Opinion
10 Civ. 5765 (NRB)
05-21-2012
DANIEL FORKELL, Plaintiff, v. LOTT ASSISTED LIVING CORP., SFDS DEVELOPMENT CORP., and JAMES JANESKI, Defendants.
Attorney for Plaintiff: Vincent E. Bauer, Esq. 475 Park Avenue South, 25th Floor New York, NY 10016 Attorney for Defendants: John P. Keil, Esq. Collazo Florentino & Keil LLP 747 Third Avenue, 25th Floor New York, NY 10017
MEMORANDUM AND ORDER
Plaintiff Daniel Forkell brings this action pursuant to the federal and New York False Claims Acts ("FCAs"), alleging that defendants Lott Assisted Living Corp. ("Lott"), SFDS Development Corp. ("SFDS"), and James Janeski (collectively, "defendants") unlawfully terminated his employment in retaliation for having engaged in protected conduct under the statutes.
Codified respectively at 31 U.S.C. §§ 3729 et seq. and New York State Finance Law §§ 187 et seq.
Presently before the Court is defendants' motion for summary judgment. For the reasons stated below, defendants' motion is granted.
BACKGROUND
This background is derived from Defendants' Statement of Undisputed Facts Pursuant to Local Civil Rule 56.1("R. 56.1"), filed October 18, 2011, plaintiff's Response to Rule 56.1 Statement ("Counter R. 56.1"), filed November 18, 2011, and the Declaration of Vincent E. Bauer ("Bauer Decl."), filed November 18, 2011.
I. The Defendants
Defendant Lott is a not-for-profit assisted-living facility located at 1261 Fifth Avenue in Manhattan. (R. 56.1 ¶ 1.) Approximately 67% of Lott's revenues are derived from Medicaid reimbursements, which are determined on a per diem basis dependent on each resident's individual needs. (Id. ¶¶ 3-5.)
Defendant SFDS is a not-for-profit corporation that develops low-income housing in New York City, principally in East Harlem. (Id. ¶ 9.) SFDS develops many of its properties in conjunction with Enterprise Community Investment ("Enterprise"), a private not-for-profit corporation. (Id. ¶ 10.) Enterprise finances the housing projects by soliciting contributions from private investors, who in exchange receive a dollar-for-dollar reduction of their federal tax income liability through the application of low-income housing tax credits ("LIHTCs"). (Id.) Housing projects formed by SFDS and Enterprise are limited partnerships in which a not-for-profit corporation wholly owned by SFDS serves as general partner and Enterprise serves as limited partner on behalf of its investors. (Id. ¶ 11.)
Forkell claims that in addition to the financing received through Enterprise, the housing developments receive subsidies and subsidized loans from the New York City Housing Development Corporation, the New York City Department of Housing and Preservation & Development, the United States Department of Housing and Urban Development ("HUD"), and the New York State Energy and Research Development Authority ("NYSERDA"). (Counter R. 56.1 ¶ 13.)
Defendant Janeski has served as the President and Chief Executive Officer ("CEO") of both Lott and SFDS since 2002. (Id. ¶ 23.)
II. Forkell's Tenure at Lott and SFDS
Forkell was hired to serve as Chief Financial Officer ("CFO") of Lott and SFDS on December 1, 2008. (Id. ¶ 28.) The organizations - particularly SFDS - had experienced numerous problems in their accounting practices prior to Forkell's arrival. (Id. ¶¶ 44-56; Counter R. 56.1 ¶ 32.) In fact, an anonymous complaint to HUD had trigged an audit of SFDS's accounting practices for the years 2006 to 2008, and one of Forkell's primary responsibilities was to reconstruct financial records that were to be turned over to HUD in connection with the investigation. (R. 56.1 ¶¶ 49, 56.)
SFDS reached a settlement with HUD in 2009 in connection with roughly $700,000 in accounting misallocations that were discovered through the audit. (R. 56.1 ¶ 49; Counter R. 56.1 ¶¶ 22, 49.) Defendants note that despite the accounting errors identified, the HUD audit did not find that Janeski or SFDS had engaged in any fraudulent practices. (R. 56.1 ¶ 52.)
The relationship between Forkell and Janeski became strained shortly into Forkell's tenure, and Forkell's frustration with Janeski's management only escalated over time. The record is replete with emails that evidence this tension, as Forkell took a hostile and seemingly incredulous tone in communicating with Janeski. For example:
• On April 20, 2009, after being told by Janeski that he would be expected to submit certain work product, Forkell wrote: "I told you at the meeting this morning that [if] we concentrate on SFDS we will not be able to finalize [Lott], and vice-versa. Don't start putting impossible demands on my plate." (Id., Ex. 16.)
• On April 20, 2009, following an exchange in which Forkell and Janeski debated whether certain demands that had been set by the boards were unreasonable, Forkell wrote to Janeski: "You know I haven't gotten one iota of support from you since I started this job." (Id.)
