United States Ex Rel. Scott v. Pacific Architects & Engineers, Inc. , 270 F. Supp. 3d 146 ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA, ex
rel. PATRICIA SCOTT and JOHN L.
TUDBURY,
Plaintiffs,
v.
Civil Action No. 13-1844 (CKK)
PACIFIC ARCHITECTS AND
ENGINEERS (PAE), INC. dba PAE
Government Services, Inc, aka PAE
Group,
Defendant.
MEMORANDUM OPINION AND ORDER
(September 13, 2017)
In this action under the False Claims Act (“FCA”), 31 U.S.C. §§ 3729–3733,
Relators Patricia Scott and John L. Turbury principally allege that Defendant Pacific
Architects and Engineers, Inc. (“PAE”) engaged in improper billing practices in Beirut,
Lebanon pursuant to civil police training contracts awarded by the Department of State.
Pending before the Court is Defendant’s [33] Motion to Dismiss the Second Amended
Complaint, brought pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). Upon
consideration of the pleadings, 1 the relevant legal authorities, and the record for purposes
1
The Court’s consideration has focused on the following documents:
• Second Am. Compl., ECF No. 30 (“Compl.”);
• Mem. of P&A in Supp. of Mot. to Dismiss the Second Am. Compl., ECF No. 33
(“Def.’s Mem.”);
• Mem. in Supp. of Opp’n to Def.’s Mot. to Dismiss Relators’ Second. Am. Compl.,
ECF No. 34-1 (“Opp’n Mem.”);
• Reply Mem. in Response to Pl.’s Opp’n to Def.’s Mot. to Dismiss the Second Am.
Compl., ECF No. 35 (“Reply Mem.”);
• Statement of Material Disclosure by Patricia Scott, ECF No. 1 at 17–30 (“Ex. A”);
• Statement of Material Disclosure by John L. Tudbury, ECF No. 1 at 32–40 (“Ex.
B”).
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of the pending motion, the [33] Motion to Dismiss is GRANTED-IN-PART and
DENIED-IN-PART. As explained further below, Relators’ claim pursuant to section
3729(a)(1)(G), and Relator Tudbury’s claim pursuant to section 3730(h), are dismissed
without prejudice. However, Relators have stated viable claims pursuant to sections
3729(a)(1)(A) and 3729(a)(1)(B), and Relator Scott has stated a viable retaliation claim
pursuant to section 3730(h).
I. BACKGROUND
The following factual narrative is gleaned from the allegations of the complaint,
which are taken as true solely for purposes of the pending motion.
Defendant is “a company operating in 45 countries that has many contracts with
the United States for logistics, construction, services including peace keeping, justice
programs, capacity building, and international policing programs.” Compl. ¶ 8. Since 2007,
the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs
(“INL”) has awarded Defendant contracts to provide civil police training and
administrative services in Beirut, Lebanon, among other locations around the world. Id. ¶
9. Relator Scott worked for Defendant in Lebanon from February to August 2011 as a
Human Resource and Administrative Manager. Ex. A, ¶ 3. Relator Tudbury worked for
Defendant in Lebanon from October 2009 to October 2011 as an International Police
Trainer. Ex. B, ¶ 3. The crux of Relators’ allegations is that from approximately December
2007 to December 2011, Defendant submitted false claims for reimbursement, on a
monthly basis, pursuant to the civilian police contracts awarded by INL. Relators allege
that this conduct was facilitated by PAE employees Thomas Barnes, who was a Deputy
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Program Manager in Lebanon, and Dan Moritz, who was a Program Manager in Lebanon.
Compl. ¶ 12.
In particular, Relators allege that Defendant routinely falsified GSA 139 forms,
which Defendant used to record the hours worked by its personnel and to seek
compensation when invoicing the government. Compl. ¶ 16. Several strategies were
allegedly used to have personnel record hours when they were not actually working. One
such strategy was a system of “team building” exercises. Id. ¶ 35. According to the
complaint, PAE management would “send out emails for ‘team building’ events as a facade
to hide the fact that their employees were going on hikes and sightseeing (including trips
to Byblos and other sites) and shopping trips, all the while billing hours worked to the U.S.
