Ronald Young v. CHS Middle East, LLC , 611 F. App'x 130 ( 2015 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2342
RONALD P. YOUNG; RAMONA YOUNG,
Plaintiffs – Appellants,
v.
CHS MIDDLE EAST, LLC,
Defendant – Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:13-cv-00585-GBL-JFA)
Argued: January 28, 2015 Decided: May 27, 2015
Before MOTZ, GREGORY, and WYNN, Circuit Judges.
Reversed and remanded by unpublished opinion. Judge Wynn wrote
the opinion, in which Judge Motz and Judge Gregory joined.
ARGUED: Robert Scott Oswald, THE EMPLOYMENT LAW GROUP, P.C.,
Washington, D.C., for Appellants. John Kirk Train, IV,
WEINBERG, WHEELER, HUDGINS, GUNN & DIAL, LLC, Atlanta, Georgia,
for Appellee. ON BRIEF: Nicholas Woodfield, THE EMPLOYMENT LAW
GROUP, P.C., Washington, D.C., for Appellants. Julie C. Hall,
WEINBERG, WHEELER, HUDGINS, GUNN & DIAL, LLC, Atlanta, Georgia;
Carlos M. Recio, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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WYNN, Circuit Judge:
The False Claims Act’s whistleblower provision prohibits
retaliation “because of lawful acts done . . . in furtherance of
an action” under, or otherwise “to stop 1 or more violations
of,” the False Claims Act. 31 U.S.C. § 3730(h). Plaintiffs
Ronald and Ramona Young contend that they sufficiently alleged
that their former employer, CHS Middle East (“CHS”), terminated
them because they undertook lawful acts “in furtherance of an
action” under, or otherwise “to stop 1 or more violations of,”
the False Claims Act. Id. Particularly in light of United
States ex rel. Omar Badr v. Triple Canopy, Inc., 775 F.3d 628
(4th Cir. 2015), we agree and conclude that the district court
erred in dismissing the Youngs’ suit for failure to state a
claim. Accordingly, we reverse.
I.
Accepting the facts pled as true, as we must on a motion to
dismiss, CHS had a $61.5 million services agreement with the
U.S. Department of State to provide medical services to non-
military personnel in Iraq. The contract required CHS to
“ensure” that its staff was “properly trained and certified.”
J.A. 99. Pursuant to that contract, CHS hired the Youngs, both
experienced nurses, to work as “Medical Surgery Registered
Nurses.” Id.
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When he began work in September 2011 at Forward Operating
Base Shield in Iraq, Ronald Young noticed that CHS attempted to
utilize expired medicine. He informed his supervisors that
“using them was illegal” and “violated CHS’ contractual
requirements with the Department of State.” J.A. 100. By
November 2011, Ronald Young was transferred to Sather Air Force
Base (“Sather”), where his critical care skills were needed.
Ramona Young also worked at Sather, beginning in October
2011, where she expressed concern “about the lack of equipment
and properly trained medical personnel.” J.A. 100. She
informed a supervisor that such shortcomings were “totally
misleading,” put her nursing license “on the line,” and amounted
to a “breach of CHS’s contract for properly trained and
qualified staff.” J.A. 100-01.
At a staff meeting, Ramona Young shared her concerns that
Sather was “not properly staffed, [ ] did not have qualified
staff, and that according to CHS’s contract we would have . . .
properly trained and qualified [staff].” J.A. 101. Both of the
Youngs allegedly mentioned that the failings they witnessed were
“a total breach of contract.” J.A. 101. The Youngs observed
various additional failings and escalated their concerns to CHS
employees not stationed in Iraq.
The Youngs allege that “Mr. Young [] told [CHS’s director
of international operations] that ‘CHS management at Sather is
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defrauding the government.’” J.A. 104. The Youngs pled that
Ronald Young told CHS’s director of international operations
that “CHS list[ed] emergency medical technicians as scrub
technicians for surgery even though they had no surgical
experience.” Id. And “Mrs. Young emphasized ‘the potential
liability’ of reporting false employee staffing at Sather to the
State Department.” Id.
The Youngs allege that CHS staff began treating them poorly
because of their whistleblowing. On December 20, 2011, the
Youngs contacted the State Department to raise their concerns
regarding CHS. Two days later, CHS terminated the Youngs. The
Youngs returned to the United States on December 24, 2011.
In July 2012, the Youngs filed this case in state court,
and it was then removed to the Eastern District of Virginia.
There, the district court granted CHS’s motion to dismiss the
Young’s first amended complaint for failure to state a claim but
permitted them to file a second amended complaint, which they
did. On October 28, 2013, the court again granted CHS’s motion
to dismiss, this time with prejudice. The Youngs timely
appealed from this dismissal, which we review de novo,
construing the facts and inferences to be drawn therefrom in the
light most favorable to the nonmoving party, here the Youngs.
Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011).
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II.
A.
The False Claims Act discourages fraud against the federal
government by imposing liability on “any person who . . .
knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval.” 31 U.S.C. §
3729(a)(1)(A). Central to this case, the False Claims Act
includes a whistleblower provision.
The whistleblower provision, which Congress broadened in
2009, prohibits retaliation “because of lawful acts done . . .
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). In other words, among other things, it “protect[s]
employees while they are collecting information about a possible
fraud, before they have put all the pieces of the puzzle
together.” United States ex rel. Yesudian v. Howard Univ., 153
F.3d 731, 739 (D.C. Cir. 1998).
