# Opposition Brief — United States ex rel. Brensilber v. Bausch & Lomb Optical Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1943
- **Citation:** 320 U.S. 711

## Text

amended complaint fails to state a cause of
action under the False Claims Statute ...........-

II. The question presented by petitioners is not
open for consideration. In any event sum-
mary judgment for respondents was required
since petitioners failed to present any gen-
uine issue of fact

III. There is no conflict of decisions and the case
is of no general importance ........----------------------

CONCLUSION ----0--0--c--cceccecveneeecencesceeoseneeseess
APPENDIX
Citations
Cases

Altman v. Curtiss-Wright Corporation, 124 F. (2d)
177 (C.C.A. 2, 1941) ...
Baran v. Goodyear Tire & Rubber Co., 256 Fed. 571
(S.D. N.Y., 1919)

Barnsdall Refining Corp. v. Birnamwood Oil Co., 32
F, Supp. 308 (E.D. Wis., 1940) . .

PAGE
OPINION BELOW ......----------oesceseensenseesseneeensenes 1
JURISDICTION -...--.---cn--o-eenerensensenssensennenssenennnsnnsnnssnnsensenssnnsensseess 1
QUESTION PRESENTED -..-------cccssvssns-eeeeeeeeeeeeeeeeeeeennnnnnnncseretes 2
GTATUTES INVOLVED ......------c--co-sccesseossenseeeneeensenenennnecenssecnennes 2
QPATEMENT .22.--ccccocvsosecccscssnsseccesennssesessenssnesserecsnnnnsssceescensssaeeten 2
ARGUMENT. .....-.------0-0-eereeree-0e0 cece Te 6

L The decision below was correct; the proposed

13

11

ii

PAGE
Black & Yates, Ine. v. Mahogany Association, Inc., 34
F. Supp. 450 (D. Del., 1940), reversed on other
grounds, 129 F. (2d) 227 (C.C.A. 3, 1942), cert.
den. 87 L.E. 49 (Oct. 26, 1942) -........ — i
Blair v. Oesterlein, 275 U.S. 220 (1927) .........22222... 12

Curacao Trading Co. Inc. v. William Stake & Co. Inc.,
5 F. R. S. 64 (S.D. N.Y., 1941, not officially re.

ported) . an 8
Denver Stocky ard Co. v. United States, 304 U.S. 470

SETI cassseurhctntersctiateniehinnpussieninneieenainaietatanamnaiannihintetieaataate 12
Duignan v. United States, 274 U.S. 195 (1927) ............ 12
Glenn Coal Company v. Dickinson Fuel Co., 72 F. (2d)

ee Eh a 7

Gnozzo v. Marine Trust Company of Buffalo, 258 App.
Div. 298° (1939), aff’d. without opinion 284 N.Y. 617 14

Helvering 7. Minnesota Tea Co., 296 U.S. 378 (1935) 12

Helvering v. Tex-Penn Co., 300 U.S. 481 (1987) -......... 12
Holland v. Majestic Radio & Tel. Corp., 27 F. Supp.
Ff 3 88 ee 8

Lipson v. Socony-Vacuum Corp., 76 F. (2d) 213
(C.C.A. 1, 1935), appeal dism’d. by stip. 301 U.S.

ek NED ccitetesdectesestiiesnenicnnsinditeadincenninianennitotinnaninitn 7
MeMullen v. Hoffman, 174 U.S. 6389 (1899) 0... 21
McJunkin v. Richfield Oil C shan .. 08 F. Supp. 466 (N.D.

ee 7

Murphy v. Mitchell, 249 Fed. 499 (N.D. N.Y., 1918)... 8
Prudential Ins. Co. of America v. Goldstein, 43 F.

og gs 2 ee | ee 13
Standard Oil Co. v. United States, 283 U. S. 163
STUIINEE TD csicsshstsciissitinsueimtccnphecoialeniidiceadeistiahiimaebeinatiinineitiemaiaian 9

Stanfa v. Bynum, 37 F. Supp. 962 (W.D. La., 1941)... 8
Sun Oil Co. v. Blevins, 29 F. Supp. 901 (W.D. La.,
1939), aff’d. 110 F. (2d) 566 (C.C.A. 5, 1940).......... 8

Triangle Conduit & Cable Co., 38 F. Supp. 533 (D.
Del., 1941); reversed on other grounds, 125 F.
(2d) 1008 (C.C.A. 3, 1942)

ili

PAGE
Twin Ports Oil Co. v. Pure Oil Co., 26 F. Supp. 366

(D. Mimm., 1939) .....---.-----ssssesessseesceconeeseenneesenneenennessenness 11
United States rt. Newbury Mfg. Co., 123 F. (2d) 453

(CCA, 1, 1941) .n.--eeeeeeeecoeecseesssssenssensesenseenennnnnenneennesennsss
United States ex rel. Kessler v. Mereur Corp., 13 F.
Supp. 742 (S.D. N.Y., 1935) aff’d. 83 F. (2d) 178

(C.C.A. 2, 1936) cert. den. 299 U.S. 576 (1936)........ 7
United States ex rel. Mareus v. Hess, 87 Law. Kd.
374 (Jan. 18, 1943) ............-csceceseeeseseseseneees 2, 7, 8, 18, 21, 22

Welch v. T. W. Warner Co., 47 F. (2d) 2381 (S.D.
N.Y., 1930) ; aff’d. 47 F. (2d) 232 (C.C.A. 2, 1981) 6

Zimmerman v. National Dairy Products Co., 30 F.
Supp. 438 (S.D. NvY., 1989) ...------sceseeseeseeseeseeeneentees 8
Statutes

RS. Secs. 3490-4 and 5438 (31 U.S.C.A., Sees. 231-5) 2, 25
Act of October 15, 1914, ¢. 328, See. 5 (Clayton Act),

28 Stat. 730, 731 (15 1.S.C.A. See. 16) .........-.cc0ceese 11
RS. See. 3721 (34 U.S.C.A. See. 569)......--------cee-e-00- 17
Act of Mareh 2, 1901, ¢. 803, 31 Stat. 895, 905 (10

UFROLA. Bee. UBBB) cncencececeresecsessesressseceewsnsevevensensveneccoors 17
Act of June 30, 1902, ¢. 1328, 32 Stat. 507, 514 (10

te SS }) a, 17
Act of May 11, 1908, ¢. 163, 35 Stat. 106, 125 (10

VELC.A. Bee. TIGD) -<cccecerversesecceesencesesersnosensssessereevsessese 17
Act of June 30, 1914, ¢. 130, 38 Stat. 392, 399 (34

ite -) 18
Act of June 30, 1921, c. 33, 42 Stat. 68, 90 .............--.--.-- 18
Act of June 30, 1922, ec. 253, 42 Stat. 716, 742-3, 754... 18
Act of February 28, 1931, ¢. 326, 46 Stat. 1431, 1442.... 17
Act of June 30, 1932, ¢. 318, 47 Stat. 421, 441-442........ 18
Act of March 3, 1933, ¢. 213, 47 Stat. 1521, 1540............ 18
Act of March 3, 1933, ec. 212, Title 3, Sec. 2, 47 Stat.