Government.” Id. At a June 2011 meeting, Mr. Moritz allegedly suggested how certain
non-work could be called “team building” and thereby invoiced to the government. Id. ¶
36. Relator Scott recalls that Mr. Barnes said that “you have to be ‘creative’ with your
billing and . . . gave the example that if you go to the mall you should record the time on
the timesheet and call it ‘Team Building.’” Id. ¶ 37. According to Relator Scott, although
training classes were not held on Friday or Saturday, Defendant “billed the government
using fictitious time sheets [that] they instructed the employees to fill out as if they worked
full days. Instead of working, employees went out on the town. This was done with the
knowledge, approval and participation of management.” Ex. A, ¶ 10.
Another alleged strategy was to mark employees as “available” for work, and
thereby bill for their services, even though they were not actually present and ready to
work. Compl. ¶ 34. In particular, Relator Scott alleges that Lebanese nationals employed
by Defendant did not work on Saturdays, but that Defendant nonetheless billed for those
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days. Ex. A, ¶ 24. On other occasions, Relator Scott was allegedly required to mark
employees as “available” for work, even though they were not. Id. The complaint lists
numerous examples of this behavior, by employee name and date. Compl. ¶ 34. This
allegation is corroborated by the statement of Relator Tudbury, who alleges that “we were
supposed to submit time sheets for 8 hours of work, 6 days a week, which is what the
contract with [the Department of State] called for.” Ex. B, ¶ 9. He recounts that although
“we were required to have academies for local police on Saturdays, there were no
academies on Saturdays when I worked there. This was because we had no cadets (locals)
who were there on that day. [Defendant] was aware [that] the cadets were off on Saturdays
due to Lebanese custom and religious practices.” Id. ¶ 11. According to Relator Tudbury,
out of approximately “70 foreign workers, there were about 50 who were billing for
Saturdays and for 2 week breaks where no work was done.” Id. ¶ 19. Harkening back to
Relator Scott’s allegations regarding the “team building” strategy, Relator Tudbury alleges
that Defendant instructed him to find another way to bill time on Saturdays, such as by
going to the gym and checking his emails, and labeling the time as “Team Building.” Id. ¶
13. He recalls a particular occasion on which Mr. Moritz and Mr. Barnes provided
suggestions for how to address time billing issues with auditors. Id. ¶ 14. One suggestion
was that if a “company guy calls for [a] team meeting, [and it] only lasts an hour, [you] can
charge 8 hours.” Id. According to Relator Tudbury, Mr. Moritz and Mr. Barnes referred to
this practice as “creative billing.” Id.
Another alleged example of billing impropriety occurred between December 2009
and January 2010. According to the complaint, “Defendant submitted time sheets for the
period of December 28, 2009 through January 31, 2010 requesting reimbursement for time
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worked by its employees who worked as ‘International Trainers’ for the period of
December 15, 2009 through January 26, 2010 even though Defendant knew [that]
International Trainers did not work from December 15, 2009 through January 26, 2010 as
they were not scheduled to do so nor were any . . . classes . . . held during this period.”
Compl. ¶ 27. The complaint provides a list of trainer names, dates, and the number of hours
allegedly billed inappropriately to the government. Id. Similar allegations are made for
several other time periods. Id. ¶¶ 28–29.
Other improprieties are also alleged. According to the complaint, “Relator
Tudbury and other employees were instructed by PAE management (and specifically David
Kynoch) to submit time sheets prior to the end of the period of the time sheet—thus
requiring PAE employees to fabricate at least one week of time worked.” Id. ¶ 30. The
complaint specifies which of Relator Tudbury’s timesheets were affected by this practice.
