Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03440/USCOURTS-cand-3_04-cv-03440-9/pdf.json

Parties Involved:
Qui Tam
Plaintiff
United States of America
Plaintiff
University of San Francisco
Defendant
Patricia Paul Westerfield
Plaintiff

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1 The University’s requests for judicial notice are GRANTED. See Fed. R. Evid. 201.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA and STATE

OF CALIFORNIA, ex rel. PATRICIA PAUL

WESTERFIELD,

Plaintiffs,

 v.

UNIVERSITY OF SAN FRANCISCO,

Defendant.

 /

No. C 04-03440 JSW

ORDER GRANTING

UNIVERSITY’S MOTION TO

DISMISS WESTERFIELD’S

FIRST AMENDED COMPLAINT

Now before the Court is the motion to dismiss Claimant Patricia Paul Westerfield

(“Westerfield”)’s First Amended Complaint (“FAC”) by Defendant University of San Francisco

(the “University”). Having carefully considered the parties’ arguments and relevant legal

authority, the Court hereby GRANTS the University’s motion to dismiss. 

BACKGROUND

In February 2003, Westerfield filed a complaint in San Francisco Superior Court against

the University, her former employer.1 Westerfield subsequently filed this action against the

University pursuant to the False Claims Act, 31 U.S.C. § 3729, et seq. (“FCA”). Westerfield

alleges that the University failed to comply with the Americans with Disabilities Act (“ADA”)

by failing to provide reasonable accommodations for disabled students, by manipulating the data

on the number of disabled students, and by rejecting applicants based on their disabilities. She

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further alleges that the University falsely certified that it had complied with statutes relating to

discrimination as a condition of receiving government funding. 

On February 14, 2006, the Court dismissed Westerfield’s FCA claim with leave to

amend, and Westerfield subsequently filed an amended FCA claim. University now moves to

dismiss Westerfield’s amended FCA claim on several grounds. In addition to her federal FCA

claim, Westerfield brings a two state law claims: a claim under the California False Claims Act,

California Government Code § 12651, et seq., and a claim for retaliation under California

Government Code § 12653(b). The Court will address the additional specific facts as required

in the analysis. 

ANALYSIS

A. Legal Standards on a Motion to Dismiss.

A motion to dismiss is proper under Rule 12(b)(6) where the pleadings fail to state a

claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A motion to dismiss should

not be granted unless it appears beyond a doubt that a plaintiff can show no set of facts

supporting his or her claim. Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also De La Cruz

v. Tormey, 582 F.2d 45, 48 (9th Cir. 1978). In ruling on a Rule 12(b)(6) motion, the complaint

is construed in the light most favorable to the non-moving party and all material allegations in

the complaint are taken to be true. Sanders v. Kennedy, 794 F.2d 478, 481 (9th Cir. 1986). The

court, however, is not required to accept legal conclusions cast in the form of factual allegations

if those conclusions cannot reasonably be drawn from the facts alleged. Cleggy v. Cult

Awareness Network, 18 F.3d 752, 754-55 (9th Cir. 1994) (citing Papasan v. Allain, 478 U.S.

265, 286 (1986)). 

Unlike a Rule 12(b)(6) motion, in moving to dismiss under Rule 12(b)(1), a party can

“attack the substance of a complaint’s jurisdictional allegations despite their formal sufficiency,

and in so doing rely on affidavits or any other evidence properly before the court.” St. Clair v.

City of Chico, 880 F.2d 199, 201 (9th Cir. 1989).

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B. The University’s Motion to Dismiss.

1. Westerfield’s FCA Claim.

The University argues that Westerfield’s FCA claim should be dismissed because: (1)

the Court lacks jurisdiction over her claim based on the “public disclosure” bar; (2) Westerfield

failed to allege her FCA claim with sufficient particularity; and (3) her claim is barred by res

judicata. 

A private person, also known as a relator, may bring a qui tam action on behalf of the

United States against a person or entity who defrauds the government. 31 U.S.C. §§ 3729,

3730(b). However, the court’s jurisdiction is limited by 31 U.S.C. § 3730(e)(4), which

provides: “No court shall have jurisdiction over an action under this section based upon the

public disclosure of allegations or transactions ... unless the action is brought by the Attorney

General or the person bringing the action is an original source of the information.” 31 U.S.C. §

3730(e)(4)(A). The statute defines an “original source” as “an individual who has direct and

independent knowledge of the information on which the allegations are based and has

voluntarily provided the information to the Government before filing an action under this

section which is based on the information.” 31 U.S.C. § 3730(e)(4)(B). Westerfield, “as the qui

tam plaintiff, bears the burden of establishing subject matter jurisdiction.” See United States v.

