United States Ex Rel. Berge v. Board of Trustees of the University of Alabama , 104 F.3d 1453 ( 1997 )

Filed: February 11, 1997
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 95-2811
(CA-93-158-N)
United States of America ex rel. Pamela A.
Berge,
Plaintiff - Appellee,
versus
The Board of Trustees of the University of
Alabama, et al,
Defendants - Appellants.
O R D E R
The Court amends its opinion filed January 22, 1997, as
follows:
On page 3, section 1, line 19 -- the following is added after
"Denver, Colorado" and before "for Amici Curiae": Ray Farabee, Vice
Chancellor and General Counsel, Dudley R. Dobie, Jr., Office of the
General Counsel, THE UNIVERSITY OF TEXAS, Austin, Texas; C. Peter
McGrath, President, NATIONAL ASSOCIATION OF STATE UNIVERSITIES AND
LAND-GRANT COLLEGES, Washington, D.C."
- 2 -
On page 8, first full paragraph, line 13 and page 9, first
full paragraph, line 22 -- "5 U.S.C." is corrected to read "31
U.S.C."
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, ex rel.
PAMELA A. BERGE,
Plaintiff-Appellee,
and
UNITED STATES OF AMERICA,
Intervenor,
v.
THE BOARD OF TRUSTEES OF THE
UNIVERSITY OF ALABAMA; ROBERT F.
PASS, Professor of Pediatrics; SERGIO B.
STAGNO, Professor and Chairman,
Department of Pediatrics; CHARLES A.
ALFORD, Professor of Pediatrics;
No. 95-2811
KAREN B. FOWLER,
Defendants-Appellants.
AMERICAN COUNCIL ON EDUCATION; THE
AMERICAN ASSOCIATION OF STATE
COLLEGES & UNIVERSITIES; THE
NATIONAL ASSOCIATION OF STATE
UNIVERSITIES AND LAND-GRANT
COLLEGES; AMERICAN ASSOCIATION OF
COMMUNITY COLLEGES; COUNCIL OF
GRADUATE SCHOOLS; THE REGENTS OF THE
UNIVERSITY OF MINNESOTA; THE
UNIVERSITY OF TEXAS SYSTEM; THE
UNIVERSITY OF COLORADO; THE REGENTS
OF THE UNIVERSITY OF CALIFORNIA;
THE REGENTS OF THE UNIVERSITY OF
MICHIGAN; ASSOCIATION OF AMERICAN
MEDICAL COLLEGES; EUGENE DONG,
M.D., J.D.; ROBERT L. SPRAGUE, M.D.,
Ph.D.; JEFFREY F. WILLIAMS, B.V.Sc.,
M.R.C.V.S., Ph.D.; TAXPAYERS AGAINST
FRAUD, THE FALSE CLAIMS ACT LEGAL
CENTER,
Amici Curiae.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Edward S. Northrop, Senior District Judge.
(CA-93-158-N)
Argued: December 4, 1996
Decided: January 22, 1997
Before ERVIN and WILKINS, Circuit Judges, and MICHAEL,
Senior United States District Judge for the
Western District of Virginia, sitting by designation.
_________________________________________________________________
Reversed by published opinion. Judge Ervin wrote the opinion, in
which Judge Wilkins and Senior Judge Michael joined.
_________________________________________________________________
COUNSEL
ARGUED: William Allen Bradford, Jr., HOGAN & HARTSON,
L.L.P., Washington, D.C., for Appellants. David Jonathan Fine,
DANGEL, DONLAN & FINE, L.L.P., Boston, Massachusetts, for
Appellee. Michael Eugene Robinson, Appellate Staff, Civil Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington,
2
D.C., for Intervenor. ON BRIEF: Barbara F. Mishkin, Sarah E.
Mitchell, HOGAN & HARTSON, L.L.P., Washington, D.C., for
Appellants. Edward T. Dangel, III, Alexander T. Bok, DANGEL,
DONLAN & FINE, L.L.P., Boston, Massachusetts, for Appellee.
Frank W. Hunger, Assistant Attorney General, Lynne A. Battaglia,
United States Attorney, Douglas N. Letter, Appellate Litigation
Counsel, Appellate Staff, Civil Division, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Intervenor.
Richard O. Duvall, John Thorpe Richards, Jr., HOLLAND &
KNIGHT, Washington, D.C.; Sheldon Elliot Steinbach, AMERICAN
COUNCIL ON EDUCATION, Washington, D.C., for Amici Curiae
American Council, et al. Mark B. Rotenberg, General Counsel, Mark
A. Bohnhorst, OFFICE OF THE GENERAL COUNSEL, Minneapo-
lis, Minnesota; Elsa K. Cole, General Counsel, UNIVERSITY OF
MICHIGAN, Ann Arbor, Michigan; James E. Holst, General Coun-
sel, John F. Lundberg, Christopher M. Patti, UNIVERSITY OF CAL-
IFORNIA, Oakland, California; Charles V. Sweet, University
Counsel, Daniel J. Wilkerson, UNIVERSITY OF COLORADO
HEALTH SCIENCES CENTER, Denver, Colorado; Ray Farabee, Vice
Chancellor and General Counsel, Dudley R. Dobie, Jr., Office
of the General Counsel, THE UNIVERSITY OF TEXAS, Austin,
Texas; C. Peter McGrath, President, NATIONAL ASSOCIATION
OF STATE UNIVERSITIES AND LAND-GRANT COLLEGES,
Washington, D.C., for Amici Curiae Regents of the University
of Minnesota, et al. Robert A. Burgoyne, Cristina C. Chou,
FULBRIGHT & JAWORSKI, L.L.P., Washington, D.C.;
Joseph A. Keyes, Jr., ASSOCIATION OF AMERICAN MEDICAL
COLLEGES, Washington, D.C., for Amicus Curiae Associa-
tion. Eugene Dong, Palo Alto, California, for Amici Curiae Dong, et
al. Priscilla R. Budeiri, Gary W. Thompson, Lisa R. Hovelson, TAX-
PAYERS AGAINST FRAUD, THE FALSE CLAIMS LEGAL CEN-
TER, Washington, D.C., for Amicus Curiae Taxpayers.
