FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
NYLE J. HOOPER,
Plaintiff-Appellant,
v. No. 11-55278
LOCKHEED MARTIN CORPORATION, D.C. No.
Defendant-Appellee, 2:08-cv-00561-DSF-
FMO
UNITED STATES OF AMERICA, Ex OPINION
rel.,
Plaintiff.
Appeal from the United States District Court
for the Central District of California
Dale S. Fischer, District Judge, Presiding
Argued and Submitted
May 10, 2012—Pasadena, California
Filed August 2, 2012
Before: Harry Pregerson, Susan P. Graber, and
Marsha S. Berzon, Circuit Judges.
Opinion by Judge Pregerson
8543
8546 HOOPER v. LOCKHEED MARTIN
COUNSEL
Joseph A. Black, The Cullen Law Firm, PLLC, Washington,
D.C., for the plaintiff-appellant.
Mark R. Troy and Mana E. Lombardo, Crowell & Moring,
LLP, Los Angeles, California for the defendant-appellee.
Catherine Y. Hancock, United States Department of Justice,
Washington, D.C., for the amicus.
OPINION
PREGERSON, Circuit Judge:
Plaintiff-Appellant Nyle J. Hooper brings suit under the qui
tam provisions of the False Claims Act (“FCA”), 31 U.S.C.
§§ 3729-3733, against Lockheed Martin Corporation
(“Lockheed”). The FCA permits individuals, known as “rela-
tors,” to file suit on behalf of the United States seeking dam-
ages from persons who file false claims for government funds.
HOOPER v. LOCKHEED MARTIN 8547
31 U.S.C. § 3730(b)(1). Hooper alleges that Lockheed
defrauded the United States Air Force under a contract for the
Range Standardization and Automation (“RSA”) IIA program
concerning software and hardware used to support space
launch operations at Vandenberg Air Force Base and Cape
Kennedy. Hooper filed his qui tam suit in the District Court
for the District of Maryland, which transferred the suit at
Lockheed’s request to the Central District of California on
forum non conveniens grounds. The California district court
granted summary judgment in favor of Lockheed on all
grounds.
For the reasons set forth below, we affirm in part and
reverse in part the district court’s grant of summary judgment.
BACKGROUND1
A.
Relator Hooper worked for six years for Lockheed. He was
hired on April 29, 1996, as a Senior Research Operations
Engineer and later became a Senior Project Engineer assigned
to work on the RSA IIA Program. On July 19, 2002, Hooper
was involuntarily terminated after investigating the fraud
alleged in his qui tam complaint and after threatening to
report the fraud to the government.
On July 18, 2005, Hooper filed his qui tam action in Mary-
land against Lockheed, asserting causes of action under the
qui tam provisions of the FCA and under § 3730(h) of the
FCA for retaliation in employment for FCA-protected activ-
ity. In addition, Hooper alleges that Lockheed violated the
FCA by: (1) knowingly underbidding the contract; (2) includ-
ing undisclosed freeware in software deliverables that did not
1
Because we are reviewing a grant of summary judgment in favor of
Lockheed, we state the facts in the light most favorable to Hooper. Dark
v. Curry County, 451 F.3d 1078, 1082 n.2 (9th Cir. 2006).
8548 HOOPER v. LOCKHEED MARTIN
convey all intellectual property rights; and (3) failing to per-
form all required tests or improperly conducting those tests.
B.
In 1995, the United States Air Force awarded the RSA IIA
contract to a predecessor of Lockheed.2 The objective of the
contract is to “automate, standardize, and modernize software
and hardware used to support our nation’s space launch oper-
ations . . . at Vandenberg Air Force Base (Western Range)
and Cape Kennedy (Eastern Range), while also providing
continued support for and transition from legacy systems.”
The contract is a cost reimbursement plus award fee con-
tract, under which the contractor is not paid a fixed price, but
instead is reimbursed for its actual costs and receives periodic
award fees based on its overall performance, including spend-
ing less money than estimated. The Air Force concluded that
the contract would be a cost-reimbursement contract because
“uncertainties inherent in the requirements render attempts to
establish a fixed-price unrealistic.”
At the original contract competition, the Air Force issued
to potential bidders a Request for Proposal (“RFP”). The RFP
laid out six factors that the Air Force would consider in decid-
ing which company would win the contract. The first four fac-
tors (management, systems engineering, systems integration,
and product development) were first and equal in importance.
The fifth factor — cost — was second in importance, but was
a significant consideration in the decisional process. The Air
Force “informed the offerors that it may select an offer that
is not the lowest priced technically acceptable offer, but may
instead select a higher priced offer that represented the ‘Best
Value’ to the Government.”
2
Lockheed took over the performance of the RSA IIA contract, as the
successor company. It is undisputed that Lockheed stands in the shoes of
the predecessor and assumes liability. For the sake of consistency, we will
refer to Lockheed only.
HOOPER v. LOCKHEED MARTIN 8549
Three companies responded to the RFP. Lockheed’s initial
bid was $439.2 million, but its Best and Final Offer was
$432.7 million. To compare the three final offers, the Air
Force hired independent consultants to create an “Independent
Government Estimate.”
After conferring with independent consultants, the Air
Force drafted a memorandum summarizing the bid process.