Id. Relators also allege that Defendant hired personnel in Lebanon that did not meet the
minimum requirements for their jobs, and three specific examples are provided. Id. ¶¶ 42–
48. They further allege that on several occasions, drivers paid for by the government were
used by Defendant’s employees—in particular, Mr. Barnes—for recreational purposes
unrelated to government work. Id. ¶ 49. Three specific examples, with dates, descriptions,
and sources of information, are provided. Id. Relators also allege that Defendant
encouraged employees to purchase exorbitantly priced airfare, despite the availability of
lower-priced options, because Defendant received ten percent of the purchase price. This
practice was allegedly contrary to Defendant’s internal policy and the Fly America Act, 49
U.S.C. § 40118. Id. ¶¶ 50–56. The specifics of two tickets allegedly purchased pursuant to
this practice are described in the complaint. Id. ¶ 56.
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Finally, Relators allege that they were terminated in retaliation for their efforts to
investigate the allegedly fraudulent activities described above. Id. ¶¶ 57–75.
II. LEGAL STANDARD
A. Motion to Dismiss for Failure to State a Claim
Defendant moves to dismiss the complaint for “failure to state a claim upon which
relief can be granted” pursuant to Federal Rule of Civil Procedure 12(b)(6). “[A] complaint
[does not] suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual
enhancement.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 557 (2007)). Rather, a complaint must contain sufficient factual
allegations that, if accepted as true, “state a claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570. “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S. at 678.
In deciding a Rule 12(b)(6) motion, a court may consider “the facts alleged in the
complaint, documents attached as exhibits or incorporated by reference in the complaint,”
or “documents upon which the plaintiff’s complaint necessarily relies even if the document
is produced not by the plaintiff in the complaint but by the defendant in
a motion to dismiss.” Ward v. District of Columbia Dep’t of Youth Rehab. Servs., 768 F.
Supp. 2d 117, 119 (D.D.C. 2011) (internal quotation marks omitted). The Court shall
consider for purposes of the pending motion the Statement of Material Disclosure by
Patricia Scott, ECF No. 1 at 17–30, and the Statement of Material Disclosure by John L.
Tudbury, id. at 32–40. These documents are expressly incorporated by reference in the
complaint. See Compl. ¶ 25.
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B. Pleading a Fraud Claim Pursuant to Federal Rule of Civil Procedure 9(b)
“Complaints brought under the FCA must . . . comply with Rule 9(b).” United
States ex rel. Landis v. Tailwind Sports Corp., 51 F. Supp. 3d 9, 49 (D.D.C. 2014) (citing
United States ex rel. Totten v. Bombardier Corp., 286 F.3d 542, 551–52 (D.C. Cir. 2002)).
Rule 9(b) states that “[i]n alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.” “Reading Rule 9(b) together with Rule
8’s requirement that allegations be ‘short and plain,’ . . . the D.C. Circuit has required
plaintiffs to ‘state the time, place and content of the false misrepresentations, the fact
misrepresented and what was retained or given up as a consequence of the fraud,’ and to
‘identify individuals allegedly involved in the fraud.’” United States ex rel. Morsell v.
Symantec Corp., 130 F. Supp. 3d 106, 117 (D.D.C. 2015) (citing United States ex rel.
Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251, 1256 (D.C. Cir. 2004)). “Put
more colloquially, an FCA plaintiff must identify the ‘who, what, when, where, and how
of the alleged fraud.’” United States v. Kellogg Brown & Root Servs., Inc., 800 F. Supp.
2d 143, 153 (D.D.C. 2011) (quoting U.S. ex rel. Wilson v. Kellogg Brown & Root, Inc.,
525 F.3d 370, 379 (4th Cir. 2008)).
As recently explained by the D.C. Circuit, “the point of Rule 9(b) is to ensure that
there is sufficient substance to the allegations to both afford the defendant the opportunity
to prepare a response and to warrant further judicial process.” United States ex rel. Heath
v. AT&T, Inc., 791 F.3d 112, 125 (D.C. Cir. 2015). Accordingly, “Rule 9(b) does not
inflexibly dictate adherence to a preordained checklist of ‘must have’ allegations.” Id. “In
sum, although Rule 9(b) does not require plaintiffs to allege every fact pertaining to every
instance of fraud when a scheme spans several years, defendants must be able to defend
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against the charge and not just deny that they have done anything wrong.” Williams, 389
F.3d at 1259 (internal quotation marks omitted).