_________________________________________________________________
OPINION
ERVIN, Circuit Judge:
Defendants-Appellants appeal from a denial of their motion for
judgment as a matter of law following a jury verdict awarding the
United States, after trebling and the imposition of a civil penalty,
$1.66 million, 30% of which ($498,000) is to be awarded to Relator-
Appellee Pamela A. Berge (Berge), on a False Claims Act claim, and
awarding Berge $265,000 in compensatory and punitive damages on
3
a pendent state law claim for conversion of intellectual property. We
reverse.
I.
At the time the events at issue occurred, Pamela Berge was a doc-
toral candidate in nutritional sciences at Cornell University. The indi-
vidual Defendants-Appellants Sergio Stagno, Charles Alford, and
Robert Pass were medical researchers and professors at Defendant-
Appellant The University of Alabama at Birmingham (UAB).
Defendant-Appellant Karen Fowler was a doctoral candidate at UAB
supervised by Pass.
Scientists at UAB have been studying cytomegalovirus (CMV), the
most common infectious cause of birth defects, since 1971, and over
the years have accumulated the leading database on maternal and con-
genital CMV in the world. A significant part of the funding for this
research has been provided by grants from the National Institutes of
Health (NIH), in particular grant HD-10699, "Perinatal Infections,
Immunity and Maldevelopment Research Program Project," adminis-
tered by NIH's National Institute of Child Health and Human Devel-
opment (NICHD). This grant is renewable every five years, with
years 11 to 15 relevant to this case. Alford was the principal investi-
gator for this project, although Stagno and Pass were closely associ-
ated with it. All three are internationally recognized as leading
authorities on CMV.
Berge decided to do her dissertation on CMV as a possible cause
of low birth weight. She arranged access to and extensive assistance
with UAB's database through Stagno, and she worked closely with
Stagno and his colleagues while she was in residence as a visiting
graduate student at UAB from February to August 1987. After Berge
returned to Cornell, she resisted others' attempts to use the collected
data and began to complain about Cornell faculty members, including
her thesis chairman. She made three further trips to Birmingham dur-
ing which she made presentations of her work. She completed her the-
sis in May 1989 and received her Ph.D. Berge thereafter attempted to
publish papers based on her thesis, but she was rejected repeatedly by
Journal of the American Medical Association, Epidemiology, and
Journal of Infectious Diseases.
4
In the meantime, Defendant-Appellant Fowler decided in June
1988 to do her dissertation on the relationship between CMV and
sexually-transmitted diseases and began working with Pass. After
Fowler had begun her data analysis, based in part on UAB's existing
database and in part on original medical records, she consulted com-
pleted theses, including Berge's, to choose a format. She defended her
dissertation in May 1990. The following month, Fowler presented her
research at a meeting of the Society of Epidemiological Research.
Berge was in the audience and became shocked at what she consid-
ered to be plagiarism of her own work by Fowler.
Berge brought her allegations to Stagno's attention but did so in
such a way that ultimately Stagno and his colleagues determined they
could no longer collaborate with her. Two investigations of the alle-
gations were conducted at UAB, but the allegations were found to be
baseless. Unsatisfied with these results, as well as those produced
from the other avenues she pursued, Berge next obtained copies of
UAB's grant applications through a Freedom of Information Act
(FOIA) request and then brought this litigation.
As the basis for her qui tam action under the False Claims Act, 31
U.S.C. §§ 3729-3733, Berge alleged that UAB had made false state-
ments to NIH in its annual progress reports under its grant. In particu-
lar, these false statements were that (1) UAB misled NIH in year 11
about the amount of data that had been computerized; (2) UAB had
included an abstract of Berge's work in year 12 without mentioning
her name, thereby overstating UAB's competence and progress in epi-
demiology; (3) UAB, although including Berge's name on the
abstracts in years 13 and 14, had "submerged" her research so that
serious questions about one of UAB's central theses would not be
noticed; and (4) UAB misled NIH in year 15 by including abstracts
of Fowler's work which plagiarized Berge's. Although Berge also
alleged a number of pendent state law claims, only the conversion of
intellectual property is at issue on this appeal.
After this action was filed, the government naturally investigated
to determine whether it would choose to prosecute the matter on its
own behalf. The Office of the Inspector General (OIG) of the Depart-
ment of Health and Human Services conducted such an investigation
and recommended that no action be taken. Its report stated:
5
This investigation, which has involved the interview of
NICHD grant officials, interview of University officials, and
the examination of documents of relator, NICHD and the
University of Alabama, has found no evidence that the sub-
jects committed a criminal violation in connection with
grant applications or progress reports submitted to the Gov-
ernment. Information has been obtained however, which
shows many of the assumptions behind the relator's allega-
tions to be in error or exaggerations of the truth.
J.A. at 179 (emphasis added). The government accordingly declined
to become involved in the litigation below pursuant to 31 U.S.C.
§ 3730. This OIG report was never submitted into evidence at trial.
