Petition for Writ of Certiorari — McCoy v. Seaward Marine Services, Inc.

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Supreme Court, U.S.

FILED

No.

LNOV 25 1992

OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

October Term 1992

CHARLES I. McCOY AND SEAVAC

INTERNATIONAL, INC.-USA

Petitioners,

Vv.

SEAWARD MARINE SERVICES, INC.

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

JAMES H. FALK, SR.*

WILLIAM F. CAUSEY

SCOTT A. MILLS

FALK & CAUSEY

2445 M Street, N.W.

Suite 260

Washington, D.C. 20037

(202) 833-8700

Counsel for Petitioners

*Counsel of Record

CASILLAS PRESS, INC., 1717 K STREET, N.W., WASHINGTON, D.C. 20036

QUESTIONS PRESENTED

1. Whether, in a case brought pursuant to the qui tam pro-

visions of the False Claims Act, the United States and private

relators are bound by the contract interpretations of a Govern-

ment employee who lacks authority to contract on behalf of

the United States?

2. Whether a court, in reviewing the evidence on a motion

for judgment as a matter of law, should review all of the

evidence, only the evidence which is favorable to the nonmov-

ing party, or evidence which is undisputed and unfavorable

to the nonmoving party?

PARTIES TO THE PROCEEDING

The parties to this proceeding were the sole parties to the

proceeding below, which was captioned United States of

America ex rel. Charles I. McCoy and Seavac International,

Inc.-USA v. Seaward Marine Services, Inc. Petitioner Charles

I. McCoy was a former supervisory employee of the respon-

dent Seaward Marine Services, Inc. Petitioner Seavac Inter-

national, Inc.-USA is a private underwater hull cleaning con-

tractor. For over ten years, the respondent, Seaward Marine

Services, Inc. (‘‘Seaward’’), has been the exclusive contrac-

tor for worldwide cleaning of the underwater hulls of United

States Navy ships. Petitioner Seavac International, Inc.-USA

is not a parent, subsidiary, or affiliate of any corporation or

public entity. Respondent Seaward Marine Services, Inc.

previously certified to the Court of Appeals below that it is

not a parent, subsidiary, or affiliate of any publicly held cor-

poration, or other publicly held entity.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED..................2-2-22-2 00.

PARTIES TO THE PROCEEDING....................... ii

TABLE OF AUTHORITIES..................-2002222--. V

OPINIONS BRLOW..... 0c. c ccc ccc ccc ccc ccc wccececes l

STATEMENT OF JURISDICTION....................-.. 2

RELEVANT FEDERAL STATUTES AND

ee 2

STATEMENT OF THE CASE.................2002--- 05. 4

REASONS FOR GRANTING THE WRIT................. 9

I. THIS COURT MUST DECIDE THE IMPOR-

TANT FEDERAL QUESTION OF

WHETHER THE DOCTRINE OF ‘‘PRAC-

TICAL INTERPRETATION’ MAY BE

ASSERTED AS A DEFENSE AGAINST

THE UNITED STATES IN A FALSE

EE 9

Il. | THIS COURT MUST RESOLVE A CON-

FLICT AMONG THE CIRCUITS ON

WHETHER THE UNITED STATES MAY

BE ESTOPPED UNDER THE QUI TAM

PROVISIONS OF THE FALSE CLAIMS

ACT BY THE REPRESENTATIONS OF A

GOVERNMENT EMPLOYEE WHO LACKS

AUTHORITY TO CONTRACT ON BEHALF

fe ey iy yy. 12

Ill. THIS COURT MUST RESOLVE THE

SEVERAL CONFLICTS AMONG THE CIR-

CUITS REGARDING THE SCOPE OF AP-

PELLATE REVIEW FROM A JUDGMENT

Pe hee at oe | ere 15

Ce eh bc ie k an da ue een wane eos Cree

APPENDIX:

APPENDIX A: Opinion of Court of Appeals............. la

APPENDIX B: Order and Memorandum

Opinion of District Court............... 10a

APPENDIX C: Initial District Court

Judgment and Jury Verdict............. 27a

APPENDIX D: Order of Court of Appeals

Denying Petition for Rehearing.......... 3la

APPENDIX E: Federal Acquisition Regulations....... one

TABLE OF AUTHORITIES

CASES: Page

Anderson v. Liberty Lobby, Inc.,

re ee i ag ea ae eet a ee 19

Anderson v. Phillips Petroleum Co..,

Obi ©.20 Gol (iOth Cir. 1OGB). 2... wc ccc ccc ecass 18

Argubnight v. Beech Aircraft Corp.,

868 F.2d 764 (5th Cir.), cert. denied,

Se Wits, Wa RI a ov booked nvcc cues swcdcdacusces 17

Astra Pharmaceutical Products, Inc. v. Occupational

Safety and Healih Review Commission,

ee 20

Bettius & Sanderson, P.C. v. National Union

Fire Insurance Co. of Pittsburgh, PA,

839 F.2d 1009 (4th Cir. 1988).................0...... 18

Bigelow v. Agway, Inc.,

we ©.20 SOL GG Cir. IOTE).. .. na cece cca c ccc 16

Boeing Co. v. Shipman,

411 F.2d 365 (5th Cir. 1969)...................... 17, 19

Bornstein v. United States,

OOS F.0d SSS Ct. Cl. FOGS). gw ccc ccc c cer ccece 12

Brown v. McGraw-Edison Co.,

136 F.2d GOB (10th Cir. 1984)... 0... ccc cece cee. 18

California Computer Products Inc. v. International

Business Machines Corp.,

613 F.2d 727 (9th Cir. 1979)................ a Sp oe 18

Carlson v. American Safety Equipment Corp.,

wee © .20 SOG Gat Cir. 1976)... ww. ccc cccssscccccs 16

Page

Castle v. Sangamo Weston, Inc.,

ee Pie Beet Ghee Ge, TOME 6 eck cka vc ccascnenens 18

Central Engineering & Construction Co. v.

United States, 59 F. Supp. 553

ee oi aera seb eb ahsa eee eee earae 11

Clearfield Trust Co. v. United States,

SS ns Ds oc ib Wh oka 6b eK CK ERE R OR 10

Connell v. Sears, Roebuck & Co.,

. ge Bf.) Bo a. | ree 18

Crawford v. Garnier,

i Be @ vay, Be A. re 20

Dace v. ACF Industnes, Inc.,

ge & Sf Do A errr 16

Ellis v. International Playtex, Inc.,

oe Pf ge | rer eer 16

Federal Crop Insurance Corp. v. Mermill,

ee Se OD, a kc wend oe G40 KS RI Ke 12, 13

Feldman v. Simkins Industnes, Inc.,

8 & > Fs a errr errr rrr ee 17

Felton v. Spiro,

ee ee ee Ss 5 hic ah Sie eee 16

Fireman's Fund Ins. Co. v. Videfreeze Corp.,

540 F.2d 1171 (3d Cir. 1976), cert. denied,

ae a Uk, . Sry rrr er yrer 17

Forman v. United States,

ee £ Bs || er rr re 10

Page

Fruge v. Penrod Drilling Co., ~

918 F.2d 1163 (5th Cir. 1990)........................ 17

General American Life Ins. Co. v. Central National

Bank of Cleveland,

136 F.2d 821 (6th Cir. 1943)......................... 16

Gill v. Rollins Protective Services Ce.,

773 F.2d 592 (4th Cir. 1985)......................... 18

Goldberg v. Weinberger,

946 F.2d 477 (2d Cir. 1976), cert. denied,

ee SO Nas elves e's ehv ke vane udder 13

Grant v. Preferred Research, Inc.,

885 F.2d 795 (11th Cir. 1989)........................ 18

Grooms v. Minute-Maid,

267 F.2d 541 (4th Cir. 1959)......................... 19

Hampton v. Hanrahan,

600 F.2d 600 (7th Cir. 1979), modified,

446 U.S. 754, rehearing denied, 448 U.S.

We MY 56008 s bie daeh 0h%s oid ksade Ook loc 17

Hannigan v. Sears, Roebuck & Co.,

410 F.2d 285 (7th Cir.), cert. denied,

We A OE GO 5 Bos ois civ cnn es iceseccdeiginccn. 17

Heckler v. Community Health Services

of Crawford County, Inc.,

ed | 11, 13, 14, 15

Hoffman v. Allied Corp.,

912 F.2d 1379 (11th Cir. 1990)....................... 18

Hughes v. Halifax County School Board,

855 F.2d 183 (4th Cir. 1988), cert. denied,

Oe ee WO OO sis cout dvs sied nnn eeenkcnucecc: 18

Vill

Page

Inventive Music Ltd. v. Cohen,

oi £ 8 Fe Le Rp ree erry 17

J&H Auto Trim, Co., Inc. v. Bellefonte Insurance Co.,

pe @ Bs 0s) Be ae. re 18

Koch Secunty v. Secretary of the Dept. of Health,

Education & Welfare, 590 F.2d 260 (8th Cir. 1978)...... 16

Layne v. Vinzant,

ee fF 8 Be | Rr ee 16

Lee v. Munroe & Thornton,

7 GR Gee, S E, BG. Bie CUBIS). ooo sc cciewecsess 15

Lopez v. A/S D/S Svendborg,

os F F fe | eee ere rere 16

Management Systems Associates, Inc. v.

McDonnell Douglas Corp.,

ee 8) ge Ae rrr 10

Mays v. Pioneer Lumber Corp.,

502 F.2d 106 (4th Cir. 1974), cert. denied,

ek ee ee ee 19

Morelock v. NCR Corp.,

586 F.2d 1096 (6th Cir. 1978), cert. dented,

wR ee ae ae 19

Neville Chemical Co. v. Union Carbide Corp.,

422 F.2d 1205 (3d Cir.), cert. dented,

ee ee oo oe clade daaeneie es 17

Office of Personnel Management v. Richmond,

ey Oe I fo pc euceeeat ec ees eee aan 11,

Old Colony Trust Co. v. Omaha,

ee Se te SG 5s oo ooh s ox dwnaecwers xs 9, 10, 11

Page

Pinkowski v. Sherman Hotel,

313 F.2d 190 (7th Cir. 1963)......................... 17

Quaker City Gear Works, Inc. v. Skil Corp.,

747 F.2d 1446 (Fed. Cir. 1984), cert. dented,

Ste We SOM WO 0c FG oe Vk 18

Richardson by Richardson v. Richardson-Merrell, Inc..,

857 F.2d 823 (D.C. Cir. 1988), cert. dented,

Dee ee oy cer go Pk 18

Scharfenberger v. Holmes,

384 F. Supp 1269 (W.D. Ky. 1974), reversed,

42 F.2d 328 (6th Cir. 1976)......................... 19

Schwetker v.-Hansen,

WE NF FO CII os eee ca cevciccdccusecence,. 15

Schwimmer v. Sony Corporation of America,

459 U.S. 1007, rehearing denied,

459 U.S. 1138 and 1189 (1983).................... 55, 17

Simblest v. Maynard, mn

427 F.2d 1 (2d Cir. 1970)............................ 16

Simon v. Shearson Lehman Bros. Inc.,

895 F.2d 1304 (11th Cir. 1990)....................... 18

Simpson v. Skelly Oil Co..,

371 F.2d 563 (8th Cir. 1967)......................... 16

Strauch v. United States,

Cor Pan arr (rm Ce, 1900).................. ns. 13

Uniroyal, Inc. v. Duke,

AES S. Ct. 429 (1991)... cece cee ccneccee.. 16

Page

United States ex rel. Hagood v. Sonoma County

Water Agency, 929 F.2d 1416 (9th Cir. 1991)............ ll

United States v. Kates,

SiD ©. Dee. GOS GED. PR. IGAR). 5 nc cece senccen 14

United States v. Killough,

BOS FOG GES CLI Cor. 19GB)... 2. cece scsecs 13, 14

United States v. Vonderau,

Be Bey’ Yo IR 13

Williams v. Nichols,

— 8 Be 8 ee 16

Wnght v. Commercial Union Insurance Co.,

oe F fen Be Se, err 18

Wyatt v. Interstate & Ocean Transport Co.,

ee ee Se I So vkie hewn csarcasvenesaces 18

STATUTES:

ee, ele ere a Geel Cau cane yeah RAS 2

i ee eins ae eed Wea ane Re een ie Knee 2

ak oe Gre rer apr rr reir rr re rrr 2

Si U.S.C. Bh Frae Crowe BITES. wn. ce csccescccces passim

REGULATIONS:

Federal Acquisition Regulations,

48 C.F.R. §§ 1.601, 1.602, 2.000, and 2.101........ 2. 33

Page

RULES:

Federal Rules of Evidence,

Se ee IR so ov oe wk cana eeskoksuateuiee 20

TREATISES:

Wright, Law of Federal Courts 4th ed. (1984)............. 17

IN THE

Supreme Court of the United States

October Term 1992

No.

