Opposition Brief — Jackson v. United States

\T) 2)

No. 10-385

Jn the Supreme Court of the Anited States

JAMES E.. JACKSON, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FORA WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

NEAL KUMAR KATYAL

Acting Solicitor General

Counsel of Record

LANNY A. BREUER

Assistant Attorney General

DANIEL S. GOODMAN

Attorney

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTION PRESENTED

Whether petitioner’s submission of false timesheet

information to a subcontractor providing services under

a government contract with the National Security Agen

cy (NSA) concerns a “matter within the jurisdiction of

the executive * * * branch,” 18 U.S.C. 1001(a), where

the false information was transmitted to the NSA and

caused the NSA to pay for services that it never re-

ceived,

TABLE OF CONTENTS

Page

Gece eee ee Ee eae l

I a g-ciou a Wie te we ee Se eee esa eee eee eee 1

El a ah era Ada eae eee eee een oe l

PE Arg wie 4 ts bo ae ee eee ee ee 6

SI svc als oe Stu ays a ceicry oe ee eee eee 14

TABLE OF AUTHORITIES

Cases:

Brogan v. United States, 522 U.S. 398 (1998) ........... 8

Bryson v. United States, 396 U.S. 64 (1969)... 2.2.2.2... 8

Hubbard v. United States, 514 U.S. 695 (1995) .......... 8

Lowe v. United States, 141 F.2d 1005 (5th Cir.

SAS vad s cae C eee ree ae ethers 5, 10, 11

United States v. Alder, 380 F.2d 917 (2d Cir.),

cert. denied, 389 U.S. 1006 (1967) ...............0.45- 8

U/nited States v. Baker, 626 F.2d 512 (5th Cir. 1980) .... 11

United States v. Blankenship, 382 F.3d 1110

(11th Cir. 2004), cert. denied, 546 U.S. 828

oP rere eee Cer Teer Teer eer ere ee 5, 10, 11, 12

United States v. Cohn, 270 U.S. 339 (1926) ............. 7

United States v. Gilliland, 312 U.S. 86 (1941) .. 2.2000... 7

United States v. Holstrom, 242 Fed. Appx. 397

Pe ES esc cee en a eee ne ae 10, 18

United States v. Rogers, 466 U.S. 475 (1984) ....... 7,8, 10

United States v. Yermian, 468 U.S. 68 (1984) 2.000000. 7,8

Wisniewski v. United States, 353 U.S. 901 (1957) .. 2... 12

(IIT)

Statutes and rule: Page

False Statements Accountability Act of 1996,

Pub. L. No. 104-292, § 2, 110 Stat. 3459 ..........20.. 8

RR EE WRN OAR OPER SRO RE rea passim

ee Shs SEED 3 ck 60444%.405400 1345S

SE, PD Fi vccubilt ae ox ea eee cae eae erento: 13

Miscellaneous:

H.R. Rep. No. 680, 104th Cong., 2d Sess. (1996) ......... 8

Jn the Supreme Court of the CAnited States

No. 10-385

JAMES E. JACKSON, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCULT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-17)

is reported at 608 F.3d 198. The opinion of the district

court (C.A. J.A. 204-208) is unreported.

JURISDICTION

The judgment of the court of appeals was entered on

June 24, 2010. A petition for a writ of certiorari was

filed on September 17, 2010. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following the entry of a conditional guilty plea in the

United States District Court for the District of Mary-

land, petitioner was convicted on three counts of know-

ingly and willfully making material false statements in

a matter within the jurisdiction of the executive branch

(1)

2

of the Government of ‘ie United States, in violation of

18 U.S.C. 1001. The district court sentenced petitioner

to 30 days of imprisonment, to be followed by two years

of supervised release, and ordered petitioner to pay

$74,346 in restitution. C.A. J.A. 241-245. The court of

appeals affirmed. Pet. App. 1-17.