III. DISCUSSION
The Court proceeds by analyzing in turn the statutory claims under the FCA that
are alleged in the complaint. Although Defendant challenges the complaint on a count-by-
count basis, many of the counts merely state different theories of recovery under the same
statutory section. To the extent the Court determines that a statutory claim can proceed on
at least one theory of liability, it offers no opinion as to the viability of the other theories
alleged in the complaint. See Tailwind, 51 F. Supp. 3d at 51 (“Because the Court concludes
the claims were false under the theory of implied certification, it need not address whether
the claims were also false under the theory of fraudulent inducement.”); United States ex
rel. Wilkins v. United Health Group, Inc., 659 F.3d 295, 313 (3d Cir. 2011) (“[W]e need
not decide whether the amended complaint states a claim under an express false
certification theory because appellants’ allegations in the amended complaint clearly state
a claim for relief under an implied false certification theory of liability.”)
A. Sections 3729(a)(1)(A) and 3729(a)(1)(B) – False Claims and Statements
Section 3729(a)(1)(A) of the FCA creates liability for “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). The prototypical case under section 3729(a)(1)(A)
is known as a “presentment” action. See Pencheng Si v. Laogai Research Found., 71 F.
Supp. 3d 73, 87 (D.D.C. 2014). The elements of a presentment claim are that “(1) the
defendant submitted or caused to be submitted a claim to the government, (2) the claim
was false, and (3) the defendant knew the claim was false.” Morsell, 130 F. Supp. 3d at
8
118 (internal quotation marks omitted). “In the paradigmatic case, a claim is false because
it involves an incorrect description of goods or services provided or a request for
reimbursement for goods or services never provided.” United States v. Sci. Applications
Int'l Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010).
Here, the Court finds that the Relators have stated a plausible claim under section
3729(a)(1)(A) that meets the requirements of Rule 9(b). In particular, Relators have
plausibly alleged that over the course of several years, Defendant billed time to the federal
government for hours that were not actually worked by its personnel in Lebanon. A specific
time period is alleged—December 2007 to December 2011—and Relators allege that
invoices were submitted on a monthly basis. Relators have described in fair detail the
allegedly fraudulent strategies by which time was inappropriately logged and invoiced. In
particular, Defendant allegedly engaged in fictitious team building exercises, marked
employees as “available” even though they were not, and billed time for training sessions
when those session were not being held. Relators have alleged that two PAE employees
advocated these practices: Thomas Barnes, a Deputy Program Manager, and Dan Moritz,
a Program Manager, both in Lebanon. And they have specified some of the particular
occasions on which Mr. Barnes and Mr. Moritz spoke in favor of these practices.
Furthermore, with respect to billing for non-existent training sessions, Relators have
alleged specific time frames during which this practice allegedly took place. True, they
have not specified every detail of every particular instance of billing fraud—but they have
provided notice of the general time period (when), the contracts and location affected (what
and where), some of the employees involved (who), and concrete details on how the fraud
was allegedly perpetrated (how). In the Court’s view, this satisfies Rules 9(b) and 12(b)(6).
9
The claim is plausible, and Defendant has been provided sufficient information in order to
mount a defense. See, e.g., United States ex rel. Tran v. Computer Scis. Corp., 53 F. Supp.
3d 104, 123 (D.D.C. 2014) (“To be sure, the complaint does not relate the specific dates
on which [defendant] submitted each of the invoices, but Rule 9(b) does not require as
much.”); United States ex rel. Harris v. Bernad, 275 F. Supp. 2d 1, 8-9 (D.D.C. 2003)
(finding that “[b]ecause the defendants’ scheme is complex and has lasted for a number of
years, the allegation of a span of time is sufficient” to survive a motion to dismiss pursuant
to Rule 9(b)); Heath, 793 F.3d at 125 (“The complaint makes clear . . . that corporate levers
were pulled; identifying precisely who pulled them is not an inexorable requirement of
Rule 9(b) in all cases.”); id. at 126 ( “the precise details of individual claims are not, as a
categorical rule, an indispensable requirement of a viable False Claims Act complaint”).
