Opposition Brief — Boeing Co. v. United States Ex Rel. Roby

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JUN 4 - 2003

No. 02-1411 OFFICE OF THE CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

The Boeing Company,

Petitioner,

United States of America ex rel. Brett Roby,

Respondents.

On Petition For A Writ Of Certiorari To The

United States Court Of Appeals For The Sixth Circuit

RESPONDENT BRETT ROBY’S OBJECTION TO THE MOTION OF THE

CHAMBER OF COMMERCE OF THE UNITED STATES OF AMERICA FOR LEAVE

TO FILE BRIEF AS AMICUS CURIAE IN SUPPORT OF THE PETITIONER

JAMES B. HELMER, JR.”

FREDERICK M. MORGAN, JR.

ROBERT M. RICE

HELMER, MARTINS & MORGAN Co., LPA

105 East Fourth Street, Ste. 1900

Cincinnati, OH 45202

(513) 421-2400

MICHAEL A. HAVARD

PROVOST * UMPHREY

490 PARK STREET

BEAUMONT, TX 77704

Attorneys for Respondent

Relator Brett Roby

“Counsel of Record

TABLE OF CONTENTS

I. Spy 9 tt oy a aren ere gerne pari vay ee ren ma ye or

II. THE CHAMBER EITHER REPEATS BOEING’S ARGUMENTS, OR

MAKES CLAIMS THAT ARE IRRELEVANT TO THE ISSUES

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III. THE CHAMBER IS INAPPROPRIATELY CONNECTED TO A

PARTISAN LOBBYIST GROUP AFFILIATED WITH BOEING,

AND IS THUS NOT A TRUE “FRIEND OF THE COURT”

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IV. THE CHAMBER IS NOT AN APPROPRIATE AMICUS CURIAE ........

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TABLE OF AUTHORITIES

PAGE

CASES

Cook County v. United States ex rel. Chandler,

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In re Buffalo,

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National Comm'n on Egg Nutrition v. Federal Trade Comm'n,

520 F.2d 157 (7th Cir. 1977), cert. denied, 439 U.S. 821 (1978) ................4-.. 4

Phoenix v. Phoenix Civic Auditorium & Convention Ctr. Ass’n.,

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Ryan v. Commodity Futures Trading Comm'n,

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United States ex rel. Compton v. Midwest Specialties, Inc.,

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United States ex rel. Marcus v. Hess,

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United States ex rel. Roby v. Boeing Co.,

302 F.3d 637 (6thk Cir. 2002), reprinted in Petition for Certiorari at la-26a ..... ye e

United States v. Aerodex, Inc.,

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United States v. Bornstein,

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United States v. Halper,

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United States v. Killough,

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United States v. Michigan,

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United States v. Neifert-White Co.,

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RULES

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OTHER AUTHORITIES

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I. INTRODUCTION

The Motion by the Chamber of Commerce to file an amicus curiae brief supporting

Petitioner Boeing should be denied. Despite the mandate of Supreme Court Rule 37.1, the

Chamber does not bring new or relevant matter to this Court’s attention. Rather, the Chamber

either repeats assertions already made by Boeing, or presents arguments that are not relevant to

the issues before the Court. In addition, counsel representing the Chamber previously

represented in this case a defense-industry lobbyist group, known as the Aerospace Industries

Association (“AIA”), that was so closely aligned with Boeing—indeed, Boeing actually

guaranteed payment of AIA’s legal bills—that the Sixth Circuit twice refused to allow the AIA

amicus status. The Chamber’s proffered amicus brief borrows extensively from the AIA’s

discredited briefs, making clear an inappropriate connection between the two groups.

Given these facts, and in light of this Court’s Rule 37.1.b. (which disfavors opposed

amicus participation at this stage), Respondent Brett Roby respectfully objects to the

participation of the Chamber of Commerce as amicus curiae in support of Petitioner.

II. THE CHAMBER EITHER REPEATS BOEING’S ARGUMENTS, OR MAKES

CLAIMS THAT ARE IRRELEVANT TO THE ISSUES BEFORE THE COURT.

