Civil Action No. 95-2282-EEO.
November 1, 1996
MEMORANDUM AND ORDER
This matter is before the court on defendant's motion for summary judgment (Doc. #36), plaintiff's motion to dismiss counts I and II (Doc. #49), and defendant's motion to strike Adler affidavit (Doc. #50). For the reasons set forth below, defendant's motion for summary judgment on counts III and IV will be granted; defendant's motion for summary judgment on counts I and II and defendant's motion to strike will be denied as moot; and plaintiff's motion to dismiss counts I and II will be granted.
For purposes of this opinion, the following is a brief summary of the material facts that are uncontroverted or deemed admitted, pursuant to Federal Rule of Civil Procedure 56 and District of Kansas Rule 56.1.
Plaintiff Linda Adler worked for defendant Continental Insurance Company ("Continental") in the Crop Hail Department from April 1989 through March 1994. Plaintiff performed various tasks for defendant, but from 1992 until 1994 she primarily audited underwriting work and verified claims prepared by adjusters pertaining to Multi-Peril Crop Insurance ("MPCI"). MPCI policies are backed by the federal government and insure farmers against certain types of perils such as rain, drought, and disease. The federal government, through the Federal Crop Insurance Corporation, reimburses defendant for the MPCI claims paid by defendant.
Plaintiff was the only Continental employee assigned to verifying adjusters' claims. The remaining verifying work was handled by independent contractors. To verify a claim, plaintiff would review the supporting documentation for accuracy and compliance with federal guidelines. For some claims, plaintiff called the adjuster or grain elevator to obtain needed information and then plaintiff reworked the claim.
In 1993, corn crops in the Midwest retained a significant amount of moisture because of heavy rains and flooding. When corn was taken to the grain elevators, the moisture content of the corn was tested and the farmers were assessed a drying charge to dry the corn to a quality level. Corn with a moisture content above a certain percentage qualified for a quality adjustment which increased the value of a MPCI claim. There were a large number of claims in Minnesota and Iowa, but the manner in which drying charges were being assessed by grain elevators was irregular. In early November 1993, the Federal Crop Insurance Corporation issued a memorandum stating that drying charges could not be included when calculating the quality adjustment. Continental's National MPCI Claims Manager, Mr. Newmack, issued a similar memorandum to Continental employees in late November 1993.
An independent contractor verifier for Continental, Ms. Peterson, initially handled all of the Minnesota and Iowa claims ("Minn-Iowa claims"). To reduce the backlog of Minn-Iowa claims, however, plaintiff received approximately 200 to 250 claims to verify in the middle of December 1993. Plaintiff noticed that many of these claims were not calculated properly by the adjusters and included drying charges in the quality adjustment, contrary to the procedures set forth in the memoranda from the Federal Crop Insurance Corporation and Mr. Newmack. Plaintiff called each grain elevator to determine the correct drying charge and then reworked these claims according to the proper procedure.
On or about December 15, 1993, plaintiff told her supervisor, Mr. Peterson, and Continental's National MPCI Claims Manager, Mr. Newmack, of these irregularities in the Minn-Iowa claims. Mr. Peterson told plaintiff to recheck the claims. Mr. Newmack told plaintiff to work the claims anywhere she could (work or home) to reduce the backlog. On or about December 28, 1993, plaintiff contacted Mr. Oaks, Continental's Assistant Vice President and supervisor of Mr. Peterson, about the Minn-Iowa claims and the payment by Continental of wages to adjusters' wives so that the adjusters could continue to receive Social Security benefits by not exceeding income limitations. Mr. Oaks told plaintiff to follow Mr. Newmack's memorandum and work on the claims correctly. Finally, on or about January 15, 1994, plaintiff contacted the USDA national hotline to report defendant's alleged fraudulent activities regarding the Minn-Iowa claims. Plaintiff contacted the USDA hotline a second time in early February 1994. Plaintiff told Ms. Laranjo, Continental's Human Resources Director, of these calls sometime between mid-January and early February of 1994.