CHARLES I. McCOY AND SEAVAC

INTERNATIONAL, INC.-USA

Petitioners,

SEAWARD MARINE SERVICES, INC.

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Petitioners Charles I. McCoy and Seavac International, Inc.-

USA (‘‘Relators’’) respectfully pray that a writ of certiorari

issue to review a decision of the United States Court of Ap-

peals for the Fourth Circuit, which was entered on August

3, 1992.

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Fourth Circuit is unpublished. The disposition of the Court

of Appeals, affirming the judgment of the United States District

Court for the Eastern District of Virginia, is reported at 972

F.2d 344 (Table), and was entered on August 3, 1992 (Ap-

pendix (“‘App.’’) at la). The decision of the District Court

was entered on May 23, 1991 (App. at 10a). The jury verdict

and initial judgment of the District Court was entered on April

3, 1991 (App. at 27a).

STATEMENT OF JURISDICTION

Relators brought a qui tam False Claims Act complaint in

the United States District Court for the Eastern District of

Virginia, pursuant to 31 U.S.C. §§ 3729 through 3733. The

jurisdiction of the District Court was founded on a federal ques-

tion, pursuant to 28 U.S.C. § 1331. A jury returned a verdict

on April 3, 1991, finding Seaward had knowingly presented

886 false claims to the Navy, resulting in $763,620 in damages,

which were trebled under the provisions of the Act. Judgment

was entered in the amount of $2,290,860. On May 23, 1991,

while a motion was pending for the imposition of $8,860,000

in statutory civil penalties, the District Court set aside the

jury’s verdict and granted judgment as a matter of law in favor

of Seaward, and conditionally granted a new trial. Relators pur-

sued a timely appeal under 28 U.S.C. § 1291.

The judgment of the Court of Appeals, for which review

is now sought, was entered on August 3, 1992, affirming the

District Court’s entry of judgment as a matter of law (App.

at la). On August 31, 1992, an Order was entered denying

a timely petition for rehearing (App. at 3la). The jurisdiction

of this Court is now invoked under 28 U.S.C. § 1254(1).

RELEVANT FEDERAL STATUTES AND

REGULATIONS

The False Claims Act, 31 U.S.C. § 3729(a) and (b):

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;

(2) knowingly makes, uses, or causes to

be made or used, a false record or state-

ment to get a false or fraudulent claim paid

or approved by the Government;

* * *

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 proof of specific intent to defraud is required.

Federal Acquisition Regulations, 48 C.F.R. §§ 1.601, 1.602,

2.000 and 2.101 (App. at 32a).

STATEMENT OF THE CASE

For more than ten years, under the terms of a series of

consecutive, fixed-price, indefinite quantity service contracts,

Seaward has been the exclusive Government contractor for

the underwater cleaning of the hulls and propellers on United

States Navy ships. Two of these contracts, executed in 1984

and 1989, are the subject of this quiz tam False Claims Act

action. Under these two contracts, Seaward billed the Navy

for hundreds of false claims for per diem and mobiliza-

tion/demobilization (‘‘mob/demob’’). Based on evidence that

Seaward had presented hundreds of false claims to the United

States Navy, Relators filed this action under the False Claims

Act, 31 U.S.C. §§ 3729 through 3733.

Throughout the performance of the contracts, Seaward’s

billing procedure successfully eluded the overview of the

Navy’s Contracting Officer, who testified he was never ask-

ed to interpret the per diem or mob/demob reimbursement

provisions of the contracts. No person at Seaward or in the

Navy ever sought the opinion of the Contracting Officer regard-

ing the proper interpretation of the contracts. The Contrac-

ting Officer never delegated to any person the authority to

bind the Government contractually. As a result, the Contrac-

ting Officer was the only person authorized to bind the Govern-

ment to an enforceable contract interpretation.

Seaward, at trial, claimed that Seaward’s and the Navy’s

construction of the contracts was controlling. Seaward claim-

ed that the Navy and Seaward shared a “‘practical interpreta-

tion’ of the contracts throughout the period of Seaward’s per-

formance. However, the testimony of the Contracting Officer

failed to support Seaward’s ‘‘practical interpretation’ defense.

As a result, Seaward was forced to rely at trial upon the

personal post hoc contract interpretation of Michael Dean.

)

Dean, a civilian project manager in the Navy’s Underwater

Ship Husbandry Division, admitted in testimony that he lack-

ed the authority to bind the Government. Dean also admitted

that his interpretations at trial were his own, and were not

based upon any determination or finding by the Contracting

Officer. Furthermore, Seaward’s President admitted that

Dean’s interpretations were only solicited by Seaward after

the Relators’ False Claims Act complaint was unsealed by the

District Court.

Seaward operated the Navy contracts under a set of policies

and interpretations which were at variance with Seaward’s

testimony and interpretations at trial. With respect to Seaward’s

East Coast operations, the contracts required Seaward to

maintain a base of operations in Norfolk, Virginia. To provide

services under the contracts, Seaward maintained several per-

manent diving crews whose areas of operations coincided with

those of the Navy. The contracts obligated the Navy to reim-

burse Seaward for the per diem expenses of its divers ‘‘in-

curred after arrival at and prior to departure froma... remote

worksite. . . .”’ The contracts also provided that the ‘‘limita-

tions applicable to subsistence will be in accordance with the

Joint Travel Regulations [(‘‘JTRs’ ’)] for Department of

Defense civilian employees.’’

Seaward paid per diem to its Florida divers for work per-

formed within a commuting distance of the divers’ Homes.

Seaward and Dean claimed at trial that the contracts unam-

biguously incorporated only the monetary ceilings imposed by

the JTRs, and that other substantive limitations of the JTRs

did not apply.

However, a diver who was formerly employed by Seaward

in Florida testified at trial that Seaward had refused to pay

him per diem for work he performed under the contracts, near

his Florida home. A supervisor for Seaward informed this diver

that it was against Seaward’s policies for the supervisor to

pay any Florida diver per diem for work performed near his

Florida home, unless the diver altered his employment records

and supplied Seaward with a false residential address — even

a post office box number — within commuting distance of

Seaward’s Norfolk offices. No evidence was presented to rebut

the testimony of the former diver regarding Seaward’s post

office box scheme.

The testimony of Seaward’s former diver established that

Seaward knowingly attempted to circumvent the prohibition

in the JTRs against paying per diem for work performed near

an employee’s home. The testimony also directly contradicted

the assertions of Seaward’s President that Seaward paid per

diem regardless of an employee’s residence. Seaward’s

testimony was supported by Dean.

The Court of Appeals concluded that Dean spoke for the

Navy, and that the Relators were, therefore, bound by Dean’s

construction of the per diem provisions of the contracts. No

evidence was otherwise presented to establish that the Navy’s

Contracting Officer, or any other agent with authority, agreed

with Seaward’s and Dean’s contract interpretations at trial.

The jury resolved the conflict in the testimony and found

that Seaward knowingly submitted 448 false claims to the Navy

for reimbursement of per diem paid to Seaward’s divers who

lived and worked in Florida.

Regarding the Government’s reimbursement of Seaward’s

mob/demob expenses, the contracts required the Navy to

reimburse Seaward for its expenses incurred ‘‘to move the

equipment and crew to and from work locations (outside of

the normal base of operations). . . .’’ The contracts further

provided that mob/demob charges may not be incurred ‘‘simul-

taneously’’ with per diem charges, and neither mob/demob

nor per diem expenses could be paid in Norfolk.

Relators argued that Seaward knowingly and falsely billed

the Navy for mob/demob and per diem for 92 return trips to

Norfolk. Relators based their claims on the contracts’ prohibi-

tion that mob/demob did not apply to Norfolk, and on the pro-

vision that mob/demob and per diem were restricted to work

locations outside the base of operations in Norfolk. The

evidence established mob/demob was intended to pay for the

Same expenses which were reimbursed under per diem. The

Navy’s reimbursement of both mob/demob and per diem,

therefore, amounted to a windfall.

Seaward’s President testified that Seaward knew that it billed

the Navy for mob/demob and per diem in the 92 return-trips

to Norfolk. He also testified that he knew that billing the Navy

for demobilization charges and per diem for return trips to Nor-

folk was inconsistent with the contracts. Seaward’s President

also testified that Dean agreed with Seaward’s construction

of the contracts. The testimony of Seaward’s President

demonstrated that Seaward had actual knowledge that the con-

tracts did not permit Seaward to bill the Navy for per diem

and subsistence for the 92 return trips to Norfolk. The testi-

mony of Seaward’s President also established that Seaward

knew it could not bill the Navy for any charges relating to

mob/demob, if those expenses were incurred on the same day

for which per diem reimbursement was sought. Moreover,

Seaward’s President testified that Seaward billed the Govern-

ment for mob/demob incurred on the same day.}

‘A complete reading of the testimony of Seaward’s President indicates

that significant portions of his testimony changed under later cross-

examination. However, Seaward’s President never changed his admis-

sion that the contracts prohibited the reimbursement of the 92 return trips

to Norfolk.

Relators established, and the jury found, through testimony

and evidentiary summaries that Seaward presented a total of

438 false claims to the Navy for mob/demob expenses incur-

red on the same day as per diem, including the 92 return trips

to Norfolk.?

On each of the counts under the False Claims Act, the panel

below made a de novo finding of fact and a conclusion of law.

As to Seaward’s per diem mischarging, the Fourth Circuit

found that the testimony from Seaward’s former diver regard-

ing Seaward’s fraudulent post office box scheme was ‘‘the ac-

tion of a single supervisor in one instance’’ and that it ‘‘did

not amount to a course of conduct’’ (App. at 9an.5). The Court

of Appeals also found that a ‘‘comprehensive reading’’ of the

testimony of Seaward’s President ‘‘allows only one construc-

tion, 1.e., that [Seaward] interpreted the Contracts to permit

same day charges and per diem reimbursement for divers

residing near the remote sites’’ (App. at 9a n.5). The Court

of Appeals concluded that the 92 claims for return trips to

Seaward’s Norfolk base of operations were not false because

2The Court of Appeals ruled de novo that Relators’ evidentiary sum-

maries were inadmissible. The Fourth Circuit made no finding of clear er-

ror or abuse of discretion by the District Court. Relators compiled their

evidentiary summaries of Seaward’s mob/demob claims based upon in-

formation contained in Seaward’s vouchers and cost summary forms. This

information was cross-checked with entries in Seaward’s expense vouchers

and cost accounting calendars. The summaries demonstrated that Seaward

oilled the Navy for mob/demob and per diem for each of the 438 claims

determined by the jury to be false. Dean and Seaward’s own accounting

clerk testified that the Relators’ methodology for compiling the summaries

would result in a very accurate picture of when the diving crews moved

between remote work sites, and that the dates could be obtained, as

Relators did, solely from Seaward’s vouchers and cost summary reports.

Nevertheless, the Court of Appeals ruled that the ‘‘only basis for the

Relator’s assertion that the per diem and mob/demob were paid while the

crew was in Norfolk was informal calendar entries prepared by a Seaward

clerk. The only testimony concerning the meaning of these entries was

given by that clerk.’’ (App. at 9a n6.)

‘‘Relators presented no evidence that the ninety-two claims

were any different from the other claims in which mob/demob

and per diem were paid on the same day’’ for trips between

remote work sites (App. at 9a n.6).

’ sé

The Court of Appeals expressly accepted Seaward’s ‘‘prac-

tical interpretation’ defense. Principally relying upon the

testimony of Dean, and without holding that Dean had the

authority to bind the Government, the Court of Appeals con-

cluded that Seaward’s and Dean’s contract interpretations

were consistent. The Court of Appeals concluded that “Tif

both the contractor and the government interpret the contract

one way throughout the contract’s history, it is unthinkable

that the contractor’s billings which follow this common inter-

pretation could constitute a false claim’’ (App. at 8a). Apparent-

ly, since Seaward’s interpretation at trial was consistent with

Dean’s personal construction of the contracts, the Court of

Appeals affirmed the entry of judgment as a matter of law on

the basis that the Relators failed to establish that Seaward

‘knowingly’ submitted a false claim.

