No. 11-2180
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
T. S. Ellis, III, Senior
District Judge. (1:08-cv-01244-TSE-TRJ)
Argued:
Decided:
December 6, 2012
wrote
the
Blackwater
(Blackwater), 1
Defendants). 2
by
USTC,
Worldwide
and
Lodge
several
and
other
Training
defendants
Center,
Inc.
(collectively,
alleged
that
Defendants
overbilled
the
federal
contracts
that
USTC
entered
into
with
the
Department
of
district
concerning
the
court
State
allowed
Department
two
of
contract,
Relators
under
claims
which
USTC
rendered
presented.
verdict
in
favor
of
USTC
on
the
The
claims
The
because
evidentiary
the
rulings,
district
court
prohibiting
made
Relators
certain
from
erroneous
introducing
evidence that would have bolstered their claims and would have
undermined
USTCs
defenses.
Relators
also
appeal
from
the
in
excluding
certain
categories
of
evidence
that
Relators sought to introduce at trial; and (3) did not abuse its
discretion in denying Relators motion for a new trial because
Relators
failed
to
establish
that
USTCs
witness
committed
perjury.
I.
A.
In 2005, the Federal Protective Service division of DHS
selected USTC to provide armed guard services in Louisiana in
support of DHS Hurricane Katrina recovery efforts.
parties
written
agreement,
USTC
was
required
Under the
to
provide
in
Baton
Rouge,
Louisiana. 3
The
Katrina
contract
to
meet
certain
minimum
qualifications,
including
English
language,
[s]ubstance
qualifications,
current
screening,
and
valid
or
prior
firearms
security
training,
firearms-related
experience,
firearms
licenses.
The
in
conjunction
with
the
Federal
Bureau
of
Investigations
also provided that DHS, rather than USTC, was responsible for
obtaining these background checks.
Also in 2005, the State Department selected USTC to provide
security services in Iraq and Afghanistan under a Worldwide
Personal Protective Services agreement.
Services
contract,
security
personnel
provided
by
USTC
would
Crime
validating
USTCs
monthly
labor
invoices.
reimbursement
expenditures,
by
for
certain
submitting
to
the
expenses,
State
such
as
Department
travel
invoices
Brad Davis
in
contract.
Iraq
in
connection
with
the
Protective
Services
Louisiana for USTC, Brad allegedly observed fraud and other acts
that,
in
his
view,
were
in
violation
of
USTCs
contractual
responsibilities.
Melan Hebert Davis (Melan) became engaged to Brad shortly
before he was hired by USTC and sent to Iraq.
needed
personnel
responsibilities.
in
that
to
perform
record-keeping
and
billing
capacity.
During
her
employment
in
Louisiana,
she
rehired
by
USTC
to
perform
work
under
the
She later
Protective
Defendants
in
December
2008
in
the
United
States
Relators
July 2010 with the filing of the Second Amended Complaint (the
Complaint), which is the set of allegations relevant to this
appeal.
As
set
forth
in
the
Complaint
and
the
accompanying
After
appeal
from
the
district
courts
summary
judgment
award.
6
that
Defendants
submitted
false
muster
sheets,
were
also
performing
alleged
that
contractual
Defendants
services.
submitted
false
The
travel
against USTC. 9
opinion,
not
the
and
the
false
travel
records
claims
asserted
court
made
certain
evidentiary
rulings
After
the
trial
concluded,
Relators
filed
motion
10
former
Chief
Operating
Officer,
allegedly
committed
perjury.
which
had
controls.
criticized
After
the
USTCs
trial,
accounting
Relators
practices
obtained
and
sworn
In that
and
concluded,
among
other
things,
that
Relators
II.
As
described
above,
the
Relators
appeal
presents
three
services
we
discretion
address
in
claim
relating
whether
excluding
from
the
to
the
district
evidence
Katrina
court
certain
contract.
abused
categories
its
of
we
address
whether
the
district
court
Third and
abused
its
We address
all
reasonable
inferences
that
may
be
drawn
from
those
2011).
genuine
dispute
as
to
any
material
fact
and
Celotex
Corp.
v.
Catrett,
477
the
movant
is
Fed. R. Civ. P.
U.S.
317,
322
(1986);
Merritt v. Old Dominion Freight Line, Inc., 601 F.3d 289, 295
(4th Cir. 2010).
The False Claims Act (the Act) provides that a complaint
may be brought against anyone who knowingly presents to the
government
approval. 10
under
the
false
or
fraudulent
31 U.S.C. 3729(a)(1)(A).
Act,
which
are
predicated
10
claim
for
payment
or
fraudulent
conduct,
12
conduct
caused
the
government
to
pay
money
in
return.
essence
was
of
that
Relators
USTCs
claim
relating
performance
under
to
the
the
Katrina
contract
was
the
government
been
aware
of
these
deficiencies,
the
[t]he
personnel,
that
the
contract
monitor
company
the
did
required
that
distribution
not
give
[USTC]
of
weapons
management
weapons[,]
and
to
or
felons
manage
ensure
persons
those
involved
in
domestic
abuse
from
obtaining
weapons.
