Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-19-04021/USCOURTS-ca10-19-04021-0/pdf.json

Parties Involved:
Aqua Engineering
Not Party
Aqua Environmental Services, Inc.
Not Party
Don Barnett
Not Party
Barnett Intermountain Water Consulting
Not Party
David Bradford
Appellee
Kevin W. Brown
Not Party
Carollo Engineers, Inc.
Not Party
City Development
Not Party
R. Steve Creamer
Not Party
Emigration Improvement District
Appellee
Michael B. Georgeson
Not Party
Lynn Hales
Appellee
Larry Hall
Not Party
Eric Hawkes
Appellee
Michael Hughes
Appellee
Ronald R. Rash
Not Party
Robert Rousselle
Not Party
Fred A. Smolka
Appellee
Joe Smolka
Not Party
Mark Stevens
Appellee
The Boyer Company
Not Party
Mark Christopher Tracy
Appellant
Kenneth Wilde
Not Party

Document Text:

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

_________________________________

UNITED STATES OF AMERICA EX. REL. 

MARK CHRISTOPHER TRACY, 

 Plaintiff - Appellant,

v.

EMIGRATION IMPROVEMENT 

DISTRICT, a Utah Special Service District; 

BARNETT INTERMOUNTAIN WATER 

CONSULTING, a Utah corporation; 

CAROLLO ENGINEERS, INC., a California 

professional corporation; R. STEVE 

CREAMER, an individual; FRED A. 

SMOLKA, an individual; MICHAEL 

HUGHES, an individual, a/k/a Michael Scott 

Hughes; MARK STEVENS, an individual; 

DAVID BRADFORD, an individual; LYNN 

HALES, an individual; ERIC HAWKES, an 

individual; DON A. BARNETT, an 

individual; JOE SMOLKA, an individual; 

RONALD R. RASH, an individual; 

KENNETH WILDE, an individual; 

MICHAEL B. GEORGESON, an individual; 

KEVIN W. BROWN, an individual, 

 Defendants - Appellees,

and

THE BOYER COMPANY, L.C., a Utah 

company; CITY DEVELOPMENT, INC., a 

Utah corporation,

 Defendants.

–––––––––––––––––––––––––––––––––––

No. 18-4109

(D.C. No. 2:14-CV-00701-JNP)

(D. Utah)

FILED

United States Court of Appeals

Tenth Circuit

February 28, 2020

Christopher M. Wolpert

Clerk of Court

Appellate Case: 19-4021 Document: 010110310742 Date Filed: 02/28/2020 Page: 1
2

UNITED STATES OF AMERICA EX. REL. 

MARK CHRISTOPHER TRACY, 

 Plaintiff - Appellant, 

v.

EMIGRATION IMPROVEMENT 

DISTRICT, a Utah Special Service District; 

MICHAEL HUGHES, an individual, a/k/a 

Michael Scott Hughes; MARK STEVENS, an 

individual; FRED A. SMOLKA, an 

individual; DAVID BRADFORD, an 

individual; ERIC HAWKES, an individual; 

LYNN HALES, an individual, 

 Defendants - Appellees,

and

AQUA ENGINEERING, a Utah corporation; 

BARNETT INTERMOUNTAIN WATER 

CONSULTING, a Utah corporation; DON 

BARNETT; AQUA ENVIRONMENTAL 

SERVICES, INC., a Utah corporation; KEVIN 

W. BROWN, an individual; CAROLLO 

ENGINEERS, INC., a California Professional 

corporation; CITY DEVELOPMENT, a Utah 

corporation; R. STEVE CREAMER, an 

individual; LARRY HALL, an individual; 

THE BOYER COMPANY, a Utah company; 

JOE SMOLKA, an individual; RONALD R. 

RASH; KENNETH WILDE, an individual; 

MICHAEL B. GEORGESON, an individual; 

ROBERT ROUSSELLE, an individual, 

 Defendants.

–––––––––––––––––––––––––––––––––––

UNITED STATES OF AMERICA EX. REL. 

No. 19-4021

(D.C. No. 2:14-CV-00701-JNP)

(D. Utah)

Appellate Case: 19-4021 Document: 010110310742 Date Filed: 02/28/2020 Page: 2
3

MARK CHRISTOPHER TRACY, 

 Plaintiff - Appellee,

v.

