United States Ex Rel. Totten v. Bombardier Corp.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 4, 2002 Decided April 16, 2002

No. 01-7071

United States of America, ex rel. Edward L. Totten,
Appellant

v.

Bombardier Corporation and Envirovac, Inc.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(No. 98cv00657)

H. Vincent McKnight Jr. argued the cause for appellant.
With him on the briefs was Peter J. Vangsnes.

Thomas M. Bondy, Attorney, U.S. Department of Justice,
argued the cause as amicus curiae supporting appellant.
With him on the brief were Roscoe C. Howard Jr., United
States Attorney, Douglas N. Letter, Litigation Counsel, Unit-

ed States Department of Justice, and Colin C. Carriere,
Counsel, National Railroad Passenger Corporation.

Mark R. Hellerer argued the cause and filed the brief for
appellee Bombardier Corporation. Donald A. Carr entered
an appearance.

Paul E. Lehner and Randall L. Mitchell were on the brief
for appellee Envirovac, Inc. Barbara Van Gelder and Scott
M. McCaleb entered appearances.

Before: Edwards and Randolph, Circuit Judges, and
Williams, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge Edwards.

Concurring opinion filed by Circuit Judge Randolph.

Edwards, Circuit Judge: Suspecting that his employer, the
National Railroad Passenger Corporation ("Amtrak") was
being defrauded by two companies with whom it had contract-
ed to supply new rail cars with improved toilet systems,
Edward Totten brought an action against these companies
under the False Claims Act ("FCA"), 31 U.S.C. ss 3729-3733
(1994). The District Court dismissed his suit, holding that,
pursuant to a recent amendment to Amtrak's governing
statute, the FCA could not be invoked with respect to federal
money invested in the railroad. Totten now appeals this
decision, and in so doing presents us with an issue of first
impression regarding the extent to which doing business with
Amtrak immunizes contractors from FCA liability.

In 1997, Congress enacted legislation which stated, in part,
that Amtrak "shall not be subject to title 31." See Amtrak
Reform and Accountability Act of 1997, Pub. L. No. 105-134,
s 415(d), 111 Stat. 2570 (Dec. 2, 1997) ("the Reform Act"),
codified at 49 U.S.C.A. s 24301(a)(3) (2001). Because the
FCA is included in title 31 of the U.S. Code, the District
Court concluded that a suit by Totten against contractors
doing business with the railroad would impermissibly make
Amtrak "subject to" the FCA. We disagree. Instead, we
hold that the Reform Act erects no per se bar preventing
individuals from bringing FCA actions against those who

make false or fraudulent claims implicating the federal funds
invested in Amtrak. Neither the text nor the legislative
history of s 24301(a)(3) compels a blanket liability exception
for businesses serving Amtrak.

Accordingly, we reverse the judgment of the District Court
and remand the case for further proceedings. On remand,
Totten may amend his complaint, which presently is inade-
quate, in order to state a proper claim for relief under the
FCA. The District Court indicated that it would have per-
mitted such an amendment had it not interpreted the Reform
Act as posing an insurmountable obstacle to Totten's suit.
We agree that an opportunity to amend is permissible and
appropriate.

In amending his complaint, Totten must state with particu-
larity the circumstances surrounding the defendants' alleged-
ly false claims, as required by Rule 9(b) of the Federal Rules
of Civil Procedure. He must also aver that the defendants
actually submitted false demands for payment, rather than
merely non-conforming goods. That said, we express no view
on the question left open by this court in United States ex rel.
Yesudian v. Howard University, 153 F.3d 731, 737-39 (D.C.
Cir. 1998), concerning the relationship between subsections
(a)(1) and (c) of 31 U.S.C. s 3729. Instead, we leave it to the
District Court to determine, should the issue arise on remand,
whether an FCA plaintiff may prevail against a defendant
who submits a false "claim" to Amtrak, as that term is
defined in s 3729(c), without evidence that the claim was ever
submitted (or resubmitted) to the federal government. We
will not venture to offer an answer to this difficult legal
question on the record currently before us.

I. BACKGROUND

Congress created Amtrak in 1971 in order to stave off the
threatened extinction of passenger rail service in the United
States. See Rail Passenger Service Act of 1970, Public Law
No. 91-518, 84 Stat. 1327 (Oct. 30, 1970); Nat'l R.R. Passen-
ger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S.
451, 453-55 (1985). Since its inception, the statutes governing

Amtrak have indicated that the railroad is to be managed as a
for-profit corporation, and not as a "department, agency, or
instrumentality" of the federal government. See generally
Lebron v. Nat'l R.R. Passenger Corp., 513 U.S. 374, 383-86
(1994). This status continues to the present day. See 49
U.S.C.A. s 24301(a). As such, the railroad is generally ex-
empt from those "statutes that impose obligations or confer
powers upon Government entities." Lebron, 513 U.S. at 392
(holding that Amtrak is nevertheless subject to the con-
straints of the Constitution).