11
13
contract
to
determine
whether
USTC
actually
was
required
to
contracts
between
private
individuals.
Lynch
v.
United
States, 292 U.S. 571, 578 (1934); see also In re Peanut Crop
Ins. Litig., 524 F.3d 458, 470 (4th Cir. 2008); United States v.
Bankers Ins. Co., 245 F.3d 315, 321 (4th Cir. 2001).
Except
the
principles
of
general
contract
law,
which
become
In re
Peanut Crop Ins. Litig., 524 F.3d at 470 (quoting Long Island
Sav. Bank, FSB v. United States, 503 F.3d 1234, 1245 (Fed. Cir.
2007)).
As
begin[]
primary
with
the
principle
language
of
of
contract
the
written
interpretation,
agreement.
we
NVT
Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir.
2004).
Craft
Mach. Works, Inc. v. United States, 926 F.2d 1110, 1113 (Fed.
Cir. 1991).
14
Applying
these
principles,
we
agree
with
the
district
to
manage
personnel,
to
monitor
the
distribution
of
We
observe that the Katrina contract, by its plain terms, did not
assign
USTC
the
responsibility
for
managing
contract
persons
did
not
ineligible
require
to
USTC
possess
personnel
or
to
ensure
weapons
by
that
felons
virtue
of
or
the
expressly
criminal
was
background
given
the
checks
responsibility
for
the
of
performing
security
guards.
services
in
failing
to
fulfill
its
purported
Relators
additional
conclusions
are
not
altered
by
because
there
remained
factual
dispute
whether
contractually-conforming services.
See Owens, 612 F.3d at 731 (plaintiff may not raise new claims
after discovery has begun without first amending the complaint);
Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 617 (4th
Cir. 2009) (same).
award
of
summary
in
favor
of
USTC
on
the
Katrina
contract claim.
B.
We next address Relators argument that they are entitled
to a new trial because the district court erred in excluding
certain categories of evidence that Relators sought to introduce
during the trial.
rulings,
we
observe
that
the
district
court
has
substantial
We
relevance
and
have
stated
prejudice
are
that
[j]udgments
fundamentally
of
evidentiary
matter
of
trial
16
(4th Cir. 2008) (quoting United States v. Simpson, 910 F.2d 154,
157 (4th Cir. 1990)).
For
these
reasons,
we
afford
the
district
court
evidentiary
rulings
absent
an
abuse
of
discretion.
United States v. Medford, 661 F.3d 746, 751 (4th Cir. 2011).
United States
of
an
alleged
containing
employees.
electronic
was
a
(email)
genuine
itinerary
handwritten
note
attachment,
from
from
USTCs
one
of
which
travel
USTCs
12
17
motion
to
exclude
this
evidence
under
the
rule
prohibiting
hearsay.
On appeal, Relators argue that the email attachment should
have been admitted because it was not being offered for the
truth of the matter asserted, cf. Fed. R. Evid. 801(c), and
because
the
attachment
was
admissible
under
the
hearsay
Corp., 269 F.3d 439, 453 (4th Cir. 2001) (evidence is properly
excluded when alternative theory of admissibility is not timely
offered); see also Wheatley v. Wicomico Cnty., 390 F.3d 328, 334
(4th Cir. 2004) (issues raised for the first time on appeal are
generally
not
considered
absent
exceptional
circumstances).
for
excluding
portions
of
the
attachment,
we
18
2.
We next address the district courts exclusion of certain
testimony and exhibits relating to the State Departments 2007
review
of
USTCs
operations
in
Iraq.
Relators
sought
to
The
district
court
excluded
this
evidence
value
and
was
highly
prejudicial,
and
thus
was
conclude
that
the
our
court
determinations.
review
did
of
In
not
the
abuse
our
record,
its
view,
14
we
discretion
the
evidence
in
making
concerning
these
the
19
is
no
evidence
that
the
records
alleged
to
have
been
Relators conceded at
or
whether
they
pertained
the
district
court
did
not
to
billing
records
to
be
Accordingly, we conclude
abuse
its
discretion
in
bribes
to
officials
in
15
Afghanistan
to
expedite
visa
20
Relators
to
bolster
Melans
credibility.
The
district
court
ruling.
Evidence concerning prior bad acts is admissible under
Rule 404(b) only if the evidence is: (1) relevant to an issue
other than character, (2) necessary, and (3) reliable.
United
States v. Hernandez, 975 F.2d 1035, 1039 (4th Cir. 1992) (citing
United States v. Rawle, 845 F.2d 1244, 1247 (4th Cir. 1988)).
However, even if the evidence satisfies this test, the evidence
still may be excluded under Rule 403.
Id.