Alcan Electrical and Engineering, Inc., 197 F.3d 1014, 1018 (9th Cir. 1999).

When the Court dismissed Westerfield’s initial complaint, the Court determined that her

FCA claim was based upon allegations or transactions that had been publicly disclosed in the

course of the litigation of another action Westerfield had previously filed in state court. See

Seal 1 v. Seal A, 255 F.3d 1154, 1159 (9th Cir. 2001) (court must determine whether at the time

the FCA claim is filed, “there has been a ‘public disclosure’ of the ‘allegations or transactions’

on which the claim is based”) (quoting 31 U.S.C. § 3730(e)(4)(A)). Accordingly, to bring her

FCA claim, Westerfield bears the burden of establishing that she qualifies as an original source,

i.e. that she (1) voluntarily disclosed the information to the government before filing her FCA

claim and (2) has direct and independent knowledge of the information on which the allegations

of her FCA claim are based. See 31 U.S.C. § 3730(e)(4)(B); see also Seal 1, 255 F.3d at 1162. 

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When the Court dismissed Westerfield’s FCA claim, it noted that if she chose to amend

her claim her toughest challenge was likely to be demonstrating that she had “direct” knowledge

of the alleged fraud. To make such a showing, Westerfield must establish she “had firsthand

knowledge of the alleged fraud, and that [s]he obtained this knowledge through [her] ‘own labor

unmediated by anything else.’” Alcan Electrical and Engineering, 197 F.3d at 1019; see also

Wang v. FMC Corp., 975 F.2d 1412, 1417 (9th Cir. 1992) (finding relator had “direct and

independent knowledge” of the fraud because “he saw [it] with his own eyes” and his

knowledge was “unmediated by anything but [his] own labor”).

In addition to her obligation to demonstrate she is an original source, Westerfield must

plead her FCA claim with particularity in compliance with Federal Rule of Civil Procedure 9(b)

(“Rule 9(b)”). See United States ex rel. Lee v. Beecham, 245 F.3d 1048, 1051 (9th Cir. 2001). 

In the order dismissing Westerfield’s original FCA claim, the Court advised Westerfield that she

needed to meet the heightened pleading standard of Rule 9(b) if she chose to amend her FCA

claim. 

i. Westerfield Fails to Allege Her FCA Claim With Particularity.

In her FAC, Westerfield alleges generally that the University applies for and receives

millions of dollars in state and federal funds and that in order to be eligible for such funds, the

University is required to submit certifications that it complies with statutes relating to

discrimination, including the Rehabilitation Act. (FAC, ¶ 27.) According to Westerfield, the

University violated the Rehabilitation Act and the ADA by failing to provide reasonable

accommodations for disabled students, by manipulating the data on the number of disabled

students, and by rejecting applicants based on their disabilities. (Id., ¶ 22.) By applying for and

receiving federal funds when it was violating these statutes, she contends that the University

made false claims to the government for money. (Id., ¶ 27.)

“Violations of laws, rules, or regulations alone do not create a cause of action under the

FCA. It is the false certification of compliance which creates liability when certification is a

prerequisite to obtaining a government benefit.” United States ex rel. Hopper v. Anton, 91 F.3d

1291, 1266 (9th Cir. 1996) (emphasis in original). In Hopper, the claimant alleged that the

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school district submitted false claims actionable under the FCA by submitting a triennial

certificate to the state department of education certifying that the district “will meet all

applicable requirements of state and federal law and regulations,” including compliance with the

Individuals with Disabilities Act (“IDEA”). In finding the FCA claim was not sufficiently

plead, the court found it significant that the IDEA does not require their funding recipients to

certify their compliance with federal laws and regulations. Id. at 1267. The Ninth Circuit

explained that merely a “breach of contract, or violation of regulations or law, or receipt of

money from the government where one is not entitled to receive the money,” does not state a

FCA claim. Rather, “[t]he FCA is far narrower. It requires a false claim. Thus, some request

for payment containing falsities made with scienter ... must exist.” Id. at 1265. In FCA claims

based on alleged false certifications, there are two major questions relating to liability: “(1)

whether the false statement is the cause of the Government’s providing the benefit; and (2)

whether any relation exists between the subject matter of the false statement and the event

triggering the Government’s loss.” Id. at 1266.

