Opposition Brief — United States ex rel. Willis v. General Dynamics Corp.

No. 95-1167

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1995

UNITED STATES OF AMERICA, ex rel.

MURRAY W. LINDENTHAL; DONALD WILLIS

Petitioners,

Vv.

GENERAL DYNAMICS CORPORATION

Respondent.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

MARK R. TROY

Counsel of Record

MICHAEL T. KAVANAUGH

SUSAN A. MITCHELL

McKenna & Cuneo, L.L.P.

444 South Flower Street

8th Floor

Los Angeles, California 90071

(213) 243-6170

Attorneys for Respondent,

GENERAL DYNAMICS CORPORATION

oY _

F et

i

QUESTIONS PRESENTED

General Dynamics takes issue with the questions

presented in the petition, which merely summarize

petitioner's arguments. General Dynamics believes the

questions to be as follows:

1. Is an award of "costs" under Fed.R.Civ.P. 54(d) to

the prevailing defendant in a qui tam action brought under

the civil False Claims Act, 31 U.S.C. §§ 3729 et seq.,

precluded by 31 U.S.C. § 3730(d)(4), which provides for an

award of attorneys’ fees and expenses if the action is proved

to be "clearly frivolous?"

2. Did the courts below err in concluding that General

Dynamics did not submit any false claims to the

government?

‘i

PARTIES TO THE PROCEEDING

The petition did not identify the parties to the

proceeding. The parties are pro se petitioner Donald B.

Willis (hereafter referred to as "Mr. Willis") and respondent

General Dynamics Corporation ("General Dynamics"). It

appears that Murray W. Lindenthal, a co-plaintiff in the

action below, is not a party to this proceeding.

For purposes of further clarification, General Dynamics

notes that this action was brought under the so-called "gui

tam" provisions of the civil False Claims Act (31 U.S.C.

§ 3730), which enable a private citizen (often referred to as a

"relator") to bring a false claims action on behalf of the

federal government. The United States, which is identified

in the case caption, has a right of intervention in all gui tam

actions. In this action, "[tJhe relators prosecuted the action

on their own after the Government declined to intervene."

Petition Appendix A-2 (Ninth Circuit Opinion). Pursuant to

the government's request -- and as reflected on the proof of

service -- the parties serve copies of all filed papers upon the

government, even though the government is not a party to

the proceeding.

CORPORATE DISCLOSURE STATEMENT

Respondent General Dynamics Corporation has no

parent company, subsidiaries or affiliates which have issued

shares to the public.

TABLE QF CONTENTS

Page

STATUTORY PROVISIONS .......csssccsscssssssscsseeseeeeeecccc. l

STATEMENT OF THE CASE.Q0....scccccccssssssscssseeeeeeeececc..... 2

REASONS FOR DENYING THE ht 6, ea 7

I. THE AWARD OF Costs UNDER RULE

OT i 7

Il. GENERAL DyNaMIcs Dip NOT VIOLATE

THE FALSE CLAIMS ACT......ssssscssssecesessssssscesssssseeeecs.., 12

A. Mr. Willis' Claim Merely

Condemns General Dynamics’

Performance Under Its Contracts

Which Is Not Actionable Under

the False Claims Act ..........ccccsccsceesssseesoss-...... 12

B. Mr. Willis Presented No Credible

Evidence To Support Either His

cs'

Reneate Or His Claims Of

Deficient Performance.............eeccccseecseeec..... 14

sp vi aah oe PES TR A TE 22

iv

TABLE OF AUTHORITIES

Page

Cases

General Atronics Corporation,

ASBCA No. 37923, 91-3 BCA ¥ 24, 047

CRDDE) sci cniitsasscindbihpesesibaitinteasitbitiasantnbeiapubiianalsenmeiaamapee 15n

Hollinger v. Title Capital Corp.,

914 F.2d 1564 (9th Cir. 1990).cccsccccscecseesscseseeesenee 13n

National Information Services, Inc. v.

TRW, Inc.,

RA RTs FL A. | ee ceaereeericoneee 9n

Serna v. Manzano,

GEG FA 2 AGS Cie CA, Be crrcsitcnsetsntnecccatinccnsioncerse 9n

Smith v. Southeastern Penn. Transp. Auth.,

Ce Rm he” is |...) SRE Cem 9n

United States v. Halper,

Te a tildes cahcnbaliecennsaeianestin 12

United States v. Mapelli,

RFE Fe Cr tes BI Natncstecaruictimsssnoniistntenssantions 13n

United States ex rel. Butler v. Hughes

Helicopter Company,

ig ef 5-2. Ts 2. . | Sanne eemnEn 18, 19

United States ex rel. Hagood v. Sonoma

County Water Agency,

929 F.2d 1416 (9th Cir. 1991)................sccscccssrceseseess 12, 13

United States ex rel. Stinson, Lyons, Gerlin &

Bustamante, P.A. v. Prudential Ins. Co.,

ge RE BE fi 5 AGRE PE ersenmenncens 2n

nn nen ee en ne ee

Vv

United States ex rel. Weinberger vy.