The parties make various contentions as to why this is so and whether
the district court abused its discretion in failing to allow it. Given our
disposition of this case, we do not reach this issue.
After a ten-day jury trial, the jury returned a verdict in favor of
Berge, finding False Claims Act liability against all defendants except
Fowler but assessing damages only against UAB in the amount of
$550,000. Pursuant to 31 U.S.C. § 3729(a), this amount was trebled
to $1.65 million, and the district court imposed a civil fine of $10,000
against all the defendants, jointly and severally, except Fowler. Pursu-
ant to § 3730(d)(2), the district court awarded Berge as relator 30%
of the United States' total recovery, or $498,000. The jury also found
the four individual defendants liable for conversion of intellectual
property in differing amounts, imposing a total of $50,000 in compen-
satory damages and $215,000 in punitive damages. The district court,
without opinion, denied defendants' motions for judgment as a matter
of law and a new trial. This appeal followed.
II.
Berge instituted the action below under the False Claims Act, 31
U.S.C. §§ 3729-3733. Subject matter jurisdiction of the district court
was thus based on the federal question statute, 28 U.S.C. § 1331. Sup-
plemental jurisdiction over the pendent state law claims was pursuant
to 28 U.S.C. § 1367. This appeal arises from a final judgment below,
and thus we possess appellate jurisdiction under 28 U.S.C. § 1291.
6
Normally that would end our jurisdictional inquiry, but the defen-
dants and various amici raise issues concerning the constitutionality
of the False Claims Act, whether qui tam relators possess standing,
and whether state instrumentalities can be held liable pursuant to the
Act under the Eleventh Amendment, especially in light of Seminole
Tribe v. Florida, 134 L. Ed. 2d 252 (1996). None of these issues were
raised below, but to the extent they partake of jurisdictional matters,
we may properly consider them. Because we reverse on the facts of
this case, we naturally see no need to reach the issue of the constitu-
tionality of the Act itself. We do, however, briefly address why we
consider the general issue of standing to be unproblematic, why the
government, as the real party in interest, possesses standing under the
facts of this case, and why Seminole does not change our view that
Eleventh Amendment immunity is a red herring in these circum-
stances.
We have previously held that the "United States is the real party
in interest in any False Claims Act suit, even where it permits a qui
tam relator to pursue the action on its behalf." United States ex rel.
Milam v. University of Tex. M.D. Anderson Cancer Ctr., 961 F.2d 46,
50 (4th Cir. 1992). Although Milam arose in the pre-Seminole context
of a claim of Eleventh Amendment immunity, which was denied
since states may be sued in federal court by the United States, we see
Milam as resolving the general issue of standing in this circuit. The
Seventh Circuit has concluded that "[o]nce we accept the premise that
the United States is the real plaintiff in a qui tam action, it stands to
reason that challenges to the standing of the government's representa-
tive are beside the point." United States ex rel. Hall v. Tribal Dev.
Corp., 49 F.3d 1208, 1213 (7th Cir. 1995). Similarly, the Ninth Cir-
cuit has analyzed extensively whether the qui tam provisions of the
False Claims Act conflict with Article III or violate the principle of
separation of powers, the Appointments Clause, or the Due Process
Clause, points which various amici raise again here, and our sister cir-
cuit concluded they do not. United States ex rel. Kelly v. Boeing Co.,
9 F.3d 743, 747-60 (9th Cir. 1993), cert. denied, 510 U.S. 1140
(1994). That court has recently affirmed its rejection of these same
arguments in United States ex rel. Schumer v. Hughes Aircraft Co.,
63 F.3d 1512, 1520-21 (9th Cir. 1995), cert. granted in part, 117 S.
Ct. 293 (U.S. Oct. 15, 1996), and we note that the Supreme Court has
granted certiorari to consider, inter alia, whether the lower courts
7
erred "in asserting jurisdiction over this action under qui tam provi-
sions of FCA." 65 U.S.L.W. 3283, 3292 (U.S. Oct. 15, 1996).
Although we would not hazard to predict what the Supreme Court
may do in Schumer or whether it will even reach the question on
which certiorari was granted, given that our disposition reverses the
liability of the defendants in toto, we decline to enter into a long dis-
quisition on the standing issue.
However, it must be admitted that, notwithstanding a qui tam rela-
tor's general standing as the government's representative, the govern-
ment, as the real party in interest, must still have suffered an injury
in fact. See Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).
Amicus Association of American Medical Colleges contends that
Berge lacks standing because the United States suffered no injury in
fact, as evidenced by the OIG report. We find this argument meritless.
In the first place, the OIG report was more concerned with possible
criminal violations, which would put the Government to a higher bur-
den of proof than in a civil action as here. Second, and most impor-
tantly, the plain language of the Act clearly anticipates that even after
the Attorney General has "diligently" investigated a violation under
31 U.S.C. § 3729, the Government will not necessarily pursue all meri-
torious claims; otherwise there is little purpose to the qui tam provi-
sion permitting private attorneys general. Cf. id. at § 3730(a) ("If the
Attorney General finds that a person has violated or is violating sec-
tion 3729, the Attorney General may bring a civil action under this
section against the person." (emphasis added)) with id. at § 3730(c)(3)
("If the Government elects not to proceed with the action, the person
who initiated the action shall have the right to conduct the action."
(emphasis added)); see also United States ex rel. McGough v. Coving-
ton Techs. Co., 967 F.2d 1391, 1397 (9th Cir. 1992) (stating that "[t]o
hold that the government's initial decision not to take over the qui tam
action is the equivalent of its consent to a voluntary dismissal of a
defendant with prejudice would require us to ignore the plain lan-
guage of § 3730(b)(1)"). The OIG report is not an admission by the
United States that it has suffered no injury in fact, but rather it
amounts to a cost-benefit analysis. Here the Government surmised--
and, as we decide this case, it turns out rightly--that the costs of pro-
ceeding on Berge's claims outweighed the anticipated benefits.
