UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

__________________ _______________ ) PENCHENG SI, ) ) Plaintiff, ) ) v. ) Civil Action No. 09-2388 (KBJ) ) LAOGAI RESEARCH ) FOUNDATION, et al. , ) ) Defendants. ) )

________________ _________________ ) MEMORANDUM OPINION Presently before the Court is Defendants’ motion to dismiss the complaint that Relator Pengcheng Si (hereinafter “Si” or “R elator”) has filed pursuant to the False Claims Act (“FCA”), 31 U.S.C. § 3729 (2012). (Defs.’ Mot. to Dismiss (“Defs.’ Mot”), ECF No. 29; Compl., EC F No. 2.) Defendants are Si’s alleged former employers—the China Information Center and Laogai Resear ch Foundation, two non-profits that receive government grant funding—as well as their di rector, Harry Wu, and his wife, Chinglee Chen. (Compl. ¶¶ 9-14.) Defendants move to dismiss the complaint for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b )(1) and for failure to state a claim for which relief can be granted with sufficient sp ecificity under Rules 12(b)(6) and 9(b). (Mem. in Supp. of De fs.’ Mot. to Dismiss (“Defs.’ Mem.”), ECF No. 30, at 1.) The Court held a hearing on Defendants’ motion to dismiss on August 20, 2013. The gravamen of Si’s compla int is that Defendants engage d in a scheme to defraud the government from 2001 thro ugh 2008 by, among other th ings, fraudulently inducing grant contracts by providing false informat ion about employees’ backgrounds, reporting2 salaries for individuals who never perfor med work, using grant funding for personal expenses, and engaging in lobbying activity in violation of the grant contract. ( See, e.g. , Compl. ¶¶ 31, 41, 44, 47.) Si sets forth sixty-three paragraphs of factual allegations that he maintains support the followi ng five FCA counts: presentm ent of false or fraudulent claims for payment or approval under 31 U. S.C. § 3729(a)(1)(A) (C ount I); knowing use of false records and statements to get false claims paid or approved under 31 U.S.C. § 3729(a)(1)(B) (Count II); knowing use of a fa lse record or statement material to an obligation to pay and/or knowing concealment or improper avoidance of an obligation to pay or transmit money to the government under 31 U.S.C. § 3729(a)(1)(G) (Count III); conspiracy to defraud the go vernment under 31 U. S.C. § 3729(a)(1)(C) (Count IV); and retaliatory termination under 31 U.S.C. § 3730(h) (Count V). (Compl. ¶¶ 64-82.) Each count realleges and incorporates by reference all sixty-three paragraphs of factual background; there is no indication of the specific fact s pertaining to each claim. ( Id. ¶¶ 64-82

. ) This is not enough to meet the plausibility sta ndard for notice pleading under Rule 8, let alone the standard fo r particularity under Rule 9(b). See Rice v. District of Columbia , 774 F. Supp. 2d 25, 33 (D.D.C. 2011) (“An i ndividual count must contain a plausible recitation of enough f acts to support it.” (internal quotation marks and citation omitted)); U.S. v. Kellogg Brown & Root Servs., Inc. , 800 F. Sup p. 2d 143, 153 (D.D.C. 2011) (a false claim allegation is an averment of fraud, so the heightened pleading requirement of Rule 9(b) applies). The instant complaint is insufficient because it is not clear which allegations pertain to which count, rendering the Court unable to determine whether Si states a claim for relief under each count with sufficient specificity.
See Rice , 774 F. Supp. 2d at 33.3 Nevertheless, the D.C. Circuit has cautione d that “[f]ailure to plead fraud with particularity . . . does not support a dismissal w ith prejudice[;] [t]o the contrary, leave to amend is ‘almost always’ allowed to cu re deficiencies in pleading fraud.” Firestone v.
Firestone , 76 F.3d 1205, 1209 (D.C . Cir. 1996) (citation omitted). Given that admonition and especially in li ght of the many facts alleged in the complaint, this Court finds that, while Si’s claims may well be “ subjectto dismissal,” the defective claims will not be dismissed at this time ; rather, the Court “will provide [Relator] an opportunity to file an amended complaint.” Burman v. Phoenix Worldwide Indus., Inc. , 384 F. Supp. 2d 316, 334 (D.D.C. 2005) (emphasis added) (dec lining to dismiss fraud complaint for lack of particularity without first giving plaint iff a chance to amend the complaint, even though plaintiff did not mo ve for leave to amend); see also Norment Sec. Grp., Inc. v. Travelers Cas. & Ins. Co. , 505 F. Supp. 2d 97, 102 (D.D.C. 2007) (same); B.R. ex rel. Rempson v. District Of Columbia , 524 F. Supp. 2d 35, 42 (D.D.C. 2007) (“[W]hen a claim is so ambiguous as to leave its viability in doubt, the appropriate action is to grant leave to amend.”). For the reasons stated herein, Defendants’ motion to dismiss for lack of specificity is DENIED without prejudice and Relator is GRANTED LEAVE to ame nd the complaint. Relator is directed, at a minimum, to revise the recitation of counts in the complaint to make clear which legal theory applies to each count and which facts se rve as the basis of each claim. Relator is furthe r admonished to adhere to th e requirements of Rule 9(b) regarding “stat[ing] with par ticularity the circumstances c onstituting fraud or mistake.”
F ED
. R. C IV
. P. 9(b); see also U.S. ex rel. Williams v. Martin-Bak er Aircraft Co., Ltd. , 389 F.3d 1251, 1262 (D.C. Cir. 2004) (affirming dismissa l of false claims allegations for failure to meet the particularity requirements of Rule 9(b)).4 The Court also notes that its denial of the motion to dismiss moots the remaining arguments in Defendants’ motion, which have not yet been considered and thus are being dismissed without prejudice. See Johnson v. Panetta , No. 12-cv-868(BJR), 2013 WL 3742495, at *5 (D.D.C. July 17, 2013) (denying defendant’s mo tion to dismiss as moot after granting plaintiff leave to amend). Defend ants are permitted to re-raise the same arguments for dismissal, to the extent applicable, in their future response to the Relator’s amended complaint. A se parate order will follow.

Date: August 21, 2013 

## Ketanji Brown Jackson KETANJI BROWN JACKSON United States District Judge