Equifax, Inc.,

557 F.2d 456 (5th Cir. 1977), cert. denied,

midleg Bog 5 NOR EE 12

Wang ex rel. United States v. FMC

Corporation,

975 F.2d 1412 (9th Cir. |) nee 6, 13, 14, 19

Statutes

15 United States Code

EE IE vionithinihatic see eracen he A Sens 9

ils cntitictecsananenmincautioctacn, cat. ce 9

cea le Sg g 5 REE ETE oe RE 9

28 United States Code

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co, a, _ SRC A MD eet ate 9

31 United States Code

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1. itil A an eR 13

Section 3730(d)(4) .......c.cececcecececesescevesesees 7, 8, 10n, 11, 12

Federal Rules of Civil Procedure

| Sl a SRR al RRO aS Ia ona 9

LASSE Eee. 2, 6, 7, 8, 9, 10n, 12

STATUTORY PROVISIONS

(Not already noted in the petition)

The Civil False Claims Act, 31 U.S.C. §§ 3729 et seq.

§ 3729. False Claims

(a) Liability for certain acts. Any person who --

(1) knowingly presents, or causes to be presented, to an

officer or employee of the United States Government or a

member of the Armed Forces of the United States a false or

fraudulent claim for payment or approval . . .

is liable to the United States Government for a civil

penalty of not less than $5,000 and not more than $10,000,

plus 3 times the amount of damages which the Government

sustains because of the act of that person... .

(b) Knowing and knowingly defined. - For purposes of

this section, the terms "knowing" and "knowingly" mean that

a person, with respect to information --

(1) has actual knowledge of the information;

(2) acts in deliberate ignorance of the truth or falsity of

the information; or

(3) acts in reckless disregard of the truth or falsity of

the information,

and no specific intent to defraud is required.

2

STATEMENT OF THE CASE

Petitioner Willis, along with his co-plaintiff,

Mr. Lindenthal, brought this gui tam action alleging that

General Dynamics defrauded the government under the civil

False Claims Act, 31 U.S.C. §§ 3729 et seg./ Mr. Willis’

claims arose from General Dynamics’ submission of a

technical data package to the Air Force which Mr. Willis

believes was non-compliant with General Dynamics’

contractual requirements. The courts below found that

Mr. Willis' claims were unsupported, and in any event

amounted merely to a condemnation of General Dynamics'

performance -- an allegation which is not actionable under

the False Claims Act which requires proof that a defendant

knowingly submitted to the government that which it knew

to be a false or fraudulent claim for payment. The court also

awarded costs to General Dynamics under Fed.R.Civ.P.

54(d). Mr. Willis, without presenting any authority in

support of his views, nor any conflict in the law, now

requests that the Court grant certiorari to consider reversing

those decisions.

At issue was a contract between the Air Force and

General Dynamics for the development and production of

eight mobile, ground-based radar systems called MUTES

(Multiple Threat Emitter Systems), a highly complex set of

electronic components that are used to train Air Force pilots

by simulating and emitting signals to pilots which duplicate

those of an enemy attack. The contract also called for

delivery to the Air Force of a technical data package

reflecting the MUTES design. Some, but not all of the

MUTES components were to be depicted in the technical

l/_ The history, background and legislative purpose behind the qui tam

provisions of the False Claims Act are summarized in United States

ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins.

Co., 944 F.2d 1149 (3d Cir. 1991).

3

data package by engineering drawings prepared in

accordance with a military specification called "Level 3"

which would enable the Air Force to use those drawings later

on to buy additional components through competitive

bidding.2/

During the course of General Dynamics' performance,

the Air Force reviewed, audited and evaluated the technical

data package, including the Level 3 drawings to determine

whether it was satisfactory. Deficiencies, i.e., drawing errors

and areas of inadequate descriptive detail, were noted by the

Air Force and corrected by General Dynamics to the

satisfaction of the Air Force which accepted the technical

data package. Petition Appendix B-5 to B-8.

