# Amicus Curiae Brief — Boeing Co. v. United States Ex Rel. Roby

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1345%3A4

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2003
- **Citation:** 539 U.S. 969

## Text

MOTION FILED 7
MAY 27 2003 H)

No. 02-1411

IN THE

Supreme Court of the Gnited States

THE BOEING COMPANY,
Petitioner,

ve

UNITED STATES OF AMERICA EX REL. BRETT ROBY,
Respondent.

On Petition for a Writ of Certiorari
to the United States Court of Appeals
for the Sixth Circuit

MOTION OF THE CHAMBER OF COMMERCE OF
THE UNITED STATES OF AMERICA FOR LEAVE TO
FILE BRIEF AS AMICUS CURIAE AND BRIEF AS
AMICUS CURIAE IN SUPPORT OF PETITIONER

ROBIN S. CONRAD JAMES J. GALLAGHER*

NATIONAL CHAMBER HERBERT L. FENSTER
LITIGATION CENTER, INC. BARBARA J. BACON

1615 H Street, N.W. MCKENNA LONG &

Washington, D.C. 20062 ALDRIDGE LLP

(202) 463-5337 444 S. Flower Street, Suite 800

Los Angeles, CA 90071
(213) 688-1000

Counsel for Amicus Curiae
Chamber of Commerce of the United States of America

May 27, 2003 *Counsel of Record

MOTION FOR LEAVE TO FILE BRIEF AS
AMICUS CURIAE

Pursuant to Rule 37.2 of the Rules of this Court, the
Chamber of Commerce of the United States of America (“the
Chamber”) requests leave to file the accompanying amicus
curiae brief in support of the petition for a writ of certiorari.
Respondent United States and Petitioner, The Boeing
Company, consented to the filing of this brief. Respondent
Roby did not.

As set forth in the accompanying brief, the Chamber
represents more than 3 million businesses and business
organizations of every size, industrial sector, and geographic
region. The Chamber often participates as amicus curiae in
cases that raise issues of vital concern to the Nation’s
business community. This is such a case.

This case concerns the proper measure of damages
under the False Claims Act. Because the Sixth Circuit’s
decision would permit the Government to recover
consequential damages under the False Claims Act, the
Chamber is concerned that businesses that do business with
the Government may be exposed to damages well in excess
of what Congress intended when it enacted the 1986
Amendments to the False Claims Act. In addition, the
Chamber is concerned that, to the extent that the Sixth
Circuit’s decision allows the Government to recover
consequential damages under the guise of direct damages, it
unwittingly invalidates consequential damages exclusions in
hundreds of commercial contracts. Because of its unique
position in the business community, the Chamber is able to
show the Court that this case is critical not only to Boeing but
also to countless other contractors and businesses.

Moreover, when the Chamber declined to file a bnef
on behalf of Boeing below, Roby’s counsel argued to the
Sixth Circuit that Boeing could not get the Chamber “‘to
support [Boeing’s] stilted legal views . . .” Relator Brett
Roby’s Opposition to the Motion by Aerospace Industries
Association of America, Inc. for Leave to File Bnef as
Amicus Curiae in Support of Boeing’s Petition for Rehearing
En Banc at 10 n. 14, United States ex rel. Roby v. Boeing,
302 F.3d 637 (6 Cir. 2002). Thus, a second reason for
seeking leave to file this brief is to show that, contrary to
Roby's contentions, the Chamber fully supports Boeing’s
position.

The Chamber’s motion for leave to file the
accompanying amicus curiae brief should be granted.