1. In or about July 20038, the National Security

Agency (NSA), a component of the United States De-

partment of Defense, entered into a contract with Com-

puter Sciences Corporation to obtain certain messaging

services. Computer Sciences Corporation entered into

a subcontract with a division of Northrop Grumman Cor-

poration to provide services to the NSA under the NSA

contract. Northrop Grumman, in turn, employed peti-

tioner to work full-time on the NSA contract. Pet. App.

5; C.A. J.A. 217.

Petitioner’s sole duty station with respect to the NSA

contract was at the NSA’s headquarters at Fort Meade,

Maryland, and petitioner was required to be at that duty

station in order to work on the contract. Petitioner’s

access to NSA Headquarters and the classified informa-

tion necessary to perform his job was subject to a con-

tinuing grant of access by the NSA. The NSA possessed

authority to suspend or revoke that grant of access to

petitioner if, for instance, it determined that petitioner

had submitted timesheets falsely claiming to have per-

formed work under the NSA contract that he did not

actually perform. The NSA also possessed authority to

obtain directly the timesheets and billing records relat

ing to petitioner in order to investigate an allegation

suggesting that petitioner had submitted false time-

sheets. The NSA then could have resolved any associ-

ated overpayment by demanding repayment from Com-

puter Sciences Corporation and could have terminated

3

its contract with that company if such deficiencies with

subcontractor personnel were not adequately remedied.

Pet. App. 5-7, 12; C.A. J.A. 217-218.

Between September 2004 and January 2007, peti-

tioner submitted numerous false timesheets to Northrop

Grumman that fasely claimed that petitioner had

worked roughly 834 more hours on the NSA contract

than he actually had worked. Pet. App. 5-6. That false

information was then “transmitted * * * to NSA,”

which paid Computer Sciences Corporation for the false-

ly claimed services. /d. at 6,17. Petitioner’s false state-

ments ultimately caused the government to pay approxi-

mately $74,346 for services that it never received. C.A.

J.A. 245; ef. id. at 218.

2. In March 2009, a federal grand jury indicted peti-

tioner on 20 counts of knowingly and willingly making

false statements, in violation of 18 U.S.C. 1001, by sub-

mitting 20 fraudulent timesheets for 20 different pay

periods. C.A. J.A. 7-11. As relevant here, Section 1001

provides that “whoever, in any matter within the juris-

diction of the executive * * * branch of the Govern-

ment of the United States, knowingly and willfully—

* * * (2) makes any materially false, fictitious, or

fraudulent statement or representation” shall be fined,

imprisoned, or both. 18 U.S.C. 1001(a).

Petitioner moved to dismiss the indictment, arguing

that his timesheets did not reflect false statements in a

matter within the jurisdiction of the executive branch

within the meaning of Section 1001. C.A. J.A. 12-28.

The district court denied the motion. /d. at 204-208.

The court concluded that petitioner’s alleged submission

of false timesheet information to Northrop Grumman,

which allegedly caused the NSA to pay Computer Sci-

ences Corporation for time that petitioner falsely

4

claimed to have worked, itself provided “the required

jurisdictional nexus” under Section 1001 because the

false statements were made in a matter “within the ju-

risdiction of NSA.” /d. at 206. The district court noted

that “[cJourts do not require that a federal agency have

any direct supervisory power over a defendant in order

to have jurisdiction under § 1001,” 7bid., and concluded

that there were “a myriad of other ways” in which the

NSA had authority with regard to petitioner’s alleged

false statements beyond the NSA’s responsibility for its

payment of funds. /d. at 207. The NSA, the court ex-

plained, had authority effectively to “end[] [petitioner’s]

work on the contract” for submitting false timesheet

information because it “could have suspended or re-

voked [his] access to NSA facilities and information” for

such conduct. /bid. The court also concluded that the

NSA “had the option of terminating its contract with”

Computer Sciences Corporation based on deficiencies

caused by an employee of the company’s subcontractor.

Id. at 207-208.

