Rebecca Musser v. Paul Quinn College ( 2019 )

Case: 19-10042 Document: 00515247463 Page: 1 Date Filed: 12/23/2019
REVISED December 23, 2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 19-10042 FILED
December 9, 2019
Lyle W. Cayce
REBECCA MUSSER, Clerk
Plaintiff - Appellant
v.
PAUL QUINN COLLEGE,
Defendant - Appellee
Appeal from the United States District Court
for the Northern District of Texas
Before CLEMENT, ELROD, and DUNCAN, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
After she was fired, Rebecca Musser sued her former employer, Paul
Quinn College, for retaliation under the False Claims Act. The college
maintains that it had legitimate reasons for terminating Musser’s
employment, including that her position was eliminated. But Musser claims
that the college retaliated against her for internally reporting allegedly
fraudulent practices by the college’s chief financial officer in securing federal
grants. The district court granted summary judgment to Paul Quinn College
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because Musser failed to establish that the stated reason for her termination
was pretext for retaliation. We affirm the district court’s judgment.
FACTS AND PROCEEDINGS
Paul Quinn College (“PQC”) is a private, historically black college in
Dallas, Texas. A major source of PQC’s funding is federal grants authorized by
Title III of the Higher Education Act of 1965, as amended, 20 U.S.C. §§ 1051et seq., which provides financial assistance to historically black colleges and
universities. In 2007, during a period of financial and organizational difficulty
for the college, PQC hired Michael Sorrell as president and tasked him with
turning things around. One of Sorrell’s first actions was to hire Antwane
Owens and his company, Excellence Through Insight, Inc. (“ETI”), to manage
and oversee the college’s finances. Owens became the acting chief financial
officer of the college, but his position was only temporary while PQC searched
for a permanent CFO.
ETI hired Musser as an independent contractor in March 2010. Although
Musser was not a certified public accountant and had no experience with
federal grants or nonprofit educational institutions, she was tasked with
providing financial and accounting services to PQC as the college’s interim
controller. Her job duties included overseeing the business office, providing
information for grant applications, handling accounts payable, reviewing grant
reports, and preparing information for auditors. In performing her duties,
Musser worked with employees of eCratchit, an accounting firm utilized by
PQC to assist with bookkeeping functions. After Musser’s contract with ETI
ended, PQC hired her directly as its full-time controller, and she continued to
work under the supervision of Owens.
Almost immediately after Musser’s employment began, there were
problems with her performance. Between September 2011 through early
November 2011, Owens repeatedly counseled Musser about her
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communicating directly with staff and students without his approval, her
failure to supervise an employee in the business office who was submitting
inaccurate timesheets, her inability to explain financial issues clearly and
concisely, and her failure to accomplish assigned tasks. These issues were no
secret to Sorrell and his chief of staff, Lori Price.
Owens’s problems with Musser eventually became mutual. On
November 10, 2011, Musser sent an e-mail to Owens questioning whether he
performed federal grant drawdowns properly. Musser admits that she did not
expressly accuse Owens of fraud or illegal activity in this e-mail. Meanwhile,
Owens and Sorrell were attending an out-of-town conference. While at the
conference, Owens and Sorrell discussed Musser’s poor performance. And on
November 11, 2011, Owens submitted a memorandum to Sorrell
recommending that Musser be fired at the end of the year. Sorrell agreed.
That same day, Musser requested a meeting with Sorrell so she could
share some “important information” with him. Sorrell did not immediately
respond to her request. A few days later, on November 14, Musser e-mailed
Owens explaining that there appeared to be a discrepancy in the amount of
grant money that PQC was claiming versus the amount that PQC was
spending. Owens asked Musser to prepare a spreadsheet showing the
discrepancy, but he could not understand the spreadsheet that she created.
On November 15, Musser followed up on her request for a meeting with
Sorrell. She explained that she wanted to alert his attention to something that
could be a “very serious risk for the college.” Sorrell was out of town, but he
told her that she could meet with Price in the meantime. Later that day,
Musser and Owens agreed to meet for coffee the following morning. During
their meeting on the morning of November 16, Owens informed Musser that
her employment would be terminated at the end of the year.