1489, 1520 (41 U.S.C.A. See. 10a) -...-.-----.0----c-seeese 18
Act of March 15, 1934, c. 69, 48 Stat. 403, 421................ 18

Act of June 24, 1935, ec. 291, 49 Stat. 398, 418................ 18

iv

Federal Rules of Civil Procedure

PAGE
Bae. Ge BR QED ccucecessenesessecsennvesessvcceannesevinmertnsmepmnammcnecees 8, 9, 28
De Ge. Fe snuininsessscenetinenienentniniunmiiaaaiiiaeanan 5, 28
A |} en 5, 6, 28
BB, C. Be FEG GD ccectececscscseessivencrevensinerenssnnecinvinnenememmunsaees 14, 29
Miscellaneous
OE Fae TID ccccsssestnnestineceniegeeesigeiehiipsceaindiniemivebiinseisiariniabaniaietiiaacatesiatiniies 93
New York Times, July 26, 1941 .....22.22.2......c.cccccscccoseseoes 4
New York Times, May 19, 1942 ...............2.--c-ccc-ccscsesscseee 4
New York Times, September 7, 1942-00000... 4
Rep. No. 263, 78th Cong. 1st Sess. .............-.-.c--s-scscscseees 23
Si, III cls ema eeaiundeasbaplniaahamant allel adeihaderieaaiaaitanmaniandiinadans 23

Webster’s New International Dictionary, 2d. Ed. ........ 17

IN THE
Supreme Court of the United States

OCTOBER TERM, 1942

—

No. 761

— a

Usirep States or America, Ex Rel. Murray BreENSILBER,
and EMANUEL THEBNER, and Murray Brensitper and
EmaxveL THEBNER, On their own behalf,
Petitioners,
v.

Bavscu & Lomp Opticar Company, Carv Zeiss, Inc., M. H.
Eis—ENHART, Cart L. Bauscu and Txueopore B. DrescHER.

BRIEF IN OPPOSITION ON BEHALF OF BAUSCH
& LOMB OPTICAL COMPANY, M. H. EISENHART,
CARL L. BAUSCH AND THEODORE B. DRESCHER

Opinion Below

The District Court rendered no opinion. The opinion
of the Cireuit Court of Appeals for the Second Cireuit
(R. 267-269) is reported in 131 F. (2d) 545.

Jurisdiction

The judgment of the Cireuit Court of Appeals sought
to be reviewed was entered November 23, 1942 (R. 270).

2

Petitioners invoke the jurisdiction of this Court under
Section 240(a) of the Judicial Code, as amended by the
Act of February 13, 1925.

Question Presented

Whether, upon the facts in this case, the court below
erred in unanimously affirming a summary judgment for
respondents in an action brought by informers under
Sections 3490-3494 and 5438 of the Revised Statutes (31
U.S.C.A., Sections 231-235), where no cause of action was
alleged, and both courts below have found and the record
shows that no false, fictitious or fraudulent claims were
made upon or against the United States.

Statutes Involved

The action is brought under Sections 3490-3494 and
5438 of the Revised Statutes (31 U.S.C.A., Sections 231-
235), sometimes known and referred to herein as the False
Claims Statute (Appendix, pp. 25-7).

Statement

This is a civil action for damages and penalties, alleged
to aggregate more than $40,000,000, brought by two
lawyers on their own behalf and on behalf of the United
States under the False Claims Statute (R. 8S. 3490-3494;
5438), which statute was recently considered by this Court
in United States ex rel. Marcus v. Hess (U. 8.), 87 L. Ed.
374 (decided January 18, 1943).

This action was instituted a year and a half after the
final disposition in 1940 of certain criminal and civil anti-
trust proceedings brought by the Department of Justice.

3

In those proceedings the Government attacked the validity
of certain agreements between Bausch & Lomb and Carl
Jeiss, of Jena, Germany (not sued herein), dealing with
the manufacture and sale of military optical instruments
under patents owned by Zeiss.* The anti-trust proceedings
terminated in pleas of nolo contendere, payment of fines,
and the entry of a consent decree (R. 243-8).°* Govern-
ment counsel in charge of those proceedings, and under
whose personal supervision the Grand Jury investigation
preceding them was made, expressly stated in open court
at the time of acceptance of the pleas, in response to a
direct question hy the Court, that no charge of fraud was
involved in connection with the acts complained of in the
indictment (R. 24). The indictment, equity complaint,
bills of particulars and exhibits, and consent decree are in
the record (R. 86-248) and were before the courts below.

Petitioners concede that their case is based solely on
the record in the anti-trust proceedings. Yet, when they
served their complaint, long after the anti-trust proceed-
ings had been terminated and ten days after Pearl Harbor
(when these respondents were still more deeply concerned
with war production), petitioners did not adhere to the
allegations made in those proceedings. Instead, peti-
tioners distorted the plain provisions of the written agree-
ments involved in those proceedings and made other false
allegations. Thus, the complaint (R. 3-10) departed from
the facts of record in the anti-trust proceedings (on which

* These agreements made it possible for Bausch & Lomb to obtain for
the use of the United States Government the patented and unpatented technical
advancements of Zeiss in the field of military optical instruments and resulted

in great benefits in the improvement of such instruments supplied to the Gov-
ernment (R. W).

** The agreements had been suspended prior to the entry of the pleas and
decree in the anti-trust proceedings (R. 246). These respondents settled those
proceedings largely because they were too preoccupied with the increasing
American armament program to prepare for and participate in a trial of the
issues (R. 23-4, W).

4

alone it was based) and, in an attempt to frame a com.
plaint against Bausch & Lomb under the False Claims
Statute, falsely alleged that under the agreements, Bausch
& Lomb agreed to and did add 20% to its prices on sales
by it of military optical instruments to the United States
Government, and agreed to and did pay the amount of such
markup to Carl Zeiss of Jena.* (Compare R. 25-7 and
933-6 with R. 5-8 and 221-2.) This was the basic charge
of the complaint and its only material allegation of fact
under the False Claims Statute.

Recognizing the gravity of charges that they had con-
spired to defraud and had defrauded their Government,
and desiring to obtain immediate and definitive relief
against the false charges so made in the complaint, these
respondents moved for an order dismissing the complaint
for failure to state a cause of action under the statute and
for summary judgment.** Respondents submitted affidavits
in support of the motion (R. 17-33), made on knowledge,
setting forth facts showing that there had been no fraud
upon, or submission of fraudulent claims to, the United
States. The affidavits further emphasized the critical
importance of immediate disposition of the case to avoid
interruption of work for the Government (i. i"

Before the return day of the motion, petitioners served
a purported amended complaint (R. 78-85), withdraw-

* The complaint contained other distortions of the facts of record in the
anti-trust proceedings; for example, that the agreements in question (1) were
made between respondent Bausch & Lomb and respondent Carl Zeiss Inc., and
(2) that the individual respondents were officers and directors not only o
Bausch & Lomb, but also of Carl Zeiss Inc. :

** These respondents also attacked the venue of the action, but requested
the district court to decide the case on the merits. Neither of the courts
below passed upon the venue question.