Petitioner subsequently entered into a conditional

plea agreement under which he agreed to plead guilty to

three of the 20 counts of the indictment while reserving

his right to appeal from the order denying his motion to

dismiss. C.A. J.A. 209-219; ef. id. at 217-219 (stipulation

of facts). The district court accepted petitioner’s condi-

tional guilty plea and found petitioner guilty on three

counts of making false statements, in violation of 18

U.S.C. 1001. C.A. J.A. 287, 241.

3. The court of appeals affirmed. Pet. App. 1-17.

The court of appeals concluded that petitioner’s “false

timesheets fell within the jurisdiction of the executive

branch.” /d. at 9. The court agreed with other courts of

appeals that “the executive branch has the authority (if

5

not the duty) not to pay a false invoice, no matter

through how many intermediaries’ hands it passes” and

that the submission of such a false statement prompting

a federal payment falls within the ambit of Section 1001.

Id. at 9-10, 11 n.1. Such a false statement is a statement

in a matter within the jurisdiction of the executive

branch, the court explained, because “the authority to

safeguard federal funds” is not “merely peripheral, but

rather [is] an official, authorized function of the execu-

tive branch.” /d. at 11.

Although it reasoned that “the executive branch’s

authority to safeguard federal funds is a sufficient juris-

dictional nexus on its own,” the court of appeals also

concluded “other, even more direct controls that the

executive branch exercised over [petitioner]” demon-

strated that petitioner’s false statements were made in

a matter within the jurisdiction of the executive branch.

Pet. App. 12. The court explained that the NSA had the

power to “effectively terminate [petitioner’s] employ-

ment” working on the NSA contract, by revoking his

security clearance and preventing his access to his job

site at NSA Headquarters. /bid. That control, when

“(tlaken together” with the NSA’s right to terminate its

contract with Computer Sciences Corporation and its

“power to safeguard federal funds,” provided “an ample

basis to find federal jurisdiction” under Section 1001.

Ibid.

The court of appeals rejected petitioner’s reliance on

Lowe v. United States, 141 F.2d 1005 (5th Cir. 1944),

and United States v. Blankenship, 382 F.3d 1110 (11th

Cir. 2004), cert. denied, 546 U.S. 828 (2005). Pet. App.

12-16. The court explained that Lowe was distinguish-

able from petitioner’s case because, although it involved

false statements made by the employee of a private com-

5

pany that had contracted with the United States, the

employee's “employment was entirely unaffected by the

existence of the federal contract.” /d. at 15. The court

similarly concluded that Blankenship was inapposite. In

Blankenship, the false statements related to a scheme

whereby a minority-owned business pretended to do

work that was actually performed by a non-minority

business. The minority-owned business subcontracted

with a contractor that in turn contracted with the State

of Florida, which in turn had received federal money

requiring the involvement of minority-owned businesses

in the project. As the court of appeals in this case ex

plained, the federal agency in Blankenship “had no di

rect control over the defendants” and could have re

sponded to the false statements only by attempting to

pressure a state agency to exert pressure on the private

company with which the state had contracted in order to

take action against the subcontractor and those who had

made the false statements at issue. /d. at 14-16.

ARGUMENT

Petitioner contends (Pet. 6-14) that his false state-

ments concerning the time that he worked on the NSA

contract fall outside the jurisdictional reach of 18 U.S.C.

1001 because they do not constitute statements in a

“matter within the jurisdiction of the executive * .

branch,” 18 U.S.C. 1001(a). That is incorrect. The court

of appeals correctly held that Section 1001’s jurisdic-

tional predicate was satisfied in this case, and the court’s

decision does not conflict with any decision of this Court

or any other court of appeals. No further review is war

ranted,

1. Section 1001 requires that a knowingly and will

fully false statement must be made “in a{] matter within

* ¥ ¥

branch of the

the jurisdiction of the executive

Government of the United States.” 18 U.S.C. 1001(a).