Finally, we note that injury in fact is not to be judged post hoc. The
logical outcome of amicus's position is that any losing plaintiff-
8
relator would not have possessed standing in the first place. In this
context, it is worth noting that the district court determined in a
lengthy memorandum that Berge's allegations of false statements
were sufficient to overcome a motion for summary judgment. See
United States ex rel. Berge v. Board of Trustees of the Univ. of Ala.,
Civil No. N-93-158 (D. Md. filed Mar. 14, 1995), at 9-14.
As a final jurisdictional matter, we recognize that no court has yet
considered the interposition of the Eleventh Amendment to the False
Claims Act in the wake of Seminole. Amici Regents of the University
of Minnesota et al. make an interesting case that the False Claims Act
was not intended to apply to the states, which they think takes on
added significance post-Seminole. Amici American Council on Educa-
tion et al. also suggest we need to take another look at Eleventh
Amendment immunity in the qui tam context. We disagree.
Seminole's relevant holding here is its reconfirmation that Congress
must use unequivocal statutory language if it intends to abrogate the
sovereign immunity of states in suits brought by and for private par-
ties. Seminole, 134 L. Ed. 2d at 266. But as we already said in Milam,
this is a non-issue in the False Claims Act context. Milam, 961 F.2d
at 50 n.3. There is simply no question of abrogation of immunity here.
Seminole certainly left intact what is beyond purview: that the federal
government may sue states in federal court. Seminole, 134 L. Ed. 2d
at 276 n.14 (citing United States v. Texas, 143 U.S. 621, 644-45
(1892), for the proposition that such power is necessary to the "per-
manence of the Union"); see also West Virginia v. United States, 479
U.S. 305, 311 (1987). The United States is the real party in interest.
The Act itself states that the "action shall be brought in the name of
the Government." 31 U.S.C. § 3730(b)(1). We affirm our reasoning in
Milam: "[T]he states have no Eleventh Amendment immunity against
the United States ab initio. Therefore, there is no reason Congress
would have displaced it in the False Claims Act." Milam, 961 F.2d
at 50 n.3.
III.
Turning to the merits, appellants assign at least seven points of
error to the district court below. We reach only three of them in
reversing the entire judgment below: the lack of materiality to the
government's funding decisions of the alleged false statements; the
9
insufficiency of the evidence that appellants even made false state-
ments to the government, as merged into the first issue on the False
Claims Act claim; and the preemption, by federal copyright law, of
the state law conversion of intellectual property claim.1 We address
the materiality and insufficiency of evidence issues in this section and
the preemption issue in the next section.
The civil False Claims Act provides in relevant part:
(a) Any person who--
(2) knowingly makes, uses, or causes to be made
or used, a false record or statement to get a false
or fraudulent claim paid or approved by the Gov-
ernment; . . .
is liable to the United States Government for a civil penalty
of not less than $5,000 and not more than $10,000, plus 3
times the amount of damages which the Government sus-
tains because of the act of that person . . . .
31 U.S.C. § 3729(a). We have previously suggested that the civil
False Claims Act requires a materiality element. See United States v.
Snider, 502 F.2d 645, 652 n.12 (4th Cir. 1974) (construing the FCA's
predecessor statute, 31 U.S.C. § 231). If previously unclear, we now
make explicit that the current civil False Claims Act imposes a mate-
riality requirement. See also Tyger Constr. Co. v. United States, 28
Fed. Cl. 35, 55 (1993) ("[T]he FCA covers only those false statements
that are material.").
On this materiality issue, however, we must initially determine
whether the issue is to be properly decided by the court. In the context
of the criminal false statements statute, 18 U.S.C. § 1001, we had pre-
viously held that materiality is a question of law whose test is
_________________________________________________________________
1 The other four assignments of error are that the district court failed to
set aside a flawed damages award on the False Claims Act claim since
the verdict was inconsistent, the court abused its discretion by excluding
the OIG report, the court erred in its instructions on the state law claim,
and there was insufficient proof of conversion.
10
"whether the false statement has a natural tendency to influence
agency action or is capable of influencing agency action." United
States v. Norris, 749 F.2d 1116, 1122 (4th Cir. 1984) (citations omit-
ted), cert. denied, 471 U.S. 1065 (1985). In the criminal context, that
holding can no longer stand as a result of United States v. Gaudin,
132 L. Ed. 2d 444 (1995). In Gaudin, a unanimous Court held that the
materiality of false statements was an element of the crime under 18
U.S.C. § 1001 to which a defendant has a constitutional right under
the Fifth and Sixth Amendments for a jury to determine guilt beyond
a reasonable doubt. Id. at 458. Berge's expansive interpretation that
Gaudin's rationale must apply even in civil cases where there is a
right to jury trial under the Seventh Amendment is unwarranted. The
Court expressly declined to reach that issue, stating that "the courts'
power to resolve mixed-law-and-fact questions in civil cases is not at
issue here; civil and criminal juries' required roles are obviously not
identical, or else there could be no directed verdicts for civil plain-
tiffs." Id. at 454; see also id. at 460 (stating that the "Court properly
acknowledges that other mixed questions of law and fact remain the
proper domain of the trial court") (Rehnquist, C.J., concurring).
