UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
June 23, 2008
RICHARD F. MILLER, PLAINTIFF,
PHILIPP HOLZMANN, ET AL., DEFENDANTS.
The opinion of the court was delivered by: Royce C. Lamberth, Chief Judge
Ironically enough, this sordid tale of filthy dealing and dirty money began in the sewers of Cairo. After the Camp David Accords of 1979, the United States saw an opportunity to reward Egypt for its recognition of Israel with funding for public works projects. According to plaintiffs' evidence, defendants also saw an opportunity: to enrich themselves at U.S. taxpayers' expense by colluding to secure, and then overcharge on, contracts for these projects.
Nearly twenty years after these underlying events, this multi-defendant*fn1 conspiracy case came to trial.*fn2 Over the course of seven weeks, a jury absorbed a vast amount of evidence, including testimony from forty-one witnesses and over 500 exhibits, and witnessed a vigorous and thorough defense. After resolving numerous factual disputes and weighing the credibility of each witness, the jury returned a verdict for plaintiffs on May 14, 2007, awarding over $34 million in damages to the United States. This Court ultimately fixed total liability at $90,438,087.66.*fn3
Each defendant now challenges the jury's verdict and/or the Court's judgment.*fn4 Their motions present issues relevant to both liability and damages. Defendants' challenges, in their new trial motions, to this Court's evidentiary and other rulings necessarily implicate the sufficiency of the evidence objections raised by their motions for judgment as a matter of law. Hence, this Opinion first considers defendants' proposed grounds for a new trial, then considers the sufficiency of the evidence along with defendants' other offered bases for judgment as a matter of law, and finally evaluates certain defendants' arguments for remittitur and/or relief.
I. Applicable Legal Standards
A. Rule 59(a) -- New Trial
Federal Rule of Civil Procedure 59(a) affords a court discretion to grant a new trial on all or some issues "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a). Such reasons have included excessive damages, "substantial errors . . . in the admission or rejection of evidence[,] or the giving or refusal of instructions." Nyman v. FDIC, 967 F. Supp. 1562, 1569 (D.D.C. 1997) (Urbina, J.). Yet "minor evidentiary errors . . . in the course of a long trial," do not suffice. Wild v. Alster, 377 F. Supp. 2d 186, 189 (D.D.C. 2005) (Walton, J.) (quotation marks and citations omitted). Rather, the court's discretion to grant a new trial -- which is to be exercised "sparingly and cautiously," Miller v. Penn. R.R. Co., 161 F. Supp.633, 641 (D.D.C. 1958) (Holtzoff, J.) -- "has generally been understood to include actions rendering the trial unfair." Sparshott v. Feld Entm't, Inc., 311
F.3d 425, 433 (D.C. Cir. 2002). Only "a clear miscarriage of justice," Wild, 377 F. Supp. 2d at 189, or "manifest error of law or fact" will warrant a new trial, Nyman, 967 F. Supp. at 1569.
When a court concludes that the jury's "verdict is against the weight of the evidence," rather than grant judgment as a matter of law, it may instead order a new trial. Nyman, 967 F. Supp. at 1569; see Fed. R. Civ. P. 50(b)(2). "The standard for a new trial is less onerous than the one applicable to a Rule 50 motion." Nyman, 967 F. Supp. at 1569. But just as with a motion for judgment as a matter of law, the Court should "not disturb a jury verdict 'unless the evidence and all reasonable inferences that can be drawn therefrom are so one-sided that reasonable men and women could not disagree on the verdict.'" Duncan v. Wash. Metro. Transit Auth., 240 F.3d 1110, 1113 (D.C. Cir. 2001) (en banc) (quoting Curry v. District of Columbia, 195 F.3d 654, 659 (D.C. Cir. 1999)).
B. Judgment as a Matter of Law -- Rule 50
Under Federal Rule of Civil Procedure 50, a court may, on motion, direct entry of judgment contrary to a jury verdict when "a reasonable jury would not have a legally sufficient evidentiary basis to find for that party on that issue." Fed. R. Civ. P. 50(a). Courts "do not, however, lightly disturb a jury verdict." McGill v. Munoz, 203 F.3d 843, 845 (D.C. Cir. 2000). A court may enter judgment contrary to that verdict only when "the evidence[,] and all reasonable inferences that can be drawn therefrom[,] are so one-sided that reasonable men and women could not" have reached the jury's verdict. Scott v. District of Columbia, 101 F.3d 748, 752 (D.C. Cir. 1996).
"[A]lthough the court should review the record as a whole, it must disregard all evidence favorable to the movant that the jury was not required to believe." In re Lorazepam & Clorazepate Antitrust Litig., 467 F. Supp. 2d 74, 80 (D.D.C. 2006) (Hogan, C.J.) (citing Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 151 (2000)). Further, "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves, 530 U.S. at 150. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Thus, a court should grant a Rule 50 motion only when, "under the governing law, there can be but one  conclusion as to the verdict" -- that it defies reason. Id. at 250.
C. Remittitur -- Rule 60(b)
Federal Rule of Civil Procedure 60(b) empowers courts to grant relief from a final judgment when "the judgment has been satisfied, released, or discharged." Fed. R. Civ. P. 60(b)(5). "[A] motion for a credit on a judgment should be treated as a Rule 60(b)(5) motion for relief from [that] judgment." Kassman v. Am. Univ., 546 F.2d 1029, 1033 (D.C. Cir. 1976) (per curiam). Like a motion for a new trial, "the decision to grant or deny a rule 60(b) motion is committed to the discretion of the District Court." United Mine Workers 1974 Pension v. Pittston Co., 984 F.2d 469, 476 (D.C. Cir. 1993).
D. Alteration or Amendment -- Rule 59(e)
Federal Rule of Civil Procedure 59(e) provides for alteration or amendment of a previously-entered judgment. Fed. R. Civ. P. 59(e). "While the court has considerable discretion in ruling on a 59(e) motion, the reconsideration and amendment of a previous order is an extraordinary measure." Zyko v. Dep't of Def., 180 F. Supp. 2d 89, 90 (D.D.C. 2001) (Urbina, J.). Hence, such a motion "need not be granted unless the district court finds that there is . . . 'the need to correct a clear error or prevent manifest injustice.'" Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (quoting Nat'l Trust v. Dep't of State, 834 F. Supp. 453, 455 (D.D.C. 1993)).
II. New Trial Motions
A. Prior Criminal Proceedings
In 2002, Defendant Bilhar pleaded guilty to an antitrust conspiracy in violation of the Sherman Act, 15 U.S.C. section 1. (See Exs. A, B to Pl.'s Mot. .) In its Order of March 14, 2007, this Court granted plaintiffs' motion in limine  to preclude Bilhar from contesting its liability on Contracts 20A and 29 based on this plea. (See Mem. Op. & Order of Mar. 14, 2007  at 5-6; Mem. Op. & Order of Mar. 20, 2007  at 1-2 (denying motion for reconsideration).) The Court subsequently admitted both Bilhar's plea agreement and the accompanying Joint Rule 11 Memorandum, against all defendants, under Federal Rule of Evidence 803(22). (Mem. Op. & Order of Mar. 16, 2007  at 3-4; Mem. Op. & Order of Mar. 20, 2007  at 2 (denying motion for reconsideration); Mem. Op. & Order of Mar. 21, 2007  at 4-5 (denying motion to sever).) Defendants challenge both rulings.*fn5
1. Collateral Estoppel
"Courts have often held that issues determined in connection with a criminal conviction may be preclusively established in later civil trials." Otherson v. Dep't of Justice, 711 F.2d 267, 271 (D.C. Cir. 1983). While recognizing that at least seven other Circuits have done so, our Court of Appeals has not taken a definitive position on whether issues determined in connection with a defendant's guilty plea may similarly be given preclusive effect. Id. at 275 n.8.
Meanwhile, district courts in this Circuit have routinely treated criminal convictions -- including those based on guilty pleas -- "[a]s conclusive proof of the facts supporting the conviction," and have thus given them preclusive effect in subsequent civil actions. See, e.g., Int'l Telecomm. Satellite Org. v. Colino, No. 88-1266, 1992 U.S. Dist. LEXIS 4887, at *20 (D.D.C. Apr. 15, 1992) (Lamberth, J.); United States v. Uzzell, 648 F. Supp. 1362, 1363 (D.D.C. 1986) (Green, J.). As a general matter, issue preclusion between the same parties*fn6 is available where, in the prior proceeding, (1) an identical issue*fn7 (2) was actually litigated (3) and necessarily determined, and where (4) "[p]reclusion in the second trial [would] not work an unfairness."Otherson, 711 F.2dat 273. When the proceeding is a criminal one, and the defendant enters a guilty plea, preclusion "extends only to those issues that were essential to the plea." Alsco-Harvard Fraud Litig., 523 F. Supp. 790, 802 (D.D.C. 1981) (Oberdorfer, J.).
Bilhar now insists it merits a new trial because the central issues in the False Claims case were not essential to its plea to antitrust conspiracy. (Motion Six at 2; Reply Six at 7-9.) Before examining this contention, the Court must first elucidate precisely which issues it precluded Bilhar from contesting in this civil trial. This Court treated Bilhar's guilty plea as conclusively establishing that Bilhar: (1) knowingly submitted or caused to be submitted to the government a false or fraudulent claim; (2) knowingly made or used, or caused another to make or use, a false or fraudulent record or statement to get the government to pay its claim; and (3) conspired with one or more persons -- at least one of whom performed an act to effect the conspiracy's object -- to get a false or fraudulent claim allowed or paid by the U.S. (See Mem. Op. & Order of Mar. 14, 2007  at 5-6; Verdict Form  at 2, 3, 4, 6, 7).
Next, "it is necessary to examine the issues [Bilhar] necessarily admitted by pleading guilty." Alsco-Harvard Fraud Litig., 523 F. Supp. at 802. As Bilhar concedes, (Motion Six at 2-4), its plea embraces the bare elements of a Sherman Act conspiracy, McCarthy v. United States, 394 U.S. 459, 466 (1968) (guilty plea is an admission of all elements of the charge). These elements are: "(1) the conspiracy charged was formed, and it was in existence at or about the time alleged; (2) the defendant knowingly formed or participated in that conspiracy; and (3) the activity that was the object of the conspiracy was within the flow of, or substantially affected, interstate or foreign commerce." (Ex. B to Pl.'s Mot.  at 3.) Thus, by pleading guilty, Bilhar conclusively established that it had knowingly entered into "a continuing agreement, understanding, and concert of action" to "rig the bids" on U.S. government-funded Contracts 20A, 29, and 07. (Id. at 4, 5.)
Construed in this narrow sense, Bilhar's plea establishes, at least, that it conspired with others to get a false or fraudulent claim allowed or paid by the United States: claims submitted to the government under any contract secured through a collusive conspiracy are, inevitably, false or fraudulent. United States ex rel. Marcus v. Hess, 317 U.S. 537, 543-45 (1943) (characterizing claims submitted under contract obtained through collusive bidding as "false" under the False Claims Act ("FCA")).*fn8
For issue preclusion to have been proper, however, Bilhar's plea must also have established that claims were actually submitted pursuant to that conspiracy (which would also constitute the requisite overt act for FCA conspiracy). As this Court previously concluded in ruling on the government's original motion in limine, (Mem. Op. & Order of Mar. 14, 2007  at 5-6), and on Bilhar's motion for reconsideration, (Mem. Op. & Order of Mar. 20, 2007  at 1-2), it did.
Bilhar's guilty plea extends to the essential elements of a Sherman Act conspiracy, but its reach does not end there. Federal Rule of Criminal Procedure 11(f) mandates that before entering judgment on a guilty plea, a court must "mak[e] such inquiry as shall satisfy it that there is a factual basis for the plea." Fed. R. Crim. P. 11(f). Because the court may not enter judgment without this factual basis, there is good reason to give preclusive effect to factual admissions made in Rule 11 proceedings. Though he avoids a contested trial, "a defendant who pleads guilty does not save the court as much work as does a party who" -- for example -- "stipulates to the truth of a fact in a civil trial." Otherson, 711 F.2d at 275 n.8. Moreover, because the court must conduct a Rule 11 inquiry, "the facts underlying a guilty plea are more reliable than those established only by stipulation."*fn9 Id. Disincentives to litigate other than the truth of every fact alleged in an indictment may impact a defendant's decision to plead guilty. See Haring v. Prosise, 462 U.S. 306, 318-19 (1983) (describing possible pragmatic motivations for defendant's guilty plea). But as the Eleventh Circuit has observed, "[a] federal criminal defendant wishing to avoid both a trial and any collateral estoppel effects may ask for court permission to plead nolo contendere." In re Raiford, 695 F.2d 521, 523 (11th Cir. 1983). Moreover, a defendant may choose to plead only to particular portions of an indictment, thus limiting his plea's potential preclusive effect. See, e.g. United States v. Podell, 572 F.2d 31, 36 (2d Cir. 1978).
These considerations suggest that factual admissions in a Rule 11 proceeding may broaden a guilty plea's preclusive effect beyond the mere abstract elements of the crime charged.*fn10 Indeed, various other courts have approved the extension of pleas' collateral estoppel effects to defendants' accompanying factual admissions. See, e.g., DeCavalcante v. Commissioner, 620 F.2d 23, 24, 26, 28 & n.10 (3d Cir. 1980) (approving Tax Court's holding that defendant who had pleaded guilty to conspiracy to operate an illegal gambling enterprise could not deny connection with gambling activities admitted during Rule 11 hearing); United States v. Electro-Therapeutics, Inc., No. 94 Civ. 4008, 1996 U.S. Dist. LEXIS 2563, at *7-9 (S.D.N.Y. Mar. 6, 1996) (precluding defendant who pleaded guilty under general conspiracy statute from denying overt acts admitted during plea proceedings).*fn11
In one such case, the defendants, who managed a home health services company, had pleaded guilty to conspiracy to commit health care fraud and mail fraud based on their submission of reimbursement claims to Medicare for personal expenses. United States v. Szilvagyi, 398 F. Supp. 2d 842, 844, 848 (E.D. Mich. 2005). In a subsequent FCA action, the U.S. sought damages from the same defendants for "knowingly present[ing], or caus[ing] to be presented, . . . a false or fraudulent claim for payment or approval" by the United States.*fn12 Id. at 844; 31 U.S.C. § 3129(a)(1) (2008). During the plea colloquy, both defendants had "admitted, as part of the factual basis of their guilty pleas, that they intended for the cost reports [they had] submitted to Medicare to contain illegitimate costs for the construction of their home." 398 F. Supp. 2d at 849. "Since they intended the false claims to be submitted," section 3729(a)(1)'s scienter element was satisfied, and the court estopped them from denying liability. Id.
Here, in the Rule 11 memorandum accompanying its plea agreement, Bilhar acknowledged that it "and its co-conspirators did those things that they . . . conspired to do" -- most saliently, that bids were submitted on Contracts 20A, 29, and 07 "pursuant to the terms of the bid-rigging conspiracy" and that the co-conspirators thereafter performed the contracts.*fn13
(Ex. B to Pl.'s Mot.  at 5.) As Bilhar rightly points out, a Sherman Act conspiracy need not involve an overt act. (Motion Six at 4 (citing Nash v. United States, 229 U.S. 373 (1913)).) Yet the overt acts Bilhar admitted in the Rule 11 memorandum were nonetheless "essential to [its] plea" because they supplied a factual basis, without which the criminal court, under Rule 11, could not accept Bilhar's plea.*fn14
Hence, the Court did not err in precluding Bilhar from contesting its liability for conspiracy and on Contracts 20A and 29.
2. Admission of Bilhar's Guilty Plea
Under our Federal Rules of Evidence, relevance is a threshold requirement for admissibility -- evidence must have some tendency to make the existence of any material fact either more or less probable. Fed. R. Evid. 401, 402. Even relevant evidence may be excluded, however, "if its probative value is substantially outweighed by the danger of unfair prejudice." Fed. R. Evid. 403. Defendants contend that Bilhar's plea agreement and Rule 11 memorandum lacked any probative value -- as to Bilhar or any other defendant -- or alternatively, that the danger of unfair prejudice substantially outweighed any probative value these documents might have had. (See Motion Five at 6-10; Motion Eight at 5-9.) Both arguments fail.
First, although Bilhar's liability had been conclusively established, it remained free to contest causation and damages. (Mem. Op. & Order of Mar. 14, 2007  at 6.) The plea agreement and Rule 11 memorandum had "probative value over and beyond the preclusive effect" given to the underlying plea, (Mem. Op. & Order of Mar. 20, 2007  at 2), in that they tended to show how Bilhar and its co-conspirators pursued and accomplished their objectives.*fn15 These factual details were relevant to whether Bilhar caused damages to the United States. For example, the Rule 11 memorandum states that the conspirators met and agreed "to increase the price level of bids on USAID-funded Contracts 20A, 29, and 07." (Ex. B to Pl.'s Mot.  at 5.) While not conclusive, this statement tends to make it more likely that the United States paid more on these contracts than it otherwise would have, absent any collusion -- a decidedly material issue.
Even more rudimentary logic demonstrates these documents' probative value as to the other defendants' liability. To meet its burden as to the conspiracy charge, the government had to prove by a preponderance of the evidence that, inter alia, a conspiracy to get a false or fraudulent claim allowed or paid by the U.S. existed, and these defendants were participants therein. See 31 U.S.C. § 3129(a)(3) (2008). The facts recited in the plea agreement and Rule 11 memorandum tend to prove that a conspiracy of the type alleged by the government existed.*fn16
Hence, they held significant probative value as to Bilhar's co-defendants.
Second, any danger of unfair prejudice these documents may have posed to these co-defendants*fn17 was substantially diminished by their redaction and by the limiting instructions given to the jury both immediately after the documents were introduced into evidence,*fn18 (Apr. 10, 2007 PM Tr. at 100), and again in the Court's final instructions, (May 4, 2007 AM Tr. at 44-45).