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On November 17, Musser met with Price and expressed her
apprehensions about Owens’s performance of his duties as CFO. Musser then
drafted a memorandum to Sorrell setting out all of her concerns. She delivered
the memorandum to Sorrell on November 18. Unlike her previous
communications, Musser’s memorandum explicitly accused Owens of
defrauding the federal government to secure federal funds.
Upon receiving Musser’s report, Sorrell immediately notified PQC’s
Board of Trustees, and the Board hired a law firm to conduct an independent
investigation into her allegations. On November 20, at the Board’s directive,
Sorrell placed both Owens and Musser on administrative leave with full pay
and benefits pending the results of the investigation. Sorrell was not involved
in the investigation, but he learned in January 2012 that the investigation had
concluded and no further action in response to Musser’s report was
recommended. The Board directed Sorrell to continue the search for a new CFO
and maintain Musser on paid administrative leave for the time being.
Shortly after the investigation concluded, litigation between Owens and
Musser ensued. On February 13, 2012, Owens sued Musser for falsely accusing
him of criminal conduct and violating federal law. In response, Musser
asserted counterclaims for defamation against Owens. Owens later added PQC
as a defendant, alleging that PQC was vicariously liable for Musser. The trial
court granted summary judgment to Musser on all of Owens’s claims in
October 2013, and Owens settled Musser’s counterclaims a few months later.
The court entered a final judgment against Owens and in favor of Musser and
PQC on April 21, 2014. Musser remained on paid administrative leave for the
duration of the Owens litigation. And because she was an employee, PQC paid
her legal bills.
Four months later, on August 19, 2014, Price sent Musser a letter
informing her that her administrative leave had ended and that her
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employment would be terminated at the end of the month. The letter stated
that Musser’s services were no longer needed because “the business office has
been reorganized and the position of controller has been eliminated.”
Musser filed this lawsuit against PQC on August 16, 2017. She advanced
a single claim for retaliation in violation of the False Claims Act, challenging
the August 2014 decision to terminate her employment. The district court held
that Musser failed to establish that the proffered reason for her termination
was pretext for retaliation and granted summary judgment to PQC. Musser
now appeals.
STANDARD OF REVIEW
We review a district court’s grant of summary judgment de novo. Bridges
v. Empire Scaffold, L.L.C., 875 F.3d 222, 225 (5th Cir. 2017). “Summary
judgment is appropriate if ‘there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.’” Id. (quoting Fed.
R. Civ. P. 56(a)). A court should enter summary judgment “against a party who
fails to make a showing sufficient to establish the existence of an element
essential to that party’s case, and on which that party will bear the burden of
proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
DISCUSSION
The False Claims Act (“FCA”) makes it illegal to knowingly present to
the federal government a false or fraudulent claim for payment. 31 U.S.C.
§ 3729(a)(1)(A). To encourage those with knowledge of fraud to come forward,
the FCA contains a “whistleblower” provision. Robertson v. Bell Helicopter
Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). In particular, the statute
provides a cause of action for employees who experience adverse employment
actions “because of lawful acts done by the employee . . . in furtherance of an
action under [the FCA] or other efforts to stop [one] or more violations of [the
FCA].” 31 U.S.C. § 3730(h)(1).
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We apply the familiar McDonnell Douglas burden-shifting framework to
FCA retaliation claims. Garcia v. Prof’l Contract Servs., Inc., 938 F.3d 236, 240
(5th Cir. 2019); see also McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802–
04 (1973). “Under this framework, the employee must first establish a prima
facie case of retaliation by showing: (1) that he engaged in protected activity;
(2) that the employer knew about the protected activity; and (3) retaliation
because of the protected activity.” Garcia, 938 F.3d at 241. If the employee
establishes a prima facie case, “the burden shifts to the employer to state a
legitimate, non-retaliatory reason for its decision.” Id. (quoting United States
ex rel. King v. Solvay Pharm., Inc., 871 F.3d 318, 332 (5th Cir. 2017) (per
curiam)). After the employer articulates a legitimate reason, “the burden shifts
back to the employee to demonstrate that the employer’s reason is actually a
pretext for retaliation.” Id. (quoting Solvay, 871 F.3d at 332).
Like the district court, we assume without deciding that Musser
established a prima facie case of retaliation. The burden thus shifts to PQC to
proffer a legitimate, non-retaliatory reason for Musser’s termination. “This
burden is one of production, not persuasion,” and it involves no credibility
assessment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142
(2000). PQC may meet this burden by setting forth, through admissible
evidence, “reasons for its actions which, if believed by the trier of fact, would
support a finding that unlawful [retaliation] was not the cause of the
employment action.” St. Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 507 (1993).