Moreover, the Court refused to overrule its unanimous opinion in
Kungys v. United States, 485 U.S. 759 (1988), a civil denaturalization
case, that the "materiality requirement under . . . statutes dealing with
misrepresentations to public officers" is one for the court,2 id. at 772
(citations omitted), since the constitutional ramifications were differ-
ent. Gaudin, 132 L. Ed. 2d at 458.
In addition, we have already indicated our reluctance to construe
Gaudin broadly. See, e.g., United States v. Daughtry, 91 F.3d 675,
675 (4th Cir. 1996) (stating that "Gaudin held only that in prosecu-
tions for violations of [18 U.S.C.] § 1001, the element of materiality
must be submitted to the jury" (emphasis added)); see also United
States v. Klausner, 80 F.3d 55, 61 (2d Cir. 1996) (holding that even
in some criminal contexts materiality remains a purely legal question
after Gaudin). Thus, in light of our earlier determination that the
materiality of false statements is a legal question and of our inclina-
tion not to give an expansive interpretation to Gaudin, we hold that
in the context of the civil False Claims Act the determination of mate-
_________________________________________________________________
2 Although the Court was split on the judgment, the Court was unani-
mous in the opinion that materiality was a question for the court.
11
riality, although partaking of the character of a mixed question of fact
and law, is one for the court. See also United States ex rel. Butler v.
Hughes Helicopter Co., No. CV 89-5760 SVW, 1993 U.S. Dist.
LEXIS 17844, at *43-44 (C.D. Cal. Aug. 25, 1993) (holding that the
materiality of false statements under the False Claims Act is a legal
question for the court), aff'd on other grounds, 71 F.3d 321 (9th Cir.
1995). Moreover, we see no reason to depart from the test we enunci-
ated in Norris, even though the remainder of its holding cannot stand
post-Gaudin, that is, the materiality of the false statement turns on
"whether the false statement has a natural tendency to influence
agency action or is capable of influencing agency action." Norris, 749
F.2d at 1122; see also Kungys, 485 U.S. at 770 (recognizing that a
"misrepresentation is material if it has a natural tendency to influence,
or was capable of influencing, the decision of the decisionmaking
body to which it was addressed" (internal quotation marks omitted)).
In any event, even the Gaudin Court acknowledged that there
always remains as a threshold question of law whether the case for
materiality is "so weak that no reasonable juror could credit it."
Gaudin, 132 L. Ed. 2d at 454. In the instant case, our de novo review,
see, e.g., Benedi v. McNeil-P.P.C., Inc., 66 F.3d 1378, 1383 (4th Cir.
1995) ("We review a denial of a motion for judgment as a matter of
law de novo." (citation omitted)), of the alleged false statements
plainly shows they were not material to NICHD's funding decisions,
and, furthermore, are so lacking in materiality, indeed, are not even
false, that no reasonable jury could have so found.
As a general matter, NICHD's program officer with responsibility
for UAB's grant testified that Berge's contributions were not central
to UAB's project and that the progress reported by UAB was satisfac-
tory for a recommendation of continued funding without Berge's con-
tribution. As even the government notes in its brief as intervenor on
appeal, "NICHD determined that the information Berge alleged was
false or misrepresented was not material to its funding decisions." Br.
of United States as Intervenor at 34.
More particularly, Berge's assertion of UAB's alleged misstate-
ment concerning the extent of computerization in year 11 is belied by
the fact that information on upwards of 20,000 patients had been com-
puterized by that time. Even accepting Berge's assertion that only 124
12
cases of congenitally-infected babies were computerized, that fact is
irrelevant to the greater computerization effort, and, moreover, is one
fully consistent with Berge's own dissertation claim that congenital
infection affects only 0.2%-2.4% of all live births. Furthermore, the
program officer testified that the principal purpose of the project was
the collection of data, not its computerization. Thus, not only did
UAB not mislead NIH about the extent of computerization, but UAB
fully reported the number of subjects of the project every year and
thereby complied with NIH's expectation on the collection of data. In
fact, the program officer stated that UAB's data collection "is consid-
ered to be the largest single source of information on maternal and
congenital CMV in the world." J.A. at 1510.
Second, the year 12 omission of Berge's name from an abstract
submitted as part of the progress report cannot possibly be material.
In the first place, NIH did not even require the inclusion of her name,
or anyone's name. There can only be liability under the False Claims
Act where the defendant has an obligation to disclose omitted infor-
mation. United States ex rel. Milam v. Regents of the Univ. of Calif.,
912 F. Supp. 868, 883 (D. Md. 1995). More importantly, the abstract
itself was included, and was required to be included, because Stagno
appeared on the abstract as a co-author. Berge expended considerable
effort in attempting to convince us, both in her briefs and at oral argu-
ment, that the jury properly found this failure to attribute the abstract
to her and obtain her permission to use it was a material false state-
ment. The report, in fact, did not attribute the abstract to any of its
authors; it simply "abstracted" the study for the purpose of reporting
on project activity. Under federal copyright law, Stagno, as co-author,
is a coowner of copyright in the work. See 17 U.S.C. § 201(a).
Coowners are treated as tenants in common with each coowner hav-
ing an undivided, independent right to use the work, subject only to
a duty of accounting for profits to other coowners. See H.R. Rep. No.
1476, 94th Cong., 2d Sess., at 121 (1976), reprinted in 1976
U.S.C.C.A.N. 5659, 5736; Erickson v. Trinity Theatre, Inc., 13 F.3d
1061 (7th Cir. 1994). Thus it was perfectly proper for Stagno to use
the abstract as he did, and that use therefore is not a false statement,
let alone a material one capable of affecting NIH's funding decision.
