w hi ch new cert i fi cat es m aybe i s s ued, w e ca n fi nd no l anguage t hates t abl i s hes a s t andar d fordet erm i ni ng w hen an e xpor t eri s r equi r ed19

t o obt ai n a r epl ace m entcert i fi cat e orthatbar s a U SD A i ns pect orfr om m aki ng c o rr e c tio n s to a c e rt ific a te a f te r i t h a s b e e n s ig n e d . T h e o th e r a u th o rityin v o k e d b yM r. B a h ra n i— D r. M in a ’s a ffid a v it— s i mi l a r l yd o e s n o ts u p p o r tt h e t h e o ryth a tn e w c e r t i fi c a t e s a r e r e q u i r e d e v e ryt i me a c o rre c tio n m u st b e m a d e . D r. M in a d o e s s tate th a t: B ec au se o f th e n e e d to m aintain th e integ ri tyo f th e U S D A ex p o rt cert i fi cat es forbot h ani m al m eat s and bypr oduct s ( i ncl udi ng hi des ) , any change , corr ect i on, oral t er at i on m ade t o a U SD A exportcert i fi cat e af t er i thas been s i gned bya U SD A offi ci al i s s er i ous and i m pr o p er. I tdoes no tma t t e rwh a ti n fo r ma t i o n i s c h a n g e d b ya th i r d p a rty( no n- U SD A offi ci al ) afte rt he exportcert i fi cat e i s s i gned, j us tthe fa ctthats om eone ot hert han the U SD A has i nj ect ed hi m s el f/her s el f i nt o the document at i on pr oces s cr eat es a br eac h of i nt egr i tyi n the exportdocument at i on pr oces s . A nyt hi r d part ychange s , i ncl uding butnotl i m i t ed t o change s to c o rre c t typ o g ra p h ica l e rro rs, t o sp e ll o u t a n a b b re v iate d w o rd , to c h a n g e a n a d d re ss f

ro m a p o st o ffic e b o x to a stre e t ad d re ss , o r to c h a n g e a we i g h t , c o nt a i ne r , o ri d e n t i fi c a t i o n n u mb e rwh e r e s o me n u m b ers a re trans p o sed , are str ict lyfo rbid d en , seriou s an d im p rop er. Id. at 10 2 -03 (em p h asis ad d ed ). N e v e r t h e l e s s , D r . M i n a d o e s n o ts t a t e th a te x p o r t e r s a r e r e q u i r e d t o p a y a fee everyt i m e thatchange s m us tbe made t o a ce r t i fi cat e af t eri thas been s i gned bya U SD A i ns pect or . A l t hough he opi nes that“[n] o U SD A empl oy ee ha s the au tho ri tyto g ive a thir d p artyp erm issi o n to m ak e a n ych an g es to ex p o rt c e rtific a tes a f

ter th e yh a v e b e e n sig n e d b yU S D A e m p lo y e e s,” id . at 1 0 1 (e m p h a sis a d d e d ), D r. M in a f

u rth e r sta tes th a t “[ t]h e p ro p e r p ro c e d u re fo r m a k in g c h a n g e s is t o i nform t he ce r t i fy i ng offi ci al ( i ns pect ororD V M ) of the cha nges thatneed t o be m ad e a n d the c erti fy ing o ffici al w il l i n it ial the c h an g e, or if the ch an g es a re m ajor,20

he w i l l i s s ue a r epl ace m entori n l i eu of c er t i fi cat e atthe r eques tof the export er . ” I d. ( emphasi s added) . T hus , no s t at ementfr om D r . M i na i ndi cat es thatthe ex p o rt er is req u ir ed o b tai n a n ew ce rt ifi ca te an d p aya fee w h en the c h an g es a re m in o r. L ike th e d istri ct co u rt , w e the refo re d o n o t agre e w ith M r. B ah ran i’ s e x p a n s iv e re a d in g o f

th e U S D A s ta tu te s a n d re g u la tio n s . “ N o n e o f th e . . . a u th o rities c ited in [ M r. B a h ra n i’s] a rg u m e n t . . . es tab lish e s th a t an e x p o rte r is r equi r ed t o obt ai n a r epl ace m entcert i fi cat e eve ryt i m e a c hange t o an exi s t i ng ce rt ifi ca te i s m ad e.” B ah ran i, 3 3 8 F . S u p p . 2 d at 12 0 6 (em p h asis ad d ed ). In par t i cul ar , i f a c ert i fi cat e r equi r es a mi norchange , ther e i s no i ndi cat i on thatthe e x p o rt e r i s re q u ir e d to o b ta in a n e w c e rt ific a te a n d p a yth e a c c o m p a n y in g fe e . A lth o u g h a n e x p o rte r’s m a k in g su c h m in o r c h a n g e s to a c e rtific a te m ig h t su bjec t it t o p o t e n t i a l fi n e s a n d p e n a l t i e s fo ra l t e r i n g a g o v e rn me n tc e r t i fi c a t e , s e e 2 1 U. S . C. § § 6 1 1 , 6 7 6 ; 7 U .S .C . § 1 6 2 2 (h ), th e se p o ten tial fin e s a n d p e n a lti e s a re n o t § 3729( a) ( 7) obl i gat i ons . See B ai n, 386 F. 3d at657; A m . T ext i l e M fr s . , 190 F. 3d at 738; Q I nt ’ l , 131 F. 2d at773; s ee a l s o A pl t ’ s B r . at38- 39 ( acknow l edgi ng thatt he s t atut es t hates t abl i s h penal t i es fori m perm i s s i bl yal t er i ng orus i ng al t er ed c e rt ific a te s d o n o t th e m s e lv e s e s ta b lis h § 3 7 2 9 (a )( 7 ) o b lig a tio n s ). N ev erthe less, w e d isag ree w ith the c o n clus ion d raw n b ythe d istri ct co u rt fr om i t s r ej ect i on of M r . B ahr ani ’ s i nt erpr et at i on. T he fa ctthatnew cert i fi cat es a re n o t re q u ire d “ e v e rytim e a c h a n g e to a n e x istin g c e rtific a te is m a d e ,” B a h ra n i,21

338 F. Supp. 2d at1206, does notfor ecl os e the pos s i bi l i tythatnew cert i fi cat es ( and the ac company i ng fee s ) ar e r equi r ed i n s om e i ns t ance s . A s w e have not ed, t hos e i ns t ance s ar e des cr i bed i n s i m i l arw ay s bya var i etyof w i tnes s es . D r . M i na stat es th at ne w ce rt ifi ca tes are re q u ir ed w h en the c h an g es a re “ m ajor.” S ee A p lt ’s A pp. vol . I , at100. C onagr a’ s w i tnes s es s t at e thatnew cert i fi cat es ar e r equi r ed w hen “the cus t om erneeds an ent i r el ydi ffe r ents hi pm entor. . . the w ei ght s us ed fort he hi des ar e compl et el yw r ong as oppos ed t o one di gi tbei ng i ncorr ector tra n sp o se d [ ;]” A p le’ s S u p p . A p p . v o l. II, a t 4 7 5 ; an d w h e n th e re a re “ c h a n g e s to t he pr oducti nform at i on, w hi ch w oul d i ncl ude cha nges t o the numberof pel t s or pi ece s , t he type of hi de, ort he w ei ght. . . [or ] s i gni fi cantchange s t o the i dent i fi cat i on i nform at i on, i ncl udi ng ent i r el ydi ffe r entcont ai nernum ber s or s i gni fi cantchange s t o t he portof l oadi ng orpor tof di s char ge[; ] ” i d. at385. T hi s agr eed de s cr i pt i on of the ci r cumst ance s i n w hi ch the U SD A r equi r es exp ort ers t o o btai n n ew cert i fi cat es i s a pl ausi ble one. Itado pts a pri ncipl e— m at eri al i t y— t hat has been w i delyem ploy ed in vari ou s ci rcum st ances, i ncl udi ng Fal s e C l ai m s A ctact i ons . See, e. g. , U ni t ed St at es ex r el . A + H om eca r e, I nc. v. M eds har es M gm t . G r oup, I nc. , 400 F. 3d 428, 442 ( 6th C i r . ) ( hol di ng that

