1

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA

)

UNITED STATES OF AMERICA, )

ex rel. )

STEVEN O. SANSBURY, et al. )

)

Plaintiffs, ) Civ. Action No. 07-251 (EGS)

)

v. )

)

LB&B ASSOCIATES, INC., et al. )

)

Defendants. )

)

MEMORANDUM OPINION

Pending before the Court are two motions to dismiss filed 

by Defendants Edward Brandon, Lily Brandon, and LB&B Associates, 

Inc. (hereinafter, “LB&B”) (collectively, “LB&B Defendants”). 

Relators brought this action against the LB&B Defendants, as 

well as Bering Straits AKI, Chilkat Services, Inc., and two 

individual representatives of those companies pursuant to the 

qui tam provision of the False Claims Act (“FCA”), 31 U.S.C. §

3730(b). Relators allege that Defendants violated the FCA with 

respect to their participation in the Small Business 

Association’s (hereinafter “SBA”) Section 8(a) program and 8(a) 

Mentor Protégé program. On April 14, 2011, the Government filed 

its notice of election to intervene in part, electing to 

intervene in Relators’ claims only insofar as they relate to the 

LB&B Defendants’ participation in the Section 8(a) program, but 
2

not the Mentor-Protégé program. The Government subsequently 

filed its complaint in intervention on August 19, 2011. The 

Government’s complaint in intervention asserts two additional 

causes of action against LB&B Defendants for common law 

negligent misrepresentation and fraud against the LB&B 

Defendants. Pending before the Court are the LB&B Defendants’ 

motions to dismiss both complaints, pursuant to Rules 9(b) and 

12(b)(6) of the Federal Rules of Civil Procedure.

1 Having 

carefully considered Defendants’ motions to dismiss, the 

responses and replies thereto, the applicable law, and the 

record as a whole, Defendants’ Motion to Dismiss Relators’ 

complaint is DENIED and Defendants’ Motion to Dismiss the 

Government’s complaint in intervention is GRANTED IN PART AND 

DENIED IN PART.

I. Background

A. Statutory Framework

1. The Section 8(a) Program

The SBA’s Section 8(a) program is a business development 

program for small businesses owned by individuals who are 

socially and economically disadvantaged. See 15 U.S.C. § 

637(a); 13 C.F.R. § 124.1. Qualifying small businesses that are 

 

1 Because a number of the arguments made in both motions to 

dismiss overlap, the Court will address the motions together. 

Further, because only the LB&B Defendants have responded to the 

complaint, this opinion refers to them throughout as 

“Defendants.”
3

owned or controlled by socially or economically disadvantaged 

individuals may apply to the SBA, and if accepted into the 

program, they are eligible to receive preferential treatment in 

the form of “set aside” contracts. They are also eligible to 

receive technological, financial, and practical assistance. 

Relators’ Compl. ¶ 15; Gov’t Compl. ¶¶ 19-21. 

In order for a small business to participate in the 

program, it must apply to and be certified by the SBA. It must 

first meet certain size requirements, see 13 C.F.R. Part 21, and 

it must also be “disadvantaged,” which requires that at least 

fifty one percent of the business is owned and controlled by one 

or more individuals who are socially and economically 

disadvantaged. See 15 U.S.C. § 637(a)(4)(A)-(B); 13 C.F.R. § 

124.105. The program defines socially “disadvantaged 

individuals” as those who have been “subjected to racial or 

ethnic prejudice or cultural bias within American society 

because of their identities as members of groups and without 

regard to their individual qualities.” 13 C.F.R. § 124.103(a); 

see also 15 U.S.C. § 637(a)(5). “Economically disadvantaged” 

individuals are those socially disadvantaged individuals “whose 

ability to compete in the free enterprise system has been 

impaired due to diminished capital and credit opportunities as 

compared to others in the same or similar line of business who 

are not socially disadvantaged.” 13 C.F.R. § 124.104(a); see 
4

also 15 U.S.C. § 637(a)(6)(A). A company selected for the 

program must annually certify its continued eligibility for the 

Section 8(a) program and must provide financial and other 

information to the SBA. See 13 C.F.R. §§ 124.112(b),

124.509(c), 124.601, 124.602. A company may remain in the 

program for a maximum of nine years if it continues to meet the 

eligibility requirements throughout the period, and it may 

participate in the program only once. See 13 C.F.R. §§ 124.2, 

124.108(b).

Individuals who are members of certain racial and ethnic 

groups are considered to be presumptively socially 

disadvantaged. See 13 C.F.R. § 124.103(b)(1); see also 15 

U.S.C. § 631(f)(1)(B)-(C) (explaining that socially 

disadvantaged individuals include “members of certain groups 

that have suffered the effects of discriminatory practices or 

similar invidious circumstances over which they have no 

control,” including, but not limited to “Black Americans, 

Hispanic Americans, Native Americans, Indian tribes, Asian 

Pacific Americans, Native Hawaiian Organizations, and other 

minorities”). This presumption is rebuttable, and may be 

overcome by credible evidence to the contrary. See 13 C.F.R. § 

124.103(b)(3). An individual who is not a member of one of 

these groups may nonetheless gain admission into the Section 

8(a) program by establishing by a preponderance of the evidence 
5

that he or she is socially disadvantaged under criteria set 

forth in 13 C.F.R. § 124.103(c).

In the context of the Section 8(a) program, “control” 

requires that “both that disadvantaged persons have the power to 

control the company and that such persons actually exercise 

their authority to control the company.” Gov’t Compl. ¶ 26; see

also 13 C.F.R. § 124.106. Although a non-disadvantaged 

individual may be involved in the management of a company that 

participates in the Section 8(a) program, that individual may 

not, inter alia, exercise actual control of the company or 

receive compensation that exceeds that of the socially or 

economically disadvantaged person who controls the company. See 

13 C.F.R. § 124.106(e). Further, non-disadvantaged individuals 

who “transfer majority stock ownership or control of the firm to 

an immediate family member within two years prior to the 

application and remain involved in the firm as a stockholder, 

officer, director, or key employee of the firm” are subject to a 

rebuttable presumption that they actually control the firm. Id.

§ 124.106(f).

2. Mentor Protégé Program

In addition to the Section 8(a) program, the SBA also 

administers a Mentor-Protégé program, which allows a non-Section 

8(a) company to form a joint venture with a Section 8(a) 

eligible company. The program is designed to encourage an 
6

approved mentor, that is not a Section 8(a) concern, to provide 

managerial, financial, and technical assistance in order to 

improve a protégé’s ability to bid on and compete for government 

contracts. See 13 C.F.R. § 124.520(a)-(b). The protégé must be 

in the development stage of participation in the Section 8(a) 

program, have never received an 8(a) contract, or have a size 

that is half the size of the corresponding NAICS code. Id. § 

124.520(c).

In order to participate in the program, a mentor and 

protégé must submit their joint venture agreement to the SBA for 

approval. Id. § 124.513(a)(1). The Section 8(a) participant 

must be the “managing venturer” of the joint venture, and an 

employee of the Section 8(a) concern must be designated as the 

project manager responsible for overall contract performance. 

Id. § 124.513(c)(2). Where the “8(a) concern brings very little 

to the joint venture relationship in terms of resources and 

expertise other than its 8(a) status, SBA will not approve the 

joint venture agreement.” Id. § 124.513(a)(2). The applicable 

regulations specifically provide that “[n]o determination of 

affiliation or control may be found between a protégé firm and 

its mentor based on the mentor/protégé agreement or any 

assistance provided pursuant to the agreement.” Id. § 

124.520(d)(4). 

B. Factual Background
7

LB&B is a North Carolina company that has its principal 

place of business in Columbia, Maryland. It was certified by 

the SBA as a Section 8(a) concern on April 6, 1995. This 

certification was based on the status of President Lily Brandon, 

who is an Asian Pacific American. Relators’ Compl. ¶¶ 7, 29; 

Gov’t Compl. ¶ 12. Both Relators were employed at LB&B --

Steven O. Sansbury was employed as an Operations and Maintenance 

Institutional Planner from 2000 until his separation from the 

company in 2003, Relators’ Compl. ¶ 4; James Buechler was 

employed as an Assistant Project Manager at the FDA from July 

2003 until August 2005, Id. ¶ 5. 