REASONS FOR GRANTING THE WRIT

I. THIS COURT MUST DECIDE THE IMPOR-

TANT FEDERAL QUESTION OF WHETHER

THE DOCTRINE OF “PRACTICAL INTER-

PRETATION” MAY BE ASSERTED AS A

DEFENSE AGAINST THE UNITED STATES

IN A FALSE CLAIMS ACTION

The Fourth Circuit’s panel opinion impermissibly extends

to Federal contract law the equitable doctrine that courts

should not disturb the ‘‘practical interpretation’ of the par-

ties to a contract. The seminal decision from this Court, from

which the defense derives in the Federal court system, is Old

Colony Trust Co. v. Omaha, 230 U.S. 100 (1913).3 In Old

Colony Trust, this Court stated that ‘‘[g]enerally speaking,

the practical interpretation of a contract by the parties to it

for any considerable period of time before it comes to be the

subject of controversy is deemed of great, if not controlling,

influence.’’ Jd., 230 U.S. at 118.

However, the doctrine of ‘‘practical interpretation’’ is deriv-

ed from state contract law in which equitable principles are

applied as defenses to contract disputes. Old Colony Trust,

230 U.S. at 118. The Supreme Court acknowledged in Old

Colony Trust that the ‘‘state [of Nebraska], like individuals,

may be estopped by its act, conduct, silence, and ac-

quiescence.’’ Old Colony Trust, 230 U.S. at 119. In the case

sub judice, the considerable body of Federal common law —

not the equitable principles of state law expressed in Old Coll-

ony Trust — controls the construction of contracts to which

the Federal Government is a party. Clearfield Trust Co. v.

United States, 318 U.S. 363, 366-67 (1943); Forman v. United

States, 767 F.2d 875, 879-80 (Fed. Cir. 1985).

The Fourth Circuit’s opinion in this case relied upon Manage-

ment Systems Associates, Inc. v. McDonnell Douglas Corp.,

762 F.2d 1161, 1172 (4th Cir. 1985) (quoting Old Colony Trust,

230 U.S. at 118). However, the Fourth Circuit failed to cite

any Federal contract case authority in which the principle has

3Seaward failed to establish the necessary elements to the defense of

‘‘practical interpretation,’’ even if such doctrine is applicable in disputes

involving the interpretation of Federal contracts. The ‘‘practical interpreta-

tion’’ upon which Seaward and the unauthorized Navy personnel agreed

was not devised until after this False Claims Act controversy arose.

Seaward and Dean did not discuss their ‘‘mutual’’ interpretations until

after the Relators’ complaint was unsealed. Yet, the mutual contract in-

terpretation upon which a party relies must have existed ‘“‘for any con-

siderable period of time before it comes to be the subject of controver-

sy....’’ Old Colony Trust, 230 U.S. at 118 (emphasis added).

been applied against the Government in a contract dispute.

Cf. Central Engineering & Construction Co. v. United States,

59 F. Supp. 553, 565 (Ct. Cl. 1945) (citing Old Colony Trust)

(court followed the contract interpretations of the parties

where the Contracting Officer and the head of the agency

agreed with the contractor’s interpretation).

The Fourth Circuit’s opinion, without embracing equitable

estoppel, is just another variation of the ‘‘rationales and

analyses’’ by which various Courts of Appeals have searched

‘‘for an appropriate case in which to apply estoppel against

the Government,”’ Office of Personnel Management v. Rich-

mond, 496 U.S. 414, 422 (1990). By applying the doctrine

of ‘‘practical interpretation,’ the appellate court has permit-

ted Seaward to do indirectly what it was prohibited from pur-

suing directly.4

Because the doctrine of ‘‘practical interpretation,”’ express-

ed by this Court in Old Colony Trust, has never before been

recognized by this Court as an equitable bar to the Govern-

ment in a contract action, the opinion of the Fourth Circuit

presents an unsettled and important question of Federal law

which should be decided by this Court.

‘Seaward failed to plead equitable estoppel as an affirmative defense.

The defense was first raised in Seaward’s jury instructions. However,

the District Court rejected Seaward’s proposed jury instruction and ques-

tioned whether equitable estoppel should apply in the case, given the

sovereign function performed under the contracts. The court also prop-

erly questioned whether Dean had the authority to bind the Government.

Moreover, the District Court held that Seaward had failed to establish

the necessary traditional elements of equitable estoppel. See United States

ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1422 (9th

Cir. 1991) (quoting Heckler v. Community Health Services of Crawford

County, Inc., 467 U.S. 51, 61 (1984)) (‘‘defendant’s ‘inability to retain

money that it should never have received in the first place’ is not the kind

of detrimental reliance that justifies estoppel against the government’’).

II. THIS COURT MUST RESOLVE A CON-

FLICT AMONG THE CIRCUITS ON

WHETHER THE UNITED STATES MAY BE

ESTOPPED UNDER THE QUI TAM PROVI-

SIONS OF THE FALSE CLAIMS ACT BY

THE REPRESENTATIONS OF A GOVERN-

MENT EMPLOYEE WHO LACKS

AUTHORITY TO CONTRACT ON BEHALF

OF THE UNITED STATES.

The decision of the Court of Appeals leaves the door of the

United States Treasury ajar without a watchdog. Failing to

reverse the decision of the Court of Appeals will allow future

government contractors to avoid liability created by their false

claims based only upon the testimony of a Government

employee whose only warrant of authority is his Federal

paycheck. Such a holding is clearly contrary to a court’s duty

‘“‘to observe the conditions defined by Congress for charging

the public treasury.’’ Federal Crop Insurance Corp. v. Mer-

nll, 332 U.S. 380, 385 (1947).

If an agent without authority can speak for the Government

to preclude the legitimate prosecution of a gui tam False Claims

Act case, there is no reason why the same voice may not also

bind the Government in a contract dispute, or in any other

action. Clearly, the result herein should not differ simply

because the action is prosecuted by qui tam relators on behalf

of the Government. ‘‘[L]ack of authority is fatal to any claim

of estoppel based on the conduct of an agent.’’ Bornstein v.

United States, 345 F.2d 558, 562 (Ct. Cl. 1965).

However, the Fourth Circuit’s decision binds the Govern-

ment to the unauthorized, personal contract interpretation of

an agent who lacks authority.5 This represents a direct con-

flict with decisions of this Court. See Heckler v. Community

Health Services of Crawford County, Inc., 467 U.S. 51, 66

(1984); Federal Crop Insurance Corp. v. Merrill, 332 U.S. 380,

383-84 (1947).

The Fourth Circuit’s opinion also conflicts with decisions

of other Courts of Appeals on the same matter. See United

States v. Killough, 848 F.2d 1523, 1526-27 (11th Cir. 1988)

(estoppel denied as a defense to a False Claims action, where

Government agent lacked authority); see also Strauch v. United

States, 637 F.2d 477, 482 (7th Cir. 1980) (quoting Goldberg

v. Weinberger, 546 F.2d 477, 481 (2d Cir. 1976), cert. denied,

431 U.S. 937 (1977)).

In United States v. Killough, 848 F .2d 1523, (11th Cir. 1988),

the Eleventh Circuit held that for estoppel to apply against

the Government in a False Claims Act dispute, ‘‘(1) the tradi-

tional elements of estoppel must have been present; (2) the

government must have been acting in its proprietary Capacity

as Opposed to its sovereign capacity; and (3) the government’s

agent must have been acting within the scope of his or her authori-

ty.’’ 848 F.2d at 1526 (citing United States v. Vonderau, 837

F.2d 1540, 1541 (11th Cir. 1988)) (emphasis added). The

defendant in Killough claimed that the Government should be

estopped from prosecuting its civil complaint under the False

*Under the Federal Acquisition regulations, only a Contracting Officer

may bind the Government, to the extent of his authority. ‘“‘Contracting

officer’’ is defined as ‘‘a person with the authority to enter into, administer,

and/or terminate contracts and make related determinations and findings.’’

FAR 2.101, App. at 36a. At trial, Dean acknowledged that his interpreta-

tions, alone, could not bind the Government, and that he must consult

the Contracting Officer to insure that his interpretation is consistent with

the contract. As to all other Government contracts to which Dean had

responsibility, Dean consulted the appropriate Contracting Officers to en-

sure that his interpretations were correct, yet he interpreted the hull clean-

ing contracts ‘‘on [his] own.”’

Claims Act because of the representations of an Assistant

United States Attorney, who agreed to compromise the claims

against the defendants. The Eleventh Circuit held that the

Assistant United States Attorney lacked the authority to bind

the Government to such an agreement. Killough, 848 F.2d

at 1526-27 (citing United States v. Kates, 419 F. Supp. 846,

858 (E.D. Pa. 1976)).

To be sure, as a Government contractor, Seaward had a

duty to familiarize itself with the legal requirements for cost

reimbursement under its Navy contract. When questions arose

concerning per diem and mob/demob cost reimbursement,

Seaward’s own action in consulting Dean and other low-level

contract administrators ‘‘demonstrates the necessity for it to

have obtained an interpretation of the applicable regulations;

respondent indisputably knew that this was a doubtful ques-

tion not clearly covered by existing policy statements.’’®

Heckler v. Community Health Services of Crawford County,

Inc., 467 U.S. at 64.

Yet in this case, Seaward made no attempt to have the ques-

tions resolved by the Contracting Officer; ‘‘it was satisfied

with the policy judgment of a mere conduit.’’ Jd., 467 U.S.

at 65. Seaward, therefore, prepared its invoices and cost sum-

mary reports ‘‘on the basis of an oral policy judgment by an

official who, it should have known, was not in the business

of making policy. That is not the kind of reasonable reliance

that would even give rise to an estoppel against a private par-

ty. It therefore cannot estop the Government.’’ Jd., 467 U.S.

at 66.

6Prior to Relators’ False Claims Act complaint, Seaward consulted con-

tract administrators at the Naval Sea Systems Command for contract in-

terpretations whenever questions arose regarding per diem.

This Court left open the question of ‘‘whether an estoppel

claim could ever succeed against the Government.’’? Office

of Personnel Management v. Richmond, 496 U.S. at 423. See

Heckler v. Community Health Services of Crawford County,

Inc., 467 U.S. at 68 (REHNQUIST, J., concurring) (‘‘our

cases have left open the possibility of estoppel against the

Government only in a rather narrow possible range of cir-

cumstances’’); Schweiker v. Hansen, 450 U.S. 785, 792 (1981)

(per curiam) (MARSHALL, J., dissenting) (‘‘we will know an

estoppel when we see one’). Because a conflict exists among

the circuits, and because the Fourth Circuit’s opinion presents

an important question of Federal law which has not, but should

be, resolved by this Court, a writ of certiorari should issue

to review the decision of the Fourth Circuit.

III. THIS COURT MUST RESOLVE THE SEVERAL

CONFLICTS AMONG THE. CIRCUITS RE-

GARDING THE SCOPE OF APPELLATE RE—

VIEW FROM A JUDGMENT AS A MATTER

OF LAW

In Schwimmer v. Sony Corporation of America, 459 U.S.

1007, 1008-09 (per curiam) (WHITE, J., dissenting), rehear-

ing denied, 459 U.S. 1138 and 1189 (1983), this Court declined

to grant a petition for writ of certiorari to resolve the con-

siderable conflict among the circuits concerning the scope and

the nature of proof required in an appellate court’s review of

“Since the doctrine of equitable estoppel against the United States was

first addressed by this Court in Lee v. Munroe & Thornton, 7 Cranch 366,

3 L. Ed. 373 (1813), the Supreme Court has reviewed the application of

the doctrine in several subsequent cases. In no case has the Supreme Court

ever held the Government to be estopped contractually by the represen-

tation or conduct of its agents. See Office of Personnel Management v. Rich-

mond, 496 U.S. at 422: Heckler v. Community Health Services of Crawford

County, Inc., 467 U.S. at 66-67 (REHNQUIST, J., concurring).

a judgment notwithstanding the verdict. The need for resolv-

ing this conflict has not abated with the passage of time. See

Uniroyal, Inc. v. Duke, 112 S. Ct. 429 (1991) (denial of writ

of certiorari to the Fourth Circuit to review conflict among

circuits regarding the scope of review of judgment notwith-

standing the verdict). Lacking a uniform rule, Federal Courts

of Appeals have adopted four different approaches to deciding

this issue.

