2001 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-13-2001

Hutchins v. Wilentz Goldman

Precedential or Non-Precedential:

Docket 98-6248

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Recommended Citation

"Hutchins v. Wilentz Goldman" (2001). 2001 Decisions. Paper 129.

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Filed June 13, 2001 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

Nos. 98-6248 & 98-6339 

CHARLES T. HUTCHINS 

v. 

WILENTZ, GOLDMAN & SPITZER; 

LOUIS DeLUCIA; 

JOHN DOES "1" THROUGH JOHN DOES "3"; 

JOAN LAVERY 

(Newark D.C. Civil No. 96-4678) 

CHARLES T. HUTCHINS 

v. 

ABC CORP., SEALED 

(Newark D.C. Civil No. 96-5988) 

 Charles T. Hutchins, 

 Appellant 

On Appeal from the United States District Court 

for the District of New Jersey 

D.C. Civil Action Nos. 96-cv-04678 & 96-cv-05988 

(Honorable Katharine S. Hayden) 

Argued February 8, 2001 

Before: SCIRICA, McKEE and STAPLETON, Circuit Judges 

(Filed: June 13, 2001) 
 CHARLES T. HUTCHINS (ARGUED) 

 5011 Marshall Road 

 Farmingdale, New Jersey 07727 

 Appellant, Pro Se 

 MARIANNE E. MURPHY, ESQUIRE 

 (ARGUED) 

 Tompkins, McGuire, Wachenfeld & 

 Barry 

 Four Gateway Center 

 100 Mulberry Street 

 Newark, New Jersey 07102 

 Attorney for Appellees, 

 Wilentz, Goldman & Spitzer, 

 Louis DeLucia, Joan Lavery 

 DOUGLAS HALLWARD-DRIEMEIER, 

 ESQUIRE (ARGUED) 

 DOUGLAS N. LETTER, ESQUIRE 

 MICHAEL E. ROBINSON, ESQUIRE 

 United States Department of Justice 

 Civil Division, Appellate Staff 

 601 D Street, N.W., Room 9106 

 Washington, D.C. 20530 

 Attorneys for Amicus Curiae- 

 Appellant, United States of 

 America 

OPINION OF THE COURT 

SCIRICA, Circuit Judge. 

The principal issue on appeal is whether the submission 

of fraudulent legal bills for approval to the United States 

Bankruptcy Court violates the False Claims Act, 31 U.S.C. 

S 3729. We hold the False Claims Act only prohibits

fraudulent claims that cause economic loss to the 

government. We also hold that a r etaliatory discharge cause 

of action under 31 U.S.C. S 3730(h) requires proof that the 

employee engaged in "protected conduct" and that the 

 2 
employer was on notice of the "distinct possibility" of False 

Claims Act litigation and retaliated against the employee. 

I. 

Charles Hutchins was one of two paralegals in the 

creditors' rights department of the New Jersey law firm of 

Wilentz, Goldman & Spitzer from Mar ch 1993 to October 

1995. On August 2, 1995, Louis T. DeLucia, a partner in 

Wilentz, Goldman & Spitzer's creditors' rights department, 

asked Hutchins to investigate certain client bills, with 

particular attention to the "high costs" of certain

computerized research. After investigating the matter and 

discussing it with the law firm's paralegal supervisor, Marie 

Henneberry, Hutchins submitted a short memorandum to 

DeLucia stating, "I was told that the fir m has a policy 

whereby actual Westlaw and LEXIS expenses are multiplied 

by 1.5 in order to arrive at the amount the client is invoiced 

for." Hutchins also expressed concer n to Henneberry that 

paralegals were being used to perfor m secretarial tasks 

resulting in overcharging clients. 

On September 22, 1995, over a month after submitting 

his billing practices memorandum, Hutchins was 

summoned by firm management to a meeting to discuss his 

continued employment. Hutchins contends the lawfirm

wanted to fire him because of his "investigation" into their 

fraudulent billing practices. Wilentz, Goldman & Spitzer 

countered they were upset over Hutchins's relationships 

with other firm employees, and wanted to discuss an

anonymous memorandum circulated in May 1995 

containing disparaging comments about Andrew W agner, 

the other paralegal in the creditors' rights department. The 

law firm advised Hutchins that they believed he wrote the 

memorandum. After denying involvement, Hutchins wr ote a 

letter to Kim Haan, a paralegal in another department 

whom he believed was the source of the accusation, stating, 

 You considered my prior uses of guerilla tactics against 

 the I.R.S., my ex-wife and her attorneys as evidence 

 that I wrote the . . . [disparaging memorandum]. The 

 I.R.S. has stolen my money, locked me up in court 

 battles for a decade, ruined a relationship/marriage 

 3 
 engagement, harassed me and filed hundreds of 

 thousands of dollars in tax liens against me. My ex- 

 wife and her attorneys used perjured testimony and 

 affidavits to induce the government courts to issue 

 restraining orders keeping me away fr om my children. 

 There just is no comparison between these 

 interferences with my money and my kids, and

 someone propositioning a married woman in the office 

 . . . . After you've read Atlas Shrugged two or three 

 more times (I've read it five times) you may recognize 

 Rand's belief that free men have a moral duty to resist 

 abuses of government and to resist the ef forts of those 

 who misuse government agencies and gover nment 

 power for personal reasons. Her philosophy guides my 

 subtle warfare against tyrants. Its [sic] a great deal 

 more appropriate than blowing up federal buildings 

 . . . . 

 I suppose I would hope that if you learn anything from 

 all of this it would be not to be so quick to rush to 

 judgment about people . . . and that you would be 

 careful about what you say about people. The next 

 time you might injure someone less prepar ed to deal 

 with abuse, or the person you injure just mightfile a 

 defamation/slander lawsuit against you. 

