U.S. ex rel. Totten v. Bombardier Corp.

• Decision Date: 27 August 2004
• Docket Number: No. 03-7128.,03-7128.
• Citation: 380 F.3d 488
• Parties: UNITED STATES of America ex rel. Edward L. TOTTEN, Appellant, v. BOMBARDIER CORPORATION and Envirovac, Inc., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 488

380 F.3d 488

UNITED STATES of America ex rel. Edward L. TOTTEN, Appellant, v. BOMBARDIER CORPORATION and Envirovac, Inc., Appellees.

No. 03-7128.

United States Court of Appeals, District of Columbia Circuit.

Argued April 20, 2004.

Decided August 27, 2004.

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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 Justice, Roscoe C. Howard, Jr., U.S. Attorney, Douglas N. Letter, Attorney, Colin C. Carriere, Counsel to the Inspector General, Office of the Inspector General, National Railroad Passenger Corporation, and D. Hamilton Peterson, Deputy Counsel to the Inspector General.

Mark R. Hellerer argued the cause and filed the brief for appellee Bombardier Corporation. Philip L. Douglas entered an appearance.

Randall L. Mitchell argued the cause for appellee Envirovac, Inc. With him on the brief was Paul E. Lehner. Barbara Van Gelder and Scott M. McCaleb entered appearances.

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 Envirovac, Inc., alleging that those companies violated the False Claims Act, 31 U.S.C. § 3729, by delivering allegedly defective 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 ... 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 Envirovac 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.

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 Amtrak 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 incorporated 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 threshold 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 presenting evidence that the claim was ever actually submitted to the U.S. government." Id. at 553.

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 complaint 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, 2003 WL 22769033 (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, *2. 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 government corporation prior to December 1997 and the Government 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

Even prior to 1997 — indeed, at all times since the company 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 specified 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, 115 S.Ct. 961, 971, 130 L.Ed.2d 902 (1995); see also Totten I, 286 F.3d at 544-45 (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, 78 S.Ct. 946, 2 L.Ed.2d 996 (1958), is clearly distinguishable. Rainwater 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, 78 S.Ct. at 948-49 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, 78 S.Ct. at 948 (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 employees 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, advances 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 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 Envirovac'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 10-11. 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... 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 "inconsistent with the plain language of [Section] 3729(c)." Amicus 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 ... [the] grantee ... 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 ...