#** Bausch & Lomb’s contribution to our war effort has been repeatedly
recognized. (See, among others, the award to it of the Navy “E” for achieve-
ment on July 26, 1941 (New York Times, July 26, 1941) and the award to it
of the Joint Army and Navy “E” on September 7, 1942 (New York Times,
September 7, 1942). It was the first company to receive the Navy “E” with
Star (New York Times, May 19, 1942) and now has a total of three stars
for continued excellence of production.)

5

ing the above mentioned allegations. Their falsity thus
stood admitted.* In this document petitioners merely
plagiarized the Government’s charges in the anti-trust
proceedings and added conclusory allegations of fraud
substantially in the words of the False Claims Statute.

Respondents took immediate steps to prevent the peti-
tioners from delaying final decision by this manoeuver.
The purported amendment was rejected because it was
untimely under Rule 15(a)** of the Federal Rules of
Civil Procedure (R. 51, 54-6). Respondents then moved
for an order declaring the purported amended complaint
a nullity and not a proper amendment as of course
under Rule 15(a); and, in addition, that leave to amend
in accordance therewith, if requested, should be denied.
Respondents asked, however, that the purported amended
complaint be considered by the district court, on the
motion for summary judgment, as an admission by peti-
tioners of the falsity of the charges in the original com-
plaint. In the event that amendment were permitted,
respondents, in the alternative, renewed the motion to dis-
miss and for summary judgment.

The district court held the attempted amendment a
nullity, and denied leave to amend in accordance there-

* Although no explanation of the distortion of facts in the complaint was
ever offered below, the petitioners now assert that it was an inadvertence
(Pet. pp. 8, 20). For two lawyer-plaintiffs (one of whom was the sole counsel
of record in the district court) to make so many inadvertent mistakes in
plagiarizing matters of record in a suit by which they sought to recover more
than $20,000,000 for themselves is rather unusual.

The amount of the claim itself also shows a reckless disregard for facts.
The royalty record (R. 144) shows that the amount of $8,000,000 claimed by
petitioners as damages for the year 1938 alone (R. 8-9) exceeded the total
sales of military optical instruments by Bausch & Lomb in that year by over
800%. The ingenuous device of expanding the period covered by this claim
in the purported amended complaint to include the last two months of 1937
(R. 84) only makes the distortion more obvious.

Such disregard of the responsibilities of verification by counsel imposed
by Rule 11 of the Federal Rules (Appendix p. 28) furnishes some measure of

the weight to be given to the conclusory allegations of fraud in the purported
— complaint as against the statements on knowledge in the respondents’
davits.

** Appendix pp. 28-9.

,.

6

with on the ground that the proposed amended complaint
did not state a cause of action under the statute. It
thereupon dismissed the complaint and granted summary
judgment to respondents (R. 254-62). The Cireuit Court
of Appeals unanimously affirmed, per curiam, the orders
and judgment of the District Court, being of the opinion
that, whether amendment should have been permitted or
not, respondents were entitled to summary judgment
since this ‘‘action is of precisely the sort which a motion
for summary judgment was intended to nip in the bud”
(R. 267-9).°

ARGUMENT

POINT I
The decision below was correct; the proposed

amended complaint fails to state a cause of action
under the False Claims Statute.

Petitioners disavow the complaint with its false allega-
tions. They stand on the purported amended complaint
(R. 78-85). The courts below were clearly right in treat-
ing the purported amended complaint as insufficient to

* While the Circuit Court of Appeals found it unnecessary to decide
whether the time for petitioners to amend as of course had expired, since in
any event summary judgment for respondents was required, the district court
appears to have been correct in holding that the attempted amendment was a
nullity because respondents, by moving for summary judgment, had interposed
a “responsive pleading” to the complaint within the meaning of Rule 15(a),
after which petitioners lost their right to amend as of course. In so ruling,
the district court followed the only decision on the point, Triangle Conduit
& Cable Co. v. Nat. Elec. Products Corp., 38 F. Supp. 533 (D. Del., 1941),
rev'd on other grounds, 125 F. (2d) 1008 (C.C.A. 3, 1942). Compare U. S.
v. Newbury Mfg. Co., 123 F. (2d) 453 (C.C.A. 1, 1941), which deals, how-
ever, with a motion to dismiss rather than a motion for summary judgment,
to which a different rule is applicable.

In further denying leave to amend where the proposed amendment does
not state a cause of action and would, therefore, merely require the court to
entertain and grant a subsequent motion to dismiss, the district court fol-
lowed the salutary doctrine applied in Welch v. T. W. Warner Co., 47 F.
(2d) 231 (S. D.N. Y., 1930, aff'd 47 F. (2d) 232 (C.C.A. 2, 1931), and other

cases.

7

block summary judgment, as they were plainly right in
granting summary judgment for respondents on the entire
record (Point II, infra*). Consideration of the record
throws light on the reasons for petitioners’ failure to
comply with the fundamental rules of pleading discussed
below. They could not plead the necessary factual alle-
gations of the making of false or fraudulent claims by
respondents because the record shows that no such facts
exist. Thus, insistence on the insufficiency of the plead-
ings involves no mere technicality; it is necessary to pro-
tect these respondents from harassment and the courts
from further consideration of utterly unfounded and in-
sufficient allegations.

To state a cause of action under the False Claims
Statute, facts, not conclusions of law, must be alleged to
show that a false, fictitious and fraudulent claim against
the United States has been actually paid or allowed.
United States ex rel. Kessler v. Mercur Corp., 13 F. Supp.
742 (S.D. N.Y., 1935), aff’d 83 F. (2d) 178 (C.C.A. 2,
1936), cert. den. 299 U.S. 576 (1936); Cf. United States
ex rel. Marcus v. Hess, supra.

Nor is it enough to plead generally in the language
of the Statute. Glenn Coal Company v. Dickinson Fuel Co.,
72 F. (2d) 885 (C.C.A. 4, 1934) ; Lipson v. Socony-Vacuum
Corp. 76 F. (2d) 213 (C.C.A. 1, 1935), appeal dism’d.
by stip. 301 U. S. 711 (1937); Baran v. Goodyear Tire &
Rubber Co., 256 Fed. 571, 574 (S.D. N.Y., 1919) ; McJunkin
v. Richfield Oil Corp., 33 F. Supp. 466 (N.D. Calif., 1940);
Black & Yates, Inc. v. Mahogany Association, Inc., 34 F.
Supp. 450 (D. Del., 1940), reversed on other grounds, 129

_ *It is also shown in Point II that the question presented by the Petition
is not open on the record.

8

F. (2d) 227 (C.C.A. 3, 1942), cert. den. 87 L.E. 49 (Oct. 26,
1942). If facts to corroborate conclusory charges are not
alleged, the court may properly take the view that the
failure of the pleader to allege these facts creates the
presumption that they do not exist. Sun Oil Co, y,
Blevins, 29 F. Supp. 901 (W.D. La. 1939), aff’d 110 F.
(2d) 566 (C.C.A. 5, 1940).