Respondents Roby and the United States brought this False Claims Act case because

Petitioner Boeing knowingly sold the Army defective Chinook CH-47D helicopters, yet falsely

certified those aircraft as “airworthy.” The helicopters were not “airworthy.” They contained

defective flight-critical transmission gears that could—and did—explode in flight and cause fiery

helicopter crashes. One such crash occurred in Saudi Arabia during the final days of Operation

Desert Shield, totally destroying the $10 million aircraft and all its contents. Boeing violated the

False Claims Act because it submitted claims for payment that falsely represented to the United

States that the helicopters complied fully with all contract requirements when they did not.

Boeing took steps to hide this information from the Army.

As a direct, proximate, and foreseeable result of Boeing’s representations of quality, con-

formance and airworthiness, the United States did two things. First, it paid Boeing for the heli-

copters. Second, it flew the helicopters. But once helicopters containing cracked transmission

gears were put into service, the catastrophic failure of that gear and the total destruction of the

helicopters were as foreseeable as sunrise. As the Sixth Circuit correctly observed, the defective

gear in the Saudi Chinook “was not simply of lesser quality than specified; it was a defective

flight-critical part, which made the loss of [the helicopter] inevitable.” Petition App. at 16a n.7.

While there were two issues certified by the District Court for appeal, both involving

Boeing's efforts to avoid responsibility for the Saudi crash, the Chamber of Commerce purports

to address only one in its proffered amicus brief: Boeing’s claim that the destroyed Saudi

Chinook was “consequential” damage and therefore unrecoverable under the False Claims Act.

This assertion was rejected by both the District Court and unanimously by the Sixth Circuit, and

Boeing’s Petition followed. While the Chamber seeks to occupy amicus curiae status, on this

issue of the appropriate measure of damages under the Act the Chamber offers no new or

relevant argument. Instead, with one notable exception not relevant to the Petition, the Chamber

merely echos Boeing’s arguments.

The first half of the Chamber’s proffered amicus brief is seemingly devoted to arguing

that False Claims Act damages must be limited in all circumstances to the value of the

underlying false claim—in this instance, the $4.1 million claim Boeing made for the doomed

Saudi Chinook. The Chamber relies mostly on United States v. Bornstein, 423 U.S. 303 (1976)

and United States v. Aerodex, Inc., 469 F.2d 1003 (Sth Cir. 1972) for the incorrect proposition

that False Claims Act damages are capped in all instances by the amount wrongfully paid on the

false claim. Amicus Brief at 2-8. Were this the sum total of the Chamber’s argument, it most

certainly represents needless repetition of arguments made by Boeing. See Petition at 22-30, and

its heavy treatment of both Bornstein and Aerodex. But the Chamber goes further and tries to

revive a claim that Boeing itself abandoned long ago, and which is thus not before this Court.

In the District Court, Boeing asserted that the “amount wrongfully paid” in connection

with the destroyed Chinook was the cost of the defective gear—about $10,000. Before the Sixth

Circuit, Boeing advocated the same “amount wrongfully paid” position, but conceded that this

amount could be the $4.1 million Boeing was paid to rebuild the doomed Chinook. Neither

argument comported with this Court’s repeated assertion that False Claims Act damages must be

99]

measured to make the United States “completely whole,” and the Sixth Circuit paused briefly to

dispense with the “value of the gear” argument:

Negotiation strategy aside, we are at a complete loss as to how Boeing can

understand "the amount wrongfully paid" to be limited to "the portion of the

contract price allocated to the defective gear." Reply Br. at 21. According to our

reading of the contract and the subsequent invoice, Boeing billed the Government

for the remanufactured helicopters as units, not as assembiages of assorted parts.

The fact that every component but one conformed to contract requirements is not

legally significant when the defective gear was "flight critical" and thus necessary

for flight.

Petition App. at 15a (internal citation omitted). Boeing’s Petition for certiorari makes no

mention of this “value of the gear” proposition.

