Amicus Curiae Brief — United States, ex rel. Joshua Harman, Petitioner v. Trinity Industries, Inc., et al.

NO. 17-1149

In the Supreme Court of the United States

UNITED STATES OF AMERICA, EX REL., JOSHUA HARMAN,

v.

Petitioner,

TRINITY INDUSTRIES, INC. &

TRINITY HIGHWAY PRODUCTS, LLC,

Respondents.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF FOR CONGRESSMAN H. MORGAN GRIFFITH

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

E. Travis Ramey

Counsel of Record

BURR & FORMAN LLP

420 North 20th Street

Suite 3400

Birmingham, AL 35203

(205) 251-3000

tramey@burr.com

Counsel for Amicus Curiae

Becker Gallagher · Cincinnati, OH · Washington, D.C. · 800.890.5001

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . ii

INTEREST OF AMICUS CURIAE . . . . . . . . . . . . . . 1

SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . 2

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

I.

Courts should respect Congress’s policy

decisions and should not rewrite statutes in

the name of interpreting them . . . . . . . . . . . . 3

II.

Congress has rejected granting the Executive

Branch absolute control over False Claims

Act litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 4

III.

The Fifth Circuit’s application of Escobar is

contrary to Congress’s rejection of absolute

Executive control over False Claims Act

litigation, or it invades the province of the

jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

IV.

This case is an excellent vehicle to resolve

important issues that are likely to recur . . . 16

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

ii

TABLE OF AUTHORITIES

CASES

Allison Engine Co. v. U.S ex rel. Sanders,

553 U.S. 662 (2008) . . . . . . . . . . . . . . . . . . . . . . . 4

Boeing Co. v. Shipman,

411 F.2d 365 (5th Cir. 1969) . . . . . . . . . . . . 12, 14

Edwards v. Aguillard,

482 U.S. 578 (1987) . . . . . . . . . . . . . . . . . . . . . . . 4

Gautreaux v. Scurlock Marine, Inc.,

107 F.3d 331 (5th Cir. 1997) . . . . . . . . . . . . . . . 12

Graham Cty. Soil & Water Conservation Dist. v.

U.S. ex rel. Wilson, 559 U.S. 280 (2010) . . . . . . . 7

Kumar v. Republic of Sudan,

880 F.3d 144 (4th Cir. 2018) . . . . . . . . . . . . . . . . 4

Nat’l R.R. Passenger Corp. v. Nat’l Ass’n of R.R.