PQC offered evidence of a legitimate, non-retaliatory reason for Musser’s
termination: a reorganization of the college’s business office resulting in the
elimination of Musser’s position. Elimination of an employee’s position as a
result of a reorganization or a reduction-in-force is a legitimate, non-retaliatory
reason for the employee’s termination. See, e.g., Diaz v. Kaplan Higher Educ.,
L.L.C., 820 F.3d 172, 176 (5th Cir. 2016) (holding company-wide reduction-in-
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force was a legitimate, non-retaliatory reason for termination); Berquist v.
Wash. Mut. Bank, 500 F.3d 344, 356–57 (5th Cir. 2007) (holding reorganization
of a department that resulted in elimination of the plaintiff’s position was a
legitimate, non-discriminatory reason for termination). PQC also produced
evidence of an additional reason for Musser’s termination that is not
inconsistent with the first: her poor performance. “Job performance is a
legitimate, non-retaliatory reason for termination.” LeMaire v. La. Dep’t of
Transp. & Dev., 480 F.3d 383, 391 (5th Cir. 2007) (citing Perez v. Region 20
Educ. Serv. Ctr., 307 F.3d 318, 326 (5th Cir. 2002)).
Because PQC articulated legitimate, non-retaliatory reasons for its
decision, the burden shifts back to Musser to establish that PQC’s proffered
reasons are actually pretext for retaliation, which Musser “accomplishes by
showing that the adverse action would not have occurred ‘but for’ [PQC’s]
retaliatory motive.” Feist v. La., Dep’t of Justice, Office of the Att’y Gen., 730
F.3d 450, 454 (5th Cir. 2013) (quoting Univ. of Tex. Sw. Med. Ctr. v. Nassar,
570 U.S. 338, 360 (2013)). In order to avoid summary judgment, Musser must
show that there is a “conflict in substantial evidence” on this ultimate issue.
Hernandez v. Yellow Transp., Inc., 670 F.3d 644, 658 (5th Cir. 2012) (quoting
Long v. Eastfield Coll., 88 F.3d 300, 308 (5th Cir. 1996)). “Evidence is
‘substantial’ if it is of such quality and weight that reasonable and fair-minded
men in the exercise of impartial judgment might reach different conclusions.”
Id. (quoting Long, 88 F.3d at 308).
A review of our prior decisions in retaliation cases sheds light on the
quality of evidence needed to survive summary judgment at the pretext stage.
In Solvay, for example, we held that the plaintiffs’ evidence of being terminated
three-and-a-half months after making complaints of FCA violations combined
with their positive performance reviews prior to their terminations was not
enough to create a dispute of material fact regarding pretext. Solvay, 871 F.3d
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at 334; see also Strong v. Univ. Healthcare Sys., L.L.C., 482 F.3d 802, 808 (5th
Cir. 2007) (affirming the district court’s grant of summary judgment because
the plaintiff’s only evidence of pretext was temporal proximity).
On the other hand, in Garcia, we held that the plaintiff pointed to enough
evidence of pretext to survive summary judgment. Garcia, 938 F.3d at 244. The
plaintiff’s evidence in that case consisted of temporal proximity between his
protected activity and termination, his dispute of facts leading up to his
termination, disparate treatment of a similarly situated employee, harassment
from his supervisor after the company knew of his protected activity, the stated
reason for the termination had been known to the company for years, and the
company stood to lose millions of dollars if its conduct was discovered. Id.; see
also Shackelford v. Deloitte & Touche, LLP, 190 F.3d 398, 409 (5th Cir. 1999)
(holding that evidence of tight temporal proximity, unfounded performance
concerns, warnings from other employees not to engage in the protected
activity, and disparate treatment was enough to create an issue of fact
regarding pretext). 1
Musser’s evidence falls far short of the body of evidence described in
Garcia. On appeal, she argues that the following evidence demonstrates that
PQC’s explanation for terminating her was pretext for retaliation: (1) her
position was eliminated while she was on administrative leave as a result of
her protected activity; (2) PQC’s proffered explanation is unworthy of credence
because there is conflicting testimony regarding who assumed her job duties
and no evidence that eliminating her position saved the college money;
(3) Sorrell had a retaliatory motive because he was friends with Owens;
1 In determining whether Musser has produced sufficient evidence of pretext to
survive summary judgment, cases involving retaliation claims under Title VII and the Age
Discrimination in Employment Act inform our analysis because such claims involve the same
but-for causation requirement at issue in FCA retaliation claims. See Solvay, 871 F.3d at 334
n.17 (citing Nassar, 570 U.S. at 350–52).
