Source: https://law.justia.com/cases/federal/appellate-courts/F3/136/676/553618/
Timestamp: 2020-06-06 08:51:33
Document Index: 229497891

Matched Legal Cases: ['§ 3730', '§ 3729', '§ 3729', '§ 3729', '§ 3729', '§ 3729', '§ 3729', '§ 3729']

The United States of America Ex Rel. Todd Aakhus, Personalrepresentative of the Estate of Miles Aakhus,plaintiff-appellant, v. Dyncorp, Inc., Defendant-appellee, 136 F.3d 676 (10th Cir. 1998) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Tenth Circuit › 1998 › The United States of America Ex Rel. Todd Aakhus, Personalrepresentative of the Estate of Miles Aakh...
The United States of America Ex Rel. Todd Aakhus, Personalrepresentative of the Estate of Miles Aakhus,plaintiff-appellant, v. Dyncorp, Inc., Defendant-appellee, 136 F.3d 676 (10th Cir. 1998)
US Court of Appeals for the Tenth Circuit - 136 F.3d 676 (10th Cir. 1998) Feb. 10, 1998
We review the district court's grant of a directed verdict de novo, applying the same standard used by the district court. Oja v. Howmedica, Inc., 111 F.3d 782, 792 (10th Cir. 1997). A directed verdict is appropriate only if the evidence, viewed in the light most favorable to the nonmoving party, points but one way and is susceptible to no reasonable inferences supporting the nonmoving party. Id. However, a mere scintilla of evidence is insufficient to create a jury question. Id.
Before specifically addressing the claims, we pause briefly to outline the mechanisms provided in the False Claims Act (FCA). "The FCA sets out civil and criminal penalties for persons who knowingly submit false claims to the government." United States ex rel. Dunleavy v. County of Delaware, 123 F.3d 734, 738 (3d Cir. 1997); see also Avco Corp. v. United States Dept. of Justice, 884 F.2d 621, 622 (D.C. Cir. 1989) (FCA "is the government's primary litigative tool for the recovery of losses sustained as the result of fraud against the government."). "A private person with knowledge of fraud against the government, acting as a de facto 'attorney general,' can instigate litigation on the government's behalf against the parties responsible. Such suits are known as qui tam actions." Dunleavy, 123 F.3d at 738. The FCA provides a built-in incentive for the private plaintiff, referred to as the relator, to bring suit. Id. Specifically, the FCA provides the relator shall receive between fifteen and thirty percent of the proceeds of the action, plus reasonable expenses, fees, and costs. 31 U.S.C. §§ 3730(d) (1), (2).
Claim under 31 U.S.C. § 3729(a) (4)
The relator contends the district court erred in concluding there was insufficient evidence to support his claim under 31 U.S.C. § 3729(a) (4), which makes it unlawful for any person who
We have found one published case discussing this subsection of the FCA. See United States ex rel. Stinson v. Provident Life & Accident Ins. Co., 721 F. Supp. 1247, 1259 (S.D. Fla. 1989). Based upon the plain language of (a) (4), we agree with Stinson that the essential elements of a cause of action thereunder include (1) possession, custody, or control of property or money used, or to be used, by the government, (2) delivery of less property than the amount for which the person receives a certificate or receipt, (3) with intent to defraud or willfully to conceal the property. Although Stinson suggests a plaintiff must also prove damages suffered by the government, there is authority to the effect that the government need not prove damages to establish liability under the FCA, but can instead recover statutory penalties for a violation even absent any damages. See John T. Boese, Qui Tam: Beyond Government Contracts, 456 Practicing Law Institute/Litigation and Administrative Practice Course Handbook Series 7, 32 (March 1993). We find it unnecessary to decide whether proof of damages is an essential element under (a) (4) because, as discussed below, the relator here cannot satisfy one of the other essential elements of his claim.
After carefully reviewing the record on appeal, we conclude there is no evidence demonstrating DynCorp received any type of certificate or receipt from the government within the meaning intended by (a) (4). Although the relator contends DynCorp received a receipt each time it was issued a piece of property from the government, the record on appeal does not support this. At best, the record indicates DynCorp employees created internal receiving records each time they received an item of property from the government. In our view, the language of (a) (4) clearly suggests the certificate or receipts at issue must be created by the government. We therefore fail to see how the internal records pointed to by the relator can support a claim under (a) (4). Even overlooking this flaw, there is a separate problem with the "receipts" relied upon by the relator. The plain language of (a) (4) makes clear the certificate or receipt at issue must have some connection or relationship to the defendant's return of property.4 In other words, the certificate or receipt must indicate how much property defendant allegedly returned to the government. Here, the "receipts" pointed to by the relator were issued each time DynCorp received items of property from the government. Accordingly, they bear no relation to the amount of property returned by DynCorp to the government at the conclusion of the RATSCAT contract. We conclude the district court properly granted a directed verdict in favor of DynCorp on the relator's claim under (a) (4).
