United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 8, 2000 Decided June 30, 2000
No. 99-7090
United States of America ex rel. Joseph T. Siewick,
Appellant
v.
Jamieson Science and Engineering, Inc., et al.,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 92cv00045)
Joseph J. Aronica argued the cause for appellant. With
him on the briefs was Robert B. Norris.
Gary Howard Simpson argued the cause and filed the brief
for appellees.
Before: Williams, Henderson and Randolph, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge: Any person can initiate a lawsuit
in the name of the United States for substantive violations of
the False Claims Act (the "Act" or "FCA"). See 31 U.S.C.
s 3730(b) (authorizing action by a "person"). Such violations
include presenting to the government "a false or fraudulent
claim for payment or approval." See id. s 3729(a) (establish-
ing liability). Here the non-government person (known as
the relator), Dr. Joseph T. Siewick, a physicist hired by
Jamieson Science and Engineering, Inc. ("JSE") in May 1990
but laid off in December 1991, presses a claim against JSE
and two of its officers at the relevant time, Vincent T.
O'Connor and Dr. John A. Jamieson. He argues that the
monthly invoices that JSE submitted to the government for
payment under government contracts were false claims.
They were false, in his view, because JSE filed them notwith-
standing alleged violations by O'Connor of a criminal statute
aimed at "revolving door" abuses by former government
employees, 18 U.S.C. s 207.
Siewick proposes two theories to support the alleged falsi-
ty. First, he says, the certified invoices implicitly declared
"compliance with applicable law, including Section 207," and
thus were "impliedly false." Appellant's Br. at 11. Second,
Siewick argues that a violation of s 207 renders a govern-
ment contract unenforceable. From this supposed unenforce-
ability he reasons that both O'Connor and Jamieson knew
that JSE was not entitled to the payments JSE requested, so
JSE's invoices claiming that JSE was entitled to payment
were false.
Neither of Siewick's theories convinces us that the alleged
s 207 violations transformed JSE's invoices into the type of
false claims made actionable by the qui tam provisions of the
FCA. We affirm the district court's grant of partial sum-
mary judgment.
* * *
In 1986, the Strategic Defense Initiative Organization
("SDIO") sought proposals for a project assessing its infrared
sensors and related technology. O'Connor was the contract
officer assigned to the project and consequently received the
proposal submitted by JSE. Although he didn't have the
power to choose the winning bidder, he was assigned the task
of negotiating JSE's fee and the final contract price. After a
day of negotiations, the contract was signed on December 8,
1986 by O'Connor for the United States and Jamieson for
JSE. O'Connor retained some role in administering the
contract, but the parties disagree as to its scope.
In the summer of 1987, O'Connor decided to leave govern-
ment service. He filed the requisite notice indicating his
intention to retire and began discussing employment opportu-
nities with government contractors. A technical representa-
tive within SDIO, Peter Franklin, mentioned to Jamieson that
O'Connor was retiring and that he would be a helpful addition
to JSE's staff. And after Jamieson and O'Connor met,
Jamieson offered O'Connor the job of Executive Vice Presi-
dent of JSE, which he accepted as of November 1, 1987.
JSE bid on and received a second and third contract as the
previous contracts expired. Siewick alleges that in represent-
ing JSE in matters related to these contracts, O'Connor
repeatedly violated 18 U.S.C. s 207. According to Siewick,
these violations began even before O'Connor had fully parted
company with the Navy (he had been on terminal leave from
November 1, 1987 to January 1, 1988) and continued through
to the period covered by the third contract. Siewick claims
that these violations taint nearly every invoice submitted on
the three contracts.
The district court granted summary judgment in favor of
the defendants on the claims premised upon s 207 violations.
The court found both that Siewick's evidence was insufficient
as a matter of law to prove a violation of s 207 and that even
if s 207 had been violated, the violation did not transform the
invoices into false claims. But it denied the defendants'
motion for summary judgment on Siewick's claims premised
upon padding and falsification of timesheets; those claims
remain before the district court. Siewick requested that the
district court enter final judgment pursuant to Fed. R. Civ. P.