The first approach, employed by the Eighth® and Sixth®

Circuits, limits the court’s review to the evidence of the non-

moving party to determine if it supports the jury’s verdict.

At various times the Fourth Circuit has adopted this ap-

proach. !°

The second approach, adopted by the First,!! Second, !?

8Dace v. ACF Industnes, Inc., 722 F.2d 374, 376 (8th Cir. 1983)

(‘‘evidence produced by the prevailing party must be disregarded’’),

rehearing denied, 728 F.2d 976 (8th Cir. 1984) (per curtam); Koch Secun-

ty v. Secretary of the Dept. of Health, Education & Welfare, 590 F.2d 260,

261 (8th Cir. 1978) (citing Williams v. Nichols, 266 F.2d 389, 393 (4th

Cir. 1959)); Stmpson v. Skelly Oil Co., 371 F.2d 563, 567 (8th Cir. 1967).

9Felton v. Spiro, 78 F. 576, 582-83 (6th Cir. 1897); General Amencan

Life Ins. Co. v. Central National Bank of Cleveland, 136 F.2d 821, 823

(6th Cir. 1943).

10See, e.g., Williams v. Nichols, 266 F.2d 389, 393 (4th Cir. 1959)

(quoting Felton v. Spiro, 78 F. 576 (6th Cir. 1897)); Ellis v. International

Playtex, Inc., 745 F.2d 292, 298 and at 298 n. 1 (4th Cir. 1984) (‘‘the

[trial] court’s sole duty is to examine the sufficiency of the evidence

tendered by the party opposing the motion’’; “‘ignoring defendant’s

evidence’’).

‘Layne v. Vinzant, 657 F.2d 468, 472 (1st Cir. 1981); Carlson v.

Amenican Safety Equipment Corp., 528 F.2d 384, 385 (1st Cir. 1976) (‘‘We

examine the facts in the light most favorable to plaintiff, but without neg-

lecting the uncontradicted evidence introduced by defendant’’).

127 opez v. A/S D/S Svendborg, 581 F.2d 319, 321 (2d Cir. 1978); Bigelow

v. Agway, Inc., 506 F.2d 551, 554 (2d Cir. 1974) (‘‘evidence favorable

to [the nonmovant] may be considered only if evidence stands uncon-

tradicted and unimpeached’’); Stmblest v. Maynard, 427 F.2d 1, 4-5 (2d

Cir. 1970).

Third, 13 and Seventh" Circuits, requires the court to consider

both favorable and undisputed, unfavorable evidence to the

nonmovant.!§

The third approach, adopted by the Third,16 F ifth,!” Ninth, !*

'3Inventive Music Ltd. v. Cohen, 617 F.2d 29, 33 (3d Cir. 1980) (cited

in Schwimmer v. Sony Corporation of Amencca, 459 U.S. at 1009 (WHITE,

J., dissenting).

‘Hampton v. Hanrahan, 600 F.2d 600, 608 (7th Cir. 1979), modified,

446 U.S. 754, rehearing denied, 448 U.S. 913 (1980) (on motion for

directed verdict, the court must consider ‘‘all the evidence — disregard-

ing conflicting, unfavorable testimony — and extract all the reasonable in-

ferences therefrom’’). But see Hannigan v. Sears, Roebuck & Co., 410

F.2d 285, 288 (7th Cir.), cert. denied, 396 U.S. 902 (1969) (on motion

for directed verdict or motion for JNOV, the court is obliged to ‘‘view

all the evidence’’); Pinkowski v. Sherman Hotel, 313 F.2d 190, 192 (7th

Cir. 1963) (on motion for directed verdict, the court ‘‘must look to all

the evidence in the record’’).

‘SCommentators have favored variations of this approach. See, e.g.,

Wright, Law of Federal Courts 4th ed. (1984), at 642 (‘‘court may con-

sider all of the evidence favorable to the . . . party opposing the motion’’,

taking into account ‘‘evidence supporting the moving party that is uncon-

tradicted and unimpeached, at least to the extent that this evidence comes

from disinterested witnesses’’).

'6Neville Chemical Co. v. Union Carbide Corp., 422 F. 2d 1205, 1212

n. 7 (3d Cir.), cert. denied, 400 U.S. 826 (1970) (adopting a standard which

requires the judge to view all the evidence); accord Fireman’s Fund Ins.

Co. v. Videfreeze Corp., 540 F.2d 1171, 1177-78 (3d Cir. 1976), cert. denied,

429 U.S. 1053 (1977) (court appeared to view all the evidence, stating

that “‘it is the function of . . . the jury .. . to weigh contradictory

evidence’’).

‘7 Boeing Co. v. Shipman, 411 F.2d 365, 374-77 (Sth Cir. 1969) (‘‘[o}n

motions for directed verdict and for judgment notwithstanding the verdict

the Court should consider all of the evidence — not just that evidence

which support the non-mover’s case. . .”’); Argubright v. Beech Aircraft

Corp., 868 F.2d 764, 766 (5th Cir.), cert. denied, 493 U.S. 934 (1989)

(the court ‘‘must also consider all evidence in the case, rather than just

the evidence favorable to the nonmovant’ '); Fruge v. Penrod Drilling Co.,

918 F.2d 1163, 1165-66 (5th Cir. 1990).

'8Feldman v. Simkins Industries, Inc., 679 F.2d 1299, 1303 (9th Cir.

1982) (on motion for directed verdict, the court ‘‘must consider all the

(continued on next page)

————

Tenth, 9 Eleventh,° District of Columbia,?! and Federal?? Cir-

cuits, requires a cuurt to consider all the evidence presented,

both favorable and unfavorable to the nonmovant. The Fourth?

evidence’’); California Computer Products, Inc. v. International Business

Machines Corp., 613 F.2d 727, 732-34 (9th Cir. 1979) (the court must

consider all evidence, both favorable and unfavorable to the nonmovant).

19Anderson v. Phillips Petroleam Co., 861 F.2d 631, 634-35 (10th Cir.

1988) (in an ADEA case, the court viewed both parties’ evidence on mo-

tion for directed verdict); Brown v. McGraw-Edison Co., 736 F.2d 609,

615-16 (10th Cir. 1984) (court considered all evidence, but resolved con-

flicts in favor of nonmovant).

20Hoffman v. Allied Corp., 912 F.2d 1379, 1383 (11th Cir. 1990) (on

motion for summary judgment, ‘‘[t]he court must view all evidence most

favorably toward the nonmoving party . . .’”); Simon v. Shearson Lehman

Bros., Inc., 895 F.2d 1304, 1310 (11th Cir. 1990) (on motion for JNOV,

‘‘fajll of the evidence presented at trial must be considered’’) (quoting

Castle v. Sangamo Weston, Inc., 837 F.2d 1550, 1558 (11th Cir. 1988));

Grant v. Preferred Research, Inc., 885 F.2d 795, 798 (1ith Cir. 1989)

(‘‘courts must consider all of the evidence’’); Wnght v. Commercial Union

Insurance Co., 818 F.2d 832, 834 (11th Cir. 1987) (on motion for directed

verdict, ‘‘the court must consider all evidence, not just evidence favoring

the nonmovant’’); /&H Auto Trim Co., Inc. v. Bellefonte Insurance Co.,

677 F.2d 1365, 1368 (11th Cir. 1982) (reconsidering all the evidence).

21 Richardson by Richardson v. Richardson-Merrell, Inc., 857 F.2d 823,

827 (D.C. Cir. 1988), cert. denied, 493 U.S. 882 (1989) (‘‘The court must

consider all of the evidence offered by the parties’’).

22Quaker City Gear Works, Inc. v. Skil Corp., 747 F.2d 1446, 1454 (Fed.

Cir. 1984), cert. dented, 471 U.S. 1136 (1985) (on motion for directed ver-

dict and motion for JNOV, the court must ‘‘consider all the evidence’’)

(quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1546 (Fed.

Cir. 1983)).

23Hughes v. Halifax County School Board, 855 F.2d 183, 185 (4th Cir.

1988), cert. denied, 488 U.S. 1042 (1989) (in ruling on a motion for a

directed verdict ‘‘the district court must consider the record as a whole’’);

Gill v. Rollins Protective Services Co., 773 F.2d 592, 594 (4th Cir. 1985)

(in deciding a motion for JNOV, ‘‘the trial court must consider the record

as whole’); Wyatt v. Interstate & Ocean Transport Co., 623 F.2d 888,

891 (4th Cir. 1980) (in ruling on a motion for JNOV, the ‘‘court must con-

sider the record as a whole and in the light most favorable to the party

opposed to the motion’’); see also Bettius & Sanderson, P.C. v. National

Union Fire Insurance Co. of Pittsburgh, PA, 839 F.2d 1009, 1014 (4th

and Sixth”4 Circuits have also employed this approach.

This fourth approach is expressed in the Fourth Circuit’s

panel opinion below. This approach requires ‘‘a comprehen-

sive reading’’ of all the testimony, including evidence which

is conflicting, impeached, and unfavorable to the nonmoving

party (App. at 9a n.5). However, this approach has the

greatest risk of encroaching upon the jury’s province as sole

fact-finder, because it permits a court to reweigh conflicting

evidence. As such, a party’s Seventh Amendment right to trial

by jury is usurped by judicial fiat.

In considering a motion for judgment notwithstanding the

verdict (t.e., judgment as a matter of law), this Court has

specifically prohibited any court to weigh the evidence, or to

draw factual inferences in favor of the moving party. Ander-

son v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (‘‘Credi-

bility determinations, the weighing of the evidence, and the

drawing of legitimate inferences from the facts are jury func-

tions, not those of the judge. . . . The evidence of the non-

movant is to be believed, and all justifiable inferences are to

be drawn in his favor’’). The Fourth Circuit’s ‘‘comprehen-

sive reading’’ approach is therefore contrary to the established

precedent of this Court.

To be sure, federal circuits need guidance from the Court

on the proper standard for reviewing the sufficiency of the

evidence.

Cir. 1988); Mays v. Pioneer Lumber Corp., 502 F.2d 106, 108 (4th Cir.

1974), cert. dented, 420 U.S. 927 (1975); Grooms v. Minute-Maid, 267

F.2d 541, 543 (4th Cir. 1959).

?4Morelock v. NCR Corp., 586 F.2d 1096, 1103-05 (6th Cir. 1978), cert.

denied, 441 U.S. 906 (1979) (on motion for JNOV in ADEA case, court

looked at both parties’ evidence); see also Scharfenberger v. Holmes, 384

F. Supp. 1269, 1272 (W.D. Ky. 1974), reversed, 542 F.2d 328 (6th Cir.

1976) (quoting Boeing Co. v. Shipman, 411 F.2d 365 (5th Cir. 1969)) (‘‘the

federal standard requires consideration of ‘all [of] the evidence — not just

that which support the non-mover’s case’ ’’).

The decision here by the Fourth Circuit, presenting three

insular, substantial evidentiary issues,?5 is well suited to enable

this court to provide the necessary guidance for the federal

circuits. Therefore, a writ of certiorari should issue to review

the decision of the panel of the United States Court of Ap-_— -

peals for the Fourth Circuit.

25After a ‘‘comprehensive reading,’’ the panel below found that

Seaward’s President did not mean what he said when he testified that it

was ‘“‘improper for Seaward to bill the government for demobilization

charges on the same day that per diem charges were being billed and in-

curred.’’ The Court reached its conclusion without considering that the

above testimony of Seaward’s President later changed under cross-

examination by Seaward’s counsel. Relators submit that the Fourth Cir-

cuit failed to read the conflicts in the testimony in the light most favorable

to support the jury’s verdict.

