Contents    Prev    Next    Last

 Title United States v. Bombardier Corp.

 Argued April 20, 2004                    Decided August 27, 2004

 Subject Business

                                                                                                                                                                                                                

Previous Opinion | Contents | Next Opinion

 

 

  Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

      United States Court of Appeals

                 FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 20, 2004                        Decided August 27, 2004

                              No. 03-7128

     UNITED  STATES OF AMERICA  EX REL.  EDWARD  L. TOTTEN,

                               APPELLANT

                                      v.

         BOMBARDIER  CORPORATION AND ENVIROVAC,  INC.,

                               APPELLEES

         Appeal from the United States District Court

                    for the District of Columbia

                            (No. 98cv00657)

  H. Vincent McKnight, Jr. argued the cause and filed the

briefs for appellant.

  Thomas M. Bondy, Attorney, U.S. Department of Justice,

argued the cause for amicus curiae United States of America

in support of appellant.  With him on the brief were Peter D.

Keisler, Assistant Attorney General, U.S. Department of Jus-

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

 

                               2

tice,  Roscoe C. Howard, Jr., U.S. Attorney, Douglas N.

Letter, Attorney, Colin C. Carriere, Counsel, National Rail-

road Passenger Corporation (Amtrak), and D. Hamilton Pe-

terson, Deputy Counsel.

  Mark R. Hellerer argued the cause and filed the brief for

appellee Bombardier Corporation.      Philip L. Douglas en-

tered an appearance.

  Randall L. Mitchell argued the cause for appellee Enviro-

vac, Inc.    With him on the brief was Paul E. Lehner.

Barbara Van Gelder and Scott M. McCaleb entered appear-

ances.

  Before:  ROGERS, GARLAND, and ROBERTS, Circuit Judges.

  Opinion for the Court filed by Circuit Judge ROBERTS.

  Dissenting opinion filed by Circuit Judge GARLAND.

  ROBERTS, Circuit Judge:  Relator Edward Totten brought a

qui tam action against Bombardier Corporation and Enviro-

vac, Inc., alleging that those companies violated the False

Claims Act, 31 U.S.C. § 3729, by delivering allegedly defec-

tive rail cars to the National Railroad Passenger Corporation

(Amtrak) and submitting invoices to Amtrak for payment

from an account that included federal funds.  The pertinent

provision of the Act imposes liability for civil penalties and

treble damages on anyone who ``knowingly presents, or

causes to be presented, to an officer or employee of the

United States Government TTT a false or fraudulent claim for

payment or approval.''  Id. § 3729(a)(1).  Amtrak is not the

Government, 49 U.S.C. § 24301(a)(3), and Totten alleged only

that the funds Amtrak used to pay Bombardier and Enviro-

vac came in part from the Government -- not that those

companies presented their claims to an officer or employee of

the Government.      The district court accordingly dismissed

Totten's complaint.  We agree that under the plain language

of Section 3729(a)(1), claims must be presented to an officer

or employee of the Government before liability can attach.

We therefore affirm.

 

                                3

                                I.

   This is Totten's second appeal in this case;  the facts are

summarized in our opinion in the first, United States ex rel.

Totten v. Bombardier Corp., 286 F.3d 542, 545 (D.C. Cir.

2002) (Totten I):

        The dispute giving rise to this case began when Am-

     trak contracted with two private companies, Bombardier

     Corporation and Envirovac, Inc. (``the Contractors''), to

     supply rail cars with new toilet systems for its trains.

     Bombardier makes the cars and Envirovac makes the

     toilets.  Specifications for the toilet systems were incor-

     porated into Amtrak's contracts with the Contractors.

     On March 16, 1998, Totten, a former Amtrak employee,

     filed a suit against the Contractors under the False

     Claims Act , alleging that they had supplied unsuitable

     parts that did not meet the contractual specifications.

According to Totten's amended complaint, Bombardier and

Envirovac are liable under the False Claims Act because they

submitted periodic invoices to Amtrak for noncompliant rail

cars and Amtrak paid the invoices with funds that included

federal grant money.

   The district court dismissed the complaint at the threshold,

concluding that 49 U.S.C. § 24301(a) -- which states that

Amtrak ``shall not be subject to title 31'' -- bars False Claims

Act suits that involve claims made to Amtrak.  United States

ex rel. Totten v. Bombardier Corp., 139 F. Supp. 2d 50, 54

(D.D.C. 2001).    This court reversed and remanded, holding

that Section 24301(a) is not a bar to False Claims Act suits

against those who submit claims to Amtrak:  in such cases, we

reasoned, it is the claimant -- not Amtrak -- that is rendered

``subject to'' the Act.  Totten I, 286 F.3d at 548, 550.  The

court in Totten I ``express ed  no opinion'' on another thresh-

old question in the case: ``whether a False Claims Act

plaintiff may prevail against a defendant who submits a false

`claim' to a federal grantee (such as Amtrak), without pre-

senting evidence that the claim was ever actually submitted to

the U.S. government.''   Id. at 553.

 

                                 4

  That question was the focus of the district court's inquiry

on remand, after Totten amended his complaint.  The court

again dismissed the action, noting that the amended com-

plaint alleged only that ``the allegedly false claims in this case

were presented to and paid by Amtrak, not that the false

claims were presented to any federal officer or employee.''

United States ex rel. Totten v. Bombardier Corp., No. 98-

0657, Mem. op. at 7 (D.D.C. Sept. 3, 2003).  The district court

recognized that 31 U.S.C. § 3729(c) defines ``claim'' under the

Act to include claims made to a grantee if the Government

provides all or part of the money to pay the claim, but noted

that ``Congress nevertheless did not remove the unambiguous

language requiring presentment to the United States'' in

Section 3729(a)(1).     Id. at 5.  Totten now appeals, and the

Government has filed briefs and argued as amicus curiae in

support of Totten.1

                                 II.

A.  Amtrak is Not the Government

  Totten -- but not the Government -- argues that the

allegedly false claims in this case were presented to the

Government, because Amtrak was a mixed-ownership govern-

ment corporation prior to December 1997 and the Govern-

ment has continued to hold all of Amtrak's preferred stock,

and has provided sizable subsidies to Amtrak, since that date.

Totten Br. at 6.   This argument is unavailing.2

  1 The statute governing qui tam actions under the False Claims

Act allows the Government to intervene in the district court and

take over responsibility for conducting the litigation.  See 31 U.S.C.

§ 3730(b)(2), (4)(A).  In this case, the Government chose not to

intervene;  for its part, Amtrak has not brought any action against

Bombardier or Envirovac for the fraud Totten alleges.

  2 It was also arguably not preserved for appeal, because it was

made only in the most cursory fashion in the district court.      We

need not decide whether it was adequately preserved, because it

was in any event preserved only to fail.

 

                                5

   Even prior to 1997 -- indeed, at all times since the compa-

ny was created in 1971 -- Amtrak's organic statute has flatly

stated that the company ``is not a department, agency, or

instrumentality of the United States Government.''  49 U.S.C.

§ 24301(a)(3); see also Totten I, 286 F.3d at 544.  In its brief,

the Government candidly concedes that ``Congress has speci-

fied that Amtrak is not itself an agency of the Government.''

Amicus Br. at 10.  And in a case involving the provision that

is now Section 24301, the Supreme Court deemed the statute

``assuredly dispositive of Amtrak's status as a Government

entity for purposes of matters that are within Congress's

control.''  Lebron v. National R.R. Passenger Corp., 513 U.S.

374, 392 (1995);  see also Totten I, 286 F.3d at 544­45 (citing

Lebron).  Totten offers no reason, and we can think of none,

why False Claims Act coverage is not a matter ``within

Congress's control.''

   The case on which Totten relies, Rainwater v. United

States, 356 U.S. 590 (1958), is clearly distinguishable.  Rain-

water held that the Commodity Credit Corporation was ``part

of `the Government of the United States' for purposes of the

False Claims Act,'' id. at 592, but as the Court noted, the

statute in that case expressly provided that the Corporation

was ``an `agency and instrumentality of the United States.' ''

Id. at 591 (quoting Commodity Credit Corporation Charter

Act, Pub. L. No. 80-806, § 2, 62 Stat. 1070 (1948)).  Amtrak's

statute, of course, gives Amtrak the exact opposite status.

Attempts to analogize the other facts in Rainwater -- that all

of the Commodity Credit Corporation's employees were em-

ployees of the U.S. Department of Agriculture, and that the

entire budget of the Corporation came from the federal

treasury, see id. -- are similarly fruitless.

B.  Section 3729(a)(1) Requires Presentment to an Officer

     or Employee of the Government

   1.  Totten, now with the support of the Government, ad-

vances an alternative argument: that a claim submitted to

Amtrak is effectively a claim presented to the Government.

Thus Totten asserts that ``the False Claims Act  covers

claims presented to grantees,'' Totten Br. at 21; see also

 

                                  6

Reply Br. at 2, and relies on dicta from United States ex rel.

Yesudian v. Howard University, 153 F.3d 731, 738 (D.C. Cir.

1998), which suggest that claims presented to grantees may

be considered `` `effectively' presented to the United States'' if

the claims are paid with funds the grantee received from the

Government.  See Totten Br. at 13;  see also Amicus Br. at 18

(quoting Yesudian).

   Totten and the Government are unable to refute Enviro-

vac's argument that their reading of the statute would ``write

the clear unambiguous language of Section 3729(a)(1) entirely

out of the Act.''  Envirovac Br. at 9;  see also Bombardier Br.

at 10­11.  Liability under Section 3729(a)(1) arises when any

person ``knowingly presents, or causes to be presented, to an

officer or employee of the United States Government  TTT  a

false or fraudulent claim for payment or approval,'' 31 U.S.C.

§ 3729(a)(1) (emphasis added); Totten and the Government

offer no plausible explanation for how presentment of a claim

to Amtrak can satisfy the clear textual requirement that a

claim be presented to a federal officer or employee.  Instead,

they shift to a textual argument of their own, arguing that a

presentment requirement in Section 3729(a)(1) would be ``in-

consistent with the plain language of Section  3729(c).''  Ami-

cus Br. at 9;  see also Reply Br. at 2.

   Section 3729(c) defines a claim to include a request or

demand for payment made to a grantee ``if the United States

Government provides any portion of the money or property

which is requested or demanded, or if the Government will

reimburse TTT the  grantee TTT for any portion of the money

or property which is requested or demanded.''          31 U.S.C.

§ 3729(c).  A presentment requirement in Section 3729(a)(1),

the argument goes, would mean that False Claims Act liabili-

ty for claims submitted to grantees would attach only if the

claims are presented for reimbursement, and thus would

``render    the first `if' clause meaningless.''  Amicus Br. at 13.

   Not at all.    It is quite easy to square the language of

Section 3729(c) -- including both ``if'' clauses -- with the

presentment requirement in Section 3729(a)(1).  The first ``if''

clause defines a claim to include claims submitted to grantees

 

                                   7

if the Government ``provides'' any portion of the funds used to

pay the claim.  In a rhetorical sleight of hand, the Govern-

ment urges that this clause must reach any claim where the

money ``has already been or is being provided by the Federal

Government.''   Id. (emphasis added).   Such a reading equates

the present-tense ``provides'' in the statute with the past-

tense ``has provided'' in the argument -- and thereby runs

afoul of the Supreme Court's admonition that ``Congress' use

of a verb tense is significant in construing statutes.''  United

States v. Wilson, 503 U.S. 329, 333 (1992).

