Court Opinion

ID: 1012838
Source: CourtListenerOpinion
Date Created: 2013-07-04 20:51:09.234725+00
Date Added: 2024-06-11T15:38:30.499220
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

UNITED STATES EX REL. JOSE A.           
HERRERA,
                 Plaintiff-Appellant,
                 v.                              No. 03-1343

DANKA OFFICE IMAGING COMPANY,
               Defendant-Appellee.
                                        
            Appeal from the United States District Court
         for the Eastern District of Virginia, at Alexandria.
              James C. Cacheris, Senior District Judge.
                           (CA-00-1702)

                      Argued: January 21, 2004

                      Decided: March 15, 2004

  Before WIDENER, LUTTIG, and WILLIAMS, Circuit Judges.

Affirmed by unpublished per curiam opinion.

                            COUNSEL

ARGUED: John C. Maginnis, Washington, D.C., for Appellant. Rus-
sell James Gaspar, COHEN MOHR, L.L.P., Washington, D.C., for
Appellee. ON BRIEF: William J. Hardy, KARALEKAS & NOONE,
Washington, D.C., for Appellant.
2              UNITED STATES v. DANKA OFFICE IMAGING
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

PER CURIAM:

   Jose A. Herrera, a qui tam relator, appeals the district court’s grant
of summary judgment in favor of Danka Office Imaging Co. (Danka)
in this action alleging violations of the False Claims Act, 31 U.S.C.A.
§§ 3729-3733 (West 2003). Finding no error in the district court’s dis-
position of the case, we affirm.

                                   I.

   Jose Herrera was an employee of Danka, a large distributor of pho-
tocopiers. Danka held a Federal Supply Service Schedule Contract for
photocopiers with the General Services Administration. Under this
contract, the Defense Automated Printing Service (DAPS) issued
blanket purchase agreements (BPAs) to Danka. The first BPA
between Danka and DAPS was in effect from September 23, 1998, to
May 18, 2001, and included a provision requiring Danka to pay a one-
half of one percent (0.5%) "Fee for Service" (FFS) on the value of all
sales made under that BPA. (J.A. at 187.) The BPA explicitly stated
that "[a]ll prices . . . shall include" the FFS. (J.A. at 187.) Pursuant
to the FFS provision, Danka was to provide DAPS with a quarterly
report of its sales under the BPA and remit quarterly payments of the
FFS to DAPS. The BPA stated that "[i]f Danka fails to remit [pay-
ment] . . . the amount shall be considered a contract debt to the United
States Government." (J.A. at 187.) The BPA also explained that the
"Government may exercise all its rights under this BPA, including
withholding or setting of payments and interest on the debt . . . and
may result in termination of the BPA." (J.A. at 187.)

   Nothing in the record reflects that Danka was required to certify
that it was in compliance with the FFS provision, and none of its
invoices included such a certification. Danka failed to file its quar-
terly reports and also failed to remit quarterly payments of the FFS
                UNITED STATES v. DANKA OFFICE IMAGING                      3
to DAPS. DAPS never contacted Danka about its failure to follow the
FFS provision, and Danka is currently conducting a manual review of
its records to determine its contract debt to DAPS.

   Acting as a qui tam relator, Herrera filed a complaint under seal,
on October 13, 2000, in the United States District Court for the East-
ern District of Virginia. On January 14, 2002, the United States gave
notice that it was declining to intervene in the action. Herrera served
Danka with his first amended complaint on April 19, 2002, alleging
four violations of the False Claims Act. Relevant here, Herrera
alleged that Danka violated the False Claims Act because it "failed to
pay [DAPS] the [FFS] it owes for its sales to [DAPS] from the [Fed-
eral Supply Schedule] contract because it had no compliance system
in place to audit such sales to an agency such as [DAPS]." (J.A. at 24)
(the FFS Claim). According to Herrera, the FFS claim includes both
a direct false claim and a false implied certification claim.1 The dis-
trict court granted Danka’s motion for summary judgment as to the
FFS claim on January 22, 2003.2 Herrera now appeals.

                                     II.

