PURCELL, et al v. MWI CORPORATION, et al

Filing 486

MEMORANDUM OPINION to the Order on the two Motions for Judgment as a Matter of Law. Signed by Judge Gladys Kessler on 6/25/14. (CL, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,
ex rel. ROBERT R. PURCELL,
Plaintiffs,
v.

Civil Action No. 98-2088 (GK)

MWI CORPORATION,
Defendant.

MEMORANDUM OPINION

On November 25, 2013, after a nine-day trial,
Defendant
violations
§

MWI
of

3729(a) (1),

Corporation
the
(2).

("Defendant"

False

Claims

or

Act

a jury found

"MWI")
("FCA")

liable
31

I

for

u.s.c.

The matter is now before the Court on MWI's

Motion for Judgment as a Matter of Law [Dkt. No. 443]
Renewed Motion for Judgment as a Matter of Law

and MWI's

[Dkt. No.

478].

Upon consideration of the Motions, Oppositions, Replies, and the
entire record herein,

and for the reasons set forth below,

the

Court concludes that Defendant's Motion for Judgment as a Matter
of

Law

shall

be

denied

and

Defendant's

Judgment as a Matter of Law shall be denied.

Renewed

Motion

for

I .

BACKGROUND

In

1

1992,

MWI,

a

Florida

corporation,

arranged

to

sell

irrigation pumps and other equipment to seven Nigerian states.
The total sale price was $82.2 million.
To
Nigeria

finance

these

("Nigeria")

sales,

sought

MWI

and

and the

received

Export-Import Bank of the United States
the

United

States

that

finances

and

Federal

eight

Republic of

loans

from

the

("Ex-Im"), an agency of
facilitates

transactions

between U.S. exporters and international buyers. Ex-Im agreed to
finance the deal and loan Nigeria $74.3 million. Nigeria agreed
to pay back the $74.3 million, as well as interest and fees, and
the

individual Nigerian states agreed to pay the remainder of

the $82.2 million price.
Before
required

Ex-Im

MWI

to

would
submit

approve
a

the

"Letter

loans
of

to
Credit

Nigeria,

it

Supplier's

Certificate" for each of the eight loans. On each of those eight
Letter of Credit Supplier's Certificates,

MWI attested that it

had paid only "regular commissions" in connection with the pump
sales. See Pls.' Ex. 283.
1

For purposes of ruling on a motion for judgment as a matter of
law, the evidence is examined in the light most favorable to the
nonmoving party. Kakeh v. United Planning Org., Inc., 655 F.
Supp. 2d 107, 115 (D.D.C. 2009) (citation omitted). Accordingly,
unless otherwise noted, the facts that follow are taken from the
evidence presented at the nine-day trial held in November 2013
and from Plaintiffs' Oppositions.
-2-

After Ex-Im approved the loans, but before it disbursed any
funds,

it

required

Certificate."
Certificates

MWI

MWI
that

to

submit

attested
it

had

on

paid

a
50

only

connection with the pump sales.

"Disbursement

Supplier's

Disbursement

Supplier's

"regular

See Pls.'

commissions"

Ex.

284.

Thus,

in
MWI

submitted eight Letter of Credit Supplier's Certificates and 50
Disbursement Supplier's Certificates to Ex-Im. 2
In 1998, Relator Robert Purcell, a former employee of MWI,
filed

this

action under

the

FCA.

Complaint

[Dkt.

No.

1]

He

alleged that MWI paid commissions in excess of 30 percent to its
long-time
("Irtdimi").

Nigerian
Id.

~~

payments were not

sales

35-37.

agent,

Alhaji

Mohammed

Indimi

Purcell alleged that those commission

"regular"

and should have been disclosed on

all of the Supplier's Certificates that MWI submitted to Ex-Im.
Id.
In April of 2002,
and

filed

a

("Complaint")

the United States decided to intervene,

complaint

which

[Dkt.

18]

No.

commissions paid to Indimi,

then
Based

governed
in part

the
on the

proceedings
amount

of

which at the time was estimated to

2

As this Court has already noted, MWI did not challenge at trial
the Government's evidence or testimony regarding 58 total
Supplier's Certificates. United States ex rel. Purcell v. MWI
Corp.,
F. Supp. 2d _, 2014 WL 521524, at *1 n.1 (D.D.C. Feb.
10, 2014) ("Judgment Opinion")
-3-

be approximately $28 million dollars, 3 the Complaint alleged two
violations

of

the

FCA

(Counts

I

and

II)

and

two

common

claims for unjust enrichment and payment by mistake

law

(Counts III

and IV) .
The
Ricardo

case
M.

conclusions

was

litigated

Urbina.
that

Judge

bind

for

several

Urbina

this

made

Court,

years

several

including

before

Judge

findings
two

and

opinions

granting in part and denying in part various Motions for Summary
Judgment.
al.,

See United States ex rel.

520 F.

Supp.

2d 158

United States ex rel.
(D.D.C. 2011)

(D.D.C.

Purcell v.

2007)

MWI

Corp. ,

et

("First MSJ Opinion");

Purcell v. MWI Corp.,

824 F. Supp.

2d 12

("Second MSJ Opinion").

After Judge Urbina's retirement, the case was reassigned to
Judge

Colleen

resolving

Kollar-Kotelly,

many pre-trial

and

motions,

then
the

to

this

Court.

case

went

to

After

trial

on

November 6, 2013.

3

At trial, the Government argued that MWI had paid $25 million
dollars in commissions to Indimi, not $28 million. See, e.g.,
Pls.' Opening St., Trial Tr. Nov. 8, 2013, A.M. Session at 25:912 (telling jury it needed "to decide whether MWI knew or should
have known that the $25 million payment to Mr. Indimi was
irregular and that it should have been disclosed"); Pls.'
Closing Arg., Trial Tr. Nov. 21, 2013, A.M. Session at 50:20-22
("$25 million in Ex-Im funds went into the bank account of MWI's
Nigerian agent Alhaji Indimi."); id. at 76:10-12 (suggesting
that measure of amounts be the $25 million that United States
"unknowingly paid to Mr. Indimi").
-4-

At

the

close

of

the

Government's

case,

MWI

moved

for

judgment as a matter of law under Rule 50(a). Trial Tr. Nov. 19,
2013,

P.M.

practices

Session

at

governing

79:8-80:7.

pre-verdict

"Consistent

motions,

with

the

the

Court

best

reserved

ruling" on MWI's motion. See Hancock v. Washington Hosp. Ctr.,
F.