   The word ``provides'' in Section 3729(c), when appropriately

limited to the present tense, squares neatly with a present-

ment requirement.        False Claims Act liability will attach if

the Government provides the funds to the grantee upon

presentment of a claim to the Government.             Liability will

also attach if, after the grantee presents the claim, the

Government provides the funds directly to the claimant:  the

first ``if'' clause of subsection (c) -- unlike the second -- does

not circumscribe the set of possible recipients of the federal

funds.  And under the second ``if'' clause, liability will attach

if the Government -- again, upon presentment of the claim --

reimburses the grantee for funds that the grantee has already

disbursed to the claimant.         Nothing about the language of

subsection (c) requires ignoring that of subsection (a)(1) to

make sense of the statute.3

   3 Although the dissent ultimately does not challenge our reading

of subsection (a)(1), it does dispute this explanation of how (a)(1)

and (c) can be read together, in the course of pressing its theory

that (a)(2) does not require presentment.       See post at 15­16.

According to the dissent, we are wrong to say that ``False Claims

Act liability will attach if the Government provides the funds to the

grantee upon presentment of a claim to the Government,'' because

the italicized language does not appear in subsection (c).  See id. at

16.   Of course it does not: our point was not to suggest that

subsection (c) itself contains a presentment requirement -- it is,

after all, a definitional rather than a liability provision -- but

instead to respond to the erroneous contention that a presentment

requirement was somehow inconsistent with the definition of a claim

in subsection (c).

 

                                8

   Indeed, Totten and the United States never connect the

dots in their argument based on subsection (c).         Whatever

that argument may show about what constitutes a ``claim,'' it

does not respond to the plain requirement of subsection (a)(1)

that, to be actionable under the False Claims Act, any such

claim must be presented to an officer or employee of the

United States Government.       As Judge Randolph noted in

Totten I, it is clear on the face of the statute that ``no matter

how `claim' is defined, subsection (a)(1) requires the alleged

false claimant to present it (or cause it to be presented) to a

federal officer or employee.''  286 F.3d at 554 (Randolph, J.,

concurring).

   2.  In Yesudian, the court considered the present question,

but expressly concluded that it ``need not resolve that ques-

tion today.''  153 F.3d at 739.  That was because the issue in

Yesudian was not liability under the False Claims Act for

false claims, but whether an employer retaliated against an

employee for filing a qui tam action under the Act.        Such

retaliation, the Yesudian court concluded, could be shown

without establishing that the qui tam plaintiff would have

prevailed in his suit.    Id.; see Totten I, 286 F.3d at 546

(``Neither this court nor the Supreme Court has definitively

explicated the complex relationship between the definition

clause   in   § 3729(c)   and   the   presentment     clause   in

§ 3729(a)(1);'' Yesudian ``declined to answer'' the question).

The Yesudian court noted that the statutory language could

be read to require presentment to the United States, but also

surmised -- relying on the legislative history of the 1986

amendments to the False Claims Act, see 153 F.3d at 737­

39 -- that it was ``also possible to read the language to cover

claims presented to grantees, but `effectively' presented to

the United States because the payment comes out of funds

the federal government gave the grantee,'' id. at 738.  Now

that the question is which interpretation is correct, as op-

posed to whether either is arguable, we adhere to the plain

language of the statute, rather than invoke the legislative

history to embrace a reading at odds with the statutory text.

   As an initial matter, the Supreme Court reiterated as

recently as this past Term that resort to legislative history is

 

                                 9

not appropriate in construing plain statutory language.

`` W hen the statute's language is plain, the sole function of

the courts -- at least where the disposition required by the

text is not absurd -- is to enforce it according to its terms.''

Lamie v. United States Tr., 124 S. Ct. 1023, 1030 (2004)

(quoting  Hartford Underwriters Ins. Co. v. Union Planters

Bank, N.A., 530 U.S. 1, 6 (2000));  see also Ratzlaf v. United

States, 510 U.S. 135, 147­48 (1994) (courts should ``not resort

to legislative history to cloud a statutory text that is clear'');

Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 808­09

n.3 (1989) (``Legislative history is irrelevant to the interpreta-

tion of an unambiguous statute.'').

   Totten and the United States do not suggest that the

language of Section 3729(a)(1) is somehow not plain; they

merely argue that a plain language reading would yield

results at variance with the legislative history of the 1986

amendments.  Given that we are dealing with plain language,

however, there is no way to ``construe'' the language so that it

is satisfied when claims are presented to Amtrak.  We could

say that submitting a claim to Amtrak is ``just like'' or

``equivalent to'' or ``effectively'' submitting a claim to ``an

officer or employee of the United States Government,'' and

that subsection (a)(1) is therefore satisfied, but those would

just be different ways of saying that we are not going to read

(a)(1) as written by Congress.  ``There is a basic difference

between filling a gap left by Congress' silence and rewriting

rules that Congress has affirmatively and specifically enact-

ed.''  Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625

(1978).  Totten and the United States imply that the asserted

variance with the legislative history empowers us to ignore

the plain language of subsection (a)(1), but such extraordinary

power is limited to the situation in which adherence to the

plain text leads to an ``absurd'' result, see, e.g., Lamie, 124 S.

Ct. at 1030, and no one has suggested that to be the case

here.

   None of this is to gainsay the argument based on the

legislative history, ably advanced (and suitably, given the

nature of the question presented) in Yesudian.         But there

would be no need for a rule -- or repeated admonition from

 

                                 10

the Supreme Court -- that there should be no resort to

legislative history when language is plain and does not lead to

an absurd result, if the rule did not apply precisely when

plain language and legislative history may seem to point in

opposite directions.

   Totten and the United States argue that adhering to the

plain language would leave intact opinions Congress intended

to overrule in the 1986 amendments, but that is not clear with

respect to the decision that the Senate Judiciary Committee

most clearly intended to overrule -- United States v. Azzarel-

li Construction Co., 647 F.2d 757 (7th Cir. 1981).  See S. REP.

NO. 99-345, at 22 (1986) (S. REP.).  Azzarelli held that because

the federal funds at issue were part of a ``fixed and determi-

nate yearly contribution'' rather than an ``open-ended federal

expenditure program,'' the False Claims Act did not apply.

Azzarelli, 647 F.2d at 761;  see S. REP. at 15, 22 (describing

Azzarelli's holding).   Under our reading of subsections (a)

and (c) of Section 3729, the fixed nature of a federal grant

would be no bar to a claimant's liability;  such liability would

turn on whether the Government ``provides'' the funds -- in a

fixed or variable amount -- upon presentment of a claim to

the Government.  In fact, this presentment requirement was

satisfied in Azzarelli:  the payment scheme clearly required

the state to present to the Government claims for reimburse-

ment after it paid the contractors' fraudulent claims.  See 647

F.2d at 760.

   Totten and the United States may be on firmer ground

with respect to some of the other cases with which the

Committee expressed displeasure.       But our point is not to

debate the legislative history; rather, `` t hese uncertainties

illustrate the difficulty of relying on legislative history TTT

and the advantage of our determination to rest our holding on

the statutory text.''  Lamie, 124 S. Ct. at 1034.  And whatev-

er degree of confidence about congressional purpose one

derives from the legislative history, that purpose must find

expression ``within the permissible limits of the language''

before it can be given effect.   HENRY J. FRIENDLY, BENCHMARKS

216 (1967).

 

                               11

  At its most broad, the legislative history of the 1986

amendments declares that ``a false claim is actionable al-

though the claims or false statements were made to a party

other than the Government, if the payment thereon would

ultimately result in a loss to the United States.''  S. REP. at

10.  Even if the Committee ``intended the concept of loss to

the United States to be considered broadly,'' Yesudian, 153

F.3d at 739, ``no legislation pursues its purposes at all costs,''

Student Loan Mktg. Ass'n v. Riley, 104 F.3d 397, 408 (D.C.

Cir. 1997) (quoting Rodriguez v. United States, 480 U.S. 522,

525­26 (1987)) (internal quotation marks omitted).  The task

of statutory interpretation cannot be reduced to a mechanical

choice in which the interpretation that would advance the

statute's general purposes to a greater extent must always

prevail over one that would both advance the same ends --

though to a slightly lesser extent -- and have fewer draw-

backs.  See BP West Coast Prods., LLC v. FERC, 374 F.3d

1263, 1292­93 (D.C. Cir. 2004) (statutory objective of provid-

ing tax incentives for certain pipeline owners does not mean

all interpretive questions should be resolved in favor of

whatever results in most favorable tax treatment for such

owners) (citing Michigan v. EPA, 268 F.3d 1075, 1084 (D.C.

Cir. 2001)).   Nothing in the legislative history of the 1986

amendments suggests that the present False Claims Act is, to

borrow a phrase from another context, ``the product of mono-

maniacs.''   Student Loan Mktg. Ass'n, 104 F.3d at 408.

  What is more, if the overriding intent of Congress were in

fact to delete the requirement that claims be presented to a

Government officer or employee, Congress could readily have

done just that -- amend subsection (a)(1) to provide that

claims be presented to the Government or a grantee or

recipient of Government funds.  But Congress did not touch

(a)(1) at all in 1986.  Congress proceeded quite elliptically if

its intent were to eliminate the requirement of presentment

to the Government in the case of claims against grantees.

  In the final analysis, we can remain agnostic on the ques-

tion whether Congress intentionally left the presentment

requirement in Section 3729(a)(1) or simply forgot to take it

out.   The suggestion that Congress may have ``dropped a

 

                                 12

stitch,'' Yesudian, 153 F.3d at 738, is not enough to permit us

to ignore the statutory text.  The Supreme Court reminded

us in the Term just ended that `` ` i t is beyond our province

to rescue Congress from its drafting errors, and to provide

for what we might think TTT is the preferred result.' ''  La-

mie, 124 S. Ct. at 1034 (quoting United States v. Granderson,

511 U.S. 39, 68 (1994) (Kennedy, J., concurring)) (ellipsis in

Lamie);  see also Consolidated Rail Corp. v. United States,

896 F.2d 574, 579 (D.C. Cir. 1990) (courts are generally not

``free to `correct' what they believe to be congressional over-

sights by construing unambiguous statutes to the contrary of

their plain meaning'').

   There are good reasons for this rule;  a court's attempt to

correct a statute can often create new problems.         At least

three complications could flow from the proposed correction.

First, as Judge Randolph observed in Totten I, extending

False Claims Act liability here seems to result in quadruple

liability for false claimants:  a grantee could presumably bring

suit and obtain a recovery for itself, in addition to the treble

damages the Government and the relator divvy up under the

Act.   See 286 F.3d at 554 (Randolph, J., concurring).       Tot-

ten's response -- ``So be it,'' Opposition to Mots. to Dismiss at

30 -- is candid but not reassuring.