1. Allegations in the Government’s Complaint in 

Intervention2

LB&B was incorporated in 1992. Govt. Compl. ¶ 28. 

Initially, the Board of Directors of the company had six 

members, only two of whom were socially and economically 

disadvantaged: Ms. Brandon and her son, F. Edward Brandon Jr. 

Relators and the Government allege that neither possessed 

sufficient skills or experience to run a company engaged in 

LB&B’s main lines of business -- government contracts, 

manufacturing, facilities management, and government services. 

Id. ¶¶ 29-30. Three of the other directors, including Defendant 

 

2 These allegations relate to claims made in both the Relators’ 

complaint as well as in the United States’ complaint in 

intervention.
8

F. Edward Brandon, Ms. Brandon’s husband, had extensive 

experience in government contracting and the other lines of 

business. Id. ¶ 31. Despite her alleged lack of experience, 

Ms. Brandon was selected as the president of the company. 

Moreover, though she contributed substantially the same amount

as the other directors, Ms. Brandon’s financial contribution was 

treated as equity and she was given 51 percent of the company’s 

stock. Id. ¶¶ 33-34.

In 1994, prior to applying for Section 8(a) certification, 

all of the directors of the company except for Ms. Brandon 

officially resigned, though they stayed on as employees with the 

same titles and salaries as before their resignations. Id. ¶¶ 

35-37. The Government alleges that two of the original 

directors sold their stock to Ms. Brandon at this time at the 

share price set at the time of the company’s formation despite 

the fact that the company had grown in the interim. As a result 

of this sale, Ms. Brandon acquired an 81 percent interest in the 

company. Id. ¶ 39. 

On December 28, 1994, LB&B initially applied for Section 

8(a) certification. The Government alleges that there were a 

number of misrepresentations on the initial application. For 

instance, Ms. Brandon’s salary was listed as $64,000 and Mr. 

Brandon’s total compensation was listed at $42,500. According 

to the Government, Ms. Brandon’s salary was actually $13,692.16 
9

while Mr. Brandon’s total compensation was $18,126.60. Because 

Mr. Brandon’s salary allegedly exceeded that of Ms. Brandon, 

LB&B would have been ineligible to participate in the Section 

8(a) program. Id. ¶¶ 43-47.

Further, on its application, LB&B represented that Ms. 

Brandon would be responsible for the day-to-day operation of the 

company and described Mr. Brandon’s role as limited to assisting 

the president. Id. ¶¶ 48-49. However, the Government alleges 

that Ms. Brandon had “no meaningful substantive role” in the 

daily operations of the company, and did not:

(i) make specific decisions regarding bidding on new 

business; (ii) oversee [LB&B’s] performance of its 

government contracts . . . ; (iii) play any 

substantive role in the negotiation and formulation of 

[LB&B’s] government contracts; (iv) set and enforce 

expectations for the company’s general managers; (v) 

formulate specific company practices regarding 

collective bargaining and interactions with unions; or 

(vi) oversee the financial performance of [LB&B] on 

its government contracts.

Id. ¶ 50. Those functions were instead overseen by Mr. Brandon 

and others. Id. ¶ 51. Thus, the Government alleges that Ms. 

Brandon’s actual role at the company “failed to satisfy the 

statutory and regulatory requirements of control sufficient to 

participate in the Section 8(a) business development program.” 

Id. ¶ 52.

After receiving LB&B’s initial application for 

certification, the SBA requested additional materials from the 
10

company. The SBA specifically noted that Ms. Brandon’s résumé

did not appear to indicate that she had the necessary skills to 

manage and operate the company. The SBA asked LB&B to provide a 

fuller explanation of who had such skills at the company. Id. ¶ 

54. The Government alleges that in responding to this request 

for information, Defendants further misrepresented Ms. Brandon’s 

skills and role by stating that she had prior management 

experience in the manufacturing industry, that she had direct 

control over daily operations, that only she could sign company 

commitments and checks, and that she controlled the finances of 

the company. Id. ¶¶ 56-60. 

The Government alleges that on the basis of these 

misrepresentations, the SBA certified LB&B as a Section 8(a) 

concern on April 6, 1995 for a period of nine years to conclude 

in April 2004. Id. ¶ 61. On the basis of this certification, 

LB&B was able to market itself as a Section 8(a) program 

participant and bid on “set-aside” contracts, which the 

Government contends it began to actively and aggressively do 

after February 1, 1997. Id. ¶¶ 62-67; 82-84. Moreover, on the 

yearly certifications that it submitted after April 1995, the 

Government alleges that LB&B continued to falsely certify, as it 

had on its original application, that Ms. Brandon controlled the 

company and that she was the only person at the company who 

could commit monies and sign company checks. Id. ¶¶ 68-81. For 
11

instance, during this period, the Government alleges that at 

least five additional people at the company had the authority to 

sign company checks and make commitments. Id. According to the 

Government, that Ms. Brandon did not actually control the 

company is further evidenced by the numerous company memoranda 

issued by Mr. Brandon between 1996 and 2004 on the full range of 

company operations. Id. ¶¶ 80-81. 

After LB&B “graduated” from the Section 8(a) program in 

2004, the Government alleges that Ms. Brandon resigned as 

president and Mr. Brandon officially took on the role he had 

been performing for years. Id. ¶¶ 85-86. Nevertheless, LB&B 

purportedly continued to represent itself as a woman-owned and –

operated business until at least 2007. Id. ¶ 88.

2. Allegations in Relators’ Complaint 

In addition to the allegations above, Relators also allege 

that Defendants engaged in fraud in two joint ventures that LB&B 

entered into with Section 8(a) concerns under the SBA Mentor

Protégé program. Relators allege that in late 2003 and early 

2004, prior to its “graduation” from the Section 8(a) program, 

LB&B began to search for protégé companies “so that it could 

continue to illegally benefit from the 8(a) programs’ [sic] 

advantages on bids on government contracts.” Relators’ Compl. ¶ 

50. To that end, Relators claim that LB&B entered into 

discussions with Bering Straits Aki, LLC (hereinafter “BSA”), an 
12

Alaskan, Inuit company owned by Defendant Gail Schuber, 

regarding a proposed mentor-protégé relationship. Id. ¶¶ 50-

52. On August 16, 2004, a little over four months after LB&B 

exited the Section 8(a) program, the SBA approved a joint 

venture agreement between LB&B and BSA, pursuant to which the 

joint venture was able to secure several government contracts, 

including contracts with the Centers for Medicare & Medicaid 

Services, the General Services Administration Public Buildings 

Services, the Federal Emergency Management Agency, and the 

United States Air Force. Id. ¶¶ 52-53. Relators allege that 

the project managers for these contracts were LB&B employees 

until January 2005, which was after the joint venture was 

approved by the SBA. Id. ¶ 55. These project managers 

purportedly did not switch their employment to BSA until January 

2005, when they were instructed to do so by a senior vice 

president at LB&B. Id. ¶ 56.

LB&B also entered into a mentor-protégé relationship with 

Ckilkat Services, an Alaskan corporation, at some point in 2006. 

Id. ¶ 64. Also in 2006, LB&B hired Sheldon L. Jahn as a senior 

vice president. Relators allege that Mr. Jahn’s employment was 

transferred from LB&B to Chilkat in late 2006 or early 2007, 

after the SBA had already approved the joint venture, so that he 

could serve as the general manager of the joint venture. Id. 

C. Procedural History
13

On or about December 27, 2004, Relators filed an action 

alleging similar claims relating to Defendants’ participation in 

the Section 8(a) program in the United States District Court for 

the District of Maryland. See United States ex rel. Sansbury v. 

LB&B Associates, Inc., No. 04-4018. On May 5, 2006, the 

Government filed a notice of its election not to intervene. 

After the Government declined to intervene in the District 

of Maryland action, Relators filed a sealed qui tam complaint in 

this court on February 1, 2007, alleging violations of the FCA. 

