US v. Peters

• Citation: 927 F. Supp. 363
• Decision Date: 03 June 1996
• Docket Number: No. 4:CV 95-3347.,4:CV 95-3347.
• Parties: UNITED STATES of America, Plaintiff, v. Stanley L. PETERS, Defendant.
• Court: U.S. District Court — District of Nebraska

927 F. Supp. 363

UNITED STATES of America, Plaintiff, v. Stanley L. PETERS, Defendant.

No. 4:CV 95-3347.

United States District Court, D. Nebraska.

June 3, 1996.

Paul D. Boeshart, Assistant United States Attorney, Lincoln, NE, for Plaintiff.

Michael J. Hansen, Berry, Kelley, Hansen & Burt, Lincoln, NE, for Defendant.

MEMORANDUM AND ORDER

KOPF, District Judge.

Pending before the court are the parties' cross-motions for summary judgment (filing 11, Defendant's motion; filing 15, Plaintiff's motion) and the evidence submitted in support of these motions.¹ For the reasons discussed below I will grant the plaintiff's motion for summary judgment and deny defendant's motion for summary judgment.

I. BACKGROUND

In December 1993, Stanley L. Peters (Peters) was convicted on three counts of submitting false claims to the Environmental Protection Agency, one count of conspiracy to defraud the United States, and one count of theft of government property. United States v. Stanley L. Peters, 4:CR93-3034, aff'd, U.S. v. Peters, 59 F.3d 732 (8th Cir. 1995). The United States has now brought this action against Peters to recover civil monetary penalties and damages pursuant to the False Claims Act (FCA), 31 U.S.C. § 3729 et seq.

Defendant's motion for summary judgment (filing 11) alleges that based on Peters's prior criminal conviction the doctrine of res judicata or collateral estoppel bars this claim or bars relitigation of certain issues. Peters also asserts that this civil penalty constitutes punishment for double jeopardy purposes and thus violates the Fifth Amendment. Plaintiff's motion for summary judgment (filing 15), alleges that defendant's prior criminal conviction collaterally estops the defendant from relitigating the issue of liability, and as a matter of law the plaintiff is entitled to treble damages in the amount of $460,428 and $40,000 in civil penalties pursuant to § 3729(a).

II. UNDISPUTED MATERIAL FACTS

After considering the parties' evidence and briefs in support of their motions for summary judgment, I find the undisputed material facts to be as follows.

1. Peters owned the architectural/engineering firm of Stanley L. Peters and Associates (SLPA). SLPA was in the business of assisting school districts in applying for federal grants for the removal of asbestos under the Asbestos School Hazard Abatement Act (ASHAA), 20 U.S.C. §§ 4011 et seq.

2. SLPA assisted the Fairbury Public Schools (FPS) in applying to the United States Equal Protection Agency for financial assistance under the ASHAA, and on April 28, 1989 the EPA awarded FPS a grant in the amount of $281,176 and a no-interest loan in the amount of $319,630 for asbestos removal.

3. On May 15, 1989, SLPA entered into an agreement with FPS to design and oversee the asbestos abatement procedure to be followed by the contractor who would do the actual asbestos removal. On February 28, 1990, Brad's Asbestos Removal, Inc., (BAR) was awarded the contract for the asbestos removal work. BAR is owned by Russell Curtis, and the Nebraska BAR office is managed by Russell's brother Dean Curtis.

4. Funds are disbursed to a grant/loan recipient under ASHAA only after the recipient certifies to the EPA that costs have been incurred and work has been performed in accordance with the provisions of the program.

5. Between 1989 and 1991, Peters conspired with Dean and Russell Curtis to submit claims to the EPA for reimbursement under the ASHAA grant/loan for work that had not yet been undertaken, and for renovation work that did not involve asbestos removal and did not fall under the scope of ASHAA.

6. Peters prepared and submitted three false claims for reimbursement to the EPA on behalf of FPS, resulting in overpayment of ASHAA federal funds to FPS in the amount of $153,476.