   Second, authorizing suit on behalf of an entity to which a

claim was not presented raises complicated questions in ap-

plying the statute's scienter requirement:  if the claimant has

told the grantee pertinent facts that would, in the absence of

such disclosure, make a claim fraudulent, it seems that the

claimant has not ``knowingly'' presented a false claim to the

grantee.    See, e.g.,  United States ex rel. Durcholz v. FKW

Inc., 189 F.3d 542, 545 (7th Cir. 1999) (`` T he government's

knowledge effectively negates the fraud or falsity required by

the Act .'').  But see United States ex rel. Hagood v. Sonoma

County Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991)

(``The requisite intent is the knowing presentation of what is

known to be false.      That the relevant government officials

know of the falsity is not in itself a defense.'').  It is unclear

how to apply the ``knowingly presents'' element when the

Government itself (or a relator) brings suit for claims made to

 

                                13

a grantee, if there is no longer any requirement of present-

ment to the Government.

  Third, an ``effective'' presentment approach would make the

potential reach of the Act almost boundless: for example,

liability could attach for any false claim made to any college

or university, so long as the institution has received some

federal grants -- as most of them do.  The Yesudian court

recognized this concern:

     It may be that this reading TTT should not apply to all

     grantees.  It may not be appropriate, for example, where

     the grantee's federal funds are an insubstantial percent-

     age of its total budget, where there is little likelihood

     that any of a defendant's money actually came from the

     federal grant, or where there is little continuing contact

     between the grantee and the government once the grant

     is made.

153 F.3d at 738.      Such an imprecise line of demarcation,

however, seems little more than a prescription for even more

collateral litigation under the False Claims Act.

  Our point is not that these problems would inevitably arise.

It is instead that the prospect of them, and others we have

not anticipated, reminds us that our job is reading statutes as

written, not rewriting them ``in an effort to achieve that which

Congress is perceived to have failed to do.''  United States v.

Locke, 471 U.S. 84, 95 (1985).

                               III.

                                A.

  Our dissenting colleague prefers to sidestep the question

whether Section 3729(a)(1) requires presentment and rest his

decision instead on subsection (a)(2).   That provision is direct-

ed at those who make false statements to get the Government

to pay false claims, and has no express requirement of

presentment to an officer or employee of the United States

Government.      None of the parties argued that subsection

(a)(2) could provide the grounds for resolving this case during

the six years the case was pending before reaching us for oral

 

                                14

argument: not in the first round of litigation that included

the appeal to this court in Totten I, not in the district court

below on remand, and not in the initial briefing on this

appeal.   See Totten Suppl. Br. at 1 (``Neither side had ad-

dressed the possible application of subsection (a)(2) instead

of (a)(1)  in the court below or in the briefs submitted to this

Court.'').

  Ordinarily, arguments that parties do not make on appeal

are deemed to have been waived.  See, e.g.,  Ark Las Vegas

Rest. Corp. v. NLRB, 334 F.3d 99, 108 n.4 (D.C. Cir. 2003)

(argument petitioner raised for first time at oral argument is

``waived because it was not raised in petitioner's  briefs'');

Narragansett Indian Tribe v. National Indian Gaming

Comm'n, 158 F.3d 1335, 1338 (D.C. Cir. 1998) (`` W e ordinari-

ly do not entertain arguments not raised by parties'');  Dis-

trict of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1084

(D.C. Cir. 1984) (under ``well settled'' rule, ``issues and legal

theories not asserted at the District Court level ordinarily will

not be heard on appeal'').  The court has authority to remedy

errors  sua sponte in ``exceptional circumstances'' -- when

they ``seriously affect the fairness, integrity, or public reputa-

tion of judicial proceedings,'' United States v. TDC Mgmt.

Corp., 288 F.3d 421, 425 (D.C. Cir. 2002) (quotation omit-

ted) -- but no one has suggested that this is such a case.  A

party's failure to pursue one of several available lines of

argument is hardly an ``error'' of the sort that would warrant

exercising our narrowly circumscribed remedial authority.

  We regularly attempt to avoid constitutional questions by

resting decision on a statutory basis, see Ashwander v. Ten-

nessee Valley Auth., 297 U.S. 288, 345­48 (1936), but there is

no comparable doctrine that would favor avoiding one ques-

tion of statutory interpretation -- the one litigated by the

parties that was the basis for decision below -- by proposing,

and then answering, a different one not posed by the parties

or addressed by the district court.  Even if such a ``statutory

avoidance'' doctrine existed, it is difficult to see why we would

invoke it in this case: the proper construction of Section

 

                                 15

3729(a)(2) seems harder, not easier, than that of Section

3729(a)(1).4

  The dissent chides us for responding to its analysis of

(a)(2), but a response is appropriate given the dissent's deter-

mination to embrace a reading of (a)(2) that would render the

plain language reading of (a)(1) largely meaningless.             In

short, we would prefer not to reach an issue the parties did

not in the six previous years of litigation, but now that the

dissent insists on putting it on the table, we are obliged to

explain why the proper resolution of that issue does not

undermine our reading of (a)(1) -- the issue the parties did

raise, and which was decided below.

                                 B.

  The dissent's effort to avoid deciding the presentment issue

by looking to Section 3729(a)(2) is ultimately unavailing --

which may explain why the approach was never suggested by

appellant, appellees, amicus, or the district court.        Making

false records or statements to get a false claim paid or

approved by Amtrak is not making or using ``a false record or

statement to get a false or fraudulent claim paid or approved

by the Government,'' 31 U.S.C. § 3729(a)(2) (emphasis added).

  We are apparently in agreement with the dissent that

Amtrak is not ``the Government'' for False Claims Act pur-

poses.    See supra at 4­5.      But in concluding that Section

3729(a)(2) reaches the alleged false statements in this case --

  4 The cases the dissent cites to rebut this point, see post at 3 &

n.3, are far afield.   Resting on (a)(1) would not implicate an

antecedent but unaddressed issue, as in United States National

Bank of Oregon vs. Independent Insurance Agents of America, 508

U.S. 439, 447 (1993), nor is the (a)(2) issue one that has arisen

because of an intervening decision of this court, as in Acree v.

Republic of Iraq, 370 F.3d 41, 58 (D.C. Cir. 2004).      Finally, in

Cicippio-Puleo v. Islamic Republic of Iran, 353 F.3d 1024, 1030

(D.C. Cir. 2004), a sovereign defendant had failed to appear alto-

gether.  The Cicippio court's decision to order briefing on certain

questions sua sponte has no relevance to this case, in which Totten

has litigated vigorously -- but not at all on (a)(2).

 

                               16

statements that induced Amtrak to pay false claims -- the

dissent finds that payment by Amtrak is payment ``by the

Government'' because some of the funds came from a federal

grant to Amtrak.     As support for this reading, the dissent

points to Section 3729(c), which, as we have seen, provides

that the term ``claim'' includes requests made to grantees and

other recipients ``if the United States Government provides

any portion of the money or property which is requested or

demanded, or if the Government will reimburse the recipi-

ent  for any portion of the money or property.''             Id.

§ 3729(c).  In short, the dissent believes that Section 3729(c)

collapses the distinction between the Government and its

grantees where liability under Section 3729(a)(2) -- but ap-

parently not under Section 3729(a)(1) -- is concerned.  Tot-

ten and the Government advanced the same view, when

prodded by our order requesting supplemental briefing on

the (a)(2) question.  Totten Suppl. Br. at 13 (``The import of

Section 3729(c) is that it broadens who constitutes the Gov-

ernment under the False Claims Act.'');  Amicus Suppl. Br. at

12­13 (`` A  claim is paid `by the Government' either if the

government pays it directly or if the money is disbursed by a

third-party funding recipient who receives from the govern-

ment all or part of the funding for the payment'').

  This reading has a fatal flaw: it yields exactly the same

meaning that would result if Section 3729(a)(2) did not contain

the words ``by the Government'' at all.      If Congress had

intended to predicate liability under subsection (a)(2) on

payment or approval either by the Government itself or by a

grantee using federal funds, then a reference to false records

or statements made ``to get a false or fraudulent claim paid or

approved'' would have been enough.        That is exactly what

subsection (a)(2) provided before the 1986 amendments.  By

adding subsection (c) in 1986 to provide that ``claim'' included

claims against a grantee or recipient, Congress arguably

could have achieved the result for which Totten and the

Government contend simply by leaving (a)(2) untouched.

Congress did not do that.        At the same time it added

subsection (c), Congress added the words ``by the Govern-

ment'' to (a)(2).  False Claims Amendments Act of 1986, Pub.

 

                                  17

L. No. 99-562, § 2(3), (7), 100 Stat. 3153, 3153­54.  Notably,

Congress did not say ``by the Government or a grantee,

contractor, or other recipient as provided in subsection (c) of

this section.''5

   It is, of course, a ``cardinal principle of statutory construc-

tion that a statute ought, upon the whole, to be so construed

that, if it can be prevented, no clause, sentence, or word shall

be superfluous, void, or insignificant.''  Alaska Dep't of Envtl.

Conservation v. EPA, 124 S. Ct. 983, 1002 n.13 (2004) (quota-

tion omitted);  see also Hibbs v. Winn, 124 S. Ct. 2276, 2286

(2004) (``rule against superfluities'' bars a reading that would

have one of several words in statutory provision ``do all the

necessary work''); Duncan v. Walker, 533 U.S. 167, 174

(2001).  Moreover, `` w hen Congress acts to amend a statute,

we presume it intends its amendment to have real and

substantial effect.''  Stone v. INS, 514 U.S. 386, 397 (1995).

The intended effect of adding ``by the Government'' at the

same time as subsection (c) is fairly obvious:  Congress was

referring back to the presentment requirement of Section

3729(a)(1).   And in so doing, Congress was reinforcing --

rather than abandoning -- the distinction between the Gov-

ernment and its grantees that might otherwise have been

blurred by the addition of Section 3729(c).6

   5 The dissent purports to make a plain language argument, but

has to alter the statutory words to make its point, asserting that

``paid by the Government'' means ``paid with government money.''

See post at 6­7.  The statute does not talk of ``government money''

or, the term the dissent employs elsewhere, ``federal monies.''  It

speaks of claims ``presented TTT to an officer or employee of the

United States Government TTT for payment or approval'' and claims

``paid or approved by the Government.''

