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observing that a connection to actual or threatened litigation is no longer required under the FCA's anti-retaliation provision
Summary of this case from Kalch v. Raytheon Tech. Servs. Co.Opinion
CASE NO. 2:09-CV-1082-WKW [WO].
July 27, 2010
MEMORANDUM OPINION AND ORDER
Previously, the court granted Defendants' Motion to Dismiss in part, permitted Mr. Bell to amend his Complaint, and ordered additional briefing concerning what is required to state a claim under the retaliation provision of the False Claims Act ("FCA"), as amended in 2009. (Doc. # 26.) Mr. Bell filed an Amended Complaint (Doc. # 27), and the parties submitted the required briefing. (Doc. # 27, Attach. 1; Doc. # 28.) Rather than rehashing the factual and procedural history provided in the earlier opinion, the court will limit the discussion to whether the Amended Complaint states a claim, and, if so, addressing the issue of qualified immunity.
I. DISCUSSION
A. Stating a Claim
As Mr. Bell notes, the revised language of the FCA retaliation provision requires only that protected behavior have been done "in furtherance of other efforts to stop 1 or more violations of this subchapter." 31 U.S.C.A. § 3730(h) (2009). No nexus to actual or threatened litigation is required, in contrast to the former version of the statute, which measured a retaliation claim by the likelihood of a substantive FCA suit being brought. In his Amended Complaint, Mr. Bell alleges that he, in his position as Director of Title III Programs at Alabama State University ("ASU"), filed a grant application with the U.S. Department of Education seeking the award of Title III funds for the 2008-2009 fiscal year. (Doc. # 27, ¶ 11.) After such funds had been received, Defendants pressured Mr. Bell to apply the grant funds to specific projects that were not mentioned in the grant application and would not be legitimate uses of Title III funds. (Doc. # 27, ¶¶ 12-14.) Mr. Bell informed Defendants that their proposed uses were "not lawful," and that he would report any such misuses to the Department of Education and request an audit. (Doc. # 27, ¶ 15.) Significantly, the Amended Complaint explains that a document called a "Revised Activity to Expand Carry-Over Money" would have to be filed with the Department of Education in order obtain authorization for the use of Title III funds for purposes other than those mentioned in the original application. (Doc. # 27, ¶ 14.) At one meeting, Mr. Bell was shown such a document, with entries requesting that funds be "carried over" for two projects that he did not believe qualified for Title III funding, because they involved renovations to non-instructional buildings. (Doc. # 27, ¶ 17.)
Mr. Bell does not allege that this document was ever actually submitted to the Department of Education, but he need not do so in order to state a claim under the retaliation provision of the FCA. It does not require extensive analysis to conclude that Mr. Bell's Amended Complaint states a claim under the retaliation provision. His explicit threats to report what he viewed as unauthorized uses of funds, coupled with documents that would likely constitute false claims if they were submitted to the Government, indicate that his alleged actions were undertaken "in furtherance of other efforts to stop 1 or more violations of" the FCA. § 3730(h). The allegations are sufficient to state a claim that Mr. Bell's "efforts" were thus "in furtherance" of stopping violations of the FCA, in that he sought to prevent the possible filing of false "carry over" applications to the Department of Education. Potentially, his efforts to stop the misuse of funds could also be viewed as an effort to prevent a violation of the terms of the original grant application, although the court notes that Mr. Bell has not alleged that Defendants intended any falsity or fraud when the original Title III application was filed. Nonetheless, as the court discussed in its earlier opinion, "false certifications" that grant monies were used for their proper purpose may constitute false claims, and, even if no such false certifications were actually filed, Mr. Bell's efforts may nonetheless have been in furtherance of efforts to stop them from being filed. ( See Doc. # 27, Attach. 1, at 6 (arguing that such future false certifications were likely if misuse of funds occurred).)
Further, Mr. Bell points out that it is possible to violate the FCA without the actual making of a claim, if an entity ". . . knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government." § 3729(a)(1)(G). Because ASU would have been required to repay any grant monies not used for their originally authorized purpose, the knowing use of the funds for improper purposes would constitute a violation of this subsection as well. Mr. Bell's efforts would allegedly be in furtherance of efforts to stop such a violation, all potential false claims aside.
