                            In the

United States Court of Appeals
              For the Seventh Circuit

Nos. 10-2676 & 10-3599

U NITED S TATES OF A MERICA,
                                                Plaintiff-Appellee,
                                v.

M ARSHALL P ECORE AND
C ONRAD W ANIGER,
                                          Defendants-Appellants.


           Appeals from the United States District Court
              for the Eastern District of Wisconsin.
           No. 07-C-316—William C. Griesbach, Judge.


  A RGUED S EPTEMBER 22, 2011—D ECIDED D ECEMBER 30, 2011




 Before B AUER, M ANION, and K ANNE, Circuit Judges.
  K ANNE, Circuit Judge. After a six-year investigation, an
additional two-and-one-half years of discovery and pre-
trial posturing, and a nine-day jury trial, Marshall Pecore
and Conrad Waniger (the “defendants”) prevailed against
civil charges that they violated the False Claims Act
(“FCA”). Unsatisfied with just the trial victory and
perhaps disturbed that the government spent nearly a
decade chasing about $75,000, the defendants moved for
2                                  Nos. 10-2676 & 10-3599

attorney’s fees under the Equal Access to Justice Act
(“EAJA”), 28 U.S.C. § 2412(d)(1)(A), or alternatively,
sanctions under Rule 37(c)(2) of the Federal Rules of
Civil Procedure. The district court denied both motions.
Despite our discomfort with what looks like govern-
ment overreaching, we find that the district court’s
ruling was not an abuse of discretion and accordingly,
we affirm.


                    I. B ACKGROUND
  The origins of this dispute date back to 2000 when
Menominee Tribal Enterprises (“Menominee,” “MTE,” or
the “Tribe”), the principal business arm of the Menominee
Indian Tribe of Wisconsin, first applied for and received
federal funding under the Hazardous Fuels Reduction
program (“HFR”). The federal Bureau of Indian Affairs
(“BIA”) created HFR as a long-term strategy to grad-
ually reintroduce the beneficial aspects of fire into fire-
dependent ecosystems such as densely-wooded forests.
To obtain HFR funds, an applicant is required to first
submit a proposal for its planned fire reduction work.
Unlike previous federal programs, this fire reduction
program required approved applicants to request BIA
reimbursement only after incurring project costs.
  In 2000 and again in 2001, Menominee forest manager
Marshall Pecore, and Menominee fire management officer
Conrad Waniger, applied for HFR funding on behalf of
the Tribe. The application sought federal funds to grade
141 miles of forest roads and to create an additional
Nos. 10-2676 & 10-3599                                          3

273 miles of fuel breaks.1 To create these fuel breaks, MTE’s
application represented that it would remove excess
vegetation by performing brushing and disking work. As
its name implies, brushing removes potentially flam-
mable brush near a forest road. Disking, on the other
hand, is the process of mixing organic soil with forest
vegetation to eliminate the continuity of vegetation on
the forest floor. After obtaining BIA approval, Menominee
began HFR work in December 2000, and began invoicing
BIA in 2001. Early MTE invoices requested BIA reim-
bursement totaling a flat fee of $450 for each mile of fuel-
break work. As work progressed, MTE abandoned its per-
mile, fixed-fee invoices in exchange for invoices that
requested reimbursement for actual costs incurred. The
purpose of this change was hotly disputed during trial.
  The government claimed that problems with the Tribe
developed in June 2001, after several MTE staff
members told Dave Congos, the BIA forester assigned to
the Tribe, that MTE’s Roads Department budget was
running a deficit. Menominee employees reported that
the Tribe purposefully diverted HFR funds to the Roads
Department as a way to close the budget shortfall.
Prompted by these reports, Congos and Thomas
Magnuson, another BIA forester, personally inspected
some of the work MTE claimed to have completed. Congos