Since actions under the False Claims Statute are in
essence actions for fraud (United States ex rel. Marcus y,
Hess, supra), the pleader must comply with Rule 9(b) of
the Federal Rules of Civil Procedure, which requires that
in all averments of fraud the circumstances constituting
the fraud must be stated with particularity.” General, un-
specific and unsupported charges of fraud are insufficient.
Holland v. Majestic Radio & Tel. Corp., 27 F. Supp. 990,
992 (S.D. N.Y., 1939); Zimmerman v. National Dairy
Products Corp., 30 F. Supp. 438 (S.D. N.Y., 1939) ; Curacao
Trading Co. Inc. v. William Stake € Co. Inc., 5 F. B.S.
64 (S.D. N.Y., 1941, not officially reported); Stanfa v.
Bynum, 37 F. Supp. 962 (W.D. La., 1941); see Murphy v.
Mitchell, 249 Fed. 499 (N.D. N.Y., 1918.)

Measured by these established requirements, it seems
obvious that even were amendment otherwise proper
(which we do not concede) the proposed amended com-
plaint could not be sustained. Nowhere does it allege
facts constituting a single instance in which a false, ficti-
tious or fraudulent claim was submitted to the United
States by these respondents and allowed or paid. It also
fails to allege such an instance with respect to Carl Zeiss
of Jena (not named as a defendant in the action). The
conclusory allegation that Bausch & Lomb and Carl Zeiss
of Jena sold military optical instruments to the United

* See Appendix p. 28.

)

States ‘‘at arbitrary, artificial and unreasonable and non-
competitive prices agreed upon’’ between them, certainly
does not constitute the required specification, however
proper the allegation might have been in an indictment
under the Sherman Act or the Wilson Tariff Act, to which
different rules of pleading apply. Similarly defective is
the charge that Bausch & Lomb (not Zeiss) submitted
«shids’’? to the United States ‘‘at prices that pretended to
be and were represented to be, and which the Government
* * * believed to be, the normal, prevailing and com-
petitive prices for such * * * instruments’’, but which
in fact were not, ‘‘but were in excess’’ of such prices. See
Standard Oil Co. v. United States, 983 U. S. 163, 172
(1931). This allegation cannot be considered the state-
ment of circumstances constituting fraud with the par-
ticularity required by Rule 9(b). The allegation imme-
diately following does not even charge that ‘‘such bids’’
were accepted by the Government, but only that “various
bids, submitted by the defendant Bausch & Lomb at vari-
ous times’’, were so accepted, the dates, prices, amounts
and other particulars of which are unknown. Information
sufficient to claim damages in the astronomical amounts
demanded should, if it existed, have permitted the specifi-
cation of at least one instance of the misconduct charged
as an earnest of petitioners’ right to proceed. Finally it
is alleged, in the words of the statute, that ‘‘the defend-
ant * * * presented for payment and approval * * *
bids, claims, invoices, bills, vouchers and statements and
aceounts’? knowing the same to be ‘‘excessive, false, ficti-
tious and fraudulent by reasons aforesaid, in that said
defendants added to the normal, prevailing and competi-
tive prices, an arbitrary amount pursuant to the con-
spiracy * * *’, and that the said claims, ete. were paid
and satisfied, But, unless suits such as this are to enjoy

10

some immunity ‘from the rules of pleading enforced in all
other fraud actions to prevent imposition on the courts,
such conclusory statements, in the statutory language, are
wholly insufficient.

It is apparent, therefore, that the District Court cor-
rectly held the purported amended complaint insufficient.
Whether the amendment was recognized or allowed and
then dismissed, or rejected at the outset, was immaterial.
Petitioners have made two attempts, on the basis of the
records in the anti-trust proceedings, to demonstrate that
they have a case within the statute on which they rely,
In their first attempt they concededly distorted the facts;
in their second, they have failed to comply with settled
requirements applicable to pleading in such actions and
have failed to allege a cause of action. The courts below
correctly concluded that this failure was due to the
absence of facts to support the serious charge made. Sum-
mary disposition was required; this litigation does not
deserve to be further prolonged.

POINT Il

The question presented by petitioners is not open
for consideration. In any event summary judgment
for respondents was required since petitioners failed
to present any genuine issue of fact.

Briefly stated, the question presented by petitioners
(Pet. p. 2) is whether an action lies under the False
Claims Statute ‘‘where the record before the Court
shows’’ that Carl Zeiss, of Jena, pursuant to agreements
with Bausch & Lomb, ‘‘when invited by the United States
to make a bid, was required to submit, and did in fact

11

submit excessive prices (so-called ‘‘protective offers’’)
fixed by the American corporation’? (Bausch & Lomb).*

Before passing to the fundamental misconstruction of
the record embraced in petitioners’ statement of the ques-
tion, it should be noted that the question is not open on
the record since no such question is tendered by or within
petitioners’ pleadings and no such claim was made in the
courts below.

It is unnecessary to look to the complaint, which peti-
tioners have abandoned. Its basic charge, that Bausch &
Lomb added 20% to its prices on sales of military optical
instruments to the United States, is concededly false.

The proposed amended complaint, the material and
legally insufficient allegations of which are set forth under
Point I, supra, likewise does not make the charge tendered
for review. It carefully distinguishes between Carl Zeiss,
Inc., a respondent to the instant petition, and Carl Zeiss,
of Jena, not named as a defendant in the action (R. 79-
80). The allegation with respect to the former is not
that it bid and submitted excessive prices, but expressly
that, pursuant to the conspiracy, it refused to bid (R. 81).
The only allegation charging affirmative action with re-
spect to the United States by Carl Zeiss, of Jena, is that

*In addition to the fundamental errors of fact embraced in petitioners’
statement of the question presented which we point out infra, pages 12-18,
there are several others which deserve mention. These respondents have not ad-
mitted that the patent licensing agreements with Zeiss were unlawful. Their
pleas of nolo contendere to the anti-trust indictment did not constitute such
admissions. See Twin Ports Oil Co. v. Pure Oil Co., 26 F. Supp. 366 (D.
Minn., 1939); Barnsdall Refining Corp. v. Birnamwood Oil Co., 32 F. Supp.
308 (E. D. Wis., 1940). The consent decree in the equity anti-trust case
(R. 243-8) expressly recognizes the respondents’ claim of innocence of viola-
tion of law (R. 243) and Section 5 of the Clayton Act (15 U.S.C.A., Sec. 16)
provides that such consent decrees are not to be treated as admissions.

Also, the question as stated in the petition infers that summary judgment
was granted by the courts below solely on the ground that “the complaint and
the unlawful agreements showed no false representations in deceit of the United
States” and that the lower courts did not consider the bills of particulars and
exhibits in the anti-trust proceedings. The fact is, of course, that the summary

judgment for respondents was necessarily based on the entire record before the
courts below.

12

“* © *® Bausch & Lomb and Carl Zeiss, of Jena, * * *
by concerted action, * * * sold, shipped and delivered
military optical instruments to the Government of the
United States at arbitrary, artificial and unreasonable and
non-competitive prices agreed on by the defendant Bausch
& Lomb with Carl Zeiss, of Jena * * *’’ (R. 81). Itis
not alleged that Zeiss ever received payments from the
United States Government for the sale of military optical
instruments, but only that Bausch & Lomb did (R. 83).
The remaining allegations, by reference to Bausch &
Lomb, or to ‘‘the defendants,’’ in terms exclude Carl
Zeiss, of Jena (R. 83-5). The proposed amended com-
plaint is not predicated upon the claim of the use of
‘‘protective offers’ by Carl Zeiss of Jena to throw busi-
ness to Bausch & Lomb (now asserted in the petition), but
wholly on alleged sales by Zeiss and Bausch & Lomb at
what are claimed to be fraudulent prices, thus making
their several claims fraudulent. What petitioners seek is
a review of a charge which they have not even pleaded, an
omission which is fatal to review here. Denver Stockyard
Co. v. United States, 304 U. S. 470, 485 (1938).