   We review de novo the entry of summary judgment in favor of
Danka. American Legion Post 7 v. City of Durham, 239 F.3d 601, 605
(4th Cir. 2001). Summary judgment is appropriate only "if the plead-
ings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue
  1
     The specifics of the direct false claim and the false implied certifica-
tion claims are discussed in the text infra.
   2
     Herrera argues that the district court dismissed his complaint pursuant
to Federal Rule of Civil Procedure 9(b), and thus, that we should deter-
mine only whether Herrera’s complaint states a claim upon which relief
may be granted. (Appellant’s Br. at 7.) This argument is without merit.
The district court did find that Herrera failed to plead his false implied
certification claim with particularity as required by Federal Rule of Civil
Procedure 9(b). The district court also held, however, that even if the
false implied certification claim had been pleaded with particularity,
Danka was entitled to summary judgment on the merits. Accordingly, the
district court entered summary judgment for Danka on the entire FFS
claim.
4              UNITED STATES v. DANKA OFFICE IMAGING
as to any material fact." Fed. R. Civ. P. 56(c) (West 1992); Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). "In deciding whether
there is a genuine issue of material fact, the evidence of the nonmov-
ing party is to be believed and all justifiable inferences must be drawn
in its favor." American Legion, 239 F.3d at 605. A mere scintilla of
proof, however, will not suffice to prevent summary judgment; the
question is "not whether there is literally no evidence, but whether
there is any upon which a jury could properly proceed to find a ver-
dict for the party" resisting summary judgment. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251 (1986) (internal quotation marks omit-
ted). "[A] complete failure of proof concerning an essential element
of the nonmoving party’s case necessarily renders all other facts
immaterial." Celotex, 477 U.S. at 323.

    The False Claims Act, 31 U.S.C.A. §§ 3729- 3733 (West 2003), is
intended to aid the government in "uncover[ing] fraud and abuse by
unleashing a posse of ad hoc deputies to uncover and prosecute frauds
against the government." Harrison v. Westinghouse Savannah River
Co., 176 F.3d 776, 784 (4th Cir. 1999) (internal quotation marks
omitted). To that end, the False Claims Act permits qui tam relators
to file suit on behalf of the United States against individuals who have
violated § 3729. 31 U.S.C.A. § 3730(b). Section 3729(a)(1) creates
liability against 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." 31 U.S.C.A.
§ 3729(a)(1).

   On appeal, Herrera presents two theories of liability under
§ 3729(a)(1). First, Herrera contends that each invoice Danka submit-
ted to its governmental customers under the BPA violated
§ 3729(a)(1) because the invoices included the FFS that Danka was
not going to pay. This type of claim is called a "direct false claim."
To prove a direct false claim, Herrera must establish that Danka made
a claim for payment or approval by the government, that the claim
was false or fraudulent, that Danka acted "knowingly" in presenting
the false claim, and that the falsity was material. Harrison, 176 F.3d
at 784-85. Herrera cannot prove this first theory of liability because
Danka did not submit a false or fraudulent claim. It is axiomatic that
"a central question in False Claims Act cases is whether the defendant
ever presented a ‘false or fraudulent claim’ to the government." Id. at
               UNITED STATES v. DANKA OFFICE IMAGING                    5
785. The BPA required Danka to include the FFS in all of its
invoices, and then to remit the FFS on a quarterly basis to DAPS.
Thus, Danka did not submit a false claim to its governmental custom-
ers by including the FFS in its invoice prices; the contract, by its own
terms, required the FFS to be included. Danka’s subsequent failure to
remit the FFS to DAPS may have breached its contract with DAPS,
but Danka was required to include the FFS in its invoices, and Danka
did not submit a false claim by following that requirement.

    Second, Herrera argues that each invoice Danka submitted to a
governmental customer under the BPA acted as an implied certifica-
tion that Danka intended to comply with the FFS provision. To the
extent that the theory is valid, the theory of implied certification
creates liability under § 3729(a)(1) where "submission of invoices and
reimbursement forms constituted implied certifications of compliance
with the terms of the particular government program."3 Harrison, 176
F.3d at 786 & n.8. Courts that "have been ready to infer certification
from silence" require the relator to at least show "certification was a
prerequisite to the government action sought." United States ex rel.
Siewick v. Jamieson Sci. & Eng’g, Inc., 214 F.3d 1372, 1376 (D.C.
Cir. 2000). For example, in Harrison we held that even assuming a
false implied certification claim was viable, the relator’s implied cer-
tification claim failed because the relator "ha[d] never asserted that
such implied certifications were in any way related to, let alone pre-
requisites for, receiving continued funding." Harrison, 176 F.3d at
793. Likewise, the BPA at issue here does not condition payment of
Danka’s invoices on a certification that Danka will remit the FFS.
Thus, Herrera’s theory of implied certification fails as well, and the
district court was correct to grant Danka summary judgment as to that
theory of recovery. Siewick, 214 F.3d at 1376.

  3
   We have previously noted that claims of implied certification were
"questionable" in this circuit. Given our resolution of this issue we need
not decide whether claims for implied certification are viable under the
False Claims Act. Harrison v. Westinghouse Savannah River Co., 176
F.3d 776, 787 n.8 (4th Cir. 1999).
6              UNITED STATES v. DANKA OFFICE IMAGING
                                  III.

   Because Herrera cannot show that Danka submitted a false claim
or that payment of Danka’s invoices was conditioned upon Danka’s
certification that it would remit the FFS, the district court was correct
to grant summary judgment to Danka. Accordingly, we affirm the
judgment of the district court.

                                                            AFFIRMED