Haan reported to the firm personnel manager, Anne 

Riegle, that she was "terrified" by the letter. Riegle noted 

that Haan was "visibly upset" believing that Hutchins might 

"do something to her." On Friday, September 27, 1997, the 

law firm decided to terminate Hutchins as a result of "the 

culmination of escalating problems with his superiors and 

with staff." 

When informed of the decision to terminate Hutchins, 

Haan asked the law firm to wait until after the weekend to 

inform him. Because she was taking the law school 

admission test that weekend, Haan explained that she was 

afraid Hutchins would attempt to disrupt her . She also 

asked to be excused from work the following Monday and 

Tuesday so that she would not be present when Hutchins 

was discharged. Wilentz, Goldman & Spitzer agreed. 

On Monday, October 2, 1995, Hutchins requestedfiles

from the accounting department reflecting the law firm's 

 4 
billing of Westlaw and LEXIS expenses. The accounting 

department denied him access. Two hours later , Hutchins 

was informed that he was fired. 

On October 18, 1995, Hutchins notified the United States 

Trustee by sworn affidavit that he believed Wilentz, 

Goldman & Spitzer had engaged in fraudulent and unlawful 

billing practices. He filed a pro se qui tam complaint under 

S 3729 of the False Claims Act alleging W ilentz, Goldman & 

Spitzer submitted fraudulent billing statements to the 

United States Bankruptcy Court and that the lawfirm

violated the whistleblower provisions of the False Claims 

Act, 31 U.S.C. S 3730(h), by terminating his employment 

because of his investigation into the firm's billing practices. 

The District Court dismissed Hutchins's qui tam claim 

under Fed. R. Civ. P. 12 (b)(6),1 and granted Wilentz, 

Goldman & Spitzer summary judgment on Hutchins's 

retaliatory discharge claim.2 

II. 

The District Court had jurisdiction over Hutchins's qui 

tam and retaliatory discharge claims under 28 U.S.C. 

S 1331. We have jurisdiction over the District Court's final 

order dismissing his claims under 28 U.S.C.S 1291. We 

exercise plenary review over the District Court's grant of 

summary judgment on Hutchins's retaliatory discharge 

claim and its dismissal of his qui tam claim under Fed. R. 

Civ. P. 12 (b)(6). Liberty Lincoln-Mer cury, Inc. v. Ford Motor 

Co., 171 F.3d 818, 822 (3d Cir. 1999); Malia v. Gen. Elec. 

Co., 23 F.3d 828, 830 (3d Cir.), cert. denied, 513 U.S. 956 

(1994). 

_________________________________________________________________ 

1. United States ex rel. Hutchins v. W ilentz, Goldman & Spitzer, C.A. No. 

96-5988, slip. op. at *4 (D.N.J. August 4, 1998) ("Hutchins I") 

(dismissing 

qui tam claim). 

2. United States ex rel. Hutchins v. W ilentz, Goldman & Spitzer, C.A. No. 

96-5988, slip. op. at *15-16 (D.N.J. September 8, 1998) ("Hutchins II") 

(granting defendant summary judgment on retaliatory discharge claim). 

 5 
III. 

A. 

The False Claims Act provides: 

 (a) Liability for certain acts - Any person who - 

 (1) knowingly presents, or causes to be pr esented, to 

 an officer or employee of the United States 

 Government or a member of the Armed For ces of the 

 United States a false or fraudulent claim for payment 

 or approval; 

 (2) knowingly makes, uses or causes to be made or 

 used, a false record or statement to get a false claim 

 or fraudulent claim paid or approved by the 

 Government; 

 (3) conspires to defraud the Government by getting a 

 false or fraudulent claim allowed or paid; 

 * * * 

 (7) knowingly makes, uses, or causes to be made or 

 used, a false record or statement to conceal, avoid, 

 or decrease an obligation to pay or transmit money 

 or property to the Government, 

 is liable to the United States Government for a civil 

 penalty of not less than $5,000 and not more than 

 $10,000, plus three times the amount of damages 

 which the Government sustains because of the act of 

 that person . . . . 

31 U.S.C. S 3729. An action under the False Claims Act 

may be commenced in two ways. The United States 

Department of Justice may file suit to collect damages 

suffered as the result of fraudulent claims which cause 

government money to be expended from the United States 

Treasury. Alternatively, a private plaintiff may bring a qui 

tam action3 on behalf of the government to recover losses 

_________________________________________________________________ 

3. In Vermont Agency of Natural Resources v. United States ex rel. 

Stevens, 529 U.S. 765, 768 n.1 (2000) (inter nal citations omitted), the 

United States Supreme Court set forth the historical foundations of the 

 6 
incurred because of fraudulent claims. 31 U.S.C. 

S 3730(b)(1). When a private plaintiff brings a qui tam 

action, the government is permitted to intervene. But the 

private plaintiff may continue his suit even if the

government declines to intervene. 31 U.S.C.S 3730(c)(1). If 

the qui tam suit is ultimately successful, the private 

plaintiff, known as a relator, is entitled to up to 30% of the 

funds the government recovers. 31 U.S.C.S 3730(d). 

B. 

Relying on the qui tam provisions of the False Claims Act, 

Hutchins filed suit alleging that Wilentz, Goldman & 

Spitzer's submission of inflated legal bills to the United 

States Bankruptcy Court violated S 3729(a)(1) of the False 

Claims Act.4 To establish a prima facie case under the False 

_________________________________________________________________ 

qui tam suit stating, "qui tam is short for the Latin phrase qui tam pro 

domino rege quam pro se ipso in hac parte sequitur, which means `who 

pursues this action on Lord the King's behalf as well as his own.' The 

phrase dates from at least the time of Blackstone." The Court further 

explained, 

 Qui tam actions appear to have originated ar ound the end of the 

 13th century, when private individuals who had suf fered injury 

 began bringing actions in the royal courts on both their own and 

the 

 Crown's behalf. Suit in this dual capacity was a device for getting 

 their private claims into the respected r oyal courts, which 

generally 

 entertained only matters involving the Crown's interest. 