Third, Berge's claim of the "submergence" of her work in the prog-
ress reports for years 13 and 14 is inexplicable. In each year's prog-
13
ress report, fully half of the discussion of activity under Specific Aim
#1 of Project 1 is given over to quoting in full from Berge's abstracts,
with attribution. If Berge's work supported the hypothesis that there
was a downside risk to a live vaccine, the development of which she
claims was a central goal of UAB's project, then it was incumbent
upon her to note that implication in her work, which she did not. The
omission is her own fault, not UAB's. An ex post facto realization of
the possible importance of this implication cannot support a charge of
falsity at the time the report was submitted. Moreover, NIH's expecta-
tion that only the abstract would be included in the progress report
cannot form the basis for liability for an omission in any event. While
it is true that the reports mistakenly referred to Berge as a "postdoc-
toral graduate student from the Department of Biostatistics" at Cor-
nell, see J.A. at 1188, 1202, when, in fact, she was in year 13 a
doctoral candidate in nutritional sciences and by year 14 had obtained
her Ph.D., no reasonable jury could conclude that such trivial errors
were materially capable of influencing NIH's funding decision.
As to Berge's final asserted false statement by UAB, that NIH was
misled by including an abstract of Fowler's work in year 15, which
allegedly plagiarized Berge's own work and about which plagiarism
UAB knew, the evidence is patently clear that there was no plagiarism
by Fowler and thus no false statement by UAB. The government itself
points out that "none of the scientific or administrative bodies to
which [Berge] complained found that Fowler had plagiarized Berge's
work." Br. of United States as Intervenor at 5. As Berge herself con-
cedes, "Ms. Fowler's ultimate hypothesis and conclusions were dif-
ferent from [mine]." Br. of Appellee at 19. But if the hypothesis and
conclusions were different, what was plagiarized? Certainly not
independently-obtained data sets extracted from UAB's own collec-
tion; nor the case control method, one of the most frequently-used
research designs in epidemiology; nor the textbook statistical method-
ologies employed; nor the risk factors, derived from the scientific lit-
erature, commonly used in perinatal studies; nor even the organization
of Fowler's and Berge's tables which do nothing more than reflect
UAB's own clinic forms. None of these "ideas" were original to
Berge, and thus none of these could have been taken by Fowler from
Berge and passed off as her own. The ideas that were original to
Berge were her hypotheses and conclusions concerning the relation-
ship between CMV infection and low birth weight, but these ideas are
14
concededly different from Fowler's hypotheses and conclusions con-
cerning the relationship between sexually-transmitted diseases and
maternal CMV infection. As the Public Health Service's Office of
Research Integrity has determined, plagiarism does not include credit
disputes. See 3 ORI Newsletter 3 (Office of Research Integrity, U.S.
Public Health Service, Dec. 1994). But once the surface is scratched,
there is nothing to Berge's claim except her complaint that Fowler did
not give Berge's work the notice she felt she deserved. If that be sci-
entific misconduct, it is far too attenuated to any federal right for us,
or any federal court, to decide.
Berge also makes much of the fact that the year 15 review had to
be performed three times before UAB could allegedly get its grant
renewed. Indeed, she claims it is "difficult to imagine a more concrete
demonstration of the materiality of the false statements." Br. of
Appellee at 29. However, the record clearly shows that the first
review had to be rejected because of a conflict of interest by one of
the reviewing scientists, and the second had to be rejected because it
impermissibly had access to the first review. The third review was
thus the only clean review, and it recommended funding the project.
Thus Berge's most concrete demonstration of materiality rests on no
foundation whatsoever.3
In addition to this allegation by allegation analysis that demon-
strates the lack of materiality, as well as the lack of falsity, of the
statements, we also decide that no reasonable jury could possibly con-
clude that a multi-million dollar grant, continually renewed over a
period of more than a decade, undertaken by three internationally-
respected scientists engaged, in part, in the collection of the world's
leading database on CMV, would be reduced or eliminated due to
UAB's lack of expertise in an area that could only be bolstered by the
work of an unknown graduate student in nutritional sciences--work
that, when reviewed by independent scientists at peer-reviewed jour-
nals, was determined to be "scarcely comprehensible," J.A. at 1489,
"extremely difficult to read and even more difficult to evaluate," J.A.
at 1486, and so cavalier in its design and conduct as to induce great
_________________________________________________________________
3 Moreover, Berge totally ignores the fact that, at the time of trial, well
after all of Berge's allegations had been repeatedly probed, NIH contin-
ued to fund UAB under the grant.
15
skepticism in "any findings reported from it," J.A. at 1489. The hubris
of any graduate student to think that such grants depend on the results
of her work is beyond belief. That is not the way Big Science works.
Assuming arguendo that all of Berge's allegations were true and
UAB had made these false statements, it is hard to imagine that NIH's
decision-making would have been influenced by them.
Reviewing all this evidence in the light most favorable to Berge,
it is abundantly clear that substantial evidence upon which the jury
could have found for Berge is lacking. See Benedi v. McNeil-P.P.C.,
Inc., 66 F.3d 1378, 1383 (4th Cir. 1995) (citation omitted). Her evi-
dence amounts at most to a scintilla, which is insufficient to sustain
the verdict. See Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655,
660 (4th Cir.), cert. denied, 510 U.S. 965 (1993). At best, Berge fails
on her burden of showing materiality; at worst, she cannot even show
the statements were false. In either case, judgment as a matter of law
is appropriate for appellants on the False Claims Act claim since
Berge has "failed to make a showing on an essential element of [her]
case with respect to which [s]he had the burden of proof." Singer v.