The memorandum concludes, in relevant part, as follows:
[Lockheed’s] cost estimating and risk analysis
practices were assessed for compatibility with the
technical approach and for the probable accuracy of
the methodologies employed. . . . The assessment . . .
found that [Lockheed] employed realistic methods
. . . but was optimistic about some of the inputs to
the methodology, resulting in an overstated potential
for cost savings. [Lockheed’s] Risk Analysis was
found to be unrealistic: the methodology employed
is sound in theory, but the inputs (severity of certain
risks) are understated, so the total risk is understated.
Also, technical risks are not explicitly quantified, as
specified in the RFP. However, defects in the Risk
Analysis were not considered a discriminator, since
the Risk Analysis accounted for only a portion of
one of the Cost Factors. Overall, [Lockheed] was
found “realistic” for this factor.
In its summary, the Air Force stated that although Lock-
heed did not submit the lowest bid, Lockheed’s bid provided
the “best overall value,” knowing that it was possible that
there were “risks” that might “lead to cost growth beyond tar-
get cost.” The Air Force concluded that “the risk potential is
acceptable . . . and . . . determined that a fair and reasonable
price was obtained without reliance on certified cost or pric-
ing data.” Accordingly, the Air Force awarded Lockheed the
RSA IIA contract. Lockheed has been paid more than $900
million for its work on the RSA IIA contract. Hooper did not
8550 HOOPER v. LOCKHEED MARTIN
work for Lockheed when Lockheed’s proposal was prepared
or when the Air Force awarded Lockheed the RSA IIA con-
tract.
Lockheed employee Mike Allen, one of the individuals
who prepared cost estimates for the RSA IIA program, testi-
fied that Lockheed employees were instructed to lower their
estimates without regard to actual costs. Although Allen did
not see the final bid, he saw “some of the workups that they
had done in the bidding process.” He concluded that the
inputs used to compute the final bid were based on “bad, bad
guesses” but were not false.
C.
1.
After winning the contract, Lockheed sent the Air Force a
series of seven letters in which Lockheed disclosed its use of
“software to be provided with less than unlimited rights”
(“Disclosure Letters”). This software, also referred to as
“FOSS”, is “freely downloadable open source software from
which the human-readable source code is available for use,
study, reuse, modification, enhancement, and redistribution by
the users of that software.” FOSS can be downloaded at no
charge, but “comes with license restrictions which are gener-
ally aimed at preserving the free and open nature of the partic-
ular FOSS product.” The Disclosure Letters listed a
description of the software, the name of the manufacturer, the
product in which it is used, the intended use, and the software
license type. The Letters also “requested that the Air Force
review the identified items, and provide its concurrence with
[Lockheed’s] use of them.”
The Air Force Contracting Officer issued responses to these
Disclosure Letters and approved each use of the disclosed
FOSS. For example, in its June 2, 2005 response letter, the
government stated that “the Government hereby acknowl-
HOOPER v. LOCKHEED MARTIN 8551
edges and approves the use of the subject software by [Lock-
heed]” and “[t]he Government believes this discretion to be
within the current contractual requirements[,] estimated costs,
and terms and conditions.“
Marilyn Washington, the Air Force Contracting Officer for
the RSA IIA program from 2000-2005, testified that she inter-
acted daily with Lockheed personnel on the RSA IIA pro-
gram. As Contracting Officer, she was required to respond to
Lockheed’s Disclosure Letters. Relying on Air Force Deputy
Program Manager Cory Pike, she responded to the Lockheed
Disclosure Letters approving the use of the FOSS items listed
in the letter. “At no point during [her] tenure as Contracting
Officer on the RSA IIA contract” did Washington recall “any-
one ever saying that FOSS was not permissible under the con-
tract.” Nor was she “aware of any violations by Lockheed
Martin under the RSA IIA contract.” Washington did not
believe that there was any obligation under the RSA IIA con-
tract that required Lockheed to disclose the use of freeware at
any time.
Pike stated that he interacted daily with Lockheed regard-
ing the RSA IIA program. Pike was “the Air Force person in
charge of coordinating the Air Force’s assessment of the use
or incorporation of [FOSS].” He stated that the Air Force
employed independent contractors to provide the Air Force
“with assessments of various technical issues under the RSA
IIA contract, including technical assessments about the use of
FOSS.” Pike provided the independent assessments and his
own recommendation to Washington, who formally approved
the use of the disclosed FOSS. He stated that he “never had
any reason to believe that Lockheed Martin should have made
its FOSS disclosures at some earlier point in time.” Pike also
said that “the Air Force, at all times, had the opportunity and
option to make changes to exclude the use of FOSS if it had
deemed such changes necessary. The Air Force did not deem
any such changes necessary or important.”
8552 HOOPER v. LOCKHEED MARTIN
At his deposition, Hooper admitted that he does not know
if there is any particular contract provision, Air Force man-
date, standard, or any other requirement that dictates the tim-
ing of the disclosure of the use of FOSS in the RSA IIA
contract. He further admitted that his claim regarding the Air
Force’s fraudulent use of FOSS was based on guesswork and
Google searches.
2.
Lockheed invited the Air Force and its consultants to
observe its RSA IIA program testing. The Air Force consul-
tants had keys to Lockheed’s facilities, and some Air Force
consultants had offices in those facilities. The Air Force and
its consultants “reviewed and commented on test plans and
procedures, discussed testing verification methods, reviewed
test reports, and witnessed testing.”
Hooper was not involved with testing for the RSA IIA pro-
gram. He admitted that he “has no personal knowledge to sup-
port his allegation that Lockheed Martin had a ‘practice’ of
not performing 30-50% of testing.” He also admitted that his
allegations based on testing are “predicated on information
provided to him by” two other Lockheed employees.