   6 The dissent's suggestion that ``by the Government'' was added

to clarify that the Act reaches false claims only where the Govern-

ment ``directly or indirectly provides the funds and suffers the loss,''

post at 9 n.8, does not hold up;  the definition of ``claim'' already

contains that limitation.  See 31 U.S.C. § 3729(c).  The dissent is

unwilling to give the addition of ``by the Government'' to (a)(2) any

weight because it cannot find a statement in any committee report

explaining what Congress intended to accomplish by that amend-

 

                                 18

   The parallel structure of (a)(1) and (a)(2) strongly supports

this interpretation.    Subsection (a)(1) refers to presenting

claims to the Government for ``payment or approval;''  subsec-

tion (a)(2) to making false statements to get claims ``paid or

approved by the Government.''  As it turns out, that parallel

structure is no accident.   Prior to 1982, the liability provisions

of the False Claims Act were contained in one unwieldy

sentence that had survived, with only minor modifications,

since the Act's enactment in 1863:

     Any person TTT who shall make or cause to be made, or

     present or cause to be presented, for payment or approv-

     al, to or by any person or officer in the civil, military, or

     naval service of the United States, any claim upon or

     against the Government of the United States, TTT know-

     ing such claim to be false, fictitious, or fraudulent, or

     who, for the purpose of obtaining or aiding to obtain the

     payment or approval of such claim, makes, uses, or

     causes to be made or used, any false bill, receipt, vouch-

     er, roll, account, claim, certificate, affidavit, or deposition,

     knowing the same to contain any fraudulent or fictitious

     statement or entry TTT shall forfeit and pay to the

     United States the sum of $2,000, and, in addition, double

     the amount of damages which the United States may

     have sustainedTTTT

31 U.S.C. §  231 (1976) (emphasis added).

   In 1982, Congress undertook a comprehensive revision of

Title 31 of the U.S. Code and substituted ``simple language

TTT for awkward and obsolete terms.''  H.R. REP.  NO. 97-651,

at 1 (1982).  As part of this revision, the single interminable

sentence constituting the False Claims Act (of which only a

ment.  See post at 9.  But statutory language cannot be slighted

simply because it is not addressed in legislative history.  See, e.g.,

New York v. FERC, 535 U.S. 1, 20­21 (2002).  The case cited by the

dissent -- Cook County, Illinois v. United States ex rel. Chandler,

538 U.S. 119 (2003) -- rejected an argument that Congress accom-

plished a significant change without discussion.  The presentment

requirement, however, has been in the statute for 140 years.  The

addition of ``by the Government'' did not change but confirmed that.

 

                                   19

small portion is quoted above) was divided into the numbered

subsections of Section 3729(a).  Congress made it extremely

clear, however, that the bill ``ma de  no substantive change in

the law.''  Id. at 3;  see also id. at 1 (``The purpose of the bill

is to restate in comprehensive form, without substantive

change, TTT laws related to money and finance'');  id. at 2 (``In

making changes in the language, precautions have been taken

against making substantive changes in the law.'').

   The present Section 3729(a)(2), therefore, is the direct

descendant of a clause that could only be read in conjunction

with what is now Section 3729(a)(1):  the reference to ``such

claim'' was a shorthand reference to the claim already identi-

fied in the current subsection (a)(1) -- that is, a claim that

would be presented or caused to be presented to the United

States.7  The legislative history even explains why the word

``such'' disappeared from the statute:  Congress removed it in

light of the general purpose of the 1982 revision -- to make

the statute more readable.  See id. at 3 (``The word `such' is

no longer  used as a demonstrative adjective.'').

   The dissent reads the 1982 revision to effect a significant

substantive change.       Rather than accepting that ``paid or

approved'' in subsection (a)(2) is an invocation of ``payment or

approval'' in (a)(1), the dissent seizes onto the absence of any

discussion of presentment in subsection (a)(2) and concludes

that Congress had a wholly different type of liability in

mind -- one in which presentment of a claim is irrelevant, so

long as a defendant happens to have made a false record or

statement.  The various subsections of Section 3729(a) must

of course be read disjunctively, because the word ``or'' ap-

   7 The dissent offers a different interpretation of ``such claim,''

arguing that it refers to a ``claim upon or against the Government of

the United States'' rather than to a claim presented to the United

States.  See post at 12­13 & n.11.      Within the framework of the

pre­1982 version of the statute, we fail to see how the dissent's

reading is any different from our own:  a claim could not be upon or

against the Government unless it was presented to the Government.

The parallel between presented to the Government for payment or

approval and paid or approved by the Government confirms the

point.

 

                                  20

pears between subsections (a)(6) and (a)(7), but that word is

not a license to ignore the provenance of subsection (a)(2) in

construing what ``paid or approved by the Government'' in

that subsection means.  See 2A NORMAN  J. SINGER,  STATUTES

AND  STATUTORY  CONSTRUCTION § 46:05, at 165­66 (6th ed. 2000)

(`` A  statutory subsection may not be considered in a vacuum

TTT;  courts should not rely too heavily upon characterizations

such as `disjunctive' '') (footnote omitted).

   To the extent that the Government buttresses its reading

of Section 3729(a)(2) with citations to the legislative history of

the 1986 amendments, see, e.g., Amicus Suppl. Br. at 13, such

reliance is gravely misplaced:  the Senate report was based on

a version of the bill that did not yet include the provision

adding the words ``by the Government'' to subsection (a)(2).

See S. REP. at 39.  It thus makes little sense to protest that

giving effect to those restrictive words would run counter to

some of the report's sweeping explanations of the Senate

Judiciary Committee's intent.

   The proposition that subsection (a)(2) harkens back to

(a)(1), and that the latter requires presentment, is supported

in scholarly commentary on the False Claims Act.  A leading

treatise on the False Claims Act states that `` t he three

requirements of Section 3729 (a)(1)'' -- including the require-

ment ``that a claim be presented to the United States'' -- are

``still applicable'' to Section 3729(a)(2).  1 JOHN  T. BOESE,  CIVIL

FALSE  CLAIMS AND QUI  TAM  ACTIONS § 2.01 B , at 2-21 (2d ed.

Supp. 2004-1).       The dissent's contrary conclusion -- that

subsection (a)(2) does not require any presentment that may

be required under subsection (a)(1) -- has tellingly little

support.

   The dissent's reading of (a)(2) would make the presentment

requirement in (a)(1), which the dissent does not challenge

head-on, largely meaningless.  In most cases false records or

statements are made or used to get false claims paid or

approved.  If the dissent's view prevailed, the plain language

requirement in (a)(1) that claims be presented to an officer or

employee of the Government would only trip up those foolish

enough to rely on (a)(1) rather than (a)(2) -- and even they

 

                                  21

might find a court willing to excuse their omission.             The

dissent candidly views this as all well and good -- a way of

``reconciling § 3729(a) as a whole with § 3729(c) and the

legislative history,'' post at 2 -- but it is not our task to find

ways of circumventing plain statutory language.8            Allowing

(a)(2) to swallow (a)(1) is particularly egregious, since it

seems clear that (a)(2) is complementary to (a)(1), designed to

prevent those who make false records or statements to get

claims paid or approved from escaping liability solely on the

ground that they did not themselves present a claim for

payment or approval.       See United States ex. rel. Harris v.

Bernad, 275 F. Supp. 2d 1, 6 (D.D.C. 2003) (``the main

purpose of section 3729(a)(2) is to remove any defense that

the defendants themselves did not submit false claims to the

government'') (citing BOESE,  supra, at § 2.01 B ).          This is

presumably why (a)(2) was not argued by the parties

throughout this litigation.   To the extent the dissent's reading

of (a)(2) does not completely swallow (a)(1), it leads to an

anomalous result:  a defendant who makes a false record to

help someone else get a false claim paid or approved by a

grantee would be covered by the Act, but a defendant who

actually presents a false claim to the grantee for payment or

approval would not be.

   The dissent seems to recognize that a false record cannot

be said to be used to get the Government to ``approve'' a

claim if the Government has no role to play because there is

no presentment, but contends that the situation is very

different under the payment prong of (a)(2).  See post at 5­6.

But under that prong as well the false record does not

prompt any action ``by the Government'' under the dissent's

   8 The dissent asserts that it is not guilty of this transgression

because there is no plain language presentment requirement in

(a)(2).  See post at 2 n.2.  This misses the point:  there is a plain

language presentment requirement in (a)(1) and the dissent's read-

ing of (a)(2) would circumvent that.  Elsewhere the dissent recog-

nizes that ``words of a statute must be read in context and with a

view to their place in the overall statutory scheme.''  See post at 14

(quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120,

133 (2000)).

 

                                  22

view, but only by the grantee or contractor.           The dissent

hinges coverage on the presence of funds that can trace their

genealogy to the Government, without explaining the limits of

this non-statutory ``federal monies'' concept.  If, as was actu-

ally largely the case here, see Decl. of Carol J. Dillon;  Decl.

of Brian Adam, Amtrak pays Bombardier with proceeds from

a Canadian Export Development Corporation loan and an

Export Development Bank loan, and then repays the loans

with money from its capital budget, it is not clear that

Bombardier's claims -- as opposed to those of the Export

Corporation and Bank for repayment -- are satisfied out of

federally provided funds.       And it remains unclear whether

``federal monies,'' which apparently retain that character un-

der the dissent's view even though no further government

role is involved, are still ``federal monies'' when passed along

to subgrantees or subcontractors, employees and suppliers of

subgrantees and subcontractors, and so on.9

                                 * * *

   The dissent literally begins and ends with legislative histo-

ry.  See post at 1, 22­23.  We will end as we began, too, but

with the statutory language:  Section 3729(a)(1) imposes liabil-

ity on anyone who ``knowingly presents, or causes to be

presented, to an officer or employee of the United States

Government  TTT a false or fraudulent claim for payment or

approval.''  That was not done here;  claims were presented

only to Amtrak for payment or approval, and Amtrak is not

the Government.  Section 3729(a)(2) imposes liability on any-

   9 The policy concern that the Government invokes and that the

dissent repeats -- that requiring presentment will ``withdraw  

False Claims Act protection'' from a ``broad swath of false claims,''

see post at 23 (quoting U.S. Br. at 9) -- rather plainly begs the

question. In addition, the Government is of course free to structure

its grants in such a way as to require presentment and thereby

trigger coverage under the False Claims Act, and often does so.

See, e.g.,  United States ex rel. Marcus v. Hess, 317 U.S. 537, 543

(1943) (``It was a prerequisite to respondents' payment by the

grantee  that TTT estimates be filed, transmitted to, and approved

by, the Government  authorities.'').

 

                             23

one who makes a false record or statement ``to get a false or

fraudulent claim paid or approved by the Government.''  That

too was not done here;  the records were made to get claims

paid or approved by Amtrak, and Amtrak is not the Govern-

ment.

  The judgment of the district court is affirmed.

 

                                  1

   GARLAND, Circuit Judge, dissenting:  The False Claims Act,

``adopted in 1863 and signed into law by President Abraham

Lincoln in order to combat rampant fraud in Civil War

defense contracts,'' S. Rep. No. 99-345, at 8 (1986), is the

``Government's primary litigative tool for combating fraud,''

id. at 2.  Today, the court adopts an interpretation that, the

government warns, leaves ``vast sums of federal monies''

without False Claims Act protection.          Oral Arg. Tr. at 3.

Under the court's interpretation, the government1              cannot

recover against a contractor that obtains money by present-

ing a false claim to a federal grantee -- even if every penny

paid to the contractor comes out of an account comprised

wholly of federal funds -- unless the grantee ``re-presents''

that false claim to a federal employee.          Although Amtrak

receives billions of dollars in federal funds that it uses to pay

contractor invoices, because it does not (and is not required

to) re-present those invoices to the federal government, the

court's ruling immunizes those who defraud even that govern-

ment-funded corporation from False Claims Act liability.

