Texas Sample Motion for Summary Judgment

The following summary judgment has nothing to do with a credit card lawsuit but is provided for people in Texas to get a general idea of the format:



UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

__________________________________________________

UNITED STATES OF AMERICA,                                 )

EX REL. ALFRED J. LONGHI, JR.,                             )

)

PLAINTIFFS,                           )         No. H-02-CV-4329

)         Judge Miller

vs.                                             )

)         Jury Demanded

LITHIUM POWER TECHNOLOGIES, INC.                 )

AND MOHAMMED ZAFAR A. MUNSHI ,                   )

DEFENDANTS.                       )

__________________________________________________


PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT ON DAMAGES, PENALTIES, ATTORNEY’S FEES, COSTS AND EXPENSES

The United States files this brief identifying the damages and civil penalties, and the Relator’s attorney’s fees, costs and expenses, associated with the four contracts on which this Court granted Plaintiffs’ summary judgment. The Plaintiffs now move for summary judgment on the damages, penalties, attorneys’ fees, costs, and expenses set forth below.


Background

On September 27, 2007, this Court granted the Plaintiffs’ Motion for Partial Summary Judgment, finding Defendants liable to the United States under the False Claims Act (FCA) for fraudulently inducing the United States into entering into four research contracts. On that same date, the Court entered an amended Scheduling Order asking that the Plaintiffs identify the damages they sustained as a result of Defendants’ fraud. This brief responds to that Order, identifying damages and civil penalties in an amount between $5,274,365 and $5,576,365, and Relator’s attorney’s fees, Case 4:02-cv-04329 Document 110 Filed 10/29/2007 Page 1 of 8 The Plaintiffs briefed the 5 1 th Circuit’s standards for summary judgment in their memorandum of law filed in support of their motion for partial summary judgment. Xosts and expenses in the amount of $272,766.49. The Plaintiffs move for summary judgment on these amounts. [The Plaintiffs briefed the 5th Circuit’s standards for summary judgment in their memorandum of law filed in support of their motion for partial summary judgment.]


The Four Contracts

The research contracts that this Court found the Defendants fraudulently procured from the United States can be identified as follows:

Contract 1     ARMY Phase 1     ARMY 8630     F08630-98-0066/P00001
Contract 2     ARMY Phase2     ARMY 0018     DASG60-00-C-0018
Contract 3     USAF Phase 1     USAF 2048     F33615-C-2048
Contract 4     USAF Phase 2     USAF 2122     F33615-00-C-2122

Each of these contracts was a form of “fixed fee” contract. The United States budgeted a maximum amount of money it would pay out on each contract regardless of the actual costs incurred by Defendants. Under the Federal Acquisition Regulations (FARs), the Defendants had to submit vouchers or invoices to the United States to be paid. Each voucher or invoice had to request a sum certain and identify the work performed. The Phase 2 contracts, Contracts 2 and 4, were paid pursuant to vouchers that Defendants submitted monthly. The smaller Phase 1 contracts, Contracts 1 and 3, were paid out with less frequency. Contract 1 was paid out in one lump sum pursuant to one voucher. Contract 3 was paid out every two months, again contingent upon the United States receiving vouchers from Defendants. Spreadsheets identifying these payments for each contract are attached to the Personal Declaration of NASA Investigative Auditor Melody J. Coston, which is Exhibit 1 to this brief.

The United States would not have paid out any monies on these contracts had Defendants not submitted the vouchers claiming payment.


