Court Opinion

ID: 6341390
Source: CourtListenerOpinion
Date Created: 2022-05-17 16:00:46.515822+00
Date Added: 2024-06-11T08:47:17.631835
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 3, 2022                  Decided May 17, 2022

                        No. 21-7039

 UNITED STATES OF AMERICA, EX REL. VERMONT NATIONAL
                TELEPHONE COMPANY,

                            AND

        VERMONT NATIONAL TELEPHONE COMPANY,
                     APPELLANT

                             v.

            NORTHSTAR WIRELESS, LLC, ET AL.,
                      APPELLEES

        Appeal from the United States District Court
                for the District of Columbia
                    (No. 1:15-cv-00728)

    Jeffrey A. Lamken argued the cause for appellant. With
him on the briefs were Bert W. Rein, Bennett L. Ross, Stephen
J. Obermeier, Eugene A. Sokoloff, and Mark W. Kelley.

    Seth P. Waxman argued the cause for appellees. With him
on the brief were Catherine E. Stetson, Jonathan L.
Diesenhaus, Ari Q. Fitzgerald, Howard M. Shapiro, Daniel S.
                                2
Volchok, Beth S. Brinkmann, Peter B. Hutt II, and Michael M.
Maya. Joseph Meyer and Susan Pelletier entered appearances.

Before: ROGERS, TATEL*, and PILLARD, Circuit Judges.

    Opinion for the court filed by Circuit Judge TATEL.

     TATEL, Circuit Judge: In this qui tam action, Vermont
National Telephone Company alleges that several
telecommunications companies defrauded the United States
Government of $3.3 billion by manipulating Federal
Communications Commission rules and falsely certifying their
eligibility for discounts on spectrum licenses. The district court
dismissed the suit, resting its decision on the False Claims
Act’s “government-action bar” and its “demanding materiality
standard.” Because neither basis invoked by the district court
warrants dismissal, we reverse.

                                 I.

     The Communications Act of 1934 authorizes the Federal
Communications Commission to grant licenses allowing
companies to use portions of the electromagnetic spectrum,
“the range of electromagnetic radio frequencies used to
transmit sound, data, and video across the country.” SNR
Wireless LicenseCo, LLC v. FCC, 868 F.3d 1021, 1025 (D.C.
Cir. 2017) (internal quotation marks omitted); see 47 U.S.C.
§§ 307, 309. Once licensed, companies may use their allocated
radio frequencies to provide television, cell phone, and wireless
internet service. SNR Wireless, 868 F.3d at 1025.

   To apportion spectrum licenses among competing
companies, the Commission holds auctions that involve a

* Judge Tatel assumed senior status after this case was argued and
before the date of this opinion.
                                 3
two-step license application process. See 47 U.S.C. § 309(j)(1);
47 C.F.R. §§ 1.2105, 1.2107. First, applicant companies
submit “streamlined, short-form application[s]” providing,
under penalty of perjury, information concerning their
eligibility to bid in the auction. SNR Wireless, 868 F.3d at 1027
(internal quotation marks omitted); 47 C.F.R. § 1.2105.
Companies claiming “bidding credits”—discounts used to
cover part of the cost of licenses won at auction—must certify
their eligibility for such credits in their short-form applications.
See 47 C.F.R. §§ 1.2105(a)(2)(iv), 1.2110(f). Companies
determined by the Commission to be “qualified to bid” based
on their short-form applications may participate in the auction.
See id. § 1.2105.

     Second, winning bidders “file a more comprehensive long-
form application” to demonstrate their qualifications to hold
spectrum licenses and their eligibility for claimed bidding
credits. SNR Wireless, 868 F.3d at 1027 (internal quotation
marks omitted); 47 C.F.R. § 1.2107. Once the Commission
publicly announces its acceptance of a winning bidder’s long-
form application, any “party in interest” may file a petition to
deny the application on the grounds that granting it would be
inconsistent with “the public interest, convenience, and
necessity.” 47 U.S.C. § 309(a), (d)(1); see 47 C.F.R. § 1.2108.
The winning bidder may, in turn, “file an opposition to any
petition to deny, and the petitioner a reply to such opposition.”
47 C.F.R. § 1.2108(c). After reviewing the application and the
pleadings filed, the Commission determines whether the
winning bidder is qualified to hold a license. 47 U.S.C.
§ 309(d)(2); 47 C.F.R. § 1.2108(d).