Id. at 774 (internal citations omitted). 

The Court noted that in the 14th century, 

 Parliament began enacting statutes that explicitly provided for qui 

 tam suits. These were of two types: those that allowed injured 

 parties to sue in vindication of their own inter ests (as well as 

the 

 Crown's) . . . and . . . those that allowed informers to obtain a 

 portion of the penalty as a bounty for their infor mation (about 

those 

 who transgressed against the king) even if they had not suffered 

the 

 injury themselves. 

Id. at 775 (internal citations omitted). 

4. As noted, S 3729(a)(1) provides: 
 7 
Claims Act a plaintiff must prove: (1) the defendant 

presented or caused to be presented to an agent of the 

United States a claim for payment; (2) the claim was false 

or fraudulent; (3) the defendant knew the claim was false or 

fraudulent; and (4) the United States suffer ed damages as 

a result of the false or fraudulent claim. Young-Montenay, 

Inc. v. United States, 15 F.3d 1040, 1043 (Fed. Cir. 1994) 

(quoting Miller v. United States, 550 F .2d 17, 23 (Ct. Cl. 

1977)). It is undisputed that the United States T rustee and 

the United States Bankruptcy Courts are gover nment

agents for purposes of the False Claims Act. Additionally, it 

is clear that inflating the Westlaw and LEXIS expenses was 

unlawful under the Bankruptcy Code. 

The crux of the dispute is whether the submission of 

these fraudulent bills was a "false claim for payment or 

approval" that caused damage to the United States 

government. Focusing on the latter portion ofS 3729(a)(1), 

Hutchins contends that even if no government money were 

expended from the United States Tr easury in connection 

with the law firm's inflated legal bills, the submission of 

these bills for approval by the Bankruptcy Court violates 

the False Claims Act. 

Although not linguistically implausible, we find no

support for this reading from the jurisprudence interpreting 

the False Claims Act. Rainwater v. United States , 356 U.S. 

590, 592 (1958) ("It seems quite clear that the objective of 

Congress was broadly to protect the funds and property of 

the Government from fraudulent claims."); United States ex 

rel. Marcus v. Hess, 317 U.S. 537, reh'g denied, 318 U.S. 

799 (1943). Nor have we been able to find any case 

establishing that a false statement to the gover nment which 

does not cause the government economic loss gives rise to 

False Claims Act liability. United States ex r el. Hopper v. 

_________________________________________________________________ 

 Any person who- 

 (1) knowingly presents, or caused to be pr esented, to an officer 

or 

 employee of the United States Government, or a member of the 

 Armed Forces of the United States a false or fraudulent claim for 

 payment or approval . . . is liable . . . . 

 8 
Anton, 91 F.3d 1261, 1266 (9th Cir . 1996) ("[T]he Act 

attaches liability, not to underlying fraudulent activity, but 

to the `claim for payment.' ") (quoting United States v. 

Rivera, 55 F.3d 703, 709 (1st Cir . 1995)), cert. denied, 519 

U.S. 1115 (1997). 

"Not all false statements made to the federal government 

are claims within the meaning of the False Claims Act." 

United States v. Greenberg, 237 F . Supp. 439, 442 (S.D.N.Y. 

1965) (citing United States v. Howell, 318 F .2d 162 (9th Cir. 

1963)). "Even under a somewhat broader definition, only 

`actions which have the purpose and effect of causing the 

government to pay out money are clearly`claims' within the 

purpose of the Act.' " United States v. Lawson, 522 F. Supp. 

746, 750 (D.N.J. 1981) (quoting United States v. Silver, 384 

F. Supp. 617, 620 (E.D.N.Y. 1974), aff 'd, 515 F.2d 505 (2d 

Cir. 1975)); see also United States v. Neifert-White Co., 390 

U.S. 228, 233 (1968) (False Claims Act reaches to "all 

fraudulent attempts to cause the Government to pay out 

sums of money."). As the Supreme Court r ecognized in 

United States v. McNinch, 356 U.S. 595, 599 (1958) (quoting 

United States v. Tieger, 234 F.2d 589, 591 (3d Cir. 1956)), 

" `The conception of a claim against the government

normally connotes a demand for money or for some 

transfer of public property.' " In McNinch, the Supreme 

Court traced the legislative history of the False Claims Act 

stating, 

 The False Claims Act was originally adopted following 

 a series of sensational congressional investigations into 

 the sale of provisions and munitions to the W ar 

 Department. Testimony before Congr ess painted a 

 sordid picture of how the United States had been billed 

 for nonexistent or worthless goods, charged exorbitant 

 prices for goods delivered, and generally r obbed in 

 purchasing the necessities of war. Congr ess wanted to 

 stop this plundering of the public treasury. At the 

 same time it is equally clear that the False Claims Act 

 was not designed to reach every kind of fraud practiced 

 on the Government. 

Id. at 599; see also United States ex r el. Pogue v. Am. 

Healthcorp., Inc., 914 F.Supp. 1507, 1512 (M.D.Tenn. 1996) 

("The legislative history of the False Claims Act reveals that 

 9 
it was designed to protect the Federal T reasury.") (citing S. 

Rep. No. 99-345 at 4 (1986), reprinted in 1986 U.S.C.C.A.N. 

5266, 5269). 