Secondly, the panel below failed to give all reasonable inferences to the

admissions of Seaward’s supervisor regarding the improper payment of

per diem to Florida divers. These admissions were admissible under

801(d)(2)(D), Fed. R. Evid. See Crawford v. Garnier, 719 F.2d 1317, 1324

(7th Cir. 1983) (personnel officer’s statement to applicant that he should

falsify his employment application to qualify for a federal employment pro-

gram held admissible). These admissions, which directly conflicted with

the testimony of Seaward’s President on the same issue, went unrebut-

ted and constitute substantial evidence. Astra Pharmaceutical Products,

Inc. v. Occupational Safety and Health Review Commission, 681 F.2d 69,

74 (1st Cir. 1982) (unrebutted admissions of a party’s agent regarding

illegal occupational practices were substantial evidence). —

Third, the Fourth Circuit ignored testimony from Seaward’s and

Relators’ witnesses which conflicts with the Court’s de novo evidentiary

finding regarding Relators’ evidentiary summaries of improper mob/demob

charges. A ‘‘comprehensive reading’’ of the testimony of Seaward’s cost

accountant, Dean, and Relators’ witnesses would have confirmed the

District Court’s holding that the summaries were not based on Seaward’s

accounting calendars. Moreover, the Fourth Circuit erred in the absence

of its finding any error or abuse of discretion by the trial court, which ad-

mitted the summaries.

CONCLUSION

For the foregoing reasons, this Court should grant the writ

and reverse the decision below.

Respectfully submitted,

JAMES H. FALK, SR.*

WILLIAM F. CAUSEY

SCOTT A. MILLS

FALK & CAUSEY

2445 M Street, N.W.

Suite 260

Washington, D.C. 20037

(202) 833-8700

Counsel for Petitioners

*Counsel of Record

APPENDIX

APPENDIX A

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 91-1642

United States of America, ex rel.

Charles I. McCoy; Seavac

International, Incorporated-USA

Plaintiffs-Appellants,

Seaward Marine Services, Incorporated,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of Virginia at Alexandria.

James C. Cacheris, Chief District Judge.

(CA-89-1323-A)

Argued: July 6, 1992

Decided: August 3, 1992

Before WILKINS, NIEMEYER, and HAMILTON, Circuit

Judges.

Affirmed by unpublished per curiam opinion.

COUNSEL

ARGUED: Scott Alton Mills, FALK & CAUSEY

Washington, D.C. for Appellants. Jerome P. Facher, HALE

& DORR, Washington, D.C. for Appellee. ON BRIEF:

James H. Falk, Sr., James H. Falk, Jr., John M. Falk, FALK

& CAUSEY, Washington, D.C., for Appellants. James L.

Quarles, II], HALE & DORR, Washington, D.C.; Buel White,

Richard H. Saltsman, VERNER, LI[PFERT, BERNHARD,

MCPHERSON & HAND, Washington, D.C., for Appellee.

Unpublished opinions are not binding precedent in this circuit.

See I.0.P. 36.5 and 36.6.

OPINION

PER CURIAM:

Charles McCoy and Seavac International Inc.! (the

‘‘Relators’’) appeal the district court’s order granting judg-

ment as a matter of law in favor of Seaward Marine Services,

Inc. (Seaward) and, in the alternative, a new trial. Fed. R.

Civ. P. 50, 59. The Relators brought this qui tam? action under

the False Claims Act, 31 U.S.C. §§ 3729-33 (the Act).

The Relators alleged that Seaward submitted false claims to

the United States Navy (Navy) in connection with its contracts

for providing ship hull-cleaning services. The Relators

claimed that Seaward improperly: (1) billed for the cost of per-

forming a partial hull-clean when the cost was in excess of a full

\McCoy is a former employee of Seaward who now works for Seavac.

Seavac is a direct competitor of Seaward.

2A qui tam action is an action brought by individual(s) under federal law

which provides for a penalty for the commission or omission of a certain

act. The penalty, recoverable in a civil action, is shared by the govern-

ment and the individual(s). Qui tam literally means ‘‘on behalf of.’’ Black's

Law Dictionary 1251 (6th Ed. 1990). Such an action is called a qui tam

action because ‘‘the plaintiff states that he sues as well for the state as

for himself.’’ Jd.

hull-clean, (2) billed the Navy for mileage costs and per diem

reimbursement on the same day, and (3) billed the Navy for

per diem reimbursement for diverse residing in the same area

in which contract work was performed.

The jury returned a verdict in Seaward’s favor on the first

claim and in the Relators’ favor or the second and third claims

in the amount of $763,620, which was trebled under provi-

sions of the Act.

Finding that the Relators failed to carry their burden of pro-

ving a false claim, the district court granted judgment as a mat-

ter of law in favor of Seaward, and in the alternative a new

trial. This appeal followed.

We agree with the holding of the district court that the

Relators failed to show that Seaward knowingly submitted a

false claim to the United States Government, therefore, we

affirm the decision of the district court.?

Seaward is a private contractor that performs a substantial

amount of contract work for the Navy. Its services primarily

consist of underwater cleaning of hulls and propellers on a

variety of Navy ships. To provide this service, Seaward main-

tains teams of divers in zones which cover the Navy’s areas

of operations. Seaward provided these services in accordance

with three consecutive fixed-price, indefinite quantity con-

tracts. The particular contracts under which Seaward allegedly

mischarged the Navy were the 1984 and 1989 contracts

(Contracts).

With respect to the East Coast operations, the Contracts

required Seaward to maintain a base office in Norfolk, Virginia.

‘Our decision obviates the necessity of considering the district court’s

conditionally granting a new trial.

The Contracts provided that the Navy would reimburse

Seaward for the per diem expenses of its divers, at a flat rate,

as follows:

The Contractor will also be reimbursed for the

reasonable actual subsistence costs (including lodg-

ing) incurred after arrival at and prior to departure

from a CONUS [Continental United States] re-

mote work site . . . . The limitations applicable to

subsistence will be in accordance with the Joint

Travel Regulations for Department of Defense

[JTRs)]....

(Contracts Joint Appendix J.A.) 1540, 1394). With respect

to the East Coast operations, a remote work site is any

worksite other than the home base in Norfolk. The amount

of the per diem reimbursement varied from location to loca-

tion, depending on the monetary limitations established by the

JTRs.

The Contracts also allow Seaward a fixed amount per mile

for the costs of moving men and equipment to a remote work

site — referred to as mobilization — and the same amount

per mile for the cost of returning men from the remote work

site — referred to as demobilization.

Mobilization/Demobilization are the total costs in-

cluding crew salary incurred by the Contractor to

move the equipment and crew to and from work loca-

tions [i.e. remote work sites] (outside of the nor-

mal base of operations) cited in the Task

Assignment.

(Contracts J.A. 1392, 1538). The Contracts provide that these

charges, collectively referred to as mob/demob charges, could

not be incurred ‘‘simultaneously’’ with per diem charges, and

——— <<<

neither mob/demob nor per diem expenses could be paid for

operations in Norfolk. (Contracts J.A. 1394, 1540).

Seaward paid the per diem to its men for each day they were

present at a remote work site. Seaward also billed for

mob/demob costs for every day the men and equipment were

in transit from or to a remote work site. As a result of these

practices, on days when a crew arrived at or departed from

a remote work site, Seaward billed for both mob/demob costs

and per diem reimbursement. This is because, on such days,

the crew was present at the remote work site for part of the

day and in transit for part of the day. If the crew was in tran-

sit for an entire day and neither arrived nor departed a remote

work site on that day, they did not receive a per diem reim-

bursement. The Relators contend that this policy violated the

Contracts’ provisions against billing mob/demob costs and per

diem costs simultaneously.

Seaward paid the per diem to divers at remote sites even

though some of the men maintained residences near the

remote work site. The Relators contend that this policy was

fraudulent. Although the contract does not specifically prohibit

this, the Relators contend that the Contracts’ reference to

the JTRs incorporated the substantive provision of those

regulations which, among other restrictions, precluded the pay-

ment of per diem expenses within the area of residence.

At trial, two witnesses from the Navy with contracting

responsibility testified. One, the contracting officer, John

Vollmer, was called by the Relators. The second, Michael

S. Dean, the head of the Navy’s Underwater Ship Husbandry

Division, was called by Seaward.

Mr. Vollmer was the procuring officer with authority to sign

and execute contracts on behalf of the Navy. Vollmer testified

that Seaward was entitled to bill for per diem reimbursement

—

incurred at work sites other than Norfolk, Virginia. He did

not specifically testify that mob/demob and per diem could not

be paid on the same day or that it was improper to seek per

diem reimbursement for divers who lived near a remote work

site. Vollmer did testify that Dean was the official responsible

for overseeing the Contracts. Dean stated that he was respon-

sible for the day-to-day supervision of the Contracts, that he

initiated necessary changes, and that he wrote the 1989 con-

tract. He testified that any location outside of Norfolk was a

remote work site and that Seaward was entitled to reimburse-

ment of per diem costs, regardless of the divers’ residence,

so long as the diver was at a remote work site. He further

testified that no provisions of the JTRs applied to the parties’

contractual relationship, other than the monetary ceiling limita-

tions, and that it was permissible for Seaward to bill

mob/demob and per diem costs on the same day, provided

the crew arrived or departed the remote work site on that day.

Seaward’s President, John Armstrong, also testified that

it was his understanding that the JTRs did not apply to the

Contracts outside of the monetary ceiling limitations. He con-

firmed that Seaward paid per diem regardless of the divers’

residence and billed for per diem and mob/demob expenses

on the same day if the divers were both present at the remote

work site and traveled on that day.

The district court determined that the unambiguous mean-

ing of the word ‘‘simultaneously’’ did not encompass ‘‘on the

same day.’’ Furthermore, the district court stated that, even

if the term was ambiguous, the clear testimony of both par-

ties was that the Contracts permitted same day charges for

per diem and mob/demob. The district court held, therefore,

that Seaward was entitled to judgment as a matter of law on

the same day charge claim.

With respect to the Relator’s claim that it was improper,

pursuant to the JTRs, to bill for per diem at remote work sites

for divers who resided near those sites, the district court noted

that the parties to the Contracts also agreed the JTRs, ex-

cept with respect to per diem monetary limitations, did not

apply to the Contracts. The residence of a diver, therefore,

was irrelevant. The district court held that Seaward was en-

titled to judgment as a matter of law on this claim.

The standard for granting a judgment as a matter of law is

essentially the sarne standard as that used for granting sum-

mary judgment. In discussing the relevant inquiry on motion

for summary judgment and motion for directed verdict,‘ the

Supreme Court stated: ‘‘the primary difference between the

two motions is procedural . . . In essence, though, the in-

quiry under each is the same; whether the evidence presents

sufficient disagreement to require submission to a jury or

whether it is so one sided that one party must prevail as a

matter of law.’’ American v. Liberty Lobby, Inc., 477 U.S. 242,

251 (1986).

Ill

We agree with the district court’s holding. In order to state

a claim in this gui tam action, the Relators were required to

plead and prove that Seaward:

knowingly present[ed] or caus[ed] to be presented,

to an officer or employee of the United States

Government, or member of the Armed Forces of

the United States a false or fraudulent claim for pay-

ment or approval.

*As of December 1, 1991, both the directed verdict and judgment not-

withstanding the verdict are referred to collectively as ‘‘Judgment as a

Matter of Law’’ under Fed. R. Civ. P. 50.

31 U.S.C. § 3729(a)(1) (emphasis added). The use of the term

‘‘knowingly’’ has a special meaning within the context of the

Act.

Knowing and Knowingly defined — For purposes of

this section, the terms ‘‘knowing’’and ‘‘knowlingly’”’

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 proof of specific intent to defraud is required.

31 U.S.C. § 3729(b).

The Relators’ claims are based on an alleged false inter-

pretation of the Contracts by Seaward. As the district court

noted, even if there is ambiguity in a contract, the parties’

construction of that contract generally controls. Management

Sys. Assocs. v. McDonnell Douglas Corp., 762 F.2d 1161, 1172

(4th Cir. 1985), (citing Cole v. Indus. Fibre Co., 157 S.E.2d

857 (N.C. 1931)). If both the contractor and the government

interpret the contract one way throughout the contract’s

history, it is unthinkable that the contractor’s billings which

follow this common interpretation could constitute a false claim.

Dean, the Navy’s hull cleaning program director, contract

technical advisor, and the author of the 1989 contract, testified

that the per diem and mob/demob costs billed to the Navy

by Seaward were appropriate. Armstrong, the President of

Seaward also testified to this effect.5 It cannot be said,

therefore, that Seaward ‘‘knowingly’’ submitted a false claim.®

The Relators failed to show an essential element of a false

claims action and judgment as a matter of law was appropriate.