1
  A fuel break is a strip of land cleared of potentially flammable
vegetation that runs parallel to a forest road. Among other
benefits, an effective fuel break provides a defensive area
for firefighters.
4                                 Nos. 10-2676 & 10-3599

and Magnuson walked the forest roads and compared
their observations of work performed to a map prepared
by MTE that purported to show completed and invoiced
work. Both Congos and Magnuson concluded that the
submitted invoices overstated the actual work done.
In some cases, Congos felt that the work performed
actually increased the risk of fire. Congos reported his
findings to his supervisor and discussed the results
with Waniger, who agreed to rework certain portions
of the forest.
  Following their initial meeting in 2001, Waniger sub-
mitted revised maps to Congos that again purported to
show portions of the forest where HFR fire prevention
work had been completed and invoiced. In one memoran-
dum submitted by Waniger documenting 2001 fire reduc-
tion accomplishments, Wangier claimed that fuel breaks
were created for 96.2 miles. Of those 96 miles, 54 miles
were fully completed and the remaining 42 miles were
95% complete. Maps and memos in hand, Congos in-
spected Tribal grounds for a second time to determine
whether the actual work performed reconciled to what
MTE had billed. Congos’s inspections confirmed his
belief that the defendants were submitting false invoices
for work that was never completed or completed in a
way that did not meet HFR standards. This inspection,
in part, subsequently served as the basis for the govern-
ment’s False Claims Act suit.
  In July 2002, Congos and Magnuson contacted
Joseph Schwartz in the Office of Inspector General
(“OIG”) for the Department of Interior. Based on
Nos. 10-2676 & 10-3599                                  5

Congos’s report, Schwartz initiated an investigation
into Menominee’s billing practices that included em-
ployee interviews and a review of subpoenaed records.
During the investigation, the government also identified
what it believed were instances of falsified time cards
relating to HFR funds. Namely, the government alleged
that Tribe management required certain employees to
code time worked to fire reduction efforts even though
these employees were actually working on unrelated
projects.
  By 2005, the government formally contacted MTE to
discuss the results of the OIG investigation. Throughout
the next several months, the parties communicated regu-
larly and even appeared close to a settlement. But in
2006, the defendants refused the government’s settle-
ment offer and broke off negotiations. At that time, the
defendants maintained their innocence and principally
argued that the allegations were all one big misunder-
standing. Had government investigators spent more
time discussing the allegations with Pecore and Waniger,
the defendants argue that the protracted litigation
could have been avoided.
  With a settlement off the table in April 2007, the
United States filed suit against MTE, Pecore, and Waniger
alleging violations of the FCA, 31 U.S.C. §§ 3729-33. MTE,
Pecore, and Waniger all filed motions to dismiss. The
district court denied the motions as to Pecore and
Waniger, but granted MTE’s motion because it was not
a “person” within the meaning of the FCA. Subsequently,
the district court rejected the remaining defendants’ and
the government’s partial motions for summary judgment.
6                                    Nos. 10-2676 & 10-3599

  At trial, the defendants claimed that the government
was unclear about the standard fuel-break width it
would use to evaluate whether MTE complied with HFR
protocols. The defendants construed this silence and
subsequent confusion about the fuel-break standard as
evidence of a simple misunderstanding rather than evi-
dence that the defendants knowingly submitted false
invoices. There was further confusion about whether
Menominee employees were properly recording time to
HFR projects. The defendants conceded that one em-
ployee had truly misclassified his time, but this fabrication
was nothing more than an isolated anomaly. All other
time-card discrepancies were really a proper internal-
reporting scheme designed to reclassify time between
certain departments. Again, had the government investi-
gators explicitly discussed these discrepancies with the
Tribe, there would have been no need for litigation.
The defendants considered their ace-in-the-hole to be
a 2009 inspection prepared by Ken Sloan, a retired
forester.2 The defendants hired Sloan to independently
inspect portions of the forest to determine whether



2
   The defendants submitted the Sloan report shortly before
trial, but after the discovery period had closed. The govern-
ment vigorously argued that the report should be excluded
from trial on the grounds that the defendants had violated a
discovery order. The district court noted the violation but
ultimately accepted the evidence to “ensure a full record
and protect the Defendants themselves from the arguably
deficient performance of their attorney.” United States v.
Menominee Tribal Enters., No. 07-C-316, 2010 WL 2465505, at *4
(E.D. Wis. June 15, 2010).
Nos. 10-2676 & 10-3599                                         7