The Air Force later used the General Dynamics’

technical data package to purchase spare component parts

from General Dynamics and other contractors through

competitive bidding. The Air Force also used the technical

data package as the basis for a competition for a contract to

build fourteen additional MUTES systems. That contract

was won by Aydin Corporation, for whom Mr. Willis was

employed as an engineer. Aydin's contract required it to rely

exclusively upon the technical data package the Air Force

2/ Level 3 is described in a military specification called MIL-D-

1000A which states in pertinent part that Level 3 drawings "shall

provide engineering definition sufficiently complete to enable a

competent manufacturer to produce ... item(s) . . . interchangeable

with those of the original design . . . without resorting to additional

product design effort ...." The specification further states that

Level 3 drawings shall: “reflect the end product . . . provide the

engineering data for the support of quantity production . . . [and]

provide the necessary data to permit competitive procurement . . .

of items substantially identical to the original item(s) ...." See

district court's paraphrasing of this specification at Petition

Appendix B-4.

4

received from General Dynamics. This is referred to as a

"build-to-print" contract, which requires the contractor to

build the product precisely according to the technical data

package supplied by the government, and requires the

government to pay additional sums every time the contractor

has to change a drawing because of an error or omission.

Petition Appendix A-4.

According to Mr. Willis, Aydin encountered difficulty

in manufacturing the MUTES because the technical data

package lacked sufficient information to manufacture all of

the components, and some of the drawings contained errors.

The Air Force agreed to increase the price of Aydin's

contract in exchange for converting the contract from

requiring Aydin to "build-to-print” to one which obligated

Aydin to produce MUTES that satisfied the Air Force's

performance requirements. This is referred to as a

"performance specification” contract which obligates the

contractor to produce a system, for the contract price, that

meets the performance requirements of the contract,

regardless of whether the technical data package -- which is

supplied merely as a guide -- is accurate and complete.

Petition Appendix A-4.

Mr. Willis filed this action alleging that the amount of

money which-the Air Force paid to Aydin in accordance with

converting Aydin's contract to a performance specification

contract constituted damages incurred by the United States as

a direct result of General Dynamics providing a deficient

technical data package to the Air Force. Mr. Willis, who was

not a party to the contracts between General Dynamics and

the Air Force, nor involved in any way in those contracts,

alleged (and restates in his petition) that General Dynamics

was required to provide a technical data package that would

be sufficient for another contractor to build entire MUTES

systems under a build-to-print contract. Since the technical

data package ultimately was not used in that manner, but was

instead used first by the Air Force to buy spare parts and then

as a guide to assist Aydin in building entire MUTES systems

under a performance specification contract, Mr. Willis

5

asserted that General Dynamics must have defrauded the

government.

In essence, Mr. Willis would hold General Dynamics

liable under the False Claims Act -- which imposes liability

(in the form of treble damages and penalties) on one who

"knowingly presents, or causes to be presented . .. a false or

fraudulent claim for payment" (31 U.S.C. § 3729(a)(1)) -

solely on the theory of deficient performance under a

‘government contract. Mr. Willis views the primary issue of

this case as one of contract interpretation. According to

Mr. Willis, since General Dynamics' technical data package

did not meet Mr. Willis’ own interpretation of General

Dynamics’ contract requirements, the submission of the

technical data package was a per se violation of the False

Claims Act.

The courts below disagreed with Mr. Willis' factual

assertions about General Dynamics’ contract requirements

and its performance, finding: (a) General Dynamics'

technical data package, including the Level 3 drawings, met

the Air Force's expectations despite the presence of a small

number of minor errors, (b) the technical data package was

never intended to be used for building entire MUTES

systems on a build-to-print contract (in part because the

contract did not require Level 3 drawings for the entire

MUTES system), and (c) General Dynamics did not

knowingly or recklessly submit any false information to the

government in connection with the technical data package or

in connection with anything else. Accordingly, the courts

found that the technical data package was not the basis of

any "false claims" (Petition Appendix A-8). In support of

that finding, the courts relied upon the Air Force's own

acknowledgment that it originally intended the Aydin

contract to be a performance specification contract, not a

build-to-print contract, and that the decision to convert it

back to a performance specification contract was not caused

by any act or omission of General Dynamics. Petition

Appendix B-19.

6

The courts also disagreed with Mr. Willis’ legal theory,

holding, as a matter of law:

Allegations or evidence which amount

merely to a condemnation of a government

contractor's performance of its contracts,

including engineering efforts performed

under those contracts, does not rise to the

level of fraud or liability under the False

Claims Act.

Petition Appendix B-22 (citing Wang ex rel. United States v.

FMC Corporation, 975 F.2d 1412, 1420 (9th Cir. 1992).

In his petition, Mr. Willis asserts that the courts erred

in not adopting his interpretation of General Dynamics'

contract requirements. He disagrees with the finding that

General Dynamics met the government's expectations,

maintaining it was based on Air Force testimony of

"questionable admissibility." Furthermore, Mr. Willis

continues to ignore the elements of proof required to

establish liability under the False Claims Act. His petition --

like his case at trial -- is devoid of any evidence that General

Dynamics violated the False Claims Act. As discussed

below, Mr. Willis' factual and legal assertions are

unsupported, and his petition presents no grounds for

reviewing the case on the merits.