     A winning bidder that defaults on its “binding obligation
to pay its full bid amount upon acceptance of the winning bid
at the close of an auction” is subject to a “default payment.”
47 C.F.R. § 1.2104(g)(2). And a bidder that violates the
                               4
Commission’s rules in connection with its participation in the
competitive bidding process may be subject to sanctions,
including “forfeiture of [its] upfront payment, down payment
or full bid amount.” Id. § 1.2109(d). Such forfeiture penalties
are assessed in a separate “forfeiture proceeding,” initiated by
a notice of apparent liability or a notice of opportunity for
hearing. Id. § 1.80(f)–(h).

     This case arose from Auction 97, in which companies bid
for “exclusive access to 1,614 Advanced Wireless Services
licenses in [three radio frequency] bands.” Am. Compl. ¶ 2.
When announcing the auction, the Commission’s Wireless
Telecommunications Bureau explained that small businesses
would be eligible to receive bidding credits entitling them to
either a 15-percent or 25-percent discount on their winning
bids. Id. ¶ 48; Auction of Advanced Wireless Services (AWS-3)
Licenses Scheduled for November 13, 2014 (Auction Notice),
29 FCC Rcd. 8386, 8411–12 (2014). The size of the bidding
credits would depend on the business’s attributable revenues
over the preceding three years, which includes the revenues of
the small business itself as well as those of any entity with “de
facto control” over the business. Auction Notice, 29 FCC Rcd.
at 8412–13; Am. Compl. ¶ 48.

     Northstar Wireless, LLC (“Northstar”) and SNR Wireless
LicenseCo, LLC (“SNR”) each submitted short-form
applications to participate in Auction 97, claiming eligibility
for the 25-percent bidding credit offered to “very small
businesses” with less than $15 million in attributable revenues.
Am. Compl. ¶¶ 3, 48, 82 (internal quotation marks omitted).
Their applications disclosed that “they had acquired the capital
that they needed to participate in the auction from DISH
[Network]—a large, established corporation that was itself
ineligible for bidding credits.” SNR Wireless, 868 F.3d at 1027.
The applications also disclosed that DISH, Northstar, and SNR
                               5
had adopted “joint bidding protocols and agreements” pursuant
to which the three companies could coordinate their bidding
strategies. Id. Based on their short-form applications, the
Commission found Northstar and SNR “qualified to bid” in
Auction 97. Auction of Advanced Wireless Services (AWS-3)
Licenses 70 Bidders Qualified to Participate in Auction 97, 29
FCC Rcd. 13465, 13465 & n.3, 13477 (2014) (determining that
applicants’ short-form applications were “complete and
compl[ied] with the Commission’s competitive bidding rules
and policies”).

     Northstar and SNR were “remarkably successful” in
Auction 97, collectively winning 43.5 percent of the licenses in
play. SNR Wireless, 868 F.3d at 1027–28. After the auction,
Northstar and SNR submitted long-form applications for the
licenses they won, reiterating that they were “very small
businesses” entitled to bidding credits. Id. at 1028. The use of
such credits would discount the price of Northstar’s and SNR’s
winning bids from $13.3 billion to approximately $10 billion.
Am. Compl. ¶ 100. Once the long-form applications became
public, eight companies petitioned the Wireless Bureau to deny
Northstar’s and SNR’s applications. SNR Wireless, 868 F.3d at
1028. All eight challengers argued that Northstar and SNR
were ineligible for very-small-business credits because DISH
effectively controlled them. Id. One challenger, VTel Wireless,
Inc., also argued that Northstar and SNR withheld from the
Commission material information about their relationship with
DISH. Northstar Wireless, LLC (FCC Opinion), 30 FCC Rcd.
8887, 8940 (2015).