Thus, the Ninth Circuit made clear in Hopper, that merely alleging violations of federal

statutes while receiving funds is insufficient to state a claim under the FCA. A plaintiff must

allege the private individual or entity made a false certification of compliance which was a

prerequisite to obtaining the government benefit. Id. at 1266-67. Here, Westerfield does not

plead with sufficient particularity that she has direct and independent knowledge of the basis for

her FCA claim. She fails to allege what fund(s) the University received, when it applied for or

received such fund(s), what certification was required for such fund(s), when such certification

was submitted, or who signed and submitted such certification. The most detailed information

in her FAC is that she alleges applicants must sign Standard Form 424B certifying their

compliance with statutes relating to discrimination, including the Rehabilitation Act, in order to

received federal grants for non-construction programs from the Department of Education. 

(FAC, ¶ 27.) However, she does not specifically allege what federal grants the University

received under non-construction programs from the Department of Education or when the

University applied for such grants. 

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Later in the same paragraph in her FAC, Westerfield alleges that the University received

federal grants for a program called “the Executive Masters Program in Rehabilitation

Management.” (Id.) She does not clearly allege that the Executive Masters Program in

Rehabilitation Management is a non-construction program of the Department of Education for

which the University must have submitted a Standard Form 424B. (Id.) However, even if the

Court were to construe her FAC liberally to infer such an allegation, Westerfield fails

sufficiently to allege when the University applied for funds under the Executive Masters

Program in Rehabilitation Management, when the University submitted the alleged certification,

who signed the alleged certification, when the University received funds under this program, or

how much money the University allegedly received under this program. Therefore, the Court

finds that Westerfield fails to meet the heightened pleading standard of Rule 9(b).

ii. Westerfield Has Not Demonstrated that the Heightened Pleading

Standard May Be Relaxed.

In her opposition to the instant motion, Westerfield concedes that she does not have

direct knowledge that the University filed certifications of compliance with the ADA and the

Rehabilitation Act as a condition of receiving federal grants. She explains that those

certifications were not made in her office and the University controls access to such

certifications. (Opp. at 6.) Westerfield argues that because the University has unique access to

the requisite information regarding any certifications, the Court should relax the pleading

standards for her FCA claim. However, even if the Court were able to relax the requirements

under Rule 9(b) for pleading a FCA claim, Westerfield’s request conflicts with her argument

that she is an “original source” of the University’s fraudulent conduct. See United States ex rel.

Joshi v. St. Luke’s Hosp., Inc., 441 F.3d 552, 560 (8th Cir. 2006) (noting that claimant’s

argument for a relaxed pleading standard where the information concerning the alleged fraud is

uniquely within the defendant’s control conflicts with claimant’s allegation that he is an

“original source” of the alleged fraudulent conduct); see also United States ex rel. Karvelas v.

Melrose-Wakefield Hosp., 360 F.3d 220, 230 (1st Cir. 2004) (noting that the definition of

“original source,” as someone who has direct and independent knowledge of the information,

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excludes individuals who need information that is not in their possession to adequately state

their FCA claim). As noted above, because the information on which Westerfield’s FCA claim

is based has already been publicly disclosed, she must demonstrate that she has direct and

independent knowledge of the alleged fraud to demonstrate jurisdiction. 31 U.S.C. §

3730(e)(4). Without direct and independent knowledge of the details of the alleged

certifications, Westerfield cannot demonstrate that she is an original source of the alleged false

claims by the University.

Westerfield’s reliance on United States ex rel. Augustine v. Century Health Services,

Inc., 289 F.3d 409 (6th Cir. 2002), Shaw v. AAA Engineering & Drafting Inc., 213 F.3d 519

(10th Cir. 2000), in an attempt to evade her requirement to plead, and demonstrate direct and

independent knowledge of, such detail, is misplaced. In Augustine, the court made detailed

factual findings regarding the specific fraud perpetrated by the company, including the details

regarding the substance and the timing of certifications made and how the company defrauded

the government. A company submitted cost reports and cost statements claiming that the

contributions it made to its Employee Stock Ownership Plan (“ESOP”) were reimbursable by

Medicare. Augustine, 289 F.3d at 412. Each cost report contained a certification that the report

was a true, correct, and complete report prepared in accordance with the applicable Medicare

instructions. Id. Although the company contributed almost $3 million to the ESOP over a twoyear period, it promptly transferred all but approximately $7,000 back to the company. The

district court found the company liable under the FCA for knowingly presenting false cost

reports to the government to secure payment under Medicare for nonallowable expenses. Id. at

414. The district court relied on a theory of implied certification, finding that by submitting cost

reports with certifications that the cost reports were true, correct, and complete in accordance

with the applicable instructions, the company represented that it would continue to comply with

the Medicare regulations governing the allowability of ESOP expenses. Id. at 414-15. The

company argued that because the cost reports were not expressly false at the exact time they

were submitted, it could not be held liable under the FCA. Id. The Sixth Circuit rejected the

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company’s argument and held that liability could attach under the FCA “if the claimant violates

its continuing duty to comply with the regulations on which payment is conditioned.” Id. 