   My colleagues concede that 31 U.S.C. § 3729(a)(2) ``has no

express requirement of presentment to an officer or employee

of the United States Government.''  Op. at 13.  The court's

interpretation of that subsection as requiring presentment is

thus inconsistent with its plain text -- as well as with the

statutory definition of ``claim'' contained in § 3729(c).  More-

over, the court's interpretation is not just inconsistent, but

irreconcilable, with the legislative history of the 1986 Amend-

ments to the False Claims Act.          See False Claims Amend-

ments Act of 1986, Pub. L. No. 99-562 § 2(c), 100 Stat. 3153

(Oct.  27, 1986) (hereinafter 1986 Amendments).  The court

marches on nonetheless, surrounding itself on all sides with

``canons'' of statutory construction, which serve here as ``can-

nons'' of statutory destruction.  Although I have no quarrel

   1 Although in the instant case the plaintiff is a private ``relator''

suing in the name of the government, see 31 U.S.C. § 3730(b), the

statute authorizes the government to sue in its own name or to take

over a relator's suit and conduct the action itself, see id.

§ 3730(b)(2), (b)(4)(A).  The statute's substantive provisions are the

same regardless of whether the government or a relator prosecutes

the action.

 

                                  2

with the canons the court has chosen, properly deployed they

do not support the position it has taken in this case.

                                  I

   I begin with a preliminary matter:  I am perplexed by the

court's long prologue protesting the propriety of deciding the

meaning of § 3729(a)(2), followed immediately by its decision

on that very issue.   See Op. at Part III.A.

   First, the rationale for exploring the meaning of subsection

(a)(2) is straightforward.  As discussed in United States ex

rel. Yesudian v. Howard University, the conclusion that

liability under § 3729(a)(1) requires that a false claim be

presented to the government rather than a grantee is difficult

to reconcile with § 3729(c), and perhaps impossible to recon-

cile with the Act's legislative history.  153 F.3d 731, 737-38

(D.C. Cir. 1998); see infra Parts III, IV.             Nonetheless,

subsection (a)(1)'s language renders this reading ``possible,''

Yesudian, 153 F.3d at 738, and perhaps would not alone

warrant a dissent.  As discussed below, however, what is a

plausible reading of subsection (a)(1) -- given its ``presents,

or causes to be presented'' language -- is not plausible for

subsection (a)(2), which contains no such language.

   Moreover, even if subsection (a)(1) were read as imposing a

presentment requirement, reading subsection (a)(2) as not

also imposing such a requirement goes a long way toward

reconciling § 3729(a) as a whole with § 3729(c) and the

legislative history that indicates Congress intended to reach

false claims made to grantees.2  Hence, there is good reason

to interpret both subsections (a)(1) and (a)(2) at the same

time, because the reasonableness of the interpretation of the

former may rest on the meaning assigned to the latter.

   Second, there is no procedural impropriety in deciding the

meaning of subsection (a)(2) here.           The plaintiff's com-

plaint -- which the district court dismissed on the plead-

   2 As discussed below, achieving such a reconciliation would not

``circumvent    plain statutory language,'' Op. at 21, as there is no

language of presentment -- ``plain'' or otherwise -- in § 3729(a)(2).

 

                                  3

ings -- was not limited to subsection (a)(1), but rather

asserted liability under ``31 U.S.C. § 3729'' in its entirety.

Am. Compl. ¶¶ 11, 63, 107.  His district court pleadings were

more specific, charging a violation of ``§§ 3729(a)(1) - (a)(3).''

Pl.'s Opp'n to Mots. to Dismiss, at 2.  Indeed, our own prior

decision in this case noted that ``the sections relevant here''

proscribe (inter alia) `` `false records or statements' used to

induce false  claims, see § 3729(a)(2).''  United States ex rel.

Totten v. Bombardier, 286 F.3d 542, 551 (D.C. Cir. 2002)

(hereinafter Totten I).

   Although initially the plaintiff did not separately address

the meaning of subsection (a)(2), he did argue that the False

Claims Act (FCA) does not contain a presentment require-

ment.  See Appellant's Br. at 5, 11-18, 21;  Pl.'s Opp'n at 25-

30.   After oral argument in this court, we ordered supple-

mental briefing specifically ``addressing the application of 31

U.S.C. § 3729(a)(2) to this case.''  Order (Apr. 20, 2004) (per

curiam).  The issue has now been fully briefed, removing the

fairness concerns that ordinarily militate against entertaining

arguments not initially presented.  See, e.g., Corson & Gru-

man Co. v. NLRB, 899 F.2d 47, 50 n.4 (D.C. Cir. 1990) (``We

require petitioners and appellants to raise all of their argu-

ments in the opening brief to prevent `sandbagging' of appel-

lees and respondents and to provide opposing counsel the

chance to respond.''). There is, therefore, no impediment to

our consideration of the meaning of subsection (a)(2).3

   Finally, my colleagues simply ``protest too much.''  WILLIAM

SHAKESPEARE,  HAMLET, act III, sc. 2.  No one has compelled

   3 See United States Nat'l Bank of Oregon v. Independent Ins.

Agents of Am., 508 U.S. 439, 445-48 (1993) (holding that this court

had authority, after ordering supplemental briefing, to decide the

validity of a statutory section despite the parties' failure to dispute

it);  Acree v. Republic of Iraq, 370 F.3d 41, 48, 58 (D.C. Cir. 2004)

(determining the validity of a cause of action, an issue not addressed

by the parties, after advising the parties that it would be addressed

at oral argument);  Cicippio-Puleo v. Islamic Republic of Iran, 353

F.3d 1024, 1030 (D.C. Cir. 2004) (considering an issue not raised by

the parties after giving them an opportunity to submit supplemental

briefing).

 

                                   4

them to address this issue.          If they truly thought that

determining the meaning of subsection (a)(2) were somehow

inappropriate, they could have resisted the temptation and

left the issue undecided.

  Having dispensed with these preliminaries, I now proceed

directly to the question of whether liability under § 3729(a)(2)

of the False Claims Act requires presentment (or re-

presentment) of a claim to a government employee, rather

than to a grantee like Amtrak.  Part II discusses the text of

subsection (a)(2), while Part III addresses the related text of

subsection (c).   Part IV considers the legislative history of

the 1986 Amendments, and Part V reviews the various policy

arguments my colleagues advance in support of their position.

                                  II

  ``The starting point in discerning congressional intent is,'' of

course, ``the existing statutory text.''  Lamie v. United States

Trustee, 124 S. Ct. 1023, 1030 (2004).          Subsection (a)(2)

imposes liability on any person who ``knowingly makes, uses,

or causes to be made or used, a false record or statement to

get a false or fraudulent claim paid or approved by the

Government.''  31 U.S.C. § 3729(a)(2);  see id. § 3729(c) (de-

fining ``claim'' as, inter alia, ``any request TTT for money TTT

which is made to a TTT grantee TTT if the United States

Government provides any portion of the money TTT which is

requested'').  As charged in the complaint, defendants Envi-

rovac and Bombardier made false statements in order to get

false claims paid with government money.  Accordingly, de-

fendants' conduct appears to fall within the proscription of

subsection (a)(2).

                                   A

  The court's textual response to this argument is that the

defendants' conduct does not fall within subsection (a)(2)

because the defendants presented their false claims to Am-

trak rather than to a government employee.  It is true that a

different subsection -- (a)(1) -- does contain presentment

language.    See 31 U.S.C. § 3729(a)(1) (imposing liability on

 

                                   5

anyone who ``knowingly presents or causes to be presented, to

an officer or employee of the United States Government'' a

false or fraudulent claim).  Indeed, it is upon that language

that the court bases its conclusion that presentment is re-

quired for liability under subsection (a)(1).  Op. at 2, 11-12.

As already noted, however, the court concedes that subsection

(a)(2) contains ``no express requirement of presentment to an

officer or employee of the United States Government.''  Id. at

13.    And the absence of presentment language in (a)(2),

coupled with its presence in (a)(1), cannot help but call to

mind a traditional canon of construction:  `` W hen Congress

includes particular language in one section of a statute but

omits it in another section of the same Act, it is generally

presumed that Congress acts intentionally and purposely in

the disparate inclusion or exclusion.''        Barnhart v. Sigmon

Coal Co., 534 U.S. 438, 452 (2002) (internal quotation marks

omitted);  see Russello v. United States, 464 U.S. 16, 23 (1983)

(``We refrain from concluding TTT that the differing language

in the two subsections has the same meaning in each.'').4

   Lacking any reference to presentment in subsection (a)(2),

the court contends that the words ``by the Government'' have

the same effect.  But if Congress had meant the same thing,

it would have said the same thing.  See id.  The court might

yet have an argument if subsection (a)(2) were limited to false

claims ``approved'' by the government.  But the subsection's

   4 The court also finds support for its presentment theory in what

it calls the ``parallel structure'' of subsections (a)(1) and (a)(2):

``Subsection (a)(1) refers to presenting claims to the government for

`payment or approval;'  subsection (a)(2) to making false statements

to get claims `paid or approved by the Government.' ''  Op. at 18.

But these two subsections are not ``parallel'' at all.  Instead, they

are quite distinct, imposing liability on different kinds of fraud:  the

first captures the person ``who TTT presents TTT to an TTT employee

of the United States Government TTT a false TTT claim for payment

or approval''; the second catches the one ``who TTT  makes  TTT  a

false TTT statement to get a false TTT claim paid or approved by the

Government.''    31 U.S.C. § 3729(a)(1), (2).     The fact that both

subsections require some form of payment or approval does not

mean that they both require presentment to a government official.

 

                                 6

requirement is that the claim be ``paid or approved by the

Government.''      31 U.S.C. § 3729(a)(2) (emphasis added).

And as the court recognizes, we should endeavor to construe

statutes so that no ``word shall be superfluous.''  Op. at 17

(quoting Alaska Dep't of Envtl. Conservation v. EPA, 124 S.

Ct. 983, 1002 n.13 (2004)) (internal quotation marks omitted).

Hence, claims ``paid by'' the government suffice for subsection

(a)(2) liability, whether approved by it or not.

  But, the court counters, the payment to the defendants was

not a payment ``by the Government'' since Amtrak -- a

government grantee rather than the government itself --

wrote the check.      The implications of the court's argument

are breathtaking, because they do more than just impose a

requirement of re-presentment.  If payment ``by the govern-

ment'' means that the government itself must write the check,

then fraud on grantees who pay their own contractors is not

covered by the False Claims Act regardless of whether claims

are re-presented to a government employee.

  The statutory language requires no such result.  In com-

mon parlance,5 the fact that expenses are ``paid by'' an entity

does not mean that the entity paid them directly.  When a

student says that his college living expenses are ``paid by'' his

parents, he typically does not mean that his parents send

checks directly to his creditors.  Rather, he means that his

parents are the ultimate source of the funds he uses to pay

those expenses.  See United States Suppl. Br. at 12-13 (argu-

ing that ``a claim is `paid by the Government' either if the

government pays it directly or if the money is disbursed by a

third-party funding recipient who receives from the govern-

ment all or part of the funding for the payment'');  see also

United States ex rel. Marcus v. Hess, 317 U.S. 537, 544-45

(1943) (``Government money is as truly expended whether by

checks drawn against the Treasury to the ultimate recipient

  5 See Walters v. Metropolitan Educ. Enters., Inc., 519 U.S. 202,

207 (1997) (``In the absence of an indication to the contrary, words

in a statute are assumed to bear their ordinary, contemporary,

common meaning.'') (internal quotation marks omitted).

