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United States ex rel Totten v. Bombardier Corporation

August 27, 2004


Appeal from the United States District Court for the District of Columbia (No. 98cv00657)

Before: Rogers, Garland, and Roberts, Circuit Judges.

The opinion of the court was delivered by: Roberts, Circuit Judge

Argued April 20, 2004

Dissenting opinion filed by Circuit Judge GARLAND.

Relator Edward Totten brought a qui tam action against Bombardier Corporation and Envirovac, Inc., alleging that those companies violated the False Claims Act, 31 U.S.C. § 3729, by delivering allegedly defective rail cars to the National Railroad Passenger Corporation (Amtrak) and submitting invoices to Amtrak for payment from an account that included federal funds. The pertinent provision of the Act imposes liability for civil penalties and treble damages on anyone who "knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval." Id. § 3729(a)(1). Amtrak is not the Government, 49 U.S.C. § 24301(a)(3), and Totten alleged only that the funds Amtrak used to pay Bombardier and Envirovac came in part from the Government -- not that those companies presented their claims to an officer or employee of the Government. The district court accordingly dismissed Totten's complaint. We agree that under the plain language of Section 3729(a)(1), claims must be presented to an officer or employee of the Government before liability can attach. We therefore affirm.


This is Totten's second appeal in this case; the facts are summarized in our opinion in the first, United States ex rel. Totten v. Bombardier Corp., 286 F.3d 542, 545 (D.C. Cir. 2002) ( Totten I ):

The dispute giving rise to this case began when Amtrak contracted with two private companies, Bombardier Corporation and Envirovac, Inc. ("the Contractors"), to supply rail cars with new toilet systems for its trains. Bombardier makes the cars and Envirovac makes the toilets. Specifications for the toilet systems were incorporated into Amtrak's contracts with the Contractors. On March 16, 1998, Totten, a former Amtrak employee, filed a suit against the Contractors under the [False Claims Act], alleging that they had supplied unsuitable parts that did not meet the contractual specifications.

According to Totten's amended complaint, Bombardier and Envirovac are liable under the False Claims Act because they submitted periodic invoices to Amtrak for noncompliant rail cars and Amtrak paid the invoices with funds that included federal grant money.

The district court dismissed the complaint at the threshold, concluding that 49 U.S.C. § 24301(a) -- which states that Amtrak "shall not be subject to title 31" -- bars False Claims Act suits that involve claims made to Amtrak. United States ex rel. Totten v. Bombardier Corp., 139 F. Supp. 2d 50, 54 (D.D.C. 2001). This court reversed and remanded, holding that Section 24301(a) is not a bar to False Claims Act suits against those who submit claims to Amtrak: in such cases, we reasoned, it is the claimant -- not Amtrak -- that is rendered "subject to" the Act. Totten I, 286 F.3d at 548, 550. The court in Totten I "express[ed] no opinion" on another threshold question in the case: "whether [a False Claims Act] plaintiff may prevail against a defendant who submits a false `claim' to a federal grantee (such as Amtrak), without presenting evidence that the claim was ever actually submitted to the U.S. government." Id. at 553.

That question was the focus of the district court's inquiry on remand, after Totten amended his complaint. The court again dismissed the action, noting that the amended complaint alleged only that "the allegedly false claims in this case were presented to and paid by Amtrak, not that the false claims were presented to any federal officer or employee." United States ex rel. Totten v. Bombardier Corp., No. 98-0657, Mem. op. at 7 (D.D.C. Sept. 3, 2003). The district court recognized that 31 U.S.C. § 3729(c) defines "claim" under the Act to include claims made to a grantee if the Government provides all or part of the money to pay the claim, but noted that "Congress nevertheless did not remove the unambiguous language requiring presentment to the United States" in Section 3729(a)(1). Id. at 5. Totten now appeals, and the Government has filed briefs and argued as amicus curiae in support of Totten.*fn1


A. Amtrak is Not the Government

Totten -- but not the Government -- argues that the allegedly false claims in this case were presented to the Government, because Amtrak was a mixed-ownership government corporation prior to December 1997 and the Government has continued to hold all of Amtrak's preferred stock, and has provided sizable subsidies to Amtrak, since that date. Totten Br. at 6. This argument is unavailing.*fn2

Even prior to 1997 -- indeed, at all times since the company was created in 1971 -- Amtrak's organic statute has flatly stated that the company "is not a department, agency, or instrumentality of the United States Government." 49 U.S.C. § 24301(a)(3); see also Totten I, 286 F.3d at 544. In its brief, the Government candidly concedes that "Congress has specified that Amtrak is not itself an agency of the Government." Amicus Br. at 10. And in a case involving the provision that is now Section 24301, the Supreme Court deemed the statute "assuredly dispositive of Amtrak's status as a Government entity for purposes of matters that are within Congress's control." Lebron v. National R.R. Passenger Corp., 513 U.S. 374, 392 (1995); see also Totten I, 286 F.3d at 544-45 (citing Lebron ). Totten offers no reason, and we can think of none, why False Claims Act coverage is not a matter "within Congress's control."