The United States was contemporaneously served with the 

Complaint. The Government filed several motions for an 

extension of time to determine whether it would intervene in the 

claims raised in Relators’ complaint. During this time, the 

Government met with both Relators and Defendants and attempted 

to resolve the matter short of continued litigation. On April 

14, 2011, the Government filed a notice of election to 

intervene; it elected to intervene in that part of the action 

that relates to Defendants’ participation in the Section 8(a) 

program and declined to intervene in the remaining claims 

relating to participation in the Mentor-Protégé program. Upon 

the unsealing of the action before this Court on June 29, 2011, 

Defendants moved to unseal the District of Maryland action, 

which was eventually unsealed on October 13, 2011. On August 

19, 2011, after Defendants were served with Relators’ complaint, 
14

the Government filed its complaint in intervention. Defendants 

filed motions to dismiss both the Relators’ complaint and the 

Government’s complaint in intervention. Those motions are now 

ripe for determination by this Court.

II. Standard of Review

A. Rule 12(b)(6)

A motion to dismiss pursuant to Rule 12(b)(6) tests the 

legal sufficiency of the complaint. See Browning v. Clinton, 

292 F.3d 235, 242 (D.C. Cir. 2002). In order to be viable, a 

complaint must contain “a short and plain statement of the claim 

showing that the pleader is entitled to relief, in order to give 

the defendant fair notice of what the . . . claim is and the 

grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 555 (2007) (internal quotation marks and citations 

omitted). The plaintiff need not plead all of the elements of a 

prima facie case in complaint, Swierkiewicz v. Sorema N.A., 534 

U.S. 506, 511-14 (2002), nor must the plaintiff plead facts or 

law that match every element of a legal theory. See Krieger v. 

Fadely et al., 211 F.3d 134, 136 (D.C. Cir. 2000).

However, despite these liberal pleading standards, to 

survive a motion to dismiss, “a complaint must contain 

sufficient factual matter, accepted as true, to state a claim to

relief that is plausible on its face.” Ashcroft v. Iqbal, 556 

U.S. 662, 678 (2009) (internal quotation marks omitted); 
15

Twombly, 550 U.S. at 562. A claim is facially plausible when 

the facts plead in the complaint allow “the court to draw the 

reasonable inference that the defendant is liable for the 

misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 

550 U.S. at 556). While this standard does not amount to a 

“probability requirement,” it does require more than a “sheer 

possibility that a defendant has acted unlawfully.” Id. (citing 

Twombly, 550 U.S. at 556).

“[W]hen ruling on a defendant’s motion to dismiss [pursuant 

to Rule 12(b)(6)], a judge must accept as true all of the 

factual allegations contained in the complaint.” Atherton v. 

D.C. Office of the Mayor et al., 567 F.3d 672, 681 (D.C. Cir. 

2009) (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)). The 

court must also give the plaintiff “the benefit of all 

inferences that can be derived from the facts alleged.” Kowal 

v. MCI Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 

1994)(internal citation omitted). Despite this, a court need 

not “accept inferences drawn by plaintiffs if such inferences 

are unsupported by the facts set out in the complaint. Id. 

Further, “[t]hreadbare recitals of the elements of a cause of 

action, supported by mere conclusory statements” are not 

sufficient to state a claim. Iqbal, 556 U.S. at 678 (internal 

citation omitted). 

B. Rule 9(b)
16

This Circuit has held that complaints brought under the 

False Claims Act are subject to the heightened pleading 

requirements of Fed. R. Civ. P. 9(b). See United States ex rel. 

Totten v. Bombardier Corp. and Envirovac, Inc., 286 F.3d 542, 

551-52 (D.C. Cir. 2002) (“Every circuit to consider the issue 

has held that, because the False Claims Act is self-evidently an 

anti-fraud statute, complaints brought under it must comply with 

Rule 9(b).”). Rule 9(b) requires that “in all averments of 

fraud or mistake, the circumstances constituting fraud or 

mistake shall be stated with particularity.” Fed. R. Civ. P. 

9(b). This specificity requirement “normally . . . means that 

the pleader must state the time, place and content of the false 

misrepresentations, the fact misrepresented and what was 

obtained or given up as a consequence of the fraud.” United 

States ex rel. Joel D. Joseph v. Cannon, 642 F.2d 1373, 1385 

(D.C. Cir. 1981) (internal quotation marks omitted).

Likewise, in the context of the FCA, “the circumstances 

that must be pleaded with specificity are matters such as the 

time, place, and contents of the false representations, such 

representation being the element of fraud about which the rule 

is chiefly concerned.” Totten, 286 F.3d at 552 (internal 

citation omitted) (emphasis in original); Shekoyan v. Sibley

Int’l. Corp., 217 F. Supp. 2d 59, 73 (D.D.C. 2002) (noting that 

in the FCA context, “a claimant must typically allege the 
17

identity of the person who made the fraudulent statement, the 

time, place and content of the misrepresentation, the resulting 

injury, and the method by which the misrepresentation was 

communicated”) (internal citation omitted).

C. False Claims Act

The FCA provides a civil penalty and treble damages against 

any individual who: (1) knowingly presents or causes to be 

presented a false or fraudulent claim for payment or approval by 

the United States, 31 U.S.C. § 3729(a)(1); (2) knowingly makes, 

uses, or causes to be made or used, a false record or statement 

material to getting a false or fraudulent claim paid or approved 

by the Government, id. § 3729(a)(2); or (3) conspires to defraud 

the United States by getting a false or fraudulent claim allowed 

or paid, id. § 3729 (a)(3). To enforce these and other 

provisions of the FCA, a private person, known as a “relator,” 

may bring a civil or qui tam action in the government’s name. 

31 U.S.C. § 3730(b)(1). If the government elects to intervene, 

it shall then have the primary responsibility for prosecuting 

the action, although the relator may continue as a party to the 

action, subject to certain limitations enumerated in the 

statute. Id. § 3730(c)(1). 

III. Discussion

A. Relators’ Standing to Bring FCA Claims Related to 

Participation in 8(a) Program 
18

Defendants first argue that, because the Government has 

intervened in this action with respect to the claims regarding 

their participation in the 8(a) program, those claims have been 

rendered impermissibly duplicative, and Relators thus lack 

standing to bring them. See Defs.’ MTD Relators’ Compl. at 19-

20. Relators argue that Defendants cannot seek to dismiss the 

portions of their complaint in which the Government has 

intervened. Rather, they argue that the only way for Defendants 

to limit their participation is to file a motion pursuant to 31 

U.S.C. § 3730(c)(2)(D), which states that “[u]pon a showing by 

the defendant that unrestricted participation during the course 

of the litigation by the person initiating the action would be 

for purposes of harassment or would cause the defendant undue 

burden or unnecessary expense, the court may limit the 

participation by the person in the litigation.” Relators’ Opp’n 

at 17 (quoting 31 U.S.C. § 3730(c)(2)(D)). The Government 

agrees that its complaint in intervention is the operative 

complaint as to all claims in which it has intervened. However, 

the Government notes that Relators also still have the right to 

continue in the action as parties with respect to those 

intervened claims. The Government therefore recommends that the 

Court deny as moot Defendants’ motion to dismiss the Section 

8(a) claims in Relators’ initial complaint. See Gov’t’s Opp’n 

at 5 n.1. 
19

The FCA states that “[a] person may bring a civil action 

for a violation of section 3729 for the person and for the 

United States government.” 31 U.S.C. §3730(b)(1). Thus, the 

statute explicitly gives a relator the right to proceed as a 

real party in interest in a qui tam action. The statute does 

not indicate that a relator does not retain standing after the 

government intervenes. In fact, the statute provides for the 

opposite, stating: “If the Government proceeds with the action, 

it shall have the primary responsibility for prosecuting the 

action, and shall not be bound by an act of the person bringing 

the action. Such person shall have the right to continue as a 

party to the action . . . .” 31 U.S.C. § 3730(c)(1) (emphasis 

added). Thus, by automatic operation of the statute, the 

Government’s complaint in intervention becomes the operative 

complaint as to all claims in which the government has 

intervened. See United States ex rel. Feldman v. City of New 

York, 808 F. Supp. 2d 641, 648-49 (S.D.N.Y. 2011)). However, a 

relator’s initial complaint continues to be the operative 

complaint for all non-intervened claims and relators remain a 

party to the Government’s intervened claims and continue to have 

rights to participate in those claims under 31 U.S.C. § 

3730(c)(1) and to receive any relator’s recovery permitted by 31 

U.S.C. § 3730(d), subject to the limitations of the FCA and the 

facts and circumstances a particular case. Defendants can only 
20

seek to have the Court limit relators’ participation pursuant to 

31 U.S.C. § 3730(c)(2)(D).

Most other courts that have addressed this issue have 

dismissed relators’ superseded claims. See, e.g. Feldman, 808 

F. Supp. 2d at 649 (dismissing relator’s amended complaint for 

lack of standing because it was “superseded in its entirety by 

the Government’s Amended Complaint”); United States ex rel Magee 

v. Lockheed Martin Corp., No. 09-324, 2010 U.S. Dist. LEXIS 

23295, at *8-*9 (S.D. Miss. Mar. 12, 2010) (same); United States 

ex rel. Becker v. Tools & Metals, Inc., No. 3:05-CV-0627, 2009 

U.S. Dist. LEXIS 27507, at *6, *17-*19 (N.D. Tex. March 31, 

2009); In re Pharm. Indus. Average Wholesale Price Litig., No. 

