Nyle Hooper v. Lockheed Martin Corp. , 640 F. App'x 633 ( 2016 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
FEB 12 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
NYLE J. HOOPER, No. 14-56192
Plaintiff - Appellant, D.C. No. 2:08-cv-00561-BRO-
PJW
And
UNITED STATES OF AMERICA, MEMORANDUM*
Plaintiff,
v.
LOCKHEED MARTIN CORPORATION,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Beverly Reid O’Connell, District Judge, Presiding
Argued and Submitted February 1, 2016
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: PAEZ and M. SMITH, Circuit Judges and SILVER,** Senior District
Judge.
I. Introduction
This case is before us for a second time. In the prior appeal, we reversed the
district court’s summary judgment against Plaintiff Nyle J. Hooper as to one False
Claims Act theory, affirmed the grant of summary judgment as to two other
theories, and reversed the dismissal of Hooper’s retaliation claim. Hooper v.
Lockheed Martin Corp., 688 F.3d 1037 (9th Cir. 2012) (“Hooper I”). On remand,
the case proceeded to a six-day jury trial. The jury found for Defendant Lockheed
Martin Corporation, and the court entered judgment against Hooper.
The facts of the case are familiar to the parties, and the background of the
Air Force’s Range Standardization and Automation (RSA) IIA project is set forth
in our prior opinion. We therefore do not recite the facts here except as needed in
our discussion of Hooper’s arguments on appeal. Finding merit in none of those
arguments, we affirm.
II. Jury Instruction 21 Was Not Erroneous
At trial, Hooper pursued a theory that the invoices submitted under the RSA
IIA contract were fraudulent because Lockheed fraudulently underbid for the
**
The Honorable Roslyn O. Silver, Senior District Judge for the U.S.
District Court for the District of Arizona, sitting by designation.
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contract. “[F]alse estimates, defined to include fraudulent underbidding in which
the bid is not what the defendant actually intends to charge, can be a source of
liability under the FCA, assuming that the other elements of an FCA claim are
met.” Hooper I, 688 F.3d at 1049 (internal reference omitted). Thus, it was not
necessary for Hooper to separately prove the falsity of each invoice, because
“liability will attach to each claim submitted to the government under a contract,
when the contract or extension of government benefit was originally obtained
through false statements or fraudulent conduct.” U.S. ex rel. Hendow v. Univ. of
Phoenix, 461 F.3d 1166, 1173 (9th Cir. 2006).
In the Joint Pretrial Conference Order, Hooper stated that he intended to
“introduce evidence that Defendant submitted approximately 1200 invoices for
payment in the amount of $882,717,983.” The jury instructions addressed these
invoices. Instruction 21 stated: “If you find that Lockheed violated the False
Claims Act, you must identify each specific, individual claim for payment—an
invoice or other payment demand—that Mr. Hooper proved to constitute a false
claim.”
Hooper argues that the jury could have understood the instruction to require
separate falsity in each invoice, instead of, in accordance with Hooper’s theory, in
the bid. However, Instruction 21 must be read in conjunction with all the
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instructions. Instruction 14 set forth the elements of Hooper’s underbidding claim.
Additionally, instruction 15 specified that Hooper alleged that Lockheed submitted
false claims for payment in the form of invoices. Hooper’s proposed instruction 8,
concerning penalties, would have instructed the jury to “decide how many such
claims or statements, if any, were made or presented to the Government by
Lockheed.”
Instruction 21 did not erroneously instruct the jury that it needed to find
independent falsehood in each invoice. It merely required the jury to identify each
false invoice if it found liability. Because the jury found no False Claims Act
violation, it left blank the later space on the verdict form for specifying the number
of false claims.
Accordingly, Hooper has not shown that any instruction misstated the
elements of his claim, or that the district court abused its discretion in formulating
the instructions as a whole. See Masson v. New Yorker Magazine, Inc., 85 F.3d
1394, 1397 (9th Cir. 1996).