Supp.

2d

Moore's

2014 WL 60288,

Federal

Defendant

to

Practice

file

a

at

Civil

§

*1

(D.D.C.

50.33).

written brief

in

2014)

The

support

(quoting

Court
of

ordered

its

motion.

Trial Tr. Nov. 19, 2013, P.M. Session at 80:7-8.
On November 22, 2013, the case went to the jury on Counts I
and II of the Complaint. On November 25, 2013, the jury returned
a verdict for Plaintiffs on both Counts I and II [Dkt. No. 453].
The

Government

then

dismissed

Counts

III

and

IV

of

the

Complaint, its common law claims, with prejudice. Trial Tr. Nov.
25, 2013, A.M. Session at 22:18-20.
On

December

9,

2013,

Plaintiffs

an

Opposition

Defendant's Motion for Judgment

as

460],

Defendant filed a Reply

and on December 19,

2013,

a

filed

Matter of Law

[Dkt.

to
No.

[Dkt.

No. 466]
On

February

Plaintiffs

[Dkt.

12,

2014,

Judgment

No.

473].

On

March

was
12,

entered

in

2014,

MWI

favor
filed

of
a

Renewed Motion for Judgment as a Matter of Law ("Renewed Mot.")
[Dkt. No. 478]. On April 9, 2014, Plaintiffs filed an Opposition
-5-

[Dkt.

No.

483],

and on April 25,

("Renewed Reply")

II.

2014,

Defendant filed a Reply

[Dkt. No. 484].

STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 50 (a),

has

been fully heard on an issue

court

finds

sufficient
issue,"
matter
under

of

a

a

reasonable

evidentiary

then

a

law

the

with

that

court

basis
may

against

the

finding

to

"grant

find
a

and the

not

for

a

have

a

legally

the

party

for

judgment

motion

party on

controlling law,

favorable

jury would

a party

jury trial

during a

"[i] f

claim or

on

that
as

defense

a

that,

can be maintained or defeated only
on

that

issue."

Fed.

R.

Civ.

P.

50 (a) (1) (B) .
"If

the

court

does

not

grant

a

matter of law made under Rule 50(a),
have

submit ted

~the

act ion

to

the

motion

for

judgment

as

the court is considered to

jury subject

to

the

court ' s

later deciding the legal questions raised by the motion."
R.

Civ.

P.

50(b).

If

the

moving

a

party

renews

its

motion

Fed.
for

judgment as a matter of law following the discharge of the jury,
the

Court

may

the

entry

of

consider the
judgment

as

motion and,
a

matter

of

if

appropriate,

law.

Fed.

R.

direct
Civ.

P.

50 (b) (3).
"The legal standard for granting a motion for judgment as a
matter

of

law

is

the

same

whether
-6-

it

is

rendered

during

the

trial

under Rule

50 (a),

under Rule 50 (b) . "
2d 247,

249

Beyene v.

(D.D.C.

law

or after the

2013).

only

Hilton Hotels Corp.,

A court

"when a

jury has been discharged

should grant

party has

been

958 F.

Supp.

judgment as a

matter

of

fully

heard on

an

issue,

and there is no legally sufficient evidentiary basis for

a reasonable jury to find for that party on that issue." Reeves
v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 135 (2000).
Although
record,
of

the

court

the

nonmoving
or

party,
weigh

courts "do not
matter

of

reasonable
sided

examine

all

evidence

in

the

"the court must draw all reasonable inferences in favor

determinations

a

should

that

law

and
the

it

may

evidence."

not
Id.

make
at

credibility

149.

Moreover,

lightly disturb a jury verdict. Judgment as
is

appropriate

inferences
reasonable

that
men

only

can be

if

drawn

and women

the

evidence

therefrom are

could not

verdict in plaintiff's favor." Nelson v.

Dist.

have

and
so

all
one-

reached

of Columbia,

a

953

F. Supp. 2d 128, 130 (D.D.C. 2013).
As a
of

a

Rule

post-trial

post-trial Rule 50(b)
50 (a)

motion

motion must

for
be

motion is limited to a

judgment

limited

to

as

a

those

specifically raised in the prior Rule 50(a)
F. Supp. 2d at 249

(citation omitted).

-7-

matter

of

grounds
motion.

renewal
law,

that
Beyene,

the
were
958

III. ANALYSIS
The
the

Government

Government

fraudulent

alleged

claims

Complaint ~~ 46-48
Government

alleged

alleged

two violations

that

for payment

MWI

knowingly

MWI

the

FCA.

presented

First,

false

or

to the United States Government.

(citing 31 U.S.C.
that

of

§

knowingly

3729 (a) (1)).
made

false

Second,
records

the
or

false statements to get the Government to pay or approve false
or fraudulent claims for payment.
U.S.C.

§

(citing 31

3729(a) (2)) . 4 The jury found for the Government on both

Counts. Verdict at 1-2
4

Complaint ~~ 49-51

[Dkt. No. 453].