Passengers, 414 U.S. 453 (1974) . . . . . . . . . . . . . 3

Reeves v. Sanderson Plumbing Prods., Inc.,

530 U.S. 133 (2000) . . . . . . . . . . . . . . . . . . . 12, 14

Taxman v. Bd. of Educ. of Twp. of Piscatawnay,

91 F.3d 1547 (3d Cir. 1996) . . . . . . . . . . . . . . . . . 4

U.S. ex rel. Campie v. Gilead Scis., Inc.,

862 F.3d 890 (9th Cir. 2017) . . . . . . . . . . . . . . . 12

U.S. ex rel. Escobar v. Universal Health

Servs., Inc., 842 F.3d 103 (1st Cir. 2016) . . . . . 12

U.S. ex rel. Hopper v. Anton,

91 F.3d 1261 (9th Cir. 1996) . . . . . . . . . . . . . . . . 5

iii

U.S. ex rel. Marcus v. Hess,

317 U.S. 537 (1943) . . . . . . . . . . . . . . . . . . . . . . . 6

U.S. ex rel. State of Wisc. v. Dean,

729 F.2d 1100 (7th Cir. 1984) . . . . . . . . . . . . . . . 7

U.S. ex rel. Weinberger v. Florida,

615 F.2d 1370 (5th Cir. 1980) . . . . . . . . . . . . . . . 7

United States v. Bornstein,

423 U.S. 303 (1976) . . . . . . . . . . . . . . . . . . . . . . . 5

United States v. McNinch,

356 U.S. 595 (1958) . . . . . . . . . . . . . . . . . . . . . . . 5

United States v. Triple Canopy, Inc.,

857 F.3d 174 (4th Cir.), cert. dismissed,

138 S. Ct. 370 (2017) . . . . . . . . . . . . . . . . . . . . . 12

Universal Health Services, Inc. v. United States &

Massachusetts ex rel. Escobar,

136 S. Ct. 1989 (2016) . . . . . . . . . . . . . . . . passim

STATUTES AND RULE

31 U.S.C. § 232(C) (1946) . . . . . . . . . . . . . . . . . . . . . 7

31 U.S.C. § 232(E) (1946) . . . . . . . . . . . . . . . . . . . . . 7

31 U.S.C. § 3729(a)(1)(A) . . . . . . . . . . . . . . . . . . 9, 10

31 U.S.C. § 3729(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 10

31 U.S.C. § 3729(b)(4) . . . . . . . . . . . . . . . . . . . . . . . 10

31 U.S.C. § 3730(e)(4) . . . . . . . . . . . . . . . . . . . . . . . . 8

Act of Dec. 23, 1943, ch. 377, 57 Stat. 608 . . . . . . . . 6

Act of Mar. 2, 1863, ch. 67, 12 Stat. 696 . . . . . . . . . 5

iv

False Claims Amendments Act of 1986,

Pub. L. No. 99-562, 100 Stat. 3153 . . . . . . . . . . . 8

Fraud Enforcement and Recovery Act,

Pub. L. No. 111-21, 123 Stat. 1617 (2009) . . . . 10

Fed. R. Civ. P. 50 . . . . . . . . . . . . . . . . . . . . . . . . 12, 14

OTHER AUTHORITIES

2 U.S. Dep’t of Commerce, Historical Statistics of

the United States: Colonial Times to 1970 (1975),

https://goo.gl/wg74Va . . . . . . . . . . . . . . . . . . . . . . 6

Elletta Sangrey Callahan & Terry Morehead

Dworkin, Do Good and Get Rich: Financial

Incentives for Whistleblowing and the False

Claims Act, 37 Vill. L. Rev. 273 (1992) . . . . . . . . 7

Cong. Globe, 37th Cong., 3d Sess. 348 (1863)

(statement of Sen. Wilson) . . . . . . . . . . . . . . . . . 5

Dep’t of Justice, Fraud Statistics Overview (2017),

https://goo.gl/VaE4fL . . . . . . . . . . . . . . . . . . . . . 16

Joan H. Krause, Reflections on Certification,

Interpretation, and the Quest for Fraud that

“Counts” Under the False Claims Act, 2017 U.

Ill. L. Rev. 1811 . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Nat’l Park Serv., The Civil War: Facts,

https://goo.gl/poE9B1 . . . . . . . . . . . . . . . . . . . . . . 4

Clayton R. Newell, The Regular Army Before the

Civil War: 1845–1860, 50 (U.S. Army Ctr. of

Military History 2014), https://goo.gl/syg3h6 . . . 4

Pet. for Writ of Cert., Gilead Scis., Inc. v. U.S. ex

rel. Campie, No. 17-936 (Dec. 26, 2017) . . . . . . 16

v

Press Release, Dep’t of Justice, Justice Department

Recovers Over $4.7 Billion from False Claims

Act Cases in Fiscal Year 2016 (Dec. 14, 2016),

https://goo.gl/ZC5HVz . . . . . . . . . . . . . . . . . . . . 17

Francis E. Purcell, Jr., Qui Tam Suits Under the

False Claims Amendments Act of 1986: The Need

for Clear Legislative Expression, 42 Cath. U. L.

Rev. 935 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A. Scalia, A Matter of Interpretation 20 (1997) . . . . 4

S. Rep. No. 99-345 (1986), reprinted in 1986

U.S.C.C.A.N. 5266 . . . . . . . . . . . . . . . . . . . . . . . . 8

Claire M. Sylvia, The False Claims Act: Fraud

Against the Government (2d ed. 2010) . . . . 5, 6, 8

1

INTEREST OF AMICUS CURIAE1

Amicus curiae H. Morgan Griffith is a member of the

United States House of Representatives. The United

States Constitution empowers Congress to enact laws

and tasks it with responsibility for the public fisc. As a

result, members of Congress have a strong interest in

ensuring that courts construe the False Claims Act

consistent with its text and purpose. In addition,

members of Congress routinely file briefs as amici

curiae in this Court and in other federal courts.