54(b) on his s 207 claims, and the district court granted this
request after explicitly finding no just reason for delay.
Siewick filed a timely appeal.
After hearing oral argument we ordered this case held in
abeyance pending the Supreme Court's decision in Vermont
Agency of Natural Resources v. United States ex rel. Stevens,
___ U.S. ____, 120 S. Ct. 1858 (2000); the Court had ex-
pressed interest in standing in qui tam actions generally,
Stevens, 120 S. Ct. at 523 (expanding cert. grant). As the
Court ultimately found no generic lack of standing, Stevens,
120 S. Ct. at 1863, 1865, and as we see no particular infirmity
here, we turn to the merits.
* * *
We review a district court's grant of summary judgment de
novo; a party is not entitled to summary judgment if a
reasonable jury could return a verdict for the nonmoving
party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986); Aka v. Washington Hosp. Ctr., 156 F.3d 1284,
1288 (D.C. Cir. 1998) (en banc). We assume in favor of
Siewick that his case could withstand summary judgment on
the proposition that JSE violated s 207. But we find that
s 207 violations would not in themselves render JSE's in-
voices "false claims" covered by the Act.
The Act establishes liability for anyone who "knowingly
presents, or causes to be presented, to an officer or employee
of the United States Government ... a false or fraudulent
claim for payment or approval." 31 U.S.C. s 3729(a)(1).
Siewick's problem is that because of defects in his theories
and the evidence, a reasonable jury could not find that JSE
knowingly presented a false or fraudulent claim.
For both theories it is essential that the vouchers and
invoices at issue here constitute "claims" within the meaning
of the Act. They do. A "claim" is "any request or demand,
whether under a contract or otherwise, for money or property
which is made to a contractor, grantee, or other recipient."
Id. s 3729(c). Indeed, any request for payment is properly
considered a claim for purposes of the FCA. See United
States v. Neifert-White Co., 390 U.S. 228, 233 (1968); see also
United States ex. rel. Schwedt v. Planning Research Corp., 59
F.3d 196, 203 (D.C. Cir. 1995).
Siewick's first theory--that the vouchers made an "implicit
certification" of non-violation of s 207--is a non-starter. It is
doomed by the rule, adopted by all courts of appeals to have
addressed the matter, that a false certification of compliance
with a statute or regulation cannot serve as the basis for a
qui tam action under the FCA unless payment is conditioned
on that certification. As the Ninth Circuit said,
Violations of laws, rules, or regulations alone do not
create a cause of action under the FCA. It is the false
certification of compliance which creates liability when
certification is a prerequisite to obtaining a government
benefit.
United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1266
(9th Cir. 1996) (second emphasis added). Courts have been
ready to infer certification from silence, but only where
certification was a prerequisite to the government action
sought. See, e.g., Harrison v. Westinghouse Savannah River
Co., 176 F.3d 776, 793 (4th Cir. 1999) ("[The FCA] claim fails
on the pleadings because [the relator] has never asserted that
such implied certifications were in any way related to, let
alone prerequisites for, receiving continued funding."). See
also United States ex rel. Weinberger v. Equifax, Inc., 557
F.2d 456, 461 (5th Cir. 1977); compare United States ex rel.
Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899,
902 (5th Cir. 1997) (seeming to require that the certification
be a prerequisite to receiving funds before liability under the
FCA can attach, even where the certification is express:
"false certifications of compliance create liability under the
FCA when certification is a prerequisite to obtaining a gov-
ernment benefit."). Siewick points to nothing suggesting that
JSE was required to certify compliance with s 207 as a
condition of its contract. Thus his claim of implied certifica-
tion fails.