“ fa lse sta tem e n ts o r c o n d u c t m u st b e m a ter ial to th e fa lse o r f ra u d u len t cla im to h o ld a p e rso n c iv ill yliab le u n d e r th e [ F a lse C laim s A c t]” ), ce rt. d e n ied , 1 2 6 S . C t. 7 2 7 (2 0 0 5 ); H a rriso n v . W e stin g h o u se S a v a n n a h R iv e r C o ., 1 7 6 F .3 d 7 7 6 , 7 8 4 (4 th C i r. 19 99 ) ( st at i ng t hat “[l ]i abil i t yun der each o f t he p rovi si on s of t he F al se22

C l ai m s A cti s subj ectt o the further, j ud i ci al l y -i m po sed, requi rem ent that the fa l se s t at ementorcl ai m be mat er i al ” and that“[m]a t er i al i tydepends on w hetherthe fal s e s t at ementhas a natur al t endenc yt o i nfl uence agenc yact i on ori s capa bl e of i n fl u e n c i n g a g e n c y a c t i o n ” ) ( i n t e rn a l q u o t a t i o n m a r k s o m i t t e d ) . A c c o r d i n g l y, al t hough t he part i es m aydi s put e w hethera part i cul archange i n a part i cul ar cert i fi cat e i s s i gni fi cantenough t o r equi r e i s s uance of an “ i n l i eu of” or repl acem ent cert i fi cat e, w e con cl ud e from this recor d thatthere i s a cer t ai n clas s of cha nges t hatdo r equi r e s uch ce r t i fi cat es . See Excel C orp. v. U ni t ed St at es D ep’t . of A gri c. , 39 7 F . 3d 12 85 , 12 96 (10t h C i r. 20 05 ) ( st at i ng that “w e m ust defe rt o bot h form al and i nform al agenc yi nt erpr et at i ons of an a m bi guous re g u latio n u n les s th o se in terp re tatio n s a re p lain lye rro n e o u s o r in c o n sis ten t w ith t he r egul at i on”) ( i nt ernal quot at i on m arks om i t t ed) . T her efor e, i n exami ni ng the p a rties ’ o th e r a rg u m e n ts, w e c o n sid e r w h e th e r C o n a g ra ’s a lleg e d fa ilu re to o b tain n e w c e rtific a tes in th o se in sta n c e s (w h e re th e re w e re “ m ajo r” o r “ sig n ifica n t” ch an g es) c o n sti tuted the a v o iding o f a n “o b li g ati o n ” u n d er § 3 7 2 9 (a)(7).

2. O bl i gat i ons U nder § 3729( a) ( 7) M r . B ahr ani nextchal l enges t he di s tr i ctcourt ’ s concl us i on that , even i f the U SD A r egul at i ons r equi r e export er s t o payfor“i n l i eu of” and r epl ace m ent cert i fi cat es ( a pr opos i t i on w e ac ceptt o the ext entt hatt he cha nges ar e “maj or ” or “s i gni fi cant ”) , t hat“obl i gat i on” i s out s i de the s cope of § 3729( a) ( 7) . T he23

g o v ern m en t has fil ed an am icus b ri ef in w h ich it agre es w ith M r. B ah ran i’ s pos i t i on. A ccor di ng t o t he governm ent , tw o ki nds of obl i gat i ons m aybe the s ubj ect o f a re v e rse fa lse c laim s a c tio n u n d e r § 3 7 2 9 (a )(7 ): (1 ) “ [ t]h e re m a yb e a fix e d o b lig a tio n , sp e lled o u t b ya ju d g m e n t, co n tra c t, sta tu te, o r re g u latio n , tha t im p o se s a d u tyo n th e p e rso n to p a ym o n e yo r tra n sm it pr oper t yt o t he governm ent . T hi s fi xed obl i gat i on m aybe l i qui dat ed as w i th a j udgm ent , ori tm aybe unl i qui dat ed buteas i l ydet erm i nabl e[; ] ” A m i cus B r . at10; and ( 2) t her e ar e otherobl i gat i ons thatar e “noty et‘ fi xed’ i n al l part i cul ar s ”; t hes e “obl i gat i ons ” maybe pr es ent“byvi r tue of the r el at i ons hi p betw een the g o v e rn m e n t a n d th e p e rs o n w h o o w e s th e g o v e rn m e n t m o n e yo r p ro p e rt y .” Id . Forexampl e, s uch obl i gat i ons m ayexi s t“[w ] hen the per s on and the governm ent have a contr actual , gr ant or - gr ant ee, l i cens or - l i cens ee, fee - bas ed, ors i m i l ar r el at i ons hi p. ” I d. T he governm entm ai nt ai ns that , acc ept i ng M r . B ahr ani ’ s cont ent i on thatt he U SD A r egul at i ons r equi r e export er s t o payfornew cert i fi cat es w hen the or i gi nal c e rtific a tes c o n tain e rro rs o r o m iss io n s, th e fe e s fo r th e n e w c e rtific a tes fa ll w i t hin this second cat ego ryof ac t i on able § 37 29 (a) (7) ob l i gati on s. I n r es pons e, C onagr a not es t hat , att he t i m e thatan export erdet erm i nes t hat a ce r t i fi cat e cont ai ns err or s orom i s s i ons , no paym enti s due the U SD A . I ns t ead,24

paym enti s due onl yaft er( 1) t he export ernot i fi es the U SD A of the err or s and om i s s i ons t hatneed t o be cha nged; ( 2) the U SD A det erm i nes that“an i n l i eu of” orr epl ace m entcert i fi cat e i s r equi r ed; and ( 3) the U SD A char ges the es t abl i s hed fe e . A c c o rd in g to C o n a g ra , the se a d d iti o n a l sta g e s in th e p ro c e ss in d ica te th a t, w hen i t s empl oy ees m ade c hanges t o the or i gi nal exportcert i fi cat es , ther e w as no “ob l i gati on ” t o p ayt he fe e for “i n li eu o f” or repl acem ent cert i fi cat es. C o n ag ra a lso a d v an ce s sev era l po li cyarg u m en ts ch all en g ing M r. B ah ran i’ s and the governm ent ’ s r eadi ng of the s t atut e. I tcont ends t hatt he purpos e of the fe e s a t is s u e is to re im b u rs e th e g o v e rn m e n t fo r t h e c o s t o f p ro v id in g c e rt ific a tio n . Y et , byal l egedl yfai l i ng t o r eques t“i n l i eu of” and r epl ace m entcert i fi cat es , t he c o m p a n yd id n o t ca u se th e g o v e rn m e n t to p ro v id e a n yse rv ice s fo r w h ich it sh o u ld have be en r ei m bur s ed. B eca us e the Fal s e C l ai m s A ctw as enac t ed t o pr ot ectt he g o v e r n me n tf

r o m fi n a n c i a l l o s s e s , a l l o wi n g M r . Ba h r a n i t o p u r s u e h i s c l a i ms w o u ld b e inc o n sist en t w ith the p u rpo se o f th e statute. M o reo v er, C o n ag ra concl udes , t o al l ow M r . B ahr ani t o i nvoke the s t atut e her e w oul d l ead t o an unw arr ant ed expa ns i on of r ever s e fa l s e cl ai m act i ons . A bs entpr oof of l os s t o t he g o v e r n me n t , a n y o n e c h a l l e n g i n g a fa i l u r e t o c o mp l ywi th a r e g u l a t o rys c h e me c o u ld file s u it. W e begi n w i t h t he t i m i ng of the paym entforexpor tcert i fi cat es . L i ke the governm ent , w e thi nk t hati ti s s i gni fi cantt hat§ 3729( a) ( 7) r efe r s t o “an o b lig a tio n ” a n d n o t “a fix e d o b lig a tio n .” W e a g re e th a t th e re a re in sta n c e s in25