The interests of members of Congress are

particularly strong here. Although purporting to apply

the materiality discussion in Universal Health Services,

Inc. v. United States & Massachusetts ex rel. Escobar,

136 S. Ct. 1989 (2016) [Escobar], the United States

Court of Appeals for the Fifth Circuit has potentially

resurrected the exclusive control the Executive once

had over False Claims Act litigation that resulted from

the “government knowledge” provisions Congress

eliminated in 1986. Another possible explanation for

the Fifth Circuit’s decision is invasion of the role of the

jury as factfinder, itself troubling. Congressman

Griffith submits this brief to make clear that it is

inappropriate for courts to grant to the Executive

through interpretation what Congress rescinded

through legislation.

1

Counsel for all parties received notice at least ten days before the

due date of Congressman Griffith's intention to file this brief, and

the parties have consented to the filing of this brief. No counsel for

a party authored this brief in whole or in part, no counsel for a

party made a monetary contribution to fund the preparation or

submission of this brief, and no one other than the amicus curiae

and his counsel made any such monetary contribution.

2

SUMMARY OF THE ARGUMENT

Under separation-of-powers principles, courts

should defer to Congress’s decisions about lawmaking

and decline invitations to substitute their judgment for

that of Congress. The history of the False Claims Act

shows that Congress has decided it is inappropriate to

give the Executive Branch complete control over

protecting government coffers from fraud. In fact, in

1986, Congress expressly repealed the old “government

knowledge” provisions of the False Claims Act, which

had given the Executive the sole power to bring suit

once the government knew of the activity the relator

claimed was fraudulent.

The Fifth Circuit’s decision in this case raises the

specter of giving the Executive similar if not greater

power over False Claims Act suits. Purporting to apply

the materiality analysis from this Court’s decision in

Escobar, the Fifth Circuit granted judgment as a

matter of law in favor of Respondents Trinity

Industries, Inc. and Trinity Highway Products, LLC

(referred to collectively as Trinity), dismissing the

claims of the Petitioner and Relator Joshua Harman.

That decision is riddled with confusion about what the

Court meant when it stated that government decisions

to continue to pay claims despite knowledge of

violations is “very strong evidence” of immateriality.

The Fifth Circuit has apparently interpreted “very

strong evidence” as: (1) an invitation to reweigh

evidence and substitute its judgment for the jury’s;

(2) creating some sort of rebuttable presumption of

immateriality; or (3) creating an irrebuttable, outcomedeterminative presumption of immateriality. All three

of those possible interpretations should concern the

3

Court. And the third of them would give the Executive

Branch through “interpretation” even greater control of

False Claims Act litigation than the old “government

knowledge” defense that Congress repealed through

legislation.

There is disagreement among the courts of appeals

about how to apply the Escobar materiality analysis,

and the Fifth Circuit’s decision in this case shows the

need for the Court to give additional guidance. Because

that need is great, because this case is a good vehicle

for giving that guidance, and because the issue is

important, the Court should grant Harman’s petition

for a writ of certiorari.

ARGUMENT

I.

Courts should respect Congress’s policy

decisions and should not rewrite statutes

in the name of interpreting them.

Separation of powers is a foundational principle of

the American republic. In service of that principle, the

United States Constitution provides different roles for

the legislative and judicial branches of the national

government. At the risk of oversimplification, Congress

makes the law, and courts apply the law.

Because the Constitution vests lawmaking

authority in Congress, courts should respect Congress’s

policy decisions when applying the law. Courts use

Congressional intent as the touchstone for determining

a statute’s proper construction. See Nat’l R.R.