Until 1997, Amtrak was formally classified as a "mixed-
ownership Government corporation," 31 U.S.C. s 9101(2)(A)
(1983), and was therefore bound by the rules that federal law
imposes on such entities. See Government Corporation Con-
trol Act, 31 U.S.C. ss 9101-9109 ("GCCA"). That year, con-
cerned that these and other restrictions were jeopardizing
Amtrak's financial viability, Congress enacted the Reform Act
in order to increase the railroad's managerial flexibility and
improve its economic prospects. See S. Rep. No. 105-85, at 1
(1997) ("In order to achieve operating self-sufficiency, the bill
is designed to enable Amtrak to increase efficiencies, reduce
costs, and operate as much like a private business as possi-
ble."). To these ends, while Amtrak was provided with an
influx of federal dollars -- appropriations totaling $5.2 billion
over the 1998-2002 period -- Congress simultaneously sought
to alter the railroad's legal status as a recipient of that
money.

It did so in two ways that are significant for the present
appeal. First, the Reform Act amended the GCCA to remove
Amtrak from the list of mixed-ownership corporations. See
Pub. L. No. 105-134, s 415(d)(2). This change freed the
railroad from the requirements that bind companies so desig-
nated, such as the submission of budget reports to Congress,
31 U.S.C. s 9103, and annual government audits, 31 U.S.C.
s 9105. Relatedly, the Act specifically amended 49 U.S.C.
s 24301(a)(3) to provide that Amtrak "shall not be subject to
title 31." See Pub. L. No. 105-134, s 415(d)(1). These
amendments do not figure prominently in the legislative
history of the Reform Act. Indeed, the only specific refer-
ence to this section of the bill notes tersely that it "removes

Amtrak from the Government Corporations Act." H.R. Rep.
No. 105-251, at 34 (1997).

Certainly, neither the statutory text nor its history makes
any mention of the False Claims Act. Yet, along with the
rules regarding government corporations, that statute is
housed in title 31. And the present case calls upon us to
decide the extent to which this provision of the Reform Act
narrowed the reach of the FCA as it relates to Amtrak. This
is an issue of first impression.

The dispute giving rise to this case began when Amtrak
contracted with two private companies, Bombardier Corpora-
tion and Envirovac, Inc. ("the Contractors"), to supply rail
cars with new toilet systems for its trains. Bombardier
makes the cars and Envirovac makes the toilets. Specifica-
tions for the toilet systems were incorporated into Amtrak's
contracts with the Contractors. On March 16, 1998, Totten, a
former Amtrak employee, filed a suit against the Contractors
under the FCA, alleging that they had supplied unsuitable
parts that did not meet the contractual specifications. Tot-
ten's complaint asserted that these noncompliant toilets were
so defective that they endangered the health of Amtrak's
passengers and employees. Totten further averred that the
Contractors knew of these defects, yet delivered the cars
anyway in order to obtain payment under their contracts.

In order to advance its purpose of protecting federal funds
from fraud, the False Claims Act allows a private individual
such as Totten (known as the relator) to bring a qui tam
action "in the name of the Government," and by that means to
share in the ultimate recovery. See 31 U.S.C. s 3730(b); see
generally Vermont Agency of Natural Res. v. United States
ex rel. Stevens, 529 U.S. 765, 768-70 (2000). The statute's qui
tam provision is a powerful tool that augments the govern-
ment's limited enforcement resources by creating a strong
financial incentive for private citizens to guard against efforts
to defraud the public fisc. See Yesudian, 153 F.3d at 736.
Indeed, an FCA plaintiff can realize a substantial recovery, as
the statute imposes both treble damages and a civil penalty of
up to $10,000 on any person who, inter alia, "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. s 3729(a)(1).

The language of s 3729(a)(1) suggests that the alleged false
claim must have been presented to the federal government
itself. Section 3729(c), however, defines "claim" quite broadly
to include:

any request or demand, whether under a contract or
otherwise, for money or property which is made to a
contractor, grantee, or other recipient if the United
States Government provides any portion of the money or
property which is requested or demanded, or if the
Government will reimburse such contractor, grantee, or
other recipient for any portion of the money or property
which is requested or demanded.