01-12257, 2007 U.S. Dist. LEXIS 89835, at *17 (D. Mass. Dec. 6, 

2007) (“[O]nce the government has intervened, the relator has no 

separate free-standing FCA cause of action.”) (citing United 

States ex rel. Barajas v. Northrop Corp., 147 F.3d 905, 910 (9th 

Cir. 1998))); but see United States ex rel. Landis v. Tailwind 

Sports Corp., No. 10-cv-976, 2014 U.S. Dist. LEXIS 83313 (D.D.C. 

June 19, 2014), at *23-*28 (refusing to dismiss relators’ 

intervened claims on the basis that they no longer had standing 

because the text of the FCA does not require it). 

However, dismissal is by no means required especially 

where, as here, Defendants have made no showing that the 

Relators’ participation during the course of the litigation will 
21

cause them undue burden or expense that would justify limiting 

their participation. Therefore, because the Government’s 

complaint in intervention supersedes Relators’ complaint with 

respect to the intervened claims, and because Relators have the 

right to continue as parties to this action, the Court will deny 

Defendants’ motion to dismiss Relators’ claims, to the extent 

that they are duplicative of the Government’s claims, as moot. 

B. Statute of Limitations

1. Government’s FCA Claims pre-February 2001

Defendants argue that all of the Government’s FCA claims 

that predate February 1, 2001 are barred by the statute of 

limitations. The FCA provides that:

A civil action under section 3730 may not be brought--

(1) more than six years after the date on which 

the violation of section 3729 is committed, or 

(2) more than three years after the date when 

facts material to the right of action are known 

or reasonably should have been known by the 

official of the United States charged with 

responsibility to act in the circumstances, but 

in no event more than 10 years after the date on 

which the violation is committed, 

whichever occurs last. 

31 U.S.C. § 3731(b). The Act further states that “[f]or statute 

of limitations purposes, any . . . Government pleading shall 

relate back to the filing date of the complaint of the person 

who originally brought the action, to the extent that the claim 
22

of the Government arises out of the conduct, transactions, or 

occurrences set forth, or attempted to be set forth, in the 

prior complaint of that person.” Id. § 3731(c).3 

Neither party disputes that the Government’s claims arise 

out of the conduct, transactions, and occurrences set forth in 

Relators’ complaint, and that the Government’s complaint thus 

“relates back” to the date of the filing of Relators’ complaint. 

Defs.’ MTD Govt.'s Compl. at 15-16; Govt.’s Opp’n at 11. 

Defendants argue that because the Government did not file its 

complaint in intervention within three years of the date when it 

should have known of any potential claims – that is, February 1, 

2007, the date on which Relators filed their initial complaint –

the Government cannot avail itself of the ten-year statute of 

limitations in section 3731(b)(2), and thus only a six-year 

statute of limitations applies. Therefore, according to 

Defendants, the Government may only maintain claims for 

violations that are alleged to have occurred after February 1, 

 

3 Section 3731(c) was added as an amendment as part of the Fraud 

Enforcement and Recovery Act of 2009. As the D.C. Circuit held 

in United States ex rel. Miller v. Bill Harbert International 

Construction, Inc., 608 F.3d 871, 879-80 (D.C. Cir. 2010), the 

2009 amendments to Section 3731 apply to this matter as “the 

provision permitting relation back was made expressly 

‘applicable to cases pending on the date of enactment.’” 

Miller, 608 F.3d at 878 (quoting Fraud Enforcement and Recovery 

Act of 2009, Pub. L. No. 111-21, § 4(f)(2), 123 Stat. 1617, 

1625).
23

2001, six years prior to the filing of Relators’ complaint. MTD 

Govt.'s Compl. at 16.

The Government argues that Defendants ignore a fundamental 

principle of the qui tam mechanism: “that for statute of 

limitations purposes, the Government stands in the shoes of the 

relator.” Govt.’s Opp’n at 9. Thus, if a relator’s claim is 

timely, so too will a government complaint in intervention 

alleging the same wrongdoing be timely, regardless of when it is 

filed. Id. The Government admits that it was aware of 

Relators’ claims beginning on or around December 27, 2004, when 

the same Relators filed a qui tam action in the United States 

District Court for the District of Maryland. Id. at 5, 12-14. 

The Government argues that because the initial complaint in this 

action was filed by Relators on February 1, 2007, within three 

years of the date when U.S. officials became aware of the claims 

on December 27, 2004, the Government’s complaint in intervention 

can apply to claims as far back as February 1, 1997, even though 

the Government did not file its complaint in intervention until 

August 19, 2011. Id. at 12-14. The Government’s theory then 

is that it can avail itself of the ten year statute of 

limitations in section 3731(b)(2) by operation of section 

3731(c)’s relation-back provision.

The Government provides no support for its theory that if 

the Relator files its initial complaint within three years of 
24

when the Government should have been aware of certain claims, 

the relation-back provision allows for the Government to take 

advantage of the ten-year statute of limitations, starting from 

the date of filing of the Relators’ initial complaint. Indeed, 

the only case cited by the Government, United States ex rel. 

Serrano v. Oaks Diagnostics Inc., 568 F. Supp. 2d 1136 (C.D. Cal 

2008), is entirely irrelevant. There, in a pre-FERA case, the 

court addressed the question of whether the government’s 

complaint in intervention related back to relator’s complaint, 

which was filed almost five years prior to the complaint in 

intervention. The court ruled that the government’s complaint 

did relate back to the relator’s complaint after conducting an 

exhaustive analysis of relation-back principles under Fed. R. 

Civ. P. 15. Id. at 1139-42. Because relator had filed the 

original complaint within three years of the alleged conduct, 

the court did not address which statute of limitations would 

apply. Id. at 1142. Here, in a case to which the FERA 

amendments apply, Relators did not file their original complaint 

within three years of the alleged conduct, which spans as far 

back as 1994, when Defendants first applied for the Section 8(a) 

program. Even accepting that the Relators’ District of Maryland 

action is relevant here, that action was not filed until 

December 2004.
25

Similarly, the cases on which Defendants rely also do not 

address the precise issue presented here as most of them predate 

the 2009 amendments. See United States ex rel. Frascella v. 

Oracle Corp., 751 F. Supp. 2d 842 (E.D. Va. 2010); United States 

ex rel. Purcell v. MWI Corp., 520 F. Supp. 2d 159 (D.D.C. 2007); 

United States v. Intrados/Int’l Mgmt. Group, 265 F. Supp. 2d 1 

(D.D.C. 2002). Indeed, all of these cases hold that the 

relation-back provision allows the government to take advantage 

of the six-year statute of limitations from the date of the 

filing of the relator’s initial complaint, a point that is not 

in dispute here. 

For instance, in Frascella, defendants, like Defendants 

here, argued that many of the government’s claims were barred by 

the applicable statute of limitations. 751 F. Supp. 2d at 848. 

There, relator filed his sealed complaint on May 29, 2007 and 

the government filed its complaint in intervention on July 29, 

2010, more than three years after relator’s initial complaint. 