As this Court acknowledged in its original ruling on this issue, the plea agreement and Rule 11 memorandum "pose[d] certain problems" -- "[w]ithout guidance, the jury could become confused and assume that unrelated references in those documents to defendants in this case must mean that they were the others with whom Bilhar conspired" -- and accordingly, all reference to these defendants was redacted before the documents' admission. (Mem. Op. & Order of Mar. 16, 2007  at 3.) Nonetheless, defendants contend the documents' generic references to "co-conspirators" and their "conspicuous redactions" spawned the same confusion.*fn19 (Motion Five at 9; Motion Eight at 8.) The identified language could have occasioned no prejudice.*fn20 Even absent any reference to "co-conspirators" in the documents, a reasonable juror -- particularly one instructed on the definition of conspiracy, as the jury was here -- would assume that Bilhar could not have entered into the pleaded conspiracy alone.
Yet defendants insist the jury must have "substitute[d] the prior criminal proceeding for its own judgment of the facts." (Motion Six at 9.) Introduction of another fact-finder's conclusions may create a risk that the jury will abdicate its duty to make an independent appraisal, but the gravity of this risk depends on the surrounding circumstances.*fn21 Moreover, this Court places greater faith in the presumption -- elemental to our justice system -- that a properly instructed jury will follow the law.*fn22 Here, this Court twice instructed the jury as follows:
The fact that Bilhar pleaded guilty may not in any respect be considered against any other defendants, nor may any inference be drawn against them by reason of Bilhar's plea of guilty. The guilty plea was the personal plea of [Bilhar] and was binding only upon it. Guilt is personal. The verdict as to each defendant before you must be considered separately with respect to that defendant solely upon the evidence against that defendant or the lack of such evidence. (Apr. 10, 2007 PM Tr. at 100; May 4, 2007 AM Tr. at 44-45.) In light of the thorough precautionary measures undertaken here, the Court concludes any danger of unfair prejudice was effectively mitigated*fn23 and did not substantially outweigh the documents' high probative value.
The plea agreement and Rule 11 memorandum were also hearsay, however, and even relevant hearsay evidence is inadmissible. Fed. R. Evid. 802. As in other areas of the law, myriad exceptions to this general rule exist, and this Court originally admitted these hearsay documents under one such exception, codified in Federal Rule of Evidence 803(22). (Mem. Op. & Order of Mar. 16, 2007  at 3.) Defendants now attack this ruling on three, interrelated grounds.
First, they insist that one defendant's guilty plea may never be admitted against co-defendants in a subsequent civil trial. (Motion Five at 7-8; Reply Five at 6-7.) Yet Rule 803(22) itself expressly contemplates this scenario: it expressly does not reach "judgments against persons other than the accused," but only when they are "offered by the Government in a criminal prosecution for purposes other than impeachment." Fed. R. Evid. 803(22). Defendants' reading of the Rule entirely ignores this qualifying clause. Moreover, various precedents support the admission of co-defendants' guilty pleas against civil defendants. See, e.g., Scholes v. Lehmann, 56 F.3d 750, 762 (7th Cir. 1995) (one defendant's plea agreement was admissible under Rule 803(22) and established other defendants' liability); Guillermety v. Gonzalez, 491 F. Supp. 2d 199, 201 (D.P.R. 2006) (one defendant's guilty plea was admissible under Rule 803(22) to establish all defendants' liability).*fn24
Second, defendants observe that Rule 803(22) permits introduction of a guilty plea only "to prove  fact[s] essential to sustain the judgment," Fed. R. Evid. 803(22), and they suggest that Bilhar's admissions in the plea documents exceeded this scope.*fn25 (See Motion Eight at 6; Reply Eight at 2.) As explained above, however, because Federal Rule of Criminal Procedure 11 demands that a court assure itself of a factual basis for any guilty plea, Fed. R. Crim. P. 11(f), the admissions in these documents were essential to Bilhar's plea.*fn26 See supra part II.A.1.
Third and finally, citing the Advisory Committee's Note, defendants contend that Rule 803(22) provides for two, incompatible alternatives: a court may give preclusive effect to a prior conviction, or it may admit evidence of that conviction "for what it is worth." (Motion Eight at 6-7; Reply Eight at 2-3; Reply Five at 6.) If the former, defendants argue, then the evidence becomes devoid of probative value and consequently inadmissible. (Motion Eight at 6.) Assuming, without deciding, that defendants have accurately interpreted the Note, giving preclusive effect to Bilhar's guilty plea would only render the plea documents irrelevant to Bilhar's liability. It would in no way diminish their probative value -- discussed above -- as to the other defendants' liability. And even if the Court erred in admitting the documents against Bilhar under Rule 803(22), they were nonetheless admissible against Bilhar as non-hearsay under Rule 801(d)(2)(A).*fn27
Accordingly, the Court concludes its admission of Bilhar's plea documents was proper.
B. Hearsay Testimony
Defendants next take issue with the Court's admission of certain testimony under Federal Rule of Evidence 801(d)(2)(E) and United States v. Gewin, 471 F.3d 197 (D.C. Cir. 2006).*fn28
(See Mem. Op. & Order of Apr. 27, 2007  at 1-2.) They contend this testimony was inadmissible hearsay because the statements were not made in furtherance of a conspiracy or joint venture.*fn29 (Motion Five at 21-23.)
1. Richard Miller
First, defendants point to several statements by relator Richard Miller. (Motion Five at 22.) Miller testified that in 1990, after a meeting in Cairo on Contract 20A, John Ollis told him of a conversation with defendant Anderson, in which Anderson "told him that every U.S. contractor that was prequalified to do USAID work in Cairo was a member of a club that had been set up and met in Frankfurt to essentially setup or rig the bids." (Mar. 28, 2007 PM Tr. at 90-91, 102-03.) Defendants challenge only the second level in this double hearsay statement, Ollis's statement to Miller. (Motion Five at 22.) Yet because plaintiffs did not offer this statement for its truth, but rather for its effect on the hearer -- Ollis's statement explained Miller's motivation for raising concerns about the 20A project to his superiors at J.A. Jones, (Mar. 28, 2007 PM Tr. at 103-05) -- it was not hearsay, see Fed. R. Evid. 801(c). Moreover, given that Ollis had related Anderson's statement directly to the jury the previous day, (Mar. 27, 2007 PM Tr. at 41-42), Miller's repetition of the statement could hardly have prejudiced the defendants.
Miller also testified to statements by Jones President Charles Davidson. (Mar. 28, 2007 PM Tr. at 104-05.) After Miller shared what Ollis had told him in Cairo, Davidson advised Miller that he would inform Johnie Jones, CEO of parent company J.A. Jones, Inc. (Id.) Defendants insist this statement advanced only Jones's interests, not those of the joint venture,*fn30
(Reply Five at 11-12), but this myopic argument ignores the obvious benefit the joint venture would derive from uncovering any illegality among its activities. Miller and Davidson were then unaware whether and to what extent Anderson's statement might be true, and if it were, who in the joint venture partners' corporate hierarchies might be in on the scheme. By warning one partner's CEO that some illegality might be afoot, Davidson would help to ensure that joint venture decision-makers could evaluate, and if necessary, act on, this potentially damaging information. Cf. United States v. Walls, 70 F.3d 1323, 1327 (D.C. Cir. 1995) (warning that another co-conspirator could not be trusted furthered the conspiracy's objectives). By sharing his intent to do so with Miller, he kept another joint venturer informed. See United States v. Snider, 720 F.2d 985, 993 (8th Cir. 1983) (statements ensuring co-conspirator's "informed participation" advanced the conspiracy). Moreover, even had Davidson's statement not been made in furtherance of the joint venture, defendants do not explain how its admission prejudiced them.*fn31
(See Reply Five at 10-11.)
Finally, defendants assert that Miller testified to statements by Fritz Biesecker in authenticating Plaintiffs' Exhibit 202. (Motion Five at 22.) Miller stated that he initially learned of this document when Biesecker showed it to him, and that Biesecker "discussed" it with him. (Mar. 29, 2007 AM Tr. at 45-46.) But contrary to defendants' assertion, (Reply Five at 12), it is not clear which of Miller's statements concerning the document, if any, simply parroted Biesecker, and defendants make no effort to distinguish among them. Hence, the Court cannot conclude these statements were inadmissible hearsay.
2. John Ollis
Second, defendants challenge certain statements related by John Ollis during his testimony. (Motion Five at 22-23.) They first cite Davidson's advice to Ollis and Miller that they retain personal attorneys, (Mar. 27, 2007 PM Tr. at 50-51), which plaintiffs claim was offered merely for its effect on the listeners, "who subsequently sought legal counsel," (Opposition Five at 19). Yet Ollis testified he consulted private counsel a full six to eight months later, a delay that belies plaintiffs' argument. (Mar. 27, 2007 PM Tr. at 54-55.) Plaintiffs' perfunctory assertion that this statement falls within 801(d)(2)(E)'s exemption likewise fails, as they do not explain how advice that Ollis and Miller seek personal legal counsel would further the joint venture's interests. (See Opposition Five at 19.) Nonetheless, considered in context, this statement's admission did not comprise "a clear miscarriage of justice" that would prompt this Court to order a new trial. See Wild v. Alster, 377 F. Supp. 2d 186, 189 (D.D.C. 2005) (Walton, J.). Ollis testified only that during a meeting after Anderson's Cairo disclosure, Davidson proposed that Miller and Ollis seek legal advice, "[b]ecause of possible legal implication[s]." (Mar. 27, 2007 PM Tr. at 50-51.) The jury may have interpreted this statement as reflecting consciousness of wrongdoing. But Ollis's next comments -- that Davidson also asked him to brief a Jones corporate attorney, to whom Ollis related his conversation with Anderson, and who then conducted an investigation, (id. at 51-54) -- thoroughly eclipsed his earlier statement in terms of prejudicial effect and value to plaintiffs' case. Hence, while its admission may have been error, a new trial is unwarranted.
Ollis also related a double hearsay statement: Manfred Pietchottka told Ollis he had overheard Gunter Niebergall speaking to an unknown listener over the telephone. (Mar. 27, 2007 PM Tr. at 60-61.) The second link in this chain -- from Pietchottka to Ollis -- falls under Rule 801(d)(2)(E). Pietchottka, a Jones employee, repeated Niebergall's statements about paying other contractors to refrain from bidding in response to his supervisor's (Ollis) query about a large and seemingly inexplicable payment to Holzmann. (Id. at 57-62.) This statement advanced the joint venture's interests in that Pietchottka -- a joint venture partner employee -- provided his boss with "important background information" that Ollis requested while "carry[ing] out his duties" as Vice President of one joint venture partner. See United States v. Tarantino, 846 F.2d 1384, 1413 (D.C. Cir. 1988).
The first link is more problematic. Because plaintiffs cannot identify the person to whom Niebergall spoke, defendants contend his statements cannot possibly have been in furtherance of the bid-rigging conspiracy.*fn32 (Reply Five at 12-13.) This threshold admissibility issue was one for the Court to determine by a preponderance of the evidence, Bourjaily v. United States, 483 U.S. 171, 175 (1987), and several elements of Ollis's testimony convince it that plaintiffs met their burden. First, Pietchottka indicated that he heard Niebergall, a Holzmann employee, "talking to one of the other contractors" about a payment for not bidding on a contract. (Mar. 27, 2007 PM Tr. at 62.) Given plaintiffs' other evidence that the instant bid-rigging conspiracy involved such payments among construction contractors, it would be reasonable to infer that Niebergall was speaking to a co-conspirator about a promised payment. A second fact bolsters this inference: Pietchottka told Ollis that the conversation escalated into a "heated argument." (Id.) Finally, Niebergall ultimately directed the other party to talk to "PS," or Pieter Schmidt,. (Id.) That Niebergall referred the other party to Schmidt, a pivotal figure in the overall conspiracy, and that the other party was familiar enough with Schmidt to associate these initials specifically with him, further suggest the mystery caller was a fellow conspirator. Thus, it appears more likely than not Niebergall's statements to the unknown caller were made in furtherance of the conspiracy. Accordingly, having reevaluated Ollis's statements' admissibility, the Court again concludes they were non-hearsay under Rule 801(d)(2)(E).
Finally, Ollis repeated Niebergall's statement that "he could bid the work for [Jones] in Egypt, because he knew all the prices before they were submitted." (Mar. 27, 2007 PM Tr. at 63.) Defendants characterize Niebergall's statement as "spilling the beans" and therefore outside the scope of Rule 801(d)(2)(E). (Motion Five at 22-23 (citing City of Tuscaloosa v. Harcros Chems., 158 F.3d 548, 559 (11th Cir. 1998)).) Plaintiffs, however, insist "Niebergall was essentially attempting to recruit Ollis into the bid-rigging conspiracy by offering to handle Jones' bidding process for them," (Opposition Five at 20), which would have furthered the conspiracy's interests, see City of Tuscaloosa, 158 F.3d at 559. Considered in context, the latter reading is more plausible. At a dinner meeting between executives from Jones and Holzmann, during a discussion of Jones's international various projects, Niebergall, who represented Holzmann's International Division, offered to bid work for Jones on an international project.*fn33 (See Mar. 27, 2007 PM Tr. at 62, 63.) Rather than mere bragging or boasting,*fn34 Niebergall offered -- at a business meeting between corporate executives -- to share the bid-rigging conspiracy's benefits with Jones. Hence, the Court concludes this statement was intended to advance the conspiracy's objectives and was properly admitted under Rule 801(d)(2)(E).
3. Ernest Teal
Third, defendants protest Ernest Teal's relation of double hearsay. (Motion Five at 23; Motion Eight at 10.) Teal testified that Jurgen Schoenwasser told him Pieter Schmidt and Johnie Jones had ordered Schoenwasser to cancel a scheduled audit of Contract 20A. (Mar. 28, 2007 AM Tr. at 49.) As plaintiffs explain, (Opposition Five at 20 n.24), Schoenwasser's statement to Teal was not hearsay because plaintiffs offered it for its effect on Teal -- to show why he did not audit Contract 20A. (Mar. 28, 2007 AM Tr. at 47-53.) And considering that Schmidt was a key player in the bid-rigging conspiracy, plaintiffs' proffered explanation -- that Schmidt and Jones ordered the audit cancelled "to conceal facts pertinent to the conspiracy and  to the diversion of profits," (Opposition Five at 21) -- is wholly reasonable.*fn35 Accordingly, Schmidt and Jones's directions to Schoenwasser were likewise non-hearsay (under Rule 801(d)(2)(E)), and the Court did not err in admitting Teal's testimony.
In sum, of defendants' myriad complaints concerning hearsay evidence, only one rings true. Ollis' recounting of Davidson's advice to Ollis and Miller that they retain personal attorneys, (Mar. 27, 2007 PM Tr. at 50-51), was not properly admissible either for its effect on the hearer or as a joint venturer's statement. Nonetheless, this statement's admission did not comprise "a clear miscarriage of justice" that would prompt this Court to order a new trial. See Wild, 377 F. Supp. 2d at 189.
C. McAfee Testimony
Over defendants' repeated and strenuous objections, this Court permitted Professor R. Preston McAfee to testify as an expert in the field of economics on plaintiffs' behalf. (Order of Apr. 4, 2007 ; Apr. 5, 2007 PM Tr. at 49, 58, 72-73.) Specifically, McAfee "was asked to explain how auctions and bidding work, how collusion in auctions work[s], and the incentives that are created for seeking cost-reducing technologies." (Id. at 75.) Defendants opposed -- and still oppose -- his testimony as an expert on these subjects. (See Motion Five at 37-44; Motion Eight at 18-25.)
Federal Rule of Evidence 702 principally governs admission of expert testimony. The party seeking to present the expert's testimony must convince the Court of its admissibility by a preponderance of the evidence. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592 & n.10 (1993). In all instances, the proffered expert must be qualified "by knowledge, skill, experience, training, or education," and his testimony must be helpful to the trier of fact. Fed. R. Evid. 702. Generally, his testimony must be "based upon sufficient facts or data" and must also be "the product of reliable principles and methods," applied "reliably to the facts of the case." Id.
Evidently relying on this last phrase, defendants protest that McAfee's testimony was "completely unmoored from the facts of this case." (Motion Eight at 19.)*fn36 Yet courts routinely permit experts to "explain principles without applying them or offering an opinion on the ultimate issue." See, e.g., Erickson v. Baxter Healthcare, Inc., 151 F. Supp. 2d 952, 968 (N.D. Ill. 2001).*fn37 As the Advisory Committee's Note to Rule 702 recognizes, it might  be important in some cases for an expert to educate the factfinder about general principles, without ever attempting to apply these principles to the specific facts of the case . . . . The  amendment does not alter the venerable practice of using expert testimony to educate the factfinder on general principles.
Fed. R. Evid. 702 Advisory Committee's Note (emphasis added).*fn38 Thus, while an expert may base his opinion on "facts or data in the particular case . . . perceived by or made known to the expert at or before the hearing," he may alternatively rely on facts or data "of a type reasonably relied upon by experts in the particular field," whether admissible or not. Fed. R. Evid. 703. Hence, so long as McAfee's testimony satisfied Rule 702's other requirements, it was properly admitted regardless of whether he reviewed facts particular to this case or applied the economic principles he explicated to them.