PROCEEDINGS
On July 18, 2005, Hooper filed his qui tam action under the
FCA against Lockheed, asserting causes of action under the
qui tam provisions of the FCA and under § 3730(h) of the
FCA for retaliation in employment for FCA-protected activ-
ity. Hooper originally filed his complaint in the District Court
for the District of Maryland. While the case was pending in
Maryland district court, the United States declined to inter-
vene in the case. On January 4, 2008, the Maryland district
court granted Lockheed’s motion to transfer the case to the
Central District of California on forum non conveniens
grounds.
HOOPER v. LOCKHEED MARTIN 8553
On August 12, 2008, the California district court granted
Lockheed’s motion to dismiss with leave to amend Hooper’s
Second Amended Complaint, except with regard to Hooper’s
retaliation claim. As to that claim, the district court dismissed
with prejudice, holding that the claim was barred by Califor-
nia’s two-year statute of limitations.
On September 5, 2008, Hooper filed his Third Amended
Complaint. In his Third Amended Complaint, Hooper alleges
that Lockheed violated the FCA by: (1) knowingly underbid-
ding the contract; (2) including undisclosed FOSS in software
deliverables that did not convey all intellectual property
rights; and (3) failing to perform all required tests or improp-
erly conducting those tests.
On November 22, 2010, Lockheed moved for summary
judgment. Lockheed also filed 52 evidentiary objections to
Hooper’s factual submissions in support of summary judg-
ment. After Hooper filed a response to the motion for sum-
mary judgment and the United States filed an amicus curiae
brief, the district court granted Lockheed’s motion for sum-
mary judgment, ruling that (1) Hooper had not presented suf-
ficient evidence of fraudulent underbidding to allow his claim
to survive summary judgment; (2) Hooper’s claims regarding
FOSS are “completely unsupported”; and (3) there is “no evi-
dence to support any fraud in the RSA IIA testing.” The dis-
trict court declined to reach Lockheed’s argument that a
fraudulent underbid or false estimate can never create liability
under the FCA.
ANALYSIS
I.
[1] As noted, Hooper brings a claim under 31 U.S.C.
§ 3730(h), alleging that he was wrongfully discharged in
retaliation for FCA-protected activity. The FCA protects
8554 HOOPER v. LOCKHEED MARTIN
“whistle blowers” from retaliation by their employers.3
Because § 3730(h) contains no express limitations period, the
court borrows the most closely analogous state statute of limi-
tations. See Graham Cnty. Soil & Water Conservation Dist.
v. United States ex rel. Wilson, 545 U.S. 409, 422 (2005)
(holding that in assessing timeliness of a FCA retaliation
claim, courts should borrow the most closely analogous state
limitations period). Hooper argues that the district court
should have applied Maryland’s three-year statute of limita-
tions, not California’s two-year statute. We review de novo
the district court’s determinations with respect to the statute
of limitations. Lukovsky v. City of San Francisco, 535 F.3d
1044, 1047 (9th Cir. 2008).
A.
Hooper properly filed his case in Maryland, where Lock-
heed’s corporate headquarters are located. The Maryland dis-
trict court granted Lockheed’s motion to transfer the case to
the Central District of California, on forum non conveniens
grounds, under 28 U.S.C. § 1404(a).
[2] In Van Dusen v. Barrack, the Supreme Court held that
after a transfer pursuant to 28 U.S.C. § 1404(a), the transferee
district court generally must apply the state law that the trans-
feror district court would have applied had the case not been
moved. 376 U.S. 612, 639 (1964). Hooper argues that, under
Van Dusen, the California district court, as the transfee court,
was required to apply the law that a Maryland district court
would have applied, including Maryland’s statute of limita-
tions. For the reasons set forth below, we agree that the dis-
trict court erred in applying California’s two-year statute of
3
The FCA makes it illegal for an employer to “discharge[ ], demote[ ],
suspend[ ], threaten[ ], harass[ ], or in any other manner discriminate[ ]
against [an employee] in the terms and conditions of employment because
of lawful acts done by the employee . . . in furtherance of an action under
this section.” 31 U.S.C. § 3730(h)(1).
HOOPER v. LOCKHEED MARTIN 8555
limitations, rather than Maryland’s three-year statute of limi-
tations.
Van Dusen arose under diversity jurisdiction and the case
presented to this court arose under federal question jurisdic-
tion. See id. at 637-38. Still, Van Dusen’s analysis is not
wholly inapplicable here. Van Dusen concluded that “[a]
change of venue under § 1404(a) generally should be, with
respect to state law, but a change of courtrooms.” Id. at 639.
The Supreme Court reasoned that to hold otherwise, “a defen-
dant’s motion to transfer could be tantamount to a motion to
dismiss.” Id. at 630. Following Van Dusen, the Supreme
Court rendered its decision in Ferens v. John Deere Co.,
another case that arose under diversity jurisdiction. 494 U.S.
516, 529 (1990). In Ferens, the Supreme Court held:
We reasoned in Van Dusen that, if the law changed
following a transfer initiated by the defendant, a dis-
trict court “would at least be reluctant to grant trans-
fers, despite considerations of convenience, if to do
so might conceivably prejudice the claim of a plain-
tiff.” The court, to determine the prejudice, might
have to make an elaborate survey of the law, includ-
ing statutes of limitations, burdens of proof, pre-
sumptions, and the like. This would turn what is
supposed to be a statute for convenience of the
courts into one expending extensive judicial time
and resources. Because this difficult task is contrary
to the purpose of the statute, in Van Dusen we made
it unnecessary by ruling that a transfer of venue by
the defendant does not result in a change of law.