Neither this court nor the Supreme Court has definitively
explicated the complex relationship between the definition
clause in s 3729(c) and the presentment clause in
s 3729(a)(1). Instead, we have noted, but declined to answer,
the question of whether an FCA plaintiff can prevail by
proving only that a false claim was submitted to a federal
grantee (such as Amtrak), as defined in subsection (c), with-
out further demonstrating that the claim was submitted (or
resubmitted) to the federal government, as suggested by the
text of (a)(1). See Yesudian, 153 F.3d at 737-39.

The District Court did not face this question. Rather, the
court relied on different grounds in rejecting Totten's com-
plaint. See United States ex rel. Totten v. Bombardier Corp.,
139 F. Supp.2d 50, 52 & n.1 (D.D.C. 2001). First, the District
Court held that, regardless of whether s 3729(a)(1) requires a
showing that claims were presented to the United States
itself, Totten's complaint failed because it did not allege that
the Contractors presented "any request or demand ... for
money or property" to Amtrak. Rather, the complaint mere-
ly asserts that defendants delivered goods to the railroad that
did not meet the specifications of its contracts. Second, the
District Court found that the complaint makes no representa-
tions regarding Amtrak's status as a recipient of federal

money, either in general or in connection with the specific
projects at issue in this case. Therefore, even if the Contrac-
tors had actually presented demands for payment to Amtrak,
the complaint gives no indication as to how such demands
would be "claim[s]" under the terms of subsection (c). Third,
the District Court pointed out that Totten's complaint does
not state the time, place, and content of defendants' alleged
false statements, as required by Rule 9(b). See Fed. R. Civ.
P. 9(b) ("the circumstances constituting fraud or mistake shall
be stated with particularity").

The District Court noted that ordinarily it would have
allowed a plaintiff to cure such pleading flaws by amendment,
but concluded that such a remedy would have been futile in
Totten's case because his suit was doomed as a matter of law.
See Bombardier, 139 F. Supp.2d at 52 n.1. Specifically, the
court held that Amtrak's special legal status rendered its
contractors totally immune from liability under the FCA,
regardless of how the case was pleaded. According to the
District Court, the purpose of the Reform Act was to "negate
the normal repercussions of government funding" as it relat-
ed to Amtrak. Id. at 54. Among these repercussions is
potential FCA liability for those entities receiving, through
contracts with Amtrak, a share of the federal money invested
in the railroad. The District Court thus held that the phrase
"not subject to title 31" in 49 U.S.C.A. s 24301(a)(3) was
intended to prevent "Amtrak's receipt of government funds
from bringing Amtrak, and its business dealings, within the
reach of the False Claims Act." Id. at 55.

Totten appeals from this decision. The United States
elected not to intervene in this litigation pursuant to 31
U.S.C. s 3730(b)(5). However, the United States has now
filed an amicus curiae brief on appellant's behalf arguing
against the District Court's expansive construction of the
Reform Act.

II. DISCUSSION

The central issue in this appeal is whether the Reform Act,
in stating that Amtrak "shall not be subject to title 31,"

exempts those who contract with Amtrak from liability under
the False Claims Act. We believe that it does not. Rejecting
the District Court's construction of the Reform Act leads us
to the question of whether Totten should be allowed to amend
his complaint to correct its various shortcomings. We believe
that he should.

A. The Meaning of "Subject To" in 49 U.S.C.A.
s 24301(a)(3)

The argument that the Reform Act bars Totten's suit,
which the District Court accepted and which the Contractors
echo on appeal, runs as follows: The FCA confers benefits
and imposes burdens on entities who receive government
funding. The statute's stringent penalties deter fraud but
they also may make some businesses reluctant to contract for
fear of liability. Accordingly, if demands for payment pre-
sented to Amtrak can be considered "claims" within the
meaning of 31 U.S.C. s 3729(c), the FCA would both protect
and (indirectly) constrain Amtrak in its business transactions.
And this would leave the railroad "subject to," in the sense of
being "affected by," the terms of the statute. Under this
scenario, Totten's cause of action is precluded by
s 24301(a)(3).