Accordingly we affirm the decision of the district court grant-

ing judgment as a matter of law in favor of Seaward.

AFFIRMED

5The Relators claim that there is a conflict in Armstrong’s testimony

~ on this point. We agree with the district court, however, that a comprehen-

sive reading of Armstrong’s testimony allows only one construction, t.e.,

that Armstrong interpreted the Contracts to permit same day charges and

per diem reimbursement for divers residing near the remote sites, The

Relators also argue that the actions of a Seaward supervisor, in informing

a diver who lived near a remote site that he could not receive the per

diem, indicated that Seaward’s true interpretation was that the Contracts

did not permit payment of per diem to divers residing near a remote site.

However, the action of a single supervisor in one instance does not amoun‘.

to a course of conduct, particularly when there was no evidence that the

supervisor was told this was the proper interpretation of the Contracts,

and where Seaward billed the Navy in accordance with Armstrong’s in-

terpretation and contrary to the supervisor’s action.

6The Relators emphasize that, at least with respect to ninety-two par-

ticular claims, it is clear that per diem charges were improperly billed.

They base this on Armstrong’s testimony that billing for per diem, whi'e

the crew was in Norfolk, was improper, and the summary of expense

documentation indicated that demob to Norfolk occurred on the same day

that travel to Norfolk occurred. The Relator’s effort to differentiate these

claims fails for two reasons. First, the only basis for the Relator’s asser-

tion that per diem and mob/demob were paid while the crew was in Nor-

folk was informal calendar entries prepared by a Seaward clerk. The only

testimony concerning the meaning of these entries was given by that clerk.

She testified that the entries did not mean the crew was paid per diem

in Norfolk. Secondly, the Relators presented no evidence that the ninety-

two claims were any different from the other claims in which mob/demob

and per diem were paid on the same day, i.e., no evidence was given that

the crew was not present at the remote site sometime during the day

the per diem was paid.

10a

APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

ALEXANDRIA VIRGINIA

Civil Action No. 89-1323-A

UNITED STATES OF AMERICA, ex rel.

CHARLES I. McCOY and

SEAVAC INTERNATIONAL, INC.,

Plaintiffs,

SEAWARD MARINE SERVICES, INC.

Defendant.

ORDER

For the reasons stated in the accompanying memorandum

opinion, the defendant’s motion for judgment n.o.v. is

GRANTED and the defendant’s motion for a new trial in the

alternative is GRANTED.

The Clerk shall forward copies of this order to all counsel

of record.

James C. Cacheris

United States District Judge

May 23, 1991

Alexandria, Virginia

lla

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

ALEXANDRIA VIRGINIA

Civil Action No. 89-1323-A

UNITED STATES OF AMERICA, ex rel.

CHARLES I. McCOY and

SEAVAC INTERNATIONAL, INC.,

Plaintiffs,

SEAWARD MARINE SERVICES, INC.

Defendant.

MEMORANDUM OPINION

Before the court are two motions; (1) defendant Seaward

Marine Services, Inc. moves for judgment n.o.v. or, alter-

natively, a new trial, and (2) plaintiffs and relators Charles I.

McCoy and Seavac International, Inc. move the court to set

statutory civil penalties based upon the jury verdict of April

13, 1991.

I. Procedural History

Six categories of alleged false claims have been adjudicated

in this case.

The relators claimed that Seaward submitted false claims

by paying and billing for per diem expenses to its divers at

a flat-rate, instead of paying and billing for only the actual per

12a

diem expenses of its divers. The court granted summary judg-

ment to Seaward on this issue on March 8, 1991, holding that

this did not constitute a false claim. At that time, the relator

also agreed that two allegations in their complaint were not

| valid causes of action under the False Claims Act: the claim

that Seaward altered or forged invoices and the claim that

Seaward had supplied illegal gratuities to Navy personnel. Ac-

cordingly, the court struck these claims from the complaint

on March 8, 1991. An order clarifying this ruling was issued

on March 15, 1991.

The remaining five categories of claims went to trial. At the

close of all of the evidence, the court granted a directed ver-

dict to the defendant on two claims and part of a third. The

court dismissed the claim that it was improper for Seaward

to bill the Navy for a ‘‘full clean’’ of its ships when a full clean

had been ordered but not performed due to the shallowness

of the water. The court also dismissed the claim that it was

improper to bill for a ‘‘full clean’’ of a ship while also billing

for the use of certain instruments to clean special parts of the

same ship. In addition, the relators had maintained that it was

a false claim for the sum of the charges under a partial clean

to exceed the amount chargeable under the full-clean contract

provisions, Line Item 0001. The court held this that claim was

cut off as of October 3, 1986, due to a contract amendment.

Accordingly, this claim was sent to the jury only for the time

period before October 3, 1986.

On April 3, 1991, the jury returned its verdict on the re-

maining claims. It returned a defendant’s verdict on the allega-

tion that it was a false claim to bill for partial cleaning charges

which exceeded the cost of a full clean. The jury returned a

plaintiffs’ verdict on the other two counts. The jury found that

the defendant’s billing the Navy for mobilization/demobiliza-

tion costs (‘‘mob/demob’’) and per diem costs at the same time

13a

constituted a false claim. The jury also found that the defen-

dant’s payment of per diem costs to Seaward divers living in

the Jacksonville/Mayport, Florida area constituted a false claim.

Between these two categories, the jury found that Seaward

had submitted 886 false claims.

The defendant has moved for judgment n.o.v. or a new trial

in the alternative. The relators have made no motion regard-

ing the one claim resolved in favor of the defendant by the jury.

I. Standards of Review

A. The Standard for Considering a

Judgment N.O.V. Motion

‘‘INOV should not be granted unless the evidence is so clear

that reasonable men could reach no other conclusion than the

one suggested by the moving party.’’ Persinger v. Norfolk &

Western Railway Co., 920 F.2d 1185, 1189 (4th Cir. 1990).

Yet, a ‘‘mere scintilla’’ of evidence in support of the non-

moving party’s case is not sufficient to withstand judgment

n.o.v. Crinkley v. Holiday Inns, Inc., 844 F.2d 156, 160 (4th

Cir. 1988). In considering this motion, the evidence and all

inferences must be viewed in the light most favorable to the

non-moving party, and ‘‘the credibility of all evidence favor-

ing the non-moving party is assumed.”’ Jd.

The relators have misstated this standard in their brief in

opposition to judgment n.o.v. Citing Ellis v. International

Playtex, Inc., 745 F.2d 292 (1984), they argue that the court

should not consider the evidence presented by the defendants

when contemplating judgment n.o.v. and that doing so would

constitute an impermissible weighing of the evidence. This is

not so. The Ellis court held that the court should not weigh’

the plaintiff’s evidence against the defendant’s in considering

14a

judgment n.o.v. It did not hold that that defendant’s evidence

is irrelevant. For example, this evidence may fill in gaps in

‘the plaintiff's case and demonstrate the failure of the plain-

tiff’s theory, and it may establish conclusively an affirmative

defense. See, e.g., E.E.O.C. v. State of Delaware Department

of Social Services, 865 F.2d 1408, 1414-16 (rd Cir. 1989) (the

defendant’s evidence was considered in deciding whether judg-

ment n.o.v. should be granted to the defendant based on an

affirmative defense).

B. The Standard for Considering a Motion for a

New Trial

The standard for considering a motion for a new trial under

Federal Rule of Civil Procedure 59 is different than the stand-

ard for Judgment n.o.v., and it is less onerous to the moving

party:

On such a motion it is the duty of the judge to set

aside theVerdict and grant a new trial, if he is of

the opinion that the verdict is against the clear weight

of the evidence, or is based upon evidence which

is false, or will result in a miscarriage of justice, even

though there may be substantial evidence which

would prevent the direction of a verdict. The exer-

cise of this power is not in derogation of the nght

of trial by jury but is one of the historic safeguards

of that nght.

Gill v. Rollins Protective Services Co., 836 F.2d 194, 196 (4th

Cir. 1987), quoting Aetna Casualty & Surety Co. v. Yeatts,

122 F.2d 350, 352-53 (4th Cir. 1941).

C. The Elements of a False Claims Act Claim

In order to state a claim, the plaintiff must plead and prove

(1) that the defendant presented or caused to be presented

a claim for payment to the United States, (2) that the claim

was false or fraudulent, and (3) that the defendant’s submis-

sion of a false claim was ““knowing.”” 31°U.S.C. V 38Z%a) and

(b). This usage of “‘knowing’’ in the False Claims Act has a

special meaning.

On October 27, 1986, Congress amended the False Claims

Act. Among other things, it defined the meaning of the word

‘‘knowingly’’ as it is used in the following representative phrase

in the Act: ‘‘Any person who. . . knowingly presents... .

a false or fraudulent claim for payment or approval . . . is liable

to the United States Government.’ 31 U.S.C. § 3729. This

is the new statutory definition of ‘‘knowingly:”’

(b) Knowing and knowingly defined. — For pur-

poses 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 proof of specific intent to defraud is required.

31 U.S.C. § 3729(b).

This section is partially ambiguous. If prong (b)(1) was read

literally, it would create strict liability for the validity of claims

submitted to the government. More specifically, a person

isin

l6a

knowingly who submits a claim to the government that is false

would be liable, even if: (a) he had no knowledge of the falsity

of the claim, (b) he was not deliberately indifferent to the truth

or falsity of the claim, and (c) he did not act with a reckless dis-

regard to the truth of (sic) falsity of the claim. This reading would

eviscerate any purpose for adding prongs (b)(1) and (b)(2).

It also would not comport with the apparent intent of Con-

gress in making this amendment. Congress did not intend to

create liability for mere negligence; instead, it intended to pre-

vent companies from engaging in ostrich-like behavior in order

to avoid liability. This legislative history is recounted in United

States v. Entin, 750 F.Supp. 512, 518 (S.D. Fla. 1990).

Accordingly, this court reads prong (b)(1) to permit liability

where the defendant has actual knowledge of the falsity of the

information. This gives meaning to prongs (b)(2) and (b)(3),

which permit liability in cases of ‘‘deliberate ignorance’’ and

‘reckless disregard,’’ respectively.

III. Defendant’s Argument in Favor of Judgment

N.O.V. — Mob/Demob

At issue is the meaning of a provision of the contract be-

tween Seaward and the Navy, which states ‘‘[t]he Contrac-

tor may not incur costs under Line Item 0015! and Line Item

1Line Item 0015 states:

iMobilization/Demobilization are the total costs including crew salary in-

curred by the Contractor to move the equipment and crew to and from

work locations (outside of the normal base of operations) cited in the Task

Assignment. The contractor will be reimbursed on the basis of the number

of miles travelled multiplied by the mileage rate as specified in the Schedule

for CONUS locations. The mileage rate is the sum total of all costs incur-

red per mile to Mobilize and Demobilize men and equipment to complete

the assigned task.

17a

001801 stmultaneously.’’ (Emphasis added). Line Item 001801

is the provision regarding the payment of per diem subsistence

costs. Line 0015 concerns mobilization and demobilization

(‘‘mob/demob’’) costs. Relators contend that this provision ~

prohibits billing for mob /demob and per diem expenses on

the same day. In fact, the relators’ theory relies on this inter-

pretation, and its brief implies that judgment n.o.v. is ap-

propriate if their interpretation is wrong. Seaward contends

that this provision only prohibits billing for mob/demob and

per diem at the same time, and that it does not prohibit billing

per diem and mob/demob on the same day as long as the mob

or demob ends before that day is over.

At the heart of this issue is the meaning of the word

‘‘simultaneously.’’ If this term’s meaning is unambiguous, then

the court can interpret the contract as a matter of law. In the

False Claims Act arena, it is the province of the court to in-

terpret the contract as a matter of law. In United States v.

