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Burke v. Record Press, Inc.

United States District Court, District Circuit

June 12, 2013

BRIAN BURKE, Plaintiff / Counter-Defendant,
v.
RECORD PRESS, INC., Defendant / Counter-Claimant.

MEMORANDUM OPINION

DEBORAH. A. ROBINSON, United States Magistrate Judge.

Plaintiff, as relator in a qui tam action commenced pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3733, alleged that Defendant Record Press, Inc., overcharged the United States Government Printing Office (hereinafter “government” or “GPO”) for the printing of briefs in a matter then pending in the United States Court of Appeals for the Second Circuit. More specifically, Plaintiff alleged that two invoices submitted by Defendant to the GPO “[were] fraudulent as they contravene[d] the express language of GPO’s contract with Record Press[]”; that “Record Press charged the Government ten times the contract rate for collating, trimming and binding briefs and appendices”; and that “it is Record Press’s standard practice to charge the Government ten times the contract rate for this service.” Joint Report Pursuant to Rule 16.3(d) (“Joint Report”) (Document No. 16) at 1-2; see also Verified Complaint (“Complaint”) (Document No. 1) ¶¶ 10-24.

After the United States declined to intervene, see United States’ Notice of Election to Decline Intervention (Document No. 5), the court (Sullivan, J.) ordered, inter alia, that the complaint be unsealed, and that Plaintiff serve it upon Defendant, see Order (Document No. 6). Defendant filed its answer in accordance with the court’s scheduling order. Answer to Plaintiff’s Verified Complaint (“Answer”) (Document No. 10); see also 07/17/2008 Minute Order. Defendant asserted “that the bills it submitted are fully in accordance with its contract with GPO, ” and that “the [contract and invoices] plainly show that no fraud has occurred.” Joint Report at 2. In addition, Defendant pled as a counterclaim tortious interference with prospective economic advantage, see Answer at 7-8, an allegation which Plaintiff denied, see Answer to Defendant’s Counterclaim (Document No. 13).

With the consent of the parties, trial of Plaintiff’s claims against Defendant proceeded to trial before this court. See Notice, Consent, and Reference of a Civil Action to a Magistrate Judge (Document Nos. 48, 88); 11/01/2010 Minute Order; 02/11/2011 Minute Order (denying Defendant’s Motion for Summary Judgment); 02/14/2011 Minute Entry (bench trial commenced and concluded). Plaintiff offered the testimony of three witness, and testified before he rested. Plaintiff’s first witness, Hugh Wilmot, Jr., the president of Defendant Record Press, Inc., identified the contract between Record Press and the GPO, and the two invoices at issue. Mr. Wilmot testified that the invoices were “billed consistently” with the applicable provisions of the contract between Record Press and GPO. Transcript of Bench Trial (Document No. 89) 36:20, 46:3-4, 55:1-12, 55:19-22; 56:9. Plaintiff’s second witness, Calvin Adgerson, Branch Chief of the GPO Commercial Billing and Examination Section, testified that after investigation of Plaintiff’s inquiry regarding the rate at which he was billed for the services of Record Press, “[i]t was determined that we had been processing the invoices correctly, and that there were no issues in the way we were processing them.” Tr. 77:24-78:1.

Plaintiff testified that he first inquired about a line item on an invoice for the services of Record Press “[because] I believe[d] as I do today [that this] is an outrageous charge.” Tr. (Document No. 90) 23:6-8; see also Tr. 25:17-20 (“some of the costs seemed quite competitive, per page costs, and the collating, trimming, and binding costs were this outrageous charge, and it certainly didn’t - - it defied logic to me . . . .”).[1] Plaintiff acknowledged that he never worked for either Record Press or the GPO, and that he did not participate in the drafting of the contract between those two entities. Tr. 31:1-10.