Effective January 1, 1994, Continental transferred all aspects of its MPCI business in the Western United States, including production, audits, claims, and processing, to Crop Growers Insurance Company. Plaintiff's supervisor announced this transfer in early January 1994. The transfer eliminated plaintiff's verifying work for four states in the western region. Missouri is the only state Adler verified that was not included as part of the western region. Continental transferred the Missouri claims to an independent contractor verifier who handled claims for the eastern region. Plaintiff's position (which included verifying claims) and the positions of the other Continental employees who adjusted claims in the western region were eliminated. On January 21, 1994, Mr. Peterson, plaintiff's supervisor, prepared Human Resources forms documenting the positions to be eliminated and the employees to be terminated. On January 25, 1994, Mr. Oaks approved the forms prepared by Mr. Peterson. No evidence in the record suggests that Mr. Peterson or Mr. Oaks knew of plaintiff's calls to the USDA hotline prior to their decision to discharge plaintiff. Mr. Peterson and Ms. Laranjo informed plaintiff on February 15, 1994, that her job was being eliminated. Plaintiff's last day of work with Continental was March 18, 1994.
In Continental's Overland Park office alone, approximately 85 employees were terminated in various reductions in force in 1994. In early 1995, Continental transferred the remaining aspects of its MPCI business for the eastern region to Crop Growers Insurance Company. Continental no longer employs underwriters or adjusters in the MPCI area.
Summary Judgment Standards
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986);Vitkus v. Beatrice Co., 11 F.3d 1535, 1538-39 (10th Cir. 1993). A factual dispute is "material" only if it "might affect the outcome of the suit under the governing law." Anderson, 477 U.S. at 248.
The moving party bears the initial burden of showing that there is an absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Hicks v. City of Watonga, 942 F.2d 737, 743 (10th Cir. 1991). Essentially, the inquiry as to whether an issue is genuine is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52. An issue of fact is genuine if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party. Id. at 248. This inquiry necessarily implicates the substantive evidentiary standard of proof that would apply at trial. Id. at 252.
Once the moving party meets its burden, the burden shifts to the nonmoving party to demonstrate that genuine issues remain for trial "as to those dispositive matters for which it carries the burden of proof." Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990);see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991). The nonmoving party may not rest on his pleadings but must set forth specific facts. Applied Genetics, 912 F.2d at 1241.
"[W]e must view the record in the light most favorable to the parties opposing the motion for summary judgment." Deepwater Invs., Ltd. v. Jackson Hole Ski Corp., 938 F.2d 1105, 1110 (10th Cir. 1991). "In a response to a motion for summary judgment, a party cannot rely on ignorance of facts, on speculation, or on suspicion, and may not escape summary judgment in the mere hope that something will turn up at trial." Conaway v. Smith, 853 F.2d 789, 793 (10th Cir. 1988). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment.Anderson, 477 U.S. at 256. Where the nonmoving party fails to properly respond to the motion for summary judgment, the facts as set forth by the moving party are deemed admitted for purposes of the summary judgment motion. D. Kan. Rule 56.1.
In this diversity case, we ascertain and apply Kansas law with the objective that the result obtained in federal court should be the same result as in a Kansas court. See Adams-Arapahoe School Dist. No. 28-J v. GAF Corp., 959 F.2d 868, 870 (10th Cir. 1992).
I. Retaliatory Discharge Under False Claims Act.
Defendant moves for summary judgment on plaintiff's retaliatory discharge claim under the False Claims Act ("FCA") (Count 4). The elements of a retaliatory discharge claim under the FCA are:
1. the plaintiff employee engaged in "protected activity;"
2. the employer was put on notice of plaintiff's protected activity prior to making its decision to discharge plaintiff; and
3. there is a "nexus" between plaintiff's discharge and her exercise of protected activity.See Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994), cert. denied, 115 S.Ct. 1110 (1995); X Corp. v. Doe, 816 F. Supp. 1086, 1095 (E.D. Va. 1993). The purpose of the FCA whistleblower provision is to encourage those individuals with knowledge of fraud against the United States government to come forward with such information.See Robertson, 32 F.3d at 951. An employee may file a private action on behalf of the government against her employer (a " qui tam" action) or the government may file its own FCA action against the employer to recover damages resulting from false claims submitted to the government.