Menominee had actually conducted appropriate brushing
and disking work between 2000-2002. In response, the
government conducted its own reinvestigation in
October 2009. Congos testified at trial that the Sloan
photographs showed some evidence of cutting, but that
it was not evidence of cutting related to the HFR pro-
gram. Additionally, Congos testified that other locations
evaluated by Sloan continued to show no signs of any fire
prevention work.
  At the close of the government’s evidence, the defen-
dants moved for judgment as a matter of law, which
the district court denied. After a nine-day trial, the defen-
dants’ theory prevailed. Following their trial victory, the
defendants moved for attorney’s fees under EAJA or
alternatively, sanctions under Rule 37(c)(2). The district
court denied both motions, and the defendants filed
this timely appeal.3




3
  Ten days before oral argument, the defendants requested
that we take judicial notice of various letters and memoranda
that purportedly illustrate Congos’s bias against defendants
Pecore and Waniger. The defendants interpret this bias as the
real reason the government brought suit. Although we are
skeptical that documents defense counsel inadvertently failed
to include in the record are the proper subject of judicial
notice, we offer no opinion on this matter because these docu-
ments do not change our conclusion that the district court
did not abuse its discretion in finding substantial justification
for the government’s position.
8                                  Nos. 10-2676 & 10-3599

                      II. A NALYSIS
  Pecore and Waniger present two related issues for
our review. The defendants first contend that the district
court erred by rejecting their post-trial motion for EAJA
attorney’s fees. Similarly, Pecore and Waniger challenge
the district court’s refusal to impose Rule 37 sanctions
against the government. We review both of the district
court’s decisions for an abuse of discretion. Pierce v.
Underwood, 487 U.S. 552, 559-60 (1988) (reasoning that
in EAJA cases, “the district court may have insights not
conveyed by the record, into such matters as whether
particular evidence was worthy of being relied upon, or
whether critical facts could easily have been verified by
the Government.”); Johnson v. Kakvand, 192 F.3d 656,
661 (7th Cir. 1999) (finding that Rule 37 decisions are
reviewed deferentially because “[d]istrict courts possess
wide latitude in fashioning appropriate sanctions and
evaluating the reasonableness of the attorneys’ fees re-
quested”).


A. EAJA Attorney’s Fees
  The defendants principally contend that the district
court abused its discretion by rejecting their motion for
EAJA attorney’s fees. A district court may award such
fees where “(1) the claimant is a prevailing party; (2) the
government was not substantially justified in its position;
(3) no special circumstances make an award unjust; and
(4) the fee application is timely and supported by an
itemized statement.” Conrad v. Barnhart, 434 F.3d 987, 989
(7th Cir. 2006) (quotation marks omitted); 28 U.S.C.
Nos. 10-2676 & 10-3599                                    9

§ 2412(d)(1)(A). Here, the defendants only challenge the
district court’s finding related to the second element:
whether the government was substantially justified in
bringing the FCA action. The government bears the
burden of proving that its position was substantially
justified, and to do so, it must show: “(1) a reasonable
basis in truth for the facts alleged; (2) a reasonable basis
in law for the theory propounded; and (3) a reasonable
connection between the facts alleged and the theory
propounded.” Conrad, 434 F.3d at 990; see also
Golembiewski v. Barnhart, 382 F.3d 721, 724 (7th Cir.
2004). In evaluating the government’s position, we
review the claim in its entirety rather than the
individual positions the government may have taken
throughout different phases of litigation. Comm’r, I.N.S.
v. Jean, 496 U.S. 154, 161-62 (1990).
  With that, we turn to the defendants’ argument on
appeal, which cites three sets of uncontested facts that
purportedly prove that the government’s case lacked
substantial justification. First, the defendants suggest
that the government’s position had no reasonable basis
in the law. Similarly, the defendants next argue that
the government’s position was not reasonably based on
the facts. And third, Pecore and Waniger argue that the
government failed to adequately investigate the defen-
dants’ evidence. Each set of facts standing alone, the
defendants assert, is enough to show that the govern-
ment’s position was not substantially justified. Like the
district court before us, we’ll evaluate each of these al-
legations individually.
10                                      Nos. 10-2676 & 10-3599