Id. The Frascella court, however, did not reach the precise 

question raised here - whether the Government can avail itself 

of the ten-year statute of limitations even where it failed to 

file a complaint in intervention within three years of Relator’s 

complaint - because the government conceded that it should have 

known of any potential claims against defendant when relator 

filed his complaint. Id. at 849 n.3. Instead, the government 
26

argued that claims based on alleged false statements made 

thirteen years prior to the filing of relator’s complaint were 

timely because the U.S. officials charged with responsibility to 

act could not reasonably have known of those claims prior to the 

filing of relator’s complaint. Id. at 849. The Frascella court 

found the government’s argument unavailing because a 1998 audit 

by the GSA had uncovered some of the same false statements 

alleged in relator’s complaint. The government, the court held, 

was thus on inquiry notice of these statements such that a 

reasonable person would investigate. Id. at 851-853. Despite 

Defendants’ contention that the facts of Frascella are identical 

to those here, there was no earlier filed qui tam action at 

issue in Frascella that the government claimed was the specific 

starting date for statute of limitations purposes. See Defs.’ 

MTD Govt.’s Compl. at 17. 

Similarly, the issue before the court in Purcell was 

analytically distinct. There, in a pre-FERA case, defendants 

argued that the government’s claims against the president of the 

company, who was not named as a defendant in relator’s 

complaint, were time barred because they were not filed within

three years of the date that a relevant government official 

became aware of them. 520 F. Supp. 2d at 169. In ruling on a 

prior motion to dismiss, the Purcell court denied defendant’s 

motion on the grounds that it did not have enough information, 
27

at that state in the litigation, to assess whether the claims 

were timely. Id.; see also United States ex rel Purcell v. MWI 

Corp., 254 F. Supp. 2d 69, 78 (D.D.C. 2003). After discovery, 

defendants reiterated their arguments regarding the timeliness 

of the government’s claim during summary judgment proceedings 

and the court agreed. 520 F. Supp. 2d at 169-170. The court 

applied the “discovery-due diligence” standard, under which “a 

plaintiff is deemed to have sufficient notice of critical facts 

to set the statute of limitations running if the plaintiff has 

inquiry notice of the injury and its cause.” Id. at 170 (citing 

United States v. Kubrick, 444 U.S. 111, 120 (1979). Because the 

relator’s complaint, filed more than three years prior to the 

government’s complaint in intervention, did provide the 

government with evidence supporting its case against defendants, 

the government’s claims were time barred. Id. at 170-72. The 

Court again did not consider the impact of a previously filed 

qui tam action, and the government did not attempt to avail 

itself of the ten-year limitations period. 

Finally, Defendants cite to Intrados, which is also 

inapposite. That case, while brought under the FCA, was not a 

qui tam action. Instead, the United States directly sued 

defendants under the Act. In doing so, the government argued 

that claims based on conduct that occurred more than six years 

prior to the filing of its complaint were timely because 
28

defendants had concealed the alleged fraud. 265 F. Supp. 2d at 

10. The court ruled that the government “did not exercise due 

diligence in uncovering the fraud,” especially because a 

relevant audit of the alleged fraudulent conduct was completed 

more than three years before the filing of the government’s 

complaint. Id. at 11. Thus, claims relating to invoices 

submitted more than six years before the filing of the 

government’s complaint were time barred. Id. at 10-11.

The plain text of section 3731(b)(2) appears to only relate 

to the government. However, several courts, including one in 

this District, have concluded that where the government does not 

intervene, the relator can take advantage of the tolling 

provision in section 3731(b)(2). See, e.g., U.S. ex rel. Pogue 

v. Diabetes Treatment Ctrs. of Am., Inc., 474 F. Supp. 2d 75, 

82-89 (D.D.C. 2007) (collecting cases evidencing a three-way 

split among jurisdictions about whether and when relators may 

invoke the tolling provision, and holding that relators may take 

advantage of the tolling provision even where the government 

does not intervene and that the limitations period is measured 

by the knowledge of the relevant government official); see also 

U.S. ex rel. Malloy v. Telephonics Corp., 68 Fed. App’x 270, 273 

(3d Cir. 2003) (holding that relators may invoke the tolling 

provision and basing the tolling period’s start on the relator’s 

own knowledge); U.S. ex rel. Ven-A-Care of the Fla. Keys, Inc. 
29

v. Actavis Mid Atlantic LLC, 659 F. Supp. 2d 262, 273-74 (D. 

Mass. 2009) (concluding that relators may invoke the tolling 

provision and basing the beginning of the period on the 

knowledge of the relevant government official). This view, 

while not a majority view, does offer some support for the 

Government’s theory – if the Relators here can take advantage of 

3731(b)(2), their initial complaint was filed within three years 

of the date when the Government first became aware of the 

claims. And if the Government’s complaint in intervention 

relates back to the date the Relators’ complaint was filed, then 

the Government’s claims can span as far back as February 1, 

1997. 

As explained above, none of the cases cited by either party 

adequately describe the situation currently before the Court, 

where Relator filed a second suit in a different court within

three years of the relevant U.S. official learning of the 

alleged fraud through the filing of the first suit. Nor is the 

Court aware of any such cases. Thus the court must look to the 

text of the statute for guidance. See Murphy Exploration & 

Prod. Co. v. United States DOI, 252 F.3d 473, 480 (D.C. Cir. 

2001) (citing Carter v. United States, 530 US. 255, 271 (2000)). 

By its express terms, section 3731(b)(2) is silent as to whether 

it applies to Relators. However, subsection (b) of section 3731 

begins by stating that it applies to “civil action[s] under 
30

section 3730,” which includes actions brought by both the 

Government and Relators.4 That prohibition, however, does not 

apply here as Relators are proceeding pursuant to section 

3730(b). Section 3731(b) concludes with “whichever occurs 

last.” This language is not included in subsections (a) or (b), 

but rather is offset in the same way as the introductory 

 

4 The Supreme Court has held that the limitations period in 

Section 3731(b) applies only to actions brought pursuant to 

Sections 3730(a) and (b), but not to retaliation actions brought 

by qui tam plaintiffs pursuant to Section 3730(h). See Graham 

County Soil & Water Conservation Dist. v. United States ex rel. 

Wilson, 545 U.S. 409, 415-422 (2005).

Another court in this District, relying on Graham, has found 

that section 3731(b)(2) does not apply to Relators. See Landis, 

2014 U.S. Dist. LEXIS 83313 at *44-*53. There, in determining 

whether a relator could take advantage of section 3731(b)(2)’s 

tolling provision in an action in which the Government had 

intervened, the court declined to follow Pogue and held that “it 

is not reasonable to construe Section 3731(b)(2) to mean that 

the application of tolling to relator’s lawsuit turns on the 

knowledge of the responsible United States government official, 

when the government has in fact declined to prosecute the claims 

brought by the relator and the government has not intervened or 

become a party to the relator’s lawsuit.” Id. at 51. The court 

reasoned that the “most reasonable and intuitive construction of 

section 3731(b)(2) is that ‘a civil action under section 3730’ 

does not apply to all actions under section 3730, but only as to 

those actions in which the United States has ‘acted,’ by seeking 

to participate.” Id. Thus, the court held that with respect to 

Relators claims against non-intervened defendants, the six year 

statute of limitations in section 3731(a) applied. This 

holding, however, does not in any way impact the effect of the 

tolling provision on claims for which the government has 

intervened and whether those claims are timely if a relator 

files suit within three years of the relevant government 

official’s knowledge.
31

language. This indicates that the two subsections are to be 

read together. See Pogue, 474 F. Supp. 2d at 85.

Thus, looking at the language of section 3731(b) as a 

whole, it seems clear that it includes Relators, at least in 

actions in which the Government has intervened, and there is 

nothing in section (b)(2) to suggest that Relators are excluded. 

See Pogue, 474 F. Supp. 2d at 84; see also Landis, 2014 U.S. 

Dist. LEXIS 83313 at *51. This reading of Section 3731(b) is 

also consistent with Graham, in which the Supreme Court did not 

differentiate between relators and the government with respect 

to actions brought under section 3730(b). 545 U.S. at 415. 

The legislative history of section 3731(b) also supports 

this interpretation of the statute. The Senate report on the 

1986 amendments to the FCA states that section 3731(b)(2)’s 

tolling provision means that the “statute of limitations does 

not begin to run until the material facts are known by an 

official within the Department of Justice with the authority to 

act in the circumstances.” S. Rep. No. 345, 99th Cong., 2d 

Sess., 30 (July 28, 1986), reprinted in 1986 U.S.C.C.A.N. 5266. 