' Cook County v. United States ex rel. Chandler, 538 U.S. —, —, 123 S. Ct. 1239, —,

155 L. Ed. 2d 247, 256-257 (2003), quoting United States v. Neifert-White Co., 390 U.S. 228,

232, 19 L. Ed. 2d 1061, 88 S. Ct. 959 (1968) (emphasis supplied); United States ex rel. Marcus

v. Hess, 317 U.S. 537, 552 (1943); Bornstein, 423 U.S. at 314-15 (quoting Hess).

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The Chamber, though, tries to re-inject this discredited argument into this case, arguing

that False Claims Act damages should be limit as a matter of law to “that portion of the contract

price attributable 10 the defective gear.” Amicus Brief at 7. While the Chamber clearly

misapprehends the False Claims Act and this Court’s demand for “make whole” relief, the real

problem is that an amicus curiae is not permitted to raise irrelevant issues that the parties

themselves have not brought before this Court. See Supreme Court Rule 37.1.7. The Chamber’s

effort to do just that is obviously inappropriate.

In any event, the Chamber’s (and Boeing’s) effort to limit False Claims Act damages in

all instances to the “value of the claim” is unsupported even by the principle cases upon which

they rely. Acrodex actually focuses on the issue of causction between a false claim and tie

resulting damages—not, as a matter of law, on the “value of the claim.” See Respondent Roby’s

Opposition at 23-29. And this Court in Bornstein not only allowed damages that exceeded the

value of the false claim, but also noted that such amounts represented “replacement costs” for the

faulty tubes at issue. Bornstein, 423 U.S. at 314. Accord United States v. Halper, 490 U.S. 435,

442-46 (1989) (recognizing that making the Government “completely whole” includes

consideration of amounts beyond the false claim such as, for example, investigation costs.)

Neither Bornstein nor Aerodex support the Chamber’s (and Boeing’s) effort to restrict False

> An amicus cannot join issues that have not been joined by the parties in interest.

National Comm'n on Egg Nutrition v. Federal Trade Comm'n, 520 F.2d 157, 160 n. 3 (7th Cir.

1977). cert. denied, 439 U.S. 821 (1978); In re Buffalo, 57 A.D.2d 47, 394 N.Y.S.2d 919, 921

(1977); Phoenix v. Phoenix Civic Auditorium & Convention Ctr. Ass'n., 99 Ariz. 270, 408 P.2d

818, 821 (1965) (amicus cannot create, extend, or enlarge issue).

Claims Act damages to the “amount wrongfully paid” or the “value of the claim.”

Finally, the ‘iatter half of the Chamber’s amicus brief clearly revisits arguments made by

Boeing. Therein, the Chamber asserts that “consequential” damages are not recoverable under

the False Claims Act—an unexceptional claim that is not in dispute—and then re-defines the

helicopter damages at issue in this case as “consequential.” Amicus Brief at 8-13. This is exactly

what Boeing tried to do. Petition at 26-30. Both are wrong. The False Claims Act allows for

recovery of a!i damages sustained “because of the act” that violates the statute. In this case, the

prohibited “act” giving rise to Boeing’s liability was its false claim that the doomed Saudi

Chinook conformed to all contract requirements and was airworthy.

As a direct and foreseeable result of that “act,” the Army both paid the $4.1 million claim

from Boeing and began flying a Chinook that Boeing falsely—and knowingly— represented as

airworthy, but that actually would crash soon thereafter. Indeed, neither Boeing nor the Chamber

chailenge these points, effectively admitting that the Army flew the Chinooks as a direct result of

Boeing’s false claim, and that the failure of a defective flight-critical component directly causes a

Chinook to crash. So the Chamber (and Boeing) tries to avoid these facts. It says that the only

thing caused by Boeing’s false claim—that is, the only thing the Army did “because of” Boeing’s

conduct—was pay the bill. Amicus Brief at 3-4. But that is not how damages are set by the

> The Chamber also complains that, in setting the value of the Saudi helicopter at zero,

the Sixth Circuit “effectively measured the value of the helicopter at the time of the accident(,]”

instead of “at the time it was delivered[.]” Amicus Brief at 10, n.4. The Sixth Circuit was not

confused. It squarely addressed the issue: “[A] setoff based on value purportedly received would

create a perverse incentive system in which government contractors could endanger the lives of