w hi ch a pa r t yi s r equi r ed t o paym oneyt o the governm ent , but , atthe t i m e the o b lig a tio n a ri s e s , th e s u m h a s n o t b e e n p re c is e ly d e te rm in e d . T he obl i gat i on addr es s ed bythe El eventh C i r cui ti n Pem co A er opl ex, 195 F. 3d at1237- 38, pr ovi des an i l l us tr at i on. T her e, the ai r cr aftm ai nt enanc e c o m p a n ya n d th e g o v e rn m e n t h a d a g re e d th a t th e g o v e rn m e n t co u ld e lec t to se ll exce s s pr opertyt o t he company . H ow ever , atthe t i m e thatthe companym ade the al l egedl yfal s e s t at ement s aboutthe pr operty ’ s val ues , the s peci fi c amountof the company ’ s obl i gat i on had noty etbeen de t erm i ned. N everthel es s , “[t ] hatthe m a in ten a n c e c o m p a n yo ffe re d to p u rc h a se th e p ro p e rtya n d th a t a s p e c ific pur chas e pr i ce ha d noty etbeen a gr eed upon a tthe t i m e [the company ] s ubm i t t ed the in v en toryfo rm are n o t th e tou ch ston e. . . . [S ]ub m itti n g the in v en toryfo rm w as j us tpar tof ful fi l l i ng [an] ongoi ng contr actual obl i gat i on. ” I d. ; contr a Q I nt ’ l , 131 F. 3d at774 ( s t at i ng t hat“[a ] debt , and thus an obl i gat i on underthe m e a n in g o f

th e F a lse C laim s A c t, m u st b e fo r a fix e d su m th a t is im m e d iate ly d u e ” ). A d d it ion all y , to req u ir e a fix ed m o n etaryo b li g ati o n as a p rereq u isi te fo r a rever se fal se cl ai m s act i on w ou l d b e i nco nsi st ent w i th the broad rem edial pu rpose of the Fal s e C l ai m s A ct . See N ei fert - W hi t e, 390 U . S. 228, 233 ( 1968) ( not i ng th a t “th is re m e d ial s tatu te r e a c h e s b e y o n d ‘c laim s’ w h ich m ig h t b e leg a lly enfor ced, t o al l fr audul entat t empt s t o caus e the G overnm entt o payouts um s of m oney ”) . M or eover , ot herpr ovi s i ons of the s t atut e have been c ons trued t o al l ow26

act i ons t o pr ocee d even though t he s peci fi c amountof the cl ai m w as noty et d e t e r mi n e d a tt h e t i me t h e fa l s e s t a t e me n twa s ma d e . S e e , e . g , S h a w v . AAA E ng’ g & D r aft i ng, I nc. , 213 F. 3d 519, 530 ( 10th C i r . 2000) ( aff i r m i ng a j udgm ent fort he pl ai nt i ff i n a Fal s e C l ai m A ctact i on under31 U . S. C . § 3729( a) ( 1) - ( 2) that w as bas ed upon the s ubm i s s i on of fr audul entw or k or der s and conc l udi ng that “[s ] i m pl ybeca us e the pr oduct i on quant i t i es r ecor ded on the w or k or der s di d not det erm i ne the exa ctamount of the s et t l ementdoes noter adi cat e a c onnect i on betw een the w or k or der s and the [a m ountr ece i ved bythe defendantunderthe g o v e rn m e n t co n tra c t]” ). W e th e re fo re c o n c lu d e th a t th e fa c t th a t th e fe e s fo r “ in l i eu of” and r epl ace m entcert i fi cat es ar e notpai d w hen the an e xpor t erdet erm i nes that the in it ial ce rt ifi ca te co n tai n s erro rs or o m issi o n s d o es n o t fo rec lose rec o v ery u n d er § 3 7 2 9 (a)(7). A lth o u g h a § 3 7 2 9 (a )(7 ) “ o b lig a tio n ” n e e d n o t b e fo r a p re c ise a m o u n t in or dert o be ac t i onabl e, w e do agr ee w i th the di s tr i ctcourtand C onagr a thatthe o b lig a tio n m u st a rise f ro m a so u rc e in d e p e n d e n t o f “ th e a lleg e d lyf

ra u d u len t ac ts tak e n to a v o id it. ” B a h ra n i, 33 8 F . S u p p . 2 d a t 1 2 0 7 . T h a t co n c lu sio n c o m p o rts w ith the S ixth a n d E igh th C ir cu itd ec isi o n s in A m erican . T ex ti le M an u fa cture rs and Q I nt ernat i onal , bot h of w hi ch conc l uded on the fa ct s befor e them t hatno obl i gat i on exi s t ed i ndepende nt l yof the al l eged fal s e s t at ement s themsel ves . See A m . T ext i l e M fr s . , 190 F. 3d at738- 41 ( concl udi ng that , underthe s t atut es at i ssue, t he d efen dan t ’s ob l i gati on s ar ose on l yaft er the d efen dan tm ade fal se27

sta tem e n ts a n d “ o n lyb e c a u se th e g o v e rn m e n t h a [ d ] p ro h ib ited a n a c t”) ; Q In t’l, 131 F. 3d at773 ( hol di ng t hat , w hen the defendantengage d i n the cha l l enged pr act i ce of

“A B A r emai l , ” i thad no “obl i gat i on” t o payful l dom es t i c pos t age, e v e n th o u g h th e p ra c tic e m ig h t h a v e v io la te d o th e r s ta tu te s ). H ow ever , unl i ke the di s t r i ctcour t , w e vi ew the al l eged obl i gat i ons ati s s ue i n A m er i can Text i l e M anufa ctur er s and Q I nt ernat i onal as di s t i ngui s habl e fr om t he obl i gat i on t o payfee s for“i n l i eu of” and r epl ace m entcert i fi cat es w hen maj or ors i gni fi cantchange s ar e nec es s ary . H er e, i ti s notC onagr a empl oy ees ’ m aki ng of corr ect i ons on t he or i gi nal exportcert i fi cat es thatcr eat es the obl i gat i on t o pay t he fe e. I ns t ead, t hatobl i gat i on ar i s es fr om an i ndepende nts our ce— fr om the det erm i nat i on t hatt he or i gi nal cert i fi cat e cont ai ns a maj orors i gni fi canterr oror om i s s i on and thatan “i n l i eu of” orr epl ace m entcert i fi cat e and pa ym entof the ac co m p an y ing fe e a re n ec essa ry . Itis th e d isco v erythat thes e c h an g es a re n ec essa rythat cre ates the o b li g ati o n . In o u r view , the c ir cu m stan ce s are a n a lo g o u s to a m o to rist w h o a ttem p ts to a v o id a n a n n u a l fe e b yu n law f u lly al t er i ng t he expi r at i on dat e on a l i cens e pl at e. I n thati ns t ance , i ti s notthe al t er i ng of the pl at e thatgener at es the fe e butr atheran i ndepende ntevent

— the end of the y ear l yper i od. A s t o C onagr a’ s cont ent i on thatthe al l eged fal s e s t at ement s have not r es ul t ed i n a l os s t o t he governm ent , w e not e that“ther e i s no r equi r ementi n the t ext[of § 3729( a) ( 7) ] t hatt he G overnm enthave a n ongoi ng i nt er es ti n the funds28

or that the G ov ernm ent i t sel f suffer a l oss. ” K enn ard v. C om st ock R esources, In c ., 3 6 3 F .3 d 1 0 3 9 , 1 0 4 7 (1 0 th C ir . 2 0 0 4 ), c e rt . d e n ie d , 1 2 5 S . C t. 2 9 5 7 (2 0 0 5 ). I ndeed, t he l egi s l at i ve hi s t or yof the r ever s e fa l s e cl ai m s pr ovi s i on i ndi cat es that t he ki nd of fa l s e ce r t i fi cat i on al l eged byM r . B ahr ani fal l s w i thi n i t s s cope:

