Slav Ligai v. ESCO Technologies, Inc., et a ( 2015 )

Case: 14-20637 Document: 00513141242 Page: 1 Date Filed: 08/04/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 14-20637 August 4, 2015
Lyle W. Cayce
Clerk
United States of America, ex rel, SLAV LIGAI; TATIANA LIGAI,
Plaintiffs - Appellants
v.
ESCO TECHNOLOGIES, INCORPORATED; ETS-LINDGREN, L.P.,
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:11-CV-2973
Before JOLLY, HIGGINBOTHAM, and DAVIS, Circuit Judges.
PER CURIAM:*
In their complaint before the district court, plaintiffs Slav and Tatiana
Ligai claimed, in essence, that defendant ETS-Lindgren, L.P.—their former
employer—and its parent company, ESCO Technologies, Inc., violated the
False Claims Act (FCA) by (1) submitting false claims to the federal
government for payment; and (2) firing them in retaliation for Slav Ligai’s
internal reports of those false claims. See 31 U.S.C. §§ 3729(a)(1)(A)–(B),
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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No. 14-20637
3730(h). The district court dismissed the complaint under Federal Rules of
Civil Procedure 12(b)(6) and 9(b), and the Ligais appealed.
After reviewing the briefs, pertinent portions of the record, and the
applicable law, we hold that the district court did not err in dismissing the
complaint. More specifically, the complaint alleges that ETS violated the FCA
“by submitting false certifications to the military and government”
representing that it calibrated the government’s electromagnetic-energy-
measuring instruments in accordance with applicable industry standards and
specifications. In this circuit, however, when “[t]he linchpin of an FCA claim”
is the defendant’s false certification of compliance with a statute, regulation,
or contract, the FCA claim will succeed “only when ‘certification is a
prerequisite to obtaining’” payment from the government. United States ex rel.
Spicer v. Westbrook, 751 F.3d 354, 365–67 (5th Cir. 2014) (emphasis added)
(quoting United States ex rel. Marcy v. Rowan Co., 520 F.3d 384, 389 (5th Cir.
2008)); see also, e.g., United States ex rel. Steury v. Cardinal Health, Inc., 625
F.3d 262, 266 (5th Cir. 2010) (“We have . . . repeatedly upheld the dismissal of
false-certification claims . . . when a contractor’s compliance with federal
statutes, regulations, or contract provisions was not a ‘condition’ or
‘prerequisite’ for payment under a contract.”). As the district court noted, the
Ligais’ complaint fails to identify any specific statute, regulation, or contract
provision providing that compliance with the applicable standards, let alone
certification of compliance, was a prerequisite to the government’s payments
to ETS. See United States ex rel. Steury v. Cardinal Health, Inc., 735 F.3d 202,
206–07 (5th Cir. 2013). Given this circuit’s “prerequisite requirement,” Spicer,
751 F.3d at 366 (internal quotation marks omitted), then, the district court did
not err in dismissing the Ligais’ claims under §§ 3729(a)(1)(A)–(B).
Nor did the district court err in dismissing the Ligais’ retaliation claim
under § 3730(h). As the district court explained, the complaint fails adequately
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to allege that, at the time of the Ligais’ firing, ETS knew that the Ligais had
engaged in any activity protected by the FCA—an essential element of an FCA
retaliation claim. See United States ex rel. Patton v. Shaw Servs., L.L.C., 418
F. App’x 366, 371–72 (5th Cir. 2011) (“To bring an FCA retaliation claim for
his termination, [the plaintiff is] required to show [1] that he engaged in
activity protected under the statute, [2] that his employer knew he engaged in
protected activity, and [3] that he was discharged because of it.” (citing
Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994))).
The complaint was still under seal—and thus unknown to ETS—when the
Ligais were fired. See § 3730(b)(2) (providing that FCA complaints filed by
private persons “be filed in camera” and “remain under seal for at least 60
days”). And, although Slav Ligai repeatedly reported to his superiors ETS’s
allegedly substandard calibration practices, none of his reports contained “any
suggestion that [he] was attempting to expose illegality or fraud within the
meaning of the FCA.” Patton, 418 F. App’x at 372; see also Robertson, 32 F.3d
at 951 (holding that the plaintiff’s internal reports did not constitute protected
activity in part because the plaintiff “admitted that he never used the terms
‘illegal,’ ‘unlawful,’ or ‘qui tam action’ in characterizing his concerns”).
Accordingly, although Slav Ligai’s internal reports exhibit a concern for the
quality of calibration work provided to the government—work that can be
crucial to the safety and efficacy of the nation’s military—the district court did
not err in concluding that the expressed concerns did not rise to the level of
protected activity under the FCA.
Thus, essentially for the reasons given by the district court, the district
court’s judgment is, in all respects,
AFFIRMED.
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