Dungan, 45 F.3d 823, 827 (4th Cir. 1995) (internal quotation marks
and citation omitted). We reverse the judgment below on the False
Claims Act claim in its entirety.
IV.
We turn now to the claim of conversion of intellectual property
under Alabama law. The Alabama conversion statute provides:
The owner of personalty is entitled to possession thereof.
Any unlawful deprivation of or interference with such pos-
session is a tort for which an action lies.
Ala. Code § 6-5-260. Whether federal copyright law preempts a state
law claim is a question of law that we review de novo. Rosciszewski
v. Arete Assocs., Inc., 1 F.3d 225, 229 (4th Cir. 1993).
Berge's conversion claim in this instance is clearly preempted by
federal copyright law. Section 301(a) of the Copyright Act provides
in pertinent part:
16
[A]ll legal or equitable rights that are equivalent to any of
the exclusive rights within the general scope of copyright as
specified in section 106 in works of authorship that are fixed
in a tangible medium of expression and come within the
subject matter of copyright as specified by sections 102 and
103 . . . are governed exclusively by this title.[After January
1, 1978], no person is entitled to any such right or equiva-
lent right in any such work under the common law or stat-
utes of any State.
17 U.S.C. § 301(a). We have recently held that the statute thus sets
up a two-prong inquiry to determine when a state law claim is pre-
empted: first, the work must be "within the scope of the ``subject-
matter of copyright' as specified in 17 U.S.C. §§ 102, 103," and sec-
ond, "the rights granted under state law" must be "equivalent to any
exclusive rights within the scope of federal copyright as set out in 17
U.S.C. § 106." Rosciszewski, 1 F.3d at 229 (quotation marks and cita-
tion omitted).
There can be no doubt that Berge's work--her dissertation, to
which she herself affixed a copyright mark; her abstracts; her drafts,
etc.--falls within the scope of the subject-matter of copyright. All of
these written works are clearly "original works of authorship fixed in
a[ ] tangible medium of expression." 17 U.S.C. § 102(a). Berge's
argument that her conversion claim is not preempted because it is her
"ideas and methods," which are specifically excluded from copyright
protection, see id. at § 102(b), that have been converted rests on a fal-
lacious interpretation of the Copyright Act. In other words, Berge
wants to argue that ideas embodied in a work covered by the Copy-
right Act do not fall within the scope of the Act because the Act spe-
cifically excludes them from protection. But scope and protection are
not synonyms. Moreover, the shadow actually cast by the Act's pre-
emption is notably broader than the wing of its protection.
The second prong of the preemption test is satisfied unless there is
an "extra element" that changes the nature of the state law action so
that it is "qualitatively different from a copyright infringement claim."
Rosciszewski, 1 F.3d at 229-30 (emphasis in original) (internal quota-
tion marks and citation omitted); see also Trandes Corp. v. Guy F.
Atkinson Co., 996 F.2d 655, 659-60 (4th Cir.), cert. denied, 510 U.S.
17
965 (1993). It is hornbook law that a "state law action for conversion
will not be preempted if the plaintiff can prove the extra element that
the defendant unlawfully retained the physical object embodying
plaintiff's work." Paul Goldstein, Copyright, Patent, Trademark and
Related State Doctrines 777 (3d ed. 1993) (quoting Paul Goldstein,
Copyright (1989)); see also Melville B. Nimmer & David Nimmer,
Nimmer on Copyright § 1.01[B](1)(i) (1995) ("The torts of conver-
sion and trespass relate to interference with tangible rather than intan-
gible property . . . ."). However, § 301(a) will preempt a conversion
claim "where the plaintiff alleges only the unlawful retention of its
intellectual property rights and not the unlawful retention of the tangi-
ble object embodying its work." Goldstein, supra, at 777; see Dielsi
v. Falk, 916 F. Supp. 985, 992 (C.D. Cal. 1996) (holding that a claim
for conversion of a television script was preempted since there was
no extra element to the essential claim that the ideas were misappro-
priated); compare Patrick v. Francis, 887 F. Supp. 481, 482, 484
(W.D.N.Y. 1995) (holding a conversion claim preempted where the
action actually sought to recover for unauthorized copying of the
work, concepts, and ideas of a research paper), with Oddo v. Reis, 743
F.2d 630, 635 (9th Cir. 1984) (conversion of tangible property not
preempted). It could hardly be clearer that Berge's conversion claim
is preempted. We have already dismissed Berge's argument that her
"ideas and methods" are not within the scope of copyright's protec-
tion or preemption as to the first prong. See supra. As to the second
prong, what is crucial is that Berge makes no claim that appellants
converted any tangible objects embodying her intellectual property.
Berge attempts to salvage her conversion claim first by claiming
that Alabama recognizes the conversion of intangible property and,
second, by claiming that the extra element is unauthorized use.4 She
_________________________________________________________________
4 We summarily reject Berge's additional arguments that the extra ele-
ment in this conversion claim may be supplied by (1) the severe harm
she suffered as a result of appellants' alleged "scooping" of her work, i.e.
publishing her ideas before she could do so herself, that in turn led to the
rejection of her work by academic journals and thence to the ruin of her
career, and (2) breach of trust in her relationship with Stagno. We find
these to be facially implausible as extra elements to a conversion of intel-
lectual property claim in these circumstances. Berge cites no authority
for the proposition that severity of harm has any effect on copyright pre-
18
must founder on both attempts. Although the Alabama Supreme Court
has held that "[i]n appropriate circumstances, intangible personal
property can be converted," National Sur. Co. v. Applied Sys., Inc.,
418 So. 2d 847, 850 (Ala. 1982), it was a specific computer program
that was converted there, at a time when the manner of the applicabil-
ity of copyright law to computer programs was unclear. If National
Surety holds only that intellectual property may be converted in par-
ticular circumstances, then it is unexceptional. However, if it holds
that such intellectual property can be converted without an extra ele-
ment beyond copyright infringement, then it must be repudiated as
contrary to the Copyright Act under the Supremacy Clause.
