Opinion
Case No. 5:03cv1-RH/WCS
February 2, 2004
REPORT AND RECOMMENDATION
This case, filed by Plaintiff pro se, brings claims under Title VII (sexual harassment, hostile work environment, and retaliation) (count one), the Florida Private Sector Whistleblower's Act, FLA. STAT. §§ 448.101-105 (count two), and the "Federal Whistleblower's Act,", the False Claims Act, 31 U.S.C. § 3729-3733 (count three). Doc. 13 (amended complaint). Defendant filed a motion to dismiss counts two and three of the complaint. Doc. 15. Since the motion relied upon matters outside the pleadings as to count two, it was deemed to be a motion for partial summary judgment, and Defendant was ordered to file a statement of undisputed facts. Doc. 16. Defendant did so, filing a statement of facts as to which Defendant asserts there is no dispute. Doc. 19. Plaintiff filed a response to that statement of facts. Doc. 22. Plaintiff also filed responses to Defendant's motion for partial summary judgment, docs. 32, 34, and 38, and a declaration under penalty of perjury, doc. 33. Plaintiff failed to file a statement of facts, however, as instructed by the last order. Defendant's motion is ready for ruling.
Count Two
Plaintiff alleges that she was employed by Defendant, formerly known as CEN Corporation (CENCOR), from June 16, 1999, to August 24, 2001, at the Department of the United States Navy, Coastal Systems Station (CSS), in Panama City, Florida. Doc. 13, ¶ 2. Plaintiff alleges several claims arising under the Florida Private Sector Whistleblower's Act. She alleges that she was terminated from employment for objecting to unauthorized use of CSS's computers under her user accounts and for objecting to sexual harassment by her immediate supervisor, Kendall F. Smith. She alleges her termination was in violation of FLA. STAT. § 448.101(3) [sic, § 448.102(3)]. Id., ¶¶ 37 and 38.
It is undisputed that the Coastal System Station is on federal government property acquired through purchases in 1967 and earlier. Doc. 19, ¶ 4. It is also undisputed that the deeds for the land where CSS is located reserved no concurrent jurisdiction to the State of Florida. Id. and exhibit A. The land, therefore, is a federal enclave. "A federal enclave is territory which has been transferred by a state through cession or consent to the United States and over which the federal government has acquired exclusive jurisdiction." Osburn v. Morrison Knudsen Corp., 962 F. Supp. 1206, 1208 (E.D. Mo. 1997). State laws adopted after cession of property as a federal enclave "are without force or effect on the federal enclave." Lord v. Local Union No. 2088, Intern. Broth. Of Elec. Workers, AFL-CIO, 646 F.2d 1057, 1060 (5th Cir., June 4, 1981), cert. denied, 458 U.S. 1106 (1982). The Florida Private Sector Whistleblower's Act was not enacted until 1991. Chapter 91-285, Laws of Florida (1991). Thus, this state law does not apply to the Coastal System Station.
The Eleventh Circuit adopted as precedent decisions of the former Fifth Circuit rendered prior to October 1, 1981, and of Unit B of the former Fifth Circuit. Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981); Stein v. Reynolds, Inc., 667 F.2d 33, 34 (11th Cir. 1982).
Plaintiff seeks to avoid this result by arguing that she did some of her work remotely from her home and elsewhere, while not physically on the federal enclave. In Miller v. Wackenhut Services, Inc., 808 F. Supp. 697 (W.D. Mo. 1992), the court held that an intentional tort (making harassing telephone calls to the employee's home outside the federal enclave) occurred where the injury to Plaintiff's person occurred, and therefore did not occur on the federal enclave. 808 F. Supp. at 700. Here, however, Plaintiff alleges that she lost her job with Defendant after objecting to unauthorized use of CSS's computers under her user accounts and for objecting to sexual harassment by her immediate supervisor. In particular, she alleges that in May, 2001, she logged on to her computer and received a message that she was already logged on "remotely." Doc. 13, ¶ 11. She asserts that she reported this to her supervisors, Smith and Hei. Id. In other words, Plaintiff was using her computer on the federal enclave (not "remotely") and she made her objection on the federal enclave to supervisors who undoubtedly were at their place of work on the enclave.