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(4) PQC presented shifting reasons for her termination; and (5) temporal
proximity between the finality of the litigation against Owens and her
termination. Taking this evidence in its totality and in the light most favorable
to Musser, we find that Musser fails to create a genuine dispute as to whether
she would not have been fired but for PQC’s alleged retaliation.
First, Musser attempts to establish causation by arguing that PQC
would not have eliminated her position had she not engaged in protected
activity. Essentially, Musser argues that because PQC discovered that her
position was unnecessary while she was on leave, and because she was initially
placed on leave to allow the Board to investigate her report of suspected FCA
violations, she was fired “because of” her protected activity. Musser cites no
authority to support such an attenuated theory of causation in retaliation
cases. 2 And an examination of the purpose of the FCA’s whistleblower
provision reveals the flaw in Musser’s argument.
The purpose of the whistleblower provision is to promote enforcement of
the FCA by “assur[ing] those who may be considering exposing fraud that they
are legally protected from retaliatory acts.” S. Rep. No. 99-345, at 34 (1986), as
reprinted in 1986 U.S.C.C.A.N. 5266, 5299. For this reason, the statute
prohibits an employer from retaliating against an employee because of the
employee’s protected activity; it does not prevent the employer from taking
2 Other circuit courts have rejected similar arguments. See, e.g., Schaaf v. Smithkline
Beecham Corp., 602 F.3d 1236, 1242–43 (11th Cir. 2010) (employer did not violate the Family
and Medical Leave Act by demoting employee for professional deficiencies discovered while
employee was on leave, even if employer would not have discovered those deficiencies had
employee not been on leave); Kohls v. Beverly Enters. Wis., Inc., 259 F.3d 799, 806 (7th Cir.
2001) (“The fact that the leave permitted the employer to discover the problems can not
logically be a bar to the employer’s ability to fire the deficient employee.”); Smith v. F.W.
Morse & Co., 76 F.3d 413, 424–25 & 425 n.9 (1st Cir. 1996) (rejecting employee’s argument
that “Title VII prohibits an employer from dismissing an employee while she is on maternity
leave even if the employer, in the process of rationalizing its work force, discovers that her
position is redundant and eliminates it for that reason”).
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adverse employment actions for legitimate reasons unrelated to the protected
activity. In the latter situation, the employer’s decision is motivated not by the
protected activity, but by other reasons that would have prompted the adverse
action regardless of whether the employee engaged in protected activity. Put
simply, the fact that Musser’s position was eliminated while she was on leave
after reporting suspected FCA violations does not create a dispute as to
whether PQC’s “desire to retaliate was the but-for cause of the challenged
employment action.” Nassar, 570 U.S. at 352 (emphasis added).
Second, Musser fails to cast doubt on PQC’s explanation that her position
was eliminated as part of a legitimate reorganization. There is no conflict in
testimony regarding the reallocation of Musser’s job duties. Sorrell testified
that Musser’s job “was capable of being absorbed in several places, one of them
being eCratchit,” the outside accounting firm used by PQC throughout the
course of Musser’s employment. Price testified that she began working with
eCratchit in Musser’s place. Together, Price and eCratchit assumed Musser’s
job duties. There is no dispute that PQC has not hired a new controller to
replace Musser. See Dulin v. Dover Elevator Co., 139 F.3d 898 (5th Cir. 1998)
(unpublished) (“[A]pplicable case law holds that when an employee’s position
has been eliminated and the job duties reassigned to existing employees, that
employee has not been replaced.”).
Musser also faults Sorrell for being uncertain whether the decision to
eliminate her position and redistribute her duties saved the college any money.