     The Wireless Bureau referred the petitions to the full
Commission for “consideration of the questions posed by the
petitions to deny.” SNR Wireless, 868 F.3d at 1028 (internal
quotation marks omitted). The Commission concluded that
Northstar and SNR were ineligible for bidding credits because
                               6
they were de facto controlled by DISH, such that DISH’s large
annual revenues were attributable to them. FCC Opinion, 30
FCC Rcd. at 8889–90. But based on the record before it, the
Commission found no evidence “that SNR and Northstar
attempted to mislead the Commission about their respective
relationships with DISH” or “that they did not adequately
disclose the nature of their relationship and joint bidding
arrangements with DISH.” Id. at 8890–91, 8941.

     After the Commission issued its ineligibility
determination, Northstar and SNR “notified the Commission
that they would pay the full bid amount for some of the licenses
they won [but] would default on their obligation to buy the
rest.” SNR Wireless, 868 F.3d at 1028. In response, the
Commission ordered Northstar and SNR to pay a default
payment consisting of (1) compensation for “the difference
between their own winning bids in Auction 97 and the amount
that the FCC receives when it re-auctions the licenses” and
(2) “an additional payment equal to fifteen percent of
[Northstar’s and SNR’s] own bids, or fifteen percent of the
winning bid when their licenses are re-auctioned, whichever is
less.” Id. at 1029; see 47 C.F.R. § 1.2104(g)(2).

     Northstar and SNR petitioned this court for review of the
Commission’s determination that they were ineligible for
bidding credits. SNR Wireless, 868 F.3d at 1029. Our court
upheld the Commission’s ineligibility determination but
remanded to the Commission “to give [Northstar and SNR] an
opportunity to seek to negotiate a cure for the de facto control
the FCC found that DISH exercises over them.” Id. at 1025. On
remand, the Commission directed Northstar and SNR to
renegotiate their business arrangements with DISH and then
submit revised agreements to the Commission. Northstar
Wireless, LLC, 33 FCC Rcd. 231, 232–34 (2018). Northstar’s
                               7
and SNR’s petition for review of that FCC decision remains
pending.

     Meanwhile, and setting the stage for this case, Vermont
National Telephone Company (“Vermont Telephone”) filed a
qui tam action against Northstar, SNR, DISH, and several
affiliated companies (collectively, “Defendants”), alleging
they violated the False Claims Act (FCA) by making false
certifications and manipulating the Commission’s auction rules
to secure fraudulent bidding credits on spectrum licenses. Am.
Compl. ¶¶ 1–7. As relevant here, the FCA imposes civil
penalties on anyone who “knowingly makes, uses, or causes to
be made or used, a false record or statement material to an
obligation to pay . . . money . . . to the Government.” 31 U.S.C.
§ 3729(a)(1)(G); see also id. §§ 3729(a)(1)(A), (B), (C). The
Act authorizes private entities like Vermont Telephone to bring
actions on behalf of the government, sharing in the recovery
when such actions succeed. Id. § 3730(b), (d). The district
court, however, dismissed Vermont Telephone’s suit, relying
on the Act’s government-action bar which forecloses qui tam
actions “based upon allegations or transactions which are the
subject of a civil suit or an administrative civil money penalty
proceeding in which the Government is already a party.” Id.
§ 3730(e)(3); U.S. ex rel. Vermont National Telephone Co. v.
Northstar Wireless LLC (Vermont Telephone), 531 F. Supp. 3d
247, 251, 264–67 (D.D.C. 2021). The court also held that
Vermont Telephone’s allegations failed to satisfy the Act’s
“demanding materiality standard.” Id. at 251, 268–70.

     Vermont Telephone appeals, arguing that neither basis
invoked by the district court supports dismissal. Defendants
defend the district court’s decision, and argue that we can
affirm on the alternative grounds that Vermont Telephone has
failed to plead its FCA claims with the requisite plausibility
and particularity needed to satisfy Federal Rules of Civil
                              8
Procedure 8 and 9(b). Our review is de novo. U.S. ex rel.
Cimino v. International Business Machines Corp., 3 F.4th 412,
421 (D.C. Cir. 2021) (reviewing de novo dismissal of
fraudulent inducement and presentment claims under the
FCA).

                              II.