When an expert testifies "to educate the factfinder on general principles,"*fn39 Rule 702 requires that: (1) the expert be qualified;*fn40 (2) the testimony address a subject matter on which the factfinder can be assisted by an expert; (3) the testimony "fit" the facts of the case, and (4) the testimony be reliable. Fed. R. Evid. 702 Advisory Committee's Note. The latter three criteria follow directly from the Supreme Court's landmark decision on Rule 702 in Daubert. There, the Court directed district courts evaluating proffered experts to conduct a "preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue." Daubert, 509 U.S. at 592-93. This assessment's objective is two-pronged: it "ensure[s] the reliability and relevancy of expert testimony." Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999). Consequently, reliability is among the Advisory Committee's four criteria. Fed. R. Evid. 702 Advisory Committee's Note. Its second criterion -- "that the evidence or testimony 'assist the trier of fact to understand the evidence or to determine a fact in issue'" -- "goes primarily to relevance." Daubert, 509 U.S. at 591. And its third criterion, "fit," simply restates this relevancy consideration. Id. See also United States v. Downing, 753 F.2d 1224, 1242 (3d Cir. 1986) ("An additional consideration under Rule 702 -- and another aspect of relevancy -- is whether expert testimony proffered in the case is sufficiently tied to the facts . . . that it will aid the jury in resolving a factual dispute.").
Addressing the helpfulness requirement, defendants contend McAfee testified only "to matters of 'common sense,' which [are] not the proper subject of expert testimony." (Reply Eight at 12.) A review of his direct examination reveals that defendants have committed a frequent error of non-economists: confusing correlation with causation. McAfee's conclusions may, to some degree, have accorded with "common sense" notions, but this coincidence does not necessarily imply that his conclusions derived from "common sense." McAfee explained to the jury, inter alia, the U.S. federal government's standard procurement process, (Apr. 5, 2007 PM Tr. at 76-77), auction bidders' incentives to discover cost-reducing technology, both before and after bids are submitted, in competitive and collusive processes, (id. at 84-87, 93-94), and the typical equilibrium points for winning bids in oral and sealed-bid auctions, (id. at 104-06). These are precisely the sort of specialized, technical matters concerning which a lay jury may benefit from a qualified expert's tutelage.*fn41 McAfee distilled complex economic concepts into language that would be comprehensible to the jury. While this may have enhanced his testimony's persuasive value, it did not render that testimony inadmissible.*fn42
Continuing with the subject of relevancy, defendants offer several arguments which the Court construes as attacking McAfee's testimony's "fit" with the facts of this case. They focus predominantly on McAfee's reliance on a set of assumptions in articulating his model of cartel behavior. (Motion Five at 39, 41; Motion Eight at 19-21.)
As set forth in McAfee's testimony, several assumptions underpinned his analytic model:
(1) the government procurement process begins with a need; (2) "there is a qualification stage for potential suppliers" of that need; (3) the government issues a sealed-bid tender, or request for supply, to the qualified bidders; (4) interested, qualified bidders respond by submitting sealed bids; and (5) the government "either picks the lowest priced supplier or  negotiates with that supplier." (Apr. 5, 2007 PM Tr. at 76-77.) He then explained how, under this set of assumptions, a prospective bidder would select his bid price in a competitive auction, (id. at 78-90), and how he would do so in a cartel situation, (id. at 90-104).
As defendants correctly point out, an expert may rely on assumptions, but those assumptions must be "based on fact." Three Crown Ltd. P'ship v. Salomon Bros., 906 F. Supp. 876, 893-94 (S.D.N.Y. 1995) (excluding damages expert's testimony where he assumed, inter alia, that one of plaintiff's investment groups -- "which, by its own admission, conducted highly leveraged discretionary trading which frequently had to be adjusted to keep pace with the rapidly changing market and that mandates ever evolving opportunities for profit and loss" -- would have entered a particular future line of trades). See also Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549, 569 (D.C. Cir. 1993) (holding damages expert's testimony should have been excluded where he assumed that decedent would have entered a wholly new line of work).
According to the defendants, "several of McAfee's key assumptions proved to be either demonstrably wrong or contrary to the testimonial record." (Motion Five at 41.) First, they cite his "assumption" that this case involved U.S. government procurement, explaining that Egyptian authorities managed the bidding on the contracts at issue here. (Id.) Yet the record reflects no such assumption. McAfee merely analogized the auctions in the instant case to the typical government procurement process:
Q: What is your understanding of how the procurement process that you just described generally compares to the process that took place on the contracts at issue in this case?
A: Well, my general understanding is that it's similar, it's the same, that is to say, there were announced needs, there were requests for bids, the bids were submitted. In one case there was negotiation that followed. My understanding is that it matches quite well. (Apr. 5, 2007 PM Tr. at 78.) Defendants were free to query McAfee about this analogy on cross-examination and to argue any dissimilarities to the jury.*fn43
Defendants save their harshest criticism for McAfee's assumption "that a cartel in fact existed amongst all the bidders on the USAID contracts," (Motion Five at 39; see also Motion Eight at 20), but yet again, meticulous examination of the record reveals no such assumption. McAfee never assumed that a cartel existed in this case.*fn44 (See,e.g., Apr. 5, 2007 PM Tr. at 78 ("Q. And I think it was correctly pointed out before the break that you're not making a determination . . . here about whether there was a cartel or not, correct? A. That's correct."); id. at 127 ("Q. -- but you haven't made any determination whether there is a cartel in this case. A. I have not.").) Rather, he contrasted how a procurement auction would operate under competitive conditions with how it would operate under collusive conditions, (see id. at 78-104), leaving the jury to determine which scenario best "fit" the facts in this case.
Hence, the Court concludes McAfee's testimony as a "teaching witness" educated the jury about theoretical characteristics of collusive behavior in an auction setting and assisted them in determining whether events in this case bore the hallmarks of such collusion.*fn45 While McAfee's model may not have mimicked the facts herein in every minute detail, it was "sufficiently tied to the facts of the case . . . [to] aid the jury in resolving [this] factual dispute." See United States v. Downing, 753 F.2d 1224, 1242 (3d Cir. 1986).
"[T]he test of reliability is 'flexible,' . . . [and] the law grants a district court the same broad latitude when it decides how to determine reliability as it enjoys in respect to its ultimate reliability determination." Kumho, 526 U.S. at141-42. Defendants nonetheless contend the Court exceeded this broad latitude in admitting McAfee's testimony, which they claim was not "the product of reliable principles and methods" as required by Rule 702.*fn46 (Motion Eight at 21- 23, 24-25.)
Though "[m]any factors will bear on the [reliability] inquiry," in Daubert, the Supreme Court offered "some general observations" on the subject. 509 U.S. at 593. Whether a theory or technique has been tested, whether it has been subjected to peer review and publication, its potential rate of error, and its "general acceptance" may all bear on its reliability. Id. at 593-94. As the Court emphasized in Kumho, however, a trial court has "considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable," and in doing so, it may consider any "reasonable measures" of that testimony's reliability. 526 U.S. at 152.
Because McAfee confined his testimony to general economic theory -- in defense counsel's words, "vanilla economics," (Apr. 5, 2007 PM Tr. at 125) -- the Court believes two factors discussed in Daubert are particularly "reasonable measures" by which to evaluate his testimony's reliability, see 526 U.S. at 152. First, according to McAfee's unrebutted statements, his theories on auctions have formed the subject of over twenty peer-reviewed articles and numerous other publications. (Apr. 5, 2007 PM Tr. at 52-54.) Second, though he did not specifically describe the provenance of each portion of his testimony, it avowedly embodied basic principles taught in undergraduate economics courses, which indicates the theories he expounded are generally accepted in the field of economics. (See id. at 125.) Indeed, McAfee's credentials rendered him supremely well-qualified to testify on generally-accepted economic principles: he holds a Ph.D. and has taught at Purdue University, the University of Western Ontario, the University of Texas, and the California Institute of Technology, where he currently heads the economics department. (Id. at 50-51.) In light of these circumstances, the Court finds McAfee's testimony was reliable, as required by Daubert and Rule 702.*fn47
Because McAfee's testimony as a "teaching witness" satisfied both Rule 702's criteria and Daubert's reliability and relevancy requirements, its admission was proper.
D. Jury Instructions
Defendants next challenge several jury instructions.*fn48 A district court enjoys broad discretion in crafting language for jury instructions. Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549, 556 (D.C. Cir. 1993). Hence, "[t]he standard for determining whether an erroneous jury instruction mandates a new trial is the general harmless error standard." In re Lorazepam & Clorazepate Antitrust Litig., 467 F. Supp. 2d 74, 89 (D.D.C. 2006) (Hogan, C.J.) (citing Williams v. U.S. Elevator Corp., 920 F.2d 1019, 1022 (D.C. Cir. 1990)).
Both substantive FCA provisions alleged in plaintiffs' complaint provide for liability only when the defendant acts "knowingly." 31 U.S.C. § 3729(b)(1), (2) (2008). In relevant part, this Court defined "knowingly" for the jury as follows:
. . . that a defendant, with respect to information:One, had actual knowledge of the information; or two, acted in deliberate ignorance of the truth or falsity of the information; or three acted in reckless disregard of the truth or falsity of the information . . . . Plaintiffs may establish that a defendant had knowledge through circumstantial evidence . . . . If it appears from the evidence in the case that a defendant or defendants had information which would lead a reasonably prudent person to make an inquiry through which he would have surely learn[ed] certain facts, then the defendant or defendants may be found to have had actual knowledge of these facts, the same as if the defendant or defendants had made such inquiry and had actually learned such facts. (May 4, 2007 PM Tr. at 48-49.) Defendants suggest this last sentence, referring to "reasonable inquiry," reduced the knowledge standard to one of mere negligence. (Motion Five at 24.)
Yet the FCA's scienter requirement clearly embraces the very circumstances the Court described. According to Judge Oberdorfer, Congress placed reckless disregard among the three alternative scienter tests in the FCA "to address the refusal to learn of information which an individual, in the exercise of prudent judgment, should have discovered." United States ex rel. Ervin & Assocs., Inc. v. Hamilton Sec. Group, 370 F. Supp. 2d 18, 42 (D.D.C. 2005). Thus, the FCA imposes liability "not just [on] those who set out to defraud the government, but also [on] those who ignore obvious warning signs." Crane Helicopter Servs., Inc. v. United States, 45 Fed. Cl. 410, 433 (Fed. Cl. 1999). See also United States v. Krizek, 111 F.3d 934, 942 (D.C. Cir. 1997) ("the best reading of the Act defines reckless disregard as an extension of gross negligence"). The statute's legislative history confirms this reading. When Congress amended the FCA in 1986, adding the word "knowingly," the accompanying Senate Report noted that "those doing business with the Government have an obligation to make a limited inquiry to insure that the claims they submit are accurate." S. Rep. No. 99-345, at 7 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5272.*fn49 These authorities confirm it was not error for this Court to instruct the jury that failure to inquire when known facts reasonably compel such inquiry falls within the FCA's definition of "knowledge."*fn50
The Court instructed the jury at length on the definition and elements of conspiracy, (see May 4, 2007 AM Tr. at 48, 58-65), and defendants point to several alleged errors in these instructions, two of which merit discussion.*fn51
First, defendants assert that the Court failed to instruct or improperly instructed the jury as to the intent and/or knowledge necessary to join a conspiracy. (Motion Eight at 29-31.) In their view, the Court's instructions reduced the standard to gross negligence when specific intent was required. (Reply Eight at 24.) In fact, the Court twice explained in its charge that to find a particular defendant liable for conspiracy, the jury must find that the defendant "willfully became a member of the conspiracy." (May 4, 2007 AM Tr. at 59, 60.) Defendants do not contend this instruction misstated the law, nor can they.*fn52 See, e.g., United States v. White, 116 F.3d 903, 927 (D.C. Cir. 1997); United States v. Yunis, 924 F.2d 1086, 1096 (D.C. Cir. 1991).
Instead, they suggest the charge was misleading because it was not given coincident with the elements of a FCA conspiracy claim, but rather along with several pages of instructions on conspiracy generally, and because it failed to define "willfully," which the jury allegedly could have confused with the Court's definition of "knowingly."*fn53 (Motion Eight at 30-31.) Like the trial to which they pertained, the jury instructions in this case were quite lengthy, but they were not so convoluted as to induce confusion. When the Court read the applicable provisions of the FCA, it listed their elements in accordance with the statute. (May 4, 2007 AM Tr. at 46-48.) In particular, it listed the first element of subsections (a)(1) and (a)(2) as "the defendant knowingly." (Id. at 46, 47.) By contrast, the Court listed the first element of subsection (a)(3) as "the defendant conspired with one or more persons." (Id. at 48.) The Court later separately defined "knowingly" and "conspired." (Id. at 49-50, 59.) While the Court could certainly have ordered these instructions differently, the order it followed was logical and within its broad discretion. See Joy, 999 F.2d at 556.
Second, defendants assert the Court improperly omitted damages as an essential element of FCA conspiracy. (Motion Eight at 28 n.16.) They cite this Court's Memorandum Opinion & Order of March 7, 2007  listing damages as an element, which in turn cited its opinion in United States v. Bouchey, 860 F. Supp. 890, 893 (D.D.C. 1994). Notwithstanding this Court's language in Bouchey, other courts have concluded that damage to the government is not an essential element of FCA conspiracy. See, e.g., United States ex rel. Finney v. NextWave Telecom, Inc., 337 B.R. 479, 489 (S.D.N.Y. 2006); United States ex rel. Atkinson v. Pa. Shipbuilding Co., No. 94-7316, 2004 U.S. Dist. LEXIS 14532, at *13 (E.D. Pa. July 28, 2004); United States v. St. Luke's Subacute Hosp. & Nursing Centre, Inc., No. C 00-1976, 2004 U.S. Dist. LEXIS 25380, at *15 (N.D. Cal. Dec. 16, 2004); United States ex rel. Taylor v. Gabelli, 345 F. Supp. 2d 313, 331 (S.D.N.Y. 2004). Moreover, given that the jury specifically found the government suffered damage on each contract, any error was clearly harmless.
3. Imputed Knowledge
The Court also instructed the jury on imputed knowledge and collective imputed knowledge. (May 4, 2007 AM Tr. at 54-55.) Defendants insist this instruction was flawed because it "was incomplete in that it failed to state that knowledge may be imputed only if the agent is acting with the intent to benefit the principal." (Motion Five at 24.)
"As a general rule, knowledge acquired by a corporation's officers or agents is properly attributable to the corporation itself." BCCI Holdings, S.A. v. Clifford, 964 F. Supp. 468, 478 (D.D.C. 1997) (Green, J.). Accord United States v. Sun-Diamond Growers of Cal., 964 F. Supp. 486, 491 n.10 (D.D.C. 1997) (Urbina, J.) ("knowledge obtained by a corporate agent acting within the scope of his employment is imputed to the corporation"). Several exceptions to this rule exist, such as where the officer or agent is "adversely interested" to the corporation. This exception follows logically from the rule's purpose. It cannot be presumed that an officer or agent will communicate knowledge to a corporation where "it is to the agent's own interest not to impart the knowledge to the principal."
BCCI Holdings, S.A., 964 F. Supp. at 478 (internal citations omitted). Defendants' first complaint implicates this "adverse agent" exception.
Yet because the rule endeavors "to protect third parties . . . not  to serve 'as a shield for unfair dealing,'" the exception "applies only to fraud against the corporation, not to fraud on behalf of the corporation." Id. (citing FDIC v. Ernst & Young, 967 F.2d 166, 171 (5th Cir. 1992)). Indeed, according to our Court of Appeals,
[t]he Supreme Court has held that if a company's agents withholdknowledge from it, even fraudulently, thatfact "cannot alter the legal effect of their acts or of their knowledge with respect to the company in regard to third parties who had no connection whatever with them in relation to the perpetration of the fraud, and no knowledge that any such fraud had been perpetrated."
Bowen v. Mount Vernon Sav. Bank, 105 F.2d 796, 799 (D.C. Cir. 1939) (quoting Armstrong v. Ashley, 204 U.S. 272, 283 (1907)). Bowen admittedly involved very different facts from those in the instant case, but the Court of Appeals' skeptical commentary on the adverse agent exception is worth repeating:
The so-called presumption that the principal knows what the agent knows is irrebuttable; it cannot be avoided by showing that the agent did not in fact communicate his knowledge. It should follow that it cannot be avoided by showing that the agent had such an adverse interest that he would not be likely to communicate his knowledge.
Here, considering that the corporate defendants all benefitted (at least in the short term) from the actions of their allegedly adverse agents -- they obtained high-priced construction projects funded by the United States government, and according to the jury's verdict, charged the government significantly more than it would otherwise have paid -- these same defendants cannot avoid imputation of their agents' knowledge in a suit by the defrauded third party, the United States. The Court concludes its omission of defendants' proposed qualifying language -- "knowledge may be imputed only if the agent is acting with the intent to benefit the principal" -- was not error.
Next, defendants contend the FCA does not permit collective knowledge imputation.*fn54
Yet in the FCA case they cite for this proposition, the court simply concluded those facts did not "warrant the use of the collective corporate knowledge doctrine." United States v. United Techs. Corp., 51 F. Supp. 2d 167, 199 (D. Conn. 1999). And while the seminal case discussing this doctrine involved corporate criminal liability, United States v. Bank of New England, N.A., 821 F.2d 844, 856 (1st Cir. 1987), the doctrine has been applied in the civil context as well, and in this Circuit, see United States v. Phillip Morris USA, Inc., 449 F. Supp. 2d 1, 893-95 (D.D.C. 2006) (Kessler, J.). Absent any authority to the contrary, the Court concludes its instruction on the collective knowledge doctrine was not improper.*fn55
4. Imputed Liability
Because five of the six defendants at trial were corporations, the Court instructed the jury on multiple theories of imputed liability. (See May 4, 2007 AM Tr. at 52-58 (discussing, inter alia, respondeat superior, agency, joint venture, apparent authority, imputed knowledge, collective imputed knowledge, and alter ego).) Defendants characterize these instructions as "repetitive" but do not specifically indicate which among the imputed liability instructions could have been excluded as purely redundant.*fn56 (Motion Five at 25-26.) And even had they done so, "the mere fact that an instruction is repetitive is not a basis for reversal, as long as the legal principles it enunciates are correct." Lewy v. S. Pac. Transp. Co., 799 F.2d 1281, 1299 (9th Cir. 1986). Indeed, to constitute grounds for a new trial, repetitious instructions must be grossly prejudicial. See, e.g., Howard v. Cincinnati Sheet Metal & Roofing Co., 234 F.2d 233, 236 (7th Cir. 1956) ("The jury was told twenty times 'your verdict should be for the defendant,' 'plaintiff cannot recover,' 'defendant would not be liable' and 'defendant would not be guilty of negligence.' . . . [T]he instructions as a whole unduly emphasized defendant's version of the case . . . ."). It is well established that federal civil plaintiffs may pursue multiple theories of liability, and where the evidence establishes an adequate factual basis, the Court may properly instruct on them. See, e.g., Hurley v. Atlantic City Police Dep't, 174 F.3d 95, 125 (3d Cir. 1999). Defendants cannot gain a second bite at the apple by arguing otherwise.*fn57 Hence, to the extent any of defendants' challenges to the jury instructions succeeds, the error was harmless and does not compel a new trial.