 

                                    7

or by grants in aidTTTT'').6

   This interpretation of ``paid by the Government'' -- as

requiring that the government be either the direct or indirect

source of the funds -- is confirmed by § 3729(c), which

defines the word ``claim.''  As discussed in Part III, § 3729(c)

provides that a request for money made to a grantee is a

``claim'' under the FCA ``if the United States Government

provides any portion of the money or property TTT, or if the

Government will reimburse such TTT grantee, or other recipi-

ent for any portion of the money or property.''            31 U.S.C.

§ 3729(c).  This interpretation is also supported by the legis-

lative history of the 1986 Amendments which, as discussed in

Part IV, stresses that a ``false claim is actionable although the

claims or false statements were made to a party other than

the Government, if the payment thereon would ultimately

result in a loss to the United States.''  S. Rep. No. 99-345, at

10 (emphasis added);  see H.R. Rep. No. 99-660, at 21 (1986).

   The court protests that this reading of ``paid by the Gov-

ernment'' has a ``fatal flaw:  it yields exactly the same mean-

ing that would result if Section 3729(a)(2) did not contain the

words `by the Government' at all.''           Op. at 16.     Not so.

Those words make clear that, for liability to attach, the

government must have been the source of the funds either

directly or indirectly;  that is, the fraud must ultimately result

in a loss to the government.         Indeed, without those words,

   6 In the related context of 18 U.S.C. § 641, which criminalizes

embezzlement of ``money or thing s  of value of the United States,''

courts have held that ``federal grant money does not lose its federal

character simply because it is administered by a nonfederal agen-

cy.''  United States v. Largo, 775 F.2d 1099, 1102 n.3 (10th Cir.

1985);  see, e.g., United States v. Long, 996 F.2d 731 (5th Cir. 1993)

(holding that a university's funds, received from a state agency but

originating in the federal treasury, retained their federal character

for purposes of § 641);  United States v. Foulks, 905 F.2d 928 (6th

Cir. 1990) (finding that grant funds in the possession of the Toledo

Salvation Army constituted funds of the United States); United

States v. Scott, 784 F.2d 787, 790-91 (7th Cir. 1986) (concluding that

theft of funds from a local government agency, which was primarily

funded by the federal government, appropriately triggered § 641).

 

                                  8

the subsection could be read to make liable any person who

``knowingly makes TTT a false statement TTT to get a false or

fraudulent claim paid'' by anyone.

   Finally, if subsection (a)(2) does contain an implicit present-

ment requirement as my colleagues suggest, one is entitled to

ask whether their reading doesn't have the ``fatal flaw'' they

ascribe to mine:  it allows subsection (a)(1) ``to swallow'' (a)(2),

leaving the latter with no (or very little) independent mean-

ing.  Op. at 21.  My colleagues wait until virtually the last

page of their opinion to say what they think subsection (a)(2)

means: `` I t seems clear,'' they say, ``that (a)(2) is TTT

designed to prevent those who make false records or state-

ments to get claims paid or approved from escaping liability

solely on the ground that they did not themselves present a

claim for payment or approval.''  Id. (citing United States ex

rel. Harris v. Bernad, 275 F. Supp. 2d 1, 6 (D.D.C. 2003),

citing, in turn, JOHN  T. BOESE,  CIVIL  FALSE  CLAIMS & QUI  TAM

ACTIONS § 2.01 B , at 2-22 (2d ed. Supp. 2004-1)).  But since

this reading still implies that someone must have presented

the claim for liability to attach under subsection (a)(2), it does

not appear to differ from liability under (a)(1) -- or subsec-

tion (a)(3) for that matter -- which itself ensures that one

cannot avoid liability for false claims that he causes but does

not himself present.      31 U.S.C. § 3729(a)(1) (making liable

anyone who knowingly presents, ``or causes to be presented''

a false claim); see id. § 3729(a)(3) (same for anyone who

``conspires to defraud the Government by getting'' a false

claim paid).7  The court's restrictive reading is neither clear

from the statutory text nor supported by anything more than

district court dicta, which in turn is supported by nothing

more than a statement in a practitioner's guide, which itself

contains no explanation for the conclusion that it draws.  See

Bernad, 275 F. Supp. 2d at 6 (citing BOESE § 2.01 B , at 2-22).

   7 Indeed, the authority cited by the court acknowledges that

under this reading, ``many violations of (a)(2)  may also be consid-

ered violations of Section (a)(1) under the `causes to be presented'

language,'' and the ``distinctions between the two sections may be

even smaller than they first seem.''      BOESE  § 2.01 B , at 2-22.

 

                                  9

                                  B

   Without support in the statutory text, the court retreats

into legislative history -- an ironic choice, given the court's

protestations in the early pages of its opinion.            But the

retreat is to no avail.

   First, noting that the phrase ``by the Government'' was

added in 1986, the court concludes that it must have added

something new to the statute's previous meaning.                 ``The

intended effect of adding `by the Government,' '' the court

says, ``is fairly obvious:  Congress was referring back to the

presentment requirement of Section 3729(a)(1).''  Op. at 17.

But that divination of congressional intent is not obvious at

all.  ``Paid by the Government'' is not a phrase that brings

``presented to the Government'' to mind, and there was no

reason for Congress to employ different language to express

the same concept.  See Russello, 464 U.S. at 23.  Nor does

the legislative history support the court's view of congression-

al intent:  not one word in the 1986 legislative history even

mentions the addition of ``by the Government,'' let alone

reflects such an intent.8

   Indeed, as discussed in Part IV, the legislative history

suggests precisely the opposite.         The same Congress that

added ``by the Government'' also expansively defined the term

``claim'' to make clear that the FCA covers fraud on grantees,

whether or not accompanied by presentment to the govern-

   8 As the preceding discussion makes clear, my colleagues are

incorrect on two counts in saying that `` t he dissent is unwilling to

give the addition of `by the Government' to (a)(2) any weight

because it cannot find a statement in any committee report explain-

ing what Congress intended to accomplish by the amendment.''   Op.

at 17-18 n.6.   First, I do give ``by the Government'' weight: it

clarifies that the FCA only reaches false claims where the govern-

ment directly or indirectly provides the funds and suffers the loss.

Second, my argument does not rest on the absence of legislative

history, but rather on the best interpretation of the language of

§ 3729(a)(2) and (c).  The absence of legislative history merely (and

completely) counters my colleagues' own suggestion that the legisla-

tive history supports their interpretation.

 

                                10

ment.    It is difficult to believe that this Congress, after

proclaiming its purpose to reach fraud regardless of present-

ment, then subverted that purpose using words that do not

mention presentment at all.       Accordingly, rather than add

something new to the FCA, the better explanation is that

those words were intended to clarify what the Supreme

Court had long held:  that the FCA reaches only those false

claims that ultimately result in losses to the United States.

See United States v. Neifert-White Co., 390 U.S. 228, 232

(1968);  Marcus, 317 U.S. at 544-45.  Indeed, that reading is

in keeping with the overall purpose of the 1986 Amendments,

which was to ``clarif y  that the statute permits the Govern-

ment to sue under the False Claims Act for frauds perpetrat-

ed on Federal grantees, including States and other recipients

of federal funds.''    S. Rep. No. 99-345, at 21 (emphasis

added).

   Next, the court retreats even deeper into legislative histo-

ry, tracing the FCA's language and structure all the way back

to 1863.   As the court notes, from 1863 through 1982, the

liability provisions of the FCA were contained in a single,

``interminable'' sentence codified at 31 U.S.C. § 231.  Op. at

18-19.  That sentence (with clause numbers inserted for ease

of reference) made liable any person:

     who 1  shall make or cause to be made, or present or

     cause to be presented, for payment or approval, to or by

     any person or officer in the civil, military, or naval

     service of the United States, any claim upon or against

     the Government of the United States, TTT knowing such

     claim to be false, fictitious, or fraudulent, or who, 2  for

     the purpose of obtaining or aiding to obtain the payment

     or approval of such claim, makes, uses, or causes to be

     made or used, any false bill, receipt, voucher, roll, ac-

     count, claim, certificate, affidavit, or deposition, knowing

     the same to contain any fraudulent or fictitious statement

     or entry, or who 3  enters into any agreement, combina-

     tion, or conspiracy to defraud the Government of the

     United States, TTT by obtaining or aiding to obtain the

     payment or allowance of any false or fraudulent claim, or

 

                                   11

     who, 4  having charge, possession, custody, or control of

     any money or other public property TTT, with intent to

     defraud the United States TTT delivers TTT any amount

     of such money or property less than that for which he

     received a certificate or took a receipt, and every person

     whoTTTT

31 U.S.C. § 231 (1976) (emphasis added).              Contrary to the

court's characterization, Op. at 19, I do not disagree that

Congress intended no substantive change when, in 1982, it

divided this sentence into the numbered subsections of 31

U.S.C. § 3729(a).  See Pub. L. No. 97-258, § 1, 96 Stat. 978

(Sept. 13, 1982);  H.R. Rep. No. 97-651, at 1 (1982).  But I do

disagree with the conclusion the court draws from that fact,

since in my view the second clause of the pre-1982 FCA did

not contain a presentment requirement.

  The first clause of the ``interminable'' sentence is the

precursor to § 3729(a)(1) and contains the now-familiar pres-

entment language.  The conclusion that my colleagues draw

from this is that § 3729(a)(2) -- whose precursor is the

second clause of the sentence, which unlike the first contains

no reference to presentment -- can ``only be read in conjunc-

tion with'' the earlier presentment clause.  Op. at 19.  But if,

as my colleagues apparently intend, ``in conjunction with''

means ``to incorporate,'' this reading makes sense only if the

clauses of the pre-1982 version of the FCA were intended to

largely duplicate each other.   And they were not.

  The multiple clauses of the pre-1982 version were not

intended to repeatedly restate the same concept in different

words, but rather to encompass the various ways by which a

person could fraudulently obtain government funds.9  As the

  9 The court is thus wrong to say that my interpretation ``em-

brace s  a reading of (a)(2) that would render the plain language of

(a)(1) largely meaningless.''  Op. at 15;  see id. at 20.  Moreover, as

the government suggests, ``there may be acts that fall within the

scope of subsection (a)(1), but do not fall within the scope of

subsection (a)(2)'' in light of the fact that (a)(1) proscribes ``false or

fraudulent claim s ,'' 31 U.S.C. § 3729(a)(1), while (a)(2) deals with

 

                                    12

Supreme Court put it, ``the Act was intended to reach all

types of fraud, without qualification, that might result in

financial loss to the Government.''  Neifert-White, 390 U.S. at

961.  This view is supported by the sentence's multiple uses

of the disjunctive ``or,'' which indicate that subsection (a)(2)

should be read in ``disjunction'' rather than ``conjunction'' with

subsection (a)(1), and by the ``rule against superfluities'' cited

by the court, Op. at 17, which bars a reading that would have

one of several distinct clauses do all the necessary work.  See

Hibbs v. Winn, 124 S. Ct. 2276, 2286 (2004); Duncan v.