    Originally enacted during the Civil War, the FCA allows
private individuals to bring qui tam actions in the name of the
United States in order to “augment[] the government’s limited
enforcement resources” and “protect[] federal funds from
fraud.” U.S. ex rel. Totten v. Bombardier Corp., 286 F.3d 542,
545–46 (D.C. Cir. 2002); see Singletary v. Howard University,
939 F.3d 287, 292–93 (D.C. Cir. 2019) (“Congress enacted the
False Claims Act in the 1860s in response to widespread fraud
perpetrated by Civil War contractors.”). As noted above,
however, the statute’s government-action bar forecloses qui
tam suits “which [are] based upon allegations or transactions
which are the subject of . . . an administrative civil money
penalty proceeding in which the Government is already a
party.” 31 U.S.C. § 3730(e)(3).

     According to the district court, the Commission’s
post-auction licensing proceeding, which reviewed Northstar’s
and SNR’s long-form applications for spectrum licenses and
the petitions to deny them, triggered the government-action
bar. Vermont Telephone, 531 F. Supp. 3d at 251, 264–68.
Disagreeing, Vermont Telephone argues that the government-
action bar is inapplicable because the Commission’s licensing
proceeding was not an “‘administrative civil money penalty
proceeding.’” Appellant’s Br. 27 (quoting 31 U.S.C.
§ 3730(e)(3)).

   The FCA nowhere defines the phrase “administrative civil
money penalty proceeding.” But to state the obvious, an
                                9
“administrative civil money penalty proceeding” is a
proceeding in which an administrative agency may impose a
civil money penalty. Defendants contend that the licensing
proceeding qualifies as an “administrative civil money penalty
proceeding” because the Commission imposed, or could have
imposed, several different civil money penalties during that
proceeding.

     First, Defendants argue that the Commission levied civil
money penalties by subjecting Northstar and SNR to default
payments after they selectively defaulted on their winning bids
in Auction 97. But even assuming that these default payments
are civil money penalties, they have no bearing on whether the
Commission’s licensing proceeding is a “civil money penalty
proceeding” for a simple reason: The default payments were
not assessed during the licensing proceeding. In that
proceeding, the Commission determined only whether
Northstar and SNR were “qualif[ied]” to hold spectrum
licenses and “eligible” for bidding credits. FCC Opinion, 30
FCC Rcd. at 8889, 8891. The question of whether to impose
default payments arose later, after Northstar and SNR chose to
selectively default on their obligations to pay for some of their
winning bids. See Notice of Interim Default Payment
Obligation for Auction 97 Licenses, Joint Appendix 960, 964
(notifying Northstar and SNR of their default payment
obligations after they “cho[se] to selectively default”). It would
make no sense to conclude that the Commission’s ultimate
imposition of default payments, triggered by an event that had
not yet occurred at the time of the licensing proceeding,
retroactively transformed the licensing proceeding into a civil
money penalty proceeding.

     Defendants insist that “[t]he fact that weeks passed
between the eligibility decision [in the licensing proceeding]
and the imposition of the penalties does not mean the latter was
                                10
not part of the proceeding, any more than the fact that a
criminal sentence can be imposed weeks or months after a
guilty verdict means [that] sentencing is not part of the criminal
proceeding.” Appellees’ Br. 40. This analogy misses the mark.
Unlike a criminal sentence, the default payments did not
“flow[] directly,” id., from the Commission’s determination in
the licensing proceeding that Northstar and SNR were
ineligible for bidding credits. An intervening event—
Northstar’s and SNR’s decisions to selectively default—
occurred before the Commission assessed default payments
against these companies.

     Second, Defendants point out that the Commission may
assess “forfeiture penalt[ies]” for willful failure to comply with
any FCC rule or regulation, 47 C.F.R. § 1.80(a), including the
rule prohibiting the intentional submission of false or
misleading statements to the Commission, id. § 1.17(a).
Commission regulations, however, authorize assessment of
forfeiture penalties only in “forfeiture proceeding[s],” which
the Commission initiates by issuing either a “notice of apparent
liability” or a “notice of opportunity for hearing.” Id. § 1.80(f)–
(h). Because the Commission issued neither, it never initiated
a forfeiture proceeding and so had no authority to impose
forfeiture penalties. See 47 U.S.C. § 503(b)(3)(a), (4) (“[N]o
forfeiture penalty shall be imposed under this subsection
against any person unless and until . . . the Commission issues
a notice of apparent liability” or provides “notice and an
opportunity for a hearing before the Commission or an
administrative law judge.”).