On May 20, 2009, Congress enacted the Fraud Enforcement and
Recovery Act of 2 009 ( "FERA'') . Among other things, Congress
replaced the language of Section 3729(a) (2) with a new section
3729 (a) (1) (B). See FERA, Pub. L. No. 111-21, § 4 (a) (1), 123
Stat. 1617 (May 20, 2009). The amendments were made retroactive
to all "claims" under the False Claims Act "that are pending on
or after" June ·7, 2008. Id. § 4 (f) . Although our Court of
Appeals has not yet decided this issue, United States v. Sci.
Applications Int'l Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010),
(assuming without deciding that lower court determination that
statute did not apply retroactively was correct) , the district
courts in this Circuit have
found that
the retroactivity
presumption applies to claims, but not cases, pending in June
2008. See, e.g., United States ex rel. Barko v. Halliburton Co.,
952 F.
Supp.
2d 108,
118
(D.D.C.
2013)
("The retroactive
provisions apply, then, to fraudulent requests for money pending
on or after that date."); United States v. First Choice Armor &
Equip., Inc., 808 F. Supp. 2d 68, 76-77 (D.D.C. 2011) ("The word
'claims,' as it applies in the relevant provision, refers to 'a
defendant's request for payment' and not to 'civil actions for
FCA violations.'" (quotation and citation omitted)). During the
trial, this Court held in accordance with its sister courts that
the pre-amendment version of the statute would apply and
instructed the jury accordingly. Trial Tr. Nov. 8, 2013, A.M.
Session at 127:10-18.
-8-

MWI raises several arguments that the Court will address in
turn.

However,

many of MWI' s

arguments

ask the

Court

credibility determinations or weigh the evidence,"
not

permitted to

do.

Reeves,

Parsons v. Palestinian Auth.,
("Sorting

out

530

U.S.

at

149;

651 F.3d 118, 124

contradictions

[and]

. are prototypical

commandeer.") .
legal

Likewise,

conclusions,

introduced

at

(D.C.

2012)

Cir.

the

which

trial.

jury functions

Cf.

Court

were
Feld

will

(D.C. Cir. 2011)

that

v.

Feld,

much

courts may not

by

688

how

[a party] 's

revisit

unaffected

is

Estate of Mark

deciding

not

"make

which it

weight to give evidence that supports or undermines
case

to

the

F.3d

its

prior

evidence

779,

782-83

(holding that Rule 50 motions are not required

to preserve purely legal claims for appeal).

A.

There Was Sufficient Evidence to Support the Jury's
Finding that the 58 Supplier's Certificates Were
"Claims"

MWI argues that Plaintiffs failed to introduce any evidence
that

the

Supplier's

Certificates

defined by the FCA.

Renewed Mot.

were

"claims

at 45.

for

payment"

as

The FCA defines "claim"

to include

"any request or demand,

otherwise,

for money or property which is made to a contractor,

grantee,

or

provides

any

demanded,

other
of

or if

recipient

the

money

or

if

whether under a

the

United

property

the Government will
-9-

which

reimburse

contract or

States
is

Government

requested

or

such contractor,

grantee,

or

other

recipient

for

any

portion

property which is requested or demanded."

of

the

31 U.S.C.

money

or

3729(c).

§

"A submission need not be an actual invoice to be a

'claim'

'statement'

Schwedt v.

under the Act.'"

United States ex rel.

or

Planning Research Corp., 59 F.3d 196, 199 (D.C. Cir. 1995).
Earlier in this litigation, MWI argued that, as a matter of
law,

"submissions

made

in

connection

cannot

be

treated

Government

loans

FCA."

Def.

MWI

230].

Judge

Urbina

rejected

Government's

Motion

for

Summary

claim

and

the

existence

of

Corp.'s Mot.

for

with

as

efforts

false

claims

argument,

Judgment

issue

of

the

under

the

[Dkt.

No.
the

6

and

on

obtain

granted

Clarification at

that

to

issue

presentment.

of

the

First

MSJ

Opinion, 520 F. Supp. 2d at 174 n.6; see also Order of March 20,
2008
on

(granting Plaintiff's Motion for
the

FCA

elements

of

"the

Partial

existence

"presentment of a claim to the government")
Indeed,

MWI

MWI Corp.'s Mot.
under

the

resolution

for Clarification at 6

Government's
at

of

trial.") .

FCA

claims

Accordingly,

the

claim"

and

that Judge Urbina

"claim" existed. Def.

(" [T] he
no

a

[Dkt. No. 2 3 3]

acknowledged prior to trial

had resolved the issue of whether or not a

Summary Judgment

'claim'

longer
Court

element

remains
instructed

for
the

jury that the Supplier's Certificates in this case were "claims"
under the False Claims Act and that the jury could assume that
-10-

"each of

those documents

Nov.

21,

2013,

not

have

to

A.M.

is

a

Session at

introduce

evidence

'claim'

for payment."

35:16-19.
as

to

the

Tr.

Plaintiffs

Thus,

Trial

did

"claim"

element

at

trial. 5
B.

There Was Sufficient Evidence to Support
Finding that MWI's Claims Were False

Plaintiffs'
on

its

that
Tr.

Certificates

were

false

it paid only "regular commissions."
21,

2013,

A.M.

Session at

because

Complaint

36:10-17.

evaluate

whether

the

commissions

MWI

it
~

attested
15;

Trial

Consequently,

order to ascertain whether the claims were false,
to

Jury's

theory of falsity was that MWI's certifications

Supplier's

Nov.

the

paid

in

the jury had

to

Indimi

were

"regular."
Because the jury found that the 58 Supplier's Certificates
were

false

commissions

claims,
were

it
not

necessarily
"regular."

found

that

Sufficient

the

Indimi

evidence

was

introduced to support the jury's finding.
5

The jury was required to identify the number of false claims
and/or false records or false statements, if it found liability.
Trial Tr. Nov. 21, 2013, A.M. Session at 35:16-19; see also
United States ex rel. Miller v. Bill Harbert Intern. Const. ,
Inc., Case No. 95-1231, 2007 WL 851868, at *2 (D.D.C. March 14,
2007)
("The jury's job in this case will be to determine the
number of violations and fix the amount of actual damages, if
any.").
Plaintiffs
introduced evidence
that
there were
58
Supplier's Certificates, and the jury found accordingly. Pls.'
Ex. 283 (8 Letter of Credit Supplier's Certificates); Pls.' Ex.
284 (50 Disbursement Supplier's Certificates); Verdict at 1-2
[Dkt. No. 453]
(identifying 58 false "claims" and 58 "false
records and false statements").
-11-

The strongest evidence that the commissions paid to Indimi
were not regular was the sheer amount of money paid to Indimi.
Between 1992 and 1994,

the commissions paid to Indimi dwarfed

those paid to other MWI agents. Def.'s Ex.
paid

in

8

commissions

commissions
to

all

to

Indimi;

other agents) .