T he c o s to f

f r a u d c a n n o ta l way s b e me a s u r e d i n d o l l a r s and cent s , how ever . G A O p o inte d outi n i t s 1981 r eportthatfr aud e ro d e s p u b lic c o n fid e n c e in g o v e rn m e n t’s a b ili tyto e fficie n tly an d effe cti v ely m an ag e i ts p rog ram s. E v en in case s w h ere there i s no dol l arl os s , forexampl e w her e a de fens e contr ac t or cert i fi es an unt es t ed partforqual i tyy et there are no appar ent defe ct s –t he i n tegr i t yof qual i tyr equi r ement s i n pr ocur ement pr ogr ams i s s er i ous l yunderm i ned. S . R e p . N o . 9 9 -3 4 5 , rep rin ted in 1 9 8 6 U .S .C .C .A .N . 5 2 6 6 , 5 2 6 8 (e m p h a sis added) ; s ee a l s o U ni t ed St at es v. H ughes , 585 F. 2d 284, 286 n. 1 ( 7th C i r . 1978) ( “A fal s e cl ai m i s act i onabl e undert he A cteven though the U ni t ed St at es has s uffe r ed no meas ur abl e damages fr om t he cl ai m . ”) ; Fl emi ng v. U ni t ed St at es , 336 F. 2d 475, 480 ( 10t h C i r . 1964) ( “Pr oof of da m age t o the G overnm entr es ul t i ng f ro m a fa ls e c la im is n o t p a rt o f th e G o v e rn m e n t’ s c a s e u n d e r t h e A c t” ).

3. U SD A D i s cre t i on We a l s o d i s a g r e e wi t h t h e d i s tr i c tc o u r tt h a tt h e d i s c r e t i o n a ffo r d e d US DA offi ci al s t o det erm i ne w hethert o i s s ue new cert i fi cat es and cha r ge the acc om pany i ng fee s r ender s t he obl i gat i on cont i ngentand thus out s i de the s cope of § 3729( a) ( 7) . T he di s t r i ctcour tbas ed i t s narr ow r eadi ng of the s t atut e on29

A m er i can Text i l e M anufa ctur er s . and Q I nt ernat i onal . B oth cas es concl uded that a pot ent i al penal t ythatcoul d onl ybe as s es s ed af t era governm entoffi ci al e x e rc ise d d isc re tio n w a s n o t an a c tio n a b le § 3 7 2 9 (a )(7 ) o b lig a tio n . In th e S ix th C i rcui t ’s view , i f such po t enti al pen al t i es const i tuted “ob l i gati on s, ” “revers e fal se cl ai m s l i abi l i t yw oul d at t ach t o anyper s on m aki ng anyfal s e s t at ementt o conce al avoi d, ordecr eas e hi s pot ent i al cr i m i nal l i abi l i tyundera l aw thatl i s t s among a ra n g e o f p e n a ltie s th e im p o s itio n o f a fin e .” A m . T e x tile M f rs ., 1 9 0 F .3 d a t 7 3 9 . I n addi t i on t o gr eat l yexpandi ng the s cope of the Fal s e C l ai m s A ct , that in te rp re ta tio n w o u ld re q u ir e c o u rt s to s p e c u la te a s to w h e th e r i n a g iv e n c a s e , a governm entoffi ci al w oul d pur s ue an a ct i on t o r ecove ra pena l tyand w hethers uch penal t i es w oul d actual l ybe as s es s ed. I d. at740; s ee a l s o Q I nt ’ l , 131 F. 3d at774 ( r eas oni ng t hat“[a ] pot ent i al penal ty , on i t s ow n, does notcr eat e a c om m on l aw d e b t” ). H ere, t he fe es for “i n li eu o f” an d repl acem ent cert i fi cat es ar e best c h a ra c ter ize d a s u se r fe e s; th e ya re n o t p e n a lti e s. T h e fe e s m u st b e p a id in l i m i t ed ci r cumst ance s , and theyar e thus di s t i ngui s habl e fr om the gene r al obl i gat i on t o compl yw i t h s t atut es and r egul at i ons out s i de the s cope of § 37 29 (a) (7) . S ee A m . T exti l e M frs . , 19 0 F . 3d at73 7-38 (st at i ng that “C on gress m ayw el l have i nt ended r ever s e fa l s e cl ai m s l i abi l i tyt o ext end t o obl i gat i ons cr eat ed bys t atut e orr egul at i on, atl eas tw her e the s t atut e orr egul at i on i m pos es an o b lig a tio n e s s e n tia lly c o n tr a c tu a l in n a tu re ” b u t n o t d e c id in g th a t q u e s tio n ).30

T hu s, w e are not convinced thatan u nd ue ex pan si on of li abil i tyun der the reverse fal s e cl ai m s pr ovi s i on w i l l fol l ow bychar act er i zi ng as an “obl i gat i on” the p ay m en t of

the fee s fo r ne w ce rt ifi ca tes w h en m ajor o r si g n ifi ca n t cha n g es a re r equi r ed. W e ac know l edge thatt her e i s s om e di s cr et i on i n pl ayher e. A l though the par t i es do notdi s cus s t he pr oces s i n m uch det ai l , C onagr a has s ubm i t t ed an aff i davi tfr om a form erU SD A offi ci al s t at i ng thati f a c er t i fi cat e “ne eds t o be change d i n s om e w ayaft eri ti s i s s ued, the i ns pect ori n char ge has di s cr et i on u n d er 9 C . F . R . § 3 2 2 . 2 (c) to allow the e x p o rt er to m ak e the ch an g e d ir ec tl yo r, instead , to req u ir e the issua n ce o f a n ew o r rep lace m en t certi fica te. ” S ee A p le’s Supp. A pp. vol . I , at277 ( aff i davi tof D r . R obertFet zner ) . M or eover , the off i ci al cont i nues , “[i ] f a ne w orr epl ace m entcert i fi cat e i s r equi r ed, the i ns pect orhas di s cr et i on t o char ge a fee ornot [, ] ” and “ a fe e w oul d be cha r ged onl yi f the in s p e c to r d e te rm in e d it w a s n e c e s s a ry.” Id . a t 2 7 7 -7 8 . N evert hel es s , w e ar e notconvi nced thatt hi s al l eged di s cr et i on t akes t he obl i gat i on t o payt he fe es out s i de the s cope of § 3729( a) ( 7) . Som e di s cr et i on i nher es i n a w i de var i etyof governm entdeci s i ons . Forexampl e, governm ent offi ci al s m ayhave di s cr et i on as t o w hethert o i ns i s ton a party ’ s per form ance undera contr actorw hethert o fi l e a br eac h of contr actact i on i f a pa r tydoes not per form . H ow ever , a contr actual obl i gat i on fal l s w i thi n the s cope of § 3729( a) ( 7) . See Pemco A er opl ex, 195 F. 3d at1237 ( concl udi ng thata “s peci fi c,31

o n g o ing o b li g ati o n d u ri n g the life o f th e c o n tr ac t” w as c o v ere d b y§ 3 7 2 9 (a)(7)); A m . T ext i l e M fr s , 190 F. 3d at741 ( “§ 3729( a) ’ s defi ni t i on of ‘ obl i gat i on’ c e rt a in ly in c lu d e s th o s e a ri s in g f ro m . . . b re a c h e s o f

g o v e rn m e n t c o n tr a c ts ” ). H er e, evi dence s ubm i t t ed byboth M r . B ahr ani and C onagr a i ndi cat es that wh e n e x p o r tc e r t i fi c a t e s r e q u i r e d “ s i g n i fi c a n t ” o r“ ma j o r ” c h a n g e s , th e US DA r equi r ed export er s t o obt ai n “i n l i eu of” orr epl ace m entcert i fi cat es . I tw as att hat poi nt