A. Protected Activity By Plaintiff.
The plaintiff employee initially must establish that she engaged in "protected activity" within the meaning of the FCA whistleblower provision. See 31 U.S.C. § 3730(h). The FCA protects actions taken by an employee "in furtherance of an action under this section, including investigation for, . . . or assistance in an action filed under this section." Id. Although an action does not have to be filed under the FCA for an employee to maintain a retaliatory discharge claim, a private qui tam action or government FCA action must, at the least, be a "distinct possibility" at the time of the employee's activities.See Childree v. UAP/GA AG Chem., Inc., 92 F.3d 1140, 1146 (11th Cir. 1996); Neal v. Honeywell, Inc., 33 F.3d 860, 864 (7th Cir. 1994). To establish that an action was a "distinct possibility," plaintiff must establish that the filing of a private qui tam action or a government FCA action at the time of plaintiff's activities would have complied with the requirements of Rule 11 of the Federal Rules of Civil Procedure.See Neal, 33 F.3d at 864.
In addition, the FCA generally does not protect activities that are within the scope of an employee's job responsibilities. See Robertson, 32 F.3d at 952 (plaintiff's investigation did not constitute "protected activity" because plaintiff's actions were consistent with performing his normal job duties); X Corp., 816 F. Supp. at 1095 (actions taken to prod employer to pursue compliance more vigorously, not to facilitate FCA claim, are not "protected activity"); see also United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1523 (10th Cir. 1996) (plaintiff cannot maintain FCA whistleblower claim because her monitoring and reporting activities were exactly those activities plaintiff was required to undertake in fulfillment of her job duties). Further, the FCA does not protect employees who simply refuse to participate in the alleged fraud, unless they also take steps in furtherance of an FCA action. X Corp., 816 F. Supp. at 1096; see Hardin v. DuPont Scandinavia, 731 F. Supp. 1202, 1205 (S.D.N.Y. 1990).
Defendant concedes that plaintiff's calls to the USDA hotline are protected activity. The court must decide if plaintiff's actions prior to placing the calls to the USDA hotline constitute "protected activity." Plaintiff alleges that she made additional inquiries and told members of management of illegal activity which could constitute fraud against the government. Pl.'s Resp. (Doc. #45) at 33. Plaintiff does not contend, however, that these actions were in furtherance of an FCA action or that plaintiff intended to reveal this information to the government. Rather, plaintiff apparently simply refused to participate in the alleged fraudulent scheme by refusing to sign fraudulent or irregular claims. Finally, the facts, viewed most favorable to plaintiff, do not suggest that the filing of a government FCA claim or private qui tam action was a "distinct possibility" until after plaintiff called the USDA hotline. See Childree, 92 F.3d at 1146; Neal, 33 F.3d at 864. Before that time, plaintiff believed the alleged fraud would be resolved within Continental by her supervisors and managers. Further, plaintiff did not notify the government before her call to the USDA hotline.
Plaintiff first contends that on or about December 16, 1993, she notified her supervisor, Mr. Peterson, of "incorrect" procedures resulting in "false claims" against the government. Adler. Aff. ¶ 8. It appears from plaintiff's deposition testimony that she did not use the terms "false claims" in her conversation with Mr. Peterson. Even assuming plaintiff actually used the terms "false claims," plaintiff has presented no evidence to indicate that the purpose of her conversation with Mr. Peterson was anything more than performing her normal job responsibilities. Plaintiff brought similar claims that she believed were fraudulent to Mr. Peterson's attention continually throughout her employment. Further, plaintiff has offered no evidence that she intended to report these violations to the government or intended to file a private qui tam action. Thus, the court finds that plaintiff's conversations with Mr. Peterson do not constitute "protected activity."
