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United States of America v. Bill Harbert International

May 12, 2011


The opinion of the court was delivered by: Signed by Royce C. Lamberth, Chief Judge,



Four years ago one individual and five corporate entities*fn1 were found to have repeatedly and extensively fleeced the United States by engaging in a broad conspiracy to rig the bidding process for several construction contracts in Egypt that were funded by the U.S. Agency for International Development ("USAID"). Following a seven-week trial and jury verdict, the Court entered judgment against these defendants for numerous violations of the False Claims Act ("FCA") and ordered them-pursuant to the relevant provisions of the Act-to pay treble damages and the costs and attorneys' fees of relator Richard F. Miller. Having escaped judgment on the merits through an appeal of legal issues unrelated to the quality and quantity of evidence implicating them in the deceptive scheme to extract excessive funds from an agency that provides aid to third-world and developing countries-think "anti-Robin Hood"- defendants now attempt to avoid their obligations to pay Mr. Miller's counsel for their previously-successful and now partially-successful prosecution of the FCA claims in this case. In light of the Circuit Court's decision, the Court today will grant certain of these requests, deny others, and amend the original fee award as necessary.


Though this matter concerns sordid acts and this suit has a substantial history, the Court sets forth only the facts and procedural history necessary to the resolution of the issue before it.

A. Original Proceedings before this Court

In 1995, Richard F. Miller, who was then Vice President of a construction company operating abroad, brought a claim under the False Claims Act, 31 U.S.C. § 3729 et seq., alleging that defendants-in collusion with other corporate entities and contractors-were conspiring to rig the bidding process for development projects in Egypt funded by USAID. These projects were part of a U.S. policy to repay Egypt for its recognition of Israel following the Camp David Accords of 1979. The allegations in Mr. Miller's complaint focused on the bidding for one particular development project, Contract 20A, which involved the installation of large-diameter sewer pipes throughout heavily-populated districts in Cairo. Mr. Miller maintained that the company he worked for-J.A. Jones Construction Company ("Jones")-entered a joint-venture with HII, and together they extracted commitments from the only other two bidders for Contract 20A to either overbid or not bid at all. As a result of this collusion, the joint venture extracted $10 million in excess profits from the project, while the other participants received payments of $2.2 and $3 million for their role in the scheme.

In conjunction with FCA procedures, Mr. Miller's complaint was filed in camera and remained under seal while the United States evaluated its statutory options to either (1) intervene and proceed with the action itself, (2) decline to take over the action, in which case the relator may pursue the suit, or (3) petition the Court for an extension of the 60-day period during which the complaint remains sealed. 31 U.S.C. § 3730(b). In this case, the United States chose to pursue criminal investigations into the alleged conspiracy and ultimately obtained guilty pleas or convictions from at least five U.S. entities. Throughout this period, the United States filed several motions to keep Miller's complaint under seal.

Nearly six years after Mr. Miller filed suit, the United States permitted the unsealing of his complaint and simultaneously filed its own civil complaint against the defendants now before the Court. This new complaint repeated Mr. Miller's allegations as to Contract 20A and the broader scheme, while adding new claims relating to two other projects: Contract 29, which concerned the building of a wastewater treatment plant near Cairo, and Contract 07, which involved the construction of sewers in Alexandria. Mr. Miller subsequently amended his own complaint to mirror the pleadings filed by the United States, and the plaintiffs jointly pursued prosecution of these civil claims against all defendants.

After five years of discovery and motion practice,*fn2 this matter proceeded to trial in March 2007.*fn3 The trial was extensive, to say the least. It lasted over seven weeks, included testimony by more than forty witnesses, and involved the introduction of more than 500 exhibits. Ten days after beginning deliberations, the jury returned a verdict for plaintiffs and against defendants on all counts,*fn4 having found that all of the defendants "conspired to defraud the Government" and that every defendant "knowingly presented or caused to be presented a false or fraudulent claim for payment or approval to the United States" with respect to Contracts 20A, 29 and 07. Verdict Form 2--5, May 14, 2007 [858]. The jury then specified damages of $29,920,000, $3,400,000, and $1,026,029.22 on Contracts 20A, 29 and 07, respectively. Id. at 9--12.

Following the verdict, the Court entered judgment against all defendants. United States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 501 F. Supp. 2d 51 (D.D.C. 2007) ("Miller I"). In that opinion, the Court held that it lacked personal jurisdiction over HUK with respect to claims relating to Contracts 29 and 07, and therefore entered judgment against that particular defendant only for claims arising from Contract 20A. Id. at 53. Pursuant to the FCA, the Court then trebled the damages against all defendants, 31 U.S.C. § 3729(a), and entered a final judgment in excess of $90 million. Id. at 57--58. After several months of extensive briefing, the Court subsequently re-affirmed final judgment in a lengthy opinion denying defendants' motions seeking judgment notwithstanding the verdict, a new trial or alteration of the original judgment. Miller v. Holzmann, 563 F. Supp. 2d 54 (D.D.C. 2008) ("Miller II").

Two months later, the Court turned to Mr. Miller's request for fees and costs. Miller v. Holzmann, 575 F. Supp. 2d 2 (D.D.C. 2008) ("Miller III"). Having prevailed on all claims, Mr. Miller was entitled to receive compensation for reasonable expenses pursuant to 31 U.S.C. § 3730(d). In a 95-page opinion, the Court tediously reviewed over 70 pages of billing records, and concluded that defendants were obligated to pay more than $7 million in attorneys' fees and almost $300,000 in expenses and costs to plaintiff Miller. Id. at 58. Shortly thereafter, Mr. Miller requested-and received-supplemental awards for additional attorneys' fees and costs (collectively, the "fee award"). Order, Feb. 26, 2009 [1053]. Following entry of this award, defendants filed notice of their intention to appeal both the Court's denial of a directed verdict or new trial, as well as its award of litigation costs and attorneys' fees to Mr. Miller.

B. The Appeal

In an opinion release in the Summer of 2010, the D.C. Circuit surveyed several legal matters-including the proper application of relevant statutes of limitations, questions of preemption, jurisdiction and settlement, several evidentiary matters at trial, and arguments concerning the overall sufficiency of the evidence-to reverse in part and affirm in part this Court's entry of judgment against all defendants. United States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 608 F.3d 871 (D.C. Cir. 2010) ("Miller IV"). A total of three legal decisions were called into question by the opinion: first, the Circuit Court held that the statute of limitations had run on all claims relating to Contracts 29 and 07, which were only added after the suit was unsealed in 2001, id. at 880--82; second, it found error in this Court's decision to permit the United States to present evidence that BHIC existed throughout a particular period of time notwithstanding an agreed-upon stipulation to the contrary, id. at 888--89; and third, it concluded that this Court's admission of testimony concerning the wealth of defendants HII and HC was prejudicial and warranted a new trial. Id. at 896--98. The cumulative result of these three errors is that (1) judgment as to all ...

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