United States ex rel. Plumbers & Steamfitters Local Union No. 38 v. C.W. Roen Construction Co.

Opinion by Judge REINHARDT; Dissent by Judge SILVERMAN.

In this qui tam action, Plumbers and Steamfitters Local No. 38 alleges that C.W. Roen Construction Company and its president and office manager violated the False Claims Act (FCA), 31 U.S.C. §§ 3729-33 , by certifying falsely that the Company had paid the applicable prevailing wage as required by the Davis-Bacon Act and related federal laws, when in fact it had paid its employees at a lower rate. The district court found that because the Department of Labor had not conducted an area practice survey for the area in question, and because the Department’s other efforts to establish the prevailing wage were “uncertain,” no reasonable juror could find that the defendants acted with the scienter necessary to violate the FCA. The court then granted summary judgment for the defendants. We conclude, however, that an area practice survey is not necessary in all cases to establish the prevailing wage, and that the status of the Department of Labor’s determinations did not compel the conclusion that the plaintiffs could under no circumstances prove that the defendants acted with the requisite scienter. Given these determinations, and…

dissenting:

The majority’s discourse on labor law is interesting, scholarly, probably correct, but largely beside the point. This is a False Claims Act case. The point is not whether an area practice survey is the only way to establish prevailing wages. The point is that the undisputed facts did not show that Roen’s certifications, even if incorrect, were made with an intent to deceive as required by the FCA.

“For a qui tarn action to survive summary judgment, the relator must produce sufficient evidence to support an inference of knowing fraud.” United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1267 (emphasis added) (quoting United States ex rel. Anderson v. Northern Telecom, Inc., 52 F.3d 810, 815 (9th Cir.1995)). As we said in Wang v. FMC Corp., 975 F.2d 1412, 1421 (9th Cir.1992):

This is especially true in a False Claims Act case premised on a false certification. In Hopper, we specifically held, “For a certified statement to be ‘false’ under the Act, it must be an intentional, palpable lie.” Hopper, 91 F.3d at 1267 . The majority argues that these principles are “extraneous comments” that have been “read out of context to suggest that the FCA requires an intentional lie…