The case on which Totten relies, Rainwater v. United States, 356 U.S. 590 (1958), is clearly distinguishable. Rainwater held that the Commodity Credit Corporation was "part of `the Government of the United States' for purposes of the False Claims Act," id. at 592, but as the Court noted, the statute in that case expressly provided that the Corporation was "an `agency and instrumentality of the United States.' " Id. at 591 (quoting Commodity Credit Corporation Charter Act, Pub. L. No. 80-806, § 2, 62 Stat. 1070 (1948)). Amtrak's statute, of course, gives Amtrak the exact opposite status. Attempts to analogize the other facts in Rainwater -- that all of the Commodity Credit Corporation's employees were employees of the U.S. Department of Agriculture, and that the entire budget of the Corporation came from the federal treasury, see id. -- are similarly fruitless.

B. Section 3729(a)(1) Requires Presentment to an Officer or Employee of the Government

1. Totten, now with the support of the Government, advances an alternative argument: that a claim submitted to Amtrak is effectively a claim presented to the Government. Thus Totten asserts that "the [False Claims Act] covers claims presented to grantees," Totten Br. at 21; see also Reply Br. at 2, and relies on dicta from United States ex rel. Yesudian v. Howard University, 153 F.3d 731, 738 (D.C. Cir. 1998), which suggest that claims presented to grantees may be considered " `effectively' presented to the United States" if the claims are paid with funds the grantee received from the Government. See Totten Br. at 13; see also Amicus Br. at 18 (quoting Yesudian ).

Totten and the Government are unable to refute Envirovac's argument that their reading of the statute would "write the clear unambiguous language of Section 3729(a)(1) entirely out of the Act." Envirovac Br. at 9; see also Bombardier Br. at 10-11. Liability under Section 3729(a)(1) arises when any person "knowingly presents, or causes to be presented, to an officer or employee of the United States Government ... a false or fraudulent claim for payment or approval," 31 U.S.C. § 3729(a)(1) (emphasis added); Totten and the Government offer no plausible explanation for how presentment of a claim to Amtrak can satisfy the clear textual requirement that a claim be presented to a federal officer or employee. Instead, they shift to a textual argument of their own, arguing that a presentment requirement in Section 3729(a)(1) would be "inconsistent with the plain language of [Section] 3729(c)." Amicus Br. at 9; see also Reply Br. at 2.

Section 3729(c) defines a claim to include a request or demand for payment made to a grantee "if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse ... [the] grantee ... for any portion of the money or property which is requested or demanded." 31 U.S.C. § 3729(c). A presentment requirement in Section 3729(a)(1), the argument goes, would mean that False Claims Act liability for claims submitted to grantees would attach only if the claims are presented for reimbursement, and thus would "render[ ] the first `if' clause meaningless." Amicus Br. at 13.

Not at all. It is quite easy to square the language of Section 3729(c) -- including both "if" clauses -- with the presentment requirement in Section 3729(a)(1). The first "if" clause defines a claim to include claims submitted to grantees if the Government "provides" any portion of the funds used to pay the claim. In a rhetorical sleight of hand, the Government urges that this clause must reach any claim where the money " has already been or is being provided by the Federal Government." Id. (emphasis added). Such a reading equates the present-tense "provides" in the statute with the pasttense "has provided" in the argument -- and thereby runs afoul of the Supreme Court's admonition that "Congress' use of a verb tense is significant in construing statutes." United States v. Wilson, 503 U.S. 329, 333 (1992).

The word "provides" in Section 3729(c), when appropriately limited to the present tense, squares neatly with a presentment requirement. False Claims Act liability will attach if the Government provides the funds to the grantee upon presentment of a claim to the Government. Liability will also attach if, after the grantee presents the claim, the Government provides the funds directly to the claimant: the first "if" clause of subsection (c) -- unlike the second -- does not circumscribe the set of possible recipients of the federal funds. And under the second "if" clause, liability will attach if the Government -- again, upon presentment of the claim --reimburses the grantee for funds that the grantee has already disbursed to the claimant. Nothing about the language of subsection (c) requires ignoring that of subsection (a)(1) to make sense of the statute.*fn3

Indeed, Totten and the United States never connect the dots in their argument based on subsection (c). Whatever that argument may show about what constitutes a "claim," it does not respond to the plain requirement of subsection (a)(1) that, to be actionable under the False Claims Act, any such claim must be presented to an officer or employee of the United States Government. As Judge Randolph noted in Totten I, it is clear on the face of the statute that "no matter how `claim' is defined, subsection (a)(1) requires the alleged false claimant to present it (or cause it to be presented) to a federal officer or employee." 286 F.3d at 554 (Randolph, J., concurring).