     Third, Defendants allude to “other penalt[ies]” that the
Commission may impose, citing language from the
Communications Act and Commission regulations stating that
“[a] forfeiture penalty under this subsection shall be in addition
to any other penalty” provided for by the statute. Id.
                               11
§ 503(b)(1) (emphasis added); accord 47 C.F.R. § 1.80 n.1. In
search of “other penalt[ies]” available to the Commission
during its licensing proceeding, 47 U.S.C. § 503(b)(1),
Defendants point to several Commission public notices and
orders which state that “[s]ubmission of a false certification to
the Commission may result in penalties, including monetary
forfeitures, license forfeitures, ineligibility to participate in
future auctions, and/or criminal prosecution.” Application of
Winstar Broadcasting Corp., 20 FCC Rcd. 2043, 2051 n.55
(2005); accord Auction of Broadband PCS Spectrum
Scheduled for May 16, 2007, 22 FCC Rcd. 433, 448, 454
(2007). But aside from monetary forfeitures, which the
Commission may assess only in separate forfeiture
proceedings, none of the penalties listed in these notices and
orders is monetary. Defendants cite no authority, nor are we
aware of any, that permits the Commission to issue civil money
penalties without first initiating forfeiture proceedings.

    Because the Commission had no authority to assess civil
money penalties during its licensing proceeding, which
evaluated only Northstar’s and SNR’s long-form applications
and the petitions to deny them, the licensing proceeding was
not an “administrative civil money penalty proceeding.” The
government-action bar therefore poses no impediment to
Vermont Telephone’s suit.

                              III.

     To be actionable under the FCA, “a misrepresentation
about compliance with a statutory, regulatory, or contractual
requirement must be material to the Government’s payment
decision.” Universal Health Services, Inc. v. U.S. ex rel.
Escobar, 579 U.S. 176, 192 (2016). A misrepresentation is
“material” under the Act if it has “a natural tendency to
influence, or be capable of influencing, the payment or receipt
                               12
of money or property.” 31 U.S.C. § 3729(b)(4); accord Cimino,
3 F.4th at 419.

     The district court concluded that Vermont Telephone
failed to plausibly allege any false claims capable of
influencing Northstar’s and SNR’s eligibility for bidding
credits in Auction 97. Vermont Telephone, 531 F. Supp. 3d at
270. We disagree. Vermont Telephone alleged that Northstar
and SNR “knowingly failed to disclose all of their instruments,
agreements, and understandings with . . . DISH” and “falsely
certified” that they had disclosed all instruments, agreements,
and understandings relevant to their claimed bidding credits in
Auction 97. Am. Compl. ¶¶ 125, 128. Specifically, Vermont
Telephone alleged that the two companies failed to disclose
their agreement to transfer or resell their spectrum to DISH
after a five-year non-transfer period. Id. ¶¶ 125–27, 130.
Because an applicant’s attributable revenues in Auction 97
included those of any entity to which the applicant had agreed
to resell “more than 25 percent of the spectrum capacity of any
individual license,” id. ¶ 56, Northstar’s and SNR’s
undisclosed spectrum-resale arrangements would have
increased their attributable revenues beyond the $15-million
cap for very-small-business credits, id. ¶ 48. Northstar’s and
SNR’s alleged false certifications and failures to disclose
agreements central to their eligibility for bidding credits were
certainly “capable of influencing” the Commission’s bidding-
credit-eligibility determination. Cimino, 3 F.4th at 423.