E. Admission of Evidence Contrary to Stipulation
On the record during trial, the parties jointly stipulated that: "BHIC did not exist at the time Contracts 20A, 29, 07 were bid or entered into." (Apr. 25, 2007 PM Tr. at 36-37.) "The general rule is that parties are bound by stipulations voluntarily made . . . ." Farmers Coop. Elevator Ass'n Non-Stock of Big Springs, Neb. v. Strand, 382 F.2d 224, 231 (8th Cir. 1967). Further, "stipulations of fact fairly entered into are controlling and conclusive, and courts are bound to enforce them." Mobil Exploration & Producing U.S., Inc. v. NLRB, 200 F.3d 230, 234 n.1 (5th Cir. 1999) (citations omitted). Accord Fisher v. First Stamford Bank & Trust Co., 751 F.2d 519, 523 (2d Cir. 1984) ("stipulation of fact that is fairly entered into is controlling on the parties and the court is bound to enforce it").
BHIC claims the Court permitted plaintiffs to contradict the quoted stipulation by introducing Plaintiffs' Exhibit 682, BHIC's pre-qualification application for a contract not at issue here. (Motion Eight at 26-28.) Though defendants initially objected to the exhibit's admission on authentication grounds, (Apr. 12, 2007 AM Tr. at 63-66), the parties subsequently stipulated to its admissibility, and the Court received it "without objection," (Apr. 25, 2007 AM Tr. at 126). Hence, BHIC has waived any challenge to this exhibit.*fn58 Defendants also point to a question relator's counsel posed to Alf Hill*fn59 and to a statement by government counsel in closing argument*fn60 as contradicting the stipulation. Considered in context, however, these short blurbs merely supported plaintiffs' theory that BHIC was effectively indistinguishable from BLH Enterprises, an entity that did exist at "the time [when] Contracts 20A, 29, 07 were bid or entered into." As they explain in their opposition:
Plaintiffs do not dispute that at the time the contracts at issue were bid or entered into BHIC by the name of BHIC did not exist. However, the evidence at trial established that a company named BLH Enterprises was originally formed in 1986 and ultimately became BHIC in 1992. BLH Enterprises, just like BHIC, was 100% owned by Bill L. Harbert. The evidence showed that one of the principal purposes of the reorganization and name change from BLH Enterprises to BHIC was to create a company that would hold ownership in, and provide support services to Bilhar. (Opposition Eight at 12 n.9.) This position is not inconsistent with the stipulation that BHIC did not exist prior to 1992, and the Court did not breach its duty in permitting plaintiffs to argue it.*fn61
F. Judicial Bias
Defendants next seek a new trial based on an alleged appearance of judicial bias created by this Court's comments, questions, and evidentiary rulings. (Motion Eight at 9-18.) In evaluating this claim, the Court "consider[s] the record as a whole, not merely isolated remarks."*fn62 Newman v. A.E. Staley Mfg. Co., 648 F.2d 330, 334-35 (5th Cir. 1981).
"A trial judge is not required to sit mute in the courtroom and merely wield his gavel as moderator." United States v. Jackson, 627 F.2d 1198, 1206 (D.C. Cir. 1980), overruled in part on other grounds by United States v. Lipscomb, 702 F.2d 1049, 1053-54 (D.C. Cir. 1983). Rather, a judge may "interrogate witnesses," Fed. R. Evid. 614(b), "when he deems that the end of justice may be served thereby and for the purpose of making the case clear to the jurors," Griffin v. United States, 164 F.2d 903, 904 (D.C. Cir. 1947). Though they should not ask "questions that signal their belief or disbelief of witnesses," United States v. Tilghman, 134 F.3d 414, 416 (D.C. Cir. 1998), "[j]udges enjoy broad latitude regarding the type of questions asked and the extent of their questioning," United States v. Stover, 329 F.3d 859, 868 (D.C. Cir. 2003).
Considered in context, the Court's challenged questions and comments did not exceed this "broad latitude." First, during Ernest Teal's testimony, relator's counsel queried him about a proposed audit of Contract 20A. (Mar. 28, 2007 AM Tr. at 47-55.) According to Teal, he "had determined that we needed to go take a look at" Contract 20A but never followed through with an audit because a superior, Jurgen Schoenwasser, directed him not to do so. (Id. at 47, 49.) Relator's counsel asked Teal whether "any other superior [had] ever overruled [his] decision to conduct an audit," to which Teal responded negatively. (Id. at 54.) This Court then asked, "That's like a red flag to a bull, isn't it, to an auditor?" (Id.) Teal answered, "To me it was, yes, sir." (Id. at 55.) Defendants insist the Court's question "clearly told the jury that the Judge believed there was something sinister in the cancellation of the audit."*fn63 (Motion Eight at 11.) Yet the Court simply asked Teal if -- in light of his auditor's training -- he found something amiss in Schoenwasser's order. Teal was free to disagree, and defendants had ample opportunity to cross-examine on this point (and did).
Second, after a lengthy cross-examination concerning the revised engineer's estimate on Contract 20A, the Court asked Michael Gould a series of questions:
THE COURT: Do you know if it was the same people that did the May estimate as did the October estimate for AMBRIC?
THE WITNESS: I do believe that's true, Your Honor . . . .
THE COURT: Wasn't it unusual, in your experience, for the bids to come back at double  the original engineer's estimate . . . ?
THE WITNESS: Yes, we thought that was very unusual.
THE COURT: Ever happen before?
THE WITNESS: We've had bids come in considerably higher than the engineer's estimate, but I don't recall having them come in double. (Apr. 5, 2007 AM Tr. at 81.) Defendants contend this exchange "suggested to the jury that the Judge discounted the original . . . estimate, rejected the fully developed AMBRIC estimate . . . and viewed the [revised engineer's] estimate to be the proper one for comparison." (Motion Eight at 12.) Objectively, however, the Court's questions do not bear this interpretation. Rather, they helped the jury to put the discrepancies among the bids and estimates in proper context.*fn64
Third, defendants argue the Court's interaction with plaintiffs' expert demonstrated that the Court believed the winning bids on all contracts must have been inflated, and that a bid-rigging conspiracy existed. (Motion Eight at 13.) Each question or comment that defendants cite, however, did nothing more than provide helpful clarification to the jury.*fn65
Finally, defendants contend this Court's rulings on objections "clearly telegraphed to the jury [its] view of the case." (Motion Eight at 15.) They first cite three instances in which the Court overruled their objections that plaintiffs' counsel's questions misstated the evidence.*fn66
(See Mar. 26, 2007 AM Tr. at 16; Mar. 30, 2007 PM Tr. at 78; Apr. 17, 2007 PM Tr. at 63.) Their disagreement with these rulings amounts to an attack on the sufficiency of the evidence that Greselin reached an agreement with Schmidt on Contract 29, and that Harbert-Jones was a party to collusion on Contract 07. (See Motion Eight at 15-16.) The Court will address these matters below. See infra part III.A.2-3.
Additionally, defendants point to two instances in which the Court sustained plaintiffs' objections that defense counsel's questions misstated the evidence. (Motion Eight at 17.) In both cases, however, defendants' questions did misstate the evidence. First, Ollis testified that Anderson did not identify which contract had been "set up;" he did not, as defense counsel stated, deny that Anderson was speaking of Contract 20A. (Mar. 28, 2007 AM Tr. at 15.)
Second, HC's counsel stated during his cross-examination of McAfee that
Fru-Con, the people who were involved with these discussions about payoffs, never told the people doing the actual bidding that there was anything going on, any bid rigging or anything like that, and that those people who actually did the bidding came up with their best bid of $131 million. (Apr. 5, 2007 PM Tr. at 114.) Contrary to defendants' assertions, Dieter Kadenbach's testimony -- that to his knowledge, no estimator knew of his conversations with Schmidt or was influenced by conversations with competitors, (Mar. 22, 2007 PM Tr. at 14, 25) -- does not establish that the "people doing the actual bidding" were wholly ignorant of any collusive agreement and also immune to pressure from those in the know.
Considering the record as a whole, Newman v. A.E. Staley Mfg. Co., 648 F.2d 330, 334-35 (5th Cir. 1981), the Court concludes its comments, questions, and evidentiary rulings did not create an appearance of judicial bias that would compel a new trial.
G. Admission of Finances Evidence
Before trial, the Court denied motions by HII and HC to exclude evidence of defendants' current wealth and of their profits on the three contracts at issue. (Order of Mar. 15, 2007  at 3, 4-5.) Declining to issue a "blanket exclusion," the Court observed that wealth evidence "could prove relevant," and that there were "many potential, permissible uses" for profits evidence. (Id.) During the trial, plaintiffs introduced both types of evidence, and defendants now insist the Court should have excluded this evidence as irrelevant, or alternatively, under Federal Rule of Evidence 403. (Motion Five at 30-33, 34-47.)*fn67
The FCA expressly provides that a violator may be liable only for the "amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3129(a) (2008). Hence, the proper measure of damages in this FCA action was "the difference between what the United States paid and what it would have paid had there been no bid-rigging agreement."*fn68 (May 4, 2007 AM Tr. at 65 (final jury instruction).) See also United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908, 922-23 (4th Cir. 2003) ("the amount of money the government paid by reason of the false statements over and above what it would have paid absent the false statement"), followed by United States ex rel. Ervin & Assocs., Inc. v. Hamilton Sec. Group, 370 F. Supp. 2d 18, 55 (D.D.C. 2005) (Oberdorfer, J.); United States v. Mackby, 339 F.3d 1013, 1018 (9th Cir. 2003), cert. denied 541 U.S. 936 (2004) ("Ordinarily the measure of the government's damages under the FCA would be the amount that it paid out by reason of the false statements over and above what it would have paid if the claims had been truthful." (citation omitted)).
Yet "where the defendant by his own wrong has prevented a  precise computation" of this difference, damages are not entirely foreclosed. Bigelow v. RKO Pictures, Inc., 327 U.S. 251, 264 (1946). See also New York v. Hendrickson Bros., Inc., 840 F.2d 1065, 1077 (2d Cir. 1988) (plaintiff's burden of proving what would have been paid absent collusion is lightened where "there is a dearth of market information unaffected by the collusive action of the defendants"). Though "the jury may not render a verdict based on speculation or guesswork," in such a case it "may make a just and reasonable estimate of the damage based on relevant data."*fn69
Bigelow, 327 U.S. at 264. See also Samaritan Inns v. District of Columbia, 114 F.3d 1227, 1235 (D.C. Cir. 1997) ("Although a court will not permit a plaintiff to recover damages based on 'mere speculation or guess,' the fact that an estimate is uncertain or inexact will not defeat recovery, once the fact of injury is shown." (citations omitted)).
As defendants rightly point out, profits should not be used as an automatic proxy when a defendant's conduct has obscured the difference between what the government paid and what it would have paid but for the fraud. See United States ex rel. Taylor v. Gabelli, No. 03-8762, 2005 U.S. Dist. LEXIS 26821, at *50-51 (S.D.N.Y. Nov. 4, 2005) ("False Claims Act does not permit the Relator to disgorge defendants' profits"). Yet this does not render profits wholly irrelevant.
Once it found liability, to calculate damages, the jury had to determine "what [the government] would have paid had there been no bid-rigging agreement." (See May 4, 2007 AM Tr. at 65.) Because each contract was unique, no perfectly comparable data -- the winning bid for an identical project, produced under identical conditions, absent collusion among the bidders -- was available.*fn70 Hence, due to defendants' collusion, the jury could not precisely determine what the government would have paid on any of the three contracts under competitive conditions, and it was left to consider other "relevant data." See Bigelow, 327 U.S. at 264.
Plaintiffs suggest profits could be among these "relevant data" because "evidence of total job costs plus a reasonable profit -- calculated by subtracting the profits from the total contract price and adding in a typical profit percentage supported by the evidence -- is indicative of what the fair market value of the contracts would have been absent collusion." (Opposition Five at 29-30. See also id. at 30 n.33 (describing supporting evidence).) Defendants respond that no evidence demonstrates "how the final costs of a project are indicative of the bid amount the government would have accepted for a project had there been open, competitive and uncontrolled bidding." (Reply Five at 17-18.) Essentially, they contend plaintiffs mistakenly interchange final costs (which determine ultimate profits) with estimated costs (which factor into a bid).
But plaintiffs' proposed equation is not completely off the mark. Plaintiffs offered evidence that, inter alia, profits on international construction contracts of this type typically fell in the 6-15% range. (See, e.g., Mar. 21, 2007 AM Tr. at 82-83; Mar. 22, 2007 AM Tr. at 36, 63; Mar. 28, 2007 AM Tr. at 60.) Thus, generally, a competitive bidder's final costs equal 85-94% of his winning bid (what the government pays). Plaintiffs presented evidence of these defendants' final costs -- their bids less their profits. (See Mar. 14, 2007 AM Tr. at 96-97; Pl.'s Ex. 622; Mar. 26, 2007 AM Tr. at 83-84; Pl.'s Ex. 636.) Plaintiffs propose that these values would have comprised 85-94% of successful bids in a competitive environment -- that is, what the government would have paid. This chain of reasoning is far from illogical, and it need not -- and indeed, as explained above, could not -- yield the precise amount the government would have paid absent collusion. It simply provides a reasonable proxy. To this extent, then, profits evidence was relevant to damages.*fn71
Nevertheless, defendants assert the risk of unfair prejudice from this evidence substantially outweighed its probative value because coupled with plaintiffs' explicit appeals, it encouraged the jury to substitute disgorgement of profits for the proper damages measure. (Motion Five at 33; Reply Five at 18-20; Reply Eight at 18-19.) During closing arguments, government's counsel and relator's counsel both referred to defendants' profits.*fn72 But read in context, their comments amounted to nothing more than a simple, entirely permissible argument: if Harbert-Jones felt it necessary to "hide" $25 million in profits on Contract 20A, then apparently even they thought the government had paid (at least) an extra $25 million due to the bid-rigging. Plaintiffs simply pointed to another "relevant dat[um]" for the jury to consider when calculating the premium the government paid due to the bid-rigging.
In any event, if plaintiffs' counsel did intend to encourage the jury to adopt disgorgement as a remedy, their efforts obviously failed. As to each contract, the jury's damages award was considerably lower than the correlative profits. (Compare Verdict Form  at 9 ($29,920,000 on Contract 20A), with Mar. 14, 2007 AM Tr. at 96-97 ($55 million in total profits on Contract 20A); Verdict Form  at 10 ($3.4 million on Contract 29), with Mar. 26, 2007 AM Tr. at 83-84, Pl.'s Ex. 636 ($58.5 million on Contract 29); and Verdict Form  at 12 ($1,026,029.22 on Contract 07), with Pl.'s Ex. 622 ($19 million on Contract 07).)
Though the Court did decline to issue a blanket exclusion, it was "hard pressed to imagine how  evidence [of defendants' financial condition] could be relevant, or how any relevance could help but be substantially outweighed by the undue prejudice and confusion likely to ensue." (Order of Mar. 16, 2007  at 3.) Indeed, "[c]courts have held that appealing to the sympathy of jurors through references to the relative wealth of the defendants . . . is improper and may be cause for reversal." Adams Labs. v. Jacobs Eng'g Co., Inc., 761 F.2d 1218, 1226 (7th Cir. 1985). And remarks "suggesting that the defendant should respond in damages because it was rich and the plaintiff poor" may be grounds for a new trial. Wash. Annapolis Hotel Co. v. Riddle, 171 F.2d 732, 740 (D.C. Cir. 1948). More broadly, however, isolated remarks, themselves prejudicial, may have minimal or no impact on the jury in the course of a lengthy trial. See, e.g., United States v. Edmond, 52 F.3d 1080, 1102 (D.C. Cir. 1995) (isolated comments by judge to defense counsel purportedly evincing bias did not warrant new trial).
While cross-examining Raymond Harbert, relator's counsel inquired about the wealth of HII, HC, and non-defendant Harbert Management Company ("HMC"), which manages HC's and other third parties' assets. (Apr. 24, 2007 AM Tr. at 16.) He asked Harbert about HII's current revenues as well as the values HMC manages for its clients, generally, and for HC, in particular. (Id. at 10, 16-17, 18.) Defendants insist these facts bore no relevance to any material issue in the case, and that relator's counsel elicited them only to incite jury bias. (Motion Five at 34-37.)