• On June 2, 2009, Janeski wrote a detailed email to Forkell and a HUD auditor in which Janeski began the email, "I will attempt to answer both of your questions." In response, Forkell wrote to Janeski, "I didn't ask any question. I was merely trying to give you a heads up. I wish you would read my emails a little more carefully." (Id.)
• On June 17, 2009, Forkell wrote to Janeski: "I also would appreciate being copied on ANYTHING being sent to the Head of the Finance Committee and the Committee itself and not have to ask for it when the meeting occurs." (Id.)
• On June 24, 2009, when Forkell learned that Janeski had emailed a board member to preview a message that was to be sent to Forkell, Forkell wrote to Janeski, copying the board member, "1. You don't address an email to me and send it to someone else without sending it to me. Extremely unprofessional. 2. As a matter of course the CFO should be copied on all correspondence with the head of the Finance Committee." (Id.)
• On September 23, 2009, after Janeski had informed Forkell that only Janeski was to communicate with certain outside attorneys, Forkell wrote to Janeski,
"So whenever an attorney emails me a question I should forward it to you and whenever I have a question I should send it to you. Just want to make sure I understand YOUR rules, because no company I have ever worked for has prohibited the CFO from communicating with the company's attorneys." (Id., Ex. 18.)
• On November 13, 2009, in a context that is not clear, Forkell wrote to Janeski, "I can't believe that you were corresponding to the Board on this matter without copying me. Obviously you believe you can operate without the cooperation and assistance of a CFO. This is it." (Id., Ex. 16.)
The aggressive manner in which Forkell interacted with Janeski was allegedly not limited to such email exchanges. Carmen Villegas, Chairman of the SFDS board of directors and a member of the Lott board, testified that Forkell was regularly combative with Janeski at board meetings, characterizing Forkell's attitude as "very disrespectful" and "totally unacceptable." (Id., Ex. 3 at 16:16-19:25.)
The tension between Forkell and Janeski finally reached a breaking point in January 2010. On January 14, 2010, a day after a board meeting at which Janeski had supposedly failed to produce a document that Forkell had given him for the record, Forkell confronted Janeski in person. (Id. ¶ 96, Ex. 2 at 108:22-109:4.) Janeski alleges that Forkell formed his hand into the shape of a gun, pointed his finger at Janeski, and told Janeski that he would be accused of fraud, would go to jail for three years, and would be forced to do a "perp walk." (Id. ¶ 97.) Forkell does not deny that he confronted Janeski on this day, but he denies that he pointed his finger in the shape of a gun at Janeski. (Counter R. 56.1 ¶ 97.) Following the confrontation, Janeski emailed an attorney and several board members to relay what had occurred. (R. 56.1 ¶ 99.) The next day, Forkell apologized to Janeski for the manner in which he had conveyed his remarks but not for the substance of the message. (Id. ¶¶ 100-01.)
On January 20, 2010, Forkell met with Chairman Villegas and Peter Handal, a member of the Lott and SFDS boards, and levied the accusations that form the basis of the instant suit (described infra). (Id. ¶ 103.) In addition to detailing his accusations, Forkell told Villegas and Handal that if his allegations were not investigated thoroughly, he would report them to various government agencies. (Id. ¶ 111; Counter R. 56.1 ¶ 111.) Forkell added the caveat, however, that if he received a severance package of a year's salary and health insurance, he would sign a general release, move back to Florida where he had previously resided, and not disclose the allegations. (R. 56.1 ¶ 113.) Forkell does not deny making this statement, but he notes that an additional condition of the proposal was that the boards provide him a letter documenting that he had advised them of the alleged fraudulent practices. (Counter R. 56.1 ¶ 113.)
At the January 20, 2010 meeting, Forkell also expressed that he feared for his safety because of the alleged large-scale fraud that he was exposing. (R. 56.1 ¶ 107.) Specifically, Forkell told Villegas and Handal that he was contemplating obtaining a handgun for his own protection and was concerned that someone would place a bomb underneath his car. (Id.) Indeed, Forkell testified that he was so frightened that during the period from January 2010 to May 2010, he would check underneath his car for a bomb several times a day. (Id., Ex. 1 at 152:14-19.)
Finally, Forkell informed Villegas and Handal that the problems between Janeski and himself were irreconcilable, and thus either he or Janeski needed to leave the organizations. (Id. ¶ 112.)
In the wake of the January 20, 2010 meeting, the SFDS board decided to retain the Institute for Human Development ("IHD"), which SFDS had already retained to assist in the HUD audit, to investigate Forkell's claims. (Id. ¶ 117.) IHD was initially reluctant to add Forkell's allegations to the scope of its work, but Janeski and Villegas made efforts to ensure that IHD did assume this responsibility. (Id. ¶¶ 118-20, Ex. 2 at 169:13-170:14.)