Passenger Corp. v. Nat’l Ass’n of R.R. Passengers, 414

U.S. 453, 458 (1974) (“But even the most basic general

principles of statutory construction must yield to clear

contrary evidence of legislative intent.”). To determine

4

that intent, courts begin with the language of the

statute itself—the language Congress enacted. See

Allison Engine Co. v. U.S ex rel. Sanders, 553 U.S. 662,

668 (2008). They also consider Congress’s historical

regulation of the same subject matter and the context

in which Congress enacted the statute. See Edwards v.

Aguillard, 482 U.S. 578, 594–95 (1987); Kumar v.

Republic of Sudan, 880 F.3d 144, 154 (4th Cir. 2018);

Taxman v. Bd. of Educ. of Twp. of Piscatawnay, 91

F.3d 1547, 1556–57 (3d Cir. 1996). Courts should

decline parties’ invitations to rewrite a statute under

the guise of interpreting it.2 This is particularly true

when the rewritten statute would thwart, rather than

achieve, Congress’s intent.

II.

Congress has rejected granting the

Executive Branch absolute control over

False Claims Act litigation.

Before the Civil War, the United States Army

contained fewer than 20,000 soldiers.3 By January

1863, that number had swollen to over 600,000.4 For

the first time, the federal government had to feed,

clothe, and supply an army of that size. And less-thanethical suppliers were happy to take advantage of the

2

See A. Scalia, A Matter of Interpretation 20 (1997) (“Congress can

enact foolish statutes as well as wise ones, and it is not for the

courts to decide which is which and rewrite the former.”)

3

See Clayton R. Newell, The Regular Army Before the Civil War:

1845–1860, 50 (U.S. Army Ctr. of Military History 2014),

https://goo.gl/syg3h6.

4

Nat’l Park Serv., The Civil War: Facts, https://goo.gl/poE9B1.

5

situation.5 They sold the government sand instead of

gunpowder, and they sold it sick mules.6 They “billed

for nonexistent or worthless goods, charged exorbitant

prices for goods delivered, and generally robbed in

purchasing the necessities of war.” United States v.

McNinch, 356 U.S. 595, 599 (1958).

After a series of Congressional investigations

revealed the rampant pilfering of the Union war chest,7

Congress responded by passing the “Informer’s Act” or

“Lincoln Law.” See Act of Mar. 2, 1863, ch. 67, 12 Stat.

696. The purpose of what would eventually become the

modern False Claims Act was to end the widespread

fraud. See United States v. Bornstein, 423 U.S. 303, 309

(1976); U.S. ex rel. Hopper v. Anton, 91 F.3d 1261,

1265–66 (9th Cir. 1996). The law provided for double

damages and a civil fine along with criminal penalties

for violations. See Act of Mar. 2, 1863, ch. 67, 12 Stat.

696.

Congress could have given the executive branch sole

authority to prosecute false claims, but it did not.

Instead, it included a qui tam provision that allowed

private citizens to sue on behalf of the government and

receive half of any recovery as well as their costs. See

Act of Mar. 2, 1863, ch. 67, § 4, 12 Stat. 696, 698.

5

See Claire M. Sylvia, The False Claims Act: Fraud Against the

Government § 2.6 (2d ed. 2010).

6

Joan H. Krause, Reflections on Certification, Interpretation, and

the Quest for Fraud that “Counts” Under the False Claims Act,

2017 U. Ill. L. Rev. 1811, 1815.

7

See, e.g., Cong. Globe, 37th Cong., 3d Sess. 348 (1863) (statement

of Sen. Wilson).

6

After the Civil War, government spending rapidly

diminished, which reduced the opportunity for fraud.8

Despite expanding the application of the Lincoln Law

to general claims of fraud, use of the law was

uncommon.9 This continued to be the case for decades.

The law languished, with few recorded cases in the late

nineteenth and early twentieth centuries.10

By 1943, however, creative relators had begun

bringing qui tam actions based on information they

obtained from public sources, including indictments the

Department of Justice had obtained. These so-called

“parasitic” qui tam actions were unpopular, but in U.S.

ex rel. Marcus v. Hess, 317 U.S. 537 (1943), the Court

held that the 1863 Lincoln Law permitted relators to

bring them.