Id. at 528-29 (citation omitted).
Circuits have diverged on the issue of whether Van Dusen
applies to cases arising under federal question jurisdiction
with embedded state law issues. In Menowitz v. Brown, the
Second Circuit concluded that Van Dusen was limited to
8556 HOOPER v. LOCKHEED MARTIN
diversity cases and that the “ ‘choice of a limitations period
for a federal cause of action is itself a question of federal
law.’ ” 991 F.2d 36, 41 (2d Cir. 1993) (per curiam) (quoting
DelCostello v. Int’l Bhd. of Teamsters, 462 U.S. 151, 159 n.13
(1983)); see also Lanfear v. Home Depot, Inc., 536 F.3d 1217,
1223 (11th Cir. 2008); Howard v. Roadway Express, Inc., 726
F.2d 1529, 1531 (11th Cir. 1984).
By contrast, in Eckstein v. Balcor Film Investors, the Sev-
enth Circuit held that Van Dusen is not limited to diversity
cases. 8 F.3d 1121, 1127 (7th Cir. 1993). The court reasoned
that, “[w]hen the law of the United States is geographically
non-uniform, a transferee court should use the rule of the
transferor forum,” including when a federal statute “leads fed-
eral courts to use state law as the basis of a federal period of
limitations.” Id. The normal rule that “each court of appeals
considers the question independently and reaches its own
decision,” the court observed, is based on the idea that “[a]
single federal law implies a national interpretation.” Id. at
1126. When federal law is necessarily non-uniform, as when
federal courts “use state law as the basis of a federal period
of limitations,” this justification collapses. Id. at 1127. In such
situations, requiring federal courts to borrow the limitations
periods of the transferee forum runs afoul of Van Dusen’s
command “that a transfer under § 1404(a) accomplishes ‘but
a change of courtrooms.’ ” Id. (quoting Van Dusen, 376 U.S.
at 639). Federal law is not “supposed to be unitary,”
Menowitz, 991 F.2d at 40, when it is borrowing limitations
periods from the states, and so applying the law of the trans-
feree forum works a real injustice, because a motion to trans-
fer a properly filed suit can become “tantamount to a motion
to dismiss.” Van Dusen, 376 U.S. at 630.
Following Eckstein, in Olcott v. Delaware Flood Co., the
Tenth Circuit applied the appropriate limitations period from
the transferor court in its sister circuit to a federal statute. 76
F.3d 1538, 1546-47 (10th Cir. 1996). The Tenth Circuit noted
that this decision should not “be read to imply Van Dusen and
HOOPER v. LOCKHEED MARTIN 8557
Ferens have any broad applicability to federal question juris-
diction generally” but, nevertheless, the Tenth Circuit fol-
lowed the reasoning of Van Dusen and Ferens in a federal
question case to determine the appropriate borrowed statute of
limitations. Id.; see also In re Ford Motor Co., 591 F.3d 406,
413 n.15 (5th Cir. 2009) (noting that, “[a]lthough there is dis-
agreement among the courts on this point, the better view is”
the Seventh Circuit’s in Eckstein).
[3] We now join the Fifth, Seventh, and Tenth Circuits, in
holding that in a case arising under federal question jurisdic-
tion, when a federal statute directs federal courts to borrow
the most closely analogous state statute of limitations, a trans-
feree district court must apply the state statute of limitations
that the transferor district court would have applied had the
case not been transferred on forum non conveniens grounds
pursuant to 28 U.S.C. § 1404(a). Therefore, Maryland’s three-
year statute of limitations applies. Md. Cts. & Jud. Proc.
Code. Ann. § 5-101. Accordingly, we remand Hooper’s
§ 3730(h) retaliation claim to the district court so that that
claim may proceed on the merits.4
4
Neither party raised the question whether a rule other than the “forum
state” rule applies in determining whether we apply Maryland’s three-year
statute of limitations or California’s two-year statute. Both parties agree
that this court applies the forum state’s own statute of limitations. In dis-
pute is whether the forum state is Maryland or California. In this opinion,
we conclude that Maryland’s three-year statute of limitations applies
because (1) filing a motion to transfer under § 1404(a), forum non conve-
niens, accomplishes “but a change of courtrooms,” Van Dusen, 376 U.S.
at 639, and (2) applying the law of the transferee forum (California) would
work a real injustice, because motion to transfer a properly filed suit could
become “tantamount to a motion to dismiss,” id. at 630. We note that our
conclusion does not address a rule other than the “forum state” rule, the
rule that the parties assume applies. Thus, our opinion does not discuss
whether the court applies the forum state’s choice of law rules or the limi-
tations period set by the state “most connected” with the federal claim, or
some combination of these rules. See United States ex rel. Ackley v. IBM,
110 F. Supp. 2d 395, 402-03 (D. Md. 2000) (providing an illuminating
discussion of these issues); see also Chung v. Pomona Valley Cmty. Hosp.,
8558 HOOPER v. LOCKHEED MARTIN
II.