Defendant also has moved to strike plaintiff's affidavit submitted in support of her summary judgment opposition on various grounds. This motion will be denied as moot because the court can grant summary judgment in favor of defendant without striking any portion of plaintiff's affidavit.
In fact, plaintiff herself points to incidents as early as 1992 where plaintiff objected to certain claims procedures with her supervisor, Mr. Peterson. Pl.'s Resp. to Def.'s Statement of Material Facts ("SOF") ¶ 53 (Doc. #45). Plaintiff also testified that, throughout her employment, when she had a claim that was fraudulent or that she thought was fraudulent, she would take it to Mr. Peterson. SOF ¶ 53; Adler Depo. at 128, 179-81.
Indeed, plaintiff concedes that she did not bring up these issues with others prior to January 1994 because she "assumed that they [her supervisors and managers] would — they would take care of it." Pl.'s Resp. to Def.'s SOF ¶¶ 62, 64.
On or about December 16, 1996, plaintiff also notified Mr. Newmack, Continental's National MPCI Claims Manager, of "irregularities" in the Minn-Iowa claims. Again, plaintiff has presented no evidence to establish that this conversation was beyond the scope of her normal job responsibilities. See supra note 2. Plaintiff also has failed to offer evidence that she intended to assist in an FCA action or file a private qui tam action by reporting these irregularities. See supra note 3. Plaintiff's conversation with Mr. Newmack accordingly is not "protected activity."
Plaintiff also contends that she notified Mr. Oaks, Continental's Assistant Vice-President and Supervisor of Mr. Peterson, on or about December 28, 1993, about "these violations" and other "illegal" actions. Plaintiff states in her deposition that she talked with Mr. Oaks in early January. In her deposition, plaintiff did not mention the terms "violations" or "illegal." The reports by plaintiff to Mr. Oaks appear to be beyond the scope of her normal job responsibilities, particularly her statements that defendant was paying adjusters' wives so that the adjusters could continue to receive Social Security payments by not exceeding income limitations. Plaintiff has not offered any evidence, however, that she intended to report these violations to the government or file a private qui tam action. See supra note 3. Thus, plaintiff's conversation with Mr. Oaks does not constitute "protected activity."
Plaintiff maintains that her actions constitute "protected activity" even if these actions were part of her job duties. Relying on Love v. Re/Max of Am., 738 F.2d 383 (10th Cir. 1984), plaintiff contends that a "good faith belief" is all that is required for her conduct to be protected under the law. The court in Love held that "opposition activity" under Title VII is protected when it is based on a mistaken good faith (as opposed to an objectively reasonable) belief that the law has been violated. Id. at 385. Clearly, plaintiff first must establish that her actions were "adverse" or in "opposition" to defendant. Further, under the FCA, plaintiff must establish that her actions were in furtherance of an FCA action or that she intended to report the violation to the government at the time of her opposition activity. See Ramseyer, 90 F.3d at 1522-23.
B. Notice To Defendant Of Protected Activity.
Even if the court assumes that all of plaintiff's reports to management constitute "protected activity," plaintiff has failed to establish that defendant was put on notice that plaintiff was either taking these actions in furtherance of a private qui tam action or assisting in an FCA action brought by the government.Ramseyer, 90 F.3d at 1522; see Robertson, 32 F.3d at 951 ("[A] whistleblower must show the employer had knowledge the employee engaged in `protected activity.'") (citation omitted). If defendant did not receive such notice, then its actions cannot constitute retaliation. Ramseyer, 90 F.3d at 1522; see Robertson, 32 F.3d at 951.
The court must decide whether plaintiff has presented sufficient evidence for a jury to conclude that defendant was put on notice that plaintiff performed either an "investigation for" or provided "assistance in" an FCA action. Even if the court assumes the truth of plaintiff's affidavit, plaintiff has not presented sufficient evidence to meet this standard. Plaintiff's references to "incorrect procedures," "irregularities," "false claims," and even "illegal actions" would not put defendant on notice that she was taking any action in furtherance of an FCA action. Ramseyer, 90 F.3d at 1522-23. Plaintiff contends that her intent to file a qui tam action was "implicit" in her reports to management, that management knew she was referring to potential fraud, and that this information "easily could have led those individuals [of management] to believe" that plaintiff "may" report the fraudulent activity or file a qui tam action. Pl's Resp. to Def's Supp. Memo. at 14.