This obstacle to review is reinforced by the fact that
no such claim was made in the courts below—it is obvi-
ously a new theory presented for the first time in the
petition. There would appear to be no reason peculiarly
applicable to qui tam cases for departing from the ordi-
nary rule that this Court will not consider questions
not submitted by petitioners to the courts whose judg-
ments they attack. Helvering v. Minnesota Tea Co.,
296 U. S. 378, 380 (1935); Helvering v. Tex-Penn Co., 300
U. S. 481, 498 (1937) ; Duignan v. United States, 274 U.S.
195, 200 (1927) ; Blair v. Oesterlein Co., 275 U. S. 220, 225
(1927).

13

Even if these familiar objections to review are dis-
regarded, it is entirely clear that the decision below was
correct in granting summary judgment to the respond-
ents. The record is barren of any facts to support the
assertions in the petition that the agreements between
Bausch & Lomb and Carl Zeiss of Jena, or conduct under
them, resulted in fraud upon the United States or submis-
sion of fraudulent claims to the United States. Thus, the
petition tenders a wholly hypothetical question which this
Court should not consider.

The remedy of summary judgment is provided to per-
mit speedy determination on motion and without the de-
lays and expense of trial of cases where the record shows
that there is no genuine issue of fact to be tried. Altman v.
Curtiss-Wright Corporation, 124 F. (2d), 177, 180 (C.C.A.
2, 1941); Prudential Ins. Co. of America v. Goldstein, 43
F. Supp. 767, 768 (K.D. N. Y., 1942). Here the courts below
had before them the complete records in the anti-trust
proceedings upon which, alone, petitioners’ action was
predicated. Affidavits on knowledge submitted by these
respondents (R. 17-33) showed not only the falsity of the
complaint (which petitioners immediately admitted by
their attempt to amend) but asserted and set forth facts
showing that Bausch & Lomb had not submitted claims
within the statute. Even if objections to the sufficiency
of the pleadings (Point I, supra) are disregarded, the
petitioners’ general allegations, unsupported by the anti-
trust source material, were shown to be without substance
in fact. It is the purpose of summary judgment to cut
through such sham allegations without trial. Upon a
motion for summary judgment, the court may properly
accept statements of fact in affidavits made on knowledge
against any mere conclusory allegations made on infor-

14

mation and belief in a pleading or elsewhere. This is
the clear import of Rule 56(e), 28 U.S.C.A., following
§723e*, (see Gnozzo v. Marine Trust Company of Buffalo,
258 App. Div. 298 (1939), aff’d. without opinion, 284
N. Y. 617). This is all the more true where, as here, the
petitioners conceded the falsity of charges of fraud in
their original complaint. In the balance of this Point we
shall show in detail how completely the record fails to
show any facts supporting the assertions of fraudulent
conduct which are made for the first time in the petition.

. Petitioners’ new theory of their case requires that the
record present a triable issue on each of the following
points: (1) that competitive bids were necessary on mili-
tary optical instruments; (2) that Carl Zeiss, of Jena, was
invited by the United States Government to bid on the
sale of such instruments in competition with Bausch &
Lomb; (3) that when invited to bid Zeiss was required by
agreement to quote prices, which included an amount (a
so-called ‘‘protective offer’’) named by Bausch & Lomb,
to be added to the price which Zeiss would otherwise have
charged the Government for the particular instrument;
(4) that, in fact, Zeiss quoted such prices to the United
States Government; (5) that a contract was awarded on
the basis of such a quotation; and (6) that a claim based
on such contract was made upon and paid by the United
States. The record is completely barren of any facts sup-
porting any of these points.

At the outset of a scrutiny of the record, it is to be
noted that the provisions of the agreements between
Bausch & Lomb and Zeiss requiring ‘‘ protective offers’’
under certain circumstances, upon which petitioners rely,
were inserted in 1925 and eliminated in 1926 (R. 27,
933-4, 235-6, 241). No facts are alleged or contained in
the record showing that this provision continued in effect

* Anpendix p. 29.

15

thereafter.* On the contrary, the record specifically shows
that ‘‘protective offers’? were never used in connection
with any transaction with the United States Government
(R. 29).

The sole sources on which petitioners rely to gloss over
the deficiencies in their pleadings do not contain any facts
in support of the alleged fraud which petitioners now
claim. Such facts are not alleged in the indictment in the
anti-trust proceedings nor in the complaint in the equity
anti-trust ease. The bills of particulars, which contain the
details of the Government’s allegations in the indictment,
obtained after an exhaustive investigation, mention only
one sale (by Bausch & Lomb) to the United States Gov-
ernment, and only four other instances of any dealings or
communications of any kind involving the United States
Government in connection with Zeiss instruments. Anal-
ysis of these five instances shows that none supports
petitioners’ present claim.** In addition, respondents’

*The 1926 agreement (R. 238-42) contains no provision for “protective
offers.” Indeed, it expressly eliminates that provision (R. 241). In the teeth of
such express agreement by the parties, the provision in the 1926 agreement that
the parties shall “endeavor to give due consideration to one another's interests”
cannot be read as importing into the agreement the very provision which it elim-
inates. While the Government's indictment and equity complaint allege a
continuance in general terms, no facts in support thereof are alleged in the
indictment or equity complaint and in no instance after 1926 does the Gov-
ernment’s bill of particulars refer even to a foreign transaction involving a
“protective offer”. Communication with Zeiss on such foreign transactions is
to be regarded only as compliance by a patent licensee with the provision for
cooperation in the 1926 agreement. In these circumstances the courts below
were entitled to accept the factual statements on knowledge in these respondents’
afidavits, rather than any vague and unsupported general claims on behalf of
petitioners. Respondents had not, of course, conceded the correctness of the
allegations in the indictment or the equity complaint (R. 23-4, 30, 243). The
record thus does not contain any facts showing continuance of the “protective
offer” provision after 1926; even if it had, it would not affect the result since
it is entirely clear on the record that “protective offers” were never used in
connection with any transaction with the United States (R. 29).

** The first concerns the importation, on or about September 15, 1938, of
a stereo-telemeter by Bausch & Lomb from Carl Zeiss, of Jena, which was
sold by Bausch & Lomb to the United States Government for approximately
$24460 (RK. 118-9, 142-3). It is not included in the bill of particulars as an
instance of joint action but only in support of the jurisdiction of the Southern
District over commerce passing through it (Cf. R. 118-9, 142-3). There is
no indication whatever that this transaction was improper, the Government
i ry claim it to be, and the respondents’ affidavits establish its propriety
The second, in 1929 (R. 138), was alleged by the Government to be one
of three instances of Zeiss’ refusal to sell military optical instruments in the

16

affidavits show (R. 28-9) that in the one instance in which
a sample Zeiss instrument was supplied directly to the
United States Government (not included in the Govern.
ment’s bill of particulars and not referred to by these
petitioners) no ‘*protective offer’? was involved.