Other theories of liability under section 3729(a)(1)(A) are presented in the
complaint, including certification and inducement theories, which are alternative means by
which a claim under section 3729(a)(1)(A) may proceed. Pencheng, 71 F. Supp. 3d at 87
(noting that fraudulent inducement and false certification are some of the alternative
“possible theories that can support liability under section 3729(a)(1)(A)”). Because the
Court finds that Relators have stated a viable presentment claim under section
3729(a)(1)(A), it offers no view as to the viability of those other theories.
The Court also finds that Relators have stated a viable claim pursuant to section
3729(a)(1)(B), which imposes liability on any person who “knowingly makes, uses, or
causes to be made or used, a false record or statement material to a false or fraudulent
claim.” 31 U.S.C. § 3729(a)(1)(B). This claim is “complementary” to one under section
3729(a)(1)(A), and accordingly, “the elements for a count brought under section
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3729(a)(1)(B) are practically identical to the requirements for a count brought under
section 3729(a)(1)(A).” Pencheng, 71 F. Supp. 3d at 87. The principal difference between
the two claims is that section 3729(a)(1)(A) imposes liability for false claims, while section
3729(a)(1)(B) imposes liability for a knowingly false “record or statement that was
‘material’ to a false or fraudulent claim.” Morsell, 130 F. Supp. 3d at 122 (citation omitted).
“The false statements provision is ‘designed to prevent those who make false records or
statements . . . from escaping liability solely on the ground that they did not themselves
present a claim for payment or approval.’” Id. at 122–23 (citing Totten v. Bombardier
Corp., 380 F.3d 488, 501 (D.C. Cir. 2004)). Here, for the reasons already stated, Relators
have plausibly alleged, with sufficient particularity, that Defendant submitted fraudulent
billing statements and claims to the federal government.
B. Section 3729(a)(1)(G) – “Reverse” FCA Claim
A reverse false claim arises when a person “knowingly makes, uses, or causes to
be made or used, a false record or statement material to an obligation to pay or transmit
money or property to the Government, or knowingly conceals or knowingly and improperly
avoids or decreases an obligation to pay or transmit money or property to the Government.”
31 U.S.C. § 3729(a)(1)(G). In other words, “[a] reverse false claim is any fraudulent
conduct that ‘results in no payment to the government when a payment is obligated.’”
Pencheng, 71 F. Supp. 3d at 88 (quoting Hoyte v. Am. Nat’l Red Cross, 518 F.3d 61, 63
n.1 (D.C. Cir. 2008)) (internal quotation marks omitted). “Whereas a traditional false claim
action involves a false or fraudulent statement made to the government to support a claim
for money from the government, a typical reverse false claim action involves a defendant
11
knowingly making a false statement in order to avoid having to pay the government when
payment is otherwise due.” Id. (emphasis in original).
Here, Relators attempt to stake out a reverse FCA claim by alleging that Defendant
“knowingly . . . submitted invoices to the U.S. government which included expenses for
Relators’ medical examinations, but Defendant[] did not properly reimburse Relators for
such medical expenses.” Compl. ¶ 144. In Relators’ view, Defendant “knowingly
concealed that that the correct reimbursement amounts were not paid to Relators and
knowingly avoided reimbursement to the U.S. Government for amounts not reimbursed to
Relators.” Id. ¶ 145. In other words, Defendant allegedly failed to reimburse the
government for the amounts that Defendant improperly received from the government for
medical examinations. This line of reasoning, however, would turn every direct FCA claim
pursuant to section 3729(a)(1)(A) into a “reverse” claim pursuant to section 3729(a)(1)(G),
for the simple reason that whenever funds are fraudulently obtained, the recipient of those
funds can be described as depriving the government of the funds. Consequently, this Court
has previously held that the mere allegation “that Defendants fraudulently concealed their