In this regard, we believe Hutchins's r eading of the 

statute expands the False Claims Act's scope of liability to 

include actions not contemplated by Congress. His 

argument neglects the statutory definition of the term 

"claim" which provides, 

 For purposes of this section, "claim" includes 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, or if the 

 Government will reimburse such contractor , grantee, or 

 other recipient for any portion of the money or property 

 which is requested or demanded. 

31 U.S.C. S 3729(c). 

The False Claims Act seeks to redress fraudulent activity 

which causes economic loss to the United States 

government. As the Supreme Court held in Hess, the 

purpose of the False Claims Act "was to pr ovide for 

restitution to the government of money taken from it by 

fraud." 317 U.S. at 551. It was not intended to impose 

liability for every false statement made to the government.5 

Costner v. URS Consultants, Inc., 153 F .3d 667, 677 (8th 

Cir. 1998) ("[O]nly those actions by the claimant which have 

the purpose and effect of causing the United States to pay 

out money it is not obligated to pay, or those actions which 

intentionally deprive the United States of money it is 

lawfully due, are properly consider ed `claims' within the 

meaning of the FCA."). 

_________________________________________________________________ 

5. Extending the False Claims Act to reach any false statement made to 

the government, regardless of any impact on the United States Treasury, 

would appear to impermissibly expand standing doctrine and essentially 

permit any plaintiff to sue on behalf of the government when false or 

misleading statements are made to any gover nment agent including the 

courts, the legislature or any law enfor cement officer. 

 10 
For these reasons, we hold the submission of false claims 

to the United States government for appr oval which do not 

cause financial loss to the government ar e not within the 

purview of the False Claims Act. Tieger , 234 F.2d at 592 

("The provision relating to the payment or approval of a 

`claim upon or against' the Government r elates solely to the 

payment or approval of a claim for money or pr operty to 

which a right is asserted against the Government."). Unless 

these claims result in economic loss to the United States 

government, liability under the False Claims Act does not 

attach. United States v. Bornstein, 423 U.S. 303, 309 n.4 

(1976) (" `The conception of a claim against the government 

normally connotes a demand for money or for some 

transfer of public property.' ") (quoting McNinch, 356 U.S. at 

599). 

C. 

In dismissing plaintiff 's claims, the District Court stated 

the Bankruptcy Court was merely acting as an intermediary 

in approving defendant's false claims. The court noted, "[In 

most False Claims Act actions] the intermediary [to whom 

the defendants submitted false claims] has contr ol over 

government funds for the purpose of pr operly reimbursing 

a non-fraudulent party, and the suit is filed because the 

funds wind up in the hands of an improper claimant." 

Hutchins I, slip. op. at *4. The District Court noted that the 

Bankruptcy Court, as intermediary, did not have similar 

control over the funds. Permitting this claim, said the 

District Court, would mean the False Claims Act would 

"apply whenever an individual submits a gover nmentapproved false claim to a third party who happens to owe 

an unrelated debt to a government agency." Id. at *4-5. 

In its amicus curiae brief, the gover nment contends the 

District Court improperly implied that a False Claims Act 

plaintiff who alleges the defendant caused an intermediary 

to submit a false claim on its behalf must establish that the 

intermediary had control over the gover nment funds. To the 

extent the District Court's opinion implies an "intermediary 

control" requirement, we agr ee with the government that 

the District Court erred. The proper inquiry under the False 

Claims Act is not whether an intermediary controls 

 11 
government funds for any period of time but whether the 

defendant causes, or will cause, the intermediary to make 

a false claim against the government r esulting in a financial 

loss to the treasury. See, e.g., Neifert-White Co., 390 U.S. at 

233; Rainwater, 356 U.S. at 591. Several cases recognize 

that a plaintiff may assert a cause of action under the False 

Claims Act even when an intermediary, such as a 

subcontractor, is merely a conduit to the transfer of 

government funds. See, e.g., Bor nstein, 423 U.S. at 309; 

United States v. Ueber, 299 F.2d 310, 313 (6th Cir. 1962). 

The intermediary need not have discretion over, or even 

possession of, the government funds to establish that the 

defendant violated the False Claims Act. Ther efore, we 

reiterate that the proper inquiry under the False Claims Act 

is whether the defendant made fraudulent claims that 

caused economic loss to the United States Tr easury. 

D. 

On appeal, Hutchins contends Wilentz, Goldman & 

Spitzer's submission of fraudulent legal bills to the 

Bankruptcy Court constitutes a reverse false claim in 

violation of S 3729(a)(7). He argues that if the government 

were a creditor to a bankrupt estate, it would suffer 

"economic loss" by reason of the estate paying inflated legal 

bills. 

The False Claims Act recognizes that a party may be

liable for a reverse false claim if he "knowingly makes, uses, 

or causes to be made or used, a false recor d or statement 

to conceal, avoid, or decrease an obligation to pay or 

transmit money or property to the Gover nment." 31 U.S.C. 

S 3729(a)(7). But in his complaint, Hutchins never asserted 

a reverse false claim cause of action under 31 U.S.C. 

S 3729(a)(7), nor did he allege the gover nment was a 

creditor in any of the bankrupt estates in which Wilentz, 

Goldman & Spitzer submitted inflated legal bills. 

As noted, the District Court dismissed Hutchins's claim 

on a Fed. R. Civ. P. 12(b)(6) motion. Our r eview therefore is 

limited to reviewing the claims alleged in his complaint.6 

_________________________________________________________________ 

6. See, e.g., Mahone v. Addicks Utility Dist. of Harris County, 836 F.2d 

921, 935 (5th Cir. 1988) ("It is black-letter law that `[a] motion to 

dismiss 

 12 
Because Hutchins did not plead this cause of action, nor 

file a motion to amend his complaint to raise this cause of 

action, we will not address his reverse false claim argument 

on appeal. 

IV. 