We are not persuaded by this argument. We must begin,
of course, with the text of the statute. As the District Court
itself recognized, the words "subject to" leave room for
interpretation. See Bombardier, 139 F. Supp.2d at 53. It is
true that in some contexts "subject to" can mean "affected
by," for example, "Boats in San Francisco Bay are often
subject to fierce winds." However, when the phrase is used
in situations more analogous to the one here, it is typically
given a narrower cast: an entity is "subject to" a particular
legal regime when it is regulated by, or made answerable
under, that regime. See The Random House Thesaurus 696
(giving "bound by" as chief synonym for the phrase in the
sentence, "We are subject to the laws of the country"); see
also, e.g., Texaco, Inc. v. DuhE, 274 F.3d 911, 918-19 (5th Cir.
2001) (natural gas became "subject to an existing contract"

within the meaning of the Natural Gas Policy Act when it was
"governed by" the terms of that contract).

In National Collegiate Athletic Association v. Smith, for
example, the Supreme Court considered whether "a private
organization that does not receive federal financial assistance
is subject to Title IX because it receives payment from
entities that do." 525 U.S. 459, 465 (1999) (emphasis added).
In holding that the NCAA was not subject to the statute, the
Court did not preclude all applications of Title IX that
indirectly affect the organization. Rather, the Smith decision
mandated merely that the NCAA itself could not be sued
under Title IX. See id. at 470. The organization, in other
words, was not required to conform its own conduct to the
demands of the statute. That said, Title IX suits against the
colleges or universities that fund the NCAA are plainly
permitted after Smith, even though the effect of such litiga-
tion might be to limit the number of schools willing to field
athletic teams and thus to pay the Association's dues. Cf.
Pederson v. Louisiana State Univ., 213 F.3d 858 (5th Cir.
2000) (holding that LSU was liable under Title IX for not
adequately accommodating the school's female athletes). The
fact that Title IX continues to have an indirect effect on the
NCAA's business does not, in ordinary usage, render that
organization "subject to" that statute.

Other examples reinforce this common understanding of
the term. Thus, when the Supreme Court noted that a
defendant was "subject to Title VII ... only if, at the time of
the alleged retaliation, it met the statutory definition of
employer," it clearly meant that the defendant could be held
liable under Title VII only if that condition was met. Walters
v. Metro. Educ. Enters., Inc., 519 U.S. 202, 205 (1997); see
also, e.g., Nat'l Cable and Telecomm. Ass'n, Inc. v. Gulf
Power Co., 122 S. Ct. 782, 797 (2002) ("[T]he Commission has
not determined whether Internet access via cable system
facilities should be classified as a 'cable service' subject to
Title VI of the Act, or as a 'telecommunications' or 'informa-
tion service' subject to Title II.").

 Moreover, this is how the phrase is used in the context of
the False Claims Act itself. In its recent Vermont Agency
decision, the Supreme Court used the phrase "subject to the
false claims law" to describe the category of persons who can
be sued under the FCA. 529 U.S. at 784 n.13; see also, e.g.,
United States ex rel. Long v. SCS Bus. & Tech. Instit., Inc.,
173 F.3d 870, 876 (D.C. Cir. 1999) (speaking of "individuals
subject to the Act" as those who could be made liable under
it); United States ex rel. Zissler v. Regents of the Univ. of
Minnesota, 154 F.3d 870, 872 (8th Cir. 1998) (asking whether
States are "subject to the False Claims Act" in the sense of
whether they can be held legally accountable for making false
claims to the federal government).

Accordingly, where, as here, a plaintiff brings a qui tam
action against a third party who has allegedly defrauded a
federal grantee, common usage would suggest that the third
party, and not the grantee, is being made "subject to" the
FCA. We think this to be the more intuitive understanding
of the Reform Act as well. Construing s 24301(a)(3) in this
light would read it as preventing Amtrak from being directly
regulated by the various provisions in title 31, for example, by
being sued under the False Claims Act. In contrast, as long
as Amtrak is not made to conform its actions to the terms
imposed by such statutes, the railroad is not made "subject
to" those laws. And, if this is the standard, it is clearly not
met in the present case.

Here, Totten seeks to use the FCA not to regulate Amtrak,
but instead to recover for the purported fraud of contractors
hired to serve the railroad. Allowing the United States (or
its relator) to obtain damages from those who contract with
Amtrak imposes no direct legal obligation on the railroad.
Nor does it permit Amtrak's conduct to be measured against
the standards set in the statute. Even if similar suits may
have an incidental effect on Amtrak's future business rela-
tionships, Totten's litigation will not compel the railroad to
take any action in order to satisfy the demands of the FCA.
His action therefore does not implicate the Reform Act's
"subject to" provision.