The assessment of Siewick's second theory--that JSE's
invoices contained "expressly false" statements--turns in part
on the FCA's definition of "knowingly." It says that a
defendant acts "knowingly" if he "(1) has actual knowledge of
the information; (2) acts in deliberate ignorance of the truth
or falsity of the information; or (3) acts in reckless disregard
of the truth or falsity of the information." Id. s 3729(b).
The key issue, then, is whether (assuming violations of s 207)
JSE's claims were knowingly false or fraudulent.
The invoices in the record request that the U.S. Govern-
ment pay JSE "the sums owing for all work performed"
under the relevant contract and certify that (1) "all these
charges are for work authorized and performed under the
referenced contract and that payment has not been received,"
(2) "all claims are consistent with this clause," and (3) "the
required deliveries ... have been made to the distribution
specified in the contract." The parties agree that these
statements "inform[ ] the government that work which enti-
tles JSE to reimbursement has been performed." See Appel-
lee's Br. at 27. Siewick's argument is that JSE knew that the
contract was void or voidable (Siewick flips back and forth
between these characterizations), and thus knew that it was
not entitled to be paid.
A void contract is one under which the promisor has no
duty of performance. See Restatement (Second) of Contracts
s 7 cmt. a. (Indeed, some purists say that a "void contract"
is a contradiction in terms, because the word contract always
includes some element of enforceability. See 1 Joseph M.
Perillo, Corbin on Contracts s 1.7 (rev. ed. 1993)). A voida-
ble contract is one under which a party, usually a victim of
some wrong by another party, may "elect" to avoid any legal
obligations. Restatement (Second) of Contracts s 7.1 The
first category is generally reserved for a handful of contracts
that are seen as being in fundamental violation of public
policy, such as agreements to do acts that both parties know
__________
1 Siewick most commonly argues that the contracts at issue
here were "unenforceable," a legal status that appears to encompass
voidable contracts but is often treated separately. See Restate-
ment (Second) of Contracts s 8 & cmts. a & b; 1 Corbin on
Contracts s 1.8. In context, however, his claims are best under-
stood as alleging either voidness or voidability.
will constitute a felony, see Corbin on Contracts s 1.7, or
wagering agreements made in jurisdictions where gambling is
illegal, see 7 Richard A. Lord, Williston on Contracts s 17:22
(4th ed. 1997). See generally id. at s 12:1 (examining kinds
of agreements usually considered void).
We can safely rule out any suggestion that s 207 violations
could, alone, have voided the contracts (let alone that JSE
could have "known" of the voiding). In United States v.
Mississippi Valley Generating Co., 364 U.S. 520 (1961), de-
cided in an era when Supreme Court readiness to infer
remedies from criminal statutes was at a high point, the
Court found that violations of a predecessor of s 207's statu-
tory neighbor criminalizing certain conflicts of interest, 18
U.S.C. s 208, gave the government the right to "disaffirm a
contract which is infected by an illegal conflict of interest."
364 U.S. at 566. There is no suggestion in the opinion that
the contract self-destructed into voidness, depriving the gov-
ernment of its election. The decision assumes (without dis-
cussion, to be sure) that the government would want to retain
the option to treat the contract as fully in effect. See id. at
563 ("This protection [from corrupting influences] can be fully
accorded only if contracts which are tainted by a conflict of
interest ... may be disaffirmed by the Government." (em-
phasis added)). Reasons why the government would wish to
preserve that election abound: the officials authorized to
decide might regard the violation as minor; they might think
that the criminal penalties provide ample punishment of the
present violation and deterrence of future ones; they might
be concerned that disaffirmance would unduly impede future
transactions with the contracting firm (possibly in possession
of skills or other resources of exceptional value to the govern-
ment) or with other potential contractors. Longrun interests
often argue against pushing legal rights to the hilt.
We note that the Federal Circuit has said that government
contracts "tainted by fraud or wrongdoing" are "void ab
initio." In the first such case, J.E.T.S., Inc. v. United States,
838 F.2d 1196, 1200 (Fed. Cir. 1988), nothing turned on the
characterization. In the second, Godley v. United States, 5
F.3d 1473, 1476 (Fed. Cir. 1993), the consequences were
obscure, and the opinion in any event disregarded the lan-
guage of Mississippi Valley Generating that supports voida-
bility and pointed to none supporting voidness. Read for all
their worth, these opinions would vastly expand the normally
minute group of contracts treated as void.