    1.   The Government’s Position Was Reasonably Based On
         The Law 4
   The defendants first contend that two legal errors
prevented the government from ever establishing a
substantially justified claim. First, the BIA failed to
follow its own internal policies before the government
filed suit. Second, the government’s FCA suit was really
a poorly disguised breach of contract suit. The govern-
ment’s failure to select the proper cause of action pre-
cluded it from developing a substantially justified
FCA claim. Both arguments are baseless.
  First, the defendants argue that the government
violated the internal BIA policy manual and the Midwest
Regional Office Handbook, both of which require the
government to consult with Tribe personnel before
taking federal action. Had the government obeyed the
two internal consultation policies, the Tribe could have
explained away the confusion about its fire reduction
work, the rationale for its complex billing practice, and


4
  On appeal, the defendants argue for the first time that
sovereign immunity protects tribal employees such as Pecore
and Waniger from FCA suits, and as such, the government’s
position lacked substantial legal justification. Although the
defendants made a similar sovereign immunity argument in
their merits brief supporting summary judgment, which the
district court rejected, the defendants did not raise this issue
in their post-trial brief for EAJA attorney’s fees. Accordingly,
the defendants waived this argument as to EAJA attorney’s
fees, and we will not consider it. Fednav Int’l Ltd. v. Cont’l Ins.
Co., 624 F.3d 834, 841 (7th Cir. 2010).
Nos. 10-2676 & 10-3599                                      11

whether the width of its fuel breaks complied with
HFR standards. According to the defendants, had these
conversations occurred, both parties could have avoided
trial. But, as a threshold matter, a government agency’s
internal policies and procedures (as opposed to duly
enacted regulations) do not have the force of law. See
Krasilych v. Holder, 583 F.3d 962, 966 (7th Cir. 2009) (noting,
for example, that the “Attorney General’s guidelines are
internal rules that have no legal force”). In this case, the
clue as to the status of the BIA policy is located on the
very first page of the Government-to-Government Con-
sultation Policy, where it plainly states that the policy
“illustrates the guidelines that the Bureau of Indian
Affairs will follow for consultation with tribal govern-
ments.” Bureau of Indian Affairs, Government-to-Gov-
ernment Consultation Policy 1 (2000) (emphasis added).
Certainly agency guidelines do not carry the weight of
law, and thus, any alleged violation can serve only as
probative evidence that the government failed to file
suit in good faith.
  The seven cases cited by the defendants in support of
their policies and procedures argument do not bolster
their claim. Instead, each case only suggests the possi-
bility for EAJA attorney’s fees when the government
violates a law, an agency regulation, or clear judicial
precedent. See, e.g., Stewart v. Astrue, 561 F.3d 679, 684
(7th Cir. 2009) (awarding EAJA attorney’s fees “because
the ALJ contravened longstanding agency regulations, as
well as judicial precedent”); Golembiewski, 382 F.3d at 724
(awarding EAJA attorney’s fees because “the ALJ and
Commissioner violated clear and long judicial precedent
12                                 Nos. 10-2676 & 10-3599