First, this evidence was relevant. In Labadie Coal Co. v. Black, 672 F.2d 92 (D.C. Cir. 1982), our Court of Appeals adopted a two-part inquiry to be pursued in determining whether to pierce a corporate veil. 672 F.2d at 96. For present purposes, only the second element, fairness, matters: "if the acts are treated as those of the [subsidiary] corporation alone, will an inequitable result follow?" Id. Though fraud and purposeful undercapitalization both satisfy this prong of Labadie, neither is a prerequisite to veil-piercing: "a case must only 'present an element of injustice or fundamental unfairness.'" Id. at 99 (quoting DeWitt Truck Brokers, Inc. v. W. Ray Flemming Fruit Co., 540 F.2d 681, 687 (4th Cir. 1976)). Thus, where "adherence to corporate form . . . could very well 'lead to an evasion of legal obligations,'" evidence of a defendant's present financial condition will be relevant to the alter ego analysis. Bufco Corp. v. NLRB, 147 F.3d 964, 969 (D.C. Cir. 1998) (quoting NLRB v. Greater Kansas City Roofing, 2 F.3d 1047, 1052 (10th Cir. 1993)). Here, the Court had barred relator from pursuing an alter ego theory of liability at trial, (Mem. Op. & Order of Mar. 14, 2007  at 4), but the government remained free to do so, and did. Evidence of HII and HC's present financial condition was relevant to whether adherence to corporate form in this case might allow the putative alter ego, HC, to evade the impact of a judgment against an inadequately capitalized HII.*fn73 Bufco Corp., 147 F.3d at 969. It matters not that relator's counsel, rather than government counsel, elicited the information.
Second, defendants insist that coupled with plaintiffs' improper arguments, this information tended to "appeal to the sympathy of the jurors [and] to incite an anti-defendant bias." (Motion Five at 35.) This contention implicates Federal Rule of Evidence 403. Thus, though as explained above, evidence of defendants' wealth had probative value -- indeed, under Labadie, it was crucial to the government's alter ego theory -- the Court must still determine whether the risk of unfair prejudice substantially outweighed this value.
Reasonably, knowledge that a defendant has the resources to pay a judgment may increase jurors' comfort level in making a large damages award. As the cases defendants cite suggest, however, this danger will most likely materialize when a vast disparity in wealth exists between the parties. See, e.g., Adams Labs., Inc., 761 F.2d at 1226 ("references to the relative wealth of the defendants in contrast to the relative poverty of the plaintiffs" are improper); Draper v. Airco, Inc., 580 F.2d 91, 95 (3d Cir. 1978) ("references to financial disparity" are improper); Wash. Annapolis Hotel Co., 171 F.2d at 740. In closing, relator's counsel did refer to the "less fortunate people in other countries" whom USAID might have assisted with the excess funds paid to defendants due to the bid-rigging.*fn74 (May 3, 2007 PM Tr. at 17.) But plaintiffs here never even approached the sort of egregious misconduct and overt pandering that have compelled reversal or a new trial in other cases. See, e.g., Edwards v. Sears, Roebuck & Co., 512 F.2d 276, 285 (5th Cir. 1975) (during closing argument, counsel discussed "the value which his own son would place on his father's life, . . . [his] personal association with the deceased, [and] the image of deceased's children crying at graveside and forlornly awaiting the return of their father").
After careful consideration, the Court does not believe that a bare handful of remarks in the course of a seven-week trial, cherry-picked by defendants from all over the record, created such unfair prejudice as to substantially outweigh the significant probative value of evidence of defendants' wealth. That defense counsel, from the outset, attempted to paint defendants as "deep pockets" targeted due to their financial success, only bolsters this conclusion. Defense counsel opened with this theme,*fn75 returned to it while cross-examining the relator,*fn76 and finally, cleverly wove the complained of testimony into that theme during closing:
If there was ever a doubt about why these plaintiffs have focused on [HII], that doubt must have been erased for you when Raymond Harbert was on the stand and Mr. Cultice was cross-examining him. Remember all those questions about how much HII is worth today, fifteen years after the events in question? Do you remember that Mr. Cultice thought it was necessary for you to know that Mr. Harbert's new business that wasn't even formed until HII was out of the construction business, manages billions of dollars of assets? (May 2, 2007 PM Tr. at 7 (emphasis added).) As defense counsel spoke these words to the jury, a slide depicting seven, green dollar signs projected onto a screen behind him. In light of this display, defendants' complaints of unfair prejudice ring somewhat hollow.
The Court concludes evidence of HC and HII's wealth was relevant, and though it posed a danger of unfair prejudice, this danger did not substantially outweigh the information's probative value.
H. Apportionment of Damages
Lastly, defendants seek a new trial because they contend the jury should have been directed to apportion damages among the various defendants. (Motion Five at 44-45.)
As a general matter, "the form of verdict is within the trial court's discretion." Hall v. Gen. Motors Corp., 647 F.2d 175, 179 n.10 (D.C. Cir. 1980). And more specifically, "[w]here . . . defendants, if liable at all, are liable for causing the same injury, a jury given special interrogatories should be asked what amount of damages the plaintiff has suffered. All defendants found liable for the injury are then jointly and severally liable for the single award of compensatory damages." Gagnon v. Ball, 696 F.2d 17, 19 n.2 (2d Cir. 1982). Joint and several liability applies equally in a FCA case. United States v. Uzzell, 648 F. Supp. 1362, 1368 (D.D.C. 1986) (Green, J.).
The verdict form in this case asked the jury to determine which defendants, if any, had participated in a conspiracy and which defendants, if any, had committed substantive FCA violations as to each contract.*fn77 (Verdict Form  at 2-8.) It then required them to determine how much damage any liable defendants had caused the government on each contract.*fn78 (Id. at 9-12.) Under joint and several liability, this procedure was proper.*fn79
In sum, close examination of defendants' proposed grounds for a new trial divulges no "clear miscarriage of justice" or "manifest error of law or fact." See Wild v. Alster, 377 F. Supp. 2d 186, 189 (D.D.C. 2005) (Walton, J.); Nyman v. FDIC, 967 F. Supp. 1562, 1569 (D.D.C. 1997) (Urbina, J.). To the extent defendants' motions seek a new trial on the bases canvassed above, or on any other ground not herein discussed, they shall be DENIED.
III. JNOV Motions
A. Sufficiency of the Evidence
Defendants challenge the sufficiency of the evidence in virtually every respect. In addressing their various arguments, the Court will separately examine the evidence, as to each contract, of liability and damages.*fn80 Plaintiffs' complaints stated claims under three separate FCA provisions, two substantive and one inchoate: (1) knowingly presenting (or causing to be presented) a false or fraudulent claim to the government for payment or approval;*fn81 (2) knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government;*fn82 and (3) conspiring to defraud the government by getting a false or fraudulent claim allowed or paid.*fn83 31 U.S.C. § 3729(a) (2008). To the extent defendants separately challenge them in their motions, the Court will evaluate the evidence supporting the jury's liability findings regarding each provision for each contract.
1. Contract 20A
In May 1988, Peter Schmidt of Holzmann, Jones' German parent company, gathered a group of pre-qualified Contract 20A bidders at Holzmann's Frankfurt headquarters -- among them, Dieter Kadenbach of Bilfinger & Berger, Fru-Con's European parent.*fn84 (Mar. 22, 2007 AM Tr. at 80-82.) Schmidt asked the other bidders to ensure Jones' planned joint venture with HII -- Harbert-Jones -- would secure the contract by offering higher bids. (Id. at 82-83.)
Some weeks later, Kadenbach spoke to Schmidt by phone. (Id. at 83.) Schmidt claimed he "could find a solution or an arrangement with the other competitors," and the two men then reached a verbal agreement whereby Fru-Con would bid higher than Harbert-Jones in exchange for 2-3% of the final contract price. (Id. at 82-83.) Pursuant to this agreement, Kadenbach ensured that a 15% markup -- roughly $20 million -- was added to Fru-Con's August and December 1988 bids on Contract 20A. (Id. at 87-89.) After the joint venture had won the contract, Bilfinger & Berger sent an invoice for $1,026,000 to Holzmann seeking payment for its performance of the bargain; Holzmann paid the invoice in full. (Id. at 90-94; Pl.'s Exs. 17, 18.)
In or around August 1988, Schmidt met with Constantine Iatrou of Archirodon, Fuller's parent company, and offered to compensate Fuller if it would refrain from bidding on Contract 20A. (Mar. 21, 2007 AM Tr. at 15-16.) Iatrou ultimately signed a written agreement under which the joint venture would pay Fuller a fee -- 3% of the contract price less the value of a proposed subcontract worth at least $25 million, or alternatively, 5% of the contract price -- not to tender a bid on Contract 20A.*fn85 (Id. at 19-20, 24, 26; Pl.'s Ex. 1.) The document further provided that the joint venture would reciprocate by not bidding on another contract -- either Contract 29 or Contract 23 -- to help assure Fuller would be the winning bidder. (Mar. 21, 2007 AM Tr. at 28-29.) In December 1988, Iatrou met again with Schmidt, and this time, Anderson joined them. (Id. at 40-44.) During the meeting, Anderson handwrote an addendum to the original agreement, making specific references to it, that set Fuller's fee at $3 million. (Id. at 43, 45.) Holzmann ultimately paid Archirodon through one of the latter's subsidiaries. (Id. at 77- 78.)
Based on the evidence, the jury could reasonably have found that HII, through the acts of its agents, Roy Anderson and Bill Harbert, conspired to submit false claims on Contract 20A and knowingly caused false claims to be presented and made.
Both Roy Anderson and Bill Harbert had authority to act for HII as to Contract 20A. In the joint venture's 1988 tender documents on Contract 20A, HII represented that it -- not HIE -- owned a majority stake in the joint venture, and it held out Roy Anderson as its vice-president. (Pl.'s Exs. 109, 162.) Bill Harbert, HII's president at the time, had sent Anderson to London some years before to work on HII's behalf. (Pl.'s Ex. 250.) In 1988 and 1989, he signed powers of attorney authorizing Anderson, "without reservation," to represent HII in bidding for international construction projects. (Pl.'s Ex. 652A-D.)
Armed with this authority, Anderson participated extensively in the instant conspiracy. For example, at the December 1988 meeting between Schmidt and Iatrou, Anderson personally drafted an addendum to the original bid-rigging agreement. (Mar. 21, 2007 AM Tr. at 40-45.) Along with his signature on the addendum,*fn86 the document's explicit references to language in the original agreement -- a copy of which was present at the meeting -- strongly support Anderson's awareness of its contents and import. (See id. at 43-45, 48.) The jury could have found that in drafting the addendum to this collusive agreement, and in ratifying it with his signature, Anderson, acting for HII, willfully joined and advanced the conspiracy.*fn87
From this same evidence, the jury could reasonably have concluded that Anderson had actual knowledge of the conspiracy to rig bids on Contract 20A.*fn88 Additionally, Bill Harbert's 1990 pocket calendar, in which he documented the precise amounts of the five Fuller payoff tranches, reflects his knowledge.*fn89 (See Pl. Ex. 5.) But for HII's participation in the conspiracy, claims submitted by the joint venture on Contract 20A would not have been false. See Hess, 317 U.S. at 543-45. Hence, the jury could reasonably have concluded that HII knowingly*fn90 caused false claims to be made and presented to the government on Contract 20A.*fn91 Moreover, once the jury concluded HII had willfully joined the bid-rigging conspiracy, it could properly have held HII liable for its co-conspirators' knowing creation and presentation of false claims. See Halberstam v. Welch, 705 F.2d 472, 487 (D.C. Cir. 1983). (See also May 4, 2007 AM Tr. at 59, 62.)
Thus, there was evidence in the record from which the jury could reasonably have found HII liable on Contract 20A.
Likewise, the jury could reasonably have found that HC, imbued with the knowledge of its agent, Bill Harbert, conspired to submit false claims on Contract 20A.
Bill Harbert served as HC's president until July 1990, after which he became vice chairman of its board of directors. (Pl.'s Ex. 574A.) He also served as its chief operating officer from August 1984 to December 1991. (Id.) As explained above, the jury could have concluded from Bill Harbert's 1990 pocket calendar notes that he gained knowledge of the bid-rigging on Contract 20A while serving as a fiduciary and manager of HC.*fn92 Based on the Court's instruction, the jury could have imputed this knowledge to HC.*fn93
Further, the jury viewed several pieces of evidence from which it could have found HC willfully advanced the conspiracy by rendering services and providing support crucial to HIE's securing (and submitting false claims on) Contract 20A.*fn94 Most significantly, in an internal workpaper, HC's independent auditors wrote that "[a]ccording to [HC]'s management, HIE depends on HC to provide its credit facilities, security clearance and bonding capacity. It would not be possible for HIE to [continue] operating as it has [been] . . . without the total support of HC and HII." (Pl.'s Ex. 299.) This language appears in a section entitled "Matters for Attention of Partner." (Id.) The jury could reasonably have inferred that the author, a lower level employee, would accurately report the client's representations in a memorandum to his superior, lest the partner be embarrassed by subsequent reliance on the information. Further, the jury could reasonably have credited HC's own representations to its auditor; it could thus have concluded the services HC provided were essential to HIE's performance of -- and submission of false claims on -- Contracts 20A and 07.
Three other exhibits bolster this conclusion. First, in a letter to HC's auditors, HC's vice president and general counsel indicated that HC retained some connection to HIE even after HII sold its interest to Bill Harbert in 1991, and he characterized HC's continuing bonding obligations on "'HIE jobs' contracted in HII's name" as "significant." (Pl.'s Ex. 307.) Again, the jury could have given great weight to HC's representations to its auditors and thus concluded that support from HC, whose assets far exceeded those of HIE, was crucial to HIE's ability to bid for and perform the subject contracts. Second, plaintiffs presented two letters to Southtrust Bank drafted by Margaret Russo, HC's treasurer's assistant, whose duties included "coordinat[ing] all of the bank accounts for any of the Harbert companies with Southtrust." (Apr. 4, 2007 PM Tr. at 22; see Pl.'s Exs. 269, 448.) The letters, written on HC letterhead in 1989 and 1991, change the signature authority and mailing address on a Harbert-Jones joint venture bank account used for Contract 20A. (Pl.'s Exs. 269, 448.) According to Terri Mashburn, bookkeeper for HIE, "anytime [a 'Harbert company' employee] needed to change anything, we would go through Margaret and she would take care of all the paperwork." (Apr. 4, 2007 PM Tr. at 22.) Based on these letters, the jury could reasonably have concluded that HC knowingly advanced the conspiracy by providing financial management services to HIE, without which HIE could not have submitted false claims on Contract 20A.
Based on this evidence, the jury could have found that HC willfully joined and aided a conspiracy to rig bids on Contract 20A. Once it had so concluded, it could properly have held HC liable for its co-conspirators' knowing creation and presentation of false claims. See Halberstam v. Welch, 705 F.2d 472, 487 (D.C. Cir. 1983). (See also May 4, 2007 AM Tr. at 59, 62.) Moreover, the jury could also have concluded that by providing essential services to HIE, HC, itself, knowingly caused false claims to be made and presented on Contract 20A.*fn95
Similarly, the jury could reasonably have found that BHIC, armed with its agents' knowledge, conspired to submit false claims on Contract 20A and also knowingly caused such claims to be made and presented.
At various times, Bill Harbert served as BHIC's president, CEO, and chairman. (See Mar. 30, 2007 AM Tr. at 14; Pl.'s Ex. 263.) The Court has discussed his knowledge of and involvement in the conspiracy above.*fn96 Though BHIC correctly states the rule that an agent's knowledge may be imputed to the principal only when he acquires that knowledge in the course of his agency, see BCCI Holdings, S.A. v. Clifford, 964 F. Supp. 468, 478 (D.D.C. 1997) (Green, J.), it grossly oversimplifies this rule's application, (see Reply Four at 3). First, though Harbert may have initially learned of the bid-rigging prior to BHIC's formation, he thereafter acquired additional knowledge of the conspiracy as it progressed. For example, after BHIC commenced operation, Harbert received -- and necessarily, acquired knowledge of -- clandestine payments associated with Contract 20A. (See Joint Stipulation 1; Pl.'s Exs. 467, 481.) Second, and more to the point, BHIC emerged from the reorganization and renaming of BLH Enterprises and was, like its predecessor, wholly owned by Harbert. (Pl.'s Ex. 263.) Plaintiffs offered evidence that Harbert intended this new company to hold ownership in and provide support services to HIE, (see Pl.'s Exs. 263, 682; Mar. 30, 2007 AM Tr. at 13-14), the entity to which Contracts 20A and 07 had been assigned and which actually made and submitted numerous false claims, some after 1992. Thus, the jury could reasonably have concluded that BHIC's very raison d'etre was to facilitate and further the ongoing conspiracy through aid to HIE.
The jury could also have imputed Tommy Kitchens' knowledge of the conspiracy to BHIC. Kitchens served as BHIC's executive vice president from its inception. (See Mar. 30, 2007 AM Tr. at 64.) When he resigned in 1995, having failed to extract a $1 million "bonus" from Bill Harbert, he wrote Harbert a letter in which he detailed the "accomplishments of Contract 20A." (Mar. 30, 2007 AM Tr. at 69-71.) He identified the exact amounts of bid-rigging payoffs routed through Holzmann, profits concealed through the sale-leaseback transaction, and profits "deferred" to Contract 27. (See id. at 71; Pl.'s Ex. 23.) See also infra note 149. BHIC contends the letter demonstrates only "Kitchens' knowledge of various financial transactions," (Reply Four at 5), but the jury could easily have read between the lines. From Kitchens' bitter tone, his reference to transactions otherwise identified as disguised payoffs and concealed profits as "accomplishments," and his knowledge of specific monetary values, the jury could reasonably have inferred that as BHIC's executive vice president, Kitchens actively worked to advance the conspiracy and thus expected to share in its profits.