500

$1,744,537

($26,070,181 was
was

Between 1980

paid $51,986,394 in 23 commissions to Indimi.

paid

in

and 1995,

48
MWI

Id. The other 130

commissions to MWI's other sales agents add up to approximately
$3.6 million dollars combined. Id.
Of the largest 21 commissions paid between 1980 and 1995,
Indimi received 19 of them. Id. His largest commission, in April
of 1985, was $12,750,1'49

(almost four times as much as MWI paid

all other sales agents over 15 years). Id.
MWI argues that the total dollar amount of the commissions
is misleading.

Renewed Mot.

at 2i. However,

high dollar amount Indimi received,

in addition to the

the percentage of the total

sales that he received in commissions was far higher than the
percentages given to other MWI sales agents. Eighteen of the 153
commissions MWI paid between 1980 and 1995 were above 30% of the
sales price, and 15 of those went to Indimi. Def.'s Ex. 500.
MWI emphasizes that three other commission percentages were
higher
those

than

3 0%

of

commissions

th,e
were

sales price,
comparatively
-12-

Renewed Mot.
small.

at

Def.'s

11,

but

Ex.

500

(commissions of $26,624
and $16,839
testified,

(Feb. 2, 1990), $23,387 (July 22, 1980),

(August 13,

Importantly,

1982)).

as Rita Rodriguez

commission percentages often have to be higher when

the total sale amount is lower. Test. of Rita Rodriguez,

Trial

Tr. Nov. 14, 2013, A.M. Session at 89:24-90:6; see also Test. of
Thomas

Roegiers,

Nov.

(testifying

that

amounts

separate

on

19,

"there's

no

sales

A.M.

2013,

sense

"without

Session

at

111:6-10

in"

comparing

commission

also

comparing

the

sales

value") .
In addition,
MWI

sales

agents

approximately
price

was

the average percentage of sales price paid to
in

10%,

33.9%.

commissions

but

Indimi's

Def. 's

Ex.

between
average

500.

1992

and

percentage

of

the

Similarly,

was

1994

sales
average

percentage of sales price paid to MWI sales agents between 1980
and 1995 was 14.68%,

but

Indimi' s

average percentage of sales

price was 33.71%. Id.
Thus,

the

evidence

supports

the

jury's

finding

that

the

commissions were "irregular" because the Indimi commissions were
generally much higher than the commissions paid to MWI's other
agents, both in total amount and in percentage of sales price.
Moreover,
percentages

the

between

because multiple

evidence
26%

to

that
37%

Ex-Im employees
-13-

Indimi
was

was

paid

particularly

testified that

commission
significant

they expected

commissions
area."

to be

Hess Dep.

"in the

lower than 5 to around 10 percent
Sept.

60:18-22,

2004; 6

22,

see also Test.

of

Rita Rodriguez, Trial Tr. Nov. 14, 2013, A.M. Session at 75:1516,

(testifying that 5% was standard, and that anything

76:14-19

over 8% or 10% would be unlikely to be approved) . This statement
correlates with the testimony given by MWI employee Juan Ponce
that Ex-Im expected its commissions to be no more than 5%. Test.
of Juan Ponce, Trial Tr. Nov. 13, 2013, A.M. Session at 22:1-10.
Ex-Im employees also testified that commissions of either
the percentage of sales price or the total dollar amount paid to
Indimi were unquestionably "irregular" and far outside the scope
of

anything

Chavern,

Trial

been

P.M.

84:13-23

Tr.

disclosed,

disbursement);
2013,

had

ever

Nov.

seen.

12,

See,

2013,

e.g. ,

A.M.

Test.

Session

at

of

David

83:10-18,

(testifying that if a commission of either 24% or 35%

88:24-89:9

had

they

Test.

the
of

bank

would

not

have

approved

Leilani

Lansing,

Trial

51:7-16,

51:20-21,

Session

at

48:2-3,

(referring

to

the

total

amount

paid

Tr.

to

Nov.

the
12,

52:23-25,

Indimi

in

commissions on all of the sales as "huge compared to the amount
of the sale, and also the percentage," "absurd," an "outrageous
amount,"

and

"far beyond

the

range

6

of

anything

reasonable") ;

An edited version of Hess's Sept. 22, 2004, deposition was
played for the jury on Nov. 8, 2013. See Trial Tr. Nov. 8, 2013,
P.M. Session at 10:14-15, 10:23-24.
-14-

Test.
at

of Rita Rodriguez,

29:21-37:21

percentage,
"know of
kind

of

24%,

Trial Tr.

(testifying
would be

Nov.
even

that

found

14,
the

"astounding"

and

legitimately"

"unbelievable"

and

that

anyone

such a

Government

evidence

submitted

ample

Session

commission
she did not

regularly pays

noting

the Government should finance

A.M.

lowest

irregular because

any industry in any country that
commission

2013,

that

it

that

would be

would suggest

transaction) .
supporting

that

In sum,

the

jury's

the

finding that the commissions paid to Indimi were not "regular,"
and, thus, MWI's certifications to the contrary were false.
MWI
of
the

raises

falsity,

but

sufficiency

language of

the

several
none
of

of

the

arguments
the

7

arguments

evidence.

Certificates was

negate a finding of falsity.
argument.

regarding

First MSJ Opinion,

the

jury's

7

finding

meaningfully challenges

First,
so vague

MWI

argues

that

and ambiguous

as

the
to

In 2007, Judge Urbina rejected this
520 F.

Supp.