Congress reacted swiftly to Hess, amending the

1863 Act later that same year. See Act of Dec. 23, 1943,

ch. 377, 57 Stat. 608. Congress resisted calls from the

executive to eliminate the qui tam provisions

altogether. Instead, it stripped courts of jurisdiction to

hear qui tam actions when the “suit was based upon

evidence or information in the possession of the United

8

By the end of Reconstruction in 1877, federal spending was

roughly one-third of what it had been in 1863, and spending would

not return to 1863 levels until 1913. See 2 U.S. Dep’t of Commerce,

Historical Statistics of the United States: Colonial Times to 1970,

1104 (1975), https://goo.gl/wg74Va.

9

See Francis E. Purcell, Jr., Qui Tam Suits Under the False

Claims Amendments Act of 1986: The Need for Clear Legislative

Expression, 42 Cath. U. L. Rev. 935, 941 (1993).

10

Id.; see also Sylvia, supra, note 5.

7

States, or any agency, officer, or employee thereof, at

the time such suit was brought.” 31 U.S.C. § 232(C)

(1946). The effect of that “government knowledge”

provision was to bar all qui tam claims if the

government already knew of the fraud when the relator

filed the claim. See id. So once the government knew of

the fraud—even if it learned of it from the would-be

relator11—the Executive had unfettered discretion to

decline to litigate or overlook the fraud.

The 1943 Act also reduced the relator’s portion of

the recovery to either 10% (if the government

intervened) or 25% (if it did not). See 31 U.S.C. § 232(E)

(1946). The result of the amendments was a significant

reduction in incentive to file claims and a

corresponding reduction in the number of claims filed.

See Graham Cty. Soil & Water Conservation Dist. v.

U.S. ex rel. Wilson, 559 U.S. 280, 294 (2010) (“In the

years that followed the 1943 amendment, the volume

and efficacy of qui tam litigation dwindled.”). From

1943 to 1986, relators filed only an average of about six

suits under the statute per year.12

More than four decades later, Congress concluded

that the False Claims Act had ceased to be an effective

tool to protect the government from fraud. The amount

of fraud against the government had grown to immense

11

See, e.g., U.S. ex rel. State of Wisc. v. Dean, 729 F.2d 1100, 1103

(7th Cir. 1984) (citing U.S. ex rel. Weinberger v. Florida, 615 F.2d

1370, 1371 (5th Cir. 1980)).

12

Elletta Sangrey Callahan & Terry Morehead Dworkin, Do Good

and Get Rich: Financial Incentives for Whistleblowing and the

False Claims Act, 37 Vill. L. Rev. 273, 318 (1992).

8

proportions, becoming “widespread.”13 In response,

Congress again amended the False Claims Act. See

False Claims Amendments Act of 1986, Pub. L. No. 99562, 100 Stat. 3153. As part of those amendments,

Congress strengthened the qui tam provisions,

including eliminating (for the most part) the

“government knowledge” defense. See id. Congress

replaced the “government knowledge” provisions with

the public disclosure bar. See 31 U.S.C. § 3730(e)(4).

And in the process, it took away the Executive Branch’s

near-absolute control over False Claims Act litigation,

restoring the relator to the role envisioned in the

original Lincoln Law. No longer would inaction by

government officials dictate the viability of False

Claims Act litigation.

The False Claims Act has always been the federal

government’s principal vehicle to protect itself from

fraud. For the first eighty years of the False Claims

Act’s history, Congress ensured that both relators and

the Executive Branch had the ability to protect the

public fisc. Although Congress once sought to rein in

qui tam litigation by giving the Executive the sole

ability to bring False Claims Act suits once the

government learned of the fraud, Congress later

concluded that doing so had been a mistake. It

amended the False Claims Act to allow relators to

bring claims when the government was already aware

of a fraud but had decided to do nothing. Thus,

13

Sylvia, supra note 5, § 2:9; see also S. Rep. No. 99-345, at 3

(1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5268 (discussing the

General Accounting Office’s identification of 77,000 cases of fraud

against the government).