The “primary purpose” of that “jurisdictional require-

ment” is “to identify the factor that makes the false

statement an appropriate subject for federal concern.”

United States v. Yermian, 468 U.S. 63, 68 (1984). Peti

tioner’s false statements regarding the time that he pur

portedly worked on an NSA contract were transmitted

to the NSA and directly caused the Executive Branch to

pay for services that it never received. Those false

statements plainly concern an appropriate subject for

federal concern and fall within the reach of Section

1001’s jurisdictional threshold.

Section 1001’s direct statutory predecessor originally

applied only to false statements that caused “pecuniary

or property loss” to the Federal government. United

States v. Gilliland, 312 U.S. 86, 92 (1941) (quoting

United States v. Cohn, 270 U.S. 339, 347 (1926)). Con

gress expanded the statute in 1934 by removing the text

limiting the statute to falsehoods causing monetary

harm, replacing it with the statutory requirement that

the false statement be made “in any matter within the

jurisdiction of any department or agency of the United

States.” /d. at 93; see id. at 92-94. That “broad lan-

guage” covering any false statement made in “any mat-

ter” within the government’s jurisdiction extended the

statute’s reach beyond matters “‘in which the Govern

ment has some financial or proprietary interest’” to

false statements that, inter alia, would pervert “‘the

authorized functions of government departments and

agencies.’” (/nited States v. Rogers, 466 U.S. 475, 480,

482 (1984) (quoting Gilliland, 312 U.S. at 91, 93); see

8

also Brogan v. United States, 522 U.S. 398, 403-404

(1998).’

In other words, “the phrase ‘within the jurisdiction’

merely differentiates the official, authorized functions of

an agency or department from matters peripheral to the

business of that body.” Rogers, 466 U.S. at 479. This

Court has “stressed that ‘the term “jurisdiction” should

not be given a narrow or technical meaning’” in this con-

text, id. at 480 (quoting Bryson v. United States, 396

U.S. 64, 70 (1969)), and has concluded that a matter falls

within agency’s “jurisdiction” under Section 1001 if the

agency “has the power to exercise authority in a particu-

lar situation.” /d. at 479. “Jurisdiction” under Section

1001 thus “mean|s]} simply the power to act upon infor-

mation when it is received.” Jbid. (quoting United

States v. Alder, 380 F.2d 917, 922 (2d Cir.), cert. denied,

389 U.S. 1006 (1967)).

Congress’s decision to expand the statute beyond

false statements causing the government financial harm

did not discard the statute’s original concern with such

statements, which continue to lie at the core of Section

1001. Moreover, this Court has held that an employee’s

false statements to his private-sector employer fall

within Section 1001 where, as here, the employer was a

' After this Court held that Section 1001 did not apply to false state-

ments made in any matter subject to the jurisdiction of a federal court,

see Hubbard v. United States, 514 U.S. 695, 715 (1995), Congress in

1996 again amended and expanded Section 1001 to apply to statement

made in any matter “within the jurisdiction of the executive, legislative,

or judicial branch of the Government of the United States.” See False

Statements Accountability Act of 1996, Pub. L. No. 104-292, § 2, 110

Stat. 3459 (amending 18 U.S.C. 1001(a)); H.R. Rep. No. 680, 104th

Cong., 2d Sess. 2, 8 (1996). That amendment did not alter the scope of

the statute in a manner material to this case, which concerns false state-

ments in a matter within the jurisdiction of the Executive Branch.

9

government contractor that “transmitted [the false

statements] to a federal agency” in connection with its

government contract. Yermian, 468 U.S. at 66, 75 &

n.14 (holding that a defendant need not “actually kn[o]w

that [his false statements] were being submitted to the

Federal Government,” at least where such transmission

was reasonably foreseeable); see Pet. App. 9, 11 n.1 (ex-

plaining that false statements regarding government

payments are unlawful even when the false statements

pass through “intermediaries’ hands” before reaching

the government; concluding that petitioner “cannot do

indirectly that which he is prohibited from doing di-

rectly”). Under this Court’s decisions, therefore, peti-

tioner’s false statements, which were transmitted to the

NSA and directly injured that agency by causing it to

pay for services that it never received, concern a matter

within the “jurisdiction of the executive branch.”