2d at

176-77

("Under

MWI emphasizes that William Brickhill and other Ex-Im employees
indicated that certain factors,
including difficult country
conditions, the exclusivity of the agent, or the longevity of
the agent's tenure,
may have been relevant
to whether a
commission was "regular." Renewed Mot. at 19-20; Renewed Reply
at 4, 9-10. MWI neglects to note, however, that these witnesses
testified that these factors would have been relevant to Ex-Im's
analysis of whether or not to continue with the transaction
after an irregular commission was disclosed, not whether the
commission should have been disclosed in the first instance.
See, e.g., Test. of David Chavern, Trial Tr. Nov. 12, 2013, A.M.
Session at 116:24-118:17; id. Trial Tr. Nov. 12, 2013 P.M.
Session at 19:14-21; Test. of Leilani Lansing, Trial Tr. Nov.
12, 2013, P.M. Session at 75:12-78:19.
-15-

these

standards,

the

court

sufficiently clear to put
commissions

required

to

concludes

the

regulation

exporters on notice of

be

disclosed.")

This

here

is

the type of

conclusion was

included in ·the instructions to the jury. See Trial Tr. Nov. 21,
2013,

A.M.

falsity,
or

Session at

36:22-27

("For purposes

of

determining

you may not consider whether MWI knew this definition

whether

MWI

had

'regular commission'

a

different

or whether

interpretation
the

term

of

the

term

'regular commission'

was vague or ambiguous.")
Despite
theory,

being

MWI

language

of

now

specifically
raises

the

"objective

foreclosed

same

from

argument,

standards."

pursuing

couched

Renewed

Mot.

this

in

at

the
4-10.

However, the basis of its theory is the same - that the language
of

the

Certificates

provides

so

little

guidance

that

no

commission could be said to be "regular" or "irregular." Id. at
4 (arguing that Government failed to show the commissions "could
be

objectively adjudged to be

circumstances
repeatedly

by

"intervening
8

here")
this
change

8

This

Court
of

regular or

legal
and

irregular under the

argument

MWI

controlling

has

has

failed

law[]

or

been
to
new

rejected

raise

any

evidence,"

The Court notes that MWI did not raise its "objective standard"
argument in its Rule 50(a) Motion, and, consequently, even if it
had merit, the argument was waived. Beyene, 958 F. Supp. 2d at
249 (citation omitted); see also Whelan v. Abell, 48 F.3d 1247,
1251 (D.C. Cir. 1995) (movant who omits theory from Rule 50 (a)
motion waives theory as basis for Rule 50(b) motion).
-16-

Alliance for Cannabis Therapeutics v. D.E.A., 15 F.3d 1131, 1134
(D.C.

Cir.

1994),

that

conclusion. Therefore,

would

justify

revisiting

the

Court's

the Court will simply reiterate that the

language of the Supplier's Certificate was not so ambiguous as
to prevent a finding of falsity.
Second, MWI argues that the Government failed to introduce
evidence of
14-17.
of

the

In 2007,

'regular

relevant

"industry standard."

Renewed Mot.

at

Judge Urbina found that "Ex-Im's interpretation
commissions'

as

referring

to

industry-wide

benchmarks is not only 'consistent' with the underlying term but
is

finely

Opinion,
jury

attuned

to

its

context

and

purpose."

First

MSJ

520 F. Supp. 2d at 177. Thus, the Court instructed the

that,

"[t]he

term

'regular

commissions'

refers

to

commissions normally and typically paid by the exporter and its
competitors in the same industry." Trial Tr. Nov. 21, 2013, A.M.
Session at 36:20-22.
MWI
defined

now argues
regular

that

because

commissions

as

the

instruction

"commissions

to

the

jury

normally

and

typically paid by the exporter and its competitors in the same
industry," id.

(emphasis added),

the Government was required to

introduce specific evidence of commissions paid both by MWI and
by MWI's industry competitors to meet its burden on the element
of falsity. Revised Mem. at 14-17.
-17-

The Court disagrees. The intent of this instruction was to
provide

some

guidance

"regular commissions"
requirement.
Government

At

no

could

to

the

inquiry,

point

not

as

to

the

scope

of

the

not to establish an evidentiary

has

prove

jury

this

Court

falsity

ever

unless

held

it

that

proved

by

the
a

preponderance of the evidence exactly what the industry standard
was for commission payments on the sale of pumps in Nigeria. 9
Moreover,

the

objection

because

unavailing

is

the

Government submitted evidence to the jury to enable them to make
reasonable

inferences

about

typically paid in the industry.
249

the

commissions

See Beyene,

(noting that court must draw all

normally

958 F.

Supp.

and
2d at

reasonable inferences in

favor of non-moving party). Namely, evidence was submitted that,
in markets where there was competition,

MWI' s commissions were

limited to "10 percent or less." Test. of Juan Ponce, Trial Tr.
Nov. 13, 2013, A.M. Session at 29:23-30:6; see also id. at 31:918

(in markets with competition,

be any more than 5 percent") .
MWI's

own

commissions

(commissions percentages
9

data.

"[s]ometimes commissions cannot
This testimony corresponds with
See,

e.g.,

Def. 's

in Europe between 1980

Ex.

500

and 1995 were

Indeed, Judge Urbina noted in an earlier opinion, "the precise
metes and bounds of the 'relevant industry' cannot be defined
with mechanical precision." Second MSJ Opinion, 824 F. Supp. 2d
at 27 n.6 (rejecting MWI's argument that difficulty of defining
relevant industry insulated them from liability) .
-18-

5%-10%; average commission in Central American between 1992 and
1994

was

8%) .

Evidence

was

presented

that

the

pump

industry

standard was to keep prices low by keeping commissions low.
Ponce's testimony also explained why the Government did not
have

specific

evidence

commission

about

payments

paid

by

competitors selling irrigation pumps in Nigeria - there were no
such competitors. Test. of Juan Ponce, Trial Tr. Nov. 13, 2013,
A.M.