Hutchins also alleges that Wilentz, Goldman & Spitzer 

fired him in retaliation for his investigation and reporting of 

fraud in violation of 31 U.S.C. S 3730(h). Section 3730(h) 

provides: 

 Any employee who is discharged, demoted, suspended, 

 threatened, harassed, or in any other manner

 discriminated against in the terms and conditions of 

 employment by his or her employer because of lawful 

 acts done by the employee on behalf of the employee or 

 others in furtherance of an action under this section, 

 including investigation for, initiating of, testimony for, 

 or assistance in an action filed or to be filed under this 

 section, shall be entitled to all relief necessary to make 

 the employee whole. 

This so called "whistleblower" provision protects 

employees who assist the government in the investigation 

and prosecution of violations of the False Claims Act. Neal 

v. Honeywell Inc., 33 F.3d 860, 861 (7th Cir. 1994). 

Congress enacted S 3730(h) "to encourage any individuals 

knowing of Government fraud to bring that information 

forward." S. Rep. No. 99-345, at 4 (1986), reprinted in 1986 

U.S.C.C.A.N. 5266. "[F]ew individuals will expose fraud if 

they fear their disclosures will lead to harassment, 

demotion, loss of employment or any other for m of 

retaliation." Id. at 5300. Ther efore, S 3730(h) broadly 

protects employees who assist the gover nment in 

prosecuting and investigating False Claims Act violations. 

A plaintiff asserting a cause of action underS 3730(h) 

must show (1) he engaged in "protected conduct," (i.e., acts 

_________________________________________________________________ 

for failure to state claim under Federal Rule Civil Procedure 12(b)(6) is 

to 

be evaluated only on the pleadings.' ") (quoting Jackson v. Procunier, 789 

F.2d 307, 309 (5th Cir. 1986)); see also 5A Charles Alan Wright and 

Arthur R. Miller, Federal Practice and Pr ocedure S 1356 (2d ed. 1990). 

 13 
done in furtherance of an action under S 3730) and (2) that 

he was discriminated against because of his "pr otected 

conduct." United States ex rel. Y esudian v. Howard Univ., 

153 F.3d 731, 736 (D.C. Cir. 1998) (quoting S. Rep. No. 99- 

345, at 35 (1986), reprinted in 1986 U.S.C.C.A.N. 5300). In 

proving that he was discriminated against "because of " 

conduct in furtherance of a False Claims Act suit, a plaintiff 

must show that (1) his employer had knowledge he was 

engaged in "protected conduct"; and (2) that his employer's 

retaliation was motivated, at least in part, by the

employee's engaging in "protected conduct."7 Id.; see also 

Zahodnick v. Int'l Bus. Machines Corp., 135 F .3d 911, 914 

(4th Cir. 1997). At that point, the bur den shifts to the 

employer to prove the employee would have been 

terminated even if he had not engaged in the protected 

conduct. Mikes v. Strauss, 889 F. Supp. 746, 754 (S.D.N.Y. 

1995). 

At issue here is whether Hutchins engaged in"protected 

conduct," and whether Wilentz, Goldman & Spitzer was on 

notice that he was pursuing (i.e., acting in furtherance of) 

a False Claims Act suit and retaliated against him.

Hutchins claims he engaged in three activities that were 

"protected conduct" that put his employer on notice that he 

was investigating and pursuing a potential False Claims Act 

suit. First, he cites the memorandum he wrote to Louis 

DeLucia concerning the law firm's"practice" of 

overcharging clients for Westlaw and LEXIS research costs. 

_________________________________________________________________ 

7. The requirement that employers have knowledge that an employee is 

engaged in "protected conduct" ensur es that S 3730(h) suits are only 

prosecuted where there has been actual retaliation. Robertson v. Bell 

Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994) (quoting S. 

Rep. 

No. 99-345, at 5 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5300), cert. 

denied, 513 U.S. 1154 (1995). As the Court of Appeals for the Seventh 

Circuit has noted, knowledge on the part of the employer is necessary 

because, 

 Some employees will cry "fraud" to make pests of themselves, in the 

 hope of being bought off with higher salaries or more desirable 

 assignments. Others will perceive the disappointments of daily life 

 as "retaliation" and file suits that have some settlement value 

 because of the high costs of litigation and the possibility of 

error. 

Neal, 33 F.3d at 863. 

 14 
Second, he points to his inquiry to Marie Henneberry, the 

paralegal supervisor, about this billing practice as well as 

the practice of using paralegals to perfor m secretarial 

functions resulting in inflated client bills. Finally, he cites 

his request for billing documents from the accounting 

department. 

In granting defendant's motion for summary judgment, 

the District Court found Hutchins failed to engage in 

"protected conduct" and that Wilentz, Goldman & Spitzer 

was not on notice of potential False Claims Act litigation 

when it fired him. The court found Hutchins's investigation 

and reporting of the Westlaw and LEXIS billing practice was 

not "protected conduct" because, 

 plaintiff only looked into the firm's research costs 

 because his supervisor, defendant DeLucia, asked him 

 to. The memo and all research involved, was therefore, 

 the product of a specific assignment given to him by 

 his supervisor. It was not the result of plaintiff 's 

 independent investigation prompted by a suspicion of 

 fraud upon the government. 

Hutchins II, slip. op. at *13. Additionally, the court stated, 

 [T]he record is clear that at no point did plaintiff 

 complain or express any objection to the fir m's alleged 

 policy of inflating research costs. He merely performed 

 the limited billing research his supervisor asked of 

 him, wrote his findings down in an inter office memo, 

 and submitted it to DeLucia. 