In Shaw, a company had a contract with the government to perform photography

services. Under the contract, the company was required to comply with environmental

regulations regarding silver recovery. Shaw, 213 F.3d at 527. The court permitted recovery

pursuant to the FCA based on the company’s submittal of monthly invoices for payment under

the contract when the company had been violating the environmental regulations required as a

condition of payment. The court held that there was “ample evidence that [the company]

knowingly failed to follow the silver recovery process but nevertheless invoiced for and

accepted full payment under the contract.” Id. at 533. Even though the company did not

explicitly provide a certification that it complied with the environmental statutes, by submitting

invoices for payment under the contract, the court found that the company impliedly certified

that it complied with the contractual requirements for payment, which included complying with

the environmental regulations. This implied certification was sufficient to create liability under

the FCA. Id. at 531-33. While the company did not provide explicit certifications regarding

environmental compliance, there was evidence of the invoices requesting payment submitted on

specific dates and for specific amounts, as well as evidence that at the time the invoices were

submitted, the company knowingly failed to comply with the environmental regulations

regarding the silver recovery process. Id. at 526-29, 533. 

In contrast, here, Westerfield has not sufficiently alleged that the University applied for

and received specific funds on a certain date which were conditioned upon compliance with the

Rehabilitation Act and the ADA. Moreover, Augustine and Shaw do not assist Westerfield

because she is not alleging that the University did not provide explicit certifications, but rather,

that she is unaware of the details of the University’s certifications. 

The Court finds that Westerfield fails to demonstrate that she has direct and independent

knowledge of the alleged fraud and fails to allege her FCA claim with sufficient particularity. 

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 Because the Court is dismissing the FCA claim on the grounds that Westerfield has

not demonstrated she is an original source and that it is not plead with sufficient particularity,

the Court need not address the University’s additional argument that the FCA claim is barred

by res judicata.

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Accordingly, the Court grants the University’s motion to dismiss her FCA claim.2

iii. Leave To Amend Would Be Futile.

In the first order dismissing her FCA claim, the Court specifically described the defects

with her FCA claim with respect to failing to plead sufficient facts to demonstrate she is an

original source and to comply with Rule 9(b), and gave her an opportunity to correct these

defects. In her opposition brief, Westerfield conceded that she does not have direct knowledge

that the University filed certifications of compliance with the ADA and the Rehabilitation Act

as a condition of receiving government funds. (Opp. at 11.) Moreover at oral argument on the

motion, Westerfield made it clear that she does not have any more information from which she

could allege additional facts regarding certification or of the specific funds received by the

University. Thus, it appears that providing Westerfield another opportunity to amend her

complaint would be futile. See DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir.

1992). Therefore, the Court dismisses Westerfield’s FCA claim with prejudice.

2. Westerfield’s State Law Claims.

Westerfield also brings two state law claims - one under the California False Claims Act

and one for retaliation. Generally, when a court dismisses all the federal claims on the merits,

the court has discretion under 28 U.S.C. § 1367(c) to adjudicate the remaining state law claims. 

However, here, the Court has dismissed Westerfield’s FCA claim for lack of subject matter

jurisdiction based on her failure to show she is an original source. See 31 U.S.C. § 3730(e)(4). 

When a court dismisses the federal claims for lack of subject matter jurisdiction, it has no

discretion to address the state law claims. The state law claims must be dismissed. See Herman

Family Revocable Trust v. Teddy Bear, 254 F.3d 802, 806 (9th Cir. 2001) (“If the district court

dismisses all federal claims on the merits, it has discretion under § 1367(c) to adjudicate the

remaining claims; if the court dismisses for lack of subject matter jurisdiction, it has no

discretion and must dismiss all claims.”). Because the Court has dismissed Westerfield’s FCA

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claim for lack of subject matter jurisdiction, this Court does not have discretion to adjudicate

Westerfield’s state law claims and must dismiss them without prejudice to refiling in state court

provided there is no statute of limitations bar.

CONCLUSION

For the foregoing reasons, the Court GRANTS the University’s motion to dismiss. 

Westerfield’s federal FCA claim is dismissed with prejudice and her state law claims are

dismissed without prejudice.

IT IS SO ORDERED.

Dated: October 10, 2006 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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