Following the district court's entry of judgment in favor

of General Dynamics (Petition Appendix B), General

Dynamics submitted a bill of costs totaling $246,321.00,

consisting of standard categories of recoverable costs,

including clerk fees, service and subpoena costs, court

reporter/transcript costs, witness fees, exhibit copying costs,

and costs incident to the numerous discovery and trial

depositions which occurred. Relators presented line-item

objections, and the court, after examining in detail the

categories and amounts claimed, ordered an award of costs

under Fed.R.Civ.P. 54(d) in the amount of $50,271.27.

Petition Appendix A-10.

7

Mr. Willis does not question the sufficiency of proof

with regard to the costs; nor does he contest the categories of

costs or the particular amount of the award. Rather, he

asserts, without any supporting authority, that costs under

Rule 54(d) are expressly precluded by the False Claims Act's

provision for "attorneys' fees and expenses" (31 U.S.C.

§ 3730(d)(4)), and that General Dynamics, therefore, was not

entitled to recover any of its costs.3/

The petition presents no conflicting authorities on

either question presented; therefore, there is no basis for

granting a writ of certiorari.

REASONS FOR DENYING THE PETITION

For convenience, the two questions are presented below in

the same order in which they were presented in the petition.

THE AWARD OF Costs UNDER RULE

54(d)(1) WAS PROPER

Petitioner Willis contests General Dynamics’

entitlement to costs under Rule 54(d)(1), which provides that

costs are allowed as of course to the prevailing party

"[e]xcept when express provision therefor is made ... ina

statute ...." He asserts that section 3730(d)(4) of the False

Claims Act -- which provides for an award of "attorneys' fees

and expenses" to a defendant if the qui tam relator’s claim is

proved to be frivolous -- is an express provision that

3/_ Mr. Willis’ petition drops the argument, raised with and rejected by

the Ninth Circuit, that even if the district court had authority to

award costs, it abused its discretion in doing so. Petition Appendix

A-14.

8

displaces the authority the court would otherwise have under

Rule 54(d). Since the district court did not find the action to

be frivolous, and therefore, did not award General Dynamics

its attorneys’ fees and expenses (Petition Appendix B-24),

Mr. Willis asserts that the court had no authority under Rule

54(d) to award costs.

While on its face, section 3730(d)(4) provides

expressly for attorneys’ fees and expenses and does not

contain any provision regarding "costs," Mr. Willis suggests

that the term "expenses" used in section 3730(d)(4) is the

same as the term "costs" used in Rule 54(d). Accordingly,

Mr. Willis believes that a prevailing defendant in a qui tam

action is entitled to recover its costs only if it defendant

proves the relator’s action to be frivolous.

As the Ninth Circuit opinion correctly held:

... we reject this argument because under

the FCA, fees, expenses, and costs are three

distinct categories. ‘Costs,’ under the FCA,

is not a subset of ‘expenses.

Petition Appendix A-12.

Mr. Willis’ petition repeats the unsupported arguments

made below, first pointing to cases in which courts used the

term "costs" in a way which appeared to Mr. Willis to be

interchangeable with the term "expenses." Petition, p. 9.

However, as the Ninth Circuit noted, none of those cases

raised any issue whatsoever regarding the award of costs.

Therefore, those decisions simply do not support Mr. Willis’

view. Petition Appendix A-13. He further claims that "all

prior district courts have denied such costs to prevailing

defendants,” but he does not cite any such decision.

Accordingly, there is not a single conflicting decision upon

which to base the petition for certiorari.

Mr. Willis further contends that since Congress, in

amending the False Claims Act in 1986, intended to

9

encourage more relators to bring qui tam actions, they did

not intend to penalize relators with liability for defendants'

costs, except where their action was frivolous.4/ Again, there

is no citation to any legislative history to support that view.

In fact, there is nothing either in the express language

or in the underlying intent of the False Claims Act, that

precludes a prevailing defendant from recovering Rule 54(d)

costs against a relator. Congress has passed "express

provisions" denying successful litigants recovery of costs.

See, e.g., 15 U.S.C. § 77v(a) (Securities Act) ("No costs shall

be assessed . . ."); 15 U.S.C § 78 (Securities Exchange Act):

15 U.S.C. § 79 (Public Utility Holding Company Act), and

28 U.S.C. § 2465. But in each instance, Congress has used

the precise term "costs" when crafting the limitation on Rule

54. In enacting the 1986 amendments to the False Claims

Act, Congress undoubtedly would have specifically crafted

the Act to limit a prevailing defendant's entitlement to costs

if that had been their objective.