Respectfully submitted,
Robin S. Conrad James J. Gallagher*
NATIONAL CHAMBER Herbert L.Fenster
LITIGATION CENTER, INC. _ Barbara J. Bacon
1615 H Street, N.W. MCKENNA LONG &
Washington, D.C. 20062 ALDRIDGE LLP
(202) 463-5337 444 S. Flower Street, Suite 800

Los Angeles, CA 90071
(213) 688-1000

*Counsel of Record for Amicus
Curiae Chamber of Commerce
of the United States of America

1

TABLE OF CONTENTS
Page

EM OS cs ccnssnvesenvysunnessecnesnssoonensver i
ANNE Oe BET TIRORRT TIS «occu nn.onencvncvsnsnoseoseccneonsnsenssovet ii
INTEREST STATEMENT OF AMICUS CURIAE.........:++++ 1
REASONS FOR GRANTING THE WRIT .......:::s:sesseesse= 2
1. THIS COURT SHOULD RESOLVE THE

IMPORTANT FEDERAL QUESTION OF

WHAT CONSTITUTES DAMAGES

ALLOWABLE UNDER THE FCA ....-.::se:seeeeeeeoe 2
I. THIS COURT SHOULD GRANT REVIEW

TO PRESERVE THE PROPER

DISTINCTION BETWEEN DIRECT AND

CONSEQUENTIAL DAMAGES ........ssssssssssssesseeeee 8

CONCLUSION ..........0ccsccccesssccsccseccserssnsesecsssccssesnscesssenneenes 14

i

TABLE OF AUTHORITIES
Page(s)
CASES

Cook County, Ill. v. United States ex rel. Chandler,

SF ie Sat a ET ctncsatncncinsacaniaisnacsiaeeiinitivasees 3, 4, 8, 11
Gulf Oil Corp. v. Copp Paving Co.,

ae. Rica satinintiansnnlnndinlcncibitecmeats 9
Hudson v. United States,

Fe a ee i tenscinecinscnieinssinadaeaniaiaant unin 8
Russello v. United States,

is a ieiceinsccnsssetindaniiniaaststienabhiiedlintnnsuanais 9
Russo v. Hilltop Lincoln-Mercury, Inc.,

479 S.W.2d 211, 10 UCC 768 (Mo. App. 1972) .......... 10
United States v. Aerodex, Inc.,

SGD F 20 1003 08 Cie. UTD issssessinerircinervnrnivns 3, 5, 6,8
United States v. Bornstein,

i iiciniacicciniccnininiiniioniin passim
United States v. Halper,

a te eg a 7,8
United States v. Hibbs,

Fe ee EE Ee BEE Fi cieseniinnicsins ni tthiastsiiniatcientienel 4
United States v. Woodbury,

Dee ek Fe EA Bi tictineticniienstetiatennindtincsinnenninn 4

United States ex rel. Compton v. Midwest Specialties,
BAZ F Fel BIG COE. Ve i cenrcsctnvncscinesnnsionninnisenneaniianasenis 4

il

Page(s)
STATUTES AND RULES
31 United States Code
§§ 3729-3733 (1986)......cecccereseseeseresseeeseseneneenenesens passim
§ 3729(a) ....ececeresesesssessesesessscseseenensnsssneecanarenenesenenenenensnsess 3
Supreme Court Rules
Brahe STG avin cccvincsecosciessecensisssessecnésioceensenneansensenpsvorernvnians 1
OTHER AUTHORITIES
1 J. White & R. Summers, Uniform Commercial
Code, § 10.4, 567 n.10 (4th ed. 1995)........eerereeees 9,10
25 C.J.S. Damages § 2 (1966) ..........:ccseseeseesseseresseeseenenenseeees 9
Black’s Law Dictionary (7" ed. 1999) .......s:ssessesesseeeeeneeees 1,9
Restatement (Second) of Torts (1976)
§ SA9(1)(D) ...eesesesesessceeseeeseneeeenssenessecnsnensssensneneneneess 11,12

S. Rep. No. 345, 99th Cong., 2d Sess. 19 (1986),
reprinted in 1986 U.S.C.C.A.N. 5284....cssseceseeteeerstees 6

INTEREST STATEMENT OF AMICUS CURIAE

The Chamber of Commerce of the United States of
America (“the Chamber”) is the world’s largest business
federation.! It represents an underlying membership of more
than 3 million businesses and business organizations of every
size, industrial sector, and geographic region. The Chamber
regularly advocates its members’ views in this Court and
other appellate forums. It initiates and enters litigation
involving issues of national concern to the American
business community.