IHD is a subsidiary of Catholic Charities of the Archdiocese of New York. (R. 56.1 ¶ 117.)
Roughly contemporaneous to the decision to retain IHD, there was discussion among board members about possibly terminating Forkell. In a February 9, 2010 email, Jodi Cohen, a member of the Lott board, wrote to Janeski and several other board members:
I have contacted an attorney who is a friend of mine and will be in touch with his colleague who is a labor attorney. I gave him the basic details of our request. I hope to have more information in the next couple of days and then perhaps we can set up a meeting with the attorney to review the facts so that he can provide us with advice. I realize this is in code but I think everyone understands, if you don't give me a call.(Bauer Decl. Ex. 3.) In a far more direct reference to Forkell's possible termination, on February 12, 2010, in response to learning of IHD's retention, Lott board member Dennis Greenbaum emailed other board members, "Will [IHD] be able to advise regarding SFDS's ability to terminate [Forkell] while his allegations are being addressed?" (Id., Ex. 1.)
IHD issued an interim report on March 31, 2010 that addressed each of Forkell's accusations. (R. 56.1 Ex. 37 at 8-10.) IHD concluded that the conduct underlying one of Forkell's allegations did not constitute fraud but stated that it needed more time or more information to evaluate the other claims. (Id.) Janeski, Villegas, and Harman expressed extreme dissatisfaction with the lack of detail contained in the interim report and asked IHD to enhance its report with a more thorough treatment of the allegations. (Id. ¶ 138, Ex. 3 at 115:12-117:20.) IHD resisted these requests, asserting that its employees were not forensic accountants and therefore were not competent to provide the type of analysis requested. (Id., Ex. 3 at 115:12-117:20.)
In late May 2010, IHD provided SFDS with its final report. The section addressing Forkell's claims contained little more information than that presented in the interim report. (Id., Ex. 39.) However, IHD did consider three of the allegations to have been resolved - with no findings of fraud - but stated that for the other three charges it lacked sufficient information to reach a conclusion. (Id.) Janeski and various board members were again angered by the deficiencies they viewed in IHD's work, with Janeski writing to Villegas and Handal that he had "the impression that IHD never intended to do an investigation." (Id.) Janeski even suggested that SFDS not pay the balance of fees owed to IHD. (Id. ¶ 141.)
Five of the six allegations addressed by IHD are among the accusations made by Forkell in the instant suit. Forkell has dropped one of the allegations addressed by IHD, regarding the possible backdating of leases, but he brings an additional allegation that was not addressed by IHD. This new allegation, described infra, involves a grant received from NYSERDA.
Following the completion of IHD's investigation, defendants retained the accounting and consulting firm of O'Connor Davies Munns & Dobbins LLP ("ODMD") to conduct an independent review of Forkell's allegations. (Id. ¶ 139.) ODMD issued its final report on April 4, 2011. (Id., Ex. 38.)
The ODMD report concluded that defendants did not commit any fraud. (R. 56.1 Ex. 38.) Forkell contends, however, that the Court may not consider the contents of the report because defendants did not designate the author of the report as an expert witness. In light of this objection, we note that we rely only on the fact that defendants retained ODMD to conduct the review, not on the substance of the report itself.
As the IHD investigation into Forkell's allegations unfolded, the problems between Forkell and Janeski persisted. On February 16, 2010, Villegas and SFDS board member Brenda Brown met with Forkell and Janeski. (Id. ¶ 125.) Villegas and Brown admonished Forkell for various recent acts of insubordination and for having requested to report directly to the boards rather than to Janeski. (Id.) Brown's meeting notes describe Forkell's attitude as having been "condescending and arrogant" until Brown indicated that the SFDS board would accept Forkell's resignation, at which point Forkell's persona changed. (Id. ¶ 127.) Forkell emailed Villegas and Brown the following day to apologize for his conduct during the meeting and state that he would accept direction from Janeski moving forward. (Id. ¶ 128.)
Despite this assurance, Forkell's frustration with Janeski again erupted in April 2010. On April 22, 2010, Janeski informed several board members that Forkell had apparently told Villegas that either he or Janeski needed to be gone from the organizations by the next month. (Id. ¶ 152.) Janeski also revealed that, on a conference call that week with a person outside the organization, Forkell had grown emotional and began to shout that Janeski was a liar, stating that he had twenty five documented cases of Janeski having lied to him. (Id. ¶ 153.)
Also in April 2010, SFDS failed to meet deadlines that had been set by Enterprise to submit audited financial statements for certain housing projects. (Id. ¶ 158.) The parties dispute whether Forkell or others were to blame for the failure to meet the deadlines, but it is clear that both Enterprise and members of the SFDS board treated the matter as extremely serious. On May 5, 2010, Brown suggested that Janeski relieve Forkell of responsibility for the audits and assume personal oversight of the situation. (Id. ¶ 164.)