Thus the record is barren of any facts to show the
actual making of any ‘‘protective offer’’ by Zeiss to the
United States and a fortiori that there were ‘‘ protective
offers’? by Zeiss which resulted in the award of any
contract to Bausch & Lomb. Thus the ‘‘ protective offer’
provision, in effect only between 1925 and 1926, resulted
in no conduct or claims affecting the United States which
could possibly be regarded as within that provision. The
prompt excision of the provision by the parties makes

United States unless Bausch & Lomb consented (only this one involving the
Government); there was no claim that there was any “protective offer.”
On the contrary, it indicates that Zeiss submitted no offer at all, much less
a “protective offer.” Whatever may have been the relevance of such conduct
to an anti-trust case, it does not support petitioners’ claim that a fraudulent
claim was made upon the United States.

The third, fourth and fifth (R. 138-9) are stated to be instances in
which Zeiss offered to sell military optical instruments for use in the United
States with the consent of Bausch & Lomb. Of the total of four such cases
given (R. 139), one does not concern the Government. As to Items “(ii)”
in 1928 and “(iii)” in 1935 in the bill (R. 139), there is no indication that
they involved “protective offers” by Carl Zeiss, of Jena, and the Government,
in the anti-trust proceeding, made no claim that they did; nor, for that matter,
did it make any such claim with regard to Item “(i)” (R. 139), which refers
to Exhibit U (R. 188-92). Exhibit U is a copy of a letter, dated March 7,
1928, from Bausch & Lomb to Carl Zeiss, of Jena. It appears therefrom that
the American Embassy in Berlin, presumably on behalf of the Navy Depart-
ment, inquired at Nedinsco (affiliated with Zeiss) with regard to the supply
of three military optical instruments with accessories, in which modern type
Bausch & Lomb had unsuccessfully attempted to interest the authorities at
Washington. Zeiss was apparently of the opinion that, if the Embassy was
interested in the instruments, it might redound to Bausch & Lomb’s benefit in
the future, and that Bausch & Lomb should enter into an agreement with
Nedinsco with respect thereto. “Zeiss will quote date of delivery, usual for-
eign countries’ price, delivered f.o.b. Rotterdam. 10% for you * * *.” As
appears from the cablegram of March 7, 1928 (R. 191), the quoted price was
to include the commission. There is no evidence that the Government sought
competitive bids. On the contrary, it appears that Bausch & Lomb was not
invited to bid and that the inquiry abroad represented a new development in
departmental policy. Furthermore, there is no indication that the quotation
was ever actually made, and certainly none that the transaction matured into
a sale and a subsequent claim on the Government. No consummation of any
such transaction is reflected in the bill of particulars (Cf. R. 142-3). Re-
spondents’ affidavits indicate that this transaction did not in fact materialize
(R. 28-9). Since the price to be quoted was the “usual” price which Zeiss
quoted foreign countries, and included a commission of 10% for Bausch &
Lomb (R. 188), there would, in any event, be no basis for concluding that
such a quotation, if made, involved a “protective offer” or any excessive price.

17

any comment on its propriety quite academic. In further
support of the view that petitioners’ reliance on this pro-
vision is groundless, it is to be noted that there are neither
allegations nor facts indicating that Bausch & Lomb and
Carl Zeiss, of Jena, were at any time requested to make
offers to the United States Government in response to
invitations for competitive bids or that such offers were
made, or, indeed, that competitive bidding by anyone was
required by law. The opposite appears to be true of
military optical instruments.° In any event it is incon-
ceivable that the United States military authorities would
have looked to Carl Zeiss, of Jena, or any other foreign
concern, as its source of supply for such vitally important
equipment as the range finders which control the gunfire
of our ships—any more than they would have had our
battleships constructed on foreign ways.** The only pur-

* Military optical instruments, being of a highly technical and specialized
nature, are in a different category from much of the material which the Gov-
ernment purchases. Neither the Army nor the Navy is required to seek com-
petitive bids on “ordnance.” Webster's New International Dictionary, 2d Ed.,
defines “ordnance” as including range finders, etc., and the definition obviously
is broad enough to cover all military optical instruments as defined in the
complaints (R. 4, 80).

Among the statutes exempting ordnance from requirements of competitive
bidding are:

As to the Army, the Act of May 11, 1908, c. 163, 35 Stat. 106, 125 (10
US.C.A. Sec. 1199), provides :

“Whenever proposals are invited for the furnishing of articles of ord-
nance property, the character of which or the ingredients thereof are of
such a nature that the interests of the public service would be injured
by publicly divulging them, the Chief of Ordnance is authorized to pur-
= such articles in such manner as he may deem most economical and
efficient.”

See also Act of March 2, 1901, c. 803, 31 Stat. 895, 905, Act of June 30,
c. 1328, 32 Stat. 507. 514 (10 U.S.C.A. Sec. 1201).

As to the Navy, R. S. Sec. 3721 (34 U.S.C.A. Sec. 569), provides in part:
“* * * The provisions which require that supplies shall be purchased
by the Secretary of the Navy from the lowest bidder, after advertise-
ment, shall not apply to ordnance, gunpowder, * * *.”

~

1902,

** Aside from the public policy affecting military optical instruments,
during the past twenty years, at least, various Army and Navy appropri-
ation acts have contained provisions manifesting the existence of a “Buy
American” policy. The Act of February 28, 1931, c. 326, 46 Stat. 1431, 1450,
provided in part:

“That in the expenditure of appropriations in this Act, the Secre-
tary of the Navy shall, unless in his discretion the interest of the

18

chases of Zeiss military optical instruments are shown to
have been for sample purposes (R. 28). Nor is there
a single fact indicating that these respondents ever made
a claim containing a representation that was false. In
these respects and others this case differs fundamentally
from that which was recently before this Court in United
States ex rel. Marcus v. Hess, supra. Here the record
diseloses no fraud (in the form of collusive bidding or
otherwise) and, on the contrary, expressly disproves it,
and the two courts below have concurred in finding it
absent and that there exists no issue of fact worthy of
trial. In the Marcus case, fraud had been found by the
jury and was conceded on appeal.

There is no basis for petitioners’ somewhat varied
claims (Cf. Pet. pp. 2, 16 and 18) that there was any
misrepresentation in the transactions with the United
States. The record shows no instance in which a bid

Zeiss or Bausch & Lomb did influence or possibly
could have influenced the bid of the other or the Govern-
ment’s action on any bid. There is wanting any indication
that, in fact, the Government ever purchased anything
from either at excessive prices or that any claim within
the statute was ever submitted by either. These infirmi-
ties do not go merely to the question of damages, as peti-

Government will not permit, purchase or contract for, within the limits
of the United States, only articles of the growth, production or manu-
facture of the United States, notwithstanding that such articles of the
growth, production or manufacture of the United States may cost more,
if such excess of cost be not unreasonable.”

Identical language is to be found in the following Navy Department
appropriation acts: Act of June 30, 1932, c. 318, 47 Stat. 421, 441-2; Act of
March 3, 1933, c. 213, 47 Stat. 1521, 1540; Act of March 15, 1934, ¢. 69,
48 Stat. 403, 421; Act of June 24, 1935, c. 291, 49 Stat. 398, 418.