Session at 30:11-17

("The Hydraflo pump was a proprietary

equipment, and even though we had some competition later on, but
we

were

basically

product.");

see also

were no direct
the

alone
id.

in

the

at

29:23-30:6,

competitors,

Government

to

market

with

this

31:1-7.

particular

Because there

it would have been impossible for
specific

submit

about

evidence

what

competitors paid in commissions for similar products.
In sum,
how

the

the Government submitted sufficient evidence as to

industry

generally

functioned

to

constitute

a

"legally sufficient evidentiary basis for a reasonable jury to
find" that Indimi's commissions were irregular compared to those
generally paid in the industry. Reeves, 530 U.S. at 149.
Third,
Indimi

MWI

argues

commissions

that

were

the

jury could not

irregular

as

compared

find
to

that
its

the

other

commissions because all of its commissions were calculated using
the

same

formula.

Renewed Mot .

at

-19-

17-23;

Renewed Reply at

7 1.

Def.'s Ex. 533. This formula set a commission of 10% of the base
price. Def.'s Ex. 533. The agent would then also receive half of
any sales amount
Test.

received over the base price.

of Cornelius Lang,

Trial Tr. Nov.

14,

Id. ;

2013,

see also

P.M.

Session

at 47:20-48:12.
MWI insists thc;tt its "neutral" application of this formula
to all
Mem.

sales

is nonrebuttable evidence of regularity.

at 11-12.

However,

Revised

the Government submitted evidence that

explained how the lack of competition in Nigeria affected the
sales

price

and

application

of

the

commissions

formula

in

important ways.
Because

ther~

were no competitors selling similar pumps in

Nigeria, there were no market forces to ensure that MWI's prices
or commissions were not inflated. Ponce testified that the lack
of

competition

in

Nigeria

permitted

MWI

"to

commissions into the price of the pumps." Test.
Trial Tr. Nov.
at 83:18-20

13,

2013, A.M.

put

the

high

of Juan Ponce,

Session at 16:9-10; see also id.

("[T]he fact that we had no competition, so we were

able not only to pay Indimi the high commissions,

but also to

have very high profits for the company.").
The

evidence

showed

that

Indimi

sold

his

products

to

Nigeria at between 168% of the base price and 296% of the base
price. See Def.'s Ex. 533

(setting forth formula for calculation
-20-

of commissions); Def. 's Ex.
prices).
base

On average,

price.

Id.

(listing commissions and sales

500

Indimi's sales were close to 250% of the

In

comparison,

sales

of

other

salespeople

between 1992 and 1994 were an average of 102% of the base price.
Id.
Consequently,

the fact that Indimi's high commissions were

calculated according to a formula does not make the commissions
"regular" because the formula was applied to irregular, inflated
prices.

Although companies are

free

to charge whatever prices

they can get in the private market,

the Ex-Im' s purpose is to

finance

sales

made

Sept.

100:2-10,

consistently,
commissions

a

commercially-based

2004.

As

the

purpose

of

requiring

22,

the
is,

on

at

least

in

part,

Ex-Im

to

basis.

witnesses
disclosures

assure

that

Hess

Dep.

testified
of

high

the

Bank

invests in projects where the "products are priced correctly."
Test. of David Chavern, Trial Tr. Nov. 12, 2013, A.M. Session at
109:5-14;

want
doing

situation where
is

product");
P.M.

see also id.

in

Test.

Session

commission

excess

at

rate

at 66:1-6

(stating that Ex-Im would not

"the amount

of lending that the bank is

of

what's

needed

of Leilani Lansing,
52:4-13

"would

(noting

raise

in

to

actually

Trial Tr.
that

my mind

Nov.

disclosure
the

the

12,

2013,

of

high

question

whether we approved the loan for the wrong amount")
-21-

buy

as

to

In
reject

sum,
MWI's

formula

to

the

argument
all

transactions,
accompanied

jury had

and
them,

a

that

sufficient
its

evidentiary basis

application

its

commissions
irregularly

high

"regular"

for

purposes

a

consistent

these

made

the

of

to

irregular

commissions

that

procuring

Ex-Im

commissions

were

of

financing.
Fourth,

MWI

argues

that

the

Indimi

"regular" because they were consistent with the commissions it
had been paying to Indimi for years.

Revised Mem.

at 12.

MWI

argued this theory to the jury, and the jury rejected it. It was
certainly not unreasonable for the jury to conclude that MWI' s
exorbitant

commissions

because

had

years.

it

to

Indimi

were

not

"regular"

paid him similarly exorbitant

simply

commissions

for

There is simply no basis for the Court to overturn this

finding. See Estate of Mark Parsons, 651 F.3d at 124.
Finally,
argued

that

MWI
the

argues
many

that

the

Government

unconventional

ways

in

inappropriately
which

received his commissions was evidence of irregularity.
Reply at 13. 1 ° Contrary to MWI' s
1

°

Indimi
Renewed

insistence that the Government

For example, MWI and its employees paid Indimi's personal
expenses and then deducted the payments from future commissions
at no cost; paid for Indimi's lawn, pool, cable, cleaning,
phone,
and water services; paid Indimi's $43,000 American
Express bill; made numerous cash advances to Indimi; gave Indimi
large advances on his commissions; provided Indimi with nointerest loans; helped Indimi sell his home; reimbursed Indimi's
-22-

never raised this theory before trial,
Motion

in

Limine

that

the

this Court ruled on a

Government's

evidence

regarding

Indimi' s cash payments and advances were "directly relevant to
the central factual issues in this case of whether Defendant's
certifications with the Ex-Im Bank were false and whether the
Indimi commissions were 'regular.'" Order on Motion in Limine 12
at 1

[Dkt.

No.