Damages and Civil Penalties under the False Claims Act

Any person violating the FCA becomes liable to the United States for civil penalties of notless than $5,500 per false claim and not more than $11,000 per false claim, plus three times theamount of actual damages the United States sustains because of the fraudulent acts of that person.31 U.S.C. § 3729(a) [This penalty range applies to false claims made after August 30, 1999. Prior to that date, the penalty range was $5,000 to $10,000. 28 C.F.R., Section 85.3(a)(9)(2007]. FCA damages “typically are liberally calculated to ensure that they afford the Government complete indemnity for the injuries done it.” United States ex rel. Compton v. Midwest Specialties, Inc., 142 F.3d 296, 304 (6 Cir. 1998). The fact that Congress provided for treble damages and an automatic civil monetary penalty per false claim shows that Congress believed that making a false claim to the Government was a serious offense. United States v. Mackby, 339 F. 3d1013, 1017 (9 Cir. 2003),citing S. Rep. No. 99-345 at 17 (1986), reprinted in U .S. Code Cong. & Admin. News 1986 p. 5266, 5282. Congress also felt that treble damages were necessary to fullycompensate the United States where a portion of that money might go to a relator, and in light of thefact that the FCA did not include a provision for pre judgment interest or consequential damages. See generally, Cook County, Illinois v. United States ex rel. Chandler, 538 U.S. 119 (2003)


Damages and Civil Penalties under a Fraud in the Inducement Theory

Under the fraudulent inducement theory of FCA liability, pursuant to which this Court found Defendants’ liable, the measure of actual single damages becomes the total amount of monies paid out by the United States under the subject contracts. Marcus v. Hess, 317 U.S. 537 (1943) (applying an “out of pocket” measure of damages under the FCA). See also, Harrison v. Westinghouse Savannah River Company, 176 F. 3d 776 (4th Cir. 1999).

Further, the United States is entitled to FCA penalties on the individual invoices or vouchers submitted by the Defendants under which they made their claims for payment to the United States because each voucher or claim was submitted on a contract procured by fraud. See, Marcus v. Hess,317 U.S. 537 (1943)(all claims subsequently submitted pursuant to a contract procured by fraud aresufficient to constitute “false claims” within the meaning of the false claims act), Harrison v. Westinghouse Savannah River Company, 176 F. 3d 776 (4 Cir. 1999), United States ex rel. Thomas M. Ubl v. IIF Data Solutions, 2007 WL 2220586 (E.D. Va. August 1, 2007). The FCA “covers allfraudulent attempts to cause the government to pay out sums of money.” United States v. Neifert-White Co., 390 U.S. 228, 232-33 (1968).

Here then, the United States is entitled to damages in the maximum amount of three times the actual monies paid out to Defendants under the four contracts, in addition to civil penalties inthe range of $5,500 to $11,000 per false claim [With one exception (noted in the brief), where the penalty range would be $5,000 to $10,000]


Damages and Penalties under the Four Research Contracts at Issue in this Case

To calculate actual damages, NASA’s Investigative Auditor – Melody Coston, located all of the payment vouchers Defendants submitted to the United States under the four contracts. She then confirmed the amounts paid under each voucher, adding up those amounts for each contract. Those amounts, which she calls “Mischarged Costs” on her spreadsheets, are as follows:

Contract         Amounts Paid Out

1                     $ 58,535
2                     $ 749,148
3                     $ 99,991
4                     $ 749,781

__________________________________

Total Single Damages: $1,657,455


To fully compensate the United States, the FCA permits the United States to recover up to three times this single damage amount, for a recovery of $4,972,365 in this case. These calculations are attached to Exhibit 1, Ms. Coston’s Personal Declaration.

Ms. Coston also calculated a range of penalties to which the United States would be entitled under the FCA. As pointed out, that range is anywhere between $5,500 and $11,000 per false claim. For the one voucher requesting payment on Contract 1, the penalty range would be $5,000 to $10,000, because that voucher was submitted prior to August 30, 1999, the date on which Congress made effective increased penalties. Each voucher, which served as a claim for payment upon the United States, constitutes a false claim. [The FCA does not expressly address the circumstances that would warrant imposing a higher or lower penalty within the statutory range. However, most courts take theposition that the penalties are mandatory and must be imposed, even if at the low end. See generally, United States v. Stocker, 798 F. Supp. 531 (E.D. Wis. 1992), United States v. Peters, 927 F. Supp. 363 (D. Neb. 1996), United States v. Panini, 717 F. Supp. 1013 (S.D.N.Y. 1989), United States v. Hill, 676 F. Supp. 1158 (N.D. Fla. 1987).The 5 Circuit has generally taken the position that the penalties should not be in excess th and out of proportion to the damages sought by the Government. See e.g. Peterson v.Weinberger, 508 F. 2d 45, 55 (5 Cir. 1975). This should not be an issue here because the Plaintiffs seek penalties which, even at the high end, are no more than approximately 12% of treble damages.]