Claim under 31 U.S.C. § 3729(a) (7)
The relator contends the district court erred in concluding there was insufficient evidence to support his claim under 31 U.S.C. § 3729(a) (7), which makes it unlawful for any person to "knowingly make [ ], use [ ], or cause [ ] to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government." This subsection has been referred to as the "reverse false claims provision" of the FCA. Rabushka ex rel. United States v. Crane Co., 122 F.3d 559, 565 (8th Cir. 1997). The term "knowingly," as used in (a) (7), "mean [s] 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." 31 U.S.C. § 3729(b). " [N]o proof of specific intent to defraud is required." Id.; see also United States v. Krizek, 111 F.3d 934, 941 (D.C. Cir. 1997) (holding an aggravated form of gross negligence, or "gross negligence-plus," is equivalent to reckless disregard for purposes of FCA).
In support of his claim under (a) (7), the relator contends DynCorp employees deleted 205 items from inventory without government authorization prior to the conclusion of DynCorp's contract. The relator contends DynCorp then created and submitted a false record at the end of its contract in order to conceal, avoid, or decrease its obligation to transfer the 205 inventory items to the government upon termination of its contract. To prove his claim, the relator had to demonstrate, in part, that DynCorp deleted the 205 items from inventory without authorization. We have reviewed the record on appeal and conclude the relator failed to present sufficient evidence to allow a reasonable jury to reach such a conclusion. Every witness at trial who was familiar with the DynCorp inventory system testified no items were deleted without authorization. When questioned on cross-examination, Todd Aakhus could not state that DynCorp lacked authorization to delete the items in question from inventory. Although many of the official government records pertaining to DynCorp's inventory had been lost or destroyed, the evidence demonstrated DynCorp specifically received government authorization to delete most of the 205 items at issue. As to the remaining items, the only evidence presented by the relator that even remotely touched upon the issue of government authorization was Miles Aakhus' deposition testimony that he and other DynCorp employees were directed to use the Control U/Pack method of deletion. Assuming, arguendo, that Miles Aakhus' testimony is sufficient to demonstrate the remaining items were deleted by the Control U/Pack method, we conclude the evidence is not sufficient by itself to allow reasonable jurors to conclude DynCorp lacked government authorization to delete those items.
We also note there was a provision in DynCorp's contract with the government which provided DynCorp was not liable for loss or destruction of government-issued property absent willful misconduct or lack of good faith on the part of DynCorp managerial personnel (namely Earl Thompson, the division manager in charge of the RATSCAT facility). Thus, even if DynCorp had lost or misplaced the items and could not account for their whereabouts, it would not have been contractually liable for those items absent willful misconduct or lack of good faith on the part of Thompson. Because the relator presented no evidence of any such wrongful conduct on the part of Thompson, any failure on the part of DynCorp to include the items on the final inventory listing could not have affected any obligation it had to the government. Thus, there would have been no incentive for DynCorp to submit a false record to the government. We conclude the district court properly granted a directed verdict in favor of DynCorp on the relator's claim under (a) (7).
Claim under 31 U.S.C. § 3729(a) (2)
Subsection (a) (2) of the FCA makes it unlawful for any person to "knowingly make [ ], use [ ], or cause [ ] to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government." 31 U.S.C. § 3729(a) (2); see United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir. 1997). To establish a claim under (a) (2), a person must demonstrate that (1) a "claim" was presented to the government by the defendant, or the defendant "caused" a third party to submit the "claim," (2) the claim was "false or fraudulent," (3) the defendant presented the claim knowing it was "false or fraudulent," and (4) the defendant made or used a false statement which the defendant knew to be false, and which was causally connected to the false claim. See generally Rabushka, 122 F.3d at 563; Young-Montenay, Inc. v. United States, 15 F.3d 1040, 1043 (Fed. Cir. 1994).
The relator contends DynCorp violated (a) (2) by seeking and receiving award fees that included a component for property management when, in fact, DynCorp was unable to account for many missing items. More specifically, the relator alleges DynCorp represented to the review board that they were performing adequately in the area of property management when, in fact, they were unable to locate many items of property. The record on appeal reveals the relator failed to introduce any evidence of specific representations made by DynCorp to the board (or to any other government official or agency) concerning its performance with regard to property management. Although the testimony at trial indicated DynCorp had the right to make a "sales pitch" concerning its performance, there was no evidence whatsoever that DynCorp did so. More specifically, there was no evidence DynCorp made any representations to the board concerning its performance in property management. Thus, there is no evidence DynCorp made any false claim or statement to the government to receive payment on a false claim. Accordingly, we conclude the district court properly granted a directed verdict on the relator's claim under (a) (2).
Assume, for example, a government contractor such as DynCorp is issued twenty metal desks by the government for use in carrying out a government contract. If the government issued a certificate or a receipt to the contractor at the time the desks were returned indicating how many desks were returned, such certificate or receipt would satisfy the provisions of (a) (4) because it would indicate how much property was allegedly returned to the government