Similarly, the House report noted that fraud was often difficult 

to detect, thus the statute extended the statute of limitations. 

However, the House Report also explained that “the Committee did 

not intend to allow the Government to bring fraud actions ad 

infintum [sic], and therefore imposed the strict 10 year limit 
32

on False Claims Act cases.” H. Rep. No. 660, 99th Cong., 2d 

Sess., 25 (June 26, 1986). This legislative history indicates 

that Congress intended the limitations period to run based on 

the knowledge of the government. 

Following the reasoning of Pogue, which allows relators to 

take advantage of the tolling provision of section 3731(b)(2) if 

they file a complaint within three years of the relevant 

government official learning of the fraud, which they did here, 

the Court finds that the government’s claims dating back to 

February 1, 1997 are timely. As the Pogue court noted, 

“[m]easuring (b)(2)’s limitations period by the government’s 

knowledge, and never the relator’s, makes sense because it means 

that . . . the government will be able to recover upon the 

maximum amount of claims within the overall ten-year repose 

period.” 474 F. Supp. 2d at 88. 

2. The Government’s Remaining Tort Claims

In addition to its claims pursuant to the FCA, the 

Government has also brought claims for common law fraud and 

negligent misrepresentation. These claims are governed by 28 

U.S.C. § 2415, the general federal statute of limitations, which 

provides that “every action for money damages brought by the 

United States or an officer or agency thereof which is founded 

upon a tort shall be barred unless the complaint is filed within

three years after the right of action first accrues.” 28 U.S.C. 
33

§ 2415(b). Because claims of negligent misrepresentation and 

fraud sound in tort, they are governed by this three year 

statute of limitations, Intrados, 265 F. Supp. 2d at 14, subject 

to tolling where “facts material to the right of action are not 

known and reasonably could not have been known by an official of 

the United States charged with the responsibility to act in the 

circumstances.” 28 U.S.C. § 2416(c).

Defendants argue that because the Government’s common law 

claims were brought more than three years after the date the 

relevant Government official could reasonably have known of 

them, i.e., February 1, 2007, they are time-barred and must be 

dismissed. Defs.’ MTD Govt.’s Compl. at 25. The Government 

argues to the contrary that its fraud claims are also subject to 

section 3731(c)’s relation back provision because it provides 

that if the Government elects to intervene in a qui tam action, 

it may file its own complaint to “clarify or add detail to the 

claims in which the Government is intervening and to add any 

additional claims with respect to which the Government contends 

it is entitled to relief.” Govt.’s Opp’n at 17 (quoting 31 

U.S.C. § 3731(c)) (emphasis in original). Thus, the Government 

argues that the tolling provision of section 3731(b)(2) applies

to its common law claims and that its claims relating to conduct 

after February 1, 1997 are timely. Id. at 18 n.8. 
34

The Government is correct that its complaint in 

intervention relates back to the filing of Relator’s complaint, 

because it arises out of the same conduct, transaction, or 

occurrence. Frascella, 751 F. Supp. 2d at 854. However, it 

does not then follow that the ten-year statute of limitations in 

section 3731(b)(2) applies to the Government’s common law 

claims; the statute of limitations in 28 U.S.C. § 2415(b) still 

applies. Thus, the Court must count back from February 1, 2007 

to determine which claims are timely. Accordingly, to the 

extent that the Government’s fraud and negligent 

misrepresentation claims arise out of factual allegations that 

predate February 1, 2004, they are time-barred. 

C. Relators’ and Government’s Failure to State a Claim

It is axiomatic that a plaintiff bringing an action for 

fraud under the FCA must, first and foremost, allege that an 

actual false claim or statement was presented to the government. 

See Totten, 286 F.3d at 551; U.S. ex rel. Head v. Kane Co., 798 

F. Supp. 2d 186, 195-96 (D.D.C. 2011). The FCA defines “claims” 

to include “any request or demand, whether under a contract or 

otherwise, for money or property which is made to a contractor, 

grantee, or other recipient if the United States Government 

provides any portion of the money or property which is requested 

or demanded.” 31 U.S.C. § 3729(c). Congress has emphasized 

that the FCA should be broadly interpreted “to reach all types 
35

of fraud . . . that might result in financial loss to the 

Government.” United States v. Neifert-White Co., 390 U.S. 228, 

232 (1968). Accordingly, “[f]alse claims under the FCA take a 

variety of forms.” United States v. Sci. Applications Int’l 

Corp., 626 F.3d 1257, 1266 (D.C. Cir. 2010). These include: (1) 

presentment claims; (2) fraudulent inducement claims; and (3) 

false certification (express or implied) claims. See id. 

(endorsing implied false certification theory as basis for FCA 

claims in D.C. Circuit); U.S. ex rel. Bettis v. Odebrecht 

Contractors of Cal., Inc., 393 F.3d 1321, 1326 (D.C. Cir. 2005) 

(recognizing that claims based upon fraudulent inducement are 

actionable under the FCA).

To state a claim for a false claim under the FCA, a 

plaintiff must show that “(1) the defendant submitted a claim to 

the government, (2) the claim was false, and (3) defendant knew 

the claim was false.” United States ex rel. Harris v. Bernard, 

275 F. Supp. 2d 1, 6 (D.D.C. 2003). The FCA does not require 

proof of specific intent to deceive when a defendant presents 

false or fraudulent claims to the government. 31 U.S.C. § 

3729(b); United States v. TDC Mgmt. Corp., Inc., 24 F.3d 292, 

296 (D.C. Cir. 1994). 

An FCA plaintiff may also plead a claim under 31 U.S.C. § 

3729(a)(1)(B), which provides a cause of action against anyone 

who “knowingly makes, uses, or causes to be made or used, a 
36

false record or statement material to a false or fraudulent 

claim.” Section 3729 (a)(1)(B) attaches FCA liability to a 

defendant who prepares in support of a claim a statement that it

knows to be a misrepresentation. United States ex rel. Totten 

v. Bombardier Corp., 380 F.3d 488, 500-01 (D.C. Cir. 2004).

1. Relators Have Stated a Mentor-Protégé Program 

Claim

According to Defendants, Relators’ sole allegation that 

Defendants violated the FCA with regard to its participation in 

the Mentor-Protégé program is that Defendants “falsely certified 

in the joint venture agreements submitted to SBA for approval . 

. . that the joint venture employed general managers who were 

from 8(a), Alaskan, Intuit companies.” Defs.’ MTD Relators’ 

Compl. at 22 (citing Compl. ¶ 71). As such, Defendants argue 

that Relators have failed to state a claim under the FCA 

regarding their participation in the Mentor-Protégé program. 

Defendants make three arguments in support of dismissal. First, 

they argue that there are no requirements in the SBA regulations 

regarding the general manager of a mentor-protégé joint venture, 

as opposed to project managers. Therefore, according to 

Defendants, Relators’ allegations regarding John Krulic and 

Sheldon Jahn, who are described in the complaint as “general 

managers,” are completely irrelevant. Second, Defendants argue 

that Relators’ own complaint demonstrates that the alleged 
37

representations regarding Mr. Krulic’s and Mr. Jahn’s employment 

were true. In their complaint, Relators allege that these two 

individuals “switched” employment, but they provide no factual 

allegations in support of their speculation. Indeed, as 

Defendants note, Relator Sansbury was no longer employed during 

the relevant time period, and Relator Buechler did not work at 

any of the relevant job site locations. Finally, Defendants 

argue that any alleged “switch” in employment is not a violation 

of the relevant SBA regulations.

According to the applicable SBA regulations, when a mentor 

and protégé partner for the purpose of an 8(a) contract, they 

must submit a joint venture agreement to the SBA for approval. 