EMIGRATION IMPROVEMENT 

DISTRICT, a Utah Special Service District; 

MICHAEL HUGHES, an individual, a/k/a 

Michael Scott Hughes; MARK STEVENS, an 

individual; FRED A. SMOLKA, an 

individual; DAVID BRADFORD, an 

individual; ERIC HAWKES, an individual; 

LYNN HALES, an individual, 

 Defendants - Appellants,

and

AQUA ENGINEERING, a Utah corporation; 

BARNETT INTERMOUNTAIN WATER 

CONSULTING, a Utah corporation; DON 

BARNETT; AQUA ENVIRONMENTAL 

SERVICES, INC., a Utah corporation; KEVIN 

W. BROWN, an individual; CAROLLO 

ENGINEERS, INC., a California Professional 

corporation; CITY DEVELOPMENT, a Utah 

corporation; R. STEVE CREAMER, an 

individual; LARRY HALL, an individual; 

THE BOYER COMPANY, a Utah company; 

JOE SMOLKA, an individual; RONALD R. 

RASH; KENNETH WILDE, an individual; 

MICHAEL B. GEORGESON, an individual; 

ROBERT ROUSSELLE, an individual, 

 Defendants.

------------------------------

CHRISTENSEN & JENSEN, P.C., 

 Attorney - Appellee.

No. 19-4022

(D.C. No. 2:14-CV-00701-JNP)

(D. Utah)

_________________________________

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ORDER AND JUDGMENT*

_________________________________

Before BRISCOE, MORITZ, and CARSON, Circuit Judges.

_________________________________

Mark Tracy appeals the district court’s orders dismissing his complaint and 

requiring him to pay attorneys’ fees to Emigration Improvement District (EID) and 

other defendants. EID cross-appeals the portion of the order on attorneys’ fees

declining to hold Tracy’s attorneys jointly and severally liable for those fees. For the 

reasons explained below, we vacate the district court’s orders and remand for further 

proceedings. 

Background

Tracy sued EID and others on September 26, 2014, alleging, among other 

things, that EID made false statements to obtain a federal loan for a water project in 

violation of the False Claims Act (FCA), 31 U.S.C. §§ 3729–33. Tracy amended his 

complaint several times, and the United States declined to intervene on several 

occasions. Ultimately, Tracy alleged two causes of action in his third amended 

complaint: a reverse false claim under § 3729(a)(1)(G) and a direct false claim under 

§ 3729(a)(1)(A) and (B). 

The district court dismissed Tracy’s complaint with prejudice. As to his

§ 3729(a)(1)(G) cause of action, the district court concluded that Tracy failed to state 

 * This order and judgment is not binding precedent, except under the doctrines 

of law of the case, res judicata, and collateral estoppel. But it may be cited for its

persuasive value. See Fed. R. App. P. 32.1; 10th Cir. R. 32.1.

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a claim on which relief could be granted.

1 Regarding his cause of action under 

§ 3729(a)(1)(A) and (B), the district court determined that even if Tracy stated a 

claim—which the district court assumed but did not decide—this claim was 

nevertheless barred by the statute of limitations. In so holding, the district court noted 

that our precedent required it to apply the six-year statute of limitations set forth in 

§ 3731(b)(1) to relator-initiated FCA complaints such as Tracy’s, rather than the tenyear statute of limitations set forth in § 3731(b)(2). See United States ex rel. Sikkenga 

v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 725 (10th Cir. 2006), 

abrogated by Cochise Consultancy, Inc. v. United States ex rel. Hunt, 139 S. Ct. 1507 

(2019). The district court explained that “[a]ny false statements that induced the 

[g]overnment to disburse the . . . loan must necessarily have occurred before the date 

of the final disbursement: September 29, 2004.” United States ex rel. Tracy v. 

Emigration Improvement Dist., No. 2:14-cv-00701, 2018 WL 3111687, at *4 (D. 

Utah June 22, 2018) (unpublished). And because Tracy did not sue EID until 

September 26, 2014—nearly ten years after that last disbursement—the six-year

limitations period under § 3731(b)(1) had long since passed. 

The district court later entered an order requiring Tracy to pay $92,665 in 

attorneys’ fees and expenses to EID because (1) EID had prevailed and (2) Tracy’s 

“claim[s] . . . [were] clearly frivolous, clearly vexatious, or brought primarily for 

purposes of harassment.” 31 U.S.C. § 3730(d)(4). According to the district court, 

 1 Tracy does not appeal the dismissal of his § 3729(a)(1)(G) cause of action. 

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Tracy’s cause of action arising under § 3729(a)(1)(A) and (B) was clearly frivolous 

because Tracy urged the district court to “simply ignore” Sikkenga. United States ex 

rel. Tracy v. Emigration Improvement Dist., No. 2:14-cv-00701, 2019 WL 6830890, 

at *4 (D. Utah Feb. 5, 2019). The district court also noted that “[e]ach time the 

underlying facts were disproved, Tracy changed the basic factual assertions giving 

rise to his complaint and made arguments clearly contrary to Tenth Circuit law.” Id.