In his Third Amended Complaint, Hooper asserts that
Lockheed violated the FCA by submitting a fraudulently low
bid, based on knowing underestimates of its costs, to improve
its chances of winning the Air Force RSA IIA contract. Lock-
heed asserts that allegedly “false” estimates cannot be the
basis for liability under the FCA, because an estimate is a type
of opinion or prediction, and thus cannot be said to be a “false
statement” within the meaning of the FCA. Specifically,
Lockheed argues that “estimates of what costs might be in the
future are based on inherently judgmental information, and a
piece of purely judgmental information is not actionable as a
false statement.” On this issue alone, the United States filed
an amicus brief, urging this court to hold that a false estimate
and/or fraudulently low bid may be actionable under the FCA.5
A.
[4] The FCA was enacted “during the Civil War in
667 F.2d 788, 791 (9th Cir. 1982) (applying the limitations period set by
the state most connected with the federal claim); Union of Flight Atten-
dants, Local No. 1 v. Air Micronesia, Inc., 684 F. Supp. 1520, 1528-29 (D.
Haw. 1988) (order) (applying its own two-part test incorporating both the
forum state rule and the closely connected rule). Because neither Lock-
heed nor Hooper argued that a rule other than the “forum state” rule
applies, the issue is waived. See O’Guinn v. Lovelock Corr. Ctr., 502 F.3d
1056, 1063 (9th Cir. 2007) (holding that arguments not raised before the
district court generally are waived); Smith v. Marsh, 194 F.3d 1045, 1052
(9th Cir. 1999) (holding that arguments not raised in a party’s opening
brief are generally waived).
5
From this point forward (unless otherwise noted), we use the term
“false estimate” to capture the dual concepts of “fraudulent underbidding”
and “false estimates.” At oral argument, the United States explained a dis-
tinction between the two. However, for purposes of this opinion, we con-
clude that both false estimates and fraudulent underbidding can be a
source of liability under the FCA, assuming that the other elements of an
FCA claim are met.
HOOPER v. LOCKHEED MARTIN 8559
response to overcharges and other abuses by defense contrac-
tors.” United States ex rel. Harrison v. Westinghouse Savan-
nah River Co., 176 F.3d 776, 784 (4th Cir. 1999). The
purpose of the FCA was to “[combat] widespread fraud by
government contractors who were submitting inflated
invoices and shipping faulty goods to the government.”
United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1265-66
(9th Cir. 1996). To this end, the FCA creates liability for any
person who, inter alia, “(A) knowingly presents, or causes to
be presented, a false or fraudulent claim for payment or
approval; [or] (B) knowingly makes, uses, or causes to be
made or used, a false record or statement material to a false
or fraudulent claim.” 31 U.S.C. § 3729(a)(1).
Thus, to establish a cause of action under § 3729(a)(1)(A),
the United States or relator must prove the following ele-
ments: (1) a false or fraudulent claim (2) that was material to
the decision-making process (3) which defendant presented,
or caused to be presented, to the United States for payment or
approval (4) with knowledge that the claim was false or fraud-
ulent. United States v. Bourseau, 531 F.3d 1159, 1171 (9th
Cir. 2008); see also United States ex rel. Cafasso v. Gen.
Dyanmics C4Systems, Inc., 637 F.3d 1047, 1056 (9th Cir.
2011) (holding that “to commit conduct actionable under the
FCA, one must, in some way, falsely assert entitlement to
obtain or retain government money or property”). Likewise,
to establish a cause of action under § 3729(a)(1)(B), the
United States or a relator must show that defendants know-
ingly made, used, or caused to be made or used, a false record
or statement material to a false or fraudulent claim.
B.
[5] Although the issue whether FCA liability may be prem-
ised on false estimates where those false estimates were
knowingly made is a matter of first impression for this court,
both the First and Fourth Circuits have held that FCA liability
8560 HOOPER v. LOCKHEED MARTIN
may attach in such a situation. Their decisions rest heavily on
United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943).
In Hess, the Supreme Court found contractors liable under
the FCA for claims submitted by government contractors that
the contractors obtained by collusive bidding. Id. at 542. Most
courts have interpreted Hess to stand for the “fraud-in-the-
inducement” theory of FCA liability. Accordingly, many
courts, including this court, have applied the FCA to bid-
rigging situations. See United States ex rel Hagood v. Sonoma
Cnty. Water Agency, 929 F.2d 1416, 1420 (9th Cir. 1991); see
also United States v. Gen. Dynamics Corp., 19 F.3d 770, 772,
775 (2d Cir. 1994) (the defendant liable for submitting
inflated cost estimates in subcontract submitted for approval
by the government).
The Fourth Circuit has concluded that, under a fraud-in-
the-inducement theory, construing the phrase “false or fraudu-
lent claim” broadly, FCA liability may attach where there is
“fraud surrounding the efforts to obtain the contract or benefit
status, or the payments thereunder.” Harrison, 176 F.3d at
788. In Harrison, the relator alleged that the defendant was
liable under the FCA because the defendant made several
false statements in seeking government approval for a subcon-
tract, pursuant to which the defendant subsequently made
claims for payment from the government. Id. at 785-86. The
district court expressly “rejected the possibility that [FCA]
liability could rest on false statements submitted to the gov-
ernment to gain approval for a subcontract.” Id. at 785. But
the Fourth Circuit reversed, holding the district court’s narrow
interpretation of a “false or fraudulent claim” to be incorrect.
Id. at 786.