7. On December 21, 1993, after a criminal jury trial in this court, Peters was convicted of 3 counts of criminal false claims in violation of 18 U.S.C. § 287 and one count of conspiracy to defraud the government in violation of 18 U.S.C. § 371² arising from false claims for payment of federal grant and loan funds from the EPA under ASHAA.

8. On June 28, 1994, Peters was sentenced to a term of 24 months imprisonment, and payment of restitution in the amount of $153,476. Peters appealed to the Eighth Circuit Court of Appeals which affirmed the conviction and sentence. U.S. v. Peters, 59 F.3d 732 (8th Cir.1995).

9. The Federal Bureau of Investigation incurred expenses related to the detection and investigation of Peters's case in the amount of $50,343.21.

10. The Environmental Protection Agency, Office of Inspector General has incurred expenses related to the investigation and litigation of Peters's case in the amount of $41,699.09.

III. DISCUSSION

A. Summary Judgment Standard

Summary judgment should be granted only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). See also Egan v. Wells Fargo Alarm Servs., 23 F.3d 1444, 1446 (8th Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 319, 130 L.Ed.2d 280 (1994). In passing upon a motion for summary judgment, the district court must view the facts in the light most favorable to the party opposing the motion. Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076, 1077 (8th Cir.1980). See also Reierson v. Resolution Trust Corp., 16 F.3d 889, 891 (8th Cir.1994).

In order to withstand a motion for summary judgment, the nonmoving party must substantiate their allegations with "`sufficient probative evidence that would permit a finding in their favor on more than mere speculation, conjecture, or fantasy.'" Moody v. St. Charles County, 23 F.3d 1410, 1412 (8th Cir.1994) (quoting Gregory v. Rogers, 974 F.2d 1006, 1010 (8th Cir.1992), cert. denied, 507 U.S. 913, 113 S.Ct. 1265, 122 L.Ed.2d 661 (1993)). "A mere scintilla of evidence is insufficient to avoid summary judgment." Id. Essentially the test is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2511-12, 91 L.Ed.2d 202 (1986).

The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is "entitled to a judgment as a matter of law" because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986).

B. Collateral Estoppel on the Issue of Liability

The United States moves for summary judgment on the ground that the judgment in Peters's criminal case collaterally estops Peters from contesting the issue of liability in the instant case. I agree.

Under the doctrine of collateral estoppel, a party may not relitigate an issue that has been decided on the merits in an earlier proceeding. SEC v. Gruenberg, 989 F.2d 977, 978 (8th Cir.1993). "The judgment in the prior proceeding precludes the relitigation of issues actually litigated and necessary to the outcome of the first action." Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 649 n. 5, 58 L.Ed.2d 552 (1979). It is well established that "a prior criminal conviction may work an estoppel in favor of the Government in a subsequent civil proceeding ... provided the questions were `distinctly put in issue and directly determined' in the criminal prosecution." Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 568-69, 71 S.Ct. 408, 413-14, 95 L.Ed. 534 (1951); Gruenberg, 989 F.2d at 978.

The identical factual conduct and violation of law raised in this civil action were distinctly put in issue and directly determined against Peters in his criminal trial. The False Claims Act provides for liability against:

Any person who —

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval (2) 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;

(3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.

31 U.S.C. § 3729(a).

Peters's criminal convictions for filing false claims to the EPA and for conspiring to file false claims to the EPA clearly establish violations under the False Claims Act. The complaint in this False Claims action is based on the same allegations that served as the basis for the criminal convictions. Indeed, the verdict form used by the jury in the criminal case conclusively establishes that the issues of whether Peters submitted false claims to the government and whether Peters conspired to submit false claims to the government were distinctly put in issue and directly determined in the criminal proceeding.³

Moreover, section 3731(d) of the False Claims Act instructs courts to give conclusive collateral estoppel effect to criminal convictions in any civil action, such as the present case, which arises under the Act:

Notwithstanding any other provision of law, the Federal Rules of Criminal Procedure, or the Federal Rules of Evidence, a

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