3 84] . Consequently,

MWI was on notice that the

Government would argue that the many free
MWI

to

Indimi

were

indications

that

his

services offered by
commissions were not

"regular," and that evidence was properly admitted.
In

sum,

the

evidentiary basis"

Government
for

the

presented

jury to

a

"legally

find that

the

sufficient
commissions

wife for summer school expenses; provided Indimi with a company
plane; and acted as Indimi's power of attorney. Test. of David
Eller, Trial. Tr. Nov. 8, 2013, A.M. Session at 80:9-81:3,
84:10-16, 85:7-88:2; Test. of Cornelius Lang, Trial Tr. Nov. 14,
2013, P.M. Session at 14:12-15:22, Test. of Judith Ennis, Trial
Tr. Nov. 14, 2013, P.M. Session at 66:17-67:9, 69:9-74:12, 76:777:6, 79:6-84:1, 89:3-91:5. Even though many of these payments
and services were deducted from Indimi's commissions,
the
evidence showed that, in general, MWI's other sales agents did
not receive such perks. Test. of Judith Ennis, Trial Tr. Nov.
14, 2013, P.M. Session at 92:2-4 (in 27 years with the company,
could not remember MWI paying the personal expenses of any other
sales agent); id. at 96:23-97:10 (noting that, after deposition,
she had found two examples of another agent receiving advances
against commission) .
-23-

paid

to

Indimi

were

not

regular,

and,

that

thus,

MWI' s

certifications were false.ll Reeves, 530 U.S. at 149.
C.

There Was Sufficient Evidence to Support the Jury's
Finding that MWI Acted With the Requisite Scienter

For both counts,

the Government needed to prove that MWI

acted

"knowingly."

The

False

Claims Act,

knowingly means

allegedly
actual

false

knowledge

or
of

Court

instructed the

fraudulent
the

that,

with

information,

information;

jury:

"Under the

respect
a

to

the

defendant

had

or

acted

in

deliberate ignorance of the truth or falsity of the information,
or acted in reckless disregard of the truth or falsity of the
information." Trial Tr. Nov. 21, 2013, A.M. Session at 37:3-12.

ll MWI also argues that it is entitled to judgment as a matter of
law on the Government's "second, separate theory of falsity."
Renewed Mot. at 24. MWI insists that the Government alleged in
its Complaint that. the commissions were also irregular because
they included payments to Nigerian state officials. Renewed Mot.
at 24-29. The Government did not address this issue in its
Opposition, and, thus, it may be treated as conceded. Hopkins v.
General Bd. of Global Ministries, 284 F. Supp. 2d 15,_25 (D.D.C.
2003)
("It is well understood in this Circuit that when a
plaintiff files an opposition to a dispositive motion and
addresses only certain arguments raised by the defendant, a
court may treat those arguments that the plaintiff failed to
address as conceded."). This concession is of little import,
however, because, even if this was a separate theory of falsity,
Defendant acknowledges it was an alternate Government theory of
falsity. Renewed Mot. at 24. Because the Government submitted
sufficient evidence to support the jury's finding that the
commissions were irregular based on the size of Indimi's
commissions,
its
failure
to prove
that
Indimi
used the
commission money to pay Nigerian state officials provides
Defendant no relief from the verdict.
-24-

There

was

ample

evidence

acted with, at a minimum,

to

support

a

finding

that

knowledge,
ignorance
added),

jury

or
of

had

at

to

least

_ _ _ _.c::.._::_

the

truth

MWI

reckless disregard. See United States

v. Sci. Appl. Int'l Corp., 653 F. Supp. 2d 87,
(noting

that

or

find

defendant

reckless
falsity

97

acted

disregard
of

(D.D.C. 2009)

its

"with
or

deliberate

claims")

reversed in part on other grounds,

actual

(emphasis

626 F.3d 1257

(D.C.

Cir. 2010).
For example,

Ponce testified that MWI employees knew that

the commissions MWI was paying to Indimi were much higher than
those being paid to agents

in other countries.

Ponce,

2013,

Trial

29:1-7,
been

Nov.

33:10-15.
fully

Certificates
that

Tr.

could

13,

James

Hess

that

was

ascertain

be

indicative

Session at

testified

aware"
to

A.M.

the

of

that

purpose
whether

Test.

MWI

15:25-16:7,
"should have

the·

of

Supplier's

nonregular

"noneconomic

purchaser of the products" were being paid.

of Juan

commissions

decisions
Hess Dep.

by

the

at 46:5-

17, Sept. 22, 2004. The jury could have concluded, based on this
testimony,
certified

that
that

prices were
P'ship v.

MWI

acted

commissions

"regular."

with

constituting

disregard

26%-37%

of

See United States ex rel.

Massachusetts Hous.

(D.C. Cir. 2008)

reckless

Fin.

Agency,

530

K

when
the
&

it

sales
R Ltd.

F.3d 980,

983

(observing that reckless disregard under FCA is
-25-

an

"extreme

version

citation omitted);
WL

2961105,

that

at

fails

to

of

ordinary

negligence")

United States v.

*13

(S.D.

inform

Cal.

itself

Bourseau,

Sept.

of

29,

the

(quotation
No.

2006)

03-907,
("[A]

reimbursement

and
2006

provider

requirements

acts in reckless disregard of the truth of its claims."), aff'd,
531 F.3d 1159 (9th Cir. 2008).
In addition,
approved

MWI employees testified that Eller personally

every

commissions.

commission

Test.

MWI

paid,

of Thomas Roegiers,

including

Trial Tr.

Indimi's

Nov.

19,

2013,

A.M. Session at 20:9-23; Test. of Juan Ponce, Trial Tr. Nov. 13,
2013,
he

A.M Session at

could

not

9:22-10:8,

remember

commission of more
Indimi

2013,

Session at

the

majority

of

received,

the

average

commissions
commission

reckless disregard.
942
that

(D.C.

Cir.

failure

to

120:11-22;

far

rates.

less

Def.'s

and

review

level of reckless disregard) .
-26-

higher

false

Krizek,

a

largest
Nov.

8,

Eller signe?

declaring

supports

(upholding district

verify

Tr.

even though he

evidence

agent

than the

500.

Certificates

See United States v.

1997)

other

Trial

Ex.

significantly

This

any

million.

had been paid,
were

Eller testified that

paying

$12.75

Supplier's

irregular commissions
Indimi's

ever

than $5 million,

commission
A.M.

MWI

14:14-21.

that

knew

than
a

no

that
MWI's

finding

of

111 F.3d 934,

court's determination
submissions

rose

to

Moreover,
evidence that

this

Court

has

already

noted

that

there

was

Eller had actual knowledge that the commissions

should have been disclosed. Judgment Opinion, 2014 WL 521524, at
*11.