Id. at *15. Finally the court stated, 

 [Hutchins] fail[ed] to establish facts that demonstrate 

 he alerted his employer, or acted so as to put it on 

 notice, that he was investigating alleged wr ongdoings 

 and might be reporting them. Plaintiff 's assertions that 

 he knew about unlawful practices, standing alone, 

 without facts to support a finding that defendantfired 

 him in retaliation for investigating and possibly 

 reporting what he discovered, do not constitute enough 

 evidence to support his federal claim in this action. 

Id. at *16. 

 15 
A. 

An employee must engage in "protected conduct" in order 

to assert a claim under S 3730(h). In addr essing what 

activities constitute "protected conduct," the "case law 

indicates that `protected [conduct]' r equires a nexus with 

the `in furtherance of ' prong of [a False Claims Act] action." 

McKenzie v. Bellsouth Telecomm., Inc., 219 F.3d 508, 515 

(6th Cir. 2000). This inquiry involves deter mining "whether 

[plaintiff 's] actions sufficiently furthered `an action filed or 

to be filed under' the [False Claims Act] and, thus, equate 

to `protected [conduct].' " Id. at 516. Section 3730(h) 

specifies that "protected conduct" includes "investigation 

for, initiating of, testimony for, or assistance in" a False 

Claims Act suit. 31 U.S.C. S 3730(h). 

Determining what activities constitute "pr otected 

conduct" is a fact specific inquiry. But the case law 

indicates that "the protected conduct element . . . does not 

require the plaintiff to have developed a winning qui tam 

action . . . . It only requires that the plaintiff engage[ ] in 

`acts . . . in furtherance of an action under[the False 

Claims Act].' " Yesudian, 153 F.3d at 739 (quoting 31 U.S.C. 

S 3730(h)). Under the appropriate set of facts, these 

activities can include internal reporting and investigation of 

an employer's false or fraudulent claims. Id. at 742 ("[It] 

would [not] . . . be in the interest of law-abiding employers 

for the [False Claims Act] to force employees to report their 

concerns outside the corporation in or der to gain 

whistleblower protection. Such a requir ement would bypass 

internal controls and hotlines, damage corporate efforts at 

self-policing, and make it difficult for corporations and 

boards of directors to discover and corr ect on their own 

false claims made by rogue employees or managers."); see 

also Childree v. UAP/GA Chem, Inc., 92 F .3d 1140, 1146 

(11th Cir. 1996), cert. denied, 519 U.S. 1148 (1997); 

Hopper, 91 F.3d at 1269 ("[P]laintiff must be investigating 

matters which are calculated, or reasonably could lead to a 

viable [False Claims Act] action."); Neal, 33 F.3d at 864. 

"Mere dissatisfaction with one's treatment on the job is not, 

of course, enough. Nor is an employee's investigation of 

nothing more than his employer's non-compliance with 

federal or state regulations." Y esudian, 153 F.3d at 740 

 16 
(citing Hopper, 91 F.3d at 1269); see also Zahodnick, 135 

F.3d at 914 ("Simply reporting his concern of a mischarging 

to the government to his supervisor does not suffice to 

establish that Zahodnick was acting `in furtherance of ' a 

qui tam action."); United States ex r el. Ramseyer v. Century 

Healthcare Corp., 90 F.3d 1514, 1523 (10th Cir. 1996). 

As noted, employees need not actually file a False Claims 

Act suit to assert a cause of action under S 3730. Requiring 

an employee to actually file a qui tam suit would blunt the 

incentive to investigate and report activity that may lead to 

viable False Claims Act suits. The False Claims Act was 

enacted to encourage parties to report fraudulent activity 

and was intended to "protect employees while they are 

collecting information about a possible fraud, before they 

have put all the pieces of the puzzle together ." Yesudian, 

153 F.3d at 740 (citing Neal, 33 F .3d at 864). 

B. 

As noted, the False Claims Act also requir es employees to 

prove they were discriminated against"because of " their 

"protected conduct." To meet this r equirement, a plaintiff 

must show his employer had knowledge that he was 

engaged in "protected conduct" and that the employer 

retaliated against him because of that conduct. Several 

courts of appeals have held that the knowledge pr ong of 

S 3730 liability requires the employee to put his employer 

on notice of the "distinct possibility" of False Claims Act 

litigation. Yesudian, 153 F.3d at 740; Childree, 92 F.3d at 

1146; Hopper, 91 F.3d at 1269; Neal, 33 F.3d at 864. We 

agree with this formulation. 

An employer's notice of the "distinct possibility" of False 

Claims Act litigation is essential because without knowledge 

an employee is contemplating a False Claims Act suit, 

"there would be no basis to conclude that the employer 

harbored [S 3730(h)'s] prohibited motivation [i.e.,

retaliation]." Mann v. Olsten Certified Healthcare Corp., 49 

F. Supp.2d 1307, 1314 (M.D. Ala. 1999). Courts have

recognized "the kind of knowledge the [employer] must have 

mirrors the kind of activity in which the [employee] must be 

engaged. What [the employer] must know is that[the 

 17 
employee] is engaged in protected activity .. . -- that is, in 

activity that reasonably could lead to a False Claims Act 

case."8 Yesudian , 153 F.3d at 742. 

"Merely grumbling to the employer about job 

dissatisfaction or regulatory violations does not satisfy the 

requirement - just as it does not constitute protected 

conduct in the first place." Id. at 743. As one court has 

stated, the inquiry into whether an employee puts his 

employer on notice is 

 [w]hether the employee engaged in conduct fr om which 

 a fact finder could reasonably conclude that the 

 employer could have feared that the employee was 

 contemplating filing a qui-tam action against it or 

 reporting the employer to the government for fraud 

 . . . . [L]itigation . . . [is] a "distinct possibility" only if 

 the evidence reasonably supports such fear; if the 

 evidence does not support this fear, litigation would not 

 have been a distinct possibility. 