III. The Court Did Not Abuse its Discretion in Excluding Hooper’s Expert
Witness
Federal Rule of Civil Procedure 26(a)(2) requires a party who may present
expert testimony at trial to provide a written report by the expert “at the times and
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in the sequence that the court orders.” Rule 37(c)(1) therefore “gives teeth” to the
disclosure requirements “by forbidding the use at trial of any information required
to be disclosed by Rule 26(a) that is not properly disclosed,” Yeti by Molly, Ltd. v.
Deckers Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001), unless the failure to
do so was “substantially justified or is harmless.” Fed. R. Civ. P. 37(c)(1). We
review the imposition of discovery sanctions for abuse of discretion. Payne v.
Exxon Corp., 121 F.3d 503, 507 (9th Cir. 1997).
On remand, Hooper sought to reopen discovery, but the district court did so
only for the retaliation claim, which had not been the subject of prior discovery,
and declined to reopen discovery on the underbidding claim. Nonetheless, Hooper
engaged an expert, Malek, to analyze software estimation files Lockheed had
produced in discovery. Malek’s report mostly related to underbidding, with only a
few conclusory statements related to the retaliation claim. To the extent Hooper
could have shown that his failure to timely produce Malek’s report in the original
discovery period was substantially justified or harmless, he should have moved the
district court to modify the scheduling order under Rule 16. Instead, Hooper took
the unsupportable position that the Malek report was really about his retaliation
claim. In such circumstances, the district court did not abuse its discretion in
striking the Malek report, thus precluding him from testifying at trial.
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IV. The District Court Did Not Abuse its Discretion in Excluding Polliard
“The court may exclude relevant evidence if its probative value is
substantially outweighed by a danger of one or more of the following: unfair
prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence.” Fed. R. Evid. 403. “We review
exclusion of evidence under Rule 403 for an abuse of discretion.” United States v.
Garcia, 729 F.3d 1171, 1175 (9th Cir. 2013). District courts are not required to
engage “in a mechanical recitation of Rule 403’s formula on the record . . . [a]s
long as it appears from the record as a whole that the trial judge adequately
weighed the probative value and prejudicial effect of proffered evidence before its
admission.” Bowoto v. Chevron Corp., 621 F.3d 1116, 1131 (9th Cir. 2010)
(quoting United States v. Sangrey, 586 F.2d 1312, 1315 (9th Cir. 1978)) (alteration
in original).
Polliard is a former Air Force officer and contractor. He helped test RSA IIA
software from 1998 to 2000, and returned to manage the software in 2008. Polliard
would have testified that Lockheed failed to meet the contract requirements
because it provided woefully deficient software, which imposed significant direct
costs on the Air Force. Hooper sought to use this testimony to prove that
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“Lockheed’s defective performance was the result of numerous cornercutting
measures and inefficiencies caused by its underbidding of the contract.”
The district court excluded Polliard’s testimony entirely, except as potential
rebuttal if Lockheed opened the door by introducing evidence of the high quality of
its work. During trial, the court considered whether specific evidence opened the
door to Polliard’s testimony, and reminded Lockheed that if it chose to introduce
evidence of the high quality of its work, that would open the door. Lockheed did
not introduce such evidence, so Polliard did not testify.
In conditionally excluding Polliard’s testimony, the district court reasoned
that the poor quality of the software Lockheed provided would not be directly
probative of “cutting corners and underbidding,” and that the purported
performance deficiencies were unfairly prejudicial. The Air Force itself
acknowledged the “we’re kind of developing it as we’re going” nature of the RSA
IIA contract, further disconnecting any performance deficiency from any
underbids. Indeed, the Air Force eventually paid Lockheed approximately twice
the initial bid. This further supports the district court’s assessment of the
disconnect between the underbidding theory and Polliard’s performance testimony,
because it is not as if Lockheed cut corners to deliver a product for the original bid
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price. Further, Polliard had no knowledge of the details of the initial bid or
contract, and was not involved in contract change proposals.
Thus, the district court did not abuse its discretion in considering, balancing,
and ultimately excluding Polliard’s testimony under Rule 403.
V. Conclusion
The judgment is AFFIRMED.
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