9

Congress has tried and rejected giving the Executive

sole control over False Claims Act litigation.

III.

The Fifth Circuit’s application of Escobar is

contrary to Congress’s rejection of absolute

Executive control over False Claims Act

litigation, or it invades the province of the

jury.

In Escobar, the Court resolved whether the False

Claims Act permitted recovery when a defendant

implicitly certified compliance with conditions of

payment but failed to disclose some statutory,

regulatory, or contractual violation. See Escobar, 136

S. Ct. at 1995. The Court unanimously held that an

implied false certification could support liability if the

misrepresentation by omission was material to the

government’s payment decision. See id. at 1995–96. In

doing so, the Court rejected a proposed dichotomy

under which undisclosed violations of “conditions of

payment” would result in liability but undisclosed

violations of “conditions of participation” would not. See

id. at 2001–02.

Instead, the Court focused on the requirement that

any misrepresentation be material to the government’s

payment decision. See id. at 2002–04. The relator in

Escobar sought liability under 31 U.S.C.

§ 3729(a)(1)(A), which a defendant violates when it

“knowingly presents, or causes to be presented, a false

or fraudulent claim for payment or approval.”

Although it noted that the False Claims Act defined the

term “material,” the Court declined to decide whether

that definition governed liability for violating

10

§ 3729(a)(1)(A).14 The Court reasoned that the statutory

definition was consistent with the common law

understanding of materiality. Compare 31 U.S.C.

§3729(b)(4) (“[T]he term ‘material’ means having a

natural tendency to influence, or be capable of

influencing, the payment or receipt of money or

property.”), with Escobar, 136 S. Ct. 2002 (“Materiality

looks to the effect on the likely or actual behavior of the

recipient of the alleged misrepresentation.” (cleaned

up)).

The Court went on to provide examples of what

would constitute evidence of materiality or

immateriality.

• Minor or insubstantial noncompliance

insufficient evidence of materiality.

is

• The option to decline payment based on

noncompliance is insufficient evidence of

materiality.

• The government’s designation of a provision as

a condition of payment is evidence of

materiality, but is not dispositive.

• Consistent government refusal to pay claims

based on noncompliance is evidence of

materiality.

14

Congress added that definition to the False Claims Act in 2009

as part of amendments that also expressly added a materiality

requirement to liability for violating § 3729(a)(1)(B). See Fraud

Enforcement and Recovery Act, Pub. L. No. 111-21, 123 Stat. 1617,

1623 (2009).

11

• The government’s decision to pay a claim in full

despite knowledge of the violation of some

requirements is “very strong evidence that those

requirements are not material.”

• “[I]f the Government regularly pays a particular

type of claim in full despite actual knowledge

that certain requirements were violated, and has

signaled no change in position, that is strong

evidence that the requirements are not

material.”

Escobar, 136 S. Ct. at 2003–04.

Following on the heels of Escobar, the Fifth Circuit

reversed the district court based on its reading of the

fifth and sixth of those examples. (See Pet. App.

31a–51a.) The court based its analysis on: (1) the

Federal Highway Authority’s (FHWA) purportedly

complete knowledge of all changes to the ET-Plus

system as early as 2012; (2) FHWA’s June 17, 2014

memorandum stating that the modified ET-Plus

became eligible for reimbursement back in 2005 and

continued to be eligible for reimbursement; and

(3) evidence that FHWA continues to pay for the ETPlus. (See generally id.) The court concluded that, as a

result of FHWA’s decision to continue to pay for the

ET-Plus and its failure to alter its position that the ETPlus was eligible for reimbursement, there was “very

strong evidence” of immateriality. (See Pet. App. 40a,

46a–47a.)

The foundational problem with the Fifth Circuit’s

decision is confusion about what this Court meant

when it used the phrases “strong evidence” and “very

strong evidence” in Escobar. 136 S. Ct. at 2003–04. The

12

most reasonable conclusion is that “strong evidence”

and “very strong evidence” of immateriality are still

just evidence for the jury to weigh in its deliberations.