original false claim . . . and thereby prevented the government from discovering that fraud
is not by itself enough to establish an ‘obligation’ to return the credit for the purposes of a
reverse false claim action.” United States v. Newman, No. CV 16-1169 (CKK), 2017 WL
3575848, at *9 (D.D.C. Aug. 17, 2017); see also Pencheng, 71 F. Supp. 3d at 97 (“if the
conduct that gives rise to a traditional presentment or false statement action also satisfies
the demands of section 3729(a)(1)(G), then there would be nothing ‘reverse’ about an
12
action brought under that latter section of the FCA”). Accordingly, the Court shall dismiss
without prejudice Relators’ claim pursuant section 3729(a)(1)(G). 2
C. Section 3730(h) – Retaliation under the FCA
To state a retaliation claim pursuant to section 3730(h) of the FCA, “the employee
must show: (1) that he engaged in protected activity (‘acts done . . . in furtherance of an
action under this section’); and (2) that he experienced discrimination ‘because of’ his
protected activity.” Shekoyan v. Sibley Int’l, 409 F.3d 414, 422 (D.C. Cir. 2005) (quoting
31 U.S.C. § 3730(h)). As to the first element, “while the employee must be investigating
matters which are calculated, or reasonably could lead, to a viable FCA action, it is not
necessary for a plaintiff to know that the investigation could lead to a False Claims Act
suit.” Id. (internal quotation marks, citations, and alterations omitted). Nonetheless,
“[m]ere dissatisfaction with one’s treatment on the job is not . . . enough.” United States ex
rel. Yesudian v. Howard Univ., 153 F.3d 731, 740 (D.C. Cir. 1998). “Nor is an employee’s
investigation of nothing more than his employer’s non-compliance with federal or state
regulations. . . . To be covered by the False Claims Act, the plaintiff’s investigation must
concern ‘false or fraudulent’ claims.” Id. (citations omitted). Furthermore, “[t]o establish
the second element, the employee must demonstrate that the employer had knowledge of
2
Defendant asks that, to the extent claims are dismissed, that the dismissal be with
prejudice. Def.’s Mem. at 34. “[T]he standard for dismissing a complaint with prejudice is
high: dismissal with prejudice is warranted only when the allegation of other facts
consistent with the challenged pleading could not possibly cure the deficiency.” Rudder v.
Williams, 666 F.3d 790, 794 (D.C. Cir. 2012) (internal quotation marks and alterations in
original omitted). Here, the Court is not convinced that the provision of additional factual
allegations would not serve to cure the deficiencies with the complaint identified by the
Court. Accordingly, the deficient claims shall be dismissed without prejudice.
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the employee’s protected activity and that the retaliation was motivated by the protected
activity.” Shekoyan, 409 F.3d at 422.
With respect to Relator Scott, Defendant contends that because she “was a Human
Resource and Administrative Manager,” and because “she was responsible for reviewing
employee timesheets and accountability reports,” “[i]nsofar as she complained about
‘improper’ billing of labor costs or other potential FCA violations, Scott was merely
informing her supervisors of a problem, not engaging in protected activity.” Def.’s Mem.
at 33. Defendant further contends that Relators have failed to establish a causal link
between the protected activity and Relator Scott’s termination, “because she admits in her
declaration that [the Department of State] (not PAE) eliminated her position on the
Lebanon Task Order.” Id.
“[P]laintiffs alleging that performance of their normal job responsibilities
constitutes protected activity must overcome the presumption that they are merely acting
in accordance with their employment obligations to put their employers on notice.”
Williams, 389 F.3d at 1261 (internal quotation marks omitted). “While threatening to file
a qui tam suit or to make a report to the government clearly is one way to make an employer
aware, it is not the only way, as when an employee acts outside her normal job
responsibilities or alerts a party outside the usual chain of command, such action may
suffice to notify the employer that the employee is engaging in protected activity . . . .”