2. In Yesudian, the court considered the present question, but expressly concluded that it "need not resolve that question today." 153 F.3d at 739. That was because the issue in Yesudian was not liability under the False Claims Act for false claims, but whether an employer retaliated against an employee for filing a qui tam action under the Act. Such retaliation, the Yesudian court concluded, could be shown without establishing that the qui tam plaintiff would have prevailed in his suit. Id.; see Totten I, 286 F.3d at 546 ("Neither this court nor the Supreme Court has definitively explicated the complex relationship between the definition clause in § 3729(c) and the presentment clause in § 3729(a)(1);" Yesudian "declined to answer" the question). The Yesudian court noted that the statutory language could be read to require presentment to the United States, but also surmised -- relying on the legislative history of the 1986 amendments to the False Claims Act, see 153 F.3d at 737- 39 -- that it was "also possible to read the language to cover claims presented to grantees, but `effectively' presented to the United States because the payment comes out of funds the federal government gave the grantee," id. at 738. Now that the question is which interpretation is correct, as opposed to whether either is arguable, we adhere to the plain language of the statute, rather than invoke the legislative history to embrace a reading at odds with the statutory text.

As an initial matter, the Supreme Court reiterated as recently as this past Term that resort to legislative history is not appropriate in construing plain statutory language. "[W]hen the statute's language is plain, the sole function of the courts -- at least where the disposition required by the text is not absurd -- is to enforce it according to its terms." Lamie v. United States Tr., 124 S. Ct. 1023, 1030 (2004) (quoting Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6 (2000)); see also Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994) (courts should "not resort to legislative history to cloud a statutory text that is clear"); Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 808-09 n.3 (1989) ("Legislative history is irrelevant to the interpretation of an unambiguous statute.").

Totten and the United States do not suggest that the language of Section 3729(a)(1) is somehow not plain; they merely argue that a plain language reading would yield results at variance with the legislative history of the 1986 amendments. Given that we are dealing with plain language, however, there is no way to "construe" the language so that it is satisfied when claims are presented to Amtrak. We could say that submitting a claim to Amtrak is "just like" or "equivalent to" or "effectively" submitting a claim to "an officer or employee of the United States Government," and that subsection (a)(1) is therefore satisfied, but those would just be different ways of saying that we are not going to read (a)(1) as written by Congress. "There is a basic difference between filling a gap left by Congress' silence and rewriting rules that Congress has affirmatively and specifically enacted." Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625 (1978). Totten and the United States imply that the asserted variance with the legislative history empowers us to ignore the plain language of subsection (a)(1), but such extraordinary power is limited to the situation in which adherence to the plain text leads to an "absurd" result, see, e.g., Lamie, 124 S. Ct. at 1030, and no one has suggested that to be the case here.

None of this is to gainsay the argument based on the legislative history, ably advanced (and suitably, given the nature of the question presented) in Yesudian. But there would be no need for a rule -- or repeated admonition from the Supreme Court -- that there should be no resort to legislative history when language is plain and does not lead to an absurd result, if the rule did not apply precisely when plain language and legislative history may seem to point in opposite directions.

Totten and the United States argue that adhering to the plain language would leave intact opinions Congress intended to overrule in the 1986 amendments, but that is not clear with respect to the decision that the Senate Judiciary Committee most clearly intended to overrule -- United States v. Azzarelli Construction Co., 647 F.2d 757 (7th Cir. 1981). See S. REP. NO. 99-345, at 22 (1986) (S. REP.). Azzarelli held that because the federal funds at issue were part of a "fixed and determinate yearly contribution" rather than an "open-ended federal expenditure program," the False Claims Act did not apply. Azzarelli, 647 F.2d at 761; see S. REP. at 15, 22 (describing Azzarelli 's holding). Under our reading of subsections (a) and (c) of Section 3729, the fixed nature of a federal grant would be no bar to a claimant's liability; such liability would turn on whether the Government "provides" the funds -- in a fixed or variable amount -- upon presentment of a claim to the Government. In fact, this presentment requirement was satisfied in Azzarelli: the payment scheme clearly required the state to present to the Government claims for reimbursement after it paid the contractors' fraudulent claims. See 647 F.2d at 760.