That conclusion is consistent with the Court’s analysis

in Escobar, and the Fifth Circuit at least facially gave

it that meaning. (Pet. App. 32a–40a, 46a–47a).

Moreover, giving the phrase that meaning is also

consistent with the decisions of other courts of appeals.

See U.S. ex rel. Campie v. Gilead Scis., Inc., 862 F.3d

890, 906 (9th Cir. 2017); United States v. Triple

Canopy, Inc., 857 F.3d 174, 178 (4th Cir.), cert.

dismissed, 138 S. Ct. 370 (2017); U.S. ex rel. Escobar v.

Universal Health Servs., Inc., 842 F.3d 103, 111 (1st

Cir. 2016).

Under that analysis, Harman could rebut the “very

strong evidence” of immateriality that Trinity

presented and survive a motion for judgment as a

matter of law by presenting substantial evidence of

materiality. See Fed. R. Civ. P. 50; see also Boeing Co.

v. Shipman, 411 F.2d 365, 374–75 (5th Cir. 1969) (en

banc), overruled on other grounds by Gautreaux v.

Scurlock Marine, Inc., 107 F.3d 331 (5th Cir. 1997) (en

banc). So long as Harman presented substantial

evidence, the jury—not the Fifth Circuit—was the body

entitled to assign weight to Harman and Trinity’s

evidence. See Reeves v. Sanderson Plumbing Prods.,

Inc., 530 U.S. 133, 150 (2000) (“Credibility

determinations, the weighing of the evidence, and the

drawing of legitimate inferences from the facts are jury

functions, not those of a judge.”) And when assessing

the evidentiary record to decide the motion for

judgment as a matter of law, the court should have

drawn all reasonable inferences in Harman’s favor. See

id. at 150–51.

13

In both his Petition for Rehearing En Banc and his

Petition for Writ of Certiorari, Harman identifies

substantial evidence that Trinity’s misrepresentations

were material and substantial evidence that would

allow the jury to question the veracity of FHWA’s June

17, 2014 memorandum:

• Before the jury verdict, several states voiced

concerns about the modified ET-Plus, (Pet. for

Reh’g En Banc 2);

• Before the jury verdict, several states removed

the modified ET-Plus from their qualified

products list, (Pet. for Reh’g En Banc at 2–3, 14);

• No states would have bought the modified ETPlus had Trinity disclosed that it differed from

the ET-Plus FHWA had approved, (Pet. 7, 11);

• The modified ET-Plus experienced catastrophic

failures not present before the 2005

modifications, (Pet. 7, 10; Pet. for Reh’g En Banc

3);

• Trinity took steps to conceal the changes it had

made to the ET-Plus in 2005, (Pet. 6, 11; Pet. for

Reh’g En Banc 14);

• Trinity failed to disclose five tests of the

modified ET-Plus on a flare—an angle to the

roadway—all of which resulted in catastrophic

failures much like those in documented

automobile accidents, (Pet. 10; Pet. for Reh’g En

Banc 3); and

14

• Trinity’s significant increase in lobbying and

political contributions, which could support an

inference that FHWA’s decision stemmed from

political influence, (Pet. 11; Pet. for Reh’g En

Banc 4).

Given the evidence Harman presented that Trinity’s

misrepresentations were material, the district court

properly denied Trinity’s motion for judgment as a

matter of law. (See Pet. App. 58a–109a); see also Fed.

R. Civ. P. 50; Reeves, 530 U.S. at 150–51; Boeing Co.,

411 F.2d at 374–75.

The Fifth Circuit’s decision to reverse the district

court admits of only three possible conclusions. The

first possible conclusion is that the Fifth Circuit

improperly made credibility determinations, reweighed

the evidence, and displaced the jury’s findings with its

own. That possibility is disturbing.

The second possible conclusion is that the Fifth

Circuit has interpreted Escobar’s use of the phrase

“very strong evidence” as denoting some sort of

rebuttable presumption of immateriality. The Fifth

Circuit wrote that “continued payment by the federal

government after it learns of the alleged fraud

substantially increases the burden on the relator in

establishing materiality.” (Pet. App. 37a–38a.) If

Harman’s burden can be met but is more than showing

substantial evidence, then the Fifth Circuit’s treatment

of the “very strong evidence” that results from

continued government payment would be consistent

with a rebuttable presumption. That sort of reasoning

would, however, deviate from the other courts of

appeals and would be a significant extension of Escobar

that finds no basis in the statutory text.