The Fourth Circuit held that, after the 1986 amendments to
the FCA, according to Congress the FCA should be broadly
construed. See id. at 786 (quoting S. Rep. No. 99-345, at 9
(1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5274 (“ ‘each
and every claim submitted under a contract, loan guarantee,
HOOPER v. LOCKHEED MARTIN 8561
or other agreement which was originally obtained by means
of false statements or other corrupt or fraudulent conduct, or
in violation of any statute or applicable regulation, consti-
tutes a false claim’ ”) (emphasis added in case)). Accordingly,
the court explicitly rejected the defendant’s argument that the
alleged false statements could not subject it to liability under
the FCA “because they were only estimates.” Id. at 792. The
Fourth Circuit reasoned that “an opinion or estimate carries
with it ‘an implied assertion, not only that the speaker knows
no facts which would preclude such an opinion, but that he
does know facts which justify it.’ ” Id. (quoting W. Page Kee-
ton et al., Prosser & Keeton on the Law of Torts § 109, at 760
(5th ed. 1984)).
Similarly, the First Circuit ruled that false statements made
by applicants for social security benefits were false statements
within the meaning of the FCA, even if they were just an
expression of the applicants’ opinions, so long as the appli-
cants knew of facts that would reasonably preclude such an
opinion. See United States ex rel. Loughren v. Unum Group,
613 F.3d 300, 310-12 (1st Cir. 2010) (holding that, even if
“the fact that an allegedly false statement constitutes the
speaker’s opinion,” it still “may qualify as a false statement
for purposes of the FCA where the speaker knows facts which
would preclude such an opinion”).
[6] As a matter of first impression, we conclude that false
estimates, defined to include fraudulent underbidding in
which the bid is not what the defendant actually intends to
charge, can be a source of liability under the FCA, assuming
that the other elements of an FCA claim (see p. 8558-59) are
met.
C.
Having determined that FCA liability may be premised on
false estimates, we must now determine whether a genuine
issue of material fact exists as to whether Lockheed engaged
8562 HOOPER v. LOCKHEED MARTIN
in fraudulent underbidding. The district court concluded that
Hooper failed to present sufficient evidence of fraudulent
underbidding. The district court noted that Hooper relied on
“extremely” limited evidence and that, even interpreting this
limited evidence in the light most favorable to Hooper, none
of it demonstrated that Lockheed “knowingly submitted a
false bid to the Air Force.”
On appeal, Hooper argues that (1) the district court applied
the wrong legal standard; and (2) Hooper supplied sufficient
information for a jury to determine that Lockheed acted
knowingly in submitting a false bid. Because the district court
applied the wrong legal standard and that under the correct
standard, “viewing the evidence in the light most favorable to
[Hooper as the] non-moving party and drawing all reasonable
inferences in favor of [Hooper],” genuine issues of material
fact exist, Lockheed is not entitled to judgment as a matter of
law. Range Rd. Music, Inc. v. E. Coast Foods, Inc., 668 F.3d
1148, 1152 (9th Cir. 2012).
1.
[7] The district court applied the wrong legal standard
under the “knowledge” prong of the FCA. The district court
required that Hooper demonstrate that Lockheed acted with
“the intent to deceive.” The FCA provides that
the terms “knowing” and “knowingly” —
(A) mean that a person, with respect to information
—
(i) has actual knowledge of this informa-
tion;
(ii) acts in deliberate ignorance of the truth
or falsity of the information; or
HOOPER v. LOCKHEED MARTIN 8563
(iii) acts in reckless disregard of the truth or
falsity of the information; and
(B) require no proof of specific intent to defraud[.]
31 U.S.C. § 3729(b)(1) (emphasis added). Accordingly, the
district court employed the wrong legal standard for determin-
ing FCA liability with regard to whether Hooper had estab-
lished that Lockheed “knowingly” submitted a fraudulent
underbid.6
2.
Construing the facts in the light most favorable to Hooper,
there is a genuine issue of material fact whether Lockheed
acted either knowingly, in deliberate ignorance of the truth, or
in reckless disregard of the truth when it submitted its bid for
the Air Force RSA IIA contract.
Hooper demonstrated that Lockheed employees were
instructed to lower their bids without regard to actual cost.
Mike Allen, an employee with Lockheed, testified that the Air
Force did not accept Lockheed’s initial bid because it was too
high. Subsequently, Allen “was simply asked [by manage-
ment] to change the cost” even though the change in cost was
not based on any engineering judgment. Allen also testified
that, in bidding on another contract, he was told to lower the
cost. When Allen told his supervisors, “We can’t. This is the
real cost. This is what it’s going to cost, if not more,” he was
6
Lockheed argues that the incorrect legal standard employed by the dis-
trict court resulted in “harmless error.” We disagree. In its final sentences
regarding the fraudulent underbidding, the district court concluded that,
despite Hooper’s producing evidence that “might be consistent with fraud-
ulent underbidding,” he “has no evidence as to . . . [Lockheed]’s state of
mind in making the bid and estimate choice that [it] did.” Thus, contrary
to Lockheed’s argument, the district court’s use of the wrong legal stan-
dard played a pivotal role in its legal analysis of the facts and did not
result in “harmless error.”
8564 HOOPER v. LOCKHEED MARTIN
dismissed from the bidding contract meeting. Allen later
learned that Lockheed lowered the cost by almost half and
was awarded the contract. He also testified that Lockheed was
dishonest in the productivity rates that it used to determine the
cost for a contract.
Further, in the Air Force memorandum analysis of Lock-
heed’s bid, the Air Force noted that Lockheed was “optimistic
about some of its inputs . . . , resulting in an overstated poten-
tial for cost savings.” Additionally, the Air Force stated that
it found Lockheed’s Risk Analysis to be “unrealistic . . . , so
the total risk is understated.” On the other hand, the Air Force
stated that “[o]verall, [Lockheed] was found ‘realistic’ for this
factor.” The memorandum found that Lockheed’s bid pro-
vided the best overall value, even if it was possible that there
were risks which might “lead to cost growth beyond target
cost.”