Many of the Chamber’s members provide goods and
services to the United States under government contracts. In
performing those contracts, Chamber members often prov. de
replacement components, conduct overhaul work, or
remanufacture or upgrade existing defense systems. In
addition, virtually all of the Chamber’s members enter into
commercial contracts, some of which contain consequential
damages provisions that allocate the risks to which the
contracting parties are subject.

Black’s Law Dictionary (7" ed. 1999) defines
“consequential damages” as “[ijosses that do not flow
directly and immediately from an injurious act, but that result
indirectly from the act.” The Sixth Circuit’s willingness to
permit the recovery of the full replacement cost of an aircraft
lost as the result of a defective component allows the
Government to recover what are “consequential damages,”
despite the fact that the False Claims Act, 31 U.S.C. §§ 3729-

! Pursuant to Supreme Court Rule 37.6, the Chamber hereby affirms that
no counsel for any party authored any part of this brief, and that no person
or entity other than the Chamber and its legal affiliate, the National
Chamber Litigation Center, Inc., provided financial support for its
preparation or submission.

2

3733 (1986) (“FCA”), excludes consequential damages and
provides instead for trebling of direct damages in lieu of
consequential damages. This overreaching threatens to
expand the nsk of exposure for Chamber members under the
FCA beyond limitations prescribed by Congress. Moreover,
by obliterating the proper distinction between direct and
consequential damages, the Sixth Circuit puts consequential
damages provisions in the Chamber members’ commercial
contracts in jeopardy. Consequently, the Chamber has a
strong interest in the proper resolution of this case.

The Chamber believes this Court should grant
certiorari to resolve both questions presented in Boeing’s
petition, however, the Chamber addresses only the second
question regarding the amounts permissible as damages
under the FCA. The Chamber submits this brief to show the
importance of that issue not just to the parties involved, but
to the countless businesses that are affected by this case.

REASONS FOR GRANTING THE WRIT

I. THIS COURT SHOULD RESOLVE THE
IMPORTANT FEDERAL QUESTION OF
WHAT CONSTITUTES DAMAGES
ALLOWABLE UNDER THE FCA

Having erroneously concluded that the federally-
mandated High Value Items Clause does not preclude the
Government from recovering damages for loss of
Government property under the FCA, the Sixth Circuit then
considered the appropriate method to compute the
Government’s damages in this case. Its holding — that the
Government may recover, as damages for the submission of a
purportedly false claim in connection with remanufacturing
work on a Government-owned aircraft, the full value of the
lost aircraft, trebled — is inconsistent with: (1) the statute

3

itself; (2) Cook County, Ill. v. United States ex rel. Chandler,
123 S. Ct. 1239 (2003); (3) United States v. Bornstein, 423
U.S. 303 (1976); and (4) United States v. Aerodex, Inc., 469
F.2d 1003 (5™ Cir. 1972).

The Sixth Circuit was improperly influenced by the
assumed criticality of the defective part involved in this case.
This is not, however, a case that is, or can be, controlled by
common law notions of either contractual or tort “damages.”
Rather, this case is entirely a creature of federal statute.

The impact of the Sixth Circuit’s holding on defense,
aerospace and aviation contractors and subcontractors doing
business with the Government is enormous: contractors who
supply relatively small components or perform repairs now
face potential liability for treble the entire value of multi-
million and multi-billion dollar, complex defense systems.
This holding, the Chamber respectfully submits, is contrary
to express Congressional intent to exclude consequential
damages from the FCA, and is out of line with Supreme
Court and other precedent concerning FCA damages. In
addition, the lower court’s inclusion as direct damages of
what are properly classified as consequential damages
exposes parties to commercial contracts to unanticipated and
unintended risks of financial disaster.