On May 11, 2010, an employee approached Janeski and reported that she was fearful to be in the same office as Forkell because of various comments he had made, including that he may need to bring a gun to work and check his car for a bomb. (Id. ¶ 167, Ex. 53.) Janeski emphasizes that the employee approached him with the concern and he did not solicit the complaint in any way. (Id. ¶ 168.) Forkell disputes the employee's account. He claims that he made a "joking statement" to the employee and another employee in January 2010 and the two had "laughed and seemed to take it in the vein intended." (Counter R. 56.1 ¶ 167.) Forkell also asserts that the employee only brought forward the complaint to Janeski after Forkell had filed a report documenting inappropriate behavior by the employee at work. (Id.)
Forkell was terminated from his employment on May 19, 2010. (R. 56.1 ¶ 175.) Forkell was informed that the reasons for his termination included his professed dissatisfaction with working at the organizations, his refusal to take direction from Janeski, his acts of insubordination toward Janeski, his failure to meet certain responsibilities, his having presented ultimatums that appeared extortionate, and his inappropriate comments to other employees that raised concerns about safety in the workplace. (Id., Ex. 54.)
III. Forkell's Allegations
Forkell contends that the stated reasons for his termination were merely a pretext for retaliatory animus. Forkell's allegations entail six distinct supposed violations of the federal and New York FCAs. We describe each of these allegations below as best as we can discern from the record before us. For reasons that will be made apparent infra, we do not reach a determination as to the validity of the allegations or whether, if true, they amount to substantive violations of the FCAs.
A. Architect's Bill
Forkell alleges that in early 2009, Janeski presented him with a $78,000 invoice to be paid to the architect hired for one of SFDS's housing projects. (Id. ¶ 189.) Forkell states that he was suspicious of the invoice because Janeski did not provide any explanation for the services that the invoice covered. (Counter R. 56.1 ¶ 190.) Forkell maintains that it was only after he refused to pay the invoice on multiple occasions that Janeski conferred with the architect, who agreed to reduce the invoice to $10,000. (Id.)
In response, defendants suggest that the $78,000 invoice had been issued due to a miscommunication that led the architect to believe that he was entitled to a sum of money that was actually owed to SFDS as a developer's fee for the project. (R. 56.1 ¶ 199.) Defendants contend that after the miscommunication was clarified, the architect agreed to reduce the invoice to $10,000 to cover only his out-of-pocket expenses for work on the project. (Id. ¶ 198.)
B. NYSERDA Grant
In November 2009, one of SFDS's housing projects received a grant for roughly $236,000 from the New York State Energy Research and Development Authority ("NYSERDA"). (Id. ¶ 205.) Forkell alleges that Janeski fraudulently directed him to deposit the grant money into an SFDS bank account rather than hold it in escrow. (Id. ¶ 206.)
Defendants note that the NYSERDA funds were in fact placed in an escrow account and this occurred after Janeski inquired with the relevant bank as to the proper treatment of the funds. (Id. ¶¶ 207-11.)
C. Lease of Basement Space
SFDS owns commercial space in the basement of a building located at 1255 Fifth Avenue. (Id. ¶ 216.) SFDS leased this space to Lott in the fall of 2009. (Id., Ex. 57.) Forkell suggests that the lease constituted a fraudulent transaction because the basement space was unusable and SFDS charged Lott an above-market rate. (Id. ¶¶ 214-15; Counter R. 56.1 ¶¶ 214-15.) Forkell further suggests that the transaction implicated fraud upon the government because Lott commingled Medicaid funds with all of its other funds. (Counter R. 56.1 ¶ 215.)
Defendants maintain that Lott entered the lease because it planned to move offices located at its main facility into the basement space and then convert the vacated office space into four additional one-bedroom apartments. (R. 56.1 ¶ 223.) Defendants assert that they determined the appropriate rental rate after consulting a real estate agent with expertise in the local market, and defendants note that the Lott board approved the lease knowing that the space might not be immediately usable. (Id. ¶¶ 219, 225.) Defendants also note that the terms of the lease were altered to adopt Forkell's suggestion that SFDS be required to cover the common charges in connection with the lease. (Id. ¶ 226.)
D. Lease of Commercial Space
SFDS operates three housing projects that contain street-level commercial/retail space. (Id. ¶ 235.) Each of these properties operates as a limited partnership with Enterprise. (Id. ¶ 236.) Prior to 2004, each of the housing projects leased their respective retail spaces directly to commercial tenants, but when the leases were set to be renewed in 2004, Janeski altered the arrangements such that SFDS itself leased the spaces from the housing projects and then subleased the spaces to the commercial tenants. (Id., Ex. 2 at 208:24-210:13.)
