Pfingston v. Ronan Engineering Co.
| Decision Date | 19 March 2002 |
| Docket Number | No. 00-56721.,No. 00-57166.,00-56721.,00-57166. |
| Citation | 284 F.3d 999 |
| Parties | Douglas V. PFINGSTON, Plaintiff-Appellant, and United States of America, Plaintiff, v. RONAN ENGINEERING CO.; Fleming Engineering Inc., Defendants, and Los Angeles Metropolitan Transportation Authority, Defendant-Appellee. Douglas V. Pfingston, aka Seal 1, Plaintiff-Appellant, and United States of America, aka Seal 2, Plaintiff, v. Ronan Engineering Co., aka Seal A; Fleming Engineering Inc., aka Seal B, Defendants, and Los Angeles Metropolitan Transportation Authority, aka MTA, aka Metro, aka Seal C, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Gary R. Carlin, Long Beach, CA; John Wallace (argued), Agoura Hills, CA, for the plaintiff-appellant.
Lloyd W. Pellman, County Counsel; Steven J. Carnevale, Assistant County Counsel; Richard P. Chastang (argued), Principal Deputy County Counsel; Los Angeles, CA, for the defendant-appellee.
Appeal from the United States District Court for the Central District of California; Manuel L. Real, District Judge, Presiding. D.C. No. CV-97-6602-R.
Before: O'SCANNLAIN, SILVERMAN, Circuit Judges, and REED, District Judge.*
We must decide, among other things, whether the False Claims Act authorizes an award of attorneys' fees against another attorney.
In October 1993, the Los Angeles Metropolitan Transit Authority (the "MTA") selected Fleming Engineering Company ("Fleming") to replace thirteen underground fuel storage tanks. Fleming also agreed to construct a fuel leak detection system in connection with installation of the new tanks. The MTA received federal funding for the project.
Douglas Pfingston, a Fleming subcontractor employee, inspected the leak detection system shortly after its completion in 1995. The system was operational, despite not being certified by the Fire Department and the County Public Works Department. Furthermore, Pfingston observed that the detection system was in "full red alert," meaning that fuel was leaking, yet, the system failed to shut off the flow of fuel, contrary to its design.
Pfingston immediately reported his observations to Tanzeem Rizvi, the MTA's Supervising Project Engineer.1 Rizvi told Pfingston that he had "opened a can of worms" and that he should "back off." Rizvi explained that the federal government had provided a "great deal" of funding for the project. Rizvi stated that at the time the MTA received funding, it knew, and failed to disclose, that the detection system suffered from a serious design defect. Rizvi also stated that the MTA had promised the government that it would obtain proper certification before operating the tanks.
Pfingston refused to keep quiet, pressing his complaint with the FBI, the Los Angles Fire Department, County Works Department, and various other government agencies. Pfingston was fired shortly after his initial complaint. Despite his misgivings, the tanks and detection system have operated without any reported problems.
Pfingston filed a qui tam action against the MTA under the False Claims Act, 31 U.S.C. § 3729(a) and California's False Claims Act, Cal. Gov't Code § 12651(a). The United States declined to exercise its right to participate in the action, 31 U.S.C. § 3730(b)(4). The district court granted the MTA's motions for summary judgment and attorneys' fees. Contrary to the MTA's request, the court specifically ordered that the attorneys' fees be paid by Pfingston's attorney.
The False Claims Act, 31 U.S.C. § 3729(a)(1), prohibits persons from knowingly presenting a false or fraudulent claim for payment or approval by the federal government. E.g., United States ex rel. Oliver v. Parsons Co., 195 F.3d 457, 461 (9th Cir.1999). Under the Act, a prima facie case requires proof that (1) the defendant submitted a claim to the United States, (2) the claim was false or fraudulent, and (3) the defendant knew the claim was false or fraudulent. United States v. Mackby, 261 F.3d 821, 826 (9th Cir.2001); Oliver, 195 F.3d at 461. "False" does not mean "scientifically untrue, but a lie." Wang v. FMC Corp., 975 F.2d 1412, 1421 (9th Cir.1992).2
Pfingston alleges that at the time the MTA obtained federal funding for the tank project, it failed to disclose a known, serious design defect in the leak detection system. Further, he alleges that the MTA obtained federal funding with the false promise that the tanks would be properly certified by state and local officials before becoming operational.
In opposing the MTA's motion for summary judgment, Pfingston relied upon his own affidavit, which recounts his observations of the leak detection system and his conversation with Rizvi.3 The MTA claimed that Rizvi's statements are inadmissible hearsay. Pfingston disagreed, contending that the statements are admissible as statements against interest, Fed. R.Evid. 804(b)(3). The district court failed to rule on the MTA's hearsay objection, and gave no indication as to whether it considered the statements admissible.