and violated the Commissioner’s own Ruling and Reg-
ulations”); Or. Natural Res. Council v. Madigan, 980 F.2d
1330, 1332 (9th Cir. 1992) (awarding attorney’s fees
after the agency failed to issue regulations demanded by
clear statutory language). Because the defendants allege
only that the government violated internal policy guide-
lines, we reject their first legal argument.
  Even if the BIA’s policies had the force and effect of
law, the record belies the defendants’ claim that they
were not adequately consulted before the government
brought suit. For example, Congos testified that he
spoke with Waniger in 2001 about the work deficiencies
Congos identified during his initial forest inspection, and
Waniger promised to rework the identified areas. During
the remainder of 2001 and 2002, Congos, Waniger, and
Pecore communicated through written memoranda and
work-completion maps about the status of the Tribe’s
HFR work. In 2005, the government contacted the Tribe
to formally discuss the results of the OIG investigation.
And, during much of 2006, the parties engaged in signifi-
cant settlement negotiations. Each discussion occurred
before the government brought suit in 2007. As a
simple question of fact, the record reveals that the de-
fendants had several years to eliminate any misunder-
standings about its work. Ultimately, the defendants’
internal-policies argument is baseless.
  The defendants’ second legal objection to the district
court’s ruling is that the court failed to recognize that
the government’s suit was more akin to a breach-of-con-
tract action than an FCA action. According to the defen-
Nos. 10-2676 & 10-3599                                   13

dants, if the government misused the FCA statute, then
surely it could not have been substantially justified
in bringing such a suit. As a result, the defendants
claim the breach-of-contract action should have been
governed by the Indian Self-Determination Education
and Assistance Act (“ISDEAA”).
  We need not spend much time discussing the merits
of the defendants’ claim because the district court right-
fully concluded that a case involving contract performance
does not necessarily foreclose FCA liability. Menominee
Tribal Enters., 2010 WL 2465505, at *6 (citing United States
ex rel. Davis v. Dyna Corp., 17 F.3d 397 (9th Cir. 1994)
(unpublished table decision)). It is perfectly logical for a
contracting party to knowingly submit a false invoice
purportedly pursuant to a valid contract. As we will
discuss shortly, the government had reasonable grounds
for believing that the defendants knowingly submitted
false invoices, and as such, the government’s claim fit
neatly into the FCA.
  Because the defendants’ legal objections are without
merit, we find that the government had substantial
legal justification for bringing an FCA claim.


  2.   The Government’s Position Was Reasonably Based On
       The Facts
  The defendants next contend that the government’s
position was not substantially justified because the gov-
ernment failed to prove its factual allegations at trial.
Here, the defendants argue that an FCA claim requires
the government to prove the defendants submitted a
14                                  Nos. 10-2676 & 10-3599

false statement, see Hindo v. Univ. of Health Scis./The
Chicago Med. Sch., 65 F.3d 608, 613 (7th Cir. 1995), but
the government could never prove that the defendants
lied. In the absence of a lie, the government’s position
had no substantial factual justification.
  Before reviewing the record, it is first important to
recall that the substantial justification standard does not
require the government to have won at trial. In fact, the
government’s position need not even be correct. Pierce,
487 U.S. at 566 n.2 (“[A] position can be justified even
though it is not correct, and we believe it can be sub-
stantially (i.e., for the most part) justified if a rea-
sonable person could think it correct.”). Rather, sub-
stantial justification only requires the position to have
“a reasonable basis in law and fact.” Conrad, 434 F.3d at
990; Pierce, 487 U.S. at 565 (a position need only be “justi-
fied to a degree that could satisfy a reasonable per-
son”). Here, the defendants broad assertions that “[t]he
government’s [motive] theory collapsed at trial” and “the
Government failed to prove that either Pecore or
Waniger lied,” only suggest that the jury sided with the
defendants, not that their opponent’s position was
never substantially justified. Therefore, we generally
ignore what the jury believed or did not believe at trial,
and instead focus on whether the government’s position
as a whole could satisfy a reasonable person. See Jean,
496 U.S. at 161-62.
  Moving to the facts, the defendants first argue with
some force that the government could never articulate a
reasonable motive theory. After all, why would two men
Nos. 10-2676 & 10-3599                                       15