[8] Because there is a genuine issue as to whether Lock-
heed had actual knowledge, deliberately ignored the truth, or
acted in reckless disregard of the truth when it submitted its
allegedly false bid for the RSA IIA contract, we reverse and
remand to the district court. See Balint v. Carson City, 180
F.3d 1047, 1054 (9th Cir. 1999) (en banc) (when reviewing
a district court’s grant of summary judgment, this court must
not weigh the evidence or determine the truth of the matter
but only determine whether there is a genuine issue for trial).7
III.
In addition to his claims of retaliation and fraudulent under-
bidding, Hooper alleges that Lockheed fraudulently used free-
ware and employed defective testing procedures. The district
7
Responding to Hooper’s argument that the district court applied the
wrong legal standard to the FCA’s knowledge requirement, 31 U.S.C.
§ 3729(b), Lockheed suggests that this error was harmless. We decline to
reach this issue at this stage.
HOOPER v. LOCKHEED MARTIN 8565
court dismissed these claims in its order granting summary
judgment. We affirm.
With regard to the freeware, the district court concluded
that: (1) Hooper had “no apparent foundation” and provided
“no evidence” to support his argument that the same code
used in the identified FOSS, which was submitted three days
after Hooper’s opposition was due, was the same code as that
in the RSA IIA software; (2) Hooper failed to identify any
requirement that FOSS be disclosed at any particular time;
and (3) it was “undisputed” that Lockheed was allowed to use
FOSS. Moreover, the court noted that Air Force personnel
responsible for oversight of the RSA IIA project testified that
there is no requirement that FOSS be disclosed.
With regard to fraudulent testing, the district court similarly
found Hooper’s claim to be unsupported. The district court
concluded that there was no evidence of fraud in the testing
because the Air Force was aware of and approved Lockheed’s
testing methods, even if the tests were not done in the order
specified in the contracts.
[9] After the 1986 amendments to the FCA, “government
knowledge is no longer an automatic bar to suit, [and as a
result,] courts have had to decide case by case whether a FCA
claim based on information in the government’s possession
can succeed.” United States ex rel. Butler v. Hughes Helicop-
ters, Inc., 71 F.3d 321, 326 (9th Cir. 1995). Although the gov-
ernment’s “knowledge of the underlying facts is not
automatically a complete defense when that knowledge
appears only as an allegation on the face of a complaint under
the FCA, . . . Hagood left open the possibility that at the sum-
mary judgment stage or after trial, the extent and the nature
of government knowledge may show that the defendant did
not ‘knowingly’ submit a false claim and so did not have the
intent required by the post-1986 FCA.” Id. at 327 (citing
Hagood, 929 F.2d at 1418-19, 1421). Based on the facts
before the court, the court held that it “must affirm the
8566 HOOPER v. LOCKHEED MARTIN
directed verdict.” Id.; see also Wang ex rel. United States v.
FMC Corp., 975 F.2d 1412, 1421 (9th Cir. 1992) (holding
that because the defendant had shared with the Army all of
the mistakes and limitations that later became the subject of
Wang’s FCA allegations, Wang had not produced the
required evidence of intent).
[10] The same reasoning applies here, where Lockheed
submitted overwhelming evidence that it shared with the Air
Force in its Disclosure Letters the use of FOSS and also dis-
closed to the Air Force its testing procedures. Accordingly,
Hooper’s claims fail because he has failed to demonstrate the
existence of a genuine issue of material fact as to whether
Lockheed “knowingly” submitted a false claim.
IV.
Hooper contends that the district court erred in excluding
(A) several documents; (B) the deposition transcript of Lock-
heed employee Greg Braun; and (C) an expert witness report.
“The district court’s exclusion of evidence in a summary
judgment motion is reviewed for an abuse of discretion.” Orr
v. Bank of Am., 285 F.3d 764, 773 (9th Cir. 2002).
A.
[11] Hooper contends that the district court erred in
excluding documents obtained during discovery. Without a
discussion of any specific piece of evidence and without cit-
ing any cases, Hooper generally asserts that “[a]ll of the docu-
ments Hooper produced were obtained by him while he was
at Lockheed and were either ‘a report or e-mail where there
is some indication that the subject matter is within the scope
of the writer’s normal duties’ ” and that “[m]any of these doc-
uments were also produced by Lockheed to Hooper.” It is
entirely unclear which specific pieces of evidence Hooper is
referring to and it is equally unclear on what legal basis(es)
he believes the document(s) should be admitted. As the party
HOOPER v. LOCKHEED MARTIN 8567
seeking admission of these documents, Hooper bears “the
burden of proof to show [their] admissibility.” Nursing Home
Pension Fund, Local 144 v. Oracle Corp. (In re Oracle Corp.
Sec. Litig.), 627 F.3d 376, 385 (9th Cir. 2010). Here, “[g]iven
the overwhelming volume of documents before the district
court, once Defendants objected to the evidence Plaintiff[ ]
sought to be admitted, the onus was on Plaintiff[ ] to direct
the district court’s attention to . . . evidentiary principles
under which the evidence in question could be deemed admis-
sible.” Id. at 385-86. Hooper failed to direct the district
court’s attention to any evidentiary principle and has also
failed to do so on appeal. Accordingly, the district court was
within its discretion to exclude these documents.
