Source: https://www.law.cornell.edu/supct/html/07-214.ZO.html
Timestamp: 2015-05-24 03:07:06
Document Index: 521444732

Matched Legal Cases: ['§3729', '§3729', '§3729', '§3729', 'art. 471', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§371', '§371', '§371', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729', '§3729']

In 1985, the United States Navy entered into contracts with two shipbuilders, Bath Iron Works and Ingalls Shipbuilding (together the shipyards), to build a new fleet of Arleigh
Burke class guided missile destroyers. Each destroyer required three generator sets (Gen-Sets) to supply all of the electrical power for the ship. The shipyards subcontracted with petitioner Allison Engine Company, Inc. (Allison Engine), formerly a division of General Motors, to build 90 Gen-Sets to be used in over 50 destroyers. Allison Engine in turn subcontracted with petitioner General Tool Company (GTC) to assemble the Gen-Sets, and GTC subcontracted with petitioner Southern Ohio Fabricators, Inc. (SOFCO), to manufacture bases and enclosures for the Gen-Sets. The Navy paid the shipyards an aggregate total of $1 billion for each new destroyer. Of that, Allison Engine was paid approximately $3 million per Gen-Set; GTC was paid approximately $800,000 per Gen-Set; and SOFCO was paid over $100,000 per Gen-Set. All of the funds used to pay petitioners ultimately came from the Federal Treasury.
The Navy’s contract with the shipyards specified that every part of each destroyer be built in accordance with the Navy’s baseline drawings and military standards. These requirements were incorporated into each ofpetitioners’ subcontracts. In addition, the contracts required that each delivered Gen-Set be accompaniedby a certificate of conformance (COC) certifying that the unit was manufactured in accordance with the Navy’s requirements.
In 1995, Roger L. Sanders and Roger L. Thacker (hereinafter respondents), former employees of GTC, brought suit in the District Court for the Southern District of Ohio as qui
tam relators seeking to recover damages pursuant to §3729, which renders liable any person who “knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval,” §3729(a)(1); any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government,” §3729(a)(2); and any person who “conspires to defraud the Government by getting a false or fraudulent claim allowed or paid,” §3729(a)(3).
On appeal, a divided panel of the United States Court of Appeals for the Sixth Circuit reversed the District Court in relevant part. 471 F. 3d 610 (2006). The majority agreed with the District Court that liability under §3729(a)(1) requires proof that a false claim was presented to the Government. However, the Court of Appeals held that the District Court erred in granting petitioners’ motion for judgment as a matter of law with respect to respondents’ §§3729(a)(2) and (3) claims. The Court of Appeals held that such claims do not require proof of an intent to cause a false claim to be paid by the Government. Rather, it determined that proof of an intent to cause a false claim to be paid by a private entity using Government funds was sufficient. In so holding, the Court of Appeals recognized that its decision conflicted with United States ex rel. Totten v. Bombardier Corp., 380 F. 3d 488 (CADC 2004) (Totten), cert denied, 544 U. S. 1032 (2005)
We turn first to §3729(a)(2), and “[w]e start, as always, with the language of the statute.” Williams v. Taylor, 529 U. S. 420, 431 (2000)
. Section 3729(a)(2) imposes civil liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government.”
Eliminating this element of intent, as the Court of Appeals did, would expand the FCA well beyond its intended role of combating “fraud against the Government.” See Rainwater v. United States, 356 U. S. 590, 592 (1958)
(emphasis added). As the District of Columbia Circuit pointed out, the reach of §3729(a)(2) would then be “almost boundless: for example, liability could attach for any false claim made to any college or university, so long as the institution has received some federal grants—as most of them do.” Totten, supra, at 496.
Defending the Court of Appeals’ interpretation of §3729(a)(2), the Government contends that the phrase “paid … by the Government” does not mean that the Government must literally pay the bill. The Govern-ment maintains that it is customary to say that the Government pays a bill when a person who has receivedGovernment funds uses those funds to pay a bill. The Government provides this example: “ ‘[W]hen a student says his college living expenses are “paid by” his parents, he typically does not mean that his parents send checks directly to his creditors. Rather, he means that hisparents are the ultimate source of the funds he uses topay those expenses.’ ” Brief for United States as Ami-cus
Curiae 9 (quoting Totten, supra, at 506 (Garland, J., dissenting)).
This example is unpersuasive because it involves a colloquial usage of the phrase “paid by”—a usage that is not customarily employed in more formal contexts. For example, if a federal employee who receives all of his income from the Government were asked in a formal inquiry to reveal who paid for, say, his new car or a vacation, the employee would not say that the Federal Government had footed the bill. In statutory drafting, where precision is both important and expected, the sort of col-loquial usage on which the Government relies is notcustomary.
