Court Opinion

ID: 4201874
Source: CourtListenerOpinion
Date Created: 2017-09-07 20:01:16.118511+00
Date Added: 2024-06-11T14:40:45.383768
License: Public Domain

NOT FOR PUBLICATION                        FILED
                    UNITED STATES COURT OF APPEALS                        SEP 7 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                              FOR THE NINTH CIRCUIT

UNITED STATES ex rel. ARIA KOZAK                No.    15-17246
and DONNA KOZAK,
                                                D.C. No.
                Plaintiffs-Appellees,           2:10-cv-01056-MCE-EFB

and
                                                MEMORANDUM*
UNITED STATES OF AMERICA,

      Intervenor-Plaintiff-
      Appellee,

 v.

CHABAD OF CALIFORNIA,

                Defendant-Appellant.

                  Appeal from the United States District Court
                      for the Eastern District of California
                Morrison C. England, Jr., District Judge, Presiding

                      Argued and Submitted August 14, 2017
                            San Francisco, California

Before: RAWLINSON and N.R. SMITH, Circuit Judges, and WATTERS,**
District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Susan P. Watters, United States District Judge for the
District of Montana, sitting by designation.
       Chabad of California appeals the district court’s entry of summary judgment

finding it liable to the United States under the False Claims Act, and various

aspects of the court’s damages calculation. We affirm.

       Chabad challenges the district court’s liability findings on the first, second,

and fourth elements of the United States’ claim under 31 U.S.C. § 3729(a)(1)(A).

See Hooper v. Lockheed Martin Corp., 688 F.3d 1037, 1047 (9th Cir. 2012)

(reciting elements). As to the first element, Chabad failed to produce any evidence

that creates a factual dispute about whether it made false claims. With respect to

the second element, Chabad abandoned its materiality argument below, and no

intervening law exists to excuse the waiver. USA Petroleum Co. v. Atl. Richfield

Co., 13 F.3d 1276, 1285 (9th Cir. 1994). On the fourth element, the government

was required to prove only that Chabad acted with “deliberate ignorance” or

“reckless disregard,” not that Chabad had a specific intent to defraud. 31 U.S.C.

§§ 3729(b)(1)(A)(ii)-(iii); 3729(b)(1)(B). Given undisputed evidence that Chabad

ignored expert advice about handling grant funds and Rabbi Cunin’s testimony

about Chabad’s use of the funds, the government met this standard as a matter of

law.

       Chabad failed to raise its arguments, regarding (1) whether the government

was entitled to damages and (2) the applicable statutory penalties, in the district

court. In its briefing of these issues, Chabad does not assert that these issues are

                                           2                                     15-17246
exceptions to its waiver of the issues below, thus the arguments are waived. See

Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009). As to its argument that

the district court erred in its approach to calculating the damages, Chabad also did

not raise that issue below. It argues instead that it is an exception to the waiver

rule, because it is a legal issue. However, the district court’s calculation of treble

damages was consistent with United States v. Eghbal, 548 F.3d 1281, 1285 (9th

Cir. 2008), and United States v. Bornstein, 423 U.S. 303, 314-17 (1976). Lastly,

Chabad failed to raise its argument below that the judgment violated the Excessive

Fines Clause of the Eighth Amendment, which it acknowledges is a factual issue

and thus not one of the exceptions to waiver. See United States v. Bajakajian, 524

U.S. 321, 334 (1998).

      AFFIRMED.

                                           3                                     15-17246