— w hen the cha nges beca m e nec es s ary— thatthe obl i gat i on ar os e. T he fa ct th a t U S D A o fficia ls m a yh a v e so m e su b se q u e n t d isc re tio n w h e th e r to a c tu a lly char ge the author i zed fee doe s notm ean thatthe “obl i gat i on” i s a cont i ngentone out s i de the s cope of

§ 3729( a) ( 7) . W e ther efor e agr ee w i th the governm entthat

“ th e n e e d fo r so m e f

u rth e r g o v e rn m e n tal a c tio n o r so m e f u rth e r p ro c e ss to l i qui dat e an obl i gat i on does notpr ecl ude a r ever s e fa l s e cl ai m s act i on. ” A m i cus B r . at12 n. 2; s ee a l s o i d. at14 ( s t at i ng that“i f, as al l eged by[M r . B ahr ani ] , the r egul at i ons di d notperm i ts uch al t er at i ons [of e xpor tcert i fi cat es ] , butr equi r ed th e is s u a n c e o f

a n e w c e rt ific a te a n d p a ym e n t o f a n a d d itio n a l fe e , th e n a n y. . . act s of U SD A offi ci al s i n ei t herw ai vi ng the fe e orr efus i ng t o enfor ce i tcoul d not [ re n d e r t h e fe e ] . . . d is c re tio n a ry o r c o n tin g e n t.” ). T hat conclusi on i s suppo rt ed b ythe term s of t he st atute, w hich add res s

“ conce al [i ng] , r educ[ i ng] , oravoi d[i ng] an obl i gat i on[, ] ” butdo nots peci fyt he r es ul tof thos e effor t s . T hus , i n det erm i ni ng w hethera fa l s e s t at ementi s m at er i al un der § 37 29 (a) (7) , t he inquiry“foc uses on the po t enti al effect of t he fa l se32

sta tem e n t w h e n it i s m a d e , n o t o n th e a c tu a l effe c t o f th e fa lse sta tem e n t w h e n it i s di s cover ed. ” A + H om eca r e, 400 F. 3d at445 ( emphasi s added) ( i nt ernal q u o tatio n m a rk s o m itt e d ). T h e fa c t th a t a g o v e rn m e n t o fficia l m a ysu b se q u e n tly w ai ve an e s t abl i s hed fe e does notnegat e the “pot ent i al effect ” of a fal s e r ecor d or sta tem e n t.

4. F ai l ure t o R et urn O ri gi nal C ert i fi cat es M r . B ahr ani al s o m ai nt ai ns t hatt he di s tr i ctcourterr ed bynotaddr es s i ng h is al lega ti o n that C o n ag ra e m p loy ee s v iolated § 3 7 2 9 (a)(7) b yfa il ing to return the o ri g inal ce rt ifi ca tes t o the U S D A af ter th eyd isco v ere d that ch an g es w ere nece s s ary . H e ci t es a r egul at i on t hats t at es t hator i gi nal cert i fi cat es s uper s eded by

“ in lieu o f” c e rtific a tes , “s h a ll, if a v a ilab le, b e su rre n d e re d to th e in sp e c to r in char ge. ” 9 C . F. R . § 322. 2( c) . B ym aki ng change s on the or i gi nal cert i fi cat es i ns t ead of

r etur ni ng t hem, he cont i nues , C onagr a empl oy ees avoi ded an obl i gat i on to “ tr a n s m it . . . p ro p e rt yto th e G o v e rn m e n t.” 3 1 U .S .C . § 3 7 2 9 (a )( 7 ). W e a re n o t p e rsu a d e d th a t th e d istric t co u rt e rre d in fa ili n g to c o n sid e r th is t heory . Fi r s t , w e agr ee w i t h C onagr a thatM r . B ahr ani di d notadequa t el yadvanc e t hi s al l egat i on i n t he di s t r i ctcourtpr ocee di ngs . W hen the di s tr i ctcourtas ked for s uppl ement al br i efi ng fr om t he part i es on the ques t i on of the l egal bas i s of C o n a g ra ’s “ o b lig a tio n ” u n d e r § 3 7 2 9 (a )(7 ), M r. B a h ra n i d id n o t ar g u e th a t th is al l eged dutyt o r etur n or i gi nal cert i fi cat es undert he U SD A r egul at i ons cons t i tut ed33

an i ndepende ntcl ai m . See R i os v. Z i gl ar , 398 F. 3d 1201, 1209 ( 10th C i r . 2005) (h o ld in g th a t th e “ [ f]a ilu re to ra ise a n iss u e in th e d istric t co u rt g e n e ra lly c o n s titu te s w a iv e r” ). I n d e e d , in e x p la in in g h is v ie w o f C o n a g ra ’s “ o b lig a tio n ,” M r . B ahr ani even made the fol l ow i ng s t at ement : “I f s om ethi ng change s w hi ch r ender s t he or i gi nal U SD A cert i fi cat e us el es s t o C onagr a, theycan do s ever al t hi ngs . T heycan thr ow i taw ay ; s hr ed i t ; puti ti n a fi l e neve rt o s ee the l i ghtof d a y , o r re tu rn it t o th e U S D A .” A p lt’s A p p . v o l. II, a t 3 7 0 . It w a s n o t u n til h is m ot i on forr econs i der at i on t hatM r . B ahr ani s oughtt o advanc e an i ndepende nt cl ai m bas ed on C onagr a’ s fai l ur e t o r etur n or i gi nal cert i fi cat es , s ee i d. , at422, and thi s el eventh- hourpr es ent at i on i s i ns uffi ci entt o pr es erve thatcl ai m . See S te e le v . Y o u n g , 1 1 F .3 d 1 5 1 8 , 1 5 2 0 n .1 (1 0 th C ir . 1 9 9 3 ). I n anyevent , had M r . B ahr ani t i m el yr ai s ed s uch an a r gum enti n the di s t r i ct cour t , w e ar e notconvi nced thatthes e err oneous cert i fi cat es cons t i tut e the ki nd of

“ p ro p e rty ” w ith in th e sc o p e o f § 3 7 2 9 (a )(7 ). M r. B a h ra n i cite s n o a u th o rityto th a t effe c t, an d a p p ly in g th e sta tu te in th is fa sh io n w o u ld stre tch it fa r b e y o n d its in te n d e d p u rp o s e . B . C onagra’ s A l t ernat i ve A rgum ent s for A ffi rm ance 1. A l l e ge d Lack o f