 At any rate, this result flows from what we believe to be
the most natural and ordinary reading of the phrase "subject
to." Accordingly, we will accept that conclusion, and allow
Totten's suit to go forward, unless we find evidence that
Congress had a different meaning in mind when it drafted
s 24301(a)(3). See, e.g., Williams v. Taylor, 529 U.S. 420, 431
(2000) ("We give the words of a statute their 'ordinary,
contemporary, common meaning,' absent an indication Con-
gress intended them to bear some different import.") (quoting
Walters, 519 U.S. at 207). The Contractors argue that such
evidence is to be found in the legislative history of the
Reform Act. Once again, we disagree.

If anything, the only specific reference that Congress made
to the "not be subject to title 31" language suggests that this
clause was intended to have a rather limited effect. The
amendment appeared in Section 501 of the House version of
the bill that became the Reform Act. That section, entitled
"Financial Powers," was concerned mostly with restructuring
Amtrak's stock. Subsection (e) contained both the clause
removing Amtrak from the list of mixed-ownership Govern-
ment corporations in 31 U.S.C. s 9101, and the clause adding
the "subject to" language in 49 U.S.C. s 24301(a)(3). In its
section-by-section analysis of the bill, the House Committee
on Transportation and Infrastructure reported blandly that
this subsection "removes Amtrak from the Government Cor-
porations Act." See H.R. Rep. No. 105-251, at 34.

Insofar as this statement is useful, it clearly does not help
the Contractors' cause. It provides no indication that Con-
gress expected or intended that the phrase "subject to" would
take on a broader agenda than its ordinary meaning connotes.
To be sure, the language of the amended s 24301(a)(3) plainly
does more than to remove Amtrak from the obligations of the
GCCA, and must be construed accordingly. However, the
Committee's narrow understanding of this change certainly
reinforces our decision to reject the expansive interpretation
adopted by the District Court. If anything, the legislative
history's terse analysis indicates that no one in Congress
imagined that the Reform Act would result in a repeal of the

False Claims Act as it applies to any private company doing
business with Amtrak.

Such an outcome would indeed have been striking. To
accept it, we would have to believe that just as Congress was
committing itself to a significant investment of federal money
in Amtrak, it eliminated a weapon for protecting that money
against fraud. We would have to believe that Congress
placed a significant obstacle in the way of uprooting the
unlawful depletion of that portion of the public fisc used to
develop and support the nation's passenger rail system - the
very system that the legislation in question was aimed at
protecting.

As suggested above, the words that Congress wrote do not
compel (and in their ordinary usage resist) this conclusion.
And the scant extrinsic evidence that exists to cast light on
the meaning of these words suggests that such a dramatic
result was far from the legislative mind. We think it not
unreasonable to suppose that had such a broad rollback of the
FCA in fact been the goal of the Reform Act, some indication
of that intent would appear in the congressional record. Cf.
Am. Hosp. Ass'n v. NLRB, 499 U.S. 606, 613-14 (1991).
There is none. And, without some affirmative indicator, we
are unwilling to place upon the text of that statute an
expansive gloss that would generate this surprising result.

Recognizing the weakness of arguments from specific legis-
lative history, the District Court, and now the Contractors,
have focused on the broader purposes of the Reform Act as a
possible interpretive guide. This effort falls flat as well. As
described above, the District Court concluded that the aim of
the Reform Act was to "negate the normal repercussions of
government funding." Totten, 139 F. Supp.2d at 54. That is,
while Congress would continue (at least in the short-run) to
appropriate significant federal money for Amtrak, its objec-
tive was to have the railroad treated as if it was receiving no
such funding. The statute, in other words, legislated the
pretense that Amtrak was self-sufficient. And, as such, FCA
liability would be inappropriate, as that statute applies only
where federal funds are at stake.

 The problem with this view is that there is no actual basis
for it in the legislative history. It is true that, in passing the
Reform Act, Congress sought to end federal "micromanage-
ment of Amtrak's operations," H.R. Rep. No. 105-251, at 13, in
order to allow the railroad to "operate as much like a private
business as possible," S. Rep. No. 105-85, at 1. However, even
if we accept these statements as relevant to determining the
meaning of "subject to," they do not necessarily support the
Contractors' position. In fact, they are entirely consistent
with the position taken by Totten and the United States: that
both the goal and effect of the Reform Act were to ensure
that Amtrak would be treated just like any other private
company that receives federal money. The Act, in other
words, sought to ensure that Amtrak would no longer be
subject to special restrictions that were not similarly imposed
on private-sector transportation firms.