15

The third and last possible conclusion is that,

despite its statement to the contrary, (see Pet. App.

40a), the court treated the “very strong evidence”

resulting from continued government payment as

outcome determinative—creating an irrebuttable

presumption of immateriality. Such a reading of

Escobar could leave the qui tam provisions of the False

Claims Act toothless.

This third possible conclusion goes from bad to

worse. The bad: just as before the 1986 amendments,

Executive acquiescence or even mere inaction after

learning of a fraud would make it impossible for a

relator to return funds taken through fraud to the

public coffers. The worse: unlike the defunct

“government knowledge” defense, the spoiled fruits of

Executive acquiescence or inaction could very well

extend even to situations in which the relevant officials

learn of the fraud after the filing of the qui tam

lawsuit. In short, the Fifth Circuit would give the

Executive truly unfettered control over False Claims

Act litigation even though Congress passed legislation

to reduce Executive control in 1986.

All three of these possibilities should trouble the

Court. And all three suggest the Fifth Circuit’s decision

should not stand. Yes, the Court has stated that “[t]he

materiality standard is demanding,” Escobar, 136

S. Ct. at 2003, and it is likely that most relators faced

with government acquiescence or indifference will be

unable to establish materiality. But nothing in Escobar

indicates that meeting the demanding materiality

standard is or ought to be impossible, and nothing in

Escobar empowers courts to supplant the jury’s

judgment with their own.

16

At minimum, the Fifth Circuit’s decision highlights

the need for the Court to give additional guidance on

how to apply Escobar’s materiality analysis consistent

with the text and purpose of the False Claims Act. The

Petition gives the Court the opportunity to do just that.

IV.

This case is an excellent vehicle to resolve

important issues that are likely to recur.

The confusion in the courts of appeal about how to

apply Escobar shows the need for the Court to give

additional guidance. The courts of appeals have

rendered multiple decisions in the last twenty-one

months on the materiality issue, and the Petition in

this case is one of two currently pending before Court

that raise similar issues. See Pet. for Writ of Cert.,

Gilead Scis., Inc. v. U.S. ex rel. Campie, No. 17-936

(Dec. 26, 2017). Granting certiorari will permit the

Court to provide needed guidance on how to apply the

materiality standard post-Escobar.

Determining the proper interpretation of the False

Claims Act is also important to the national interest.

False Claims Act litigation affects nearly every

industry. It also generates significant recoveries of

government funds. Between 1987 and 2016, more than

11,000 qui tam actions have led to settlements and

judgments totaling more than $37 billion.15 In 2016

alone, the Department of Justice obtained more than

15

See Dep’t of Justice, Fraud Statistics Overview (2017),

https://goo.gl/VaE4fL.

17

$4.7 billion in judgments and settlements in False

Claims Act cases.16

Finally, this case is a good vehicle for resolving

questions Escobar left unanswered. There has already

been a trial, and the jury’s award is substantial. As a

result, there will be no need to speculate on what

evidence of materiality might ultimately be available,

and the parties have significant incentive to advocate

zealously for their positions. The case also garnered

attention from amici curiae in the Fifth Circuit, and it

is likely to do so in this Court as well.

CONCLUSION

For these reasons, the Petition for Writ of Certiorari

should be granted.

Respectfully submitted,

E. Travis Ramey

Counsel of Record

BURR & FORMAN LLP

420 North 20th Street

Suite 3400

Birmingham, AL 35203

(205) 251-3000

tramey@burr.com

Counsel for Amicus Curiae

16

See Press Release, Dep’t of Justice, Justice Department Recovers

Over $4.7 Billion from False Claims Act Cases in Fiscal Year 2016

(Dec. 14, 2016), https://goo.gl/ZC5HVz.