Race, 632 F.2d 1114 (4th Cir. 1980), the court held that the

meaning of a contract provision ‘‘was purely a matter of law

for the court, which should have granted the defendants’ mo-

tion to dismiss’’ because the contract did not support the plain-

tiff’s theory of the case. Jd. at 1120. See also United States

v. Hanger One, Inc., 406 F.Supp. 60, 84 (N.D. Ala. 1975),

rev'd on other grounds, 563 F.2d 1155 (5th Cir. 19 77) (holding

that the construction of a contract in a False Claims Act case

is a matter of law for the court to resolve); Sherwood Distill-

ing Co. v. Reconstruction Finance Corp., 201 F.2d 42, 46 (4th

Cir. 1952) (in a non-False Claims Act case, the court stated

the general proposition that the interpretation of contracts is

‘‘wholly within the province of the Court’’). If the term is am-

biguous, then appropriate extrinsic evidence may be con-

sidered in interpreting it.

18a

It is a close call as to whether the word ‘‘simultaneously’’

is ambiguous in the context of the present lawsuit. Although

it cuts against their position, the relators have argued in their

previous memoranda that ‘‘simultaneously’’ should be accord-

ed its primary dictionary definition. The dictionary definition

was also the basis for the contention of the President of relator

Seavac, Gregory Dies, that mob/demob and per diem cannot

be billed on the same day. See, e.g., Dies Dep. at 960.

According to Webster’s Ninth New Collegiate Dictionary,

‘‘simultaneous’’ means ‘‘existing or occurring at the same

time: exactly coincident.’’ Webster’s Ninth New Collegiate Dic-

tionary, p. 1099 (1986). The relators have expanded this dic-

tionary definition by asserting that mob/demob and per diem

costs incurred on the same day cannot both be reimbursed.

The relators have not cited any other provision of the con-

tract to support their ‘‘on the same day’’ gloss on the term

‘‘simultaneously.’’ As a matter of common sense, two events

can occur on the same day and not be simultaneous. The court

would have been justified in granting summary judgment to

the defendant on this basis.

Yet, the court allowed this claim to proceed to trial and go

to the jury on the possibility that the parties both understood

this provision to prohibit billing on the same day (i.e., course

of performance meaning), or the possibility that this usage of

‘‘simultaneously’’ had a special meaning in the defense con-

tracting industry (usage of trade). In addition, as the Fourth

Circuit has often stated, it is appropriate in close cases to allow

a claim to go to the jury and grant judgment n.o.v. afterward

so that retrial might be avoided if the grant of judgment n.o.v.

is reversed on appeal.

Assuming arguendo that ‘‘simultaneously’’ is ambiguous,

the best evidence for interpreting the contract is the parties’

understanding. As the Fourth Circuit has stated:

19a

The general rule, is that, where, from the language

employed in a contract a question of doubtful mean-

ing arises, and it appears that the parties themselves

have interpreted their contract, practically or other-

wise, the courts will ordinarily follow such interpreta-

tion, for it is to be presumed that the parties to a

contract know best what was meant by its terms,

and are less liable to be mistaken as to its purpose

Management Systems Associates, Inc. v. McDonnell-Douglas

Corp., 762 F.2d 1161, 1172 (4th Cir. 1985), quoting Cole v.

Fibre Co., 200 N.C. 484, 157 S.E. 857 (1931). This state-

ment of law originated in Old Colony Trust Co. v. Omaha,

230 U.S. 100, 118, 33 S.Ct. 967, 972 (1913), where the court

stated that ‘‘the practical interpretation of a contract by the

parties for any considerable period of time before it comes

to the subject of controversy, is deemed to be of great, if not

controlling, influence.’’ 33 S.Ct. at 972.

As an aside, in the False Claims Act arena, the premise that

the parties’ interpretation of the contract is the preferred type

of extrinsic evidence is a matter of common sense and fairness.

While the Act is civil in name, it is punitive in nature. If a con-

tract is ambiguous, and if both the contractor and the govern-

ment have interpreted it one way throughout the contract’s

history, it is unthinkable that the contractor’s billings which

follow this common interpretation could constitute a false claim.

Any lingering doubt about the meaning of ‘‘simultaneous-

ly’’ was removed at trial.2 The pertinent view of the Navy's

2In their most recent brief, the relators’ counsel argued, inter alia, that

the court ruled that the claims which were submitted to the jury were

false claims as a matter of law. The court made no such ruling. When jury

instructions were being discussed, the court began to read from a stock

(continued on next page)

20a

interpretation was supplied by Michael Dean, who was the

Navy official entrusted with the overall responsibility of manag-

ing the contract. Dean testified that the contract permitted

the billing of per diem and mob/demob on the same day. The

relators were unable to shake Dean from this position. They

speculate in their brief in opposition to judgment n.o.v. that

Dean must have been lying in order to avoid becoming the

scapegoat for False Claim Act violations during his tenure. Yet,

the relators were unable to elicit any testimony to support

their speculation.

In previous motions, the relators have argued repeatedly

that Dean’s testimony is irrelevant because he was not the

contracting officer on the at-issue contract, and, thus, he had

no authority to alter that contract. The relators miss the point

of Dean’s testimony. In the case of ambiguity, the understan-

ding of the parties becomes relevant. Dean’s testimony cast

light on the Navy’s understanding of the word ‘‘simultaneous-

ly’’ during the time period at-issue. Yet, even if intent of the

contracting officer, John Vollmer, is somehow more relevant,

he did not testify that ‘‘simultaneously’’ meant ‘‘the same

day.’’ In fact, although he was not questioned extensively on

this issue, he testified that the contract only prohibited billing

for per diem and mob/demob ‘‘at the same time.”’ (Trans.

p. 60).3

jury instruction which contained language indicating that the court had found

the at-issue claim to be false. This was not a finding regarding the case

at bar, and the court ultimately sent the issue of the falsity of the claims

to the jury. Indeed, if one examines the portion of the transcript upon

which this argument is based, it is clear that this instruction was offered

by the court erroneously and not given to the jury.

3This was the one question on this issue which was posed to Vollmer

by the relators’ counsel:

MR. MILLS QUESTIONING MR. VOLLMER:

Q What is meant by simultaneous?

A The mobilization/demobilization is Item 13, and while in transit, both

of these line items could not be incurred at the same time.

2la

The relators hang their hat on one colloquy between defense

counsel and Seaward’s president, R. John Armstrong; yet,

this passage does not support their position. The relators argue

that he admitted that mob/demob and per diem cannot be bill-

ed on the same day. Yet, the relators omitted from their brief

a portion of this colloquy, in which Armstrong qualifies his posi-

tion and states that it would be impermissible to bill for demob

and per diem when the crew is returning to Norfolk. This com-

ports with the court’s understanding of Armstrong’s

testimony.

‘This is the complete portion of Armstrong’s testimony:

MR. MILLS QUESTIONING MR. ARMSTRONG:

Q Didn’t Mr. Dean agree with your opinion of your policy at

Seaward that it would be improper for Seaward to bill the government

for demobilization charges on the same day that per diem charges were

being billed and incurred?

Yes.

And isn’t that in fact the policy of Seaward?

What?

Not to bill per diem and demobilization charges on the same day?

Yes.

Isn’t that not only the policy of Seaward, but also Seaward’s con-

tract interpretation?

A I think — did you just say the policy not to bill demob back to Norfolk

aid subsistence on the same day?

Q Correct. Isn’t that the policy?

A That's the policy, yes.

Q Isn't that also Seaward’s contract interpretation of the hull cleaning

contract?

A Yes.

Orroroo >

Q Do you agree that if Seaward knowingly incurred per diem on the

same day that it incurred demobilization, that that practice would be a

breach of the hull cleaning contract?

ses &

A_ It would be a mistake. I’m not sure all the other factors [sic] that

would have to come into play.

Transcript pp. 122-24 (emphasis added).

aii iii

22a

Perhaps in recognition of the weakness of its position,

relators argue as follows:

Defense counsel attempts to create a smoke screen

on the issue, claiming that Mr. Armstrong’s

testimony applied only to demob back to Norfolk.

Defendant’s position really misses the point. The

issue of the parties’ contract interpretation depends

not on where the mob/demob occurred, but when it

occurred, and whether the charge to the government

constituted a simultaneous incurrence of cost with

per diem. Clearly, whether it was mob or demob

is irrelevant to the point which Mr. Armstrong ad-

mitted: billing the government would be wrong if the

charges were incurred on the same day.

(Relators’ brief in reply to Seaward’s reply to relators opposi-

tion to Seaward’s motion for judgment n.o.v. or a new trial

in the alternative, p. 6). This argument is erroneous. By his

testimony, Armstrong meant that one could not bill for per

diem on the day when a crew was demobilizing back to Nor-

folk because per diem could not be paid to crew members in

Norfolk. Armstrong’s thesis was that if the crew were going

anywhere other than Norfolk, once mobilization was over, per

diem could be billed for the remainder of the of the day.

In addition, once this colloquy with Armstrong is understood,

there is no evidence that Seaward ‘‘knowingly’’ submitted a

false claim. No witness and no exhibit indicated that Seaward

knew that this claim was false (which it was not), or that

Seaward was deliberately ignorant of the truth or falsity of

its claim, or that it recklessly disregarded the truth or falsity

of its claim.

In sum, the jury verdict on this issue must be set aside

because these claims were not false and the requisite intent

23a

was not proven. The relators have attempted to place a gloss

on the word ‘‘simultaneously’’ that is not supported by either

the plain language of the contract or the understanding of par-

ties. Judgment n.o.v. is granted to the defendant on this issue.

IV. Defendant’s Argument in Favor of Judgment

N.O.V. — Florida Divers

The parties’ dispute revolves around contract Line Item

1801, which states: ‘‘The limitations’ applicable to sub-

sistence will be in accordance with the Joint Travel Regula-

tions for Department of Defense civilian employees.’’ (Em-

phasis added). Seaward argues that the word “‘limitations’’

only refers to the monetary ceilings in the Joint Travel Regula-

tions (‘‘JTR’’) and not to any other regulations regarding reim-

bursement. Relators argue that the word ‘‘limitations’’ incor-

porated other regulations in addition to monetary limits and

that these other regulations made it improper to pay per diem

to divers who lived in the Jacksonville/Mayport, Florida area

when they performed work in that area.

This contract provision is ambiguous; it is unclear how much

of the JTR was incorporated. Thus, extrinsic evidence was

admitted at trial in order to resolve the matter. Because the

relators bore the burden of proving that the at-issue claims

were false, they bore the burden of proving that the word

‘‘limitations’’ incorporated more than just monetary limits.

Seaward’s Anderson testified that Seaward had interpreted

‘‘limitations’’ to mean only that the dollar limits in the JTR

applied, and that Seaward’s understanding was that divers

could be paid per diem as long as they were away from Nor-

folk. Dean, the Navy official who managed this contract,

testified unequivocally that only the JTR monetary limitations

were incorporated. (Trans. p. 41). Vollmer’s testimony merely

parroted the language of the contract. He stated, without

24a

providing any clarification or elaboration, that the ‘‘limitations’”’

in the JTR applied.®

The only other testimony that must be addressed is that

of Admiral Thompson, the relators’ expert witness on the in-

terpretation of the JTR. Because the issue is the meaning of

the ambiguous word ‘‘limitations’’ in the parties’ contract, his

testimony is not relevant. He did not testify about the mean-

ing of this term in the parties’ contract, and being a total

stranger to the contract, he would have been incapable of do-

ing so.

In sum, once it is established that the word “‘limitations’’

has an ambiguous scope, which the court has held, as a mat-

ter of law, then the relators have produced no evidence to

support their interpretation of that phrase. The evidence ad-

duced at trial indicated that Seaward and Dean interpreted the

contract to mean that the monetary limitations in the JTR ap-

« _ plied, and Vollmer’s testimony provided no relevant informa-

tion. The only reasonable conclusion, based upon the contract

5The following is all of the testimony elicited from Mr. Vollmer on this

issue:

MR. MILLS QUESTIONING MR. VOLLMER

Q Were there limitations placed upon the payment of per diem?

A There’s a ceiling that we apply, Joint Travel Regulations.

Q But were there limitations? Were there limitations placed on per

diem or on the payment of subsistence?

A Yes.

Q_ And what limitations were applicable in this case, in this contract?

A For the reasonable actual subsistence costs.

Q Does the contract refer to any other documents to place limitations

on the payment of per diem?

A The Joint Travel Regulations for the Department of Defense Civilian

Employees.

Q Would those limitations apply to employees of the contractor?

A Yes.

25a

and this testimony, is that both parties interpreted the con-

tract in a way favoring Seaward’s position.

