United States v. Hess, 7841.
Decision Date | 23 March 1942 |
Docket Number | No. 7841.,7841. |
Parties | UNITED STATES ex rel. MARCUS et al. v. HESS et al. |
Court | U.S. Court of Appeals — Third Circuit |
William H. Eckert and Eugene B. Strassburger, both of Pittsburgh, Pa. (J. Vincent Burke, Jr., Joseph A. Beck, Ben Paul Brasley, Peter Cooper, John J. Dougherty, A. S. Fingold, Zeno Fritz, Elder W. Marshall, James P. McArdle, Thomas D. McCloskey, John B. Nicklas, Jr., Carl D. Smith, W. W. Stoner, Ferdinand T. Weil, Gifford K. Wright, Emory R. Kyle and Smith, Buchanan & Ingersoll, all of Pittsburgh, Pa., on the brief), for appellants.
Thurman Arnold, of Washington, D. C., for the United States.
Charles J. Margiotti, Pittsburgh, Pa. (Margiotti, Pugliese & Casey, Joseph H. Reich, Joseph A. Rossi, on the brief), for appellees.
Before CLARK, JONES, and GOODRICH, Circuit Judges.
We share appellees' righteous indignation at the conduct of the appellants. In fact their own counsel made no attempt in his argument to us to justify that conduct. We cannot, however, share appellees' views of the applicable statute. The facts are not in dispute and may be simply stated. Federal funds were granted under the Public Works Administration to local municipalities and school districts in Allegheny County, Pennsylvania to be expended in public-works projects. The appellants, the officers and members of the Electrical Contractors Association of Pittsburgh, conspired to rig the bidding on these projects. The pattern of the collusion was the informal and private averaging of the prospective bid which might have been submitted by each appellant. An appellant chosen by the others would then submit a bid for the averaged amount and the others all submitted higher estimates. The government was thereby defrauded in that it was compelled to contribute more for the electric work on the projects than it would have been required to pay had there been free competition in the open market. A verdict against the appellants was had in the sum of $315,100.91, which consisted of $203,100.91 damages (being double the actual damages found by the jury) and $112,000 penalties ($2,000 penalty for each violation of the statute). The defendants' motions for a new trial and judgment non obstante veredicto were refused. These motions were on various grounds. The learned District Judge discussed principally two: the scope of the pertinent statute and the question of double jeopardy. As we think he erred as to the first, it is unnecessary to pass on the others. We may say that we have already given some consideration to the question of civil sanctions and double jeopardy.1
The plaintiff-appellee is an informer. In other words he is the "any person" referred to in the statute.2 The fact that he is manifestly any person does not completely solve his difficulty. He must also establish the relevancy of the statute. In terms it reads: "Every person who makes or causes to be made, or presents or causes 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, or any department or officer thereof, knowing 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, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim." Revised Statutes, § 5438. (Italics ours.)
In the companion section of the Revised Statutes already alluded to,3 some of the present functions of the Department of Justice were delegated to the people at large. Private persons were empowered to prosecute frauds against the United States through informer actions.4 Thus any person may sue another who commits "any of the acts prohibited by any of the provisions of section fifty-four hundred and thirty-eight."5 Section 5438 was repealed in 1909.6 Since the amendments to its successor7 were not incorporated into the provision creating liability in informer actions, these amendments may not be invoked in qui tam suits.8
Qui tam actions have always been regarded with disfavor:
* * *
Hurst, The Common Informer, 147 Contemporary Review 189, 190.
That dislike has been implemented in court decisions for informer statutes have been construed with utmost strictness. Informers wishing to recover under them must adhere to the exact language of the statute.10
The statutory language here important authorizes recovery only where the defendants presented a "claim upon or against the Government of the United States, or any department or officer thereof."11 Plaintiff would have us believe that the statutory words "presents * * * any claim upon or against" are synonymous with "commits a fraud upon". This argument is refuted both by legislative history and by grammar. The Senator in charge of the bill said in introducing it: The * * *"Congressional Globe, 37th Cong., 3d Sess., Dec. 1, 1862 — March 9, 1863, at p. 952.
That the Honorable Senator from Michigan was guilty of no overstatement is apparent from the histories of the times: 12 Hockett, Political and Social Growth of the American People 1492-1865, 759.13
1 Shannon, Organization and Administration of the Union Army, 56-58.14
To the word "claim" has been attributed several legal meanings. It is used as an equivalent for "cause of action",15 "debt",16 "demand",17 "existing right"18 and "unadjudicated obligation".19 Through...
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