Walker, 533 U.S. 167, 174 (2001).

   To support its novel incorporation theory, the court con-

tends that the reference to ``such claim'' in subsection (a)(2)'s

precursor clause10 ``was a shorthand reference to the claim

already identified in the current subsection (a)(1) -- that is, a

claim that would be presented or caused to be presented to

the United States.''  Op. at 19.  But, the pre-1982 version of

the FCA does not use the court's syntax:  ``a claim that would

be presented.''     To the contrary, rather than use the word

``presents'' as a way to describe a claim, the pre-1982 statute

uses it to describe something done to a particular kind of

claim.    And what kind of claim?          The answer is: a false

``claim upon or against the Government of the United States''

in the precursor to subsection (a)(1),11 and a ``false or fraudu-

certain ``false record s  or statement s ,'' id. § 3729(a)(2).  United

States Suppl. Br. at 6.

   10 See 31 U.S.C. § 231, cl. 2 (1976) (making liable any person

``who, for the purpose of obtaining TTT payment or approval of such

claim, makes TTT any false bill, receipt, voucher, roll, account,

claim, certificate, affidavit, or deposition, knowing the same to

contain any fraudulent or fictitious statement or entry'') (emphasis

added).

   11 See 31 U.S.C. §  231 (1976) (``Any person TTT who 1  shall make

or cause to be made, or present or cause to be presented, for

payment or approval, to or by any person or officer in the civil,

military, or naval service of the United States, any claim upon or

against the Government of the United States,  TTT knowing such

claim to be false, fictitious, or fraudulent, or who, 2  for the

 

                                   13

lent claim'' in the current version.12  Those are the phrases

that are the logical referents for ``such claim,'' and neither

contains a reference to presentment.13

   It is also important to remember that the history of the

False Claims Act did not end in 1982.              Whatever meaning

``such claim'' had prior to 1982, and whatever Congress

intended by eliminating ``such'' in that year, the new defini-

tion of ``claim'' in the 1986 Amendments eliminates any reason

a reader of subsection (a)(2) might have to refer to subsection

(a)(1) to understand the meaning of the term.                   And that

definition contains no reference to presentment.                  See 31

U.S.C. § 3729(c).  In short, whatever comfort the court de-

rives from the pre-1982 history of the FCA grows cold after

1986.  See Lamie, 124 S. Ct. at 1030 (``The starting point in

discerning congressional intent is the existing statutory text,

and not the predecessor statutes.'') (internal citation omitted).

   Finally, the court relies on ``scholarly commentary'' to

support the ``proposition that subsection (a)(2) harkens back

to (a)(1), and that the latter requires presentment.''   Op. at 20

purpose of obtaining or aiding to obtain the payment or approval of

such claim, makes, uses, or causes to be made or used, any false

billTTTT'') (emphasis added).

   12 See 31 U.S.C. § 3729(a)(1) (making liable any person who

``knowingly presents, or causes to be presented, to an officer or

employee of the United States Government TTT a false or fraudu-

lent claim for payment or approval'') (emphasis added).

   13 Nor is the court correct in saying that ``legislative history TTT

explains why the word `such' disappeared from the statute,'' Op. at

19 -- at least not in any way helpful to the court's interpretation.

The single sentence that the court relies on merely says: `` `The

word ``such'' is no longer  used as a demonstrative adjective.' ''  Id.

(quoting H.R. Rep. No. 97-651, at 3).          That is description, not

``explanation.''  Indeed, if anything, it is a description that supports

the reading argued for in the above paragraph.  After 1982, subsec-

tion (a)(2) no longer modified ``claim'' with ``such'' as in its precursor

clause, and instead substituted the specific adjectival phrase that

Congress had intended:  ``a false or fraudulent'' claim.  31 U.S.C.

§ 3729(a)(2).

 

                                14

(citing BOESE  § 2.01 B , at 2-21).     But the ``practitioner's''

guide, BOESE at i, that the court cites adds nothing to its

argument.  While the guide does include the phrase, ``a claim

must  be presented to the United States,'' in a list of the

elements of subsection (a)(2), see id. at 2-21, it does not cite a

single case or offer a single argument in support of that

proposition.   The court's opinion must stand or fall on its

own.

                                III

   To this point, the analysis has principally proceeded by

examining § 3729(a) in isolation.      But ``words of a statute

must be read in their context and with a view to their place in

the overall statutory scheme,'' FDA v. Brown & Williamson

Tobacco Corp., 529 U.S. 120, 133 (2000) (quotation marks

omitted), and here that context includes consideration of

§ 3729(c).  In 1986, Congress amended the FCA by adding

that subsection, which contained a new and comprehensive

definition of the word ``claim'':

     For purposes of this section, ``claim'' includes any request

     or demand TTT for money or property which is made to a

     contractor, grantee, or other recipient  if the United

     States Government provides any portion of the money or

     property which is requested or demanded, or if the

     Government will reimburse such contractor, grantee, or

     other recipient for any portion of the money or property

     which is requested or demanded.

31 U.S.C. §  3729(c) (italics and bolding added).

   This definition plainly reaches not only those cases in which

the grantee pays out money and then gets reimbursed by the

government (the second ``if'' clause), but also those where

``the United States Government provides any portion of the

money'' requested (the first ``if'' clause).  The definition does

require that a request or demand be made to the grantee, but

does not mention re-presentment to the government.             In-

deed, such a re-presentment requirement is counter-intuitive

with respect to the cases covered by the first ``if'' clause.

Unlike the case in which a grantee advances its own funds

 

                                 15

and then seeks federal reimbursement, when the government

provides the grantee with federal funds and the grantee then

disburses them upon receipt of a contractor's bill, it is unlike-

ly that the grantee would have any reason to re-present that

bill to the United States.  Accordingly, the government con-

tends that a re-presentment requirement would ``render    the

first `if' clause meaningless,'' United States Br. at 13, contra-

vening the ``rule against superfluities,'' see Op. at 17.

  In response, the court accuses the government of ``rhetori-

cal sleight of hand'' by equating ``the present-tense `provides'

in the statute with the past-tense `has provided' in the argu-

ment.''  Id. at 7.  I disagree.  In common parlance, it does

not change the tense of ``provides'' to say that the govern-

ment ``provides'' Amtrak with the funds it uses to pay con-

tractors who later submit claims to Amtrak.            Indeed, the

court might be charged with some tense-shifting of its own,

effectively transforming ``provides'' into the future tense by

reading the first ``if'' clause as attaching liability only:  ``if the

Government provides the funds to the grantee upon present-

ment of a claim to the Government.''            Id. (emphasis in

original).  Since in the real world these events do not tran-

spire simultaneously, the court's contention that liability at-

taches only if the government provides the funds to the

grantee ``upon presentment of a claim'' must mean ``after

presentment of a claim,'' thus effectively transforming ``pro-

vides'' into the future-tense ``will provide.''  Such a transfor-

mation is particularly suspect in the context of § 3729(c),

since its second ``if'' clause shows that Congress knew how to

use that verb form when it wanted to.               See 31 U.S.C.

§ 3729(c) (``if the Government will reimburse such contractor

TTT'') (emphasis added).

  The primary problem with the court's theory is not tense

transformation, however, but the insertion of extra words into

the statute.  Subsection (c)'s first ``if'' clause does not state,

as the court does, that ``False Claims Act liability will attach

if the Government provides the funds to the grantee upon

presentment of a claim to the Government.''  Op. at 7 (em-

phasis added).  Rather, it simply defines claim as a ``request

or demand TTT to a contractor, grantee, or other recipient'' --

 

                                   16

the phrase ``presentment of a claim to the Government'' is not

to be found.  And as the old canon says, ``we ordinarily resist

reading words or elements into a statute that do not appear

on its face.''  Bates v. United States, 522 U.S. 23, 29 (1997);

see Lamie, 124 S. Ct. at 1032.  Or, as the Supreme Court put

it more pithily in United States v. Naftalin: ``The short

answer is that Congress did not write the statute that way.''

441 U.S. 768, 773 (1979).

                                   IV

  I now turn to the legislative history of the 1986 Amend-

ments.    Although the court fires off an array of canons to

preclude such inquiry, all refer to situations in which the

statutory text is plain and unambiguous.14  But, as is readily

apparent, neither § 3729(a)(2) nor § 3729(c) mentions the

word ``presentment'' in any of its variations.  And whatever

one may think of the arguments that can be made from the

actual text, no one can say the False Claims Act ``unambigu-

ously'' imposes a presentment requirement for liability under

subsection (a)(2).  Counsel for Bombardier rightly conceded

as much at oral argument.  Oral Arg. Tr. at 29-30.  Accord-

ingly, reference to the legislative history is appropriate.  See

Blum v. Stenson, 465 U.S. 886, 896 (1984).

  Once the legislative history is consulted, any residual un-

certainty about whether to read a presentment requirement

into the statute disappears.          As this court recognized in

Yesudian, the purpose of the new definition of ``claim'' added

in 1986 was to `` `clarif y  that the statute permits the Govern-

ment to sue under the False Claims Act for frauds perpetrat-

ed on Federal grantees, including States and other recipients

  14 See Op. at 8-9 (citing Lamie, 124 S. Ct. at 1030 (`` W hen the

statute's language is plain, the sole function of the courts TTT is to

enforce it according to its terms.'') (internal quotation marks omit-

ted);  Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994) (stating

that courts should ``not resort to legislative history to cloud a

statutory text that is clear'');  Davis v. Michigan Dep't of Treasury,

489 U.S. 803, 808 n.3 (1989) (``Legislative history is irrelevant to the

interpretation of an unambiguous statute.'')).

 

                               17

of federal funds.' ''  153 F.3d at 737 (quoting S. Rep. No. 99-

345, at 21).  The Senate Judiciary Committee stressed that it

did not matter whether the claim was made to a government

employee or to a grantee.   `` A  false claim is actionable,'' the

Committee said, ``although the claims or false statements

were made to a party other than the Government, if the

payment thereon would ultimately result in a loss to the

United States.''  S. Rep. No. 99-345, at 10 (emphasis added).

And the House Judiciary Committee agreed: `` C laims or

false statements made to a party other than the Government

are covered by this term if payment thereon would ultimately

result in a loss to the United States.''  H.R. Rep. No. 99-660,

at 21 (emphasis added).

  Moreover, the ``Senate Judiciary Committee indicated that

the new subsection was inserted in response to earlier court

holdings that `a fraud against the grantee does not constitute

a fraud against the Government of the United States' where

`once the United States has made the grant to the State TTT

or other institution, it substantially relinquishes all control

over the disposition of the money.' ''  Yesudian, 153 F.3d at

737 (quoting S. Rep. No. 99-345, at 21).   The example cited by

the Committee was Salzman v. Salant & Salant, Inc., 41 F.

Supp. 196 (S.D.N.Y. 1938), in which a district court dismissed

a complaint that alleged the defendant had submitted false

claims for payment to the Red Cross, because the Red

Cross -- although a recipient of federal funds -- was neither

the government nor a department thereof.  S. Rep. No. 99-

345, at 21.   At the same time, the Committee approvingly

cited cases akin to this one, where courts had held that ``a

false claim to the recipient of a grant from the United States

TTT is a false claim to the United States.''  Id. at 10 (citing

United States ex rel. Davis v. Long's Drugs, 411 F. Supp.