The Government is also wrong in arguing that the definition of the term “claim” in §3729(c) means that §3729(a)(2)’s use of the phrase “paid by the government” should not be read literally. Under this definition, a request for money or property need not be made directly to the Government in order to constitute a “claim.” Instead, a “claim” may include a request or demand that is made to “a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.” §3729(c). This definition of the word “claim” does not support the Government’s argument because it does not alter the meaning of the phrase “by the Government” in §3729(a)(2). Under §3729(c)’s definition of “claim,” a request or demand may constitute a “claim” even if the request is not made directly to the Government, but under §3729(a)(2) it is still necessary for the defendant to intend that a claim be “paid … by the Government” and not by another entity.1
This does not mean, however, as petitioners suggest, see Reply Brief 1, that §3729(a)(2) requires proof that a defendant’s false record or statement was submitted to the Government. While §3729(a)(1) requires a plaintiff to prove that the defendant “present[ed]” a false or fraudulent claim to the Government, the concept of presentment is not mentioned in §3729(a)(2). The inclusion of an express presentment requirement in subsection (a)(1), combined with the absence of anything similar in subsection (a)(2), suggests that Congress did not intend to include a presentment requirement in subsection (a)(2). “[W]hen Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Barnhart v. Sigmon Coal Co., 534 U. S. 438, 452 (2002)
What §3729(a)(2) demands is not proof that the defendant caused a false record or statement to be presented or submitted to the Government but that the defendant made a false record or statement for the purpose of getting “a false or fraudulent claim paid or approved by the Government.” Therefore, a subcontractor violates §3729(a)(2) if the subcontractor submits a false statement to the prime contractor intending for the statement to be used by the prime contractor to get the Government to pay its claim.2 If a subcontractor or another defendant makes a false statement to a private entity and does not intend the Government to rely on that false statement as a condition of payment, the statement is not made with the purpose of inducing payment of a false claim “by the Government.” In such a situation, the direct link between the false statement and the Government’s decision to pay or approve a false claim is too attenuated to establish liability. Recognizing a cause of action under the FCA for fraud directed at private entities would threaten to transform the FCA into an all-purpose antifraud statute. Our reading of §3729(a)(2), based on the language of the statute, gives effect to Congress’ efforts to protect the Government from loss due to fraud but also ensures that “a defendant is not answerable for anything beyond the natural, ordinary and reasonable consequences of his conduct.” Anza v. Ideal Steel Supply Corp., 547 U. S. 451, 470 (2006)
This reading of subsection (a)(3) is in accord with our decision in Tanner v. United States, 483 U. S. 107 (1987)
, where we held that a conspiracy to defraud a federally funded private entity does not constitute a “conspiracy to defraud the United States” under 18 U. S. C. §371. Id., at 129. In Tanner, the Government argued that a recipient of federal financial assistance and the subject of federal supervision may itself be treated as “the United States.” We rejected this reading of §371 as having “not even an arguable basis in the plain language of §371.” Id., at 131. Indeed, we concluded that such an interpretation “would have, in effect, substituted ‘anyone receiving federal financial assistance and supervision’ for the phrase ‘the United States.’ ” Id., at 132. Likewise, the interpretation urged on us by respondents would in effect substitute “paid or approved by the Government” for the phrase “paid by Government funds.” Had Congress intended subsection (a)(3) to apply to anyone who conspired to defraud a recipient of Government funds, it would have so provided.
1 This interpretation of §3729(a)(2) does not render superfluous the portion of §3729(c) providing that a “claim” may be made to a contractor, grantee, or other recipient of Government funding. This language makes it clear that there can be liability under §§3729(a)(1) and (2) where the request or demand for money or property that a defendant presents to a federal officer for payment or approval, §3729(a)(1), or that a defendant intends “to get … paid or approved by the Government”, §3729(a)(2), may be a request or demand that was originally “made to” a contractor, grantee, or other recipient of federal funds and then forwarded to the Government.
2 Section 3729(b) provides that the terms “knowing” and “knowingly” “mean that a person, with respect to information—(1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required.” The statutory definition of these terms is easily reconcilable with our holding in this case for two reasons. First, the intent requirement we discern in §3729(a)(2) derives not from the term “knowingly,” but rather from the infinitive phrase “to get.” Second, §3729(b) refers to specific intent with regard to the truth or falsity of the “information,” while our holding refers to a defendant’s purpose in making or using a false record or statement.