Janeski claims that a representative of Enterprise had provided him with this idea as a way for SFDS to generate additional income. (Id.) However, in January 2009, when a different representative of Enterprise learned of the arrangement, that representative informed Janeski that he should not have entered the subleases and demanded that he end the practice. (Id. ¶ 242.) SFDS did indeed stop subleasing the spaces following this meeting. (Id. ¶ 244.) Nevertheless, Forkell claims that the subleases were fraudulent for the period that they were in effect in that they deprived the housing projects - and therein Enterprise - of the additional rent that SFDS earned from the subleases. (Id. ¶ 239.)
E. Funding for Social Worker
Prior to 2009, SFDS received grant money from the New York State Office of Temporary Disability Assistance ("ODTA") to fund social workers at a project it operated for homeless persons. (Id. ¶ 253, Ex. 1 at 105:25-107:15.) At some point in 2009, OTDA terminated this funding because SFDS lost its New York State charitable tax-exempt status. (Id. ¶ 254.)
Also in 2009, SFDS hired a new social worker named Tony Weaver. (Id. ¶ 256.) The parties dispute the intended scope of Weaver's work upon his being hired, but Forkell claims that Weaver was hired in anticipation of the ODTA funding being resumed for the homeless project. (Id.; Counter R. 56.1 ¶ 256.) Weaver would ultimately work at the homeless project as well as two other housing projects operated by SFDS. (R. 56.1, Ex. 2. at 92:6-15.) However, the ODTA funding was not resumed in 2009, and Weaver's salary was funded in part by SFDS and in part from social service reserve accounts that had been established for the two other housing projects. (Id. ¶¶ 264, 266.)
The precise nature of Forkell's allegations with respect to Weaver's employment is not clear, but Forkell contends that the situation amounted to "double dipping." (Id., Ex. 1 at 113:23-114:25.) In this vein, Forkell notes that the budget submitted to ODTA for the homeless project included funding for Weaver's full salary, benefits, and expenses, even though Weaver worked at other projects not meant to be supported by ODTA funds. (Id.) Defendants respond to this allegation by noting that Weaver did not receive funding from any two sources for the same service. (Id. ¶ 265.) Defendants also assert that Weaver's allocation of time between the various projects was tracked carefully and was described in the OTDA application. (Id. ¶ 267.)
F. Laundry Services
Forkell's final allegation is that SFDS unlawfully collected the proceeds from coin-operated laundry machines in certain housing projects when these proceeds should have been deposited into the housing projects' accounts. (Id. ¶ 268.) Forkell ended this practice immediately upon his arrival, and defendants note that Janeski did not oppose Forkell's changing this practice. (Id. ¶¶ 271-73.)
G. Reporting of Allegations
Although Forkell brought these allegations to the attention of Villegas and Handal at the January 20, 2010 meeting, Forkell did not report the alleged fraud to the relevant government authorities until after he was terminated from his employment and had filed a complaint in the instant suit. At such time, Forkell forwarded a copy of the complaint to the United States Attorney General's Office and the New York State Office of Medicaid Fraud. (Id. ¶¶ 181, 183.) Forkell testified that shortly after forwarding his complaint, the New York State Office of Medicaid Fraud informed him that it would open an investigation, but Forkell does not report any other action that has been taken by either of the government agencies. (Id., Ex. 1 at 148:17-149:9.)
DISCUSSION
I. Legal Standard
Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)); see also Quarles v. Gen. Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985). In this context, "[a] fact is 'material' when it might affect the outcome of the suit under governing law," and "[a]n issue of fact is 'genuine' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 202 (2d Cir. 2007) (internal quotation marks omitted).
In determining whether a genuine issue of material fact exists, a court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. See Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d Cir. 2010). "Because direct evidence of an employer's . . . intent will rarely be found," motions for summary judgment in employment discrimination or retaliation actions should be evaluated with caution. Schwapp v. Town of Avon, 118 F.3d 106, 110 (2d Cir. 1997). However, even in such cases, "a plaintiff must provide more than conclusory allegations . . . to defeat a motion for summary judgment." Id. Thus, it is well-settled that summary judgment may be appropriate even in the fact-intensive context of discrimination and retaliation suits. See Abdu-Brisson v. Delta Air Lines, Inc., 239 F.3d 456, 466 (2d Cir. 2001).
II. Federal Claims
Forkell brings his federal claims pursuant to the "whistleblower" provision of the federal FCA, which provides:
Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.31 U.S.C. § 3730(h)(1). This provision "was intended to protect persons who assist in the discovery and prosecution of fraud, because 'few individuals will expose fraud if they fear their disclosures will lead to harassment, demotion, loss of employment or any other form of retaliation.'" Faldetta v. Lockheed Martin Corp., No. 98 Civ. 2614 (RCC), 2000 WL 1682759, at *11 (S.D.N.Y. Nov. 9, 2000) (quoting S. Rep. No. 99-345, at 34 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5299). Thus, "Congress enacted [Section] 3730(h) to encourage any individuals knowing of Government fraud to bring that information forward." McAllan v. Von Essen, 517 F. Supp. 2d 672, 685 (S.D.N.Y. 2007) (internal quotation marks omitted).