13 C.F.R. § 124.513. The agreement must contain, inter alia, “a 

provision . . . [d]esignating an 8(a) Participant as the 

managing venturer of the joint venture,” and an employee of the 

managing venturer as the project manager responsible for 

performance of the 8(a) contract. Id. § 124.513(c)(2). Here, 

Relators have alleged that Defendants made false representations 

regarding the employment of several project managers of the 

relevant joint ventures. According to Relators’ complaint, 

which must be taken as true at this stage in the litigation, 

James Krulic was listed as the general manager of the BSA-LB&B 

joint venture on the joint venture agreement approved by the SBA 

on August 16, 2004 despite the fact that he was an LB&B employee 
38

at the time. Relators’ Compl. ¶ 52. Relators further allege 

that Mr. Krulic did not become a BSA employee until January 

2005, well after the joint venture was approved and even then 

only at the direction of senior employees at LB&B. Id. ¶¶ 53-

56. With respect to the Chilkat joint venture, Relators allege 

that Mr. Jahn was a senior vice president at LB&B during 2006, 

and that LB&B and Chilkat entered into a joint venture agreement

in which he was listed as the project manager. Id. ¶¶ 63-64. 

Relators allege that in late 2006 or early 2007, Mr. Jahn’s 

employment was switched to Chilkat for the purposes of the joint 

venture agreement. Id. ¶ 64. Relators do not provide a 

specific date for the approval of the joint venture, noting only 

that it was approved “in or about 2006.” Id. ¶ 64. Relators 

also contend that Relator Buechler did in fact work with the 

BSA/LB&B joint venture. See Relators’ Opp’n at 22 n.6 (citing 

Compl. ¶¶ 61-62). 

Relators additionally allege that although Mr. Krulic and 

Mr. Jahn were listed as “general managers” by defendants, they 

were, in actuality, project managers. According to Relators, 

they were employees of LB&B and then moved over to the joint 

venture, such that the relevant “project manager” was not from 

an 8(a) protégé company. See id. at 20-21. Relators also

contend that they should be allowed to conduct discovery on the 

work these men performed to see if Defendants were in 
39

contravention of the applicable regulations. See id. at 21; see 

also Allen v. Beta Constr., 309 F. Supp. 2d 42, 47 (D.D.C. 2004) 

(“[W]hile significant details [] will be necessary . . . these 

details are not necessary at this very preliminary stage of 

litigation.”).

Further, Relators also allege that Defendants listed Andrew 

F. Van Der Stuyf, Edward J. Keenan, Donald Wilson, and Donald 

Krauth as project managers on contracts secured pursuant to the 

mentor-protégé relationship. These contracts were entered into 

in October, November, and December 2004. At the time of 

contracting, Mr. Van Der Stuyf, Mr. Keenan, Mr. Wilson, and Mr. 

Krauth were purportedly employees of LB&B, despite the fact that 

they were listed as project managers. See Relators’ Compl. ¶¶ 

53-55. Relators allege that they did not “switch” their 

employment to BSA until the end of January 2005. Id. ¶ 57. 

According to Relators, all four were only employees of BSA on 

paper. Id. 

Relators have provided more than the requisite “short and 

plain statement of the claim showing that [they are] entitled to 

relief.” Twombly, 550 U.S. at 555 (internal quotation marks and 

citations omitted). They have also stated more than just one 

false claim or statement in the relevant joint venture 

agreements. As such, Defendants cannot credibly argue that they 

are not on notice of the claims against them with respect to 
40

their joint ventures with BSA and Chilkat or the false claims or 

statements they allegedly made in connection with those joint 

ventures. While Relators may not have pled sufficient facts to 

ultimately succeed on the merits of their claim, that is not 

required at this stage in the litigation. “Indeed, [Relators], 

having first stated a claim with sufficient specificity,” which 

the Court finds that they have for the reasons stated in Section 

III.B.2 supra, “must be allowed to fill in those details through 

the discovery process, especially because these details are in 

defendants’ possession and will be identified when produced in 

discovery.” Allen, 309 F. Supp. 2d at 47.

2. Relators and the Government Have Stated Their 

Claims with Adequate Particularity

Defendants argue that the Government’s Section 8(a) claims

and Relators’ claims relating to their participation in the 

Mentor-Protégé program fail because they have failed to plead 

those claims with the particularity required by Fed. R. Civ. P. 

9(b). 5 Defendants argue that the “Government has failed to 

sufficiently identify what was given up as a consequence of the 

alleged fraud” because it has not “identified a single specific 

false claim or invoice for payment or the date(s) or cost(s) of 

 

5 The Court need not analyze Defendants’ arguments with respect 

to Relators’ Section 8(a) claims because the Government’s 

Complaint in Intervention supersedes those claims and is the 

operative complaint with respect to those claims. See Section 

III.A infra.
41

any such claims.” Defs.’ MTD Gov’t Compl. at 21. According to 

Defendants, the Government has provided only two examples of 

contracts that were allegedly fraudulently obtained. Id. 

Further, Defendants argue that both the Government and Relators 

have alleged an open-ended time frame for their claims. Id.; 

Defs.’ MTD Relators’ Compl. at 25-26. With respect to Relators’ 

claims, Defendants argue that they consist of nothing more than 

allegations that “all defendants” obtained “approval of joint 

ventures under the SBA’s 8(a) Mentor-Protégé Program through 

misrepresentation, and that LB&B subsequently obtained contracts 

and payments based on those misrepresentations.” Defs.’ MTD 

Relators’ Compl. at 25. Additionally, Defendants argue that 

Relators claims are deficient because they “(a) do not specify 

particular claims or payments made in relation to the alleged 

fraudulent activity; (b) do not allege any fraudulent activity 

on the part of Lily Brandon or Ed Brandon; (c) make allegations 

‘upon information and belief;’ [and] (d) make general 

allegations against all Defendants in their Complaint.” Id. at 

26.

It is well established in this Circuit that “the simplicity 

and flexibility contemplated by the rules must be taken into 

account” when reviewing a complaint under Rule 9(b). United 

States ex rel. McCready v. Columbia/HCA Healthcare, 251 F. Supp. 

2d 114, 116 (D.D.C. 2003). Most importantly, Rule 9(b)’s 
42

particularity requirement must be read in concert with Rule 8, 

which requires only that a complaint contain a “short and plain 

statement” of the claim. See Cannon, 642 F.2d at 1386 (holding 

that “[t]he requirement of particularly does not abrogate Rule 

8, and it should be harmonized with the general directives . . . 

of Rule 8 . . . ”) (internal citations and quotation marks 

omitted); Allen, 309 F. Supp. 2d at 46.

Defendants’ narrow reading of Rule 9(b) would essentially 

eviscerate this standard and require claimants to provide 

detailed proof of their allegations at this early stage in the 

litigation. That is simply not what is required on a motion to 

dismiss pursuant to Rule 9(b). Pogue, 238 F. Supp. 2d at 269. 

Rather, at this stage in the litigation, an FCA “plaintiff need 

not allege with specificity every element of its cause of action 

if the complaint contains allegations from which an inference 

may be drawn that the plaintiff will produce evidence on the 

essential elements.” Intrados, 265 F. Supp. 2d at 7. Indeed, 

the language of Rule 9(b) makes clear that “particularity [must 

be pled] only with respect to the circumstances constituting 

fraud. . . .” United States ex rel. Folliard v. CDW Tech. 

Servs., Inc., 722 F. Supp. 2d 20, 27 (D.D.C. 2010). This is 

especially true where, as here, the Government’s FCA claims are 

based on a fraudulent “scheme,” in which the circumstances make 

it likely that the alleged fraud was “consummated through the 
43

presentment of false claims.” United States ex rel. Head v. 

Kane, 798 F. Supp. 2d 186, 203 (D.D.C. 2011) (quoting United 

States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190 (5th Cir. 

2009)).

The Government argues that it has pled its FCA “false 

claim” and “false statement” claims with particularity. 

Specifically, the Government contends that it is has set forth: 

(1) the who (the LB&B Defendants); (2) the what (express and 

implied representations regarding the extent of Ms. Brandon’s 

control of LB&B and its eligibility for the Section 8(a) 

program); (3) the when (on or after February 1, 1997 in 

certifications to the SBA and in set-aside contracts, and until 

LB&B’s graduation from the 8(a) program); (4) the where or with 

whom (the SBA and Government agencies that award set-aside 

contracts); (5) the how (claims for payment submitted pursuant 

to set-aside contracts that were obtained based on a fraudulent 

8(a) certification, statements in annual 8(a) certifications, 

and contract materials submitted by the SBA to Government 

agencies to secure 8(a) contracts); and (6) damages (Section 

8(a) contracts and modifications/extensions to those contracts, 

and payments on invoices made pursuant to those contracts). 