21
its
discretion
in
excluding
under
Rule
404(b)
the
conclusion
is
not
altered
by
Relators
additional
Complaint
does
Department
of
Relators
did
not
State
not
allege
for
appeal
that
bribes
that
[D]efendants
paid
aspect
to
of
Afghani
the
billed
the
officials.
district
courts
in
excluding
draft
audit
report
prepared
by
David
16
22
concerning
any
matters
within
his
personal
knowledge
discrepancies
in
the
bills
USTC
submitted
to
the
argue
that
the
district
court
abused
its
We disagree
testimony
concerning
the
reports
conclusions,
are
18
23
to
knowledge
scientific,
are
considered
technical,
expert
or
other
testimony
under
specialized
the
Federal
Rules of Evidence, see Fed. R. Evid. 701, and are subject to the
limitations contained in Fed. R. Evid. 702 and the disclosure
requirements contained in Fed. R. Civ. P. 26(a)(2).
See United
States v. Johnson, 617 F.3d 286, 292 (4th Cir. 2010) (opinions
not
based
experience
on
witnesses
and
training
own
are
perception
expert
but
rather
on
their
opinions
rather
than
lay
2007)
concerning
(concluding
the
understanding
of
Medicare
certain
that
Medicare
reimbursement
terms
auditors
process
constituted
expert
testimony
and
their
testimony
19
24
that
the
district
court
did
not
abuse
its
discretion
in
concerning
that
report,
because
Relators
did
not
in
falsification
former
excluding
of
evidence
government
president. 20
The
relating
form
document
by
at
to
Gary
issue
the
alleged
Jackson,
was
USTCs
Bureau
of
ATF
sought
form
to
as
willingness
ask
part
to
Jackson
of
sign
about
Relators
his
name
the
allegedly
inquiry
concerning
to
government
forms
Relators
intended
by
such
questioning
to
provoke
25
were
permitted
to
draw
an
adverse
inference
from
Jacksons
district
regarding
this
line
court
of
granted
USTCs
questioning,
motion
concluding
in
that
limine
it
was
that
character. 21
We
agree
with
the
district
courts
was
unrelated
to
the
Protective
Services
contract.
21
26
next
Relators
address
argue
was
the
final
wrongly
category
excluded
from
of
evidence
admission,
that
namely,
accountant.
The
district
court
limited
Willis
he
found
documents.
certain
fraud
The
travel
court
and
indicators
allowed
muster
upon
Willis
sheet
to
reviewing
testify
discrepancies,
USTCs
concerning
so
long
as
things
that
no
accountant
has,
and
thus,
testimony
district
court
did
not
abuse
the
broad
and
substantial
See
Benkahla,
530
23
F.3d
at
309.
The
testimony
conclusions,
about
discrepancies
documents.
any
that
and
Willis
and
all
he
observed
expressly
travel
during
was
and
his
permitted
muster
review
to
sheet
of
the
district court did not abuse its discretion in making the above
evidentiary rulings challenged in this appeal.
C.
Finally, we address Relators argument that the district
court erred in failing to grant a new trial or to order an
evidentiary hearing on the Rule 59 motion involving Relators
contention that Esposito, the former Chief Operating Officer of
USTC, committed perjury.
28
different conclusion; and (3) the party requesting the new trial
was taken by surprise when the false testimony was given, and
was unable to address it or was not aware of its falsity until
after the trial.
(4th Cir. 1976); see also Davis v. Jellico Cmty. Hosp., Inc.,
912 F.2d 129, 134 (6th Cir. 1990) (applying this test in civil
context).
(the
report)
that
was
procedures
and
controls. 24
provide
copy
of
team?
[the
critical
Esposito
report]
to
of
was
the
asked,
accounting
[D]id
[governments]
you
audit
USTCs
Esposito answered,
29
Company,
the
governments
auditing
firm
in
this
matter,
argued
in
established
the
district
that
Esposito
court
that
Farrells
committed
perjury.
hearing.
Among
other
reasons,
the
court
concluded
that
30
not
establish
Wallace,
528
that
F.2d
at
the
district
establish
to
testimony
given
omitted).
record
Espositos
by
According
discloses
perjury
has
that
866
testimony
(movant
to
the
the
different
seeking
courts
material
new
district
is
must
that
the
false)
court,
alleged
recollection
[a]t
to
from
have
the
See
trial
satisfaction
witness
witness
false. 26
was
(citation
most,
the
committed
witness
now
agree
Farrells
testimony
with
declaration
was
false,
the
district
does
but
not
rather,
courts
conclusion
establish
at
most,
that
suggests
that
Espositos
that
her
A mere
1974)
(holding
that
the
fact
26
that
two
witnesses
gave
31
Relators
accusation
Esposito
committed
perjury,
we
hold that the district court did not abuse its discretion in
denying Relators Rule 59 motion for a new trial.
Likewise, we find no merit in Relators argument that they
were entitled to an evidentiary hearing to develop further their
contention
United
that
States
Esposito
v.
Smith,
perjured
herself.
62
641,
F.3d
651
As
we
(4th
noted
Cir.
in
1995),
degree
of
deference
is
appropriate
(Citation omitted).
because
the
acumen
without
an
evidentiary
hearing.
United
States
v.
Upon our
32
III.
In sum, we hold that the district court correctly concluded
that USTC was entitled to summary judgment on claims arising
under the Katrina contract.
arising
under
the
Protective
Services
contract.
33