§ 1927 and FRAP 38 Sanctions — Appeal Is Frivolous If Obviously without Merit and Vexatious If Prosecuted for Delay, Harassment or Other Improper Purpose
U.S. ex rel. Jacobs v. Lambda Research, Inc., 2015 U.S. App. LEXIS 7308 (6th Cir. May 1, 2015):
We review the district court's grant of summary judgment de novo. Bultema v. United States, 359 F.3d 379, 382 (6th Cir. 2004). To prevail on a claim under the FCA, a plaintiff must show that the defendant made a false statement to the government, that the defendant did so intentionally, and that the statement was material to the government's decision to pay the defendant for work performed on the government's behalf. United States ex rel. A+ Homecare Inc. v. Medshares Mgm't Grp., Inc., 400 F.3d 428, 444-45, 451 (6th Cir. 2005).
Here, the district court held that no reasonable jury could find that Lambda made a false statement to the Navy, much less an intentional one. We agree. Jacobs presented no evidence that Lambda ever told the Navy that the burnishing process would always produce cold-work levels of less than five percent. To the contrary, the record showed that Lambda repeatedly disclosed to the Navy the exact cold-work levels that Lambda's process produced, rendering "absurd" any allegation that Lambda was intentionally trying to "dup[e]" the Navy. United States ex. rel. Lamers v. City of Green Bay, 168 F.3d 1013, 1019-20 (7th Cir. 1999). The district court likewise held that no reasonable jury could find that Lambda's statements about cold-work levels were material to the government's decision to hire [*10] Lambda. We agree, because three Navy witnesses submitted declarations, which Jacobs did not contradict, stating that the Navy simply did not care about the precise cold-work levels that Lambda's process would produce. Rather, the Navy's "overwhelming concern with [Lambda's process] was the demonstrated fatigue benefit," a characteristic wholly unrelated to the resulting cold-work levels. R. 52-8 at 701. Finally, all of the Navy witnesses agreed that the Navy's arrangement with Lambda met or exceeded expectations, and that the Navy continued its contractual relationship with Lambda after Jacobs's allegations were made public. For all of these reasons, the district court correctly granted summary judgment to Lambda.
Under 28 U.S.C. § 1927 and Rule 38 of the Federal Rules of Appellate Procedure, we can impose sanctions on an attorney if he files a frivolous appeal. An appeal is frivolous if "it is obviously without merit and is prosecuted for delay, harassment, or other improper purposes." Barney v. Holzer Clinic, Ltd., 110 F.3d 1207, 1212 (6th Cir. 1997) (emphasis and interior quotations omitted). As the district court concluded as to the litigation below, we are inclined to conclude that this appeal is both baseless and brought primarily for purposes of harassment, and that Jacobs's attorney, Patrick Perotti, should [*11] be sanctioned as a result. We therefore order Perotti to show cause within 14 days why he should not be sanctioned. Lambda will then have 14 days to file a response.
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