American soldiers by providing substandard materiel, and the Army would be deterred from

correcting the danger because it would be forced to bear the cost of any use it received from the

substandard goods before their defects were discovered.” Petition App. at 17a, quoting United

States ex rel. Compton v. Midwest Specialties, Inc., 142 F.3d 296, 305 n. 8 (6th Cir. 1998).

terms of the False Claims Act. Congress did not, though it surely could have, constrain damages

to the amount paid. Congress decided for case-by-case analysis of damages, with factual

development regarding what really occurred “because of” the false claim, and that is exactly what

the courts have done.*

Iii. THE CHAMBER IS INAPPROPRIATELY CONNECTED TO A PARTISAN

LOBBYIST GROUP AFFILIATED WITH BOEING, AND IS THUS NOT A TRUE

“FRIEND OF THE COURT” IN THIS CASE.

The Chamber is represented by counsel of record who appeared in the courts below on

behalf of another proffered amicus curiae, a defense industry lobbyist group known as the AIA.

But the AIA was very closely allied with Boeing, demonstrating an inappropriate partisanship for

one seeking to occupy the position of “friend of the court.” The Sixth Circuit thus did not grant

AIA amicus status.© This is important because most of AIA’s disallowed arguments have been,

often verbatim, reproduced by the Chamber and its counsel in its proffered amicus brief to this

Court.

The AIA is a partisan lobbyist group that includes many of the largest Government

contractors.° When the issues on appeal were first presented to the trial court, Boeing contacted

AIA, rounded up AIA member support, gave AIA a substantive “white paper” that outlined the

arguments that Boeing wanted to see in the AIA brief, was in constant contact with AIA during

* See, e.g, United States v. Killough, 848 F.2d 1523, 1532 (11th Cir. 1988) (quoting S.

Rep. 615, 96th Cong., 2d Sess. at 4 (1982)) (“No single rule can, or should be, stated for the

determination of damages under the Act...”)

> See Sixth Circuit Case No. 00-4157, Order dated 12/10/02 (denying AIA request to

appear as amicus supporting Boeing’s en banc petition). Without comment, the Sixth Circuit did

not consider AlA’s amicus brief when the issues on appeal were first heard.

* See AIA membership at http://www.aia-aerospace.org/about/members.cfm

the drafting of the AIA brief, and actually guaranteed the collection of money to pay fees and

costs associated with the brief.’ Moreover, the AIA’s briefing merely repeated assertions made

by Boeing, thereby inappropriately inflating the number of pages Boeing could devote to its

arguments on appeal. While we learned of this intimate relationship between Boeing and AIA

only after the AIA’s trial court appearance, we were able to present this evidence to the Sixth

Circuit. Suitably informed, that court refused to consider either of AIA’s offered amicus briefs.

Understandably, the AIA has not tried to appear as amicus before this Court. But its

counsel has. As a result, the AIA’s tainted views have gained voice through the Chamber, a

point made clear by the very extensive overlap in the arguments made by each organization. As

to the proper measure of damages under the False Claims Act, the AIA argued two points: First,

that the helicopter damages at issue in this case were “consequential,” and that “consequential”

damages are not recoverable under the False Claims Act; and second, that the proper measure of

damages in this case should be the value of the defective gear.* These are, of course, the precise

arguments made by the Chamber—including the “value of the gear” assertion that even Boeing

does not raise with this Court.

In addition, in its two amicus briefs proffered to the Sixth Circuit, the AIA supported its

’ These facts were developed in Relator’s Opposition to the Motion by Aerospace

Industries Association of America, Inc. For Leave to File Brief as Amicus Curiae in Support of

Boeing’s Petition for Rehearing En Banc at 10-11 (and referenced exhibits) filed with the Sixth

Circuit on 11/05/02. Despite aggressive solicitation by Boeing, the Chamber decided not to

tender an amicus brief below because Boeing was not then a Chamber member. /d. at Exhibit F.

This obstacle has apparently been overcome.

