Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-02269/USCOURTS-casd-3_05-cv-02269-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 31:3729 False Claims Act

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1

 Section 3729 provides:

Any person who--

knowingly presents, or causes to be presented, to an officer or employee of the United States

Government or a member of the Armed Forces of the United States a false or fraudulent claim

for payment or approval . . . is liable to the United States Government . . . .

“Under 31 U.S.C. § 3730, a ‘qui tam plaintiff,’ also known as a ‘relator,’ may bring a civil

action for a violation of the FCA for herself and for the United States government, in the name of the

government.” United States v. Johnson Controls, Inc., 457 F.3d 1009, 1012 (9th Cir. 2006) (citation

omitted). 

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MARY ANNE HERNDON, on behalf of the

UNITED STATES OF AMERICA,

Plaintiff,

CASE NO. 05CV2269-BEN (RBB)

ORDER GRANTING

DEFENDANT’S MOTION TO

vs. DISMISS [Doc. No. 15]

SCIENCE APPLICATIONS

INTERNATIONAL CORPORATION, a

Delaware corporation,

Defendant.

Plaintiff Mary Anne Herndon (“Herndon”) has filed a Complaint under the False Claims

Act, 31 U.S.C. § 3729 (“FCA”or “False Claims Act”).1

 She alleges that Defendant Science

Applications International Corporation (“SAIC”) committed fraud against the United States

government by falsely representing in contract negotiations and billing certifications that SAIC is

complying with age discrimination laws. SAIC now moves to dismiss, arguing that the Complaint

Case 3:05-cv-02269-BEN-RBB Document 21 Filed 10/31/06 Page 1 of 6
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fails to meet the pleading requirements under Rule 9(b) of the Federal Rules of Civil Procedure,

and that it otherwise fails to state a claim. SAIC’s Motion is GRANTED. Herndon’s Complaint

fails to meet the pleading requirements under Rule 9(b). Accordingly, Herndon’s Complaint is

DISMISSED, with leave to amend on or before November 27, 2006. In light of the dismissal for

failure to meet Rule 9(b)’s pleading requirements, the Court need not, and does not, address

whether Herndon’s allegations state a claim under the FCA. 

FACTS 

The facts are taken from Herndon’s Complaint. See Schneider v. California Dept. of

Corrections, 151 F.3d 1194, 1197 (9th Cir. 1998) (“The focus of any Rule 12(b)(6) dismissal . . . is

the complaint.”). Only relevant facts are stated. The Court makes no factual determinations. At

this stage, the Court is “required to presume all factual allegations of the [C]omplaint to be true

and draw all reasonable inferences in favor of” Herndon. United States v. LSL Biotechnologies,

379 F.3d 672, 698 (9th Cir. 2004). 

Herndon is 61 years old. She started working for SAIC in September 1979. Herndon has a

Ph.D. in Computer Science, and has extensive knowledge in the government contracting industry. 

Herndon also has top level security clearance and full access to all of SAIC’s Intelligence Group’s

files. In summer 2004, Herndon was promoted to Vice President-Quality in charge of process

improvement for SAIC’s Intelligence Group.

In March 2005, SAIC enacted in the Intelligence Group a “Succession Planning Policy”,

the purpose and effect of which was to discriminate against high level employees over 55 years

old. In accordance with the alleged discriminatory policy, SAIC took the following actions against

Herndon: did not invite her to meetings; did not approve the Process Improvement Plan that

Herndon prepared for the Intelligence Group; advised Herndon that her position had been

eliminated and that she should look for a “replacement” job at SAIC; excluded Herndon from

Engineering Edge Alliance meetings/project; did not allow Herndon to participate in spring 2005

Process Research Consortium; ignored Herndon’s repeated requests to fix or replace her computer;

ignored Herndon’s complaints of discrimination; and in September 2005, terminated Herndon’s

employment. 

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Herndon presents a single claim in her Complaint, which is under the False Claims Act. In

support of that claim, Herndon alleges that since March 2005, “SAIC , expressly, impliedly, and

by inference, represented to the U.S., in contracts, in billings, in certification, in progress reports,

and in the negotiation of contracts, that it did not and does not discriminate based on age and that

it complies with non-discrimination laws including the non-age discrimination laws.” Herndon

then alleges that while she “will identify the specific dates, times and other details of each

representation after she has received such information from SAIC and the U.S. in discovery,”

SAIC represented that it does not engage in age discrimination “in each and every request for

payment, billing, contract, contract negotiation, certification and process report SAIC made to the

U.S. after March 3, 2005 . . . .” 

DISCUSSION

“Complaints brought under the FCA must fulfill the requirements of Rule 9(b).” United

States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1051 (9th Cir. 2001). Rule 9(b)

provides that “in all averments of fraud . . . the circumstances constituting fraud . . . shall be stated

with particularity.” Failure to comply with Rule 9(b) requirements is grounds for dismissal. See

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). 

“To comply with Rule 9(b), allegations of fraud must be specific enough to give defendants

notice of the particular misconduct which is alleged to constitute the fraud charged so that they can

defend against the charge and not just deny that they have done anything wrong.” Bly-Magee v.

California, 236 F.3d 1014, 1019 (9th Cir. 2001) (citation and internal quotations omitted). “Mere

conclusory allegations of fraud are insufficient.” Moore v. Kayport Package Express, 885 F.2d

531, 540 (9th Cir. 1989). The plaintiff must, at a minimum, set forth the who, time, place, and

specific content of each alleged act of fraud. See Vess, 317 F.3d at 1106; see also Schreiber

Distrib. Co. v. Serv-Well Furniture, Inc., 806 F.2d 1393, 1401 (9th Cir. 1986) (To comply with

Rule 9(b), a plaintiff alleging fraud “must state the time, place, and specific content of the false

representations as well as the identities of the parties to the misrepresentation”). 