Evi de nc e R e ga r di ng Fal s e St at e m e nt s t o t he G ov e r nm e nt C onagr a mai nt ai ns t hatt he di s tr i ctcourt ’ s gr antof s um m aryj udgm ent shou l d b e affirm ed o n the al t ernat i ve g round t hat i t s em ploy ees di d n ot m ake fal se34

s t at ement s t o t he governm ent . I n s uppor tof thi s cont ent i on, C onagr a adva nces t w o ar gum ent s . Fi r s t , i tcont ends thatbeca us e empl oy ees m ade c or r ect i ons t o t he c e rtific a tes , the re w e re n o fa lse sta tem e n ts in v o lv e d . S e c o n d , C o n a g ra a ss e rts, its empl oy ees l acke d t he i nt entt o defr aud nec es s aryt o s at i s fythe s ci ent er re q u ire m e n ts fo r a re v e rse fa lse c laim s a c tio n . It m a in tain s th a t “c o rre c tio n s to th e o ri g in a l b u t in a c c u ra te c e rt ific a te s w e re a u th o ri z e d .” A p le ’s B r. a t 4 4 . W e ar e notper s uaded byt hes e ar gum ent s . A s t o the cont ent i on that C onagr a’ s empl oy ees w er e corr ect i ng the exportcert i fi cat es , w e not e thati ti s not m er el ym aki ng t he corr ect i ons t o the ce r t i fi cat es t hatm aybe ac t i onabl e undert he F alse C lai m s A ct. R athe r, itis th e m ak ing o f th o se c o rrecti o n s o v er the sign ature and cert i fi cat i on of a U S D A offi ci al w ho has no tactuall yseen or app roved those c h a n g e s . C o n a g ra ’s a lleg e d re lian c e o n U S D A o fficia ls to a p p ro v e c o rre c tio n s to or i gi nal cert i fi cat es s i m i l ar l ydoes notes t abl i s h thati t s empl oy ees l acke d the nece s s aryi nt entt o vi ol at e the s t atut e. Sect i on 3729( a) ( 7) r equi r es pr oof thatt he defe ndant“know i ngl y ” made, us ed, orcaus ed t o be made a fa l s e r ecor d or sta tem e n t to a v o id a n o b lig a tio n . T o a c t “k n o w in g ly ” m e a n s th a t “a p e rso n , w ith re sp e c t to in fo rm a tio n --(1 ) h a s a c tu a l k n o w led g e o f th e in fo rm a tio n ; (2 ) a c ts in d e lib e ra te ig n o ra n c e o f th e tru th o r fa lsityo f th e in fo rm a tio n ; o r (3 ) a c ts in rec k less d isr eg ard o f th e truth o r fa lsi tyo f th e info rm ati o n . ” 3 1 U . S . C . § 3 7 2 9 (b). “[N ] o pr oof of s peci fi c i nt entt o defr aud i s r equi r ed. ” I d. ; s ee a l s o U ni t ed St at es35

ex r el . A akhus v. D yncorp, I nc. , 136 F. 3d 676, 682 ( 10th C i r . 1998) ( di s cus s i ng th e “ k n o w in g ly ” re q u ire m e n t u n d e r § 3 7 2 9 (a )(7 )). A s w e h a v e e x p lain e d , itis onl yt he maki ng of “maj or ” or“s i gni fi cant ” cha nges w i thoutobt ai ni ng “i n l i eu of” orr epl ace m entcert i fi cat es t hates t abl i s hes an ac t i onabl e obl i gat i on undert he statu te. E v iden ce in the rec o rd in d icates tha t i n so m e ins tanc es C o n ag ra empl oy ees m ade s uch cha nges w i thoutU SD A appr oval and thus avoi ded the o b li g ati o n to p aya fee fo r “a n li eu o f” o r rep lace m en t certi fica te. S ee A p lt ’s A p p . v o l. I, a t 7 5 (te stim o n yf ro m M r. B a h ra n i th a t a C o n a g ra e m p lo y e e to ld h im t hats he cha nged the gr ade of beef fr om “no gr ade” t o “choi ce” ) . T hatevi dence su p p o rts M r. B a h ra n i’s a lleg a tio n th a t C o n a g ra e m p lo y e e s h a d th e re q u isite i n t e n t . M o r e o v e r , t h e q u e s t i o n o f w h e th e rth e e m p l o ye e s a c t e d “ k n o w i n g l y” conce r ns t hei rknow l edge a tt he t i m e theym ade the maj orchange s w i thout appl y i ng fornew cert i fi cat es . T hatU SD A offi ci al s m ayhave a ppr oved mi nor change s orm ayhave e ven w ai ved the fe es fors om e maj orchange s does not r es ol ve the ques t i on of C onagr a’ s empl oy ees ’ s t at e of mi nd w hen the empl oy ees m a d e th e c h a n g e s . 2. L ack of

pres ent m ent t o t he U ni t ed St at es C onagr a al s o ar gues t hatt he di s tr i ctcourt ’ s gr antof s um m aryj udgm ent sh o u ld b e a ffirm ed o n an o ther a lt ern ati v e g rou n d : th at ev en ac ce p ti n g M r. B ahrani ’s al l egati on s as true, C on agra em ploy ees nev er m ade an yfal se36

r epr es ent at i ons t o t he U ni t ed St at es governm ent( beca us e the exportcert i fi cat es at is s u e w e re p re s e n te d o n ly to fo re ig n g o v e rn m e n ts ). I n s uppor tof thi s ar gum ent , C onagr a i nvokes a s t at ementi n K ennar d v. C om s t ock R es our ces , 363 F. 3d 1039, 1048 ( 10th C i r . 2004) : that§ 3729( a) ( 7) “s quar el yencompas s es t he fr aud on the governm entthatoccur s w hen a pe r s on or e n tity m a k e s fa ls e s ta te m e n ts to th e U n ite d S ta te s to a v o id [ a n o b lig a tio n ].” ( emphasi s added) . C onagr a al s o ci t es a di s tr i ctcour tcas e, W i l ki ns v. O hi o, 885 F . S up p. 10 55 (E. D . O hio 199 5), i n w hich the co urtdis m i ssed a r everse fal se cl ai m act i on on t he g round s that the p l ai nti ff h ad n ot al l eged that fal se i nform at i on w as pr es ent ed t o t he governm ent . T he courtther e r el i ed on l egi s l at i ve hi s t or y . See i d. at1064 ( “The Senat e R eports uppor t s the conc l us i on that in o rde r t o h av e a ‘rev erse fa lse claim , ’ th e g o v ern m en t has to b e m ad e a w are of the fa l s e s t at ement , m i s r epr es ent at i on orm i s l eadi ng om i s s i on i n s om e fa s hi on, i.e ., th e re h a s to b e a ‘c la im .’” ). C onagr a ci t es t w o unpubl i s hed ca s es t hatm ake s i m i l ars t at ement s aboutpr es entm entt o the governm ent . See A pl e’ s B r . at46 (c iti n g S tev e n s v . M c G in n is, N o . C -1 9 3 -4 4 2 , U .S . D ist. L e x is 2 2 1 0 9 (S .D . O h io A ug . 27 , 19 96 ) a nd A t ki ns on v. Pa . Shi pb ui l di ng Co. , N o. 94 - 73 16 , 20 00 U . S. D ist . L ex is 12 0 8 1 , at *8 0 (E . D . P a. A u g . 2 4 , 2 0 0 0 )). In o u r view , thes e c ase s d o n o t pro v ide m u ch su p p o rtfo r C o n ag ra’s a rg u m e n t. T h is c irc u it’s sta tem e n t in K e n n a rd — th a t § 3 7 2 9 (a )(7 ) “ sq u a re ly e n c o m p a ss e s th e f

ra u d o n th e g o v e rn m e n t th a t o c c u rs w h e n a p e rso n o r e n tity37

m akes fal s e s t at ement s t o t he U ni t ed St at es t o avoi d [an obl i gat i on] , ” 363 F. 3d at 10 48 (em ph asi s added )— do es not r estri ctthe scop e of the st atute t o o nlytho se i ns t ance s i n w hi ch s t at ement s ar e s o m ade. M or eover , the di s tr i ctcourtcas es i nvoked byC onagr a ar e notpr ece dent i al and do notconce rn the ki nd of r egul at or ys cheme ati s s ue her e, one thati nvol ves the pr ovi s i on of governm ent s e rv ic e s in e x c h a n g e fo r p a ym e n t o f a fe e . A ddi t i onal l y , as M r . B ahr ani ar gues i n hi s r epl ybr i ef, nothi ng i n the la n g u a g e o f § 3 7 2 9 (a )( 7 ) i n d ic a te s th a t p re s e n tm e n t to th e g o v e rn m e n t is re q u ir e d . O th e r s e c tio n s o f