Imputing Harbert and/or Kitchens' knowledge to BHIC, the jury could then have concluded that BHIC willfully joined the conspiracy after its inception. Specifically, BHIC provided administrative and accounting support to the joint venture for contracts which it knew had been secured through unlawful collusion. (Apr. 4, 2007 PM Tr. at 26-29, 94, 101, 102.) BHIC managed joint venture bank accounts, prepared joint venture financial records, and handled home office invoicing -- all in regard to Contract 20A. (Id. at 26-29, 77-99.) The jury could reasonably have found that these "ministerial acts" enable the joint venture to perform and submit false claims on Contract 20A, thus advancing the conspiracy.*fn97 And having concluded that BHIC had knowingly participated in the conspiracy, the jury could properly hold BHIC liable for its co-conspirators' knowing creation and presentation of false claims. See Halberstam v. Welch, 705 F.2d 472, 487 (D.C. Cir. 1983).
As with its co-defendants, the jury could reasonably have found HUK willfully joined the conspiracy to rig bids on Contract 20A. The law imputes to a corporation the collective knowledge of its employees and agents, Phillip Morris USA, Inc., 449 F. Supp. 2d at 893-95, and when aggregated, HUK's agents' individual knowledge embraces the full bid-rigging conspiracy.
First, at a joint venture bid reconciliation meeting held in June 1988 at HUK's offices, Ian Young, a HUK employee who ultimately signed the cover letter on the joint venture's Contract 20A bid, served as chief estimator for the Harbert side. (Mar. 26, 2007 PM Tr. at 11-13; Pl.'s Ex. 162; Apr. 9, 2007 PM Tr. at 102-03.) According to Carl Nagel, a Jones estimator, Young and his team engaged in "arm twisting" during the meeting. (Mar. 26, 2007 PM Tr. at 43.) Without identifying line items they felt had been miscalculated, they insisted on raising the bid above Nagel's $95.2 million estimate, and though he acceded to their demands, Nagel never doubted his original calculations. (Id. at 44-45.)
HUK attributes the pressure Nagel described to a difference of opinion on construction methods. (Motion Four at 10.) Indeed, Nagel himself acknowledged that reasonable and experienced estimators could hold such differing opinions. (Mar. 27, 2007 AM Tr. at 29.) But while the Harbert team's "arm twisting" might thus bear an innocent explanation, the jury was entitled to view it with skepticism in light of the other evidence of bid-rigging.*fn98 As explained above, the jury heard evidence of a collusive agreement: only Fru-Con and the joint venture would bid, and Fru-Con's bid would exceed the joint venture's, however high, to ensure the joint venture would secure the contract. The jury also heard expert testimony on how, according to economic theory, parties to such an agreement typically behave: a collusive agreement's inherent purpose is to raise prices, and to realize benefits from their agreement, managers who form a cartel must exert influence on their companies' price-setting processes. (See, e.g., Apr. 5, 2007 PM Tr. at 84, 94-95, 138-40.) Under the circumstances, the jury could reasonably have construed Young's "arm twisting" as evidence of such influence. At the very least, they could have inferred he knew the joint venture's bid would be artificially inflated.*fn99
HUK's managing director, Colin Towsey, also testified to HUK's direct participation in the conspiracy, as a conduit for payoffs to co-conspirators on Contract 20A. (See Apr. 9, 2007 PM Tr. at 118-124; Apr. 4, 2007 PM Tr. at 38-66.) Towsey received invoices for engineering services purportedly requested by and rendered to HUK in Turkey, Germany, and elsewhere. (Id. at 118-20. See also Pl.'s Exs. 435, 438.) Though Towsey recognized HUK had neither ordered nor received such services -- nor had authority to do so under its services agreement with HIE -- he nonetheless paid the invoices at Tommy Kitchens' instruction. (Apr. 9, 2007 PM Tr. at 120-21.) As plaintiffs point out, Towsey denied knowledge of the conspiracy, but the jury need not have found his denials credible. Regardless, however, it could reasonably have found Towsey at least knew false invoices were used to make unjustified payments related to Contract 20A.
There was also evidence from which the jury could have imputed defendant Anderson's knowledge of these invoices' true nature to HUK. HUK protests that Anderson lacked authority to act for it and thus was not its agent, but its analysis primarily addresses the actual authority that flows from a formal agency relationship. (Motion Four at 11-12.) Even if Anderson lacked actual authority, plaintiffs introduced evidence of his apparent authority. Apparent authority arises from "'written or spoken words or any other conduct of the principal which, reasonably interpreted, causes [a] third person to believe that the principal consents to have [an] act done on his behalf by the person purporting to act for him.'" DBI Architects, P.C. v. Am. Express Travel-Related Servs. Co., Inc., 388 F.3d 886, 890 (D.C. Cir. 2004) (quoting Restatement (Second) of Agency § 27 (1958)). An "agent cannot by his own acts imbue himself with apparent authority." Evans v. Skinner, 742 F. Supp. 30, 33 (D.D.C. 1990) (Richey, J.) (quoting Fennell v. TLB Kent Co., 865 F.2d 498, 503 (2d Cir. 1989)). But such authority can arise when one holds himself out as an agent, and the putative principal unreasonably fails to deny or ratifies these representations.See DBI Architects, 338 F.3d at 894.
Towsey testified that Anderson -- and Anderson alone -- hired him to work for HUK and informed him when he was appointed managing director. (Apr. 9, 2007 PM Tr. at 75-76, 84-85.) According to Towsey, Anderson maintained an office at HUK's London headquarters, and HUK designated him as a signatory on its bank account. (Id. at 78, 82.) From these facts,*fn100 the jury could reasonably have concluded that HUK either authorized Anderson to act on its behalf or knowingly permitted him to do so.*fn101
When Towsey received the false invoices, he looked to Roy Anderson, the man who had hired him to run HUK and who had initially served as his sole point of contact, for guidance on how to proceed. (Id. at 117-18.) Thus, the jury could reasonably have found that Anderson learned HUK had received the invoices, and directed Towsey to contact Kitchens, in his role as HUK's agent. Anderson would have recognized these invoices as cover for payoffs to co-conspirators, and the jury could properly have imputed this knowledge to HUK.
Thus, after imputing the aggregate the knowledge acquired by Young, Towsey, and Anderson in the course of their agencies, and considering its role as a conduit for payoffs, the jury could reasonably have concluded that HUK willfully joined and participated in the bid-rigging conspiracy. It could then have deemed HUK liable for its co-conspirators' knowing creation and presentation of false claims. See Halberstam v. Welch, 705 F.2d 472, 487 (D.C. Cir. 1983).
As set forth above, see supra part II.G.1, the proper measure of damages in this FCA action was "the difference between what the United States paid and what it would have paid had there been no bid-rigging agreement." (May 4, 2007 AM Tr. at 65 (final jury instruction).) Thus, in calculating damages, the jury's first task was to determine "what [the government] would have paid had there been no bid-rigging agreement."*fn102 (See id.) Because each contract was unique, no perfectly comparable data -- the winning bid for an identical project, produced under identical conditions, absent collusion among the bidders -- was available.*fn103 Hence, due to defendants' collusion, the jury could not precisely determine what the government would have paid on Contract 20A under competitive conditions, and it was left to "make a just and reasonable estimate of the damage based on relevant data." Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946).
Throughout the trial, plaintiffs presented several "relevant data" to the jury.
First, the jury heard evidence of performance cost estimates for Contract 20A by AMBRIC, Jones, and Fuller. Before August 1988, AMBRIC engineers estimated Contract 20A at $136.8 million, then $90 million, and finally $58 million. (Apr. 3, 2007 PM Tr. at 60; Apr. 4, 2007 AM Tr. at 21, 78-79.) After Harbert-Jones and Fru-Con's unexpectedly high August bids, AMBRIC ordered a new engineer's estimate, which came in at $120 million. (Id. at 60, 70.) AMBRIC then lowered this estimate to $109 million based on the reduced scope of work. (Id. at 68-69, 70.) Prior to the reconciliation meeting with the Harbert team, Carl Nagel of Jones prepared an independent estimate of $95.2 million.*fn104 (Mar. 26, 2007 PM Tr. at 31.) Though Fuller joined the conspiracy and did not ultimately bid, it prepared an estimate for Contract 20A of approximately $80 million.*fn105 (Mar. 21, 2007 AM Tr. at 80-82, 94. See also Mar. 22, 2007 AM Tr. at 25-35.)
Second, the jury heard evidence of another, relevant bid. As Dr. Gould explained, Contract 20A was a scaled-down version of the defunct Contract 20,*fn106 on which procurement occurred in 1984-85 and on which Harbert-Jones had bid $61 million. (Apr. 3, 2007 PM Tr. at 51-52.)
Third, the jury heard evidence of the joint venture's actual costs and profits. Plaintiffs' expert Terry Musika testified that Harbert-Jones booked $30 million in profits, concealed another $25 million through various methods, and incurred $62 million in costs on Contract 20A. (Apr. 10, 2007 AM Tr. at 54-97.) Plaintiffs also offered evidence that profits on international construction contracts of this type typically fell in the 6-15% range. (See, e.g., Mar. 21, 2007 AM Tr. at 82-83; Mar. 22, 2007 AM Tr. at 36, 63; Mar. 28, 2007 AM Tr. at 60.)
In their closing arguments, plaintiffs proposed how the jury might translate these data into "a just and reasonable estimate of the damage." First, they suggested the jury calculate a plausible, competitive bid using cost and typical profits data, then subtract this value from the $107 million the government actually paid. (See May 1, 2007 PM Tr. at 72-74.) As explained above, the jury could have reasoned that if average profits were 6-15%, then a successful competitive bidder's final costs typically account for 85-94% of what the government ultimately pays. See supra part II.G.1. By this logic, defendants' final costs ($52 million) would equal 85-94% of a successful, competitive bid on Contract 20A. Second, plaintiffs proposed the jury adopt Nagel's "free-of-influence" $95.2 million estimate, proportionately reduced based on the post-August 1988 scope of work changes. (May 1, 2007 PM Tr. at 73-74.) Third, they suggested a similar modification of the Fuller estimate.*fn107 (Id. at 74.) Finally, plaintiffs argued that if Harbert-Jones felt it necessary to "hide" $25 million in profits, then apparently even defendants thought the government had paid (at least) an extra $25 million due to the bid-rigging. (Id. at 75.)
In the end, the jury awarded plaintiffs $29,920,000 in damages on Contract 20A. (Verdict Form  at 9.) By extension, it must have determined that the government would have paid $77,080,000 on Contract 20A to a winning bidder under competitive conditions.*fn108 The Court will not speculate as to how the jury arrived at this exact figure. Plaintiffs' counsel's list of "methods" was far from exhaustive, and the jury was entitled to compute "a just and reasonable estimate of the damage," Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946), in any logical manner, based on any relevant data in the record. The Court "need not -- and indeed cannot -- reconstruct the precise mathematical formula that the jury adopted." Carter v. Duncan-Huggins, Ltd., 727 F.2d 1225, 1239 (D.C. Cir. 1984). It suffices that plaintiffs introduced several pieces of relevant evidence from which the jury could estimate what the government would have paid but for the bid-rigging. Its award falls within the broad range described by these data.
In sum, the Court concludes plaintiffs presented sufficient evidence of each defendant's liability, and of the government's damages, on Contract 20A. The jury's verdict on Contract 20A was perfectly reasonable, and the Court will not disturb it. McGill v. Munoz, 203 F.3d 843, 845 (D.C. Cir. 2000).
2. Contract 29
In spring 1989, Schmidt hosted another meeting at Holzmann's offices, and this time, he invited Giovanni Greselin of ABB SUSA and "a gentleman from Harbert." (Mar. 23, 2007 PM Tr. at 120-21.) SUSA "was running out of work," and Harbert-Jones would be its sole competitor in the bidding for Contract 29. (Id.) As the signed, "handwritten minutes" Greselin later provided to his superior, Luigi Ruggieri,*fn109 reflect, "Greselin on the one side and Schmidt and the guy from Harbert on the other  decided . . . that one of the two [companies] would win and the other one would cover with the higher price." (Id. at 121.) "[T]he loser would be compensated in kind" -- that is, the Contract 29 winner would bid high on another contract to allow the loser a turn -- "or in cash" -- to the tune of $4 million. (Id. at 121-22.)
Despite having fleshed out these details, the meeting participants could not cement their agreement until Greselin had obtained Ruggieri's approval. (Id. at 124.) Greselin subsequently made his pitch to Ruggieri, who ratified the deal and determined SUSA would "win" the contract and would pay Harbert-Jones in cash. (Id. at 124-25.) Ruggieri directed Greselin to "interface as needed with  Schmidt and [the Harbert man] to that effect." (Id. at 125.) After Greselin left, Ruggieri shredded his copy of the "minutes" because he believed it to be "an illegal document . . . probably against a number of laws." (Id. at 126.)
Meanwhile, Robert Hemler, Greselin's subordinate, began preparing SUSA's bid on Contract 29. (Mar. 23, 2007 AM Tr. at 74-75.) Although Hemler's team produced an internal cost estimate of $85 million, an independent engineer sent in by Greselin predicted costs of $155 million. (Id. at 75-76.) Hemler managed to convince Greselin that the engineer's estimate was too high, but it was like "pulling  teeth." (Id. at 78-79.) In July 1989, after Hemler extracted a last-minute, $5 million reduction from Greselin, SUSA submitted an initial bid of $131,978,000 on Contract 29. (Id. at 84; Mar. 23, 2007 PM Tr. at 67-68.) Hemler characterized this bid as lying at the "high end" of the "competitive range," the low end being "about $120 million." (Mar. 23, 2007 AM Tr. at 86.) Prior to the bid opening, Hemler, fearing stiff competition from Harbert-Jones, pleaded with Greselin to further lower SUSA's bid, but Greselin refused. (Mar. 23, 2007 PM Tr. at 14.) Harbert-Jones, meanwhile, entered a bid of $147,424,305. (Id. at 9.) Naturally, CWO selected ABB SUSA's lower bid. (See id. at 37.) But $132 million exceeded the sum USAID had allocated for Contract 29, and rather than impose the excess cost on the Egyptian government, CWO negotiated with SUSA over certain line items to reduce the contract value to $114,869,355.*fn110 (Id. at 88, 90.)
In 1990, once these negotiations had ended, Ruggieri met with Schmidt to finalize SUSA's payoff to Harbert-Jones. (Mar. 26, 2007 AM Tr. at 17.) Because the contract had been awarded below the original bid price, he insisted on reducing the payoff amount from $4 million down to $3.4 million. (Id. at 17, 21.) To conceal the nature of the transaction and to shield the two parent companies, they agreed that invoicing and payment would occur between a Swiss Holzmann subsidiary and a British SUSA subsidiary. (Id. at 17-19.) The payoff process proceeded as agreed. (Id. at 22-26; Pl.'s Exs. 21, 22, 637.)
Before discussing the evidence of Anderson's participation, the Court must address a threshold argument that he and other defendants raise: they contend plaintiffs offered no evidence that the parties ever reached an agreement. (Motion One at 5-7; Motion Four at 21-22.) As noted above, Greselin could not definitively obligate SUSA without Ruggieri's approval.
(Mar. 23, 2007 PM Tr. at 124.) Though Ruggieri ratified the terms presented in the "minutes" document and instructed Greselin to "interface" with Schmidt and the "guy from Harbert" to effectuate them, he had no personal knowledge of how, or if, Greselin performed this task. (Id. at 125; Mar. 26, 2007 AM Tr. at 45.) Greselin, himself, testified that he did not meet with Schmidt again before the bidding and did not specifically recall talking with him on the telephone; but he never flatly denied having communicated with anyone associated with Harbert-Jones after obtaining Ruggieri's approval.*fn111 (Apr. 25, 2007 PM Tr. at 81.)
Defendants forget that jurors may make reasonable inferences from the evidence and may employ their common sense. (See May 4, 2007 AM Tr. at 29.) Greselin, Schmidt, and the "guy from Harbert" reached an "agreement in principle" to rig the bidding on Contract 29.*fn112 (Apr. 25, 2007 PM Tr. at 78.) Ruggieri ratified their agreement, selected from the alternative bid-rigging and payoff methods Schmidt had offered, and directed Greselin to carry out the plan. (Mar. 23, 2007 PM Tr. at 124-25.) The bidding and payoffs then proceeded as Ruggieri had specified.*fn113
The jury could reasonably have attributed this to more than mere happenstance. Ruggieri believed that SUSA had made a deal with Harbert-Jones, observed events consistent with this deal, and consequently paid $3.4 million to Harbert-Jones. (Id. at 73.) In defendants' version, Harbert-Jones' bid simply happened to exceed SUSA's, and Schmidt "snookered" Ruggieri into paying $3.4 million for nothing. (See Mar. 26, 2007 AM Tr. at 71-72; May 2, 2007 AM Tr. at 85-86). The jury could reasonably have deemed Ruggieri's interpretation of events more plausible.*fn114
Even if the parties had such an agreement, however, Anderson claims plaintiffs presented no evidence of his connection to it.*fn115 (Motion One at 7-12.) When Greselin first met with Schmidt, someone associated with "Harbert-Jones" joined them. (Apr. 25, 2007 PM Tr. at 69. See also Mar. 23, 2007 PM Tr. at 120-21.) Though no witness particularly identified this individual as Anderson, plaintiffs presented other evidence from which the jury could reasonably have concluded it was he. First, Anderson had the authority to approve the joint venture's involvement in bid-rigging: he was managing partner of the joint venture and held powers of attorney to act for HII, its majority partner, and for the joint venture, itself, in bidding on Contract 29. (Pl.'s Ex. 653C.) Second, Anderson was intimately involved in collusion -- spearheaded by Schmidt -- on Contracts 20A and 07: he represented HII in at least two meetings among the competitors to rig bids on these contracts. (Mar. 21, 2007 AM Tr. at 42-50; Mar. 21, 2007 PM Tr. at 87-88; Mar. 22, 2007 PM Tr. at 62-69.) Third, Anderson spent three days in Frankfurt, site of Holzmann's headquarters, around the time when the Schmidt-Greselin meeting occurred.*fn116
(Pl.'s Ex. 596(a); Apr. 4, 2007 PM Tr. at 74-76.) Fourth, during that meeting, the unidentified Harbert-Jones man did not object to the negotiated terms but did balk at signing the written "minutes" document. (Apr. 25, 2007 PM Tr. at 77.) Coincidentally, some months before, when Anderson represented HII at a meeting on Contract 20A bid-rigging payoffs, Anderson first signed a written agreement documenting the conspiracy's terms but then scratched out his name to disguise his involvement. (Mar. 21, 2007 AM Tr. at 48-49.) From this circumstantial evidence, the jury could reasonably have inferred that Anderson was the "gentleman from Harbert" who attended the Schmidt-Greselin meeting.