* See Brief Of Amicus Curiae Aerospace Industries Association of America, Inc. In

Support Of Appellant, The Boeing Company (dated 1//29/01) at 19-25; and Brief Of Amicus

Curiae Aerospace Industries Association of America, Inc. In Support Of The Boeing Company’s

Petition For Rehearing With Suggestion For Rehearing En Banc (dated 10/25/02) at 5-7.

assertions on these issues with citation to: (a) the False Claims Act; (b) the Senate Report

regarding the 1986 amendments; (c) a treatise on damages; and (d) eleven cases. All but two of

these authorities were cited by the Chamber in its amicus brief.? Perhaps more revealing, the

Chamber's amicus brief often uses the exact same words used by the AIA. For example,

footnotes 2 and 3 of the Chamber’s amicus brief are word-for-word copies of footnotes 16 and 17

from the AIA’s first submission to the Sixth Circuit. And the sole block-quotation used by the

AIA in the False Claims Act damages section of that brief (at page 22) appears verbatim at pages

5-6 of the Chamber’s instant amicus.

We will not belabor the point. The Chamber apparently used the rejected AIA’s brief as

something of a template for the amicus it submits to this Court. Since the Sixth Circuit did not

allow the AIA’s obviously partisan views, we respectfully urge concurrence by this Court

regarding the Chamber."°

IV. THE CHAMBER IS NOT AN APPROPRIATE AMICUS CURIAE.

Participation as amicus curiae is a privilege, reserved for those offering a truly impartial

perspective not otherwise available to the Court: “The orthodox view of amicus curiae was, and

oll

is, that of an impartial friend of the court[.]”'' Unfortunately, the amicus privilege has become

* One of these omissions is telling. The Chamber decided not to follow the AIA’s lead in

citing to this Court’s Marcus decision, and thus the Chamber was able to avoid confronting this

Court's “make whole” language regarding appropriate False Claims Act damages.

’ It is also worth noting that the Chamber has, independent of any obvious connection

with Boeing and the AIA, exhibited hostility towards the False Claims Act. The Chamber

recently filed an amicus brief in the Fifth Circuit arguing that the qui tam provisions are

unconstitutional. http://www.uschamber.com/nclc/caselist/issues/falseclaims.htm

'' United States v. Michigan, 940 F.2d 143, 165 (6" Cir. 1991) (emphasis in original)

(citations omitted).

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5 ROLLIE NIA SAF BNF

evermore subject to abuse, a problem recently and succinctly captured by Chief Judge Posner:

“The vast majority of amicus curiae briefs are filed by allies of litigants and duplicate the

arguments made in the litigants’ briefs, in effect merely extending the length of the litigant’s

brief. Such amicus briefs should not be allowed. They are an abuse.”’” As a result, courts must

guard against a true friend of a party slipping through disguised as a friend of the court. Indeed,

this Court discourages amicus briefs that do nothing more than repeat (and thus lengthen)

arguments already made by a party in the case. “An amicus curiae brief that brings to the

attention of the Court relevant matter not already brought to its attention by the parties may be of

considerable help to the Court. An amicus curiae brief that does not serve this purpose burdens

the Court, and its filing is not favored.” Supreme Court Rule 37.1.

In this case, the Chamber of Commerce brings no new relevant matters to the Court’s

attention. Quite the opposite. When the Chamber is not simply repeating arguments made by

Boeing, it is trying to raise issues that have long since been removed from this case—and which

no party has raised with the Court. Given this, and in light of the Chamber’s close connection

with a Boeing-controlled lobbyist group that was forbidden from occupying the position of

amicus curiae in the court below, Respondent Roby respectfully requests that the Court deny the

Chamber’s motion to participate in this case.

'2 Ryan v. Commodity Futures Trading Comm'n, 125 F.3d 1062, 1063 (7th Cir. 1997).

Chief Judge Posner further wrote that amicus curiae briefs “should normally be allowed when a

party is not represented competently or is not represented at all . . . or when the amicus has

unique information or perspective that can help the court beyond the heip that the lawyers for the

parties are able to provide.” Id. (emphasis supplied; citation omitted).

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¥. CONCLUSION

For the foregoing reasons, the Motion for Leave to File Brief Amicus Curiae by the

Chamber of Commerce should be denied.

Respectfully submitted,

JAMES B. HELMER, JR.