On appeal, Pfingston has changed course, and now argues that Rizvi's statements are admissible as statements of a party opponent, Fed.R.Evid. 801(d)(2)(D). He also argues that the MTA waived any hearsay objection by failing to object adequately in the district court.
Pfingston argues that the MTA waived its hearsay objection by failing to move to strike his affidavit below. Federal Rule of Civil Procedure 56(e) provides that summary judgment affidavits "shall set forth such facts as would be admissible in evidence." In order to preserve a hearsay objection, a party must either move to strike the affidavit or otherwise lodge an objection with the district court. E.g., Allen v. Scribner, 812 F.2d 426, 435 n. 18 (9th Cir.), amended by 828 F.2d 1445 (9th Cir.1987); Bieghler v. Kleppe, 633 F.2d 531, 534 (9th Cir.1980); Scharf v. United States Attorney Gen., 597 F.2d 1240, 1243 (9th Cir.1979). In other words, a motion to strike is not necessarily required to preserve a hearsay objection. While the MTA failed to move to strike Pfingston's affidavit, it filed an "Objection to Evidence Offered by Plaintiff in Opposition to Motion for Summary Judgment." The MTA's filing adequately put the district court on notice of its objection, and thus, preserves the issue for appeal. See, e.g., Scharf, 597 F.2d at 1243.
We decline to address Pfingston's new contention that Rizvi's statements are admissible as those of a party opponent. As an appellate court, we ordinarily do not review issues raised for the first time on appeal. E.g., Scott v. Ross, 140 F.3d 1275, 1283 (9th Cir.1998); Bolker v. Comm'r, 760 F.2d 1039, 1042 (9th Cir. 1985). Nonetheless, we have discretion to review issues not previously raised if "the issue presented is purely one of law and either does not depend on the factual record developed below, or the pertinent record has been fully developed." Bolker, 760 F.2d at 1042.
The factual record is not adequately developed to address Pfingston's new argument on appeal. A statement of a party opponent is admissible if it "concern[s] a matter within the scope of the... employment, made during the [employment]." Fed.R.Evid. 801(d)(2)(D). Because Pfingston seeks admission of Rizvi's statements, he bears the burden of proof of admissibility. E.g., Sana v. Hawaiian Cruises, Ltd., 181 F.3d 1041, 1045 (9th Cir.1999); Oki Am., Inc. v. Microtech Int'l., Inc., 872 F.2d 312, 314 (9th Cir. 1989).
The record does not clearly reveal that Rizvi's statements concern a matter within the scope of his employment. While Pfingston identifies Rizvi as the MTA's "Project Engineer," he does not provide any description of Rizvi's job responsibilities. Specifically, he does not show that Rizvi's job duties had anything to do with the MTA's request for federal funding. E.g., In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litig., 906 F.2d 432, 458 (9th Cir.1990) (). In the absence of any such evidence, we decline to address Pfingston's new argument that Rizvi's statements are admissible as those of a party opponent.
We also conclude that Pfingston has not shown that Rizvi's statements are admissible under the statement against interest exception. It is unclear whether the district court agreed with Pfingston's contention that the statements are admissible under this exception. In any event, even if the district court determined that the statements were admissible, it abused its discretion. See Block v. City of Los Angeles, 253 F.3d 410, 419 (9th Cir.2001). The statement against interest exception requires that the declarant be "unavailable." Fed.R.Evid. 804(b)(3). Pfingston has made absolutely no showing as to why Rizvi was "unavailable" to testify. For example, Pfingston has proffered no evidence that Rizvi refuses or is unable to testify. See Fed.R.Evid. 804(a); United States v. Pena-Gutierrez, 222 F.3d 1080, 1088 (9th Cir.1999). Accordingly, Rizvi's statements are not admissible under the statement against interest exception.
For the foregoing reasons, Rizvi's statements must be excluded as inadmissible hearsay. As such, Pfingston offers only his own observations in support of his allegations. Pfingston observed that the leak detection system was malfunctioning and that the tanks were operational despite not being certified by the Fire and County Public Works Departments. His observations fall far short of setting forth a prima facie case under the False Claims Act. Specifically, his observations do not show that the MTA made a "false or fraudulent" statement to the federal government at the time of funding. See e.g., Mackby, 261 F.3d at 826; Oliver, 195 F.3d at 461. We therefore conclude that summary judgment was properly granted.
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