Omwenga v. United Nations Found., --- F. Supp. 3d ---, No. 15-CV-0786 (TSC), 2017 WL
1154954, at *2 (D.D.C. Mar. 27, 2017) (internal quotation marks, citations, and alterations
omitted). Here, Relator Scott alleges that she was expressly told by her supervisor that she
was acting outside the scope of her employment by raising concerns regarding Defendant’s
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billing practices. See Ex. A, ¶ 15 (“I complained to Mr. Barnes . . . about what was going
on with the falsification of time sheets . . . . Barnes sent me an email saying [that] I am not
[the] HR manager, just the Administrative Manager.”). Consequently, and contrary to
Defendant’s position, there is no real question that Relator Scott has plausibly alleged that
Defendant was on notice of her investigatory activities, even though those activities, at
least theoretically, could have been part of her job description. Furthermore, Relator Scott
has plausibly alleged a causal connection between her investigatory activities and her
termination. In particular, Relator Scott alleges that after she “wrote a complaint to the
company about billing fraud . . . Barnes start[ed] saying [that the Department of State] was
going to eliminate [her] position.” Id. ¶ 40. She further alleges that “[a]t one time [the
Department of State was] apparently going to eliminate [her position], but PAE talked them
out of it to make more money.” Id. After Relator Scott was informed by Defendant that her
position was terminated, she was told by an official with the Department of State that he
“didn’t know [she was] there, I told them before I didn’t want anyone in that position, [I]
want [a] local national in that position.” Id. ¶ 41. Drawing all reasonable inferences in favor
of Relator Scott, and taking these allegations as true, the Court finds that she has plausibly
alleged that Defendant, and not the Department of State, was the driving force behind her
termination.
As to Relator Tudbury, Defendant contends that his retaliation claim cannot
proceed because he concedes that he “left PAE’s employment voluntarily on October 15,
2011 because of the problems of the time sheet fraud and misconduct of Thomas Barnes,
Deputy Program Manager.” Ex. B, ¶ 8. This statement contradicts the allegation in the
complaint that “Relator Tudbury was fired by Steve Fletcher of PAE Corporate and his last
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day of work was October 15, 2011.” Compl. ¶ 64. The Court need not “accept as true the
complaint’s factual allegations insofar as they contradict exhibits to the complaint . . . .”
Kaempe v. Myers, 367 F.3d 958, 963 (D.C. Cir. 2004).
Furthermore, the other allegations of retaliatory conduct against Relator Tudbury
are vague and conclusory. Notably, although Mr. Tudbury alleges that he was “sent home
early [on October 15, 2011] . . . [as] a direct result of reporting misconduct to PAE
concerning DPM Barnes,” this statement directly contradicts his assertion that he
voluntarily left Defendant’s employ on that date, and no additional factual details are
provided regarding the circumstances of his departure from PAE. See Acosta Orellana v.
CropLife Int’l, 711 F. Supp. 2d 81, 109 (D.D.C. 2010) (“where some allegations in the
complaint contradict other allegations, the conflicting allegations become naked assertions
devoid of further factual enhancement . . . , which therefore cannot be presumed true”
(internal quotation marks and alterations omitted)). Accordingly, the Court finds that
Relator Tudbury has failed to plausibly allege a retaliatory act, and consequently dismisses,
without prejudice, his retaliation claim pursuant section 3730(h) of the FCA. To the extent
Relator Tudbury is able to clarify the factual allegations regarding his departure from PAE,
he may seek leave to amend the complaint.
IV. CONCLUSION AND ORDER
For the foregoing reasons, the [33] Motion to Dismiss is GRANTED-IN-PART
and DENIED-IN-PART. Relators’ claim pursuant to section 3729(a)(1)(G), and Relator
Tudbury’s claim pursuant to section 3730(h), are DISMISSED WITHOUT
PREJUDICE. However, Relators have stated viable claims pursuant to sections
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3729(a)(1)(A) and 3729(a)(1)(B), and Relator Scott has stated a viable retaliation claim
pursuant to section 3730(h). 3
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
3
For the sake of clarity, the Court emphasizes that the dismissal of certain claims as ordered
herein is without prejudice to the United States. See United States’ Statement of Interest
Regarding Def.’s Mot. to Dismiss, ECF No. 24, at 2 (“the United States requests that any
order dismissing the Relators’ substantive FCA claims specify that such dismissal is
without prejudice to the United States’ ability to pursue any and all claims that may arise
based upon PAE’s conduct surrounding the CIVPOL Contract”).
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