     Echoing the district court’s reasoning, Defendants argue
that the alleged undisclosed agreements would not have
changed the Commission’s ultimate decision to deny bidding
credits because the Commission found Northstar and SNR
ineligible for credits even without the disclosure of any such
agreements. But, as other circuits have explained, the FCA’s
materiality inquiry “focuses on the potential effect of the false
                               13
statement when it is made.” U.S. ex rel. Loughren v. Unum
Group, 613 F.3d 300, 309 (1st Cir. 2010); U.S. ex rel. Longhi
v. United States, 575 F.3d 458, 470 (5th Cir. 2009) (focusing
on “the potential effect of the false statement when it is made
rather than on the false statement’s actual effect after it is
discovered,” and noting that the Fourth, Sixth, and Ninth
Circuits have adopted the same interpretation of the FCA’s
materiality standard (internal quotation marks omitted)). At the
time Northstar and SNR submitted their short- and long-form
applications, their eligibility for bidding credits depended on
their disclosure of all “agreements, arrangements or
understandings of any kind relating to the licenses being
auctioned.” 47 C.F.R. § 1.2105(a)(2)(viii) (requiring
“[c]ertification that the applicant has provided” all agreements,
arrangements, and understandings); id. § 1.2112 (b)(2)(vii)
(requiring applicants to “[l]ist and summarize any agreements
in which the applicant has entered into arrangements for the use
of any of the spectrum capacity of the license that is the subject
of the application”). Moreover, if Northstar and SNR had
disclosed their alleged agreements to “[resell] the spectrum
purchased during the auction” to DISH, Am. Compl. ¶ 130,
they “could not have qualified as ‘very small businesses,’ and
thus could not have received the 25 percent [bidding credits],”
id. ¶ 132; see id. ¶ 56. Northstar’s and SNR’s alleged false
certifications and failures to disclose agreements therefore had
the potential to affect the Commission’s eligibility
determinations regarding such bidding credits.

     Defendants cite the Supreme Court’s decision in Escobar
and our decision in McBride, urging us to focus on the
Commission’s “actual” decision to deny bidding credits rather
than the potential effect of Northstar’s and SNR’s
misrepresentations. Appellees’ Br. 45, 48 (internal quotation
marks omitted) (citing Escobar, 579 U.S. at 193 and U.S. ex
rel. McBride v. Halliburton Co., 848 F.3d 1027, 1032 (D.C.
                               14
Cir. 2017)). But those decisions looked to the government’s
“actual behavior” only to assess whether the government
attaches importance to a particular statutory, regulatory, or
contractual requirement. Escobar, 579 U.S. at 193–94 (internal
quotation marks omitted); see McBride, 848 F.3d at 1033–34
(considering the government’s prior cost determinations as
evidence on summary judgment that a contractor’s voluntary
disclosure of headcount data had no “connection” or
“relevan[ce]” to such cost determinations). “[I]f the
Government regularly pays a particular type of claim in full
despite actual knowledge that certain requirements were
violated,” for instance, “that is strong evidence that the
requirements are not material.” Escobar, 579 U.S. at 195;
accord McBride, 848 F.3d at 1034. Vermont Telephone’s
complaint contains no allegations suggesting that the
Commission attached minimal importance to Northstar’s and
SNR’s alleged misrepresentations. See Cimino, 3 F.4th at 423
(“The question here . . . is whether [the plaintiff] plausibly
pleaded materiality.”). Rather, the amended complaint
suggests just the opposite, emphasizing that an applicant who
fails to certify that it has disclosed all agreements relating to
auctioned licenses will not be permitted to participate in the
auction. Am. Compl. ¶¶ 57–61; 47 C.F.R. § 1.2105 (a)(2)(viii),
(b)(1)(i).

     Seeking to cast doubt on Vermont Telephone’s
allegations, Defendants assert that any misrepresentations in
Northstar’s and SNR’s short-form applications could not have
affected their “initial [discounted] post-auction payments”
because the Commission “substantially review[s]” eligibility
for bidding credits only after applicants file their long-form
applications. Appellees’ Br. 46–47 (internal quotation marks
omitted). Any disputes regarding whether the Commission
substantially reviews short-form applications, however, should
be addressed at a later stage in this litigation. The question
                               15
before us at the motion-to-dismiss stage is only “whether
[Vermont Telephone] plausibly pleaded materiality.” Cimino,
3 F.4th at 423. For the foregoing reasons, Vermont Telephone
has done so.

                               IV.

     Because the FCA is an antifraud statute, plaintiffs alleging
claims thereunder must satisfy the “plausibility” pleading
standard set forth in Federal Rule of Civil Procedure 8, as well
as the heightened “particularity” standard set forth in Rule 9(b).
Cimino, 3 F.4th at 421. Under Rule 8, the complaint must
“contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (internal quotation marks omitted).
Under Rule 9(b), the complaint “must state with particularity
the circumstances constituting fraud or mistake.” Fed. R. Civ.
P. 9(b).