B.
[12] Hooper’s opposition to Lockheed’s motion for sum-
mary judgment was due on December 13, 2010. On Decem-
ber 29, 2010, Hooper deposed Lockheed employee Braun. On
January 7, 2011, at around 6:00 p.m., less than three days
before the hearing on Lockheed’s motion for summary judg-
ment, Hooper filed the deposition transcript of Braun and
other exhibits. The district court refused to consider the Braun
deposition transcript and the other exhibits submitted on Janu-
ary 7, 2011, because it found the transcript and exhibits to be
untimely. The district court’s decision was not an abuse of
discretion. Excluding a deposition transcript filed less than
three days before a hearing and long past the deadline for sub-
mitting such materials is within the discretion of the district
court. See Hambleton Bros. Lumber Co. v. Balkin Enters.,
Inc., 397 F.3d 1217, 1226 (9th Cir. 2005) (finding no abuse
of discretion to exclude a declaration when deadline for the
summary judgment opposition lapsed forty-seven days ear-
lier).
C.
Dr. Lewis Gray is an expert with specialized knowledge of
MIL-STD 498, which is allegedly the standard requirement
8568 HOOPER v. LOCKHEED MARTIN
regarding software used in government contracts. Dr. Gray
participated in the creation of MIL-STD 498 and taught
classes on compliance with the standard. He has also written
articles and a handbook on the application of MIL-STD 498.
Dr. Gray drafted a report at the request of Hooper. Accord-
ing to Dr. Gray, under the RSA IIA contract, Lockheed’s per-
formance was governed in large part by MIL-STD 498.
Therefore, Dr. Gray’s report focuses on Lockheed’s perfor-
mance under the MIL-STD 498 standard.
The district court refused to consider Dr. Gray’s report
because (1) the opinions were improper legal conclusions and
(2) Dr. Gray lacked personal knowledge to lay the proper
foundation for the report. Specifically, the court concluded
that Dr. Gray’s “expert opinion consists entirely of improper
legal conclusions and opinions regarding government regula-
tions and policies.”
Under Federal Rule of Evidence 702, matters of law are
inappropriate subjects for expert testimony. Hooper contends,
however, that the district court abused its discretion in exclud-
ing Dr. Gray’s report because the case falls under the excep-
tion to the general rule: in “highly complex and technical”
cases, a trial judge may permit some testimony at variance
with the general rule. Specifically, Hooper contends that the
expert report was necessary “to determine whether Lock-
heed’s performance under the contract did in fact violate the
requirements of MIL-STD 498.” Hooper asserts that this is a
“complex question, which cannot be easily answered without
the assistance of an expert.”
Hooper relies in large part on Flores v. Arizona, 516 F.3d
1140 (9th Cir. 2008), reversed on other grounds by Horne v.
Flores, 557 U.S. 433 (2009). Flores held that, although “[i]t
is true that matters of law are generally inappropriate subjects
for expert testimony, . . . there may be instances in rare,
highly complex and technical matters where a trial judge, uti-
HOOPER v. LOCKHEED MARTIN 8569
lizing limited and controlled mechanisms, and as a matter of
trial management, permits some testimony seemingly at vari-
ance with the general rule.” Id. at 1166 (internal quotation
marks and citation omitted). That case, however, does not
hold that a district court is required to accept such expert tes-
timony. To the contrary, in Flores the district court permitted
the expert testimony, and we upheld its decision. Contrary to
Hooper’s urging, Flores does not stand for the proposition
that a district court must accept such expert testimony.
[13] In fact, “even if [expert] testimony may assist the trier
of fact, the trial court has broad discretion to admit or exclude
it.” Beech Aircraft Corp. v. United States, 51 F.3d 834, 842
(9th Cir. 1995) (per curiam) (internal quotation marks omit-
ted). Here, the trial court was in the best position to determine
whether Dr. Gray’s report would be helpful to its analysis. Id.
Accordingly, we affirm the district court on this issue.
CONCLUSION
We affirm in part and reverse and remand in part. We
AFFIRM the district court’s conclusion that Hooper failed to
establish his claims of fraudulent use of FOSS and defective
testing procedures because there is no genuine issue of mate-
rial fact as to whether Lockheed ‘knowingly’ submitted a
false claim.
We also AFFIRM the district court’s evidentiary rulings.
We REVERSE and REMAND the district court’s dismissal
of Hooper’s wrongful discharge claim under 31 U.S.C.
§ 3730(h) as barred by California’s two-year statute of limita-
tions. We hold that in a case arising under federal question
jurisdiction, when a federal statute directs federal courts to
borrow the most closely analogous state statute of limitations,
a transferee district court must apply the state statute of limi-
tations that the transferor district court would have applied
had the case not been moved on forum non conveniens
8570 HOOPER v. LOCKHEED MARTIN
grounds pursuant to 28 U.S.C. § 1404(a). Therefore, Mary-
land’s three-year statute of limitations applies here.
We also REVERSE and REMAND the district court’s dis-
missal of Hooper’s claim that Lockheed violated the FCA by
knowingly underbidding the contract. Having determined that
FCA liability may be premised on false estimates, we hold
that there is a genuine issue of material fact whether Lock-
heed acted either knowingly, in deliberate ignorance of the
truth, or in reckless disregard of the truth when it submitted
its bid for the Air Force RSA IIA contract.
The parties shall bear their own costs of appeal.