Moreover, as the court of appeals explained, “other,

even more direct controis that the executive branch ex-

ercised” here demonstrate that petitioner’s false state-

ments were made in a matter within the jurisdiction of

the executive branch. Pet. App. 12. The NSA had au-

thority effectively to terminate petitioner’s work on the

NSA contract based on his submission of false timesheet

information, because the NSA had authority to respond

to such misconduct by suspending or revoking peti-

tioner’s access to the NSA facilities and classified infor-

mation that petitioner needed to do his job. The NSA

also had authority to obtain that timesheet information

concerning petitioner to investigate such misconduct

and could redress such actions by subcontactor person-

® Petitioner has not argued in his petition for a writ of certiorari that

it was not reasonably foreseeable that his false statements would be

transmitted to the NSA by his employer.

10

nel under its contract with Computer Sciences Corpora-

tion. See pp. 2-3, supra; C.A. J.A. 217-218. The NSA’s

“nower to exercise authority in [this] particular situa-

tion” concerning the false timesheet information trans-

mitted to it, including the NSA’s “power to act upon

[such] information when it is received,” Rogers, 466 U.S.

at 479-480, establishes that petitioner’s false statements

were made in a matter within the “jurisdiction” of the

NSA.

2. Petitioner acknowledges that a number of the

courts of appeals have concluded that false statements

which cause payments to be made from “the public fise”

are sufficient to trigger Section 1001's jurisdictional

threshold. Pet. 9-11 (citing Pet. App. 9-11). Petitioner,

however, argues that three decisions—Lowe v. United

States, 141 F.2d 1005 (5th Cir. 1944); United States v.

Blankenship, 382 F.2d 1110 (11th Cir. 2004), cert. de-

nied, 546 U.S. 828 (2005); and United States v. Hol-

sirom, 242 Fed. Appx. 397 (9th Cir. 2007) (unpublished

decision)—conflict both with that majority rule and with

the court of appeals’ decision in this case. Pet. 11-14.

That contention lacks merit.

a. The Fifth Circuit in Lowe concluded that Section

1001’s predecessor did not apply where Lowe falsely

represented to his private employer the hours that he

worked on a government shipbuilding project. The

court concluded that the “alleged fact that the United

States reimbursed the company for its payroll pay-

ments” under a shipbuilding contract was not “suffi-

cient” by itself to trigger the statutory prohibition

where the “control and supervision” of Lowe’s duties fell

within “the exclusive dominion of his private employer”

and “every aspect. of [Lowe’s] employment was exactly

the same as it would have been had there been no con-

1]

tract with any government agency.” 141 F.2d at 1006.

Government contracts need not provide for direct reim-

bursement of a contractor’s payroll expenses, and noth-

ing in Lowe indicates that it would have been reasonably

foreseeable that Lowe’s false statements would have

been transmitted to the government. The Fifth Circuit

has accordingly treated its 1944 decision in Lowe as ap-

plying only where it “was not apparent whether the mat-

ters involving private contractors” involved a matter

within the government’s jurisdiction. United States v.

Baker, 626 F.2d 512, 515 n.6 (1980); ef. td. at 514 & n.5

(finding Section 1001 applicable where employees’ false

statements regarding the time they worked on a feder-

ally funded project were transmitted to the federal

agency that funded the project). As it is understood in

the Fifth Circuit, Lowe does not conflict with the deci-

sion below.