The Tenth Circuit rejected similar arguments in Ramseyer. The court stated that although plaintiff regularly advised her superiors of information regarding "non-compliance" with the federal Medicaid minimum program requirements and "protested" of "shortcomings" in the patient records, plaintiff never told her employer that she was going to utilize such noncompliance in furtherance of a qui tam action or that she was going to report such noncompliance to the government. Ramseyer, 90 F.3d at 1523. In the absence of such a statement, plaintiff's actions are not protected under the FCA. Further, plaintiff Adler testified that she brought fraudulent claims to the attention of her supervisor throughout her employment. Plaintiff has not presented any evidence of steps she took that would put defendant on notice that she was acting in furtherance of an FCA action — "e.g., that she was furthering or intending to further an FCA action rather than merely warning the defendants of the consequences of their conduct" — as she did throughout her employment. Id. at 1523.
Plaintiff notes that the court in Ramseyer stated that a person whose job entails the investigation of fraud is not automatically precluded from bringing a retaliatory discharge action under the FCA. Pl.'s Resp. to Def.'s Supp. Memo. (Doc. #55) at 14. The court states, in the very next sentence, "[h]owever, we do note that such persons must make clear their intentions of bringing or assisting in an FCA action in order to overcome the presumption that they are merely acting in accordance with their employment obligations." Ramseyer, 90 F.3d at 1523 n. 7. Here, plaintiff has not presented sufficient evidence for a jury to conclude that she gave such notice to defendant.
Finally, defendant maintains that plaintiff did not notify defendant of her calls to the USDA Hotline until February 7, 1994. Plaintiff testified, however, that she contacted Nancy Laranjo sometime between the middle of January and February of 1994. Viewing the evidence most favorable to plaintiff, Ms. Laranjo received notice of plaintiff's calls to the USDA Hotline in mid-January 1994.
C. "Nexus" Between Discharge And Protected Activity.
Plaintiff must establish that a nexus exists between her termination and her exercise of protected activity under the FCA.See X Corp., 816 F. Supp. at 1095. Defendant contends that there was no retaliatory discharge because the decision to lay off plaintiff was made prior to the time defendant knew plaintiff engaged in whistleblowing activities. See Stuart v. Beech Aircraft Corp., 753 F. Supp. 317, 325 (D. Kan. 1990) (no retaliatory discharge under Kansas common law based on uncontroverted facts that defendant decided to terminate plaintiff prior to plaintiff's submission of written report regarding safety concerns), aff'd, 936 F.2d 584 (10th Cir. 1991).
The only "protected activity" that defendant had notice of was plaintiff's calls to the USDA hotline. As stated above, Ms. Laranjo, defendant's Human Resources Director, received notice of plaintiff's calls to the USDA hotline on or about January 15, 1994. Viewing the evidence most favorable to plaintiff, the court finds that defendant made the decision to discharge plaintiff on January 21, 1994, when Mr. Peterson completed the Human Resources forms documenting the positions to be eliminated and employees to be terminated. SOF ¶ 27 (uncontroverted by plaintiff). On January 25, 1994, Mr. Oaks approved the forms prepared by Mr. Peterson. Plaintiff has presented no evidence, however, to indicate that Mr. Peterson or Mr. Oaks knew of plaintiff's call(s) to the USDA hotline or of plaintiff's intent to file a private qui tam action prior to their decision. Indeed, Mr. Peterson states that plaintiff never told him that she intended to file or assist in an FCA action. Given that plaintiff has not established that the individuals involved in her termination decision knew of her "protected activity," defendant is entitled to judgment as a matter of law on plaintiff's FCA claim. See X Corp., 816 F. Supp. at 1096 (plaintiff must present more than inference that individuals involved in termination decision learned of plaintiff's protected activity to defeat summary judgment).