Mr. Willis' efforts to convey an "interrelationship of the

terms fees, expenses and costs" based on his review of

4/ Mr. Willis suggests that the award of costs is an unjust penalty,

given the court's finding that his action was not clearly frivolous.

That perspective is misplaced. Denial of costs to a prevailing party

~ even in a case brought in good faith and closely litigated — is an

abuse of discretion unless the unsuccessful party proves that

prevailing party is guilty of some fault, misconduct, or default

worthy of punishment. See, National Information Services, Inc. v.

TRW, Inc., 51 F.3d 1470, 1472 (9th Cir. 1995) (denial of costs is a

penalty against the prevailing party). Smith v. Southeastern Penn.

Transp. Auth., 47 F.3d 97, 99-100 (3d Cir. 1995) (per curiam);

Serna v. Manzano, 616 F.2d 1165, 1167 (10th Cir. 1980).

Accordingly, the award of costs is not so much a penalty against

Mr. Willis, as the denial of costs would be characterized as a

penalty against General Dynamics.

10

"hundreds of authorities and literature" (Petition, p. 11) is

without legal support.4/ The clear distinction between

"costs" and "expenses" was articulated by the district court:

Costs and expenses are not synonymous, as

costs generally include only those amounts

paid for items specified in 28 U.S.C.

§ 1920.9/ Hairline Creations, Inc. v.

roe 664 F.2d 652, 655-56 (7th Cir.

1981). ... Expenses not properly taxable as

"costs" a are considered "

Dickerson v. Pritchard, 551 F. Supp. 306,

312 (W.D. Ark. 1982) (cited by plaintiff[s]).

Therefore, a court may deny certain

expenses while granting others as costs. A

motion for costs under 28 U.S.C. § 1920 is

5/ Mr. Willis also asserts that when he commenced this action, he did

not intend to risk liability for defendant's costs, asserting that he

could not possibly have been aware of potential liability for costs

under Rule 54(d), which he characterizes as "some obscure

undesignated rule.” Petition, p. 9. Notwithstanding the irrelevance

of Mr. Willis' intent, General Dynamics notes that Mr. Willis was

represented by counsel from the time of commencing his action

through the award of costs.

6/ 280U.S.C. § 1920 states that a judge or clerk of any court of the

United States may tax as costs the following: fees of the clerk or

marshal; fees of the court reporter for all or any part of the

stenographic transcript necessarily obtained for use in the case; fees

and disbursements for printing and witnesses; fees for

exemplification and copies of papers necessarily obtained for use in

the case; and docket fees. These are the categories of costs

recovered by General Dynamics. They are far more narrow and

distinct from the "expenses" which were incurred and which would

have been awarded under section 3730(d)(4) had the court found

the action to be frivolous.

11

governed by Rule 54(d). Crawford F itting

Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 441-

42 (1987).

Petition Appendix D-2 to D-3.

Section 3730(d)(2), for instance,

establishes that when a relator proceeds on

his own behalf and prevails, he shall receive

“an amount for reasonable expenses which

the court finds to have been necessarily

incurred, plus reasonable attorneys’ fees and

costs." 31 U.S.C. § 3730(d)(2). Similarly,

section 3730(g) provides that when the

government intervenes but does not prevail,

28 U.S.C. § 2412(d) shall apply. Section

2412(d), as does section 3730(d)(2),

distinguishes between fees, expenses, and

costs. See 28 U.S.C. § 2412(d)(1)(A) ("a

court shall award to a prevailing party other

than the United States fees and other

expenses, in addition to any costs"). The

language of these two sections strongly

Suggests that costs, under the FCA,

constitute a category distinct from expenses:

as a matter of logic, a court could not award

costs in addition to expenses if costs were

merely a subset of expenses.

Petition Appendix A-12 (emphasis in opinion). Since the

False Claims Act distinguishes between expenses and costs,

the Ninth Circuit correctly held that it would be

"incongruous to conclude that section 3730(d)(4), which

refers only to ‘fees’ and ‘expenses’ constitutes an

provision regarding ‘costs,' despite that it is silent regarding

‘costs. Petition Appendix A-13.

12

The statutes and rules cited above make it clear that an

award of costs under Rule 54(d) is distinct from an award of

attorneys’ fees and expenses under section 3730(d)(4) of the

False Claims Act. Petitioner Willis lacks support for his

contention that such costs are expressly precluded by the

False Claims Act. Accordingly, his arguments are without

merit and present no legal conflict upon which to grant a writ

of certiorari.

Il.