Army appropriation acts containing provisions of similar import are:
Act of June 30, 1921, c. 33, 42 Stat. 68, 90; Act of June 30, 1922, c. 253,
42 Stat. 716, 742-3, 754.

Furthermore, this “Buy American” policy is given general application by
the Act of March 3, 1933, c. 212, Title 3, Section 2, 47 Stat. 1489, 1520 (41
U.S.C.A. Sec. 10a) (see also Act of June 30, 1914, c. 130, 38 Stat. 392, 399
(34 U.S.C.A. Sec. 568) ).

19

tioners suggest (Pet. p. 20), they are basic defects in
their cause of action. They required the courts below to
make summary disposition of this case as they did. It
would have been a travesty to interrupt the criticai mili-
tary production of these respondents by requiring tiiem
to submit to examinations before trial and trial (involv-
ing highly confidential work done for the Army and
Navy with the obvious dangers to military security) while
petitioners sought vainly for evidence to support general
charges of fraud which Government counsel found absent
after a Grand Jury investigation.

The failure of the record to sustain petitioners’ claims
of fraud is not surprising. Petitioners’ charges are now
based entirely on the anti-trust proceedings, since they
have recanted the false charges in the original complaint.
And the Government (partial beneficiary of this action)
expressly disclaimed any charge of fraud in connection
with the very transactions which are the sole basis of
this suit. At the time the District Court was asked by
counsel for the Government and for these respondents to
accept nolo contendere pleas to the anti-trust indictment,
the Court specifically asked Hon. Samuel S. Isseks, the
Special Assistant to the Attorney General in personal
charge of those proceedings, whether any charge of fraud
was involved, and Mr. Isseks replied: ‘** * * There
is no charge of fraud against the defendants in connec-
tion with the acts complained of in the indictment’? (R.
24). The Court’s question was not idle; its obvious pur-
pose was to ascertain whether respondents’ conduct justi-
fied the acceptance of mere nolo pleas. The representa-
tion made to the Court by Government counsel in charge
of the case is entitled to great weight. The statement
was made after a thorough investigation, with the aid of

20

Grand Jury subpoenas. It was made, moreover, by an
official acting in the place of the District Attorney whose
statutory duty it is to enforce the False Claims Statute
by appropriate proceedings, civil and criminal, as well
as the anti-trust laws. Thus, petitioners err in implying
that the statement was somehow ultra vires, and it is
hardly fair to Government counsel to imply that he was
seeking to mislead the Court by using words in any tech-
nical sense when making a representation to the Court,
whose purpose in asking for it he fully apprehended. We
submit that the statement of disinterested Governinent
counsel lends strong support to the decisions below. It
casts the gravest doubt on the interested interpretation of
the same transactions by those who made no personal
investigation of them.

The moving affidavits for these respondents categori-
cally stated that bids by Bausch & Lomb to the United
States had not been participated in, or influenced by,
Zeiss, and that such bids were not inflated (R. 27-33).
Similarly, there were explicit statements made on knowl-
edge that no false, fictitious or fraudulent documents had
been submitted to the Government. Thus, upon the whole
record, the courts below were bound to grant summary
judgment for these respondents. The court below said:

‘To subject the defendants to a long harass-
ment hy examination and trial upon a certainly
empty charge could serve no purpose except pos-
sibly to force them to buy their peace, an extortion
against which $232 would not protect them’’ (R.
269).

In this case petitioners have actually done no more
than replead a violation of the anti-trust laws where all the
penalties vrovided for by those laws have heen exacted.

21
They suggest thai the remedies for violation of those laws
are inadequate (Pet. p. 24) and seem to urge that this
action should be maintainable to supplement the remedies
provided by law. But they are pursuing no remedy
authorized by the anti-trust laws, and, if those laws need
additional sanctions, Congress must provide them. Con-
gress has provided very explicitly the essentials to permit
recovery in such actions as this, as this Court has recently
indicated in its opinion in United States ex rel. Marcus v.
Hess, supra. This ease fails to meet those requirements.

POINT Ill

There is no conflict of decisions and the case is of
no general importance.

The agency rule in conspiracy cases is entirely inap-
plicable here. This record contains no facts to show that
Zeiss (or Bausch & Lomb) made false representations to
the United States either in furtherance of an alleged
conspiracy or otherwise. It is obvious that there is no
conflict with the familiar decisions in this field and the
failure of the experienced court below even to advert to
them emphasizes the fact that petitioners are now making
a fresh contention which was not made below.

Nor is there conflict between the decisions helow and
McMullen v. Hoffman, 174 U. S. 639, or the other cases
cited on page 17 of petitioners’ brief. There is not only
no factual allegation of “protective offers’? by Zeiss to
the United States but it affirmatively appears that there
was no inflation of bids by Bausch & Lomb. There was
therefore wholly absent the fraud and misrepresentation
which is the predicate for this claimed conflict.

22

Likewise there is no conflict with the recent decision
in U. S. ex rel. Marcus vy. Hess, supra. The court below
applied to the facts here essentially the same standards
which this Court applied in its decision in the Marcus case
and it pointed out the fundamental distinction between
the facts in the two cases. In the Marcus case there was
collusive bidding and there were false statements in some
if not all bids that bidding was not collusive. F aud was
found by the jury and was not denied on appeal. Here
all of those elements are wholly lacking.

This case depends upon its particular and special facts
and the decision below cannot affect other Government
contract cases with different facts. The contractual pro-
vision principally relied upon by petitioners was in fact
wholly inoperative against the United States and consid-
eration of that provision is academic. The record gives
no support to the general claim (Pet. p. 25) that colorable
bids were submitted and that either party was enabled
thereby to increase its bids, and the decision below cannot
be regarded as upholding such a practice—particularly
where no such contention was even made in the pleadings
or in the courts below.

Since the Court has so recently expounded the applie-
able statute in United States ex rel. Marcus v. Hess, supra,
there is no need to reexamine it when it was correctly
applied below. While in his brief amicus in the Marcus
ease the Solicitor General indicated his belief that the
court below erred in one portion of its opinion (in that
it construed the statute as requiring proof of deceit), he
does not appear to have doubted the correctness of the
final result below. Indeed in a portion of his brief not
quoted by petitioners (p. 45) he seems to have indicated

23

his belief that the decision below was correct in so far as
the particular facts in the case are concerned. In any
event, since the disposition of the case by the courts below
was clearly correct, there is no occasion to grant review
merely to consider the Solicitor General’s comment, which
was obviously made chiefly to preserve the right to argue
for a broader construction of the statute in a proper case.
The Government can always litigate the question so
mooted when it arises in a proper case. Here the charge
is false representation or deceit and it is immaterial to
this ease whether other facts going beyond deceit would
fall within the statute. It would be an undue hardship on
the respondents to grant review merely for the purpose of
considering this criticism, when the result, in this case,
would not be affected.