On this view, allowing Amtrak's contractors to be sued
under the FCA makes perfect sense, as the contractors of any
private business would likewise be subject to liability if they
submitted false claims in connection with a project to be
reimbursed with federal money. See, e.g., United States v.
Lagerbusch, 361 F.2d 449 (3d Cir. 1966); Murray & Soren-
son, Inc. v. United States, 207 F.2d 119, 123 (1st Cir. 1953)
("The fact that the claims in this case were not presented
directly to the government, but were made to it indirectly
through the contractors, does not prevent recovery under the
False Claims Statute."); cf. United States v. Bornstein, 423
U.S. 303 (1976) (FCA used to sue a subcontractor whose
fraud caused a private company that had contracted with the
government to submit false invoices to the United States).
Thus, contrary to the Contractors' contention, even the gen-
eral goals expressed by the drafters of the Reform Act
appear to support Totten's attempt to bring suit under the
FCA.

In sum, the most natural reading of 49 U.S.C.A.
s 24301(a)(3) would not withdraw FCA protection against
alleged false claims made by third parties on the extensive
sums of federal money invested in Amtrak. Neither is this
result mandated, or even suggested, by the scant legislative

history of that provision, nor by the larger purposes and aims
of the Reform Act as a whole. We therefore reverse the
District Court's conclusion that s 24301(a)(3) erects a per se
barrier preventing Totten from imposing FCA liability on the
Contractors.

B. Allowing Totten to Amend his Complaint

1. Flaws In Totten's Unamended Complaint

This legal conclusion does not, however, mean that Totten's
complaint, at least in its current form, actually states a valid
claim under the False Claims Act. Indeed, as suggested
above, there are several ways in which his present complaint
is deficient. First, Totten has alleged merely that the Con-
tractors "knowingly presented or caused to be presented
equipment to an officer or employees of the National Railroad
Passenger Corporation, that was knowingly substandard or
noncompliant with engineering specifications for the Superlin-
er II Contract to obtain payments from the National Railroad
Passenger Corporation ..." Complaint, at p 22; see also id.
at p p 27, 57. However, the bare assertion that defendants
delivered goods that did not conform to contractual specifica-
tions is not enough to state a violation of the FCA. Instead,
in the sections relevant here, the statute proscribes only false
"claims" -- that is, actual demands for money or property, see
31 U.S.C. ss 3729(a)(1), (a)(3); s 3729(c) -- and "false rec-
ords or statements" used to induce such claims, see
s 3729(a)(2). The FCA, in other words, "attaches liability,
not to underlying fraudulent activity, but to the 'claim for
payment.' " United States ex rel. Hopper v. Anton, 91 F.3d
1261, 1266 (9th Cir. 1996) (quoting United States v. Rivera, 55
F.3d 703, 709 (1st Cir. 1995)). And, to date, Totten has
simply made no allegation that the Contractors actually made
false demands or submitted false records, whether to Amtrak
or to anyone else.

The second problem with the present complaint is that
Totten has provided no basis for concluding that, even if the
defendants did present claims to Amtrak, those would be

"claims" within the meaning of s 3729(c). This provision
defines claim to include a request for payment made to:

a contractor, grantee, or other recipient if the United
States Government provides any portion of the money or
property which is requested or demanded, or if the
Government will reimburse such contractor, grantee, or
other recipient for any portion of the money or property
which is requested or demanded.

Thus, in order to satisfy Rule 12(b)(6), Totten would at least
have to plead that the federal government provided some
portion of the money requested by the Contractors, or that
the government reimbursed Amtrak for what it paid out to
improve the toilet systems on its trains. Though he has not
yet done so, it appears that Totten is aware of this require-
ment, and that he informed the District Court that he was
prepared to amend his complaint to allege that federal money
was implicated in the specific projects at issue. See Br. for
the United States of America as Amicus Curiae Supporting
Appellant 14.

A third difficulty with the complaint as it stands is that it
does not appear to satisfy Rule 9(b) of the Federal Rules of
Civil Procedure. This rule requires that "[i]n all averments
of fraud or mistake, the circumstances constituting fraud or
mistake shall be stated with particularity." Totten does not
argue that his complaint satisfies this standard, but instead
that the rule does not apply to him because he has not alleged
that defendants made "fraudulent" claims, but merely "false"
ones. He suggests that because false claims are actionable
under the FCA even without "proof of specific intent to
defraud," s 3729(b)(3), there is no "averment of fraud" within
the meaning of Rule 9(b). We disagree.