But PQC never claimed to eliminate Musser’s position solely for financial
reasons. In the years immediately before and after Musser’s tenure, PQC was
in the midst of a financial and organizational overhaul. Sorrell and the Board
regularly discussed restructuring the college’s business office—not only to
“save money” but also to increase efficiency by “streamlining the staff.” And
even if the sole reason for PQC’s decision was to save money, Musser’s
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argument is unsound because it challenges the wisdom of PQC’s decision
rather than the sincerity of its stated motivation. “Our job as a reviewing court
conducting a pretext analysis is not to engage in second-guessing of an
employer’s business decisions.” LeMaire, 480 F.3d at 391. Evidence that the
decision to eliminate Musser’s position did not ultimately achieve cost savings
“would establish only that the proffered justification was mistaken, not
dishonest, which is the key to pretext.” Easterling v. Tensas Par. Sch. Bd., 682
F. App’x 318, 323 (5th Cir. 2017) (citing Waggoner v. City of Garland, 987 F.2d
1160, 1166 (5th Cir. 1993)).
Third, Musser asserts that Sorrell had a retaliatory motive because he
was friends with Owens. The only evidence Musser cites to support this
argument is an e-mail conversation between Owens and Sorrell, in which
Sorrell agreed to waive any conflict of interest to allow PQC’s outside counsel
to represent Owens in his lawsuit against Musser. This waiver is insufficient
to demonstrate that Sorrell harbored a retaliatory motive against Musser.
Fourth, Musser argues that PQC’s “shifting reasons” for her termination
support an inference of pretext. It is true that “[a]n employer’s inconsistent
explanations for an employment decision” may give rise to an inference of
pretext in some cases. Caldwell v. KHOU-TV, 850 F.3d 237, 242 (5th Cir. 2017);
accord Burrell v. Dr. Pepper/Seven Up Bottling Grp., Inc., 482 F.3d 408, 412
n.11 (5th Cir. 2007). But in those cases, the employers gave fundamentally
different reasons for their decisions on appeal than they did in the district court
or before litigation commenced. See Hassen v. Ruston La. Hosp. Co., 932 F.3d
353, 356–57 (5th Cir. 2019) (citing Caldwell, 850 F.3d at 242; Burrell, 482 F.3d
at 413). In contrast, PQC’s story has not changed during the course of this
litigation. Both at the district court and on appeal, PQC explained that Sorrell
initially decided to fire Musser in November 2011 for poor performance, and
Musser was ultimately terminated in August 2014 after PQC determined that
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her position was unnecessary and eliminated it. These reasons are not
inconsistent or contradictory. Indeed, Musser’s history of poor performance
could have contributed to PQC’s decision to eliminate the controller position.
Finally, Musser’s temporal-proximity argument is unavailing. We have
previously acknowledged that “temporal proximity between protected activity
and alleged retaliation is sometimes enough to establish causation at the
prima facie stage.” Porter v. Houma Terrebonne Hous. Auth. Bd. of Comm’rs,
810 F.3d 940, 948 (5th Cir. 2015). But “[t]emporal proximity alone is
insufficient” to survive summary judgment at the pretext stage in the absence
of “other significant evidence of pretext.” Solvay, 871 F.3d at 334 (first quoting
Strong, 482 F.3d at 808, and then quoting Shackelford, 190 F.3d at 409).
As explained above, Musser has not provided “other significant evidence
of pretext.” Shackelford, 190 F.3d at 409. “Thus, [she] is left with no evidence
of retaliation save temporal proximity.” Strong, 482 F.3d at 808. Even if she
were to establish “suspicious timing of [her] termination in tight proximity to
her protected activity,” Shackelford, 190 F.3d at 409, temporal proximity
standing alone is insufficient to satisfy her burden at the pretext stage, see
Strong, 482 F.3d at 808. Therefore, we need not consider the merits of her
temporal-proximity argument.
CONCLUSION
To sum up, Musser failed to show that a reasonable juror could conclude
that PQC fired her in retaliation for engaging in protected activity. Because
PQC offered a non-retaliatory explanation for Musser’s termination, and
because Musser presented no evidence of pretext, the district court’s decision
granting summary judgment in favor of PQC is AFFIRMED. 3
3 Because we conclude that Musser failed to produce sufficient evidence of pretext to
survive summary judgment, we need not and do not address PQC’s additional argument that
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Musser’s suit is barred by the three-year statute of limitations applicable to FCA retaliation
claims. See 31 U.S.C. § 3730(h)(3).