But the issue is open whether s 207 violations in the
securing or execution of a contract might render it voidable.
Of course the revolving door at which s 207 is aimed may
seem less problematic than the sort of actual conflict of
interest at stake in s 208 and in Mississippi Valley Generat-
ing. And in concluding that the voidability issue was open,
the court in United States v. Medico Indus., Inc., 784 F.2d
840 (7th Cir. 1986), noted that at the time of Mississippi
Valley Generating the Court "was freer [than currently] with
the creation of additional remedies." Id. at 845. But the
Medico court went on to point out that remedies created in
that era had generally survived and that the Mississippi
Valley Generating viewpoint was the one prevailing at the
time of s 207's enactment. Id. In the end the Seventh
Circuit left the issue open because Medico had dropped the
issue in the district court. Id. at 844-45. We also leave the
issue open; its resolution is unnecessary to today's case.
Whatever the ultimate answer to that question, the obsta-
cles to a conclusion that JSE "knowingly" misrepresented the
validity of the contract obligations are legion. First, if the
panel in Medico was uncertain whether a s 207 violation
created voidability, it is hard to see how Jamieson or O'Con-
nor could--with respect even to voidability, let alone validi-
ty--have satisfied even the loosest standard of knowledge,
i.e., acting "in reckless disregard of the truth or falsity of the
information." 31 U.S.C. s 3729(b)(3). While a faulty esti-
mate or opinion can qualify as a false statement where the
speaker knows facts "which would preclude such an opinion,"
Harrison, 176 F.3d at 792 (emphasis added), the "facts" of
which the Harrison court spoke are those that the speaking
party could reasonably classify as true or false, see id. Here
there is only legal argumentation and possibility.
Moreover, a final decision that s 207 violations may allow
the government to disaffirm a contract would leave other
legal uncertainties. Assuming that O'Connor and Jamieson
had some reason to think that s 207 had been violated, and
that a contract tainted with such a violation could become
voidable, they would also have had to know whether voidabili-
ty requires materiality, i.e., whether the s 207 violations must
have affected the terms of the contracts. In most circum-
stances, the party seeking to avoid the contract must prove
that the defect had a material effect on the transaction in
question. See Restatement (Second) of Contracts ss 7 cmt.
b (fraud, mistake, or duress); 15 cmt. b (mental illness); 16
cmt. b (intoxication); but see id. s 7 cmt b (materiality
presumed when one party is an infant).
Second, even assuming that JSE's contracts were voidable,
invalidity is a distinct issue. Siewick's theory is concededly
and necessarily that JSE knew that the contracts were
invalid. But even if voidable they would have become invalid
only on a contingency--the contingency that the government
would exercise the assumed right to disclaim.
Third, a court that found contracts invalid in a qui tam
action where the government has not joined the plaintiff
would have unilaterally divested the government of the oppor-
tunity to exercise precisely the discretion that is among the
key differentiations of voidness from voidability: the discre-
tion to accept or disaffirm the contract on the basis of
complex variables reflecting the officials' views of the govern-
ment's longterm interests.
The implications of Siewick's position are extraordinary.
Disputes arise between the government and its contractors
every day. Contractors do not win every penny they claim.
On Siewick's theory, any contracting party that misunder-
stands its legal entitlements and therefore fails to recover on
an invoice in full would be liable under the False Claims
Act--except in instances where it was unaware of the facts
that led to its failure to recover in full. This is not a
prescription for fair or efficient contracting.
Accordingly, we find a want of evidence from which a jury
could reasonably infer that JSE knowingly asserted a falsity
in its claims for payment under the contracts.
The district court's grant of partial summary judgment is
Affirmed.