Courts have established three required elements to sustaining an action under Section 3730(h): (1) the employee engaged in protected conduct under the FCA; (2) the employer knew that the employee engaged in the protected conduct; and (3) the employee was discharged, discriminated against, or otherwise retaliated against by the employer because of the protected conduct. Garcia v. Aspira of N.Y., Inc., No. 07 Civ. 5600 (PKC), 2011 WL 1458155, at *3 (S.D.N.Y. Apr. 13, 2011).
A. Protected Conduct
We express reservations as to whether Forkell engaged in any protected conduct. It is not obvious that Forkell's informing Villegas and Handal of his allegations was a measure "in furtherance of an action under [the FCA]" given that Forkell expressly stated that he would not report the claims if he were provided a year's salary and health benefits. See id. at *4 (noting that "the employee's purpose must not be detached from the FCA in order for the employee to receive the FCA's whistleblower protections" (internal quotation marks and alteration omitted)).
It is also not apparent that the conduct underlying at least several of the allegations could meet the statutory elements of 31 U.S.C. § 3729, as it is not clear whether the alleged fraudulent practices actually implicated government funds. See Dookeran v. Mercy Hosp. of Pittsburgh, 281 F.3d 105, 108-09 (3d Cir. 2002) (dismissing Section 3730(h) claim when there was "no possibility that [the plaintiff] could have filed a viable FCA action").
We are cautious, however, in reaching a formal determination on this issue given that the scope of the FCA vis-à-vis recipients of government funds has yet to be fleshed out in the wake of the 2009 amendments to the FCA (and the parallel 2010 amendments to the New York FCA), see S. Rep. 111-10, at 10-12 (2009), reprinted in 2009 U.S.C.C.A.N. 430, 437-39; 2010 N.Y. Sess. Law Ch. 379 (A. 11568) (McKinney), and given that the parties have provided only vague information as to the funding structure of the relevant housing projects. In light of our holding, discussed infra, that no reasonable jury could find that Forkell was terminated due to his allegations, we will assume, arguendo, that Forkell's bringing those allegations did represent protected conduct.
B. Knowledge of Protected Conduct
If Forkell's accusations constituted protected conduct, it is implicit that defendants had knowledge of that conduct. Therefore, we will assume that Forkell satisfies this second element as well.
C. Retaliatory Motive
1. Relevant Analytical Framework
Unlike with other antidiscrimination statutes, courts applying Section 3730(h) have yet to reach a consensus on the appropriate rubric for evaluating whether an adverse employment action occurred "because of" an employee's protected status. However, the Courts of Appeals for both the First Circuit and the District of Columbia Circuit have recently held that in the context of an FCA retaliation claim, the familiar McDonnell Douglas burden-shifting framework provides a suitable methodology to guide this analysis. See United States ex rel. Schweizer v. Océ N.V., No. 11-7030, 2012 WL 1372219, at *11-12 (D.C. Cir. Apr. 20, 2012); Harrington v. Aggregate Industries-Northeast Region, Inc., 668 F.3d 25, 30-31 (1st Cir. 2012); see also Scott v. Metro. Health Corp., 234 F. App'x 341, 346 (6th Cir. 2007).
In fact, although not squarely addressing the issue, the Second Circuit has implicitly endorsed the application of the McDonnell Douglas framework to Section 3730(h) claims. See Liburd v. Bronx Lebanon Hosp. Ctr., 372 F. App'x 137, 139 (2d Cir. 2010) (holding that even if the plaintiff engaged in protected conduct under the FCA, "defendants proffered a legitimate, non-retaliatory reason for [the plaintiff's] termination and [the plaintiff] failed to raise a genuine issue of material fact as to whether that reason was a pretext for retaliation"); see also United States ex rel. Sasaki v. N.Y. Univ. Med. Ctr., No. 05 Civ. 6163 (LMM)(HBP), 2012 WL 220219, at *13-14 (S.D.N.Y. Jan. 25, 2012) (citing Liburd and applying burden-shifting framework to Section 3730(h) claim).
We consider the McDonnell Douglas approach well-suited to retaliation claims under the FCA, and we thus follow the lead of the above-cited courts and apply the framework to Forkell's claims.
2. McDonnell Douglas Framework
In the first step of the McDonnell Douglas framework, the employee bears the burden of producing evidence sufficient to support a prima facie case of retaliation. See Papelino v. Albany Coll. of Pharmacy of Union Univ., 633 F.3d 81, 91 (2d Cir. 2011).
If the plaintiff establishes a prima facie case, "the burden shifts to the defendant to articulate a legitimate, nondiscriminatory reason for its actions." Id. at 92 (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973)). This is a burden of production, not persuasion, as the defendants' obligation is to "clearly set forth, through the introduction of admissible evidence, reasons for its actions." Hongyan Lu v. Chase Inv. Servs. Corp., 412 F. App'x 413, 415 (2d Cir. 2011) (internal quotation marks omitted).