As an aside, the court notes the incompleteness of the

relators’ theory. In addition to not showing that their theory

reflected the understanding of the parties, they produced no

other way of discerning which ‘‘limitations’’ in the JTR were

incorporated other than the monetary limits. In their brief in

opposition to this motion, they state:

Those limitations would include Joint Travel

Regulations Part D (Glossary of Terms), Part L (Per

Diem), and Appendices A & E, all of which were

submitted to the jury as plaintiffs, exhibits, without

prejudice from the defendant.

(Pl. Br. in Oppo. p. 14). Based upon a footnote in the relators’

brief, the relators may also contend that Part J of the JTR ap-

plies. These provisions might have some relevance to per diem

limitations, although that is the purpose of the entire JTR. The

relators have not pointed to any contract language, any

understanding of the parties, or any known industry

understanding which indicates that these sections were incor-

porated into the parties’ contract and not the other provisions

of the JTR. Most likely, these provisions were selected by

the relators only because they best supported this particular

attempt at finding a false claim. The court cannot charge the

defendant with this after-the-fact interpretation of ‘‘limita-

tions.”’

Accordingly, the relators failed to carry their burden of pro-

ving a false claim, and judgment n.o.v. is granted to Seaward

on this issue.

V. The New Trial Motion

This motion is not mooted by the grant of judgment n.o.v.

According to Federal Rule of Civil Procedure 50(c), the court

26a

should rule conditionally on the motion for a new trial even if

judgment n.o.v. is granted.* United States v. Steed, 674 F.2d

284, 289 (4th Cir.), cert. dented, 459 U.S. 829 (1982) (although

this is a criminal case, this rule of civil procedure was applied);

Mays v. Pioneer Lumber Corp., 502 F.2d 106, 110 (4th Cir.

1974), cert. dented, 420 U.S. 927 (1975). Indeed, because the

motion for a new trial is within the discretion of the trial court

(Wilhelm v. Blue Bell, Inc., 773 F.2d 1429, 1433 (4th Cir.

1985), cert. denied, 475 U.S. 1016 (1986)), the trial court has

an obligation to make a conditional ruling so that it can be

reviewed, if necessary.

For the reasons stated above, the court finds that the jury’s

verdict is against the clear weight of the evidence. The court

can discern no significant evidence which supports the con-

tract interpretation advanced by the relators. The plain

language of the two key words, ‘‘simultaneously’’ and ‘‘limita-

tions,’’ does not support their position, and neither does in-

terpretation of the parties. Thus, the motion for a new tnal

is granted in the alternative.

VI. Conclusion

Since the court has granted judgment n.o.v., or a new trial

in the alternative, on both of the jury verdicts rendered in favor

of the relators, there is no need to consider the relators’ mo-

tion to set civil penalties. This judgment is final. An order

reflecting these rulings will accompany this memorandum

opinion.

May 23, 1991 James C. Cacheris

Alexandria, Virginia United States District Judge

6In pertinent part, Rule 50(c)(1) states:

If the motion for judgment notwithstanding the verdict, provided for in

subdivision (b) of this rule, is granted, the court shall also rule on the mo-

tion for a new trial, if any, by determining whether it should be granted

if judgment is thereafter vacated or reversed, and shall specify the grounds

for granting or denving the motion for the new trial.

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——————<e- eee

27a

APPENDIX C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF VIRGINIA

ALEXANDRIA DIVISION

CASE NUMBER: CA-89-1323-A

UNITED STATES OF AMERICA EX. REL.

CHARLES I.MCCOY & SEAVAC,

INTERNATIONAL, INC.

SEAWARD MARINE SERVICES, INC.

JUDGMENT IN A CIVIL CASE

x] Jury Verdict. This action came before the Court for a

trial by jury. The issues have been tried and the jury has

rendered its verdict.

() Decision by Court. This action came to trial or hearing

before the Court. The issues have been tried or heard and

a decision has been rendered.

IT IS ORDERED AND ADJUDGED that judgment is hereby

entered in favor of the plaintiff, United States of America Ex.

Rel. Charles I. McCoy and SEAVAC International, Inc. in the

amount of $2,290,860.00 against the defendant, Seaward

Marine Services, Inc.

28a

Judgment is entered in accordance with the Special Inter-

rogatories submitted to the Jury. (copy of interrogatories

attached)

April 3, 1991 DORIS R. CASEY

Date Clerk

RUTH WARDMAN

(By) Deputy Clerk

29a

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division FILED

IN OPEN COURT

APRIL 3 1991

Clerk,

Civil Action 89-1323-A Alexandria, Virginia

USA, ex rel. CHARLES I. McCOY, et al.,

Plaintiffs,

SEAWARD MARINE SERVICES, INC.,

Defendant.

INTERROGATORIES

(1) Did the defendant, Seaward Marine Services, Inc., know-

ingly submit false or fraudulent claims as to the following

categories of claims:

a. Charging more for partial cleaning services than the

allowable charge for a full clean.

Yes No _+

b. Charging simultaneously for a Mob/Demob and per

diem expenses.

Yes _- No

c. Charging per diem for divers living in the Mayport,

Florida area?

Yes _« No

(An answer of yes is a verdict in favor of the plaintiffs and

an answer of no is a verdict in favor of the defendant.)

If you answered any part of question (i) yes, state total

number of knowing false claims for each category.

30a

a 0

b 438

Cc 448

Also state the total actual damages to the United States for

each category of knowing false claims.

a. 0

b. $235,815.00

$527,805.00

Total damages (the total of a, b, andc, above) = $763,620.00

Multiply the damages by ‘‘3.’’ That amount is $2,290,860.00.

Dated: 4/3/91 Kelly Colinda

Foreperson

/s/ Ruth Wardman

3la

APPENDIX D —

August 31, 1992

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 91-1642

CA-89-1323-A

UNITED STATES OF AMERICA ex rel.:

CHARLES I. MCCOY; SEAVAC

INTERNATIONAL, INCORPORATED-USA

Plaintiffs-Appellants

Vv.

SEAWARD MARINE SERVICES, INCORPORATED

Defendant-Appellee

On Petition for Rehearing with

Suggestion for Rehearing In Banc

Appellants filed a petition for rehearing with sugggestion for

rehearing in banc. No member of the Court requested a poll

on the suggestion for rehearing in banc, and the original judicial

panel voted to deny the petition for rehearing.

The Court denies the petition for rehearing with sugges-

tion for rehearing in banc.

Entered at the direction of Judge Hamilton, with the con-

currence of Judge Wilkins and Judge Niemeyer.

For the Court,

/s/ Bert M. Montague

CLERK

32a

APPENDIX E

FEDERAL ACQUISITION REGULATIONS

SUBPART 1.6-CONTRACTING

AUTHORITY AND RESPONSIBILITIES

1.601 General.

Authority and responsibility to contract for authorized sup-

plies and services are vested in the agency head. The agency

head may establish contracting activities and delegate to heads

of such contracting activities broad authority to manage the

agency’s contracting functions. Contracts may be entered in-

to and signed on behalf of the Government only by contract-

ing officers. In some agencies, a relatively small number of

high level officials are designated contracting officers solely

by virtue ot their positions. Contracting officers below the level

of a head of a contracting activity shall be selected and ap-

pointed under 1.603.

1.602 Contracting officers.

1.602-1 Authority.

(a) Contracting officers have authority to enter into, ad-

minister, or terminate contracts and make related determina-

tions and findings. Contracting officers may bind the Govern-

ment only to the extent of the authority delegated to them.

Contracting officers shall receive from the appointing authority

(see 1.603-1) clear instructions in writing regarding the limits

of their authority. Information on the limits of the contracting

officers’ authority shall be readily available to the public and

agency personnel.

(b) No contract shall be entered into unless the contracting

officer ensures that all requirements of law, executive orders,

regulations, and all other applicable procedures, including

clearances and approvals, have been met.

33a

1.602-2 Responsibilities.

Contracting officers are responsible for ensuring perfor-

mance of all necessary actions for effective contracting, en-

suring compliance with the terms of the contract, and safe-

guarding the interests of the United States in its contractual

relationships. In order to perform these responsibilities, con-

tracting officers should be allowed wide latitude to exercise

business judgment. Contracting officers shall —

(a) Ensure that the requirements of 1.602-1(b) have been

met, and that sufficient funds are available for obligation;

(b) Ensure that contractors receive impartial, fair, and

equitable treatment; and

law, engineering, transportation, and other fields, as

appropriate.

1.602-3 Ratification of unauthorized commitments.

(a) Definttions.

‘‘Ratification,’’ as used in this subsection, means the act

of approving an unauthorized commitment by an official who

has the authority to do so.

‘‘Unauthorized commitment,’’ as used in this subsection,

means an agreement that is not binding solely because the

Government representative who made it lacked the authority

to enter into that agreement on hehalf of the Government.

(b) Policy. (1) Agencies should take positive action to

preclude, to the maximum extent possible, the need for ratifica-

tion actions. Although procedures are provided in this sec-

tion for use in those cases where ratification of an unauthoriz-

ed commitment is necessary, these procedures may not be

34a

used in a manner that encourages such commitments being

made by Government personnel.

(2) Subject to the limitations in paragraph (c) of this subsec-

tion, the head of the contracting activity, unless a high level

official is designated by the agency, may ratify an unauthoriz-

ed commitment.

(3) The ratification authority in subparagraph (b)(2) of this

subsection may be delegated in accordance with agency pro-

cedures, but in no case shall the authority be delegated below

the level of chief of the contracting office.

(4) Agencies should process unauthorized commitments us-

ing the ratification authority of this subsection instead of refer-

ring such actions to the General Accounting Office for resolu-

tion. (See 1.602-3(d).)

(5) Unauthorized commitments that would involve claims

subject to resolution under the Contract Disputes Act of 1978

should be processed in accordance with Subpart 33.2, Disputes

and Appeals.

subsection may be exercised only when —

(1) Supplies or services have been provided to and accepted

by the Government, or the Government otherwise has ob-

tained or will obtain a benefit resulting from performance of-

the unauthorized commitment;

(2) The ratifying official could have granted authority to enter

or could have entered into a contractual commitment at the

time it was made and still has the authority to do so;

(3) The resulting contract would otherwise have been pro-

per if made by an appropriate contracting officer;

35a

(4) The contracting officer reviewing the unauthorized com-

mitment determines the price to be fair and reasonable;

(9) The contracting officer recommends payment and legal

counsel concurs in the recommendation, unless agency pro-

cedures expressly do not require such concurrence;

(6) Funds are available and were available at the time the

unauthorized commitment was made; and

(7) The ratification is in accordance with any other limita-

tions prescribed under agency procedures.

(d) Nonratifiable commitments. Cases that are not ratifiable

under this subsection may be subject to resolution as recom-

mended by the General Accounting Office under its claim pro-

cedure (GAO Policy and Procedures Manual for Guidance of

Federal Agencies, Title 4, Chapter 2), or as authorized by

FAR part 50. Legal advice should be obtained in these cases.

[FAC 84-33, 53 FR 3689, 2/8/88, effective 2/22/88)

PART 2 — DEFINITIONS OF WORDS AND TERMS

2.000 Scope of part.

This part defines words and terms commonly used in this

regulation. Other terms are defined in the part or subpart with

which they are particularly associated (see the Index for

locations).

SUBPART 2.1 - DEFINITIONS

2.101 Definitions.

As used throughout this regulation, the following words and

terms are used as defined in this subpart unless (a) the con-

text in which they are used clearly requires a different mean-

36a

ing or (b) a different definition is prescribed for a particular

part or portion of a part.

* * *

‘‘Contracting officer’’ means a person with the authggity

to enter into, administer, and/or terminate contracts and make

related determinations and findings. The term includes cér-

tain authorized representatives of the contracting officer act-

ing within the limits of their authority as delegated by the con-

tracting officer. ‘‘Administrative contracting officer (ACO)’’

refers to a contracting officer who is administering contracts.

‘‘termination contracting officer (TCO)’’ refers to a contract-

ing officer who is settling terminated contracts. A single con-

tracting officer may be responsible for duties in any or all of

these areas. Reference in this regulation to administrative con-

tracting officer or termination contracting officer does not (a)

require that a duty be performed at a particular office or ac-

tivity or (b) restrict in any way a contracting officer in the per-

formance of any duty properly assigned.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.