Defendant maintains that it made the decision to terminate plaintiff months earlier in the Fall of 1993. The evidence, however, does not establish that defendant decided to terminate "plaintiff" in the Fall of 1993, only that defendant decided to eliminate several positions, including the majority of tasks plaintiff was performing in the Fall of 1993. It is uncontested that plaintiff performed a variety of tasks for defendant and the possibility of retaining plaintiff in another capacity was not foreclosed in the Fall of 1993. In fact, Mr. Peterson stated in his January 6, 1994 memorandum that "[i]t is too early to explain the full ramifications that this [contract with Crop Growers Insurance Company] will have on each individual employee." Adler Depo. Exh. 25.
II. Retaliatory Discharge Under Kansas Common Law.
In Kansas, employment relationships are governed by the employment-at-will doctrine. The doctrine holds that in the absence of a contract, express or implied, between an employee and his employer covering the duration of employment, the employment is terminable at the will of either party. Johnson v. National Beef Packing Co., 220 Kan. 52, 54, 551 P.2d 779 (1976). Kansas law recognizes a public policy exception to the employment-at-will doctrine for employees discharged in retaliation for the good faith reporting of a serious infraction of the law by an employer or co-employee to either company management or law enforcement officials ("whistleblowing").
To maintain a retaliatory discharge claim for whistleblowing under Kansas common law, plaintiff must present clear and convincing evidence that:
(1) a reasonably prudent person would have concluded the employee's co-worker or employer was engaged in activities in violation of rules, regulations, or the law pertaining to public health, safety, and the general welfare;
(2) the employer had knowledge of the employee's reporting of such violation prior to discharge of the employee; and
(3) the employee was discharged in retaliation for making the report.Palmer v. Brown, 242 Kan. 893, 900, 752 P.2d 685, 690 (1988);see Ali v. Douglas Cable Communications, 929 F. Supp. 1362 (D. Kan. 1996). Plaintiff also must establish that the whistleblowing was done out of a good faith concern over the wrongful activity reported rather than from a corrupt motive such as malice, spite, jealousy or personal gain. Palmer, 242 Kan. at 900, 752 P.2d at 690. In addition to these requirements, an essential element of all retaliatory discharge claims is that the plaintiff took a position adverse to her employer. See McKenzie v. Renberg's Inc., 94 F.3d 1478, 1486-87 (10th Cir. 1996); Love, 738 F.2d 383 (10th Cir. 1984) ("opposition activity" is protected).
Defendant contends that plaintiff's wrongful discharge claim under Kansas common law cannot be maintained because the claim is based upon an alleged violation of federal law. See McKenzie, supra (Oklahoma law). Defendant maintains that plaintiff has not established that submitting false claims to the federal government implicates an important state law or state public policy. Both parties apparently agree that a retaliatory discharge claim under Kansas law must be based on violation of a state law or state policy. Palmer, 242 Kan. at 897, 752 P.2d at 688. The parties dispute, however, whether submitting false claims to the federal government implicates a state law or policy.
Defendant also maintains that plaintiff's retaliatory discharge claim under Kansas law must be dismissed because plaintiff has an adequate remedy under the False Claims Act. See Polson v. Davis, 635 F. Supp. 1130, 1149-50 (D. Kan. 1986),aff'd, 895 F.2d 705, 709 (10th Cir. 1990). The court having granted summary judgment in favor of defendant on both plaintiff's FCA claim and state law retaliatory discharge claim does not need to address this issue.
Plaintiff also contends that defendant has waived its "preclusion" defense because defendant did not raise the issue at the pretrial conference and defendant has failed to properly amend its pleadings to add this defense. The final Pretrial Order (Doc. #60), however, includes the defenses that plaintiff's retaliation claim is barred because (1) plaintiff cannot assert her state law claim based on a violation of federal law and (2) federal law provides an adequate remedy. Id. at 7.