Mann, 49 F. Supp.2d at 1314; see also McKenzie, 219 F.3d 

at 514-15; Yesudian, 153 F.3d at 741-45; Neal, 33 F.3d at 

863-865. 

Whether an employer is on notice of the "distinct 

possibility" of False Claims Act litigation is also a fact 

specific inquiry. While "[a]n employer is entitled to treat a 

suggestion for improvement as what it purports to be rather 

than as a precursor to litigation," Luckey v. Baxter 

Healthcare Corp., 183 F.3d 730, 733 (7th Cir.), cert. denied, 

528 U.S. 1038 (1999), the employer is on notice of the 

"distinct possibility" of litigation when an employee takes 

actions revealing the intent to report or assist the 

government in the investigation of a False Claims Act 

violation. 

_________________________________________________________________ 

8. We note that the "protected conduct" and notice requirements are 

separate elements of a prima facie case of r etaliation under S 3730. But 

as several circuits have recognized, the inquiry into these elements 

involves a similar analytical and factual investigation. See, e.g., 

Yesudian, 153 F.3d at 742. 

 18 
C. 

1. 

In most retaliation cases under S 3730(h), the two critical 

questions are (1) what sort of activity constitutes "protected 

conduct," and (2) whether the employer was on notice that 

the employee was engaging in "protected conduct."9 

Because the inquiry into these questions is intensely 

factual, we will examine reported cases that r eview whether 

an employee engaged in "protected conduct" and whether 

this conduct was sufficiently linked to the investigation of 

a False Claims Act suit that it put the employer on notice 

of the "distinct possibility" of litigation. 

In Neal, 33 F.3d 860, an employee who worked at the

Joliet Army Arsenal Plant concluded her co-workers were 

falsifying ammunition test data reports. She r eported this 

activity to her supervisor and to her employer's office of 

legal counsel. The employer's legal counsel then notified the 

United States Army which conducted an investigation and 

found plaintiff 's fraud allegations wer e true. The Court of 

Appeals for the Seventh Circuit found the plaintiff engaged 

in "protected conduct" and put her employer on notice of 

the "distinct possibility" of False Claims Act litigation when 

she reported the fraud to her employer's legal counsel. 

Specifically, the court noted that plaintif f "conducted her 

own investigation and reported her findings through

corporate channels, leading to two additional investigations: 

one by [the defendant] and a second by the Ar my." Id. at 

865. 

In Yesudian, 153 F.3d 731, the Court of Appeals for the 

D.C. Circuit found an employee of Howar d University who 

_________________________________________________________________ 

9. As noted a prima facie case of retaliation under S 3730 requires proof 

that the plaintiff (1) engaged in "pr otected conduct," (i.e., acts done 

in 

furtherance of an action under S 3730) and (2) that the plaintiff 's 

employer discriminated him because of his "pr otected conduct." In 

proving that he was discriminated against "because of " his activities in 

furtherance of a False Claims Act suit, a plaintif f must show that (1) 

his 

employer had knowledge that he was engaged in "pr otected conduct"; 

and (2) that his employer's retaliation was motivated, at least in part, 

by 

the plaintiff 's engaging in "pr otected conduct." 

 19 
worked in the purchasing department engaged in"protected 

conduct" when he reported to upper-level University

officials that his supervisor was engaged in fraudulent 

activity. The plaintiff reported, among other things, that his 

supervisor submitted false time and attendance r ecords, 

received bribes from vendors, and made payments to 

vendors who did not provide services to the University. The 

court held the plaintiff engaged in "pr otected conduct" and 

put the University on notice of the "distinct possibility" of a 

False Claims Act suit because he repeatedly advised his 

superiors that he had evidence of false recor ds. He wrote 

several letters to his supervisors and to the University 

President and Vice-President detailing what he believed was 

illegal conduct that fraudulently resulted in the loss of 

government money. He also collected evidence from 

employees to corroborate his claims and took photographs 

of evidence. The Court of Appeals for the D.C. Cir cuit held 

these reporting actions put the University administration, 

and plaintiff 's immediate supervisors, on notice of the 

"distinct possibility" of False Claims Act litigation. Id. at 

744-45; see also Hopkins v. Actions, Incorp. of Brazoria 

County, 985 F.Supp. 706, 709-10 (S.D.T ex. 1997) (holding 

plaintiff who reported to chairman of company that 

employees were illegally using Medicare funds for payroll 

costs, as well as informed him that she intended to report 

this activity to the government, engaged in"protected 

conduct" that put employer on notice of the "distinct 

possibility" of litigation). 

Not all complaints by employees to their supervisors put 

employers on notice of the "distinct possibility" of False 

Claims Act litigation. In Robertson, 32 F .3d 948, the Court 

of Appeals for the Fifth Circuit found an employee did not 

engage in "protected conduct" nor did he put his employer 

on notice of potential False Claims Act litigation when he 

reported to his supervisors that the company was billing 

the government for various helicopter pr ojects without 

properly substantiating the charges. The court noted the 

plaintiff "never used the terms `illegal,' `unlawful' or `qui tam 

action' in characterizing his concerns about[the] charges." 

Id. at 951; see also Mann, 49 F.Supp.2d at 1307. 

In Zahodnick, 135 F.3d 911, the Court of Appeals for the 

Fourth Circuit found a managing engineer at IBM whose 

 20 
job duties included assembling cost information for

proposals to the Defense Intelligence Agency did not engage 

in "protected conduct" and failed to put his employer on 

notice of the "distinct possibility" of a False Claims Act suit. 

In Zahodnick, plaintiff engineer r eported to his supervisor 

that employees were overcharging the government for the 

amount of time they worked on government pr ojects. The 

court stated, 

 The record discloses that Zahodnick mer ely informed a 

 supervisor of the problem and sought confir mation that 

 a correction was made; he never informed anyone that 

 he was pursuing a qui tam action. Simply r eporting his 

 concern of mischarging to the gover nment to his 

 supervisor does not establish that Zahodnick was 

 acting "in furtherance of " a qui tam action. 