GENERAL DYNAMICS Dip NoT

VIOLATE THE FALSE CLAIMS ACT

A. Mr. Willis' Claim Merely Condemns General

Dynamics’ Performance Under Its Contracts

Which Is Not Actionable Under the False

Claims Act

The False Claims Act is not a remedy for challenging a

contractor's performance under a government contract.

Performance issues are matters of contract administration

which are left to the sole discretion of the government, and

are not within the purview of the False Claims Act. To

prove liability a plaintiff must prove that a defendant

knowingly submitted a false or fraudulent claim for payment

or made false statements knowing them to be false, thereby

cheating the government. United States ex rel. Hagood v.

Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th

Cir. 1991). Indeed, the civil False Claims Act has been

referred to as a fraud statute that is "quasi-criminal” in

nature. See, e.g., United States ex rel. Weinberger v.

Equifax, Inc., 557 F.2d 456, 460 (Sth Cir. 1977), cert.

denied, 434 U.S. 1033 (1978); United States v. Halper, 490

U.S. 435, 449-50 (1989) (applying double jeopardy analysis

to penalty provision).

The False Claims Act defines the "knowing"

submission of a false claim as "actual knowledge,”

"deliberate ignorance,” or "reckless disregard” of the falsity

13

of the information, definitions which uniformly require a

showing of much more than mere negligence. 31 U.S.C.

§ 3729(b)./ Courts have further defined the standard of

liability under the False Claims Act. "The requisite intent is

the knowing presentation of what is known to be false . ae

Innocent mistake is a defense to the criminal charge or civil

complaint. So is mere negligence." Hagood, supra, 929 F.2d

at 1421.

Applying this standard, courts have held, as did the

district court in this action (Petition Appendix B-22), that

allegations or evidence which amount merely to a

condemnation of a government contractor's performance of

its contracts, including engineering efforts performed under

those contracts, do not rise to the level of fraud or liability

under the False Claims Act.

In Wang ex. rel. United States v. FMC Corp., 975 F.2d

1412, 1420 (9th Cir. 1992), the court found that False Claims

Act liability could not be established when allegations

amounted to nothing more than criticisms of defendant's

engineering efforts. There, the qui tam plaintiff alleged that

defendant's engineers made faulty calculations, lacked

engineering insight and produced a defectively designed

product. /d. at 1420-21. The court, taking the allegations as

true, held that the alleged conduct might constitute a mistake

or even negligence, but found that there was no evidence that

V/ The district court also relied upon the correct definition of

“deliberate ignorance” and "reckless disregard.” See Petition

Appendix B-21 to B-22, citing United States v. Mapelli, 971 F.2d

284, 286 (9th Cir. 1993) ("deliberate ignorance” means purposely

contriving to avoid learning true facts or “willful blindness”), and

Hollinger v. Title Capital Corp., 914 F.2d 1564, 1570 (9th Cir.

1990) (“reckless disregard” means conduct that represents an

extreme departure from the standards of ordinary care to the extent

that the defendant must have been aware of it).

14

defendant showed deliberate ignorance of false claims for

payment based on its contract performance: "Proof of ones

mistakes or inabilities is not evidence that one is a cheat” and

“bad math is no fraud." Jd.

Mr. Willis’ allegations amount merely to criticisms of

General Dynamics’ drawing preparation and engineering

efforts. Thus, even if he had proved that General Dynamics’

technical data package was non-compliant with its contract --

which, as discussed below, he did not prove -- he offered the

courts below no evidence which could have given rise to

liability under any of the standards set forth in the False

Claims Act. As discussed below, his petition is similarly

devoid of such evidence.

B. Mr. Willis Presented No Credible Evidence To

Support Either His Interpretation of General

Dynamics’ Contract Requirements Or His

Claims Of Deficient Performance

Notwithstanding that Mr. Willis’ underlying premise of

deficient performance does not rise to the level of fraud or

liability required under the False Claims Act, that premise is

itself unsupported. The courts below found that no false

claims had been made and that General

performance was squarely within the Air Force's contract

requirements and expectations. Nothing in Mr. Willis’

petition casts doubt on that holding.

First, Mr. Willis asserts that the Level 3 specification

unambiguously required the submission of drawings

adequate for building MUTES systems on a build-to-print

contract. (And, according to Mr. Willis, since the technical

data package was not put to that use, General Dynamics must

have defrauded the government.) Yet the Ninth Circuit,

quoting the pertinent language from the specification,

correctly held that it does not contain the words “build-to-

print." "Nowhere does MIL-D-1000A state that Level 3

drawings must be . . . adequate to support a ‘build-to-print’