Perhaps recognizing the weakness of that reed, Berge also grasps
onto G.S. Rasmussen & Assocs. v. Kalitta Flying Serv., 958 F.2d 896
(9th Cir. 1992), cert. denied, 508 U.S. 959 (1993). But Kalitta only
held that a conversion claim did not run afoul of copyright preemp-
tion where an unauthorized copy of a Supplemental Type Certificate
from the Federal Aviation Administration had been used improperly
_________________________________________________________________
emption. We decline to erode the preemption provisions of the Copyright
Act. The evidence is abundantly clear that Berge's work did not merit
publication on the basis of its quality alone, notwithstanding any possi-
bility that she had been "scooped."
To support her claim that breach of trust provides the extra element,
Berge cites Sargent v. American Greetings Corp., 588 F. Supp. 912
(N.D. Ohio 1984). But Sargent held only that a claim for breach of confi-
dential relationship was not preempted by the Copyright Act, not that a
claim qualitatively the same as a copyright infringement claim could be
made into one qualitatively different from it if it involved a breach of
confidential relationship. Id. at 923-24. The tort for breach of confiden-
tial relations involves a wholly different proof scheme than the tort of
conversion, and Berge was not required for purposes of her conversion
claim to show any such breach, nor did she. Cases that find breach of
trust important are ones involving claims whose core consists of a breach
--such as trade secret cases--and cases where the cause of action
requires that breach of confidentiality or the like be shown. See, e.g.,
Avtec Sys., Inc. v. Peiffer, 21 F.3d 568, 574 (4th Cir. 1994);
Rosciszewski, 1 F.3d at 230; Bateman v. Mnemonics, Inc., 79 F.3d 1532,
1549 (11th Cir. 1996); Data General Corp. v. Grumman Sys. Support
Corp., 36 F.3d 1147, 1164-65 (1st Cir. 1994).
19
to obtain an airworthiness certificate from the FAA. Id. at 904. In dis-
tinguishing Kalitta, the Fifth Circuit properly recognized in Daboub
v. Gibbons, 42 F.3d 285 (5th Cir. 1995), that where the core of the
state law theory of recovery, as in conversion, goes to wrongful copy-
ing, in its case, the plagiarism of an entire song, it is preempted. Id.
at 289. Recognizing the broad and absolute preemption of § 301,
"stated in the clearest and most unequivocal language possible, so as
to foreclose any conceivable misinterpretation of its unqualified inten-
tion that Congress shall act preemptively, and to avoid the develop-
ment of any vague borderline areas between State and Federal
protection," H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976)
reprinted in 1976 U.S.C.C.A.N. 5659, 5746, the Daboub court con-
cluded that "if the language of the act could be so easily circum-
vented, the preemption provision would be useless, and the policies
behind a uniform Copyright statute would be silenced." Id. at 290 &
n.8. Berge's charge of plagiarism and lack of attribution can only
amount to, indeed, are tantamount to, a claim of copyright infringe-
ment, for Berge has certainly not been prevented from using her own
ideas and methods. See Garrido v. Burger King Corp., 558 So. 2d 79,
82 (Fla. Dist. Ct. App. 1990) (holding that where the gravamen of a
conversion claim was the unauthorized taking or use of ideas, the ele-
ments of the claim were not qualitatively different from copyright
infringement).
Berge complains that if the Copyright Act's idea-expression
dichotomy, see 17 U.S.C. § 102(b), and § 301's preemption provision
be read this way, then there is "no legal remedy for the theft of [my]
intellectual property. Intellectual property which can be stolen with-
out fear of legal punishment ceases to be property." Br. of Appellee
at 41. But what Berge fails to realize is that, as a general proposition,
ideas are simply part of the public domain. See, e.g., Hoehling v. Uni-
versal City Studios, Inc., 618 F.2d 972, 979-80 (2d Cir.) (holding that,
in non-fiction works, since facts, themes, and research "have been
deliberately exempted from the scope of copyright protection to vin-
dicate the overriding goal of encouraging contributions to recorded
knowledge, the states are pre-empted from removing such material
from the public domain"), cert. denied, 449 U.S. 841 (1980); see also
Nimmer and Nimmer, supra, at § 16.01 (stating that "[t]he concept
that ideas are ``free as air' is of ancient origin, and is well rooted in
our jurisprudence" (footnotes omitted)). It is not that this form of
20
intellectual property ceases to be property, rather it is just not intangi-
ble personalty. See, e.g., Richter v. Westab, Inc., 529 F.2d 896, 902
(6th Cir. 1976) ("The law does not favor the protection of abstract
ideas as the property of the originator."). Berge wants to fence off the
commons, but the only part she may rightly claim is the original
expression of her ideas fixed in a tangible medium. The law recog-
nizes her stake there and accords it copyright protection.
Berge's conversion claim is preempted by federal copyright law.
We therefore reverse the judgment below on this claim in its entirety.
V.
For the foregoing reasons, we hold that the district court erred
when it improperly denied appellants' motion for judgment as a mat-
ter of law, both as to Berge's False Claims Act claim and to her con-
version claim. The judgment of the district court is therefore
REVERSED.
21