Gov’t’s Opp’n at 22.

Similarly, Relators argue that their claims relating to 

Defendants’ participation in the SBA Mentor-Protégé program 
44

survive a Rule 9(b) challenge. According to Relators, they have 

alleged a claim of fraud in the inducement. Relators’ Opp’n at 

24-26. They also contend that they have not alleged an open 

ended time frame – they have stated that the LB&B/BSA joint 

venture was approved in 2004 and that the LB&B/Chilkat joint 

venture was approved in 2006. They argue that these facts are 

sufficient at this stage in the litigation. 

Both the Government’s and Relators’ allegations relating to 

Defendants’ participation in the Section 8(a) program and the 

Mentor-Protégé program plainly meet Rule 9(b)’s pleading 

requirements. They have both detailed the circumstances of the 

fraudulent schemes relating to both programs, and they have 

identified which defendants were involved in those schemes. 

They have provided specific time frames – the Government alleges 

that LB&B’s fraud began in approximately 1994 and continued 

throughout the time that the company participated in the Section 

8(a) program; Relators allege that LB&B’s fraud began in August 

2004 with respect to the BSA joint venture and in 2006 with 

respect to the Chilkat joint venture. That neither the 

Government nor Relators provide a precise end date for the fraud 

does not defeat their claims. See Kane, 798 F. Supp. 2d at 204 

(finding that relator’s allegations that a fraudulent plan began 

in 1999 and continued to “the present time” was “sufficient in a 

case involving a complex, fraud scheme”); United States ex rel. 
45

Harris v. Bernad, 275 F. Supp. 2d 1, 8 (D.D.C. 2003) (holding 

that in a case involving a complex fraud scheme that lasted for 

a number of years, an allegation that the fraud was perpetrated 

from 1993 to the present was sufficient); Pogue, 238 F. Supp. 2d 

at 268 (concluding that allegations that a complex fraud scheme 

occurred over a twelve-year period satisfied Rule 9(b)).

The Government also clearly links Defendants’ false claims 

and statements to payments made by various Government agencies. 

See Govt.’s Compl. ¶ 66 (noting that in March 1998 LB&B was 

awarded a set aside contract with the U.S. Army Operational Test 

and Evaluation Command and in March 1999 it was awarded a 

contract with the U.S. Army Material Command Acquisition 

Center). Those allegations are sufficient; the Government is 

not required to plead specific dates, invoices, or payment 

amounts pursuant to a Section 8(a) scheme that spanned many 

years. Folliard, 722 F. Supp. 2d at 31 (“Although defendants 

argue that relator must provide ‘transaction dates’ on which 

individual claims were submitted, this is incorrect.”). Indeed, 

this court has routinely held that “‘while Rule 9(b)’s 

particularity requirement applies to the [contention] that the 

request was fraudulent,’ Rule 12(b)(6)’s ‘general standards 

apply to the . . . existence of a request for payment.’” Kane, 

798 F. Supp. 2d at 205 (quoting Folliard, 722 F. Supp. 2d at 

27). 
46

Relators have also provided sufficient details, including 

the specific joint venture agreements and the fact that project 

managers listed on the agreements as being employees of the 

protégé companies were actually LB&B employees at the time those 

representations were made. Relators have further alleged that 

LB&B employees were aware of those facts and directed the 

relevant employees to switch their employment to the protégé 

companies. They need not allege more at this stage. See Allen, 

309 F. Supp. 2d at 46; see also United States ex rel. Westrick 

v. Second Chance Body Armor, Inc., 685 F. Supp. 2d 129, 137 

(D.D.C. 2010) (holding that the government had alleged enough on 

a motion to dismiss by alleging the defendant had predicated 

each sale with a fraudulent representation). 

Thus, the Court finds that both the Government and Relators 

have provided more than enough detail to satisfy Rule 9(b)’s 

purpose of guaranteeing Defendants have “‘sufficient information 

to allow for preparation of a response.’” United States ex rel. 

Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1256 (D.C. 

Cir. 2004) (quoting Cannon, 642 F.2d at 1385). “While 

significant details which will be necessary for plaintiff[s] to 

succeed on the merits of the case are indeed absent, these 

details are not necessary at this very preliminary stage of 

litigation.” Allen, 309 F. Supp. 2d at 47. Relators and the 

Government must be allowed the opportunity to fill in these 
47

details through the discovery process. See id. Accordingly, 

Defendants’ motions to dismiss the Government’s and Relators’ 

claims for failure to plead them with sufficient particularity 

are denied.

3. Relators’ and Government’s False Claims Act 

Conspiracy Claims

Defendants also move to dismiss the Government and Relators 

FCA conspiracy claims pursuant to Rule 12(b)(6) because they 

have not pled any agreement or overt act. Defendants 

additionally argue that the FCA conspiracy claims are barred by 

the intra-corporate conspiracy doctrine. 

Section 3729(a)(3) of the FCA attaches liability to anyone 

who “conspires to defraud the Government by getting a false or 

fraudulent claim allowed or paid.” The FCA does not define 

“conspiracy,” but “courts have held that general civil 

conspiracy principles apply to FCA conspiracy claims.” 

Westrick, 685 F. Supp. 2d at 140. Thus, the intra-corporate 

conspiracy doctrine, a principle of civil conspiracy law, 

applies to FCA conspiracies as well. Under this doctrine, “a 

corporation cannot conspire with its employees, and its 

employees, when acting in the scope of their employment, cannot 

conspire among themselves.” United States ex rel. Fago v. M&T 

Mortg. Corp., 518 F. Supp. 2d 108, 117 (D.D.C. 2007). 
48

There is no dispute that Defendants Edward Brandon and Lily 

Brandon are or were employees of Defendant LB&B. Thus, any 

conspiracy claims between these individual Defendants and LB&B 

fail pursuant to the intra-corporate conspiracy doctrine. See 

Kane, 798 F. Supp. 2d at 201-02 (dismissing an FCA conspiracy 

claim where plaintiffs had alleged a conspiracy between 

employees of the corporation and the corporation itself). Thus, 

the Government’s conspiracy claims fail to state a claim.

However, to the extent that Relators have alleged a 

conspiracy between employees of LB&B, LB&B itself, BSA, and/or 

Chilkat, those claims are not barred under that doctrine. In 

order to state a claim for conspiracy pursuant to the FCA, 

Relators must show “(1) that defendant[s] conspired with one or 

more persons to have a fraudulent claim paid by the United 

States, (2) that one or more of the conspirators performed any 

act to have such claim paid by the United States, and (3) that 

the United States suffered damages as a result of the claim.” 

United States v. Bouchey, 860 F. Supp. 890, 893 (D.D.C. 1994). 

Here, Relators have alleged that LB&B conspired with BSA and 

Chilkat to form a joint venture that did not meet the applicable 

requirements; that the project managers listed on the joint 

venture agreements were LB&B employees, not employees of the 

protégé companies, as required; that at some point after the 

joint ventures were approved, the relevant employees switched 
49

their employment from LB&B to the protégé companies; and that 

the joint ventures were able to secure set aside contracts as a 

result of the misrepresentation. At this stage in the 

litigation, Relators have alleged sufficient facts to survive a 

motion to dismiss. See Westrick, 685 F. Supp. 2d at 141 

(finding that assertions of meetings between employees of two 

companies were sufficient to state a claim for conspiracy).

D. Relators’ Claims Against Remaining Defendants

Relators did not serve Bering Straits AKI, Chilkat 

Services, or the individual named Defendants from those 

companies. Thus, the Court will sua sponte dismiss their claims 

against those Defendants pursuant to Fed. R. Civ. P. 4(m), which 

provides that “[i]f a defendant is not served within 120 after 

the complaint is filed, the court . . . must dismiss the action 

without prejudice against that defendant.” 

IV. Conclusion

For the reasons stated above, the Court DENIES Defendants’ 

Motion to Dismiss Relators’ complaint and GRANTS IN PART AND 

DENIES IN PART Defendants’ Motion to Dismiss the Government’s 

complaint in intervention.

SO ORDERED.

Signed: Emmet G. Sullivan

United States District Judge

July 16, 2014