contract." Petition Appendix A-7. Thus, while Mr. Willis

the specification is not found on its face; rather it is a product

of his (erroneous) interpretation.8/

In addition, Mr. Willis’ interpretation is not supported

anywhere else in the record.9/ He fails to cite any testimony

or evidence which supports his view. His general references

to one witness, Col. Schuster, and a so-called "interpretation

“Level 3” means “build-to-print.” Petition, p. 12 (citing General

Atronics Corporation, ASBCA No. 37923, 91-3 BCA 4 24, 047

9/ In fact, the Air Force witnesses testified that the Level 3

specification is by nature ambiguous. Joseph Giangrosso, the Air

Force Program Manager for the MUTES program, testified, "the

military specification for Level 3 does not tell the contractor or the

Air Force everything that needs to go into the drawings. It leaves a

lot to be interpreted.” Similarly, Col. Thomas Devenny, head of

the Air Force division which oversaw the MUTES program,

testified that a Level 3 requirement only “sets a framework or

spectrum. ... (t}here is a wide range of alternative points within

the system.” in addition, Dr. John Amold, the former chief

civilian in Air Force Range Systems (the office responsible for the

MUTES program), testified that MIL-D-1000A does not

specifically tell a contractor every piece of information that is

required for the drawing; rather, it only gives the contractor a

feeling of the breadth of information required.

16

agreement" are not supported with citations or quotations

because the record does not reflect Mr. Willis’ assertions.

The record reflects the overwhelming evidence

presented by General Dynamics and the Air Force, as to the

meaning of their contract, including the Level 3

specification. First, the contract required Level 3 drawings

for only General Dynamics-built equipment and not for

components bought from vendors. Petition B-5. Mr. Willis

never disputed that contract provision. Thus, even if

Mr. Willis were correct that Level 3 means “build-to-print,"

he ignores the fact that not all of the drawings were required

to be Level 3, and therefore, the technical data package as a

whole could not possibly have been a "build-to-print”

package.

Next, the Air Force witnesses testified that the

technical data package was intended to be used by the Air

Force to buy spare parts through competitive bidding, and

not for buying entire MUTES systems on a build-to-print

basis. Petition Appendix A-9; B-4 to B-5.10/ Mr. Willis

himself quotes Air Force personnel who oversaw the

MUTES program as saying that the technical data package

was not intended for building MUTES systems on a build-to-

print basis, but he fails to rebut that testimony. Petition, pp.

10/ The court relied upon the testimony from Col. Devenny, who stated

that while MIL-D-1000A defines Level 3 as permitting

“competitive procurement, data for competitive reprocurement is

different from data for a build to print contract.” Similarly, Mr.

Giangrosso testified that drawings adequate to support a

“competitive procurement” are not necessarily adequate for a

competitive build to print procurement. Earl Anderson, chief of the

Air Force's reprocurement team responsible for buying the

additional MUTES from Aydin, testified that "[hjaving a Level 3

package and doing an acquisition build to print absolutely does not

mean the same thing.”

17

14-15. Instead of rebutting testimony with citations to the

record, Mr. Willis merely labels testimony that he disagrees

with as "inadmissible," "questionable," and “orchestrated,”

thereby requesting the Court to review the credibility and

admissibility of their testimony. Petition, p. 14.

Further, the evidence established that the completeness

and accuracy required for a Level 3 drawing is tailored

through negotiation and drawing review to fit the needs of a

particular procurement. Petition Appendix B-4. The district

court summarized that process, describing how General

Dynamics and the Air Force worked together on the project:

Both prior to and after the award of the

. .. Contract, General Dynamics and the Air

Force met regularly and frequently,

attempting to reach agreement as to the

scope and specific kind of information that

was required to be placed on the General

Dynamics Level 3 drawings.

**++%

The Air Force regularly monitored and

inspected all aspects of General Dynamics’

performance . . . including . . . the

preparation of the Level 3 drawings.

**+*

The intent of the Air Force's in-process

drawing reviews was to drive major errors

from the drawings. What is considered a

major error depends on how the drawings

are going to be used. In the case of the

MUTES drawings, major errors are those

errors which would prohibit a competent

contractor from reprocuring spares.

**#*

18

[T]he Air Force conducted a series of

Physical Configuration Audits in which

General Dynamics participated. The

Physical Configuration Audits constituted

the formal examination and comparison of

the MUTES hardware with the Level 3

engineering drawings.

***

During the final Physical

Configuration Audit, the Air Force audit

team discovered discrepancies between

General Dynamics’ drawings and the

hardware. The Air Force considered some

of these discrepancies to be minor in nature,

and other discrepancies were noted and

disclosed to General Dynamics on

individual discrepancy sheets.

***

[D]espite the presence of some errors

in the drawings sampled by the Air Force,

the Air Force determined that all of the

drawings, whether or not specifically

reviewed during the audit, satisfied General

Dynamics’ obligation under the . . . contract.