Totten and the United States may be on firmer ground with respect to some of the other cases with which the Committee expressed displeasure. But our point is not to debate the legislative history; rather, "[t]hese uncertainties illustrate the difficulty of relying on legislative history ... and the advantage of our determination to rest our holding on the statutory text." Lamie, 124 S. Ct. at 1034. And whatever degree of confidence about congressional purpose one derives from the legislative history, that purpose must find expression "within the permissible limits of the language" before it can be given effect. HENRY J. FRIENDLY, BENCHMARKS 216 (1967).

At its most broad, the legislative history of the 1986 amendments declares that "a false claim is actionable although the claims or false statements were made to a party other than the Government, if the payment thereon would ultimately result in a loss to the United States." S. REP. at 10. Even if the Committee "intended the concept of loss to the United States to be considered broadly," Yesudian, 153 F.3d at 739, "no legislation pursues its purposes at all costs," Student Loan Mktg. Ass'n v. Riley, 104 F.3d 397, 408 (D.C. Cir. 1997) (quoting Rodriguez v. United States, 480 U.S. 522, 525-26 (1987)) (internal quotation marks omitted). The task of statutory interpretation cannot be reduced to a mechanical choice in which the interpretation that would advance the statute's general purposes to a greater extent must always prevail over one that would both advance the same ends --though to a slightly lesser extent -- and have fewer drawbacks. See BP West Coast Prods., LLC v. FERC, 374 F.3d 1263, 1292-93 (D.C. Cir. 2004) (statutory objective of providing tax incentives for certain pipeline owners does not mean all interpretive questions should be resolved in favor of whatever results in most favorable tax treatment for such owners) (citing Michigan v. EPA, 268 F.3d 1075, 1084 (D.C. Cir. 2001)). Nothing in the legislative history of the 1986 amendments suggests that the present False Claims Act is, to borrow a phrase from another context, "the product of monomaniacs." Student Loan Mktg. Ass'n, 104 F.3d at 408.

What is more, if the overriding intent of Congress were in fact to delete the requirement that claims be presented to a Government officer or employee, Congress could readily have done just that -- amend subsection (a)(1) to provide that claims be presented to the Government or a grantee or recipient of Government funds. But Congress did not touch (a)(1) at all in 1986. Congress proceeded quite elliptically if its intent were to eliminate the requirement of presentment to the Government in the case of claims against grantees.

In the final analysis, we can remain agnostic on the question whether Congress intentionally left the presentment requirement in Section 3729(a)(1) or simply forgot to take it out. The suggestion that Congress may have "dropped a stitch," Yesudian, 153 F.3d at 738, is not enough to permit us to ignore the statutory text. The Supreme Court reminded us in the Term just ended that " `[i]t is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think ... is the preferred result.' " Lamie, 124 S. Ct. at 1034 (quoting United States v. Granderson, 511 U.S. 39, 68 (1994) (Kennedy, J., concurring)) (ellipsis in Lamie ); see also Consolidated Rail Corp. v. United States, 896 F.2d 574, 579 (D.C. Cir. 1990) (courts are generally not "free to `correct' what they believe to be congressional oversights by construing unambiguous statutes to the contrary of their plain meaning").

There are good reasons for this rule; a court's attempt to correct a statute can often create new problems. At least three complications could flow from the proposed correction. First, as Judge Randolph observed in Totten I, extending False Claims Act liability here seems to result in quadruple liability for false claimants: a grantee could presumably bring suit and obtain a recovery for itself, in addition to the treble damages the Government and the relator divvy up under the Act. See 286 F.3d at 554 (Randolph, J., concurring). Totten's response -- "So be it," Opposition to Mots. to Dismiss at 30 -- is candid but not reassuring.

Second, authorizing suit on behalf of an entity to which a claim was not presented raises complicated questions in applying the statute's scienter requirement: if the claimant has told the grantee pertinent facts that would, in the absence of such disclosure, make a claim fraudulent, it seems that the claimant has not "knowingly" presented a false claim to the grantee. See, e.g., United States ex rel. Durcholz v. FKW Inc., 189 F.3d 542, 545 (7th Cir. 1999) ("[T]he government's knowledge effectively negates the fraud or falsity required by the [Act]."). But see United States ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1421 (9th Cir. 1991) ("The requisite intent is the knowing presentation of what is known to be false. That the relevant government officials know of the falsity is not in itself a defense."). It is unclear how to apply the "knowingly presents" element when the Government itself (or a relator) brings suit for claims made to a grantee, if there is no longer any requirement of presentment to the Government.

Third, an "effective" presentment approach would make the potential reach of the Act almost boundless: for example, liability could attach for any false claim made to any college or university, so long as the institution has received some federal grants -- as most of them do. The Yesudian court recognized this concern:

It may be that this reading ... should not apply to all grantees. It may not be appropriate, for example, where the grantee's federal funds are an insubstantial percentage of its total budget, where there is little likelihood that any of a defendant's money actually came from the federal grant, or where there is little ...

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