risk criminal and civil sanctions when they never
received any benefits in return? Without a motive theory,
the defendants contend that the government could not
prove a lie or false claim, and without a lie, an FCA claim
necessarily fails.5 Hindo, 65 F.3d at 613. Although the
defendants attempt to construe the motive question
as uncontested, this issue was subject to conflicting evi-
dence and testimony such that a reasonable person
could have accepted either version of events, which is
all we require. Pierce, 487 U.S. at 565. For example, the
government maintained throughout trial that Congos
and Pecore were looking for a source of funds to keep
the Menominee Roads Department in the black. The
district court heard testimony to this effect. On the
other hand, the defendants claim that the government’s
“key” motive witness unknowingly contradicted the
government’s theory by suggesting that additional
Roads Department funds were only spent three years
after they were requested. The defendants construed
this testimony as proof that the Roads Department
never had an urgent need for additional funding, and
thus, Pecore and Waniger were never motivated to
falsify government invoices to obtain additional funding.
  In pointing to the version of events that the jury ap-
parently believed, the defendants ignore the legitimate



5
  Motive is not an element for an FCA claim. See Hindo, 65
F.3d at 613. Rather, the defendants appear to only highlight the
lack of motive as evidence that defendants did not knowingly
submit a false statement.
16                                  Nos. 10-2676 & 10-3599

factual dispute that existed throughout the litigation.
Instead, the defendants seem to simply rely on their
trial victory. But this is not enough. Furthermore, even
if we completely accept as true the defendants’ version
of motive, it still does not directly contradict or disprove
the government’s position that the Roads Department
faced serious budget difficulties. Accordingly, the
district court did not abuse its discretion in finding
that the government’s motive theory was substantially
justified, even though it apparently failed at trial.
  The defendants’ second factual dispute highlights the
miscommunication between the parties about Tribal
billing practices. Here, the defendants claim that they
never billed the government on a per-mile basis, but
rather, only submitted bills for actual fire prevention
costs incurred. Moreover, the bills detailing actual costs
represented an accurate snapshot of MTE’s legitimate
costs. The defendants also contend that the maps sub-
mitted to Congos were never supposed to accurately
represent the precise amount of work MTE had com-
pleted. Instead, the maps were only to be used as a
general guide to their work. Accordingly, the de-
fendants argue that government confusion was the
reason for the charges against Pecore and Waniger, and
thus, the government could never prove that Pecore
or Waniger submitted a false claim.
  As was the case for the factual dispute about the de-
fendants’ motive, the government offered evidence to
counter the defendants’ theory. First, the government
offered testimony suggesting that MTE had submitted a
Nos. 10-2676 & 10-3599                                  17

handful of invoices on a per-mile basis. Only after
Congos’s initial inspection did the Tribe change to cost-
based invoicing. Next, the government offered a 2001
accomplishments memorandum prepared by Waniger
stating that fuel breaks were created for 96.2 miles and
that work was at least 95% completed. The government
also offered testimony indicating that Waniger sub-
mitted a second completion map to Congos after MTE
rework was completed. Finally, the government offered
Congos’s testimony about his 2001 and 2002 inspections
as well as his brief 2009 reinspection following the
Ken Sloan report. On appeal, our review of the record
confirms the district court’s finding that there was
ample confusion associated with the Tribe’s invoices.
We also agree with the district court’s finding that “even
if the Defendants’ expense-based view of its billing
was entirely correct, that did not entitle it to list areas
of work done (by mileage) if those areas were not
actually done.” Menominee Tribal Enters., 2010 WL 2465505,
at *3. Ultimately, the intense nature of this debate
suggests to us that either party’s position could be ac-
cepted as true by a reasonable person.
  Two final points about the defendants’ factual dis-
putes bear mentioning. First, the defendants ignore the
objective, although not necessarily conclusive, evidence
that the government’s complaint survived both a motion
to dismiss and a motion for summary judgment. United
States v. Thouvenot, Wade & Moerschen, Inc., 596 F.3d 378,
382 (7th Cir. 2010) (“[T]here is a [rebuttable] presumption
that a government case strong enough to survive both
a motion to dismiss and a motion for summary judg-
18                                      Nos. 10-2676 & 10-3599

ment is substantially justified.”). 6 This objective evi-
dence combined with the intensity of the factual
disputes between the parties illustrates that the govern-
ment had a substantial fact-based justification for
bringing suit. The second, and perhaps more important,
concluding thought is that our review is limited to a
discussion of whether the district court abused its dis-
cretion. Conrad, 434 F.3d at 990. Although our own
review of the record shows that the government’s
position was substantially justified, we must again ac-
knowledge the district court’s unique position to