Every circuit to consider the issue has held that, because
the False Claims Act is self-evidently an anti-fraud statute,
complaints brought under it must comply with Rule 9(b). See
Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001);
United States ex rel. Thompson v. Columbia/HCA Healthcare
Corp., 125 F.3d 899, 903 (5th Cir. 1997); Gold v. Morrison-
Knudsen Co., 68 F.3d 1475, 1476-77 (2d Cir. 1995). Totten

cites no authority whatsoever for the hairsplitting distinction
he seeks to draw between fraudulent and false claims under
9(b). And we can see no reason to recognize such a distinc-
tion.

The difference between the two categories of claims is
simply the degree of scienter involved. See United States v.
TDC Mgmt. Corp., 24 F.3d 292, 297 (D.C. Cir. 1994) (distinc-
tion turns on "whether the defendant acted with an intent to
deceive"). But this difference is entirely insignificant in the
context of Rule 9(b)'s pleading requirements. Indeed, the
rule specifically allows allegations of "intent, knowledge, and
other condition of mind" to be averred generally. See Gold,
24 F.3d at 1477. In contrast, the "circumstances" that must
be pleaded with specificity are matters such as the "time,
place, and contents of the false representations," such repre-
sentations being the element of fraud about which the rule is
chiefly concerned. See 5 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure s 1297 (2d ed.
1990) (emphasis added). Therefore, in order to satisfy Rule
9(b), Totten must set forth an adequate factual basis for his
allegations that the Contractors submitted false claims (or
false statements in order to get false claims paid), including a
more detailed description of the specific falsehoods that are
the basis for his suit. See Bly-Magee, 236 F.3d at 1018-19;
Columbia/HCA, 125 F.3d at 903.

2. Waiver of the Right to Amend

The Contractors argue that the flaws in the complaint are
fatal, because Totten waived his right to amend his complaint
by not seeking leave to do so pursuant to Rule 15(a). In-
stead, they point out, Totten merely indicated in his Opposi-
tion to defendants' motion to dismiss that he stood ready to
amend his complaint if the District Court identified any
pleading deficiencies. As authority for their position, the
Contractors cite Government of Guam v. American President
Lines, 28 F.3d 142, 149-51 (D.C. Cir. 1994), in which we held
that plaintiffs whose complaint had been dismissed (for lack
of subject matter jurisdiction) had waived their right to
amend by failing to make a Rule 15(a) motion, either before

or after the District Court granted their opponent's dismissal
motion.

The present case, however, is quite different. In President
Lines, we denied plaintiffs an opportunity to amend only after
upholding the trial court's decision to dismiss the complaint.
In other words, that litigation was over unless we allowed the
plaintiffs to reopen it, and we found that their interest in
doing so did not outweigh the "general rules favoring the
finality of judgments and the expeditious resolution of litiga-
tion." Id. at 151. Totten's situation presents no such coun-
tervailing finality concerns, in light of our conclusion that the
District Court was wrong to dismiss the complaint on the only
ground it actually gave for doing so. The waiver rule relied
upon in President Lines is therefore not similarly applicable
where the court of appeals reverses the trial court's dismissal
order. See The Dartmouth Review v. Dartmouth College, 889
F.2d 13, 23 (1st Cir. 1989) (stating the general rule that
where "the pleader has stood upon his pleading and appealed
from a judgment of dismissal, amendment will not ordinarily
be permitted ... if the order of dismissal is affirmed")
(emphasis added) (quoting Rivera-Gomez v. de Castro, 843
F.2d 631, 635-36 (1st Cir. 1988) (allowing amendment, even
after affirming dismissal, where it is "in the interest of
justice")).

As for Totten's failure to seek leave to amend his complaint
after the Contractors' Motion to Dismiss was granted, a
factor on which President Lines relied in finding a waiver, see
28 F.3d at 151, the District Court made clear in the present
case that such a request would have been futile. See Bom-
bardier, 139 F. Supp.2d at 52 n.1 ("In other circumstances
Totten would be permitted an opportunity to amend his
complaint, but, as the remainder of this Opinion demon-
strates, such an opportunity is not warranted in this case.").
Given that the District Court expressly indicated that it
would have allowed Totten to amend had it not viewed the
Reform Act as posing an insurmountable obstacle to his
suit -- regardless of how that suit was packaged -- we see no
reason, having reversed the court's legal mistake, to forbid
what would have been permitted in the absence of that error.

Therefore, we will remand the case with instructions that
Totten be granted leave to amend his complaint.