The FCA was not intended by Congress to be a
mechanism for the Government to recover common-law like
property damages caused by a defective component. The
damages that are available under the FCA are those defined
by the conduct prohibited by the statute — the submission of a
false claim. 31 U.S.C. § 3729(a) (anyone who knowingly
presents a false claim to the Government is liable for civil
statutory penalties “plus 3 times the amount of damages
which the Government sustains because of the act of that
person”) (emphasis added). The critical word is “act” and the

“act” is the submission of the false claim. Consequential
damages are not available. Chandler, 123 S. Ct. at 1247 n.9
(“The treble damages provision was, in a way, adopted by
Congress as a substitute for consequential damages”). Thus,
where the statute focuses on the false claim itself, the phrase
“because of’ cannot be construed as opening the door to
consequential damages.

In an FCA action for substandard goods, “the proper
method for determining direct damages is the difference
between the market value of the [goods] received and
retained and the market value that the [goods] would have
had if they had been of the specified quality.” Bornstein, 423
U.S. at 317 n.13. It is clear from the context of Bornstein
that the “goods” are only the components which are the
express subject matter of the false claims and not an entire
system in which the “goods” may be installed. In contrast to
the Sixth Circuit’s decision below, courts applying this
“diminution in value” measurement of damages generally
look to the contract price to establish the value of the goods
as promised. See, e.g., United States ex rel. Compton v.
Midwest Specialties, 142 F.3d 296, 304-05 (6th Cir. 1998)
(affirming award of damages based on the contract price,
which equaled the value of the goods contracted for less the
value of the goods as delivered); United States v. Hibbs, 568
F.2d 347, 351 (3d Cir. 1977) (when a defective article is
purchased in a fraudulent transaction, the measure of
damages is the difference in cost as contracted for and as
received); United States v. Woodbury, 359 F.2d 370, 379 (9th
Cir. 1966) (“Ordinarily, the measure of the Government’s
damages would be the amount that it paid out by reason of
the false statements over and above what it would have paid
if the claims had been truthful”).

As shown in Aerodex, a case neither distinguished nor
discussed by the Sixth Circuit below, the FCA does not
include as damages costs incurred as the result of the delivery
of a defective product that are above and beyond the price of
the defective product itself. 469 F.2d at 1011. In Aerodex, ©
the Government filed an FCA action against Aerodex for
making false claims for payment in connection with a
$27,000 contract for manufacture of certain aircraft engine
bearings. Aerodex delivered, and the Government accepted,
bearings that did not comply with the contract specifications.
When the Government later discovered that the bearings were
noncompliant, it removed and replaced them at a cost of
$161,000. Jd. at 1006. The court held that, although
Aerodex was liable under the FCA for the $27,000 paid by
the Government for proper bearings it did not receive, the
Government could not recover the $161,000 spent in
removing and replacing the improper bearings because that
damage was consequential in nature and not recoverable
under the FCA:

[T]he language of the False Claims Act does
not include consequential damages resulting
from delivery of defective goods. The statute
assumes double damages attributable to the
“act” which in this case is the submission of
the false vouchers. The submission of these
vouchers was not the cause of the
Government’s consequential damages. The
delivery and the installation of the bearings in
the airplanes, not the filing of the false claim,
caused the consequential damages.

In a case of this kind, damages under the False
Claims Act must be measured by the amount

6

wrongfully paid to satisfy the false claim
(citations omitted).2

Id. at 1011. In other words, the Government cannot go
outside the parameters of the contract and recover more than
the contract price.