Furthermore, it may be noted that Congressional action
to repeal the informer provision of the False Claims
Statute appears to be imminent so that subsequent cases
under that provision may not arise. Repeal has been
requested by the Attorney General*, the House has passed
the Bill (H.R. 1203) and the Senate Committee on the
Judiciary has under consideration a similar Bill (S. 920),
at this writing.

Conclusion

The case was correctly decided helow, there is no con-
fict of decisions and, as the decision helow depends upon
the particular facts, it is of no general importance. The
Court has so recently construed the same statute that no
further explication is now needed. The question presented

*See letter of Attorney General Riddle to the Speaker of the House,
dated August 28, 1942, included in Rep. No. 263, 78th Cong. Ist Sess.

24

does not appear to be open for review upon this record,
We, therefore, respectfully submit that the petition for
writ of certiorari should be denied.

Wuirney Nortu Seymour,
Counsel for Bausch & Lomb Optical
Company, M. H. Eisenhart, Carl L.
Bausch and Theodore B. Drescher.

Simpson THACHER & BaRTLeTT,
Apert C. BickForD,
Of Counsel.

April 16, 1943.

25

Appendix A
FALSE CLAIMS STATUTE

31 U. S. C. A., Sections 231-235
(R. S., Sections 3490-3494, 5438)

$231. Liasmity or Persons Maxine Fase CLais.
Any person not in the military or naval forces of the
United States, or in the militia called into or actually em-
ployed in the service of the United States, who shall make
or cause to be made, or present or cause 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 con-
spiracy to defraud the Government of the United States,
or any department or officer thereof, by obtaining or aid-
ing to obtain the payment or allowance of any false or
fraudulent claim, or who, having charge, possession, cus-
tody, or contrel of any money or other public property
used or to be used in the military or naval service, who,
with intent to defraud the United States or willfully to
conceal such money or other property, delivers or causes
to be delivered, to any other person having authority to
receive the same, any amount of such money or other
property less than that for which he received a certificate
or took a receipt, and every person authorized to make
or deliver any certificate, youcher, receipt, or other paper
certifying the receipt of arms, ammunition, provisions,
clothing, or other property so used or to be used, who
makes or delivers the same to any other person without a

26

full knowledge of the truth of the facts stated therein,
and with intent to defraud the United States, and every
person who knowingly purchases or receives in pledge for
any obligation or indebtedness from any soldier, officer,
sailor, or other person called into or employed in the
military or naval service any arms, equipments, ammuni-
tion, clothes, military stores, or other public property,
such soldier, sailor, officer, or other person not having the
lawful right to pledge or sell the same, shal! forfeit and
pay to the United States the sum of $2,000, and, in addi-
tion, double the amount of damages which the United
States may have sustained by reason of the doing or com-
mitting such act, together with the costs of suit; and such
forfeiture and damages shall be sued for in the same suit.
(R. S. $§ 3490, 5438.)

§ 232. Same; Surrs. The several district courts of the
United States, the supreme court of the District of Colum-
bia, the several district courts of the Territories of the
United States, within whose jurisdictional limits the per-
son doing or committing such act shall be found, shall,
wheresoever such act may have been done or committed,
have full power and jurisdiction to hear, try, and deter-
mine such suit. Such suit may be brought and carried on
by any person, as well for himself as for the United
States; the same shall be at the sole cost and charge of
such person, and shall be in the name of the United States,
but shall not be withdrawn or discontinued without the
consent, in writing, of the judge of the court and the
district attorney, first filed in the case, setting forth their
reasons for such consent. (R. 8S. § 3491.)

§ 233. Dury or Districr Atrorney as To Sucn Cases.
It shall be the duty of the several district attorneys of the
United States for the respective districts, for the District
of Columbia, and for the several Territories, to be diligent
in inquiring into any violation of the provisions of section
231 of this title by persons liable to such suit, and found
within their respective districts or Territories, and to
cause them to be proceeded against in due form of law for

27

the recovery of such forfeiture and damages. And such

rson may be arrested and held to bail in such sum as
the district judge may order, not exceeding the sum of
$2,000, and twice the amount of the damages sworn to in
the affidavit of the person bringing the suit. (R. 8. § 3492.)

§ 234. Ricuts or Persons Presentrnc Sucw Suits.
The person bringing said suit and prosecuting it to final
judgment shall be entitled to receive one-half the amount
of such forfeiture, as well as one-half the amount of the
damages he shall recover and collect; and the other half
thereof shall belong to and be paid over to the United
States; and such person shall be entitled to receive to his
own use all costs the court may award against the defend-
ant, to be allowed and taxed according to any provision of
law or rule of court in force, or that shall be in force in
suits between private parties in said court: Provided,
That such person shall be liable for all costs incurred by
himself in the case, and shall have no claim therefor on
the United States. (R. S. § 3493.)

$235. Limrration or Surt. Every such suit shall be
commenced within six years from the commission of the
act, and not afterward. (R. S. $3494.) '

28

Appendix B
RULES OF CIVIL PROCEDURE FOR THE DISTRICT
COURTS OF THE UNITED STATES

28 U.S.C.A. following § 723¢

Rule 9(b). Fraud, Mistake, Condition of the Mind.
In all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particu-
larity. Malice, intent, knowledge, and other condition of
mind of a person may be averred generally.

Rule 11. Signing of Pleadings. Every pleading of a
party represented by an attorney shall be signed by at
least one attorney of record in his individual name, whose
address shall be stated. A party who is not represented
by an attorney shall sign his pleading and state his ad-
dress. Except when otherwise specifically provided by
rule or statute, pleadings need not be verified or accom-
panied by affidavit. The rule in equity that the averments
of an answer under oath must be overcome by the testi-
mony of two witnesses or of one witness sustained by
corroborating circumstances is abolished. The signature
of an attorney constitutes a certificate by him that he has
read the pleading; that to the best of his knowledge, in-
formation, and belief there is good ground to support it:
and that it is not interposed for delay. If a pleading is
not signed or is signed with intent to defeat the purpose
of this rule, it may be stricken as sham and false and the
action may proceed as though the pleading had not been
served. For a wilful violation of this rule an attorney
may be subjected to appropriate disciplinary action. Simi-
lar action may be taken if scandalous or indecent matter
is inserted.

Rule 15(a) Amendments. A party may amend his
pleading once as a matter of course at any time before a

29

responsive pleading is served or, if the pleading is one to
which no responsive pleading is permitted and the action
has not been placed upon the trial calendar, he may so
amend it at any time within 20 days after it is served.
Otherwise a party may amend his pleading only by leave
of court or by written consent of the adverse party; and
leave shall be freely given when justice so requires.
party shall plead in response to an amended pleading
within the time remaining for response to the original
pleading or within 10 days after service of the amended
pleading, whichever period may be the longer, unless the
court otherwise orders.

* . . * . * * *

Rule 56—Summary Judgment.

(e) Form of Affidavits; Further Testimony. Support-
ing and opposing affidavits shall be made on personal
knowledge, shall set forth such facts as would be admis-
sible in evidence, and shall show affirmatively that the
affiant is competent to testify to the matters stated therein.
Sworn or certified copies of all papers or parts thereof
referred to in an affidavit shall be attached thereto or
served therewith. The court may permit affidavits to be
supplemented or opposed by depositions or by further

affidavits.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385610_0069%3A06. Public record. Not legal advice.