Under the four contracts, Defendants submitted a total of 55 vouchers. Ms Coston determined the penalty range as follows:

Low Range: (1 x $5,000) + (54 x $ 5,500) = $ 302,000
High Range: (1 x $10,000) + (54 x $11,000) = $ 604,000

Again, these calculations are identified in the spreadsheets attached to Exhibit1.

Adding treble damages to the penalty range, the United States is entitled to damages and penalties between the range of $5,274,365 and $5,576,365.


Relator’s Attorneys’ Fees and Litigation Expenses

The False Claims Act also provides that a relator in a successful qui tam case “shall also receive an amount for reasonable expenses which the court finds to have been necessarily incurred, plus reasonable attorneys’ fees and costs. All such expenses, fees, and costs shall be awarded against the defendant.” 31 U.S.C. § 3730(d)(1). Consistent with this statutory mandate, Plaintiffs have attached as Exhibit 2 the declaration of Relator Longhi’s counsel, Mitch Kreindler, describing the reasonable expenses, fees and costs incurred on Mr. Longhi’s behalf during this litigation. In total, Mr. Longhi incurred $270,345.83 in attorneys’ fees and $2,420.66 in out-of-pocket costs and expenses. Mr. Kreindler’s detailed attorney billing records include the date, description of the services performed, time taken, an hourly rate and the dollar amount. Because the records contain information protected by the attorney client privilege and detailed descriptions of work product, they are not appended here. However, the records are for the Court to review in camera and will be made available to Defendants counsel pursuant to an agreement designed to preserve the confidential and privileged character of the information.


Conclusion

WHEREFORE, the Plaintiffs request that the Court enter judgment in favor of the Plaintiffs for treble damages and civil penalties in an amount between $5,274,365 and $5,576,365 and for attorney’s fees, costs and expenses of $272,766.49.


Respectfully submitted,

DONALD J. DeGABRIELLE, JR.
United States Attorney

___________________________________

ANDREW A. BOBB
Assistant United States Attorney
State Bar No. 02530350
919 Milam, Suite 1500
P.O. Box 61129
Houston, Texas 77208-1129

Telephone: 713-567-9766
Facsimile: 713-718-3303

MICHAEL F. HERTZ
DENNIS PHILLIPS
Attorneys, Department of Justice
Civil Division
Patrick Henry Building
601 D Street
Washington, D.C. 20530

Telephone: (202) 307-1086
Facsimile: (202) 616-3085

ATTORNEYS IN CHARGE FOR THE
UNITED STATES OF AMERICA

Mitchell R. Kreindler
Texas Bar No. 24033516
KREINDLER & ASSOCIATES
9219 Katy Freeway, Suite 206
Houston, Texas 77024-1415
713.647.8888
FAX: 713.647.8889
mkreindler@blowthewhistle.com

ATTORNEY IN CHARGE FOR QUI TAM
RELATOR ALFRED J. LONGHI, JR.


CERTIFICATE OF SERVICE

I certify that on October 29, 2006, the foregoing document was filed electronically and service accomplished automatically though the Notice of Electronic Filing issued by the Court’s Electronic Case Filing (ECF) System to the following counsel of record:

DHolmes282@aol.com
MKreindler@blowthewhistle.com

___________________________________
Andrew A. Bobb
Assistant United States Attorney