Additionally, the district court explained, Tracy alleged “new damages” after the sixyear period had expired without any factual support for those damages. Id. The 

district court further concluded that Tracy’s § 3729(a)(1)(G) cause of action was also 

frivolous because “the terms of the loan documents are inconsistent with Tracy’s 

conclusory allegation[s].” Id. at *5. And overall, it stated that Tracy’s lawsuit was 

“clearly vexatious” and “indicate[d] bad faith and a clear intent to harass” because he 

used the litigation to “air personal grievances” and because he directed his attorneys 

to file a wrongful lis pendens on EID’s water rights at the outset of the litigation.

2 Id.

at *6.

But the district court declined to hold Tracy’s attorneys jointly and severally 

 2 After the district court found that Tracy wrongfully filed the lis pendens—

which is a notice of pending litigation “recorded in the chain of title to real 

property”—on EID’s water rights, it ordered Tracy to pay statutory damages and 

reasonable attorneys’ fees to EID. Lis pendens, Black’s Law Dictionary (11th ed. 

2019). Tracy’s attorneys objected to being held jointly and severally liable for the 

damages and fees. The district court concluded that this objection created a conflict 

between Tracy and his attorneys, so it disqualified them. See United States ex rel. 

Tracy v. Emigration Improvement Dist., 717 F. App’x 778, 782 (10th Cir. 2017)

(unpublished). But after Tracy’s attorneys withdrew their objection and offered to 

pay the damages and fees, the district court reinstated them.

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liable with Tracy for EID’s attorneys’ fees because after being disciplined for their 

conduct related to the wrongful lis pendens, his attorneys had not “multiplie[d] the 

proceedings . . . unreasonably and vexatiously.” 28 U.S.C. § 1927. Specifically, the 

district court concluded that Tracy’s conduct was not attributable to his attorneys

because the attorneys filed Tracy’s clearly frivolous complaint “based upon factual 

representations made by Tracy.”3 Tracy, No. 2:14-cv-00701, 2019 WL 6830890, at 

*7. Further, it noted that Tracy’s attorneys had not, unlike Tracy, “us[ed] the lawsuit 

and its allegations to attack [EID] and its business operations.” Id.

Tracy appeals the dismissal of his cause of action arising under 

§ 3729(a)(1)(A) and (B), as well as the § 3730(d)(4) award against him; EID crossappeals from the portion of the fee award declining to hold Tracy’s attorneys jointly 

and severally liable under § 1927. 

Analysis

In light of an intervening Supreme Court decision, we vacate both of the 

district court’s orders. After Tracy and EID briefed the statute-of-limitations issue, 

the Supreme Court found that the ten-year § 3731(b)(2) period also applies to private 

relators, abrogating our holding in Sikkenga. See Cochise Consultancy, Inc., 139 S. 

Ct. at 1511–12. But the district court did not evaluate the timeliness of Tracy’s 

 3 Despite this finding, the district court attributed to Tracy alone conduct that, 

on its face, appears attributable to his attorneys, such as drafting pleadings and 

“ma[king] arguments clearly contrary to Tenth Circuit law.” Tracy, No. 2:14-cv00701, 2019 WL 6830890, at *4. But because we remand on the statute-of-limitations 

issue, we do not reach the issue of whether the district court abused its discretion in 

making this finding.

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complaint under § 3731(b)(2) because at the time of its decision, it was bound by 

Sikkenga. And in so doing, it only assumed without deciding that September 29, 

2004, was the “the last possible date” that an FCA violation could have occurred. 

Tracy, No. 2:14-cv-00701, 2018 WL 3111687, at *4. Now that § 3731(b)(2)’s tenyear period applies to Tracy’s allegations, we remand for the district court to decide 

in the first instance whether Tracy filed his complaint “more than 10 years after the 

date on which the violation [wa]s committed.” § 3731(b)(2).

Because we vacate the district court’s dismissal order, we must also vacate its 

order on attorneys’ fees. To receive “reasonable attorneys’ fees and expenses” from 

Tracy, EID must “prevail[] in the action.” § 3730(d)(4). And we cannot say that EID 

“prevail[ed] in the action” until the district court decides whether any violation of 

§ 3729(a)(1)(A) or (B) occurred less than 10 years before Tracy filed his initial 

complaint. Id. On remand, the district court may again find Tracy’s “claim[s] . . . 

clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.” 

Id. But it should first determine whether EID in fact “prevails in the action.” Id.

Finally, because the district court premised its § 1927 ruling on joint-and-several 

liability—that is, because it considered only whether Tracy’s attorneys should be 

held liable along with Tracy for the award against Tracy under § 3730(d)(4)—we 

also vacate the portion of the district court’s order declining to hold Tracy’s attorneys 

jointly and severally liable under § 1927. 

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Conclusion

Accordingly, we vacate the orders of the district court and remand for further 

proceedings. 

Entered for the Court

Nancy L. Moritz

Circuit Judge

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