Next, Anderson challenges plaintiffs' exhibit 648, the sole documentary evidence of the claim on which he was found liable. He contends the document should have been excluded as incomplete, or alternatively, that its incompleteness so diminished its weight that no reasonable jury could have concluded it proved a false claim was submitted or presented to the government.
(Motion One at 13-16.) Federal Rule of Evidence 106, which partially codifies the common-law rule of completeness, provides that an adverse party may require the introduction of omitted portions of an incomplete document "which ought in fairness to be considered contemporaneously with it." Fed. R. Evid. 106; Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 171-72 (1988). As the Supreme Court explained in Rainey, the rule assures that "when one party has made use of a portion of a document, such that misunderstanding or distortion can be averted only through presentation of another portion, the material required for completeness is ipso facto relevant." 488 U.S. at 172 (emphasis added).*fn117
Though at least four pages of exhibit 648 appeared to be missing, the exhibit nonetheless had substantial probative value, and its incompleteness did not give rise to unfair prejudice. Its relevance was two-fold: it reflected that claim 56 was submitted to, and paid by, the government, and it stated the value of that claim. (See Pl.'s Ex. 648.) The omitted pages, which the government did not have, and which provided only "backup" information on the costs billed in the interim statement, could neither have aided nor hindered these purposes, so their absence did not detract from the exhibit's probative value.*fn118 (See Mar. 26, 2007 AM Tr. at 113, 116.) Further, although the appearance of official government insignia on a document "will indubitably influence the jury . . . such an influence is permissible and does not rise to the level of unfair prejudice" where, as here, the document has some probative value. Cortes v. Maxus Exploration Co., 758 F. Supp. 1182, 1185 (S.D. Tex. 1991). Thus, the Court did not err in admitting plaintiffs' exhibit 648.*fn119
Furthermore, considering the narrow purposes for which plaintiffs relied on the exhibit, its probative value was more than sufficient to support the jury's verdict. As explained above, plaintiffs presented other evidence sufficient to prove that SUSA secured Contract 29 by virtue of a bid-rigging conspiracy to which Anderson was a party. Claims submitted to the government under any contract secured through a collusive conspiracy are, inevitably, false or fraudulent. Hess, 317 U.S. at 543-45. Exhibit 648 reflected that SUSA submitted a claim to the government which the government paid. Nothing in the record suggests, and Anderson does not contend, that the omitted pages would have indicated otherwise.
Hence, the record contains sufficient evidence from which the jury could reasonably have found Anderson liable on claim 56 of Contract 29.
As with Contract 20A, the jury could reasonably have found HII liable on Contract 29 by virtue of the knowledge and acts of its agent, Roy Anderson. As discussed above, plaintiffs demonstrated that Anderson played a prominent role in the bid-rigging on Contract 29. See supra part III.A.2.a.i. He had authority to act for HII with respect to Contract 29,*fn120 and under the circumstances, the jury could reasonably have concluded that he exercised that authority.
The conclusions that Anderson was the "Harbert" man and that he acted for HII are mutually reinforcing. As Ruggieri testified, only two companies had pre-qualified to bid on Contract 29: SUSA, and the joint venture between J.A. Jones and HII. (Mar. 23, 2007 PM Tr. at 120-21.) Three individuals attended the bid-rigging meeting for that contract: Greselin, of SUSA; Schmidt, of J.A. Jones' parent company; and the "gentleman from Harbert." (Id.) From all the evidence, the jury could reasonably have inferred that the "gentleman from Harbert" represented the other joint venture partner, HII, and that he was the same gentleman who represented HII at the Contract 20A bid-rigging meeting, Roy Anderson. Indeed, the original written agreement to collude on Contract 20A -- to which Anderson hand-drafted an addendum, (Pl.'s Ex. 2) -- specifically contemplated future bid-rigging on, inter alia, Contract 29, (Pl. Ex.'s 1).*fn121 Given HII's participation, through Anderson, in the Contract 20A conspiracy, the jury might have viewed this reference as additional evidence that HII was more likely than not the "Harbert" whose delegate attended the Schmidt-Greselin meeting.
Finally, regardless of whether Anderson attended the meeting or did so on HII's behalf, plaintiffs presented evidence from which the jury could reasonably have found that this meeting was part of a broad, overarching conspiracy to rig bids on construction contracts. See infra part III.A.4. Having willfully joined this conspiracy at its outset, see supra part III.A.1.a.i, HII could be held liable for its co-conspirators' actions in furtherance thereof, including their knowing creation and presentation of false claims on Contract 29. See Halberstam v. Welch, 705 F.2d 472, 487 (D.C. Cir. 1983).
Defendants assert plaintiffs failed to prove the government suffered any damages on Contract 29 -- essentially, that the bid-rigging agreement had no impact whatsoever on the price the government paid. (Motion One at 16-17; Motion Two at 23-26; Motion Four at 27-28.) They first point out that Hemler, who prepared SUSA's Contract 29 bid, was unaware of the bid-rigging agreement with Harbert-Jones and characterized SUSA's ultimate bid as "reasonable" and "fair." (Mar. 23, 2007 PM Tr. at 61, 95, 105; Mar. 23, 2007 PM Tr. at 127, 128.) Even Greselin testified that "the price was low and not raised." (Mar. 25, 2007 PM Tr. at 79.)
Hemler also testified, however, that he had identified at least $10 million in "potential savings" in SUSA's June 27, 1989 bid calculation of $137 million -- that is, he believed SUSA could profitably perform the contract for $127 million. (See Mar. 23, 2007 AM Tr. at 84; Pl.'s Ex. 75.) Mere days before its submission on July 2, Hemler persuaded Greselin to reduce SUSA's bid by $5 million, only half the potential amount. (Mar. 23, 2007 AM Tr. at 84-85.) After CWO received SUSA's initial bid, but before it opened the sealed bid envelopes, Hemler -- fearing stiff competition from Harbert-Jones -- pleaded with Greselin to further lower SUSA's bid.*fn122 (Mar. 23, 2007 PM Tr. at 14.) Greselin, who knew Harbert-Jones posed no threat, refused. (Id.) Hemler described Greselin's "uncommon" involvement in the bidding process as "the most singular remarkable incident of [his] 35-year career." (Id. at 97, 110.) The jury could reasonably have concluded that but for Greselin's "very forceful" influence, (id. at 45), Hemler would have submitted an amended bid of as little as $127 million, and hence that SUSA's initial bid was inflated by as much as $5 million.
Defendants further note that post-award negotiations with USAID reduced the contract price by $17.1 million, and they argue this process must have eliminated any inflation the bid-rigging might have caused. Yet as defendants' evidence reflects, a reduction in the "provisional sum" accounted for most of the decrease. (See Defs.' Ex. 334.) Hemler explained that CWO's tender documents had instructed Contract 29 competitors to add "a provisional amount of 10 percent" to their final bids, (Mar. 23, 2007 AM Tr. at 83); because it was added to the top, this sum could not have concealed any padding that might have been included in SUSA's bid. CWO reduced the provisional sum percentage to 1 percent, and this change accounted for $10.8 million of the total $17.1 million decline in the contract price. (Def. Ex. 334.) To achieve the additional $6.3 million in savings, CWO eliminated certain line items from its tender request and reduced SUSA's projected mobilization costs. (Id.) While these line items may have harbored some of the alleged inflation in SUSA's bid, reasonably, they must also have included some legitimate costs. The jury could thus have concluded that even if CWO's hard-nosed negotiating tactics eliminated some of the remaining $5 million in "potential savings," the final contract price still incorporated some amount of inflation attributable to the bid-rigging.*fn123
As with Contract 20A, due to defendants' collusion, the jury could not precisely calculate what the government would have paid under competitive conditions, and it thus endeavored to "make a just and reasonable estimate . . . based on relevant data," Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946). Plaintiffs presented several such relevant data to the jury. First, plaintiffs' expert, Professor McAfee, testified that according to economic theory, a cartel bidder must incorporate certain, inherent costs of collusion, including "any payments made to competitors," into his bid to avoid a net loss. (Apr. 5, 2007 PM Tr. at 99-100.) See also United States v. Killough, 848 F.2d 1523, 1532 (11th Cir. 1988) (though payoffs to co-conspirators set "neither a floor nor a conclusive presumption of the measure of damages" in a bid-rigging case, they are "relevant as circumstantial evidence"). The jury also heard that via their subsidiaries, SUSA remitted a $3.4 million payoff to Harbert-Jones. (Mar. 26, 2007 AM Tr. at 22-26; Pl.'s Exs. 21, 22, 637.) From this testimony, the jury could reasonably have concluded that unless the final contract price of $114 million included at least $3.4 million in padding, SUSA would have had to perform the contract at a loss. Second, as explained above, the jury could reasonably have concluded that bid-rigging inflated the bid CWO accepted on Contract 29 by up to $5 million. Thus, the jury could have determined that the government paid up to $5 million -- and likely, at least $3.4 million -- more than it would have absent defendants' collusion. Under these circumstances, its $3.4 million damages award was an eminently "just and reasonable estimate" adequately supported by the evidence.
3. Contract 07
In 1990, USAID pre-qualified both Harbert-Jones and Fru-Con to bid on a third Egyptian construction project, Contract 07. (Mar. 22, 2007 PM Tr. at 63-64.) Roughly two months before the bidding date, Schmidt telephoned Werner Hoffmeister of Bilfinger & Berger, Fru-Con's parent company, with an invitation to meet to discuss "the procedure of the bidding." (Id. at 64.) Hoffmeister accepted and traveled to Holzmann's Frankfurt offices, where he met with Schmidt and Anderson. (Id. at 64-65.) Schmidt proposed that Fru-Con should bid high to permit Harbert-Jones to secure the contract, but Hoffmeister initially balked. (Id. at 65-66.) He questioned how the scheme could work unless all other pre-qualified companies participated, and even if such consensus were achieved, he felt Contract 07 should go to Fru-Con, not Harbert-Jones. (Id. at 66-67.) Schmidt then indicated that the other competitors either were, or soon would be, onboard, and Anderson agreed to contact Morrison-Knudsen, the only potential bidder whose consent Schmidt had not yet obtained.*fn124 (Id. at 67.)
Two weeks after their initial meeting, Schmidt called Hoffmeister to inform him that Morrison-Knudsen could not be contacted, and he proposed a new arrangement: if CWO awarded Contract 07 to either Harbert-Jones or Fru-Con, the winner would pay 1.5 million dollars or Deutschmarks to the loser. (Id. at 68-69.) Hoffmeister agreed. (Id. at 69.) Just before the bid date, he heard from Schmidt again: Schmidt had heard rumors that Fru-Con and other competitors would not bid, and he feared that if Harbert-Jones proved the sole bidder, CWO would void the tender and start afresh. (Id. at 69.) Though Hoffmeister tried to intervene with Fru-Con, his trusted contacts in the subsidiary were both on vacation, and Hoffmeister was unwilling to discuss the situation with anyone else. (Id. at 69-70.) Though Fru-Con did not enter a bid, Schmidt's fears proved groundless, and Harbert-Jones secured the contract by underbidding Morrison-Knudsen. (Id. at 70.) After additional discussions, Holzmann paid the $1.5 million loser's fee to Bilfinger & Berger. (Id.)
For several reasons, defendants contend plaintiffs failed to present sufficient evidence that any claims submitted on Contract 07 were false. (Motion Two at 27-28; Motion Four at 19-20.) They point out that Schmidt, Anderson, and Hoffmeister never agreed on which company would win the contract, that Hoffmeister in fact instructed the Fru-Con team to prepare a competitive bid, and that the evidence showed Morrison-Knudsen had prepared a competitive, though losing, bid. These facts may establish that Contract 07 was not subject to the same sort of bid-rigging that occurred on Contracts 20A and 29, but they do not impugn the jury's verdict. Collusion may take many forms, but in whatever guise, it renders false or fraudulent all claims submitted to the government on a contract thereby obtained.*fn125
"[W]hen a contract is initially obtained through fraud or deception, every claim for payment submitted pursuant to that contract is thereby tainted and triggers FCA liability regardless of whether the claim is itself 'false or fraudulent.'" United States ex rel. Bettis v. Odebrecht Contractors of Cal., 297 F. Supp. 2d 272, 279 (D.D.C. 2004) (Huvelle, J.). In its bid documents, Harbert-Jones certified that its bid was made "without connection with any other . . . corporation making any other tender for the same purpose." (Pl.'s Ex. 683; see also Pl.'s Ex. 146.) In fact, this statement was untrue: Harbert-Jones had formed a side agreement with its competitor, Fru-Con. (See Mar. 22, 2007 PM Tr. at 68-69.)
More concretely, as discussed below, the jury could reasonably have concluded that this side agreement prompted Harbert-Jones to submit an inflated bid. See infra part III.A.3.b. Consequently, the claims Harbert-Jones submitted to the government on Contract 07 incorporated this inflation, and these illegitimate charges rendered the claims false. See United States ex rel. Marcus v. Hess, 317 U.S. 537, 543 (1943) (where collusion among bidders inflated contract price, the initial fraud "entered into every swollen estimate which was the basic cause for payment of every dollar" paid by the government). See also 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 . . . which was originally obtained by means of false statements or other corrupt or fraudulent conduct . . . constitutes a false claim"). The jury could reasonably have held HII directly liable for the involvement of its agent, Roy Anderson, in conspiring to submit these false claims and in causing them to be made and presented to the government.*fn126 As discussed below, it could have imputed this liability to other participants in the overarching conspiracy, including HC and BHIC.*fn127 See infra part III.A.4.
As with its liability finding, evidence presented at trial supported the jury's $1,026,029.22*fn128 damages award on Contract 07. First, Hoffmeister testified that Harbert-Jones, via Holzmann, paid a loser's fee of 1.5 million dollars or Deutschmarks to Bilfinger & Berger.*fn129
(Mar. 22, 2007 PM Tr. at 68-69.) According to plaintiffs' expert, Professor McAfee, economic theory prescribes that a bidder must incorporate such "payments made to competitors" into his bid to avoid a net loss. (Apr. 5, 2007 PM Tr. at 99-100.) Hence, Harbert-Jones had a strong incentive to account for the anticipated payoff in its bid rather than risk surrendering a significant chunk of its profits should it secure the contract.
Second, John Ollis' testimony concerning his November 1990 conversation with Anderson suggests Harbert-Jones acted on this incentive. When Ollis expressed concern that the Jones and Harbert teams had not yet reconciled their estimates for Contract 07, despite the rapidly approaching bid submission deadline, Anderson told him that "he and Alf Hill needed room to maneuver." (Mar. 27, 2007 PM Tr. at 41.) This, he implied, had caused the delay in scheduling a reconciliation meeting. (Id.) He then told Ollis that something had been "set up." (Id. at 42.) Understanding Anderson to be referring to the bidding on Contract 07, Ollis protested that Harbert-Jones should submit a competitive bid because other big contractors might not be in on the "setup." (Id.) Anderson's response speaks volumes. He did not correct Ollis by explaining the "setup" had nothing to do with the bidding process; nor did he clarify that Harbert-Jones would, naturally, submit a competitive bid. (See id.) Instead, he assured Ollis that "all the prequalified contractors were part of the setup," implicitly confirming Ollis' interpretation of his original words. (Id.) Based on this testimony, the jury could reasonably have concluded that Anderson needed "room to maneuver" because he wanted to ensure Harbert-Jones submitted an inflated bid without undue interference from the Jones estimating team.*fn130
Third, though Morrison-Knudsen, Harbert-Jones' sole competitor on Contract 07, originally bid high, it later adjusted its bid down $5 million -- $3 million below Harbert-Jones' bid. (Apr. 19, 2007 PM Tr. at 47-49.) While Morrison-Knudsen's inexperience and ultimate disqualification do detract from the weight of this evidence, it does suggest that Contract 07 could have been profitably performed for less than Harbert-Jones chose to bid.
From this evidence, the jury could reasonably have concluded that Anderson caused the Harbert-Jones bid to be inflated by as much as 1.5 million dollars or Deutschmarks. Thanks to defendants' collusion, the jury could not precisely calculate the difference between what the government actually paid and what it would have paid absent the loser's fee arrangement, so the jury was left to "make a just and reasonable estimate . . . based on relevant data," Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946). Under the circumstances, its award of $1,026,029.22 was entirely reasonable and within the range supported by the evidence.
4. Overarching Conspiracy
In their pleadings and at trial, plaintiffs alleged that defendants colluded on Contracts 20A, 29, and 07 in furtherance of a single, overarching conspiracy. (See May 4, 2007 AM Tr. at 58; Gov't's Third Am. Compl.  ¶3; Relator's Fifth Am. Compl. ¶¶ 1-2.) In deciding this issue, the jury looked to "whether the defendants shared a common goal, whether there was any interdependence between the alleged participants in the conspiracy, and whether there was any overlap among the alleged participants, including the presence of core participants linked to all the contracts." (May 4, 2007 AM Tr. at 58 (quoting United States v. Gatling, 96 F.3d 1511, 1520 (D.C. Cir. 1996)).)
