United States ex rel. Plumbers & Steamfitters Local Union No. 38 v. C.W. Roen Construction Co.

SILVERMAN, Circuit Judge,

dissenting:

The majority’s discourse on labor law is interesting, scholarly, probably correct, but largely beside the point. This is a False Claims Act case. The point is not whether an area practice survey is the only way to establish prevailing wages. The point is that the undisputed facts did not show that Roen’s certifications, even if incorrect, were made with an intent to deceive as required by the FCA.

“For a qui tarn action to survive summary judgment, the relator must produce sufficient evidence to support an inference of knowing fraud.” United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1267 (emphasis added) (quoting United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810, 815 (9th Cir.1995)). As we said in Wang v. FMC Corp., 975 F.2d 1412, 1421 (9th Cir.1992):

The weakest account of the act’s “requisite intent” is the “knowing presentation of what is known to be false.” Citing *1096Hagood, supra, 929 F.2d at 1421. The phrase “known to be false” in that sentence does not mean “scientifically untrue”; it means “a lie.”

This is especially true in a False Claims Act case premised on a false certification. In Hopper, we specifically held, “For a certified statement to be ‘false’ under the Act, it must be an intentional, palpable lie.” Hopper, 91 F.3d at 1267. The majority argues that these principles are “extraneous comments” that have been “read out of context to suggest that the FCA requires an intentional lie to trigger liability, ... ” With all due respect, if anything is out of context, it is the attempt to apply the False Claims Act to the resolution of a jurisdictional dispute between two unions, especially when one of the unions is not even a party to the lawsuit.

It is undisputed that at the time Roen submitted its first certification, both the Laborers and the Plumbers claimed jurisdiction over the piping work at the Laguna project. Two years earlier, prior to the commencement of the job, the Plumbers and the Laborers had a jurisdictional agreement regarding the type of work in issue. The two unions had agreed that it was Plumbers’ work. It is undisputed that before Roen ever filed its first allegedly fraudulent certification, the Laborers rescinded the agreement and claimed the work as their own. The majority makes much of the 1994 letter from the Department of Labor. The problem with the letter is that it is specifically premised on the existence of the Plumbers-Laborers agreement, the very agreement that the Laborers rescinded before the Laguna job began.

Perhaps the Laborers’ attempted recission of the agreement was ineffective. Perhaps Roen could have sought a clarification. Perhaps Roen was governed by the Department of Labor’s letter regardless of the status of the jurisdictional dispute between the Plumbers and the Laborers. Perhaps an area practice survey is not a prerequisite to the determination of prevailing wages. Perhaps, in other words, Roen’s certifications were mistaken. All that may be true, but in a False Claims Act case, that’s not enough. To survive Roen’s summary judgment motion, the Plumbers also had to show that Roen acted with an intent to deceive. In my view, Judge Illston got it exactly right when she held that in light of the then-existing jurisdictional war between the two unions, “[The Plumbers] are unable to show that [Roen] knew of an intentional misclassification in their payroll records.” I would affirm.