6
   The defendants criticize Thouvenot because it supposedly shifts
the government’s statutory burden of proof to the prevailing
defendant by creating a presumption of substantial justifica-
tion if a case survives both a motion to dismiss and summary
judgment. This is wrong. Thouvenot only construes a motion
to dismiss or summary judgment victory as objective and
perhaps compelling evidence of substantial justification. Pierce,
487 U.S. at 568 (finding that objective factors are relevant).
Notably, Thouvenot left the door open for an attorney’s fees
award in those cases where something emerges at trial proving
that the government never had a case or in those cases where
the district court judge has new evidence to show that she
“erred grievously in refusing to grant the defendant’s motion
to dismiss or motion for summary judgment.” Thouvenot, 596
F.3d at 382. But, even if Thouvenot was somehow improperly
decided, the district court in this case expressly stated that
Thouvenot was only a second, independent ground for
rejecting the defendants’ EAJA motion. In other words, even
if Thouvenot did not exist, the government’s position was
still substantially justified.
Nos. 10-2676 & 10-3599                                   19

observe and weigh the evidence over two-and-one-
half years of an intensely factual litigation. Pierce, 487
U.S. at 560 (“[S]ome of the elements that bear upon
whether the Government’s position ‘was substantially
justified’ may be known only to the district court.”).
Ultimately, the defendants have not offered anything
to cast doubt on the district court’s well-reasoned sixteen-
page opinion.
  For the preceding reasons, we find the district court
did not abuse its discretion in concluding that the gov-
ernment’s position had a substantial factual justification.


  3.   The Government Properly Investigated The Defendants’
       Evidence
  Finally, the defendants argue that the government
failed to properly investigate its own FCA claim, in
violation of 31 U.S.C. § 3730(a) (“The Attorney General
diligently shall investigate a violation under section
3729.”). Such a failure to investigate, according to the
defendants, is further evidence that the government’s
position was never substantially justified. Pecore and
Waniger assert that the government’s reliance on
stale Congos inspections instead of the more recent
Sloan report exculpating the defendants is proof that
the government failed to investigate. We disagree.
  As a threshold matter and as the district court noted,
the loose grasp the government supposedly had on the
facts might have more to do with the defendants’ border-
line discovery abuses rather than the government’s
20                                 Nos. 10-2676 & 10-3599

failure to investigate to the defendants’ liking. See
Menominee Tribal Enters., 2010 WL 2465505, at *4. We
lend little credence to the defendants’ argument that
the government should have dropped its suit after
reading the Sloan report when that report was not pro-
duced until the eve of trial. Second, there is no support
for the defendants’ apparent position that the govern-
ment must give greater deference to the defendants’
expert rather than rely on its own forester’s inspec-
tions. Instead, trial litigation routinely boils down to
a battle of experts, and a dispute between experts “tends
to show a good faith dispute,” Chicago Dist. Council of
Carpenters Pension Fund v. Reinke Insulation Co., 464
F.3d 651, 656 (7th Cir. 2006), which is another way to
say that both parties’ claims were substantially justified.
Third, the defendants’ contention that Congos’s inspec-
tions were stale as compared to the Sloan report is, at
best, irrelevant. To the contrary, a reasonable person
could have found that the Congos inspections were
more reliable because they occurred closer in time to
when the fire reduction work was supposedly com-
pleted. Finally, Congos testified at trial that the govern-
ment conducted its own reinspection in October 2009
following the belated Sloan inspection. According to
Congos, the Sloan photos showed some evidence of
cutting unrelated to the HFR program, but other por-
tions of the forest continued to show no signs of any fire
prevention work. Ultimately, the defendants’ contention
that its inspection is better than the others is similar to
the other fact-intensive disputes the defendants have
highlighted on appeal. Like this other conflicting evi-
Nos. 10-2676 & 10-3599                                   21