Plaintiffs' evidence reflected: (1) a common goal uniting the schemes on Contracts 20A, 29, and 07 -- namely, reducing competitive pressures in bidding on USAID-funded infrastructure projects in Egypt;*fn131 (2) interdependence among the alleged participants;*fn132 (3) significant overlap among the participants;*fn133 and (4) ubiquitous characters whose involvement extended to all three contracts.*fn134 They also demonstrated that defendants repeatedly made collusion-related payoffs through false invoices and routed them through affiliated companies, often via a single Holzmann bank account.*fn135
Based on this evidence, the jury could reasonably have concluded that defendants acted pursuant to a single, overarching conspiracy.*fn136 "[O]nce [a] conspiracy has been formed, all its members are liable for injuries caused by acts pursuant to or in furtherance of the conspiracy. A conspirator need not participate actively in or benefit from the wrongful action in order to be found liable . . . so long as the purpose . . . was to advance the overall object of the conspiracy." Halberstam v. Welch, 705 F.2d 472, 481 (D.C. Cir. 1983). Therefore, having willfully joined the conspiracy as to Contract 20A, HC and BHIC could each be found liable for their co-conspirators' creation and presentation of false claims to the government on Contracts 29 and 07.
Accordingly, to the extent defendants' motions for judgment notwithstanding the jury's verdict challenge the sufficiency of the evidence, they shall be DENIED.
B. Statute of Limitations
HII renews its assertion that the six-year limitations period set by 31 U.S.C. § 3731(b)(1) bars plaintiffs' substantive Contract 07 claims, all but the last three of their substantive Contract 29 claims, and their FCA conspiracy claim.*fn137 (Motion Two at 31-33.) This argument fares no better than it did pre-trial.
This Court previously held that plaintiffs' Contract 29 and 07 claims relate back to the filing date of relator's original complaint because they form part of the overarching conspiracy alleged in that complaint. (Mem. Op. & Order of Mar. 6, 2007  at 9-12 (sustaining relator's objection to magistrate judge's recommendation that only Contract 20A claims could relate back). See also Mem. Op. & Order of Mar. 14, 2007  (rejecting statute of limitations arguments raised in memorandum filed by HII and HC).) In asking the Court to revisit this ruling, HII rehashes the same set of arguments this Court has already rejected. (See Motion Two at 31.) It simply asks the Court to reconsider, "taking account of the trial evidence." (Id.) As explained above, plaintiffs offered evidence sufficient to sustain the conclusion that defendants' collusion on Contracts 20A, 29, and 07 comprised a single, overarching conspiracy. See supra part III.A.4. Thus, the trial evidence entirely supports the Court's earlier rulings.*fn138
The Court also held that the FCA's six-year limitations period does not bar plaintiffs' FCA conspiracy claims because some overt acts in furtherance of the conspiracy occurred within that time frame. (Mem. Op. & Order of Mar. 14, 2007  at 4-6.) It did not, however, directly address one of the issues HII raised in its pre-trial filing and which it now asks the Court to reconsider: whether, even if plaintiffs' claims were not barred, they could use evidence of overt acts that occurred before June 30, 1989 to prove those claims. (See Motion Two at 33; Mem. Supp. HII and HC's Mot. in Limine to Exclude Evidence  at 3-7.) At trial, this Court permitted plaintiffs to introduce evidence of meetings and communications that took place before June 30, 1989; HII contends this was clear error. (Motion Two at 33.)
In its pre-trial statute of limitations rulings, this Court relied on Judge's Friedman's decision in United States ex rel. Fisher v. Network Software Associates, 180 F. Supp. 2d 192 (D.D.C. 2002). Particular language in that opinion bears on the present question:
[T]he prevailing law in this circuit [holds] that "the statute of limitations in a civil damages action for conspiracy runs separately from each overt act that is alleged to cause damage . . . ." Lawrence v. Acree, 215 U.S. App. D.C. 16, 665 F.2d 1319, 1324 & n.7 (D.C. Cir. 1981); see Thomas v. World Communications, 681 F. Supp. 55, 73 (D.D.C. 1988); see also Scherer v. Balkema, 840 F.2d 437, 439-40 (7th Cir. 1988). Under this rule, relator may attempt to prove the underlying conspiratorial agreement through those overt acts that occurred after November 22, 1993, but not those acts that occurred before that date; if successful, he may recover damages for all violations committed as a part of the conspiracy from that date forward. Thus, the statute of limitations bars recovery for some but not all of the acts committed as a part of the conspiracy alleged in Count 3. 180 F. Supp. 2d at 195. Based on this language, this Court stated that relator could "not use overt acts occurring prior to the date the statute of limitations began to run" to prove the underlying conspiratorial agreement. (Mem. Op. & Order  at 6.)
A nuanced reading of these opinions confirms the Court did not err in admitting plaintiffs' evidence of pre-June 30, 1989 acts and events. Though the Fisher opinion does not delve deeply into the underlying facts, it appears to involve a situation where the plaintiff endeavored to prove an agreement existed through circumstantial evidence -- that is, subsequent conduct consistent with an earlier, pre-limitations deadline agreement. See 180 F. Supp. 2d at 193-95. Here, however, plaintiffs had unearthed direct evidence of the underlying conspiratorial agreement -- testimony by conspirators concerning meetings at which they formulated the agreement and documents in which they memorialized its terms -- and had no need to employ circumstantial evidence to establish its existence. (See, e.g., Mar. 22, 2007 AM Tr. at 80-94; Mar. 23, 2007 PM Tr. at 120-24; Pl.'s Ex. 1, 2.)
Separately, they introduced evidence of pre-June 30, 1989 acts in furtherance of this agreement -- for example, the co-conspirators' submission of inflated bids on Contract 20A -- to prove causation and damages.*fn139 Fisher does not intimate that evidence of acts occurring prior to the limitations date cannot be used for this quite distinct purpose. Furthermore, given that defendants' pre-trial motion sought to exclude evidence of "meetings, conversations, or other alleged 'conspiratorial' conduct that occurred prior to June 30, 1989" only insofar as it was used "for the purpose of proving an underlying conspiratorial agreement," (see Mem. Supp. HII and HC's Mot. in Limine to Exclude Evidence  at 5, 6), they have waived any objection to its introduction for other purposes. Consequently, to the extent they rest on statute of limitations grounds, defendants' renewed motions for judgment as a matter of law shall be DENIED.
To the extent defendants raise any ground for judgment as a matter of law not herein addressed, their motions shall be, likewise, DENIED.
IV. Motions for Remittitur or Other Relief
A. Anderson's Liability
Hedging his bets, Anderson also seeks to lessen the sum he owes by several methods: he seeks remittitur, a complete or partial offset based on payments by settling co-defendants, and/or a reduction in the assessed statutory penalty.*fn140
Contending the jury assessed excessive damages against him, Anderson asks this Court to follow the process described in Nyman v. FDIC, 967 F. Supp. 1562 (D.D.C. 1997) (Urbina, J.). (Motion One at 18-23.) If the Court finds the verdict amount to be excessive, he asks that it "order a new trial limited to the issue of damages," or "[i]n the alternative . . . grant the motion for a remittitur by conditioning the denial of a motion for a new trial on the plaintiff's acceptance of the reduced damage award." 967 F. Supp. at 1573.
In this Circuit, courts "only require remittitur when (1) the verdict is beyond all reason, so as to shock the conscience, or (2) the verdict is so inordinately large as to obviously exceed the maximum limit of a reasonable range within which the jury may properly operate." Peyton v. DiMario, 287 F.3d 1121, 1126 (D.C. Cir. 2002). Here, the jury found Anderson liable in the amount of $46,538.40, for claim 56 on Contract 29. (Verdict Form  at 11.)
While the Court can conceive of cases in which a $46,538.40 verdict might "shock the conscience," Anderson's is simply not one of them. Conceding as much, he acknowledges the award was not excessive in an absolute sense, but he nonetheless insists it is inordinately large when considered in relation to the jury's overall damages award on Contract 29, $3.4 million. (Motion One at 19.) He notes that while $3.4 million is equal to only 2.5% of the total value of all claims submitted on Contract 29, $46,538.40 is equal to 60% of the total value of claim 56. (Id. at 20.) Anderson suggests that his liability should more appropriately have been 2.5% of the value of claim 56, or $1,956.16. (Id. & n.9.) But the jury need not have found that the premium paid by the government on Contract 29 was distributed evenly across all 56 false claims.
Further, caught up in his calculations, Anderson forgets to tether his argument to the damages measure applied in this case: "the difference between what the United States paid and what it would have paid had there been no bid-rigging agreement." (May 4, 2007 AM Tr. at 65 (final jury instruction).) Where, as here, "the defendant by his own wrong has prevented a  precise computation" of this difference, the jury "may make a just and reasonable estimate of the damage based on relevant data." Bigelow v. RKO Radio Pictures, Inc., 327 U.S. 251, 264 (1946). Based on the information in Plaintiff's Exhibit 648 and on other relevant data, the jury were entitled to make a "just and reasonable estimate" of the premium paid by the government on claim 56, for which Anderson would be jointly and severally liable with the other defendants.*fn141
Anderson offers nothing beyond his "2.5%" argument to persuade the Court that $46,538.40 is an unreasonable sum, and objectively, it does not appear so. The total value of claim 56 was $77,564, and the damages award does not exceed this value. Because the damages award against him was neither beyond all reason nor inordinately large, the Court finds Anderson has demonstrated no basis for a remittitur order. In this regard, his motion shall be DENIED.
Anderson next protests that alone among the defendants, he received no credit for amounts the government obtained from settling co-defendants, and he contends these settlement payments entirely, or at least proportionately, offset his liability. (Motion One at 23-33.) In the Memorandum Opinion accompanying its Judgment, this Court adopted McDermott, Inc. v. Amclyde's proportionate share approach in denying Anderson a set-off. (Mem. Op.  at 4-7.) This was error. Because Anderson shared joint and several liability with the other defendants as to the government's damages on claim 56, he was entitled to a proportionate credit.
As the Court acknowledged in a prior opinion in this case, contribution and indemnification are unavailable among joint tortfeasors under the False Claims Act. United States ex rel. Miller v. Bill Harbert Int'l Construction, Inc., 505 F. Supp. 2d 20, 26 (D.D.C. 2007) (collecting cases). Nonetheless, "when a plaintiff receives a settlement from one defendant, a non-settling defendant is entitled to a credit of the settlement amount against any judgment obtained by the plaintiff against the non-settling defendant as long as both the settlement and judgment represent common damages." Singer v. Olympia Brewing Co., 878 F.2d 596, 600 (2d Cir. 1989), cert. denied, 493 U.S. 1024 (1990). See also United States v. Zan Mach. Co., 803 F. Supp. 620, 623 (E.D.N.Y. 1992) (applying this rule in FCA case).
When this Court entered Judgment, the United States had received a total of $13.7 million from settling co-defendants.*fn142 Although at trial the jury calculated the government's damages as to each of the three contracts, the earlier settlement payments were not allocated among the three contracts but were structured as undivided, lump sums. For HC, HII, BHIC, and Bilhar, with whom the settling co-defendants shared joint and several liability as to all three contracts, the settlement payments and judgment represented "common damages." Hence, a simple, pro tanto credit against their overall liability would have been appropriate.*fn143 See Zan Mach. Co., 803 F. Supp. at 623. For HUK and Anderson, however, with whom the settling co-defendants shared joint and several liability only as to one contract and one claim, respectively, this was not the case. Because the $13.7 million in settlement payments embraced items of damages for which HUK and Anderson were not liable, they were not entitled to credits of the full amount.*fn144
At the most elemental level, McDermott and its predecessor, United States v. Reliable Transfer Co., 421 U.S. 397 (1975), rest on notions of fairness and proportionality. See 511 U.S. at 208, 217 (proportionate share approach prevails due to its "consistency with Reliable Transfer," which itself adopted proportionate fault rule based on "interest in fairness"). In keeping with these principles, this Court held that in calculating offsets, "the $13.7 million must be allocated in the manner in which the jury apportioned liability across each of the three contracts." (Mem. Op.  at 10.) The Court calculated the portions of that aggregate value applicable to each contract accordingly.*fn145
It now follows the same procedure in calculating the portion applicable to claim 56 of Contract 29: the jury found the government's damages on claim 56 to be $46,538.40, (see Verdict Form  at 11), which accounts for 0.1355% of the government's total damages. Applying this proportion to the total settlement payment value, $18,563.50 of the $13.7 million served to compensate the government as to claim 56. Anderson was entitled to a credit in this amount, which reduces his total liability from $149,615.20 to $131,051.70.*fn146
To the extent Anderson's motion seeks amendment of the Judgment to afford him a proportionate credit based on payments the government received from settling co-defendants, his motion shall be GRANTED, and the Judgment  shall be amended to reflect his post-credit liability of $131,051.70.
B. Statutory Penalty
Finally, defendants protest the Court's assessment of the maximum statutory per claim penalty against each of them. (Motion One at 33-39; Motion Seven at 6-13.)
A defendant found liable for violating the FCA must pay a mandatory civil penalty to the United States "of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3729(a) (2008). The trial court enjoys considerable discretion in setting a penalty amount within the prescribed range. See Cook County, Ill. v. United States ex rel. Chandler, 538 U.S. 119, 132 (2003). Broadly, the penalty's twin purposes are punishment and deterrence.*fn147 See, e.g., United
States v. Mackby, 261 F.3d 821, 830 (9th Cir. 2001) (analyzing sanction under Excessive Fines Clause). As this Court explained in the Memorandum Opinion accompanying its Judgment, however, no statutory standard or judicially defined set of criteria governs this discretionary assessment. (Mem. Op. of Aug. 10, 2007  at 8.) The Court thus considered "the totality of the circumstances, including such factors as the seriousness of the misconduct, the scienter of the defendants, and the amount of damages suffered by the United States as a result of the misconduct."*fn148 (Id.)
BHIC and HUK find fault with the Court's discretionary assessment, but their arguments amount to an assault on the sufficiency of the evidence, which the Court has already addressed at length.*fn149 The Court reaffirms its original analysis and finds a $10,000 per claim statutory penalty was entirely appropriate.
Anderson offers several additional arguments of his own. In a footnote, this Court cited United States v. Murphy, 937 F.2d 1032, 1035-36 (6th Cir. 1991), as standing for the proposition that "the involvement of a defendant in bid-rigging is sufficient to impose the maximum $10,000 civil penalty under the FCA." (Mem. Op. of Aug. 10, 2007  at 8 n.6.) Hoping to distinguish Murphy, Anderson points out that the defendants there were repeat offenders. See Murphy, 937 F.2d at 1036. But Anderson, too, participated in bid-rigging more than once: thanks to the statute of limitations, he faced liability here only as to Contract 29, but he was also intimately involved in subverting the bidding process on Contract 20A. As factors in mitigation, Anderson notes that he has already paid a $25,000 criminal penalty and that his bid-rigging activities did not bring him personal riches. (Motion One at 34-35.) The first point ignores Congress's intent. It is beyond question that Congress may impose both a criminal and a civil sanction for the same conduct, United States ex re. Marcus v. Hess, 317 U.S. 537, 549 (1943) (citing Helvering v. Mitchell, 303 U.S. 391 (1938)), and Congress has done so for collusive conspiracies on U.S. government contracts, which subject the participants to both criminal liability under the Sherman Act and civil liability under the FCA, see 15 U.S.C. § 1 (2008); 31 U.S.C. § 3729 (2008). The second point rests on a faulty premise. Anderson characterizes his income as "relatively modest" and claims he possesses limited resources. Yet a salary of $160,000 per year, in 1991, is not, in this Court's view, mere peanuts. Hence, none of Anderson's arguments persuades the Court that he merits a lesser penalty.*fn150
To the extent they seek amendment of the Judgment to impose a lesser statutory penalty, defendants' motions must be DENIED. Further, to the extent defendants' motions seek vacation, alteration, or amendment on any basis not already addressed, they shall be DENIED.
A casual glance at defendants' voluminous post-trial filings might leave one with the impression that their trial was riddled with errors, and that the deck was stacked against them. This would be a mistake. This Court has overseen defendants' case for only three of its now-thirteen years, but as expressed in this Opinion, its meticulous review of its own legal rulings and of the jury's verdict has led it to the inexorable conclusion that our judicial system afforded these defendants a fair shake. For the reasons set forth above, the Court resolves defendants' post-trial motions as follows:
(1) Anderson's Post-Judgment Motion  ("Motion One") shall be GRANTED in part and DENIED in part. To the extent Anderson's motion seeks amendment of the Judgment to afford him a proportionate credit based on payments the government received from settling co-defendants, his motion shall be GRANTED, and the Judgment  shall be amended to reflect his post-credit liability of $131,051.70. In all other respects, his motion shall be DENIED;
(2) HII's Motion for Judgment as a Matter of Law  ("Motion Two") shall be DENIED;
(3) HC's Motion for Judgment as a Matter of Law  ("Motion Three") shall be DENIED;
(4) BHIC and HUK's Motion for Judgment as a Matter of Law  ("Motion Four") shall be DENIED;
(5) HII and HC's Motion for a New Trial as to All Claims  ("Motion Five") shall be DENIED;
(6) Bilhar's Motion for Post-Trial Judgment as a Matter of Law, or in the Alternative, for a New Trial  ("Motion Six") shall be DENIED;
(7) BHIC and HUK's Motion to Alter, Amend, or Vacate the Judgment [899, 901] ("Motion Seven") shall be DENIED; and
(8) BHIC and HUK's Motion for New Trial [900, 904] ("Motion Eight") shall be DENIED.
A separate order shall issue this date.