Plaintiff also alleges that on about July 1, 1999, Smith made a "sexual request" to her in her office, on the federal enclave. Id., ¶ 6. She alleges this was repeated throughout her two years with the company. Id. Plaintiff alleges she reported this to Sandra LaBoon on July 19, 2001, when LaBoon was interviewing her. Id., ¶ 13. This interview presumably was on the federal enclave. In sum, Plaintiff's state cause of action arises as a result of employment practices on the federal enclave, and the reasoning of the Miller case does not apply. See Osburn, 962 F. Supp. At 1209 ("Any cause of action arising under the MHRA [state law] occurred as a result of defendant's employment practices on the federal enclave," distinguishing Miller.). The motion for partial summary judgment should be granted as to count two, and count two should be dismissed with prejudice.
Count Three
Defendant contends that count three should be dismissed because Plaintiff has not alleged that Defendant knowingly presented a false claim or knowingly used a false record to get a false claim paid. Dismissal of a complaint, or a portion thereof, pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted should not be ordered unless it appears beyond doubt that the Plaintiff can prove no set of facts in support of his claims which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). The court must accept as true the allegations of the complaint when ruling upon such a motion. Pro se complaints should be held to less stringent standards than those drafted by an attorney. Wright v. Newsome, 795 F.2d 964, 967 (11th Cir. 1986), citing Haines v. Kerner, 404 U.S. 519, 520-521, 92 S.Ct. 594, 596, 30 L.Ed.2d 652 (1972).
While Federal Rule of Civil Procedure 8(a) provides that a federal civil complaint need only state "a short and plain statement of the claim showing that the pleader is entitled to relief," Rule 9(b) provides that "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Rule 9(b) applies to claims brought under the False Claims Act. United States ex rel. Clausen v. Laboratory Corp. of America, Inc., 290 F.3d 1301, 1308-10 (11th Cir. 2002), cert. denied, 537 U.S. 1105 (2003). "[A]llegations of fraud 'must include facts as to time, place, and substance of the defendant's alleged fraud.'" 290 F.3d at 1308, quoting United States ex rel. Cooper v. Blue Cross Blue Shield of Fla., 19 F.3d 562, 566-67 (11th Cir. 1994) (per curiam).
Rule 9(b) is satisfied if the complaint sets forth (1) precisely what statements were made in what documents or oral representations or what omissions were made, and (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud.
290 F.3d at 1310, quoting Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001). "[I]f Rule 9(b) is to be adhered to, some indicia of reliability must be given in the complaint to support the allegation of an actual false claim for payment being made to the Government." Id., at 1311.
The heightened pleading standard is relaxed, however, "when specific 'factual information [about the fraud] is peculiarly within the defendant's knowledge or control.'" Hill v. Morehouse Medical Associates, Inc., No. 02-14429, 2003 WL 22019936, * 3 (11th Cir. Aug. 15, 2003) (citations omitted). The standard "also may be applied less stringently when the 'fraud allegedly occurred over a period of time.'" Id., *3 n. 6 (citations omitted). However, the court must be cautious with any relaxation of the heightened pleading standard because the deficiency, a copy of the contract that Defendant had with the United States and the invoices submitted for payment, presumably could be obtained from other sources, and even if not, conclusory allegations are not sufficient to warrant a relaxation of the requirements of Rule 9(b). Clausen, 290 F.3d at 1314 n. 25.
In the Clausen case, the plaintiff had alleged that a laboratory had performed "unauthorized, unnecessary or excessive medical tests," and knowingly submitted the bills for these tests to the United States. 290 F.3d at 1303. Six specific types of allegedly unnecessary procedures were alleged. Id. While the complaint was specific as to the types of alleged false claims, and even provided some names of patients, "no copies of a single actual bill or claim or payment were provided." Id., at 1306. The court held that the complaint should be dismissed because it did not "allege with any specificity if — or when — any actual improper claims were submitted to the Government. . . ." Id., at 1312. "No amounts of charges were identified. No actual dates were alleged. . . . No copy of a single bill or payment was provided." Id.