The court finds that no Kansas public policy is implicated by submitting fraudulent claims to the federal government. InMurphy v. City of Topeka, 6 Kan. App. 2d 488, 630 P.2d 186 (1981), the Kansas Court of Appeals recognized a limited public policy exception to the employment-at-will doctrine when an employee is discharged in retaliation for filing a workers' compensation claim. The court found that the remedy was designed to advance an important state interest. Kansas courts recognize several other exceptions to the employment-at-will doctrine based on state public policy for whistleblowing activities. See, e.g., Palmer, supra (reporting Medicaid fraud); Moyer v. Allen Freight Lines, Inc., 20 Kan. App. 2d 203, 885 P.2d 391 (1994) (reporting violations of transportation regulations). The Kansas Supreme Court cautions:
[b]efore courts are justified in declaring the existence of public policy, however, "it should be so thoroughly established as a state of public mind so united and so definite and fixed that its existence is not subject to any substantial doubt."Palmer, 242 Kan. at 897, 752 P.2d at 687-88 (quoting Noel v. Menninger Found., 175 Kan. 751, 267 P.2d 934 (1954)). Further, the Kansas Supreme Court has stated several times that the holding in Murphy is narrowly drawn and "applies only to interests protected by state law." See Palmer, 242 Kan. at 897, 752 P.2d at 688; Morriss v. Coleman Co., Inc., 241 Kan. 501, 513, 738 P.2d 841, 848 (1987); Anco Constr. Co. v. Freeman, 236 Kan. 626, 629, 693 P.2d 1183, 1186 (1985).
The court finds that no state public policy here is so definite and fixed to justify creating an additional exception to the employment-at-will doctrine. No Kansas appellate court apparently has addressed whether state public policy incorporates federal public policy for purposes of determining whether a state law retaliatory discharge claim can be pled. In Anco, however, the Kansas Supreme Court addressed whether a retaliatory discharge claim was preempted by the exclusive jurisdiction of the National Labor Relations Board. The court in finding preemption reasoned that the public policy sought to be protected is one arising out of federal law (National Labor Relations Act) rather than state law. 236 Kan. at 629-30; 693 P.2d at 1186. The court emphasized that no duty was imposed on the employer by state law. Id. The court accordingly held that no state law action for retaliatory discharge is pled when an employee is terminated in violation of federal public policy. Id.; see Morriss, 241 Kan. at 513; 738 P.2d at 848; see also Chrisman v. Philips Indus., Inc., 242 Kan. 772, 751 P.2d 140 (1988) (holding that retaliatory discharge claim based on internal reports of defective nuclear industrial products is preempted by Energy Reorganization Act). The Kansas Supreme Court did not determine state public policy by merely incorporating federal public policy, as suggested by some courts, but analyzed whether a state public policy existed independent of federal law.Anco, 236 Kan. at 629-30; 693 P.2d 1186. But cf. Smuck v. National Mgmt. Corp., 540 N.W.2d 669, 672 (Iowa Ct.App. 1995);D'Agostino v. Johnson Johnson, Inc., 628 A.2d 305, 312 (N.J. 1993). The court believes that the Kansas Supreme Court would follow the rationale of Anco and not carve out an additional exception to the employment-at-will doctrine based on federal public policy.
The court, in reaching its conclusion, also finds the reasoning of McKenzie persuasive. In McKenzie, the Tenth Circuit held that plaintiff's state law retaliatory discharge claim is precluded because she did not establish that Oklahoma has a clearly established public policy regarding maximum work hours and overtime pay. 94 F.3d at 1487. The court analyzed Oklahoma constitutional, statutory, and decisional law to assess Oklahoma's "established public policy." Id. The court rejected plaintiff's argument that her claim should be recognized because of a public policy found in a combined regime of both state and federal law. Id. at 1488.