At the close of Plaintiff’s case, Defendant moved for judgment pursuant to Rule 52(c) of the Federal Rules of Civil Procedure. See Tr. (Document No. 90) 59:21-23. Both parties were heard on the record with respect to said motion, and neither asked for an opportunity to file written submissions. See Tr. 59:21-60:4, 92:10-109:20.[2]

APPLICABLE STANDARDS

False Claims Act

Congress, through the False Claims Act, “created a cause of action against anyone who ‘knowingly presents, or causes to be presented, to an officer or employee of the United States Government . . . a false or fraudulent claim for payment or approval[.]’” United States v. DRC, Inc., 856 F.Supp.2d 159, 167 (D.D.C. 2012) (footnote omitted) (quoting 31 U.S.C. § 3729(a)(1) (2000)). “A proper False Claims Act claim has three elements: (1) the defendant presented a claim for payment or approval to the government, (2) the claim was ‘false or fraudulent, ’ and (3) the defendant acted knowing that the claim was false.” United States ex rel. Folliard v. Govplace, No. 07-719, 2013 WL 1092859, at *3 (D.D.C. Mar. 18, 2013) (citation omitted); see also DRC, Inc., 856 F.Supp.2d at 167 (citation omitted). A “claim” is broadly defined “to include ‘any request or demand, whether under contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money . . . or if the Government will reimburse . . . any portion of the money.’” United States ex rel. Brown v. Aramark Corp., 591 F.Supp.2d 68, 73 (D.D.C. 2008) (citation omitted). Thus, the Act “essentially creates liability for ‘all fraudulent attempts to cause the Government to pay out sums of money.’” Id. (citations omitted) (internal quotation marks omitted); see also United States ex rel. Hood v. Satory Global, Inc., No. 11-774, 2013 WL 2274798, at *8 (D.D.C. May 23, 2013) (citation omitted) (“The [False Claims Act’s] ‘chief purpose . . . is to prevent the commission of fraud against the federal government and to provide for the restitution of money that was taken from the federal government by fraudulent means.’”).

“A claim may be false under the [False Claims Act] if it is either factually or legally false.” United States v. Toyobo Co., 811 F.Supp.2d 37, 45 (D.D.C. 2011) (citation omitted). “A claim can be ‘factually false if it invoices for services that were not rendered’ or incorrectly describes goods or services provided.” Id. (citation omitted). “A claim may be ‘legally false’ if it represents falsely that the party submitting the claim has complied with an applicable federal statute or regulation, or with a contractual term.” DRC, Inc., 856 F.Supp.2d at 167 (citation omitted); cf. Toyobo Co., 811 F.Supp.2d at 45 (citation omitted) (“One way to plead a false claim under this theory is to plead ‘that the contractor withheld information about its noncompliance with material contractual requirements.’”). Claims “alleged[ly] . . . submitted under a contract procured by fraud can be actionable” even in the absence of allegations that the claims were factually or legally false. Toyobo Co., 811 F.Supp.2d at 46 (citation omitted); see also DRC, Inc., 856 F.Supp. 2d. at 168 (citation omitted) (“Claims for payment submitted under a contract procured by fraud also may be actionable.”).

The False Claims Act includes a scienter requirement; thus, the relator must demonstrate that the defendant presented a false claim “knowingly, which entails having ‘actual knowledge of the information[, ]’ acting ‘in deliberate ignorance of the truth or falsity of the information[, ]’ or acting ‘in reckless disregard of the truth or falsity of the information.’” DRC, Inc., 856 F.Supp. 2d. at 168 (quoting 31 U.S.C. § 3729(b)). “Strict enforcement of the [False Claims Act’s] scienter requirement will . . . help to ensure that ordinary breaches of contract are not converted into [False Claims Act] liability.” Id. (citation omitted) (internal quotation marks omitted).

In order to prevail on a claim brought pursuant to the False Claims Act, a plaintiff must prove all elements of the cause of action by a preponderance of the evidence. See, e.g., Grand Acadian, Inc. v. United States, 105 Fed.Cl. 447, 457 (Fed. Cl. 2012) (citations omitted).

Rule 52(c)

Rule 52(c) of the Federal Rules of Civil Procedure provides, in ...


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