Petition Appendix B-4 to B-7.

Neither Mr. Willis' appellate brief nor his petition

attempts to refute the court's recitation of those events which

show that General Dynamics could not possibly have cheated

the government under those circumstances. The level of

government scrutiny of a contractor's performance has been

considered as a factor in negating claims of fraudulent

conduct by the contractor. In United States ex rel. Butler v.

Hughes Helicopter Company, 71 F.3d 321 (9th Cir. 1995),

another qui tam action, the court found:

19

[T]he overwhelming evidence

established a pattern of cooperation between

the Army and [the defendant] during the

course of a complicated, sophisticated, and

highly technical military procurement

program. ... The evidence established that

all information upon which [plaintiff] bases

his case was not only available to the Army,

but in the Army's possession.

Id. at 326 (quoting the district court's opinion). In Wang, ex.

rel. United States v. FMC Corp., supra, 975 F.2d at 1421,

the court noted the government's own knowledge of

defendant's engineering shortcomings, which supported the

finding that defendant had performed in a manner consistent

with the government's expectations.

The government knew of FMC's

mistakes and limitations, and that FMC was

open with the government about them,

suggests that while FMC might have been

groping for solutions, it was not cheating the

government in the effort. Without more, the

common failings of engineers and other

scientists are not culpable under the Act.

In the instant action, the district court held that "General

Dynamics’ drawings met the Level 3 requirements . . . [and]

[t]he Air Force accepted General Dynamics’ [technical data

package] with full knowledge of the condition of the data

contained therein ...." Petition Appendix B-9. While the

condition of the drawings was not perfect -- as Mr. Willis

insists it was required to be --

[uJnder the contract interpretation

shared by defendant and the Air Force, there

was no expectation that General Dynamics’

drawings would be error-free. The Air

Force and General Dynamics recognized this

20

impossibility and applied practical solutions

aimed at driving out major or significant

errors from the drawings.

Petition Appendix B-23. This finding was

supported by the testimony of Col. Devenny:

I have never bought [a Level 3

drawing package] that was without errors.

These packages contain literally millions of

opportunities for error and current contractor

data systems cannot produce an error-free

data package. . . .[I]t would be unreasonable

for anyone to expect an error-free package

on a complex product such as the MUTES.

In fact, of the claimed errors which Mr. Willis

personally selected to demonstrate the kinds of errors that

were made, about half were not in need of correction by

Aydin (and therefore not subject to Mr. Willis’ claimed

damages); the other half, as the court found, "could fairly be

characterized as minor clerical or typographical errors." Still

others, Mr. Willis eventually admitted, were not caused by

General Dynamics. Petition Appendix B-10. In short, they

did not suggest fraud. Nor did those claimed errors or

anything else suggest that General Dynamics was in any way

responsible for the Air Force's decision to pay additional

sums to Aydin to convert Aydin's contract to a performance

specification contract.

ll/ Regarding that decision by the Air Force, the court found that the

Air Force originally had intended for Aydin to receive a

performance specification contract and use General Dynamics’

technical data package only as a guide. All of the testifying

officials involved in the award of Aydin's contract and Aydin's

performance (except for the contracting officer) testified that the

(Footnote cont'd on next page)

21

In contrast, the evidence showed that the Air Force

received from General Dynamics precisely what it sought,

and that the technical data package was of a very high quality

which the Air Force has used successfully. As Joseph

Giangrosso, Air Force Program Manager for the MUTES

program, testified, "the Air Force was satisfied that the

drawings were meeting the Level 3 standards" and "[bJased

on my experience with various drawing packages, I believe

that GD's drawing package was as good as any other Level 3

drawing packages that I have worked with in the past.”

In sum, despite Mr. Willis' personal and unsupported

assumptions about what General Dynamics was required to

provide -- an error free package suitable for building entire

MUTES systems on a build-to-print basis -- General

Dynamics provided that which the Air Force required. Thus,

even if Mr. Willis could state a cause of action under the

False Claims Act stemming from deficient contract

performance, there is no support in the record for any such

finding.

(Footnote cont'd from previous page.)

contracting officer made a mistake in awarding the Aydin contract

as a build-to-print contract. Thus, the additional sums paid to

Aydin were the result of the Air Force's mistake and had nothing to

do with General Dynamics. Petition Appendix B-15, B-19.

22

CONCLUSION

For the foregoing reasons, the petition for certiorari

should be denied.

Respectfully submitted,

Mark R. Troy

Counsel of Record

Michael T. Kavanaugh

Susan A. Mitchell

McKenna & Cuneo

444 South Flower Street

8th Floor

Los Angeles, California 90071

(213) 243-6170

Counsel for Respondent

General Dynamics Corporation