In so doing, however, we express no opinion on the ques-
tion left open by this court's decision in Yesudian: whether
an FCA plaintiff may prevail against a defendant who sub-
mits a false "claim" to a federal grantee (such as Amtrak),
without presenting evidence that the claim was ever actually
submitted to the U.S. government. See 153 F.3d at 737-39.
Depending on how Totten crafts his amended complaint, this
issue of statutory interpretation may be avoided altogether.
We therefore leave it for another day.

III. CONCLUSION

For the reasons given above, the judgment of the District
Court is reversed and the case is remanded for further
proceedings consistent with this opinion.

It is so ordered.

 Randolph, Circuit Judge, concurring: I agree with all the
court has written in its thorough opinion, but I believe a bit
more is needed to highlight the problem we leave to the
district court - namely, "whether [a False Claims Act] plain-
tiff can prevail by proving only that a false claim was submit-
ted to a federal grantee (such as Amtrak), as defined in [31
U.S.C. s 3729(c)], without further demonstrating that the
claim was submitted (or resubmitted) to the federal govern-
ment, as suggested by the text of [31 U.S.C. s 3729(a)(1)]."
Maj. op. at 6. Dicta in United States ex rel. Yesudian v.
Howard Univ., 153 F.3d 731, 737-39 (D.C. Cir. 1998), inti-
mates that presenting a claim to any federal grantee is the
equivalent to presenting a claim to the federal government.
If the reasons given in Yesudian are all that can be said for
this far-reaching conclusion, I would have much difficulty in
accepting it.

Those liable under the False Claims Act include any person
who "knowingly presents, or causes to be presented" - and
here is the key language - "to an officer or employee of the
United States government" a false claim. 31 U.S.C.
s 3729(a)(1). Without more, this language would not seem to
cover instances in which the false claim is presented to a
federal grantee, at least in instances when the grantee did not
turn over the claim for reimbursement by the federal govern-
ment. That may describe the alleged situation here, although
we cannot be sure until the plaintiff amends his complaint. It
is true that s 3729(c) defines "claim" to include claims sub-
mitted to federal grantees.* But it is equally true that no
matter how "claim" is defined, subsection (a)(1) requires the
alleged false claimant to present it (or cause it to be present-
ed) to a federal officer or employee.

Two points, neither of which Yesudian highlighted, seem to
me of critical importance in construing s 3729. The Attorney

__________
* A "claim" includes any "request or demand ... for money ...
made to a contractor, grantee, or other recipient if the United
States Government provides any portion of the money or proper-
ty which is requested or demanded, or if the Government will
reimburse such contractor, grantee, or other recipient for any
portion of the money or property which is requested or demand-
ed." 31 U.S.C. s 3729(c).

General is authorized to sue under the statute in the first
instance, or to take over suits brought by private parties on
behalf of the federal government (qui tam actions), or to
allow the private party to prosecute the action on its own.
See Vermont Agency of Natural Resources v. United States
ex rel. Stevens, 529 U.S. 765, 769 (2000). If a judgment is
rendered against the defendant - and this is the first point -
the award of damages is paid to the federal treasury (less a
percentage if a private party initiated the action). The
second point is that the Act authorizes treble damages plus a
civil penalty. If the Act allows suits on claims presented to
federal grantees but not presented for payment to the federal
government, these two features of the Act lead to a glaring
incongruity. To illustrate, suppose the plaintiff in this case
prevailed. The recovery would go to the plaintiff and the
federal government. Amtrak would recover nothing. Yet
the theory of plaintiff's case, as far as we can make out at the
moment, is that Amtrak suffered the loss. Presumably,
Amtrak would therefore be able to sue the defendants on its
own and if its suit were as meritorious as the relator's, it too
would recover damages. The effect would be a quadruple
damage award - Amtrak's recovery plus the treble damages
awarded under the False Claims Act.

This is the consequence of the construction suggested in
Yesudian and, at the moment, it seems to me at odds with the
structure of the Act. On the other hand, requiring that the
United States have suffered losses by paying false claims
presented to it by the federal grantee avoids this interpreta-
tive difficulty, remains faithful to the language of s 3729(a)(1)
& (c) and is entirely consistent with the provision in the Act
measuring damages not in terms of a grantee's losses, but by
"the amount of damages which the Government sustains...."
31 U.S.C. s 3729(a). I hesitate to reach a firm conclusion,
however, because we have not had sufficient briefing and
argument on the issue and because it may turn out not to be
an issue in the case when it is reformulated in the district
court.