When Congress amended the FCA in 1986, it
explicitly declined to overrule the holding in Aerodex and
allow recovery of consequential damages. In fact, when
Congress rejected the recovery of consequential damages
under the FCA, it understood, citing to Aerodex, that
replacement costs of a defective item would not be
recoverable. See S. Rep. No. 345, 99th Cong., 2d Sess. 19
(1986), reprinted in 1986 U.S.C.C.A.N. 5284. The Sixth
Circuit was obliged to respect Congress’s choice in this
regard and therefore should have followed Aerodex’s
holding, limiting baseline FCA damages to the “amount
wrongfully paid on the false claim.” 469 F.2d at 1011.

Thus, in an FCA case involving a defective
component, damages should be measured by the cost of the
defective component, as opposed to the value of the item in
which it was installed, so as to limit damages to the amount
wrongly paid as a result of the false claim. Indeed, in
Bornstein, this Court measured damages based on the value
of the falsely marked tubes, not the value of the radio kits, of
which they formed a part. Bornstein, 423 U.S. at 316 n.13.
The Sixth Circuit here attempts to distinguish Bornstein on

2 The Aerodex court noted that these consequential damages were
recoverable as single damages under the claim for breach of warranty
alleged in that action. See 469 F.2d at 1011-12. Due to the partial
settlement reached by the parties in this case, no issue pertaining to
breach of warranty damages is before this Court.

7

the grounds that “the invoices for radio kits that contained
falsely marked electron tubes ‘included claims for payment
for the falsely marked tubes.”” United States ex rel. Roby v.
Boeing, 302 F.3d 637, 646-47 (6" Cir. 2002). This
distinction leads to the anomalous result that FCA damages
for a false invoice containing separate line items for each
component used in equipment would be less than the
damages for an invoice that contained only one line item for
the delivered equipment, even though actual damages are the
same. In other words, if Boeing had included in its invoice
for the remanufactured helicopter a separately stated claim
for the $4,874 that Boeing paid for the gear, the damage to
the Government would have been the same as it was in this
case where “Boeing billed the Government for
remanufactured helicopters as units, not as assemblages of
assorted parts.” Jd. at 646. Yet, the Sixth Circuit rejected the
argument that damages should be limited to the portion of the
contract price attributed to the defective gear on the ground
that Bornstein involved bills for assemblages of assorted
parts, not units, even though the cost of the defective gear in
this case was readily available. Cf United States ex rel. Roby
v. Boeing, 79 F. Supp. 2d 877, 880 n.6 (S.D. Ohio 1999)
(“Relator asserts that Boeing paid Speco $4,874 for the cost
of the defective gear . . .”), aff'd 302 F.3d 637 (6" Cir. 2002).

The FCA, however, provides damages only for that
portion of a claim that is false. In the instant case, the
amount wrongfully paid to satisfy the false claim is that
portion of the contract price attributable to the defective gear.
Cf. United States v. Halper, 490 U.S. 435 (1989) (accepting
district court’s measure of damages as difference between the
iraproper billing rate of $12 per claim and the proper billing

rate of $3 per claim).3 The rule that damages in an FCA case
involving a defective component should be measured by the
cost of the defective component, as opposed to the
replacement cost of the item in which it was installed, limits
damages to the arnount wrongly paid as a result of the false
claim. Had the Sixth Circuit followed the rationale of these
precedents, it would have held that damages are to be
measured by separating the portion of Boeing’s claim that
was false (i.e., the cost attributable to the defective gear)
from the entire claim (i.e., the invoice delivered with the
helicopter itself). Thus, not only is the Sixth Circuit’s
_ decision in direct conflict with the Fifth Circuit’s holding in
Aerodex, it is out of step with this Court’s Bornstein and
Halper decisions.

This Court should grant Boeing’s petition to resolve
this conflict, to provide the lower courts with further
guidance on how to measure damages under the FCA, and to
clarify that baseline damages are not to exceed the amount of
the alleged false claim.