th e fa ls e c la im s ta tu te d o re q u ir e p re s e n tm e n t. S e e , e .g ., § 3 7 2 9 (a )(1 ) (e sta b lish in g liab ili tyfo r o n e w h o “ k n o w in g lyp re se n ts, o r c a u se s to b e p rese n ted, t o an o fficer o r em p loy ee o f th e U n it ed S tat es G o v ern m en t or a m emberof the A r m ed For ces of the U ni t ed St at es a fa l s e orfr audul entcl ai m for paym entorappr oval ”) ( emphasi s added) ; s ee a l s o U ni t ed St at es . ex r el . K och v. K och I ndus . , 57 F. Supp. 2d 1122, 1144 ( N . D . O kl a. 1999) ( “The bad ac tunder ( a) ( 1) i s t he pr es ent i ng of a fal s e cl ai m . T he bad a ctunder( a) ( 7) i s t he maki ng or us i ng of a fal s e s t at ementorr ecor d. T her e i s no “pr es entm ent ” l anguage i n § 3 7 2 9 (a)(7).”) (em p h asis ad d ed ). W e agr ee that§ 3729( a) ( 7) does notr equi r e pr es entm entt o the U ni t ed St at es governm ent , and C onagr a i s t hus notent i t l ed t o s um m aryj udgm enton t hat g ro u n d e ith e r.38

3. O ri ginal s ou rce req u i rem en t as t o “ m eat- rel ated” cl aim s A s a fi nal al t ernat i ve gr ound foraff i r m i ng the di s tr i ctcourt ’ s gr antof s um m aryj udgm ent , C onagr a cont ends t hatM r . B ahr ani i s notan “or i gi nal s our ce. ” C onagr a l i m i t s i t s ar gum entt o the partof the ca s e thatconce rns cert i fi cat es for m eatprodu ct s. C onagr a’ s ar gum enti s bas ed upon 31 U . S. C . § 3730( e) ( 4) ( A ) & ( B ) , w hi ch p ro v id e : ( 4) ( A ) N o cour t s hal l have j ur i s di ct ion over an act i on

under this sect i on bas ed upon the publ i c di s cl os ur e of al l egat ion s ort r ans act i ons i n a cr i m i nal , ci vi l , or admi ni s t r at i ve hear i ng, i n a congr es s i onal , admi ni s tr at i ve, o r G o v e rn m e n t A c c o u n tin g O ffice re p o r t, h e a rin g , au d it, or i nves t i gat i on, or fr om the new s m edi a, unl es s the ac t i on i s br oughtbyt he A t t o rneyG ener al orthe per s on br i ngi ng th e a c tio n is a n o ri g in a l s o u rc e o f th e in fo rm a tio n . ( B ) Forpurpos es of thi s parag raph, “or i gi nal s our ce” m eans an i ndi vi dual w ho has d ir ectand i ndepende nt k n o w ledg e o f th e info rm ati o n o n w h ich th e a ll eg ati o n s are bas ed and ha s vol u n tari l ypr ovi ded the i nform at i on t o t he G overnm entbefo re fi l i ng an ac t i on underthi s s ect i on w h ic h is b a s e d o n th e in fo rm a tio n . 3 1 U . S . C . § 3 7 3 0 (e)(4)(A ) & (B ) (em p h asis ad d ed ). A tt he s um m aryj udgm ents t age, appl i cat i on of thi s s t atut oryl anguage i nvol ves a four - par ti nqui r y : ( 1) w hethert he al l eged “ publ i c di s cl os ur e” c ont ai ns al l egat i ons ort r ans act i ons fr om one of the l i s t ed s our ces ; ( 2) w hethert he al l eged d isc lo su re h a s b e e n m a d e “ p u b lic” w ith in th e m e a n in g o f th e F a lse C laim s A c t; (3 ) w h e th e r th e re lato r’s c o m p lain t is “ b a se d u p o n ” th is p u b lic d isc lo su re ; an d , if39

so , (4 ) w h e th e r th e re lato r q u a lifie s a s a n “ o rig in a l so u rc e .” U n ited S tate s e x re l. Fi ne v. M K - Fer gus on C o. , 99 F. 3d 1538, 1544 ( 10th C i r . 1996) . T he bur den i s on M r . B ahr ani t o s how t hathe i s an or i gi nal s our ce. ” U ni t ed St at es ex r el St one v. R o ck w ell Int’l C o rp., 2 8 2 F . 3 d 7 8 7 , 8 0 0 -02 (10 th C ir . 2 0 0 2 ). H o w ev er, a co u rt s houl d addr es s t he fi r s tt hr ee publ i c di s cl os ur e i s s ues fi r s t . I d. C ons i der at i on of t he o ri ginal source requi rem ent i s necessaryon l yi f t he co urtansw ers the fir st th re e q u e s tio n s a ffir m a tiv e ly. M K -F e rg u s o n , 9 9 F .3 d a t 1 5 4 4 . H er e, C onagr a cont ends , t he fi r s tt w o el ement s of the or i gi nal s our ce defe ns e ar e cl ear l yes t abl i s hed. M r . B ahr ani r eport ed hi s al l egat i ons t o the governm enti n A ugus t1999. H ow ever , pr i ort o thatt i m e, t hes e al l egat i ons had b e e n p u b lica llya d v a n c e d in lit ig a tio n , a g o v e rn m e n t in v e stig a tio n , an d m e d ia re p o rt s . I n par t i cul ar , i n A pr i l 1999, i n the “K i m l i t i gat i on” i n the C entr al D i s tr i ct of C al i forni a, t he defendant s as s er t ed count er cl ai m s agai ns tC onagr a al l egi ng im p rop er a lt era ti o n o f m ea t exp o rtce rt ifi ca tes. A cc o rdin g to C o n ag ra, M r. B ahr ani cooper at ed w i t h t he K i m defe ndant s and thei rcouns el , even t o the poi nt of appe ar i ng vol unt ar i l yas a w i tnes s on thei rbehal f. T h ese all eg ati o n s w ere di s cl os ed i n a governm enti nves t i gat i on. T he defendant s i n the K i m l i t i gat i on pr ovi ded copi es of al l egedl yal t er ed exportcert i fi cat es t o the U SD A , w hi ch ca u sed the g o v ern m en t t o laun ch an ex tens ive in v esti g ati o n into C o n ag ra’s p r a c t i c e s . F i n a l l y, th e a lleg a tio n s m a d e in th e K im lit ig a tio n w e re w id e ly40

p u b lis h e d in th e m e d ia . A s t o t he thi r d el ement , w hethert he r el at or ’ s compl ai nti s “bas ed upon” th is p u b lic d isc lo su re , C o n a g ra n o tes th a t “[ e ]v e n q u i tam a c tio n s o n lyp a rtially bas ed upon publ i cal l ydi s cl os ed al l egat i ons ort r ans act i ons m aybe barr ed. ” U n it ed S tat es e x rel. G ryn b erg v . P rax air, Inc . , 3 8 9 F . 3 d 1 0 3 8 , 1 0 5 1 (10 th C ir . 2004) , certdeni ed, 125 S. C t . 2964 ( 2005) . “The t es ti s w hethers ubs t ant i al i dent i t yexi s t s betw een the publ i cal l ydi s cl os ed al l egat i ons ort r ans act i ons and the q u i t am co m p lai n t. ” Id . (i n terna l qu o tat ion m ark s o m itted). H ere , C o n ag ra c o n ten d s, “ B a h ra n i’s m e a t-re late d c laim s c lo se lym irro r th e a lleg a tio n s m a d e in t he K i m [l ] i t i gat i on w hi ch s paw ned the G overnm ent ’ s i nves t i gat i on and numer ous m ed ia rep o rt s. ” A p le’s B r. at 51 . A cc o rdin g to C o n ag ra, th e ide n ti ca l i ssu es a re ad d resse d in this l aw su it , “n am elyw h ethe r th e c h an g es m ad e to e x p o rt cert i fi cat es w er e appr oved byt he U SD A orw hetherC onagr a w as r equi r ed to o b ta in re p la c e m e n t c e rt ific a te s .” Id . B ec au se th ese firstthree elem en ts are sa ti sfied , C o n ag ra c o n ti n u es, M r. B ahr ani m us tes t abl i s h thathe w as an “or i gi nal s our ce. ” Thatm eans t hat( 1) he m us thave ha d di r ectand i ndepende ntknow l edge of t he i nform at i on on w hi ch the al l egat i ons ar e bas ed and ( 2) he musthave vol unt ar i l ypr ovi ded s uch i nform at i on t o t he governm entpr i ort o fi l i ng s ui t . U ni t ed St at es ex r el . H aft erD . O . v. S p ec tru m E m erg en cyC are , Inc . , 1 9 0 F . 3 d 1 1 5 6 , 1 1 6 0 -61 (10 th C ir . 1 9 9 9 ). H er e, C onagr a mai nt ai ns , M r . B ahr ani di d nothave di r ectand i ndepende nt41