Ponce testified that MWI employees were informed that the

Ex-Im expected commissions to be no more than 5 percent. Test.
of Juan Ponce, Trial Tr. Nov.
22:10. He testified that,

13,

2013,

A.M. Session at 21:20-

"we knew that we were violating .

the rules. We just hoped that we would never get caught." Id. at
35:3-4. 12 Thus,

the Government submitted sufficient evidence to

the jury for it to find that MWI's certifications were made with
actual knowledge of falsity. 13
12

MWI emphasizes that Ponce's testimony alludes to a need to
disclose all
commissions,
not
just
irregular commissions.
Renewed Mot. at 32 (citing Test. of Juan Ponce, Trial Tr. Nov.
13, 2013, A.M. Session at 63:15-64:3); Renewed Reply at 16.
However, in combination with Ponce's testimony that Eller,
Roegiers, Lang, and Bucknam knew and "had the same concern" and
that there were conversations about that concern, the testimony
still supports the jury's finding of scienter. Test. of Juan
Ponce, Trial Tr. Nov. 13, 2013, A.M. Session at 33:16-34:23.
13

MWI insists that the Court must credit Eller's testimony that
he had a discussion with Marvin Solomon ("Solomon") of the
Export-Import
Bank
( "Ex-Im")
regarding
the
Supplier's
Certificates in which Solomon told him that the Bank "do[es] not
get involved in commission levels." Renewed Mot. at 43 (citing
Test. of David Eller, Trial Tr. Nov. 8, 2013, A.M. Session at
120:22-122:1); Renewed Reply at 23. Mr. Eller's credibility was
highly contested at trial. Pls. ' Closing Arg. , Trial Tr. Nov.
21, 2013, A.M. Session 70:1-73:4 (arguing that Eller testimony
about Solomon was both internally inconsistent and directly
contracted by the testimony of others); see also Trial Tr. Nov.
8,
2013,
A.M.
Session at
63:19-21;
124:1-17
(Government
impeachment
of
Eller's
testimony
compared
to
deposition
-27-

All of MWI' s

arguments ask the Court to

"make credibility

determinations or weigh the evidence," which of course it is not
permitted

to
651

evidence

Reeves,

F. 3d

Parsons,

do.

at

that

it

530

124.

U.S.

For

interpreted

at

149;

example,
the

term

reasonably was so overwhelming that it

MWI

Estate
argues

"regular

"negate [d]

of

Mark

that

its

commissions"
an inference"

of reckless disregard. Renewed Mot. at 35-39. The Court included
an

instruction

specifically

informing

the

jury

that

it

could

consider such evidence as relevant to the issue of "knowledge."
Trial
the

Tr.

Nov.

jury that

21,

2013,

A.M.

Session at

in determining whether MWI

37:3-12

(instructing

acted "knowingly,"

it

could "consider whether or not MWI had a reasonable and/or good
faith

interpretation of

the

Supplier's Certificates");
at 3

[Dkt. No.

that

its

term

'regular

commissions'

see also Order on Motion in Limine 4

were

based

on

its

reasonable

faith understanding of the term "regular commissions."
653

interpretation
successful

the

397]. Thus, MWI was explicitly permitted to argue

certifications

Applications,

on

of

F.

Supp.
an

defense

to

Trial

Tr.

2d at

ambiguous
an alleged

97

or

good

See Sci.

("A defendant's reasonable

regulation

may

FCA violation

in

well

be

a

appropriate

cases.")

testimony);
(same) .

Nov.

8,
-28-

2013,

P.M.

Session,

6:1-7:15

Thereafter,
MWI' s
not

jury weighed the

evidence

evidence of good faith and reasonable

as

the

the

credible or persuasive

contrary.

evidence

As

that

discussed

MWI

as

knew

the
that

found

that

interpretation was

the Government's

above,

employees

and

evidence to

Government

produced

the

expected

Ex-Im

commissions to be much lower than the commission being paid to
Indimi, 14 and knew that
significantly

higher

sales

Given

agents.

the commissions being paid to him were

than
that

those
the

Court

findings or weigh the evidence,
clear that

MWI' s

argument

being

must

Reeves,

about

the

paid

to

not

any

make

530 U.S.

other

MWI

credibility

at 149,

"reasonableness"

it is

of

their

the

same

interpretation is without merit.
MWI's

other

arguments

similarly

reiterate

arguments it made to the jury in its closing argument.
so,

it misstates the role of this Court, which is only to decide

whether sufficient
element.

The

arguments

at

evidence was presented to

jury
trial,

sufficiency of

was

presented

and was

not

with

the

MWI's

persuaded by

jury on each
evidence

them.

Given

the Government's evidence to support the

finding of scienter,
14

In doing

and
the

jury's

MWI's insistence that the jury should have

This distinguishes this case from K & R Ltd., 530 F. 3d 980,
wherein plaintiffs could not point to any evidence that might
have warned Defendant that its interpretation of a particular
term was incorrect. Id. at 983 (quoting Safeco Ins. Co. of Am.
v. Burr, 551 U.S. 47, 70 (2007)).
-29-

interpreted the

evidence differently cannot

support

a

reversal

of the verdict.

IV.

CONCLUSION
After a

that

there

reasonable
149.

careful review of the record,

was

a

jury

to

Consequently,

"legally
find"

sufficient
for

evidentiary basis

Plaintiffs.

Defendant

has

failed

"reasonable men and women could not

have

plaintiff's

Supp.

favor,"

Nelson,

953

F.

Motion for Judgment as a Matter of Law
Renewed Motion for Judgment

as

a

the Court concludes

Reeves,
to

53 0

[Dkt.

U.S.

establish

reached a
2d

for

at
No.

Matter of Law

at
that

verdict

13 0,
443]
[Dkt.

and

in
its

and its
No.

478]

shall be denied.
An Order shall accompany this Memorandum Opinion.

G'Llw~Z

Gladys Ke~sler
United States District Judge

June 25, 2014

Copies to: attorneys on record via ECF

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a