II. THIS COURT SHOULD GRANT
REVIEW TO PRESERVE THE PROPER
DISTINCTION BETWEEN DIRECT AND
CONSEQUENTIAL DAMAGES

Congress contemplated. including consequential
damages language in the FCA when it amended the statute in
1986, but deliberately deleted this proposed language from
the final enactment. Consequential damages therefore are not
available under the FCA. See Chandler, 123 S. Ct. at 1247

3 Hudson v. United States, 522 U.S. 93 (1997), disavowed Halper‘s
Double-Jeopardy Clause analysis, but did not disagree with Halper‘s
calculation of damages.

n.9. See also, Gulf Oil Corp. v. Copp Paving Co., 419 U.S.
186, 200 (1974) (when a provision is deleted before
enactment, such action “strongly militates against a judgment
that Congress intended a result that it expressly declined to
enact”); Russello v. United States, 464 U.S. 16, 23-24 (1983)
(same). Thus, Congress rejected the very damages that the
Sixth Circuit would allow in this case.

If not overturned, the Sixth Circuit’s ruling could
significantly change the allocation of msks negotiated
between parties to any contract that excludes consequential
damages. As such, the Sixth Circuit’s treatment of damages
presents an inappropriate risk to the Chamber’s members,
and others, under commercial contracts as well as under the
FCA.

Generally, consequential damages are defined as
damages that “do[] not flow directly and immediately from
the act of the party, but only from the consequences or results
of such act.” 25 C.J.S. Damages §2 (1966). See also
Black’s Law Dictionary (7" ed. 1999) (‘consequential
damages” are “[l]osses that do not flow directly and
immediately from an injurious act, but that result indirectly
from the act”).

As stated in Boeing’s petition, the Sixth Circuit
defined damages to include what are commonly recognized
as consequential damages under the Uniform Commercial
Code and the common law. Pet. at 29 (citing, as an example,
1 J. White & R. Summers, Uniform Commercial Code,
§ 10.4, 567 n.10 (4th ed. 1995).

Indeed, White and Summers would classify the
replacement cost of the helicopter in this case as
consequential damages:

10

In Russo v. Hilltop Lincoln-Mercury, Inc.,
[479 S.W.2d 211, 10 UCC 768 (Mo. App.
1972)}, defective wiring caused a fire which
destroyed the buyer’s new automobile. The
court awarded the buyer the full purchase
price of the automobile without identifying
that portion of the price which represented
recovery for consequential damages. Only the
difference between the automobile’s
warranted and actual value at the time of
acceptance could be recovered as general
damages under 2-714(2). The defective
wiring system reduced the actual value of the
automobile at the time of acceptance below
the purchase price, but the defect did not
render the auto worthless as of the acceptance
date. A large part of the fire damage was
therefore consequential. Had the parties
excluded consequentials by contract, the court
would have had to identify the value
differential component of the buyer’s total
loss.

Id. at 567. White and Summers teaches that to properly
exclude consequential damages, the value of a defective item
is to be measured at the time of acceptance. Because the
defective gear did not render the helicopter worthless at the
time it was delivered, the Sixth Circuit erred in holding that
its value was zero.4

4 In this case, the Sixth Circuit effectively measured the value of the
helicopter at the time of the accident. Cf Roby, 302 F.3d at 647. The
fact that the helicopter had some, likely substantial, value at the time that
it was delivered is, however, evident in the fact that the Government did
(Footnote continued on next page)

Pn eee te en ee eee ue

A ie Oa ly Sipe.

11

The fact that the Government is not entitled to recover
damages collateral to the underlying defect that causes a
claim to be false is further supported by this Court’s most
recent FCA decision. In Chandler, this Court stated that the
FCA does not expressly provide for the consequential
damages that ordinarily are awarded for fraud. 123 S. Ct. at
1247. Rather, trebling was provided as the statutory quid pro
quo as a substitute for consequential damages. Jd.