Defendants' response seems to be that because Mr. Bell has not alleged that any false claim was actually made, or would certainly have been made absent his intervention, he can state no claim for retaliation. (Doc. # 28, at 4.) But that was not the law even before the 2009 amendment, and it is plainly not the law now. Moreover, Mr. Bell has now alleged the existence of actual documents (the carry-over applications) drafted by at least some Defendants and proposed for submission to the Government, that would, taking the facts in the light most favorable to Mr. Bell, have constituted false claims under the "false certification" theory. Defendants do not respond to the argument concerning § 3729(a)(1)(G). Accordingly, Mr. Bell has stated a claim for a violation of the revised version of subsection 3730(h).
B. Qualified Immunity
In their motion to dismiss, Defendants contend that because they are state officials, they are entitled to qualified immunity from Mr. Bell's claims when sued in their individual capacities. The court has not discovered any Eleventh Circuit case law on the issue whether qualified immunity applies to a False Claims Act retaliation suit. The court recognizes that, in general, qualified immunity applies to both statutory and constitutional claims against state officials. See Penley v. Eslinger, 605 F.3d 843, 849 (11th Cir. 2010). But, in the only appellate decision to have addressed the issue head-on, the Fifth Circuit held that qualified immunity does not apply to FCA retaliation claims. Samuel v. Holmes, 138 F.3d 173, 178 (5th Cir. 1998). That court found that "qualified immunity seems particularly ill-suited in [the FCA] context, given the goals of the FCA" of discouraging fraud and abuse. Id. Defendants offer no rejoinder to Samuel in their reply brief. (Doc. # 19, at 5-6.) The court finds the Fifth Circuit's opinion in Samuel persuasive and chooses to follow it. While qualified immunity is an understandable doctrine when applied to the split-second decisions of law enforcement officers in the field, it is difficult to discern what purpose it would serve to permit retaliation against whistleblowers by public employers on the basis that the law was not "clearly established" as to what constituted protected conduct. Such retaliation, if sufficient to actually violate the statute, has no conceivably legitimate purpose, and applying the judicially created doctrine of qualified immunity to bar it would seem at odds with the purpose of the FCA, and specifically with the purpose of the retaliation provision, as recently expanded by Congress. Accordingly, the court finds at this stage that qualified immunity is not available as a defense to Defendants in their individual capacities.
The Eleventh Circuit has twice cited Samuel as an example of a case in which qualified immunity was not available to public officials, both times in cases holding that qualified immunity was available under other statutes. See Tapley v. Collins, 211 F.3d 1210, 1215 n. 9 (11th Cir. 2000) (Wiretap Act) ; Gonzalez v. Lee County Housing Auth., 161 F.3d 1290, 1300 n. 34 (11th Cir. 1998) (Fair Housing Act retaliation provision). Neither case, however, indicated express disagreement with Samuel, and in Gonzalez, the court emphasized that its "opinion in this case should not be construed to address whether qualified immunity is available in actions brought under statutes other than [the one at issue in that case]." 161 F.3d at 1300 n. 34.
III. CONCLUSION
For the foregoing reasons, it is ORDERED that the motion to dismiss (Doc. # 13) is DENIED as to the official-capacity claims for injunctive relief, and as to Defendants in their individual capacities. Previously, the court granted the motion to dismiss claims for money damages Defendants in their official capacities. (Doc. # 26.) On the whole, then, the motion to dismiss (Doc. # 13) has been GRANTED in part and DENIED in part.