The Eleventh Circuit’s decision in Blankenship like-

wise does not support further review. In Blankenship,

the U.S. Department of Transportation (USDOT) pro-

vided grants to the Florida Department of Transporta-

tion (FDOT) under a contract that required FDOT to

ensure that 12% of the federal funds went to disadvan-

taged business enterprises (DBEs). 382 F.3d at 1116.

FDOT, in turn, contracted with Granite Construction (a

private company) to work on a federally funded highway

project, requiring Granite to ensure that 12% of its sub-

contracts were set aside for DBEs. /bid. Granite then

subcontracted with H.J. Trucking (a DBE) but the sub-

contracts and associated materials contained false state-

ments by H.J. Trucking and others that concealed the

fact that another non-DBE company was simply exploit-

ing H.J. Trucking’s DBE license to perform the subcon-

tracted work. /d. at 1116-1118. In that context, Blank-

12

enship explained that USDOT was “powerless to ‘exer-

cise authority’ over either Granite or the defendants”

who made the false statements; “lacked the power to

compel either * * * to rescind or modify [their subcon-

tracting]| agreement”; and instead could look “solely to

the FDOT to implement its contractual obligations” to

the federal government. /d. at 1136-1137. That “em-

barrassingly weak and indirect avenue of recourse,” the

court reasoned, was insufficient to establish USDOT’s

authority over Granite and the defendants and, there-

fore, was insufficient to bring the matter within the ju-

risdiction of USDOT. /d. at 1137. Blankenship does not

address circumstances where, as here, a defendant’s

false statements directly cause the government to make

payments that it otherwise would not have made. And

although the Eleventh Circuit in Blankenship eriticized

its own decisions (ineluding prior binding Fifth Cireuit

precedent) indicating that the expenditure of federal

funds will normally be sufficient to establish “jurisdic-

tion” under Section 1001, zd. at 1189-1140 & n.33, that

intra-circuit tension does not warrant this Court’s re-

view. See Wisniewski v. United States, 353 U.S. 901,

902 (1957).

In any event, the court of appeals correctly con-

cluded that the NSA’s authority to terminate peti-

tioner’s work on the contract based on his submission of

false timesheet statements and its authority over the

NSA contract distinguishes this case from Lowe and

Blankenship, which addressed circumstances in which

a federal agency had no similar authority over the mat-

ter at hand. Pet. App. 15. Lowe and Blankenship there-

fore do not address eases like this, where an Executive

Branch agency not only is harmed financially by the de-

fendant’s false statement but also has the power to act

13

on the false information transmitted to it by taking ac-

tion against the defendant both directly (by terminating

the defendant’s work on the government contract) and

indirectly (through its exercise of contract rights).

b. Finally, petitioner relies (Pet. 11-12) on the Ninth

Circuit’s unpublished decision in Holstrom. That reli-

ance is misplaced. The court in Holstrom concluded that

Holstrom’s submission of false time-card information to

her government-contractor employer did not fall within

the jurisdiction of the Department of Energy (DOE)

because the government “failed to show that DOE had

the ‘power to act’ with regard to Holstrom’s allegedly

false time card entries” and the evidence demonstrated

that Holstrom’s private-sector employer “was wholly

responsible for ‘the total performance under the con-

tract’ including all ‘disciplinary action.’” 242 Fed. Appx.

at 398-399. Under those circumstances, the court con-

cluded that Holstrom’s false statements were “not di-

rectly related to any DOE-authorized function,” without

discussing whether those statements were transmitted

to DOE or caused DOE to make payments for work it

never received. Jbid. Holstrom thus does not address

the circumstances at issue here, where the NSA had

several ways te exercise authority over petitioner’s false

statements. In any event, Holstrom is not a preceden-

tial decision, need not be followed in subsequent cases,

see 9th Cir. R. 36-3(a), and thus does not reflect a divi-

sion of authority warranting this Court’s review.

14

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

NEAL KUMAR KATYAL

Acting Solicitor General

LANNY A. BREUER

Assistant Attorney General

DANIEL S. GOODMAN

Attorney

DECEMBER 2010