In stating that consequential damages are typically
awarded in non-FCA fraud cases, this Court cited section
549(1)(b) and Comment d of the Restatement (Second) of
Torts (1976). 123 S. Ct. at 1247. Section 549(1)(b) declares
that the measure of damages for common law fraud includes
“pecuniary loss suffered otherwise as a consequence of the
recipient’s reliance upon’ the misrepresentation.”
Restatement (Second) of Torts at § 549(1)(b). Comment d to
clause (1)(b) explains that:

[a]lthough the most usual form of financial
loss caused by participation in a financial
transaction induced by a fraudulent
misrepresentation is the lessened value of the
subject matter due to its falsity, the loss may
result from a purchaser’s use of the article for
a purpose for which it would be appropmiate if
the representation were true but for which it is
in fact harmfully inappropriate. So, too, it
may be the expense to which he has gone in
preparation for a use of the article for which it

(Footnote continued from previous page)
not seek treble the replacement cost of any of the other remanufactured
helicopters that also contained the defective Speco gears.

12

would have been appropriate if the
representation had been true.

Id. at 112. The comment then states that “[t]hese ‘indirect’ or
‘consequential’ damages resulting from the misrepresentation
are recoverable if the misrepresentation is the legal cause of
them...” Jd.

Because the Restatement (Second) of Torts makes
clear that losses caused by the use of a product fraudulently
represented to be of a certain quality are considered
consequential damages, it is clear that this Court understood
that the FCA precludes recovery for the loss of a product
suffered as a result of the Government’s use of the product
where, as alleged here, the contractor falsely certified that the
product conformed to the contract. In this case, the loss of
the helicopter resulted from the mishap caused by operating
the helicopter with the defective gear, not from the filing of
the false claim. Thus, the Sixth Circuit erred in holding that
the Government could potentially recover the replacement
cost of the helicopter. This is especially true given that the
contract at issue here called for Boeing to refurbish a
government-owned helicopter rather than to purchase and
provide a refurbished helicopter.

In sum, the Sixth Circuit’s damages methodology
would dramatically change the nature of the FCA, converting
it to a mechanism to recover consequential property damages
- trebled - rather than one to recover monies paid to a
contractor because of submission of a false claim. Indeed,
permitting the Government to recover direct and
consequential damages trebled would result in a huge over
recovery. This is not what Congress or this Court intended.
Moreover, the Sixth Circuit’s willingness to permit the
recovery of all damages necessary to make the Government
whole for the destruction of the helicopter, despite the fact

13

that consequential damages are not compensable under the
FCA, threatens to blur the line between direct and
consequential damages. This, in turn, threatens to expand the
category of damages available in numerous contracts
excluding consequential damages beyond existing, well-
established _ limitations. For parties who previously
negotiated a lower price in return for assuming the risk of
consequential damages, this could result in a windfall. For
parties who believed the risk of consequential damages
presented an unacceptable risk and, therefore, negotiated to
exclude consequential damages, this could result in financial
ruin.» Boeing’s petition should be granted to permit this
Court to correct the confusion regarding the definition of
consequential damages engendered in the Sixth Circuit’s
decision.

5 Included in the Chamber members’ contracts are contracts for
commercial aircraft and satellites. The replacement cost of a single
aircraft or satellite could be enormous. Thus, when a business installs a
relatively small and/or inexpensive component on a high value item, it
will often negotiate to limit its risk for such losses.

14
CONCLUSION

For all of the foregoing reasons and for the reasons set
forth in Boeing’s Petition for Wnt of Certiorari, the Chamber
respectfully requests this Court to grant Boeing’s petition.

Respectfully submitted,
Robin S. Conrad James J. Gallagher*
NATIONAL CHAMBER Herbert L.Fenster
LITIGATION CENTER, INC. Barbara J. Bacon
1615 H Street, N.W. MCKENNA LONG &
Washington, D.C. 20062 ALDRIDGE LLP
(202) 463-5337 444 S. Flower Street, Suite 800

Los Angeles, CA 90071
(213) 688-1000

*Counsel of Record for Amicus
Curiae Chamber of Commerce
of the United States of America

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_1345%3A4. Public record. Not legal advice.