know l edge of

hi s m eat - r el at ed cl ai m s beca us e he w or ked i n the H i des D i vi s i on at C o n ag ra, no t th e M ea t Pro d u cts D ivisi o n . M o reo v er, C o n ag ra a rgu es, M r. B a h ra n i d e riv e d h is k n o w led g e f ro m in fo rm a tio n m a d e p u b lic f ro m th e K im l i t i gat i on i n C al i forni a. Forexampl e, M r . B ahr ani ’ s Second A m ended Com pl ai nt al l eges t hatt he al t er at i ons t o m eatexportcert i fi cat es began i n 1991. H ow ever , he di d notbegi n w or ki ng forC onagr a unt i l 1996, and has s ubm i t t ed no evi dence sh o w in g th a t h e h a s a n yp e rso n a l k n o w led g e o f re lev a n t ev e n ts p re e x istin g h is em ploym ent. C on agra con t end s that M r. B ahrani “app arent l yused 1 99 1 b ecause i tw as [on] t hatdat e thatt he K i m defe ndant s cl ai m ed the al l eged i m pr oper pr act i ces began. ” A pl e’ s B r . at53. A l s o, C onagr a not es , dur i ng the cour s e of t hi s l i t i gat i on, M r . B ahr ani di s cl os ed manydocument s thathe had obt ai ned fr om t he K i m l i t i gat i on. F inally , C o n ag ra a sserts, M r. B ah ran i’ s k n o w ledg e o f m ea t- related ex p o rt cert i fi cat es w as “s econd- hand. ” I d. at54. M r . B ahr ani di d nots t at e thathe per s onal l yal t er ed meatcert i fi cat es , nor , acc or di ng t o C onagr a, di d he know the pr ocedur es r el at ed t o m eatcert i fi cat es , orthe s i gni fi canc e of a nyal t er at i ons that h e d id o b s e rv e . U pon r evi ew of the r ecor d, w e ar e notper s uaded byt hi s al t ernat i ve ar gum entfors um m aryj udgm ent . A s s um i ng, w i thoutdeci di ng, t hatC onagr a has es t abl i s hed the fi r s tt hr ee e l ement s of the i nqui ry , w e conc l ude thatM r . B ahr ani has s ubm i t t ed s uffi ci entevi dence t o s uppor thi s cont ent i on thathe i s an or i gi nal42

so u rc e . In p a rticu lar , h e h a s o ffe re d a n a ff id a v it statin g th a t h e p e rso n a lly obs erved the al t er at i on of exportcert i fi cat es w hi l e he w or ked forC onagr a and t hathe hea r d a s upervi s orauthor i zi ng s uch cha nges . W hen vi ew ed i n the l i ght m ostfavo rabl e t o M r. B ahrani

— the p artyop po si ng sum m aryj ud gm ent— these s t at ement s s uppor thi s cont ent i on thathe had “ di r ectand i ndepende ntknow l edge of the i nform at i on on w hi ch [hi s ] al l egat i ons ar e bas ed” a nd thatthi s know l edge w as “gai ned by[hi s ] ow n effor t s and notacqui r ed fr om the l abor s of other s . ” G ryn b erg , 3 8 9 F . 3 d at 10 5 2 (i n terna l qu o tat ion m ark s o m itted). A d d it ion all y , M r. B ahrani has al so offered evidence indi cat i ng that he vo l un t ari l ydis cl osed these obs ervat i ons t o U SD A i nves t i gat or s i n A ugus torSept ember1999, befor e he f i l ed th is a c tio n . S e e A p le ’s S u p p . A p p . v o l. I , a t 2 3 7 . A ccor di ngl y , t o t he ext entt hatM r . B ahr ani ’ s al l egat i ons ar e bas ed upon p e rso n a l o b se rv a tio n s th a t h e d isc lo se d to in v e stig a to rs, C o n a g ra is n o t en tit led to s um m aryj udgm enton t hi s i s s ue.

I I I . CO NC L US I ON A s a p p lied to th e se c irc u m sta n c e s, w e re a d § 3 7 2 9 (a )(7 ) m o re n a rro w ly than M r. B ah ran i bu t m o re b roa d lythan C o n ag ra. L ike th e d istri ct co u rt , w e a re n o t persu ad ed that ev erych an g e to a sign ed ex p o rtce rt ifi ca te m ad e b ya C o n ag ra empl oy ee c r eat es an “obl i gat i on” undert he s t atut e. H ow ever , t o the ext entt hat C onagr a empl oy ees m ade “ m aj or ” or“s i gni fi cant ” cha nges w i thoutappl y i ng for43

“in lieu o f” o r rep lace m en t certi fica tes, theyav o ided an o b li g ati o n u n d er § 3 7 2 9 (a )( 7 ). W e em ph asi ze t hat the ap propri at e i nq uiryi s cer t i fi cat e-s pecifi c. B ecause o f th eir i n terpretati o n s o f th e re g u lat o rysch em e, bo th M r. B ah ran i and C o n ag ra h av e a d v an ce d arg u m en ts th at pe rt ain to all ch an g es to o ri g inal ex p o rt cert i fi cat es , no m at t erhow ext ens i ve. I n ourvi ew , how ever , w hethera gi ven change t o an or i gi nal cert i fi cat e tr i gger s a § 3729( a) ( 7) obl i gat i on depends upon t he natur e of the cha nge— w hetheri ti s “maj or ” or“s i gni fi cant ” and thus r equi r es a n ew ce rt ifi ca te. A lth o u g h m an yo f th e u n au tho ri ze d ch an g es a ll eg ed b yM r. B a h ra n i ap p e a r to b e m in o r, th e re is e v id e n c e th a t at le a st s o m e o f th e m fe ll w ith in th e “ m ajo r” o r “ sig n ifica n t” c las s. F u rth e r d e v e lo p m e n t o f th e re c o rd is r equi r ed t o det erm i ne the ext entt o w hi ch C onagr a empl oy ees m ade “ m aj or ” or “s i gni fi cant ” cha nges w i t houtobt ai ni ng “i n l i eu of” orr epl ace m entcert i fi cat es a n d p a y in g th e a c c o m p a n y in g fe e . B ec au se C o n ag ra’s alt ern ati v e a rgu m en ts i n su p p o rto f th e d istri ct co u rt ’s g ran t of su m m aryjud g m en t l ac k m erit , w e the refo re V A C A T E the d istri ct co u rt ’s g ra n t o f su m m a ryju d g m e n t an d R E M A N D fo r f u rth e r p ro c e e d in g s c o n sis ten t w ith th is o p in io n .