Plaintiff contends that the court should not accept the rationale of McKenzie because it was decided under Oklahoma law rather than Kansas law. The court finds the public policy exception to the employment-at-will doctrine to be analogous under Kansas and Oklahoma law. Oklahoma's public policy exception is "tightly circumscribed" and reserved for violations of "established and well-defined public policy." 94 F.3d at 1488 (quoting Burk v. K-Mart Corp., 770 P.2d 24, 29 (Okla. 1989)). The court finds that Kansas' public policy exception has similar restrictions and may even be more limited. See Palmer, 242 Kan. at 897, 752 P.2d 687-88. Plaintiff has offered no authority to suggest any pertinent distinction between Oklahoma and Kansas law on this point. Further, plaintiff fails to point to any Kansas law or public policy that addresses fraudulent claims against the federal government.
Plaintiff also attempts to rely on Moyer, supra, for the proposition that activity in violation of a federal law may give rise to a Kansas common law claim of retaliation. Plaintiff's argument is unavailing. First, the Kansas Court of Appeals inMoyer did not address the issue of whether state public policy was implicated based solely on violations of federal law. Further, the violations in Moyer related to the "serious threat to public safety because of the dangers of driving unsafe trucks on the highway." 20 Kan. App. 2d at 206, 885 P.2d at 394. The court noted that the purpose of the federal regulations is "to ensure the safety and general welfare of the public." 20 Kan. App. 2d at 207, 885 P.2d at 395. A state public policy therefore likely exists to prevent traffic accidents involving a state's own citizens. In this case, however, there is no clearly established Kansas public policy aimed at preventing fraud against the federal government. The court will grant summary judgment in favor of defendant on count III of plaintiff's complaint.
Although not argued by either party, two additional grounds potentially could support granting summary judgment for defendant on count III. First, plaintiff's state law retaliatory discharge claim may be preempted because of the existence of the False Claims Act and its whistleblower provision. See Anco, supra; Chrisman, supra. Second, even if an established state public policy is implicated by reporting fraud against the federal government, plaintiff has not proven that she reported a "serious" violation that pertains to "health, safety, and the general welfare." Without any briefing on this point, the court is uncertain whether a Kansas court would find that submitting overstated monetary claims to the federal government seriously impacts the "health, safety, and general welfare" of Kansas citizens.
Both parties argue in the alternative that the court should certify the issue of whether a Kansas retaliatory discharge claim can be based on a violation of federal law and whether a Kansas retaliatory discharge claim can be pled if an alternative remedy exists under federal law. Our resolution of the first question makes unnecessary the need to address the second question. The court declines to certify the first question to the Kansas Supreme Court because sufficient materials and authority are available to guide the court in predicting how the Kansas Supreme Court would resolve this issue. "The decision to certify rests in the sound discretion of the federal district court."Allstate Ins. Co. v. Brown, 920 F.2d 664, 667 (10th Cir. 1990) (quoting Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974));see Marzolf v. Gilgore, 924 F. Supp. 127, 129 (D. Kan. 1996). "[C]ertification is not to be routinely invoked whenever a federal court is presented with an unsettled question of state law." Armijo v. Ex. Cam., Inc., 843 F.2d 406 (10th Cir. 1988). A district court may decide in its discretion that it can resolve the issue with available research materials already at handSee Lehman Bros., 416 U.S. at 395 (Rehnquist, J., concurring).
III. Plaintiff's Motion To Dismiss Counts I And II.
Defendant also moves for summary judgment on counts I and II. In lieu of a response, plaintiff filed a motion to dismiss counts I and II without prejudice. Defendant states that it has no objections to plaintiff's motion. The court accordingly will dismiss counts I and II without prejudice and deny as moot defendant's motion for summary judgment on these counts.
IT IS THEREFORE ORDERED that defendant's motion for summary judgment on counts III and IV of plaintiff's complaint (Doc. #36) is granted.
IT IS FURTHER ORDERED that defendant's motion for summary judgment on counts I and II (Doc. #36) and defendant's motion to strike Adler affidavit (Doc. #50) are denied as moot.
IT IS FURTHER ORDERED that plaintiff's motion to dismiss counts I and II without prejudice (Doc. #49) is granted.