To survive a motion to dismiss, plaintiffs bringing an
anti-retaliation suit under the False Claims Act must plausibly
allege that (1) they engaged in a protected activity; (2) the
employer knew about these acts; and (3) the employer discharged
them as a result of these acts. Eberhardt v. Integrated Design
& Const., Inc., 167 F.3d 861, 866 (4th Cir. 1999). Notably,
these allegations need pass only Civil Procedure Rule 8(a)’s
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relatively low notice-pleadings muster. See, e.g., Mendiondo v.
Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008);
United States ex rel. Williams v. Martin-Baker Aircraft Co., 389
F.3d 1251, 1259-60 (D.C. Cir. 2004). 1
B.
The sole element on which CHS based its motion to dismiss
and on which the district court ostensibly dismissed the case 2 is
the first: the requirement that the Youngs plausibly allege that
they engaged in protected activity. Applying the law to the
second amended complaint, we conclude that the Youngs have
plausibly alleged that element.
To survive CHS’s motion to dismiss, the Youngs needed to
plead that they engaged in protected activity, i.e., that they
acted “in furtherance of an action under” the False Claims Act
or undertook “other efforts to stop 1 or more violations” of the
False Claims Act. 31 U.S.C. § 3730(h). Protected activities
include collecting information about a possible fraud, even
before the plaintiff puts together “all the pieces of the
puzzle.” Mann v. Heckler & Koch Defense, Inc., 630 F.3d 338,
343-44 (4th Cir. 2010) (quotation marks and citation omitted).
1
This contrasts with the higher Rule 9(b) standard that
applies to straight-up Fraud Claims Act fraud claims. Id.
2
The district court stated its reasoning orally from the
bench.
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By contrast, protected activities exclude “those in which ‘an
employee . . . fabricates a tale of fraud to extract concessions
from the employer, or . . . just imagines fraud but lacks
proof.’” Id. (quoting Neal v. Honeywell Inc., 33 F.3d 860, 864
(7th Cir. 1994)).
In United States v. Triple Canopy, Inc., this Court
recently shed additional light on what might qualify as
protected activity. 775 F.3d 628. In Triple Canopy, the
government alleged that a security contractor with primary
responsibility for ensuring the safety of servicemen and women
stationed at an airbase in a combat zone knowingly employed
guards who were unable to use their weapons properly yet
presented claims to the government for payment on those
unqualified guards. Id. at 632-633. We reversed the dismissal
of the claim, holding that a plaintiff successfully “pleads a
false claim when it alleges that the contractor, with the
requisite scienter, made a request for payment under a contract
and withheld information about its noncompliance with material
contractual requirements.” Id. at 636. Logically, if making
false implied staffing certifications to the government can
constitute a False Claims Act violation, acts undertaken to, for
example, investigate, stop, or bring an action regarding such
false implied staffing certifications can constitute protected
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activity for purposes of a retaliation claim. 31 U.S.C. §
3730(h).
Our review of the Youngs’ second amended complaint leads us
to conclude that they have plausibly pled the protected activity
element. They alleged, for example, that under CHS’s “$61.5
million contract with the U.S. State Department to provide
medical services at medical facilities in Iraq,” CHS was
obligated to “[e]nsure that [certain personnel] are properly
trained and certified prior to arrival in theater.” J.A. 99.
The Youngs alleged that “Mr. Young [] told [CHS’s director of
international operations] that ‘CHS management at Sather is
defrauding the government.’” J.A. 104. The Youngs pled that
Robert Young told CHS’s director of international operations
that “CHS list[ed] emergency medical technicians as scrub
technicians for surgery even though they had no surgical
experience.” Id. And “Mrs. Young emphasized ‘the potential
liability’ of reporting false employee staffing at Sather to the
State Department.” Id.
In holding that these allegations fail to state a
retaliation claim, the district court expressly relied on Glynn
v. EDO Corp., 710 F.3d 209 (4th Cir. 2013). Importantly, Glynn
predated our recent Triple Canopy decision, which bolsters the
plausibility of the Youngs’ protected activity allegations.
Specifically, in light of Triple Canopy, the Youngs’ falsified
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staffing report allegations more clearly support their having
been engaged in protected activity. Further, the retaliation at
issue in Glynn predated Congress’s broadening of 31 U.S.C.
§ 3730(h)(1) to capture not only acts done “in furtherance of an
action” under, but also “other efforts to stop 1 or more
violations” of, the False Claims Act. Finally, Glynn had
reached summary judgment, when the plaintiffs had to proffer not
just allegations but evidence, which they failed to do. By
contrast, here, we are reviewing a decision on a motion to
dismiss, and the Youngs’ allegations alone are our focus.
At this stage, we are obligated to view only the Youngs’
pleadings, and to view them generously in the Youngs’ favor.
Pub. Employees’ Ret. Ass’n of Colo. v. Deloitte & Touche LLP,
551 F.3d 305, 311 (4th Cir. 2009). Doing so, we conclude that
the Youngs have sufficiently pled that they engaged in protected
activity, i.e., that they acted “in furtherance of an action”
under, or in an “effort[] to stop 1 or more violations of,” the
False Claims Act. 31 U.S.C. § 3730(h). While the Youngs’
allegations may well be insufficient to state a False Claims Act
fraud claim subject to Rule 9(b)’s heightened pleading
standards, they make no such claim. Instead, they make only a
retaliation claim subject to Rule 8(a)’s notice pleadings
standard. And particularly in light of Triple Canopy, their
allegations suffice to survive CHS’s motion to dismiss.
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III.
For the reasons explained above, the district court’s
dismissal of the Youngs’ second amended complaint is reversed,
and the case is remanded for further proceedings.
REVERSED AND REMANDED
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