dence, the parties’ debate about the validity of the in-
spections says little about substantial justification.
Rather, the intensity of the dispute, both at trial and on
appeal, shows that a reasonable person could have been
satisfied by either party’s theory. Pierce, 487 U.S. at 565.
  Defendants’ reliance on Phil Smidt & Son, Inc. v. NLRB,
810 F.2d 638 (7th Cir. 1987), is misplaced. There,
we reversed the district court’s refusal to impose EAJA
attorney’s fees against the government in part because
of the strong contradictory evidence presented by the
defendant. We chided the government for not making
“any attempt to independently corroborate [its] allega-
tion.” Id. at 643 (emphasis added). In this case, however,
the record reveals that the government investigated the
Sloan report, reinspected portions of the forest, and
concluded that Congos’s inspections were more reliable.
This is not a case where the government completely
abdicated its duty to diligently investigate its claims
against Pecore and Waniger.
  Because the government’s position throughout trial
was substantially justified, the district court did not
abuse its discretion in denying defendants’ EAJA motion.


B. Rule 37(c)(2) Sanctions
   The defendants allege that the district court also abused
its discretion in denying its Rule 37 motion. Federal Rule
of Civil Procedure 37(c)(2) provides that a district court
must impose reasonable expenses including attorney’s
fees on a party that fails to properly admit the genuine-
22                                  Nos. 10-2676 & 10-3599

ness of a document pursuant to a Rule 36 request for
admission. Fed. R. Civ. P. 37(c)(2); Hicklin Engineering,
L.C. v. Bartell, 439 F.3d 346, 351 (7th Cir. 2006). But, this
rule provides an escape hatch for those parties that “had
a reasonable ground to believe that it might prevail on
the matter.” Fed. R. Civ. P. 37(c)(2)(C). The district court
found that the government fit into this exception, and
thus, it denied the defendants’ request for sanctions.
We agree.
  In its motion for sanctions and again on appeal, the
defendants identify two types of Rule 36 requests that
the government should have admitted. The first type
was a request like Request 21, which asked the govern-
ment to admit that the defendants incurred $8,707.50
in expenses related to invoice 200. The government
denied knowledge sufficient to admit or deny the re-
quest. The second type of Rule 36 request asked
the government to admit that work related to invoice
200, for example, had been substantially completed. The
government unambiguously denied this type of request
as it was the government’s position all along that
Pecore and Waniger submitted invoices for work that was
incomplete, deficient, or both. The defendants served
identical requests for several different invoices.
  We need not spend much time disposing of the defen-
dants’ argument because we have already covered much
of this ground in our EAJA analysis. There, we held
that there was reasonable confusion surrounding MTE’s
invoices, completion maps, and accomplishment memo-
randa such that either party’s position was “justified to a
Nos. 10-2676 & 10-3599                                   23

degree that could satisfy a reasonable person.” Pierce,
487 U.S. at 565. Rule 37(c)(2) incorporates a standard
that is strikingly similar to Pierce. The 1970 Advisory
Committee notes provide that “the true test under
Rule 37(c) is not whether a party prevailed at trial but
whether he acted reasonably in believing that he might
prevail.” Fed. R. Civ. P. 37 advisory committee’s note;
see Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312,
1326 (11th Cir. 2004). Based on our EAJA analysis, we
find that the government reasonably believed it might
prevail on the invoice and map issue for the same
reasons we found the government’s position to be sub-
stantially justified. Therefore, we find that the dis-
trict court did not abuse its discretion in rejecting the
defendants’ request for Rule 37 sanctions.


                    III. C ONCLUSION
  We hold that the district court did not abuse its dis-
cretion and accordingly, we A FFIRM its decision denying
defendants’ motions for attorney’s fees under either
EAJA or Rule 37(c)(2).




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