     Defendants urge us to affirm on the alternative grounds,
not reached by the district court, that Vermont Telephone failed
to adequately plead its claims under Rules 8 and 9(b). We
decline to do so and conclude that Vermont Telephone has
adequately pleaded its claims.

     Beginning with Rule 8, Vermont Telephone pleaded facts
“allow[ing] the court to draw the reasonable inference” that
Northstar and SNR falsely certified their disclosure of all
agreements related to auctioned licenses when, in fact, they
failed to disclose agreements to act on DISH’s behalf and
transfer spectrum rights to DISH. Cimino, 3 F.4th at 421. In
particular, Vermont Telephone alleged the following:
(1) Northstar and SNR were formed as shell companies without
any assets or revenues, at DISH’s direction, shortly before the
deadline to apply for Auction 97, Am. Compl. ¶¶ 16, 24;
(2) Northstar and SNR bid for spectrum licenses in Auction 97
                              16
“with financing provided almost exclusively from entities
controlled by . . . DISH,” id. ¶ 91; (3) Northstar and SNR bid
anonymously for the same licenses 744 times during the
auction, id. ¶¶ 67, 92, 95; (4) Northstar and SNR frequently
accepted the Commission’s random selection of the winner
when they submitted identical winning bids, id. ¶ 96;
(5) Northstar and SNR “finished the auction with geographic
gaps in their spectrum licenses” which afforded complete
coverage only when combined, id. ¶ 97; (6) Northstar’s and
SNR’s post-auction selective defaults created “geographic
holes in [their] individual coverage” while “promoting the
uniformity of spectrum coverage provided by their combined
holdings,” id. ¶ 105; (7) Northstar’s and SNR’s dispersed
spectrum blocks from Auction 97 “made no sense from the
point of view of providing communications services,” id.
¶ 117; (8) neither Northstar nor SNR had “taken steps to deploy
a wireless system” in the four years since Auction 97
concluded, id. ¶ 120; and (9) DISH guaranteed Northstar’s and
SNR’s default payment obligations when each entity
selectively defaulted, id. ¶¶ 106–07.

     Defendants offer alternative explanations for Northstar’s
and SNR’s conduct, asserting that such conduct is “consistent
with the absence of any undisclosed agreement(s).” Appellees’
Br. 55. Perhaps so, but the question before us on a motion to
dismiss is only whether the alleged undisclosed agreements to
act on DISH’s behalf or transfer spectrum rights to DISH are
“plausible.” Iqbal, 556 U.S. at 679. They are. As Vermont
Telephone alleges in its amended complaint, the
aforementioned conduct makes little sense unless Northstar
and SNR agreed in advance that DISH would ultimately
control the licenses won at auction. Am. Compl. ¶¶ 107, 117.

     Vermont Telephone also satisfied Rule 9(b) by setting
forth detailed allegations regarding the “time, place, and
                               17
manner” of the fraudulent scheme. U.S. ex rel. Heath v. AT&T,
Inc., 791 F.3d 112, 123 (D.C. Cir. 2015). According to the
amended complaint, members of the boards of Northstar’s and
SNR’s parent companies submitted short-form applications on
September 12, 2014, via the Commission’s electronic
submission portal, which contained false certifications that
Northstar and SNR had disclosed all agreements,
arrangements, and understandings related to the licenses in
Auction 97. Am. Compl. ¶¶ 83–84, 124–31. The alleged
undisclosed agreements, which the parties entered into between
August and September 2014, involved Northstar’s and SNR’s
procurement of spectrum licenses on DISH’s behalf. Id. ¶¶ 16,
24, 108–09, 125–31, 142. On February 13, 2015, Northstar and
SNR submitted long-form applications confirming and
recertifying all disclosures and representations made in their
short-form applications. Id. ¶ 90. These allegations satisfy Rule
9(b)’s particularity requirement, as they provide “sufficient
substance to . . . both afford [Defendants] the opportunity to
prepare a response and to warrant further judicial process.”
Heath, 791 F.3d at 125.

                               V.

    For the foregoing reasons, we reverse.

                                                    So ordered.