Finally, the burden shifts back to the plaintiff to demonstrate that the stated reasons were merely a pretext for retaliation. Papelino, 633 F.3d at 92. To satisfy this burden, a plaintiff must produce "not simply some evidence, but sufficient evidence" to support a rational finding that retaliation was the true reason for the adverse employment action. Weinstock v. Columbia Univ., 224 F.3d 33, 42 (2d Cir. 2000) (internal quotation marks omitted). "A plaintiff cannot defeat a summary judgment motion based on purely conclusory allegations of [retaliation], absent any concrete particulars." Nieves v. Angelo, Gordon & Co., 341 F. App'x 676, 678 (2d Cir. 2009) (internal quotation marks omitted).
3. Application
i. Prima Facie Evidence of a Causal Connection
It is far from clear that Forkell has demonstrated even a prima facie case of retaliation. There is minimal evidence, if any, suggesting a causal connection between Forkell's notifying Villegas and Handal of his allegations and the decision to terminate his employment. See Kessler v. Westchester County Dep't of Soc. Servs., 461 F.3d 199, 205-06 (2d Cir. 2006) (listing this type of causal connection as one of the required elements of a prima facie case of retaliation).
The other elements of a prima facie case of retaliation are: (1) that the employee engaged in protected activity; (2) that the employer was aware of this activity; and (3) that the employer took adverse action against the employee. Kessler, 461 F.3d at 205-06. As previously described, in analyzing claims under Section 3730(h), courts already require that a plaintiff demonstrate the existence of protected conduct and the employer's knowledge of that conduct. Because we assume, arguendo, that Forkell has satisfied these requirements, and given that Forkell's termination clearly constitutes adverse action, we focus only on the requirement of a causal connection between the adverse action and the alleged protected conduct.
Forkell relies heavily on the fact that board members began discussing his termination just several weeks after he relayed his allegations at the January 20, 2010 meeting with Villegas and Handal. It is true that "[c]lose temporal proximity between the plaintiff's protected activity and the adverse action may in itself [be] sufficient to establish the requisite causal connection." Papelino, 633 F.3d at 91 (internal quotations marks and alteration omitted). Here, however, the same temporal proximity that exists with respect to the purported protected activity also exists with respect to conduct that defendants cite as reasons for the termination. That is, it was at the same January 20, 2010 meeting that Forkell informed the board members that: (a) either he or Janeski needed to go, (b) he would not report his allegations if he were provided a year's salary and health benefits, and (c) he was considering obtaining a gun and was afraid that a bomb was going to be placed under his car.
Further undermining the notion of a causal connection between Forkell's allegations and his termination is the fact that defendants commissioned not one, but two investigations of his claims. In fact, when IHD was initially resistant to the assignment, Janeski and Villegas took measures to ensure that IHD actually investigated the claims. Then, when defendants were unsatisfied with the thoroughness of IHD's final report, they retained ODMD to conduct an entirely new investigation. Notably, the decision to retain ODMD occurred after defendants had already fired Forkell. It is wholly illogical for an employer to terminate an employee for bringing concerns to its attention only to then commence a review of the merits of those allegations.
We therefore express deep skepticism that Forkell has established a prima facie case of retaliation. However, we recognize that a plaintiff's burden at this stage is "minimal." Roge v. NYP Holdings, Inc., 257 F.3d 164, 168 (2d Cir. 2001) (internal quotation marks omitted). Given this modest burden, as well as the temporal proximity between the meeting at which Forkell described the alleged fraud and the initial discussion of his termination, we will assume, arguendo, that a prima facie case has been shown and proceed to the next step in the burden-shifting framework.
ii. Legitimate , Nondiscriminatory Rationale
Defendants have articulated a host of legitimate, non-retaliatory reasons for Forkell's termination. As an initial matter, it is beyond dispute that an employer may terminate an employee based on inappropriate comments, perceived insubordination, or disruptive behavior in the workplace. See, e.g., Nieves, 341 F. App'x at 679; Schnabel v. Abramson, 232 F.3d 83, 87-88 (2d Cir. 2000); Matima v. Celli, 228 F.3d 68, 79 (2d Cir. 2000). The undisputed evidence of Forkell's insubordination toward Janeski - including the regularly combative emails, the in-person confrontation on January 14, 2010, and the conference call with an outside party during which Forkell called Janeski a liar - demonstrate a level of hostility that would be startling when directed toward any superior, let alone the company CEO.
In addition to Forkell's constant confrontational nature, several of the comments made by Forkell at the January 20, 2010 meeting would alone constitute legitimate grounds for dismissal. Forkell's offer to remain silent about the alleged fraud if provided a year's salary and health benefits, which Forkell does not deny having made, was plainly extortionate. If this were not enough, Forkell also presented Villegas and Handal with the ultimatum that only he or Janeski could remain at the organizations. Faced with this choice, Lott and SFDS certainly had the right to select Janeski as the employee they wished to retain.
