## Facts

- C.W. Roen Construction Company contracted with the City of Santa Rosa, California, in September 1994 to perform improvements to the Laguna Wastewater Treatment Plant using federal funds.
- The project was subject to the Davis–Bacon Act prevailing-wage requirements and related obligations to submit weekly certified payrolls and wage-rate certifications.
- Proper Davis–Bacon payment depended on worker job classifications for the tasks performed.
- Roen classified certain workers performing disputed piping work as laborers, paid the laborers’ prevailing wage rate, and certified compliance.
- A 1992 collective bargaining agreement between the plumbers’ and laborers’ unions provided that workers performing that piping work were to be classified as plumbers.
- In January 1994, the Department of Labor issued a letter stating that Davis–Bacon wage rates and classifications for the work in the area would be set in accordance with the 1992 collective bargaining agreement.
- In June 1994, the laborers’ union attempted to rescind the 1992 agreement; the plumbers’ union rejected the termination, and the laborers’ union did not pursue it further.
- The relators brought a qui tam action under the False Claims Act alleging Roen knowingly submitted false certifications by misclassifying workers and underpaying them.
- The district court granted summary judgment for defendants, reasoning that the absence of a Department of Labor area practice survey and perceived uncertainty in the agency’s determination defeated proof of False Claims Act scienter.

## Issues

1. Whether the absence of a Department of Labor area practice survey necessarily prevents relators from proving the applicable Davis–Bacon classification and wage rate in a False Claims Act case.
2. Whether asserted uncertainty in the Department of Labor’s prevailing-wage determination necessarily precludes a reasonable jury from finding False Claims Act scienter (knowledge, deliberate ignorance, or reckless disregard) for wage-rate certifications.

## Decision

- The Ninth Circuit reversed summary judgment and remanded.
- The court held an area practice survey is not required in all cases to establish the prevailing wage or classification for Davis–Bacon purposes.
- The court held the status of the Department of Labor’s determination, including its letters, did not compel the conclusion that relators could not prove defendants acted with the scienter required by the False Claims Act.
- The court concluded that, given the Department of Labor’s letter and the collective bargaining agreement evidence, a reasonable factfinder could infer at least reckless disregard.
- The court noted the presence of complex legal and factual disputes not suitably resolved on the existing summary judgment record.
- A dissent would have affirmed on the view that the agency and union positions were too uncertain to support scienter.

## Legal Principles

- False Claims Act scienter may be shown by actual knowledge, deliberate ignorance, or reckless disregard; specific intent to defraud is not required.
- False certifications, including certifications of Davis–Bacon compliance that affect federal payment decisions, can support False Claims Act liability.
- Proof of the applicable Davis–Bacon prevailing wage and classification is not categorically dependent on a Department of Labor area practice survey; other evidence, including collective bargaining agreements and agency communications, may be used.
- Summary judgment is improper where evidence could permit a reasonable jury to find that defendants knew, or recklessly disregarded, the correct wage/classification when certifying compliance.

## Conclusion

The Ninth Circuit held that the lack of a Department of Labor area practice survey and alleged uncertainty in prevailing-wage guidance did not, as a matter of law, defeat a False Claims Act case based on allegedly false Davis–Bacon payroll certifications, and it remanded for factfinding on falsity and scienter.


United States ex rel. Plumbers & Steamfitters Local Union No. 38 v. C.W. Roen Constr. Co., 183 F.3d 1088 (9th Cir. 1999)