“Rule 9(b) serves not only to give notice to defendants of the specific fraudulent conduct

against which they must defend, but also to deter the filing of complaints as a pretext for the

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discovery of unknown wrongs, to protect defendants from the harm that comes from being subject

to fraud charges, and to prohibit plaintiffs from unilaterally imposing upon the court, the parties

and society enormous social and economic costs absent some factual basis.” Bly-Magee, 236 F.3d

at 1018 (citations and internal quotations and alterations omitted). The Ninth Circuit has also

“observed that qui tam suits are meant to encourage insiders privy to a fraud on the government to

blow the whistle on the crime. Because insiders privy to a fraud on the government should have

adequate knowledge of the wrongdoing at issue, such insiders should be able to comply with Rule

9(b).” Id. at 1019 (citations and internal quotations and alterations omitted). 

Against this backdrop, Herndon’s Complaint fails to meet the heightened pleading

requirements under Rule 9(b). In support of her claim that SAIC committed fraud against the

government, Herndon alleges that since March 2005, “SAIC , expressly, impliedly, and by

inference, represented to the U.S., in contracts, in billings, in certification, in progress reports, and

in the negotiation of contracts, that it did not and does not discriminate based on age and that it

complies with non-discrimination laws including the non-age discrimination laws.” This broad

claim has no factual support. Herndon does not allege the specific nature of the fraudulent

representations. She does not identify the types or contents of the contracts, billings or

certifications implicated in the alleged fraud, or identify the SAIC employees who executed or

negotiated the contracts, billings or certifications. The actual dates, times, and places the

contracts, certifications or billings were executed are also missing. See Schreiber Distrib. Co. v.

Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986) (“[T]he pleader must state the time,

place, and specific content of the false representations as well as the identities of the parties to the

misrepresentation.”); SmithKline Beecham, 245 F.3d at 1051 (holding that broad allegation that

the defendant “knowingly . . . changed control numbers [on various tests] to wrongfully represent

that the laboratory results fell within an acceptable standard of error,” where the plaintiff did not

specify the “types of tests implicated in the alleged fraud, identify the [defendant’s] employees

who performed the tests, or provide any dates, times, or places the tests were conducted,” did not

satisfy Rule 9(b)). When, as here, fraud is alleged against a company “the absence of specification

of any times, dates, places or other details of that alleged fraudulent involvement is contrary to the

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fundamental purposes of Rule 9(b).” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). 

Herndon’s generalized allegations prevent SAIC from being able to defend against the

alleged misconduct. Without notice of the circumstances upon which Herndon bases her claim for

fraud, SAIC is restricted in its Answer to setting forth general denials of wrongdoing. See

Semegen v. Weidner, 780 F.2d 727, 730 (9th Cir. 1985) (Rule 9(b) is intended to “ensure[ ] that

allegations of fraud are specific enough to give defendants notice of the particular misconduct

which is alleged to constitute the fraud charged so that they can defend against the charge and not

just deny that they have done anything wrong” ). 

Herndon appears to seek a more lenient application of the Rule 9(b)’s pleading

requirements. For example, in her Complaint, Herndon alleges that she “will identify the specific

dates, times and other details of each representation after she has received such information from

SAIC and the U.S. in discovery . . . .” “Rule 9(b) may be relaxed to permit discovery in a limited

class of corporate fraud cases where the evidence of fraud is within a defendant’s exclusive

possession.” SmithKline Beecham, Inc., 245 F.3d at 1052 (citation omitted). However, given that

Herndon was a Vice President at SAIC, had “top level security clearance and full access to all of

SAIC’s [relevant] files, had worked there for over 25 years, and was working there at the time of

the alleged fraud, she “cannot fairly allege that [SAIC] has sole possession of the facts evidencing

an FCA violation.” Id.; see also Williams v. WMX Technologies, Inc., 112 F.3d 175, 178 (5th

Cir. 1997) (in fraud cases, “the who, what, when, where must be laid out before access to the

discovery process is granted.” (emphasis in original)). 

CONCLUSION 

“Because a dismissal of a complaint or claim grounded in fraud for failure to comply with

Rule 9(b) has the same consequence as a dismissal under Rule 12(b)(6), dismissals under the two

rules are treated in the same manner.” Vess, 317 F.3d at 1107(citations omitted). “As with Rule

12(b)(6) dismissals, dismissals for failure to comply with Rule 9(b) should ordinarily be without

prejudice.” Id. at 1108 (citations omitted). Similarly, “leave to amend should be granted unless

the district court ‘determines that the pleading could not possibly be cured by the allegation of

other facts.’” United States ex rel. Lee v. SmithKline Beecham, Inc., 245 F.3d 1048, 1052 (9th

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Cir. 2001) (quoting Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir.2000)). “This approach is

required by Federal Rule of Civil Procedure 15(a) which provides that leave to amend should be

freely granted ‘when justice so requires.’” United States ex rel. Lee v. SmithKline Beecham, Inc.,

245 F.3d 1048, 1052 (9th Cir. 2001) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). 

Accordingly, for reasons discussed above, Herndon’s Complaint is DISMISSED for

failure to comply with Rule 9(b), with leave to amend on or before November 27, 2006. 

SO ORDERED.

DATED: October 31, 2006

Hon. Roger T. Benitez

United States District Judge

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