The complaint in the Hill case, another False Claims Act case, was found to be sufficient. In that case, the plaintiff alleged that defendant "routinely submitted claims for payment to the government for tests that it did not perform." 2003 WL 22019936, * 1. She alleged that diagnostic codes were changed after claims were rejected, and the claims were resubmitted, and she alleged who did it. Id. The complaint alleged that other kinds of diagnostic codes were improperly used to obtain payment. Id. Finally, it was alleged that these false claims were submitted to the Government for payment, though plaintiff alleged she could not obtain the specific claims forms. Id., * 2. The court found that these allegations were adequate. The court reasoned that unlike the plaintiff in Clausen, "Hill worked in the very department where she alleged the fraudulent billing schemes occurred — MMA's billing and coding department. Thus, she has firsthand information about MMA's internal billing practices and the manner in which the fraudulent billing schemes were implemented." Id., *4. Plaintiff alleged that "she observed" the alteration of billing codes. Id. She identified the documents in the possession of defendant. Id. She "supported her legal theory with facts describing MMA's billing process, the specific CPT and diagnosis codes that were altered for each of the five billing schemes, and the frequency of submission of each type of claim." Id. She provided the names of the persons responsible and the clinics where the codes were altered. Id. Finally, and most important, she herself was "privy to MMA's files, computer systems, and internal billing practices that are vital to her legal theory." Id. The court held that the complaint was sufficient under Rule 9(b).
While not alleged in the amended complaint, in response to the motion for summary judgment as to count three, Plaintiff argues that Defendant breached its contract with the United States by security breaches and theft of Government property, and because of these breaches of contract, was not entitled to payment. Doc. 32, ¶¶ 8, 10, 11 and 12. She argues that Defendant had contracted with the United States to provide "network security reporting at all times of its computer network," and alleges that Defendant breached this agreement. Doc. 38, ¶ 4. Plaintiff alleges that Defendant obtained a renewal of its contract by reporting to the United States that it had performed its duties under the contract. Id. Plaintiff alleges:
Plaintiff should have moved for leave to file an amended complaint. Plaintiff does not have a lawyer, however, and some latitude should be afforded to her, and it would not serve any useful purpose to require that an amended complaint be filed before ruling on the motion to dismiss.
Defendant knew it had not remitted any of Plaintiff's network security reports to government officials for further investigation as material term of contract required for payable services. Plaintiff knew of material term of contract because her former managers told her of the reporting requirements and directed her to regularly perform those requirements.Id., emphasis added.
These allegations are too general to state a claim upon which relief may be granted under the False Claims Act. While Plaintiff alleges that she was privy to the alleged security breaches and the general requirement (which seems obvious) that there not be any security breaches, Plaintiff was not privy to any of the billing practices of Defendant. She did not personally observe any of the billing practices, and has no personal knowledge of the text of the contract or the specific connection between an alleged duty to report breaches of security and payment under the contract.
As the court held in Clausen, "some indicia of reliability must be given in the complaint. . . ." 290 F.3d at 1311. A strong purpose of Rule 9(b) is to protect a defendant from "spurious charges of immoral and fraudulent behavior." Id., at 1313 n. 24. The "indicia of reliability" was provided in Hill because the claimant there had personally observed the billing practices firsthand, while that "indicia of reliability" was not provided in Clausen. Here, Plaintiff's legal theory is no more than the proposition that if there were security breaches and theft of government property, Defendant must have been improperly compensated under the contract. Were this the case, then an employee would be entitled to bring a False Claim Act claim by merely alleging a general breach of contract. "The False Claims Act does not create liability merely for a health care provider's disregard of Government regulations or improper internal policies unless, as a result of such acts, the provider knowingly asks the Government to pay amounts it does not owe." 290 F.3d at 1311.
For these reasons, the motion to dismiss count three should be granted. Dismissal should be without prejudice to give Plaintiff one more opportunity to plead this claim with the requisite specificity.
Accordingly, it is RECOMMENDED that the court GRANT Defendant's motion for summary judgment, doc. 15, as to count two, and DISMISS count two with prejudice, and GRANT Defendant's motion to dismiss count three, and DISMISS count three without prejudice.
IN CHAMBERS.