1144 (S.D. Cal. 1976)).  Thus, to read the False Claims Act as

requiring presentment to the government ``would leave intact

those court opinions Congress seemingly intended to over-

rule,'' while overturning those that Congress cited with ap-

proval.   Yesudian, 153 F.3d at 738.

  The court does not, and cannot, dispute that requiring

presentment leaves intact ``some'' of the opinions that Con-

 

                                18

gress intended to overrule.15  Yet, it contents itself with the

fact that requiring presentment does not leave intact one of

the cases that Congress cited with disapproval, United States

v. Azzarelli Construction Co., 647 F.2d 757 (7th Cir. 1981).

Op. at 10.  But while it is true that imposing a presentment

requirement does not interfere with the overruling of Azza-

relli, that is only because Azzarelli was a case that Congress

wanted to overrule for a different reason:  it had held that the

FCA did not apply to grantees ``where the Federal contribu-

tion is a fixed sum.''  S. Rep. No. 99-345, at 15.  The fact that

the court's interpretation can be squared with Congress'

intentions regarding that single case does not square its

interpretation with the legislative history of the 1986 Amend-

ments.

   Taking another tack, the court dismisses the import of the

1986 legislative history altogether, noting that the Senate

Report was based on a version of the bill that did not yet

include the provision that added the words ``by the Govern-

ment'' to subsection (a)(2).  See Op. at 20.  As discussed in

Part II, however, those words do not impose a requirement of

presentment to the government.  Nor is there any legislative

history that suggests they do.  Indeed, the history is entirely

silent as to why the words were added, and it is simply not

plausible that Congress, which had expressed its intent to

clarify that the FCA covers false claims to grantees, reversed

itself without so much as a whisper.  As the Supreme Court

said in rejecting an analogous contention that Congress had

repealed municipal liability in the 1986 Amendments, ``it is

simply not plausible that Congress intended'' to make such a

change ``sub silentio by the very Act it passed to strengthen

the Government's hand in fighting false claims.''  Cook Coun-

ty, Illinois v. United States ex rel. Chandler, 538 U.S. 119,

133-34 (2003).

   Nor can my colleagues' dismissal of the clear legislative

history find support in the arms of the inestimable Judge

Friendly.  Op. at 10 (citing HENRY  J. FRIENDLY,  BENCHMARKS

  15 See Op. at 10 (conceding that ``Totten and the United States

may be on firmer ground with respect to some of the TTT cases with

which the Committee expressed displeasure'').

 

                                   19

216 (1967)).  In fact, the canon of construction propounded by

the good judge supports the opposing view:

      I f an intent clearly expressed in committee reports is

      within the permissible limits of the language and no

      construction manifestly more reasonable suggests itself,

      a court does pretty well to read the statute to mean what

      the few legislators having the greatest concern with it

      said it meant to them.

FRIENDLY, at 216.  In this case, the intent expressed in the

committee reports is well within the permissible limits of the

language, and there is no construction that is more reason-

able.  Accordingly, in Judge Friendly's view, this court would

do ``pretty well to read the statute to mean'' what Congress

said it meant.   Id.

                                    V

   Finally, the court falls back on policy considerations to

support its presentment requirement.            Op. at 11-13.    The

court's arguments are flawed on their own terms.                More

important, the policies on which the court relies are not those

of the Congress of the United States.

   The court's policy analysis begins with the contention that

an ``interpretation that would advance the statute's general

purposes to a greater extent'' should not ``always prevail over

one that would both advance the same ends -- though to a

slightly lesser extent -- and have fewer drawbacks.''  Op. at

11.    This is fine as canons go, but only if Congress has

indicated that it would be satisfied if its ends were advanced

to ``a slightly lesser extent'' than the face of the statute

suggests.  And only if the court's idea of a ``drawback'' is the

same as the legislature's.16  But those caveats are not satis-

  16 See Lamie, 124 S. Ct. at 132 (``Our unwillingness to soften the

import of Congress' chosen words even if we believe the words lead

to a harsh outcome is longstanding.'');  FRIENDLY, at 203 (`` A  court

will `do well to stick close to the text and not import argumentative

qualifications from broad, unexpressed claims of policy.' '' (quoting

Utah Junk Co. v. Porter, 328 U.S. 39, 44 (1946))).

 

                                 20

fied here, where the statutory language includes no present-

ment requirement and the legislative history makes clear that

Congress did not want one.

  Next, the court identifies several ``complications'' that could

flow from permitting recovery where there is fraud on a

grantee, but no presentment to the government.  Op. at 12.

The first such complication is that ``extending False Claims

Act liability here seems to result in quadruple liability for

false claimants:  a grantee could presumably bring suit and

obtain a recovery for itself, in addition to the treble damages

the Government and the relator divvy up under the Act.''  Id.

But the premise of this argument is dubious.             The FCA

permits recovery only on behalf of the government, and only

for ``damages which the Government sustains.''            31 U.S.C.

§ 3729(a).17  For the grantee also to bring suit successfully, it

would have to rely on some other source of law.  And it is

pure speculation that such an unnamed (perhaps state com-

mon law) cause of action would permit a grantee duplicative

recovery, rather than require allocation among the injured

parties according to their injuries.  Moreover, even if state

law did permit such recovery, a mechanical presentment

requirement would not obviate the court's concern.

  The other main complication identified by the court is that,

without a presentment requirement, ``the potential reach of

the Act'' is ``almost boundless,'' potentially stretching to ``any

false claim made to any college or university, so long as the

institution has received some federal grants.''        Op. at 13.18

  17 In addition to trebling the amount of the government's dam-

ages, the Act provides for the recovery of an additional amount, not

less than $5,500 and not more than $11,000.           See 31 U.S.C.

§ 3729(a); see also Federal Civil Penalties Inflation Adjustment Act

of 1990, Pub. L. No. 101-410, § 5, 104 Stat. 891 (Oct. 5, 1990);  28

C.F.R. §  85.3(a)(9).

  18 The third asserted complication, that it would be ``unclear how

to apply the `knowingly presents' element,'' if there were no ``re-

quirement of presentment to the Government,'' Op. at 12-13, may be

relevant with respect to subsection (a)(1), but has no relevance to

subsection (a)(2).  As previously noted, the latter does not contain

 

                                21

This argument also fails.  As noted, the FCA limits damages

to those ``which the Government sustains.''               31 U.S.C.

§ 3729(a).    Although determining whether the government

has been damaged by fraud on a grantee may be difficult in

some cases, in others it will not.        Here, for example, the

plaintiff alleges that the money was ``paid out of Amtrak's

capital budget which consists entirely of money    received

from the United States Government, that was specifically

designated for capital expenditures.''  Dillon Decl. ¶ 5;  see id.

¶ 7.  As the government describes the current state of the

record, ``it is the United States that provided much, if not all,

of the funding for the projects with respect to which the

alleged fraud here was committed, and it is the United States

Government that will bear much, if not all, of any ensuing

losses.''  United States Suppl. Br. at 11.  Moreover, if tracea-

bility is a problem, it is a problem borne by the plaintiff, who

must prove that the claim was ``paid TTT by the Government''

in order to establish liability under § 3729(a)(2), and who

must demonstrate the extent of the United States' losses in

order to recover treble damages under §  3729(a).

  In any event, there is no evidence that Congress shares the

policy concerns identified by the court.  To the contrary, far

from worrying that the False Claims Act might extend too far

in covering fraud on grantees, Congress insisted that ``a false

claim to the recipient of a grant from the United States or to

a State under a program financed in part by the United

States, is a false claim to the United States.''  S. Rep. No. 99-

345, at 10.    And it sought to ensure that ``a false claim is

actionable although the claims or false statements were made

to a party other than the Government, if the payment thereon

would ultimately result in a loss to the United States.''  Id.

  The Supreme Court has long recognized the breadth of

Congress' concern in enacting the FCA, noting that ``Con-

gress wrote expansively, meaning `to reach all types of fraud,

without qualification, that might result in financial loss to the

Government.' ''   Cook County, 538 U.S. at 129 (quoting Nei-

the ``knowingly presents'' language that causes the complication.

Compare 31 U.S.C. §  3729(a)(1), with id. §  3729(a)(2).

 

                                22

fert-White, 390 U.S. at 232).       As a consequence, `` i n the

various contexts in which questions of the proper construction

of the Act have been presented, the Court has consistently

refused to accept a rigid, restrictive reading, even at the time

when the statute imposed criminal sanctions as well as civil.''

Neifert-White, 390 U.S. at 232.  And, in language that is a

particularly apt rejoinder to the contention that a re-

presentation requirement is needed to rein in the Act's poten-

tial reach, the Court has emphasized that federal funds

granted to third parties ``are as much in need of protection

from fraudulent claims as any other federal money, and the

statute does not make the extent of their safeguard dependent

upon the bookkeeping devices used for their distribution.''

Marcus, 317 U.S. at 544 (emphasis added).

  Indeed, if there are policy concerns that should be taken

into account in choosing between possible interpretations of

the FCA, they are the ones outlined in the preceding two

paragraphs, because they are the ones that Congress itself

expressed.  And measured by those concerns, it is the inter-

pretation that the court adopts today that should give us

pause.    The consequence of today's ruling is a dramatic

cutback in the federal government's ability to protect itself

against false claims on federal grant money.  Where a grant-

ee receives federal money in advance and then pays its

contractors directly -- without the federal government micro-

managing the program by insisting on receiving and approv-

ing every invoice before payment -- the FCA will no longer

provide an avenue to recover for false claims.  And as this

case makes clear, the court's ruling applies even to an entity

like Amtrak: a ``publicly-funded operation,'' H.R. Rep. No.

105-251, at 21 (1997), that receives almost $1 billion dollars in

federal grant money annually, see 49 U.S.C. § 24104(a),19 and

  19 See also S. Rep. No. 105-85, at 2 (1997) (``Since 1971, TTT

Amtrak has received more than $20 billion in Federal funding.'');

Lebron v. National R.R. Passenger Corp., 513 U.S. 374, 385 (1995)

(noting that Congress subsidizes ``Amtrak's perennial losses'').

 

                                23

that paid the defendants in this case out of federal funds that

were specifically provided for the contract at issue, see Am.

Compl. ¶ 43;  Dillon Decl. ¶ 5.  The removal of the protection

of the False Claims Act in these circumstances is far more

than a mere ``complication.''

                                VI

  The United States charges that the interpretation the court

adopts today will ``significantly restrict    the reach of the

False Claims Act in a manner than Congress did not intend,

withdrawing False Claims Act protection with respect to a

broad swath of false claims inflicting injury on the federal

fisc.''  United States Br. at 9.  The United States is right.  If

that interpretation were required by the statutory language,

we would of course be required to adopt it nonetheless.  But

the court's interpretation is neither compelled by nor consis-

tent with the language of 31 U.S.C. § 3729(a)(2) and (c).  I

therefore respectfully dissent.

 

	Contents    Prev    Next    Last