A copy of this checklist is available at the website for the USCA, 11th Circuit at www.ca11.uscourts.gov Effective on April 9, 2006, the new fee to file an appeal will increase from $255.00 to $455.00. CIVIL APPEALS JURISDICTION CHECKLIST1. Appealable Orders : Appeals from final orders pursuant to 28 U.S.C. § 1291: 28 U.S.C. § 158Pitney Bowes, Inc. v. Mestre 701 F.2d 1365 1368 28 U.S.C. § 636 In cases involving multiple parties or multiple claims, 54Williams v. Bishop 732 F.2d 885 885-86 Budinich v. Becton Dickinson Co. 108 S.Ct. 1717 1721-22 100 L.Ed.2d 178LaChance v. Duffy's Draft House, Inc. 146 F.3d 832 837 Appeals pursuant to 28 U.S.C. § 1292(a): Appeals pursuant to 28 U.S.C. § 1292(b) and Fed.R.App.P. 5: 28 U.S.C. § 1292 Appeals pursuant to judicially created exceptions to the finality rule: Cohen v. Beneficial Indus. Loan Corp. 337 U.S. 541 546 69 S.Ct. 1221 1225-26 93 L.Ed. 1528Atlantic Fed. Sav. Loan Ass'n v. Blythe Eastman Paine Webber, Inc. Gillespie v. United States Steel Corp. 379 U.S. 148 157 85 S.Ct. 308 312 13 L.Ed.2d 199 2. Time for Filing Rinaldo v. Corbett 256 F.3d 1276 1278 4 Fed.R.App.P. 4(a)(1): 3 THE NOTICE MUST BE RECEIVED AND FILED IN THE DISTRICT COURT NO LATER THAN THE LAST DAY OF THE APPEAL PERIOD — no additional days are provided for mailing. Fed.R.App.P. 4(a)(3): Fed.R.App.P. 4(a)(4): Fed.R.App.P. 4(a)(5) and 4(a)(6): Fed.R.App.P. 4(c): 28 U.S.C. § 1746 3. Format of the notice of appeal : See also 3pro se 4. Effect of a notice of appeal : 4
Courts of Appeals have jurisdiction conferred and strictly limited by statute: (a) Only final orders and judgments of district courts, or final orders of bankruptcy courts which have been appealed to and fully resolved by a district court under , generally are appealable. A final decision is one that "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." , , (11th Cir. 1983). A magistrate judge's report and recommendation is not final and appealable until judgment thereon is entered by a district court judge. (c). (b) a judgment as to fewer than all parties or all claims is not a final, appealable decision unless the district court has certified the judgment for immediate review under Fed.R.Civ.P. (b). , , (11th Cir. 1984). A judgment which resolves all issues except matters, such as attorneys' fees and costs, that are collateral to the merits, is immediately appealable. , 486 U.S. 196, 201, , , (1988); , , (11th Cir. 1998). (c) Appeals are permitted from orders "granting, continuing, modifying, refusing or dissolving injunctions or refusing to dissolve or modify injunctions . . ." and from "[i]nterlocutory decrees . . . determining the rights and liabilities of parties to admiralty cases in which appeals from final decrees are allowed." Interlocutory appeals from orders denying temporary restraining orders are not permitted. (d) The certification specified in (b) must be obtained before a petition for permission to appeal is filed in the Court of Appeals. The district court's denial of a motion for certification is not itself appealable. (e) Limited exceptions are discussed in cases including, but not limited to: , , , , , (1949); , 890 F.2d 371, 376 (11th Cir. 1989); , , , , , (1964). Rev.: 4/04 : The timely filing of a notice of appeal is mandatory and jurisdictional. , , (11th Cir. 2001). In civil cases, Fed.R.App.P. (a) and (c) set the following time limits: (a) A notice of appeal in compliance with the requirements set forth in Fed.R.App.P. must be filed in the district court within 30 days after the entry of the order or judgment appealed from. However, if the United States or an officer or agency thereof is a party, the notice of appeal must be filed in the district court within 60 days after such entry. Special filing provisions for inmates are discussed below. (b) "If one party timely files a notice of appeal, any other party may file a notice of appeal within 14 days after the date when the first notice was filed, or within the time otherwise prescribed by this Rule 4(a), whichever period ends later." (c) If any party makes a timely motion in the district court under the Federal Rules of Civil Procedure of a type specified in this rule, the time for appeal for all parties runs from the date of entry of the order disposing of the last such timely filed motion. (d) Under certain limited circumstances, the district court may extend the time to file a notice of appeal. Under Rule 4(a)(5), the time may be extended if a motion for an extension is filed within 30 days after expiration of the time otherwise provided to file a notice of appeal, upon a showing of excusable neglect or good cause. Under Rule 4(a)(6), the time may be extended if the district court finds upon motion that a party did not timely receive notice of the entry of the judgment or order, and that no party would be prejudiced by an extension. (e) If an inmate confined to an institution files a notice of appeal in either a civil case or a criminal case, the notice of appeal is timely if it is deposited in the institution's internal mail system on or before the last day for filing. Timely filing may be shown by a declaration in compliance with or a notarized statement, either of which must set forth the date of deposit and state that first-class postage has been prepaid. Form 1, Appendix of Forms to the Federal Rules of Appellate Procedure, is a suitable format. Fed.R.App.P. (c). A notice of appeal must be signed by the appellant. A district court loses jurisdiction (authority) to act after the filing of a timely notice of appeal, except for actions in aid of appellate jurisdiction or to rule on a timely motion of the type specified in Fed.R.App.P. (a)(4).