Opinion ID: 709078
Heading Depth: 3
Heading Rank: 3

Heading: Individual allegations of false claims

Text: 40 Butler argues that MDHC's Phase II Test Report falsely indicated that the pilot and copilot gunner radios were successfully demonstrated and ready for production. He also argues that the Phase II Test Report falsely stated that the tests of the radios were planned in accordance with the specifications for the system and the requirements of the Test Plan. He points to what he alleges are false statements in the Phase II Test Report regarding some of the Phase II pattern testing of the pilot's radio. Finally, he challenges the Phase III Test Report's account of communication testing, the automatic direction finder, and the Doppler navigation system, as well as the drafting of the Phase III Test Plan.
41 Butler claims that the Phase II Test Report, submitted to the Army in November 1983, falsely indicated that the pilot and copilot gunner radios have been successfully demonstrated and are ready for production. He argues that this was false because the testing of the radios was not done exactly as the contract specifications required. As MDHC points out, however, and as the district court found, this summary language about a successful demonstration does not represent that the radios met specifications, and the failure to meet specifications was detailed elsewhere in the report. We hold that the generalized statement with the added details was not the type of representation required by the statute, and so we do not address whether it was knowingly submitted. 42 Butler next assigns as false statements MDHC's representations in the Phase II Test Report that the tests were planned in accordance with the general requirements of the relevant portions of the specification and the Phase II Test Plan, and that [t]his report documents the results of the planned tests as modified by the program constraints described in paragraph 1.1. Paragraph 1.1 explained that the Army and MDHC had agreed to begin Phase III before Phase II testing was complete, and that the Phase II Test Plan was not revised to reflect the planned abbreviation. Butler claims the statements are false because the radios were not successfully demonstrated, and because the Phase II Test Report does not provide the results of the tests in the Test Plan. Yet these statements say nothing about successful demonstration, and actually disclose what Butler claims they conceal: that the Phase II Test Report will not be in exact accord with the Phase II Test Plan. We hold that these statements are not false, and again decline to decide whether they were knowingly submitted.
43 Butler next identifies as false statements the Phase II Test Report's general representation that pattern tests of the pilot's radio were done at 10 to 12 nautical miles and 1200 feet altitude. Butler argues that at least two test flights were actually done at closer distances. Yet he also alleges that the Army witnesses' reports stated that the tests were flown at closer distances, and MDHC points to testimony that the tests were the subject of discussion between MDHC and the Army, and the Army's AVSCOM technical representatives knew of and approved the short tests. 44 We hold that the Army knew that the summary statement of the distances at which the pattern tests were conducted was not strictly accurate as to all the tests, and that this discrepancy was the subject of dialogue between the Army and MDHC. The only reasonable conclusion is that this was not a knowingly false statement, as the noncomplying tests were known to and approved by the Army. 45 Butler also points to discrepancies within the report itself, such as the substitution of Flight # 827 for # 822. He labels these as falsified results from tests of the FM band for the pilot's radio, but does not demonstrate why they are knowingly false statements rather than clerical errors. He also labels as a false claim the pilot's radio patterns in the Phase II Test Report, because there were more data points in the Test Report than had appeared in an interim report a year earlier. Butler argues that the discrepancy must mean that data was falsified, but as MDHC points out, the Army had both the interim and final report, and the data are comparable in shape and readings despite the differences in the number of data points. We hold that Butler did not present evidence that rationally supports the conclusion that MDHC falsified data. Even if the discrepancy constituted a false statement, the Army knew of the discrepancy, and so MDHC did not knowingly submit a false claim. 46 Butler then complains that given the ambient noise at the ground station, the patterns for Flight # 370, attached to the Phase II Test Report, must be false. He cites no evidence to support this, and MDHC points to testimony that the recorded points were all above the ambient noise level. Butler next questions the accuracy of a table charting a range test result in the Phase II Test Report, but as MDHC points out, the Army had the flight test reports which noted a garbled signal, and the table itself stated that several frequencies were less than satisfactory. We hold that these statements are not false.
47 Butler claims that MDHC rigged a test in the Phase III Test Plan, which describes a one-way test for the radios rather than the two-way test required by the specification. MDHC did perform two-way tests, however, so there was no failure to perform a required test. Butler's statement that an Army flight test witness was manipulated by an MDHC employee into reporting favorable test results is not strictly consistent with the witness's testimony that he took [the MDHC employee's] word for it and is in any event irrelevant, as the Phase III Test Report disclosed mixed results for the test. 48 Butler also turns to the copilot gunner's radio, claiming that the Phase III Test Report falsely stated that it passed all tests and was ready for production. He apparently objects to the way in which the tests were documented, but this does not indicate that the test reports were in any way false. 49 Butler then claims that the Phase III Test Report contained a rigged test for the Automatic Direction Finder (ADF). His argument that the ADF could not possibly have complied does not identify an alleged false claim; his complaint about the Phase III Test Plan's criteria is a rehash of his general complaint about the Test Plan; and his description of the problems that the Army found in its later production testing provides no evidence of falsity in the Phase III Test Report. 50 Butler's arguments regarding the Doppler Navigation System similarly fail to provide any evidence on which a jury could find a false claim. He identifies as false MDHC's statement that the Doppler did not have to be tested during the Phase II navigation subsystem tests. The Doppler, however, was excluded from the Phase II tests as the Test Plans reflect. Differences between MDHC and the Army about how the Doppler was to be tested were openly aired and eventually resolved. Butler complains that the Doppler never passed the Phase III tests, but overlooks that the very test results he cites indicate that the Doppler failed.
51 Butler argues that the Phase III Test Plan, which was selected over Butler's rejected version, was improperly structured and did not properly provide for data collection. This is not a FCA claim, but a contract claim. The improper interpretation or unauthorized amendment of a contract, without more, does not constitute a false claim for payment.
52 We affirm the district court's directed verdict on the ground that the only reasonable conclusion a jury could draw from the evidence was that all the false statements alleged by Butler as the basis for his allegations of false claims either were not false, or were not made with the requisite knowledge under the FCA.