Finally, it is clear from the record that defendants truly were concerned that Forkell represented a danger to his co-workers given his comments to Villegas and Handal about obtaining a gun and checking underneath his car for a bomb. Villegas testified that Forkell's mention of a gun triggered immediate concern on her part, and her handwritten notes from the January 20, 2010 meeting, in which she circled the word "gun," corroborate this account. (R. 56.1, Ex. 3 at 14:14-15:25, Ex. 27.) Roughly a month after Forkell made the comments, Dennis Greenbaum, a physician who is a member of the Lott board, circulated an email to other board members in which he attached three newspaper articles describing, in his words, "brilliant people who had access to weapons and eventually used them - extremely unlikely events, but they do sometimes occur." (Id., Ex. 40.) The board members' concern about Forkell's potential for violence was almost surely heightened on May 11, 2010, when one of Forkell's employees reported that he had made similar comments to her and another employee. Even if the comments were intended as a "joking statement" as Forkell claims, taken in conjunction with Forkell's other erratic behavior, including his in-person confrontation with Janeski on January 14, 2010, any reasonable jury would find that defendants maintained a genuine fear for the safety of their employees.
iii. Pretext
At this final stage, Forkell must produce "sufficient evidence to support a rational finding that the legitimate, non-[retaliatory] reasons proffered by the [defendants] were false, and that more likely than not [retaliation] was the real reason for the employment action." Weinstock, 224 F.3d at 42 (internal quotation marks and alteration omitted).
Notwithstanding the temporal proximity between Forkell's levying of his allegations and the initial discussion of his termination, we conclude that no rational jury could find that defendants' stated reasons were pretextual and a retaliatory motive was the true impetus for their decision. Cf. Jowers v. Family Dollar Stores, Inc., 455 F. App'x 100, 102 (2d Cir. 2012). Forkell's claim of retaliation is simply "unconvincing and incongruous" in light of defendants' actions, Faldetta, 2000 WL 1682759, at *13, particularly the commissioning of two external investigations, as well as Forkell's own behavior, which would warrant dismissal in any context. Cf. id. at *13-14 (dismissing Section 3730(h) at summary judgment stage given clear evidence that plaintiff was not dismissed because of protected conduct); McAllan, 517 F. Supp. 2d at 686 (same); United States ex rel. Smith v. Yale Univ., 415 F. Supp. 2d 58, 107 (D. Conn. 2006) (dismissing on same grounds at motion to dismiss stage).
III. State Law Claims
The whistleblower provision of the New York FCA is essentially identical in language and substance to its federal counterpart. Accordingly, defendants are entitled to summary judgment on Forkell's New York FCA claims for the same reasons articulated with respect to his federal claims. See United States ex rel. Pervez v. Beth Isr. Med. Ctr., 736 F. Supp. 2d 804, 816 (S.D.N.Y. 2010); United States ex rel. Blundell v. Dialysis Clinic, Inc., No. 09 Civ. 710 (NAM)(DEP), 2011 WL 167246, at *21 (N.D.N.Y. Jan. 19, 2011).
The relevant provision of the New York FCA provides: "Any current or former employee, contractor, or agent of any private or public employer who is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against in the terms and conditions of employment, or otherwise harmed or penalized by an employer, or a prospective employer, because of lawful acts done by the employee, contractor, agent, or associated others in furtherance of an action brought under this article or other efforts to stop one or more violations of this article, shall be entitled to all relief necessary to make the employee, contractor or agent whole." N.Y. State Fin. L. § 191(1).
We recognize that Section 191 does differ from its federal analogue in that the state statute defines protected "lawful acts" to include providing documents to government authorities and providing documents to private counsel that has been retained for the purpose of investigating or filing a claim. N.Y. State Fin. L. § 191(2). However, this difference is not meaningful for purposes of Forkell's motion, as we assume for both the federal and state claims that Forkell did engage in protected conduct.
CONCLUSION
For the foregoing reasons, we hold that even if plaintiff engaged in protected conduct under the federal and New York FCAs - a fact we assume but of which we are not convinced - defendants have proffered legitimate, non-discriminatory reasons for their actions, and no rational jury could find that these reasons were mere pretext for retaliation. Defendants' motion for summary judgment is therefore granted.
SO ORDERED.
Dated: New York, New York
May 21, 2012
/s/_________
NAOMI REICE BUCHWALD
UNITED STATES DISTRICT JUDGE Copies of the foregoing Order have been mailed on this date to the following: Attorney for Plaintiff:
Vincent E. Bauer, Esq.
475 Park Avenue South, 25th Floor
New York, NY 10016 Attorney for Defendants:
John P. Keil, Esq.
Collazo Florentino & Keil LLP
747 Third Avenue, 25th Floor
New York, NY 10017