Id. at 914 (citing Robertson, 32 F .3d at 951). 

Last year in McKenzie, 219 F.3d 508, the Court of 

Appeals for the Sixth Circuit held a dispatcher for

BellSouth, whose regular job duties included pr ocessing 

complaints about telephone service and closing "trouble 

reports" once telephone repairs wer e made, did not engage 

in "protected conduct" nor put her employer on notice of 

potential False Claims Act litigation when she complained 

to her supervisors that BellSouth was falsifying r eports. It 

was BellSouth's policy that if repairs wer e not made within 

twenty-four hours of being reported, the customer was 

entitled to a refund for the period of time that telephone 

service was disrupted. Plaintiff alleged that various 

employees falsified time reports when outages were 

reported and when repairs were completed so that 

BellSouth could avoid paying reimbursements to 

customers, including several government agencies. Plaintiff 

complained to her supervisors about this practice and on 

one occasion showed her supervisor a newspaper article 

about a consumer fraud investigation by the Florida state 

attorney general. She also refused to falsify repair records. 

The court found the plaintiff did not engage in "protected 

conduct" reasoning that "when McKenzie br ought her

complaints to the attention of the BellSouth auditor and 

her supervisors, legal action was not a reasonable or 

distinct possibility . . . because [her complaints were] not 

 21 
sufficiently connected to exposing fraud or false claims 

against the federal government." Id. at 516-17. The court 

stated the newspaper article McKenzie showed her 

supervisor "did not relate to a qui tam action and only 

discussed a consumer fraud investigation by the Florida 

state attorney general." Id. at 518. Additionally, the article 

was widely circulated and disseminated thr oughout the 

office. The court also reasoned that "although the 

newspaper article distributed and posted by McKenzie 

shows awareness of consumer fraud, the `in furtherance of ' 

language requires more than mer ely reporting wrongdoing 

to supervisors." Id. at 516. The court stated that McKenzie's 

"numerous complaints on the matter wer e directed at the 

stress from and pressure to falsify records, not toward an 

investigation into fraud on the federal gover nment." Id. at 

517. Therefore, McKenzie did not put BellSouth on notice of 

the "distinct possibility" that she might pursue a False 

Claims Act suit or inform the government that BellSouth's 

fraudulent conduct was causing an economic loss to the 

government. 

These cases are illustrative of the general rule that a 

successful cause of action under S 3730 r equires an 

employee to prove that he engaged in "pr otected conduct," 

that is conduct in furtherance of a False Claims Act suit, 

and that his employer was on notice of the "distinct 

possibility" of False Claims Act litigation and r etaliated 

against him because of his "protected conduct." As noted, 

this is a fact specific inquiry. 

2. 

Although reporting "fraudulent" and "illegal" activity to an 

employer may satisfy the "protected conduct" and notice 

requirements in many S 3730(h) cases, in some instances 

where an employee's job duties involve investigating and 

reporting fraud, the employee's burden of proving he 

engaged in "protected conduct" and put his employer on 

notice of the "distinct possibility" of False Claims Act 

litigation is heightened. As the Court of Appeals for the 

Fourth Circuit held in Eberhar dt v. Integrated Design & 

Constr., Inc., 167 F.3d 861, 868 (4th Cir. 1999), "If an 

employee is assigned the task of investigating fraud within 

 22 
the company, courts have held that the employee must 

make it clear that the employee's actions go beyond the 

assigned task [in order to allege retaliatory discharge under 

S 3730(h)]." The court stated that when an employee is 

assigned the task of investigating fraud, "such persons 

must make clear their intentions of bringing or assisting in 

a [False Claims Act] action in order to overcome the 

presumption that they are merely acting in accordance with 

their employment obligations." Id. This r equirement is 

consistent with the understanding that the employer must 

be put on notice that the employee is contemplating a 

potential False Claims Act suit before liability will attach 

under S 3730(h). 

In Ramseyer, 90 F.3d at 1523, the Court of Appeals for 

the Tenth Circuit found a plaintif f who was the clinical 

director of a mental health facility, whose r esponsibilities 

included monitoring compliance with applicable Medicaid 

requirements, did not engage in "pr otected conduct" when 

she reported to her superiors that the facility was not 

complying with various Medicaid requirements. The court 

reasoned that these reports to her supervisors, without 

more, did not put defendants on notice of a potential qui 

tam suit because the reporting was part of plaintiff 's job 

duties. The court stated, 

 Plaintiff never suggested to defendants that she 

 intended to utilize [their] non compliance in 

 furtherance of a [False Claims Act] action. Plaintiff gave 

 no suggestion that she was going to report such 

 noncompliance to government officials, nor did she 

 provide any indication that she was contemplating her 

 own qui tam action. Rather, the monitoring and 

 reporting activities described in plaintif f 's complaint 

 [i.e., reporting to her superiors] wer e exactly those 

 activities plaintiff was required to undertake in 

 fulfillment of her job duties, and plaintif f took no steps 

 to put defendants on notice that she was acting"in 

 furtherance of " a [False Claims Act ] action. 

Id. at 1523 (internal citations omitted). 

In Robertson, 32 F.3d at 952, the Court of Appeals for the 

Fifth Circuit held a senior contract administrator with the 

 23 
Army Helicopter Improvement Program, who was 

responsible for ensuring that costs wer e properly charged to 

the government and requests for additional government 

funding were properly substantiated, did not engage in 

"protected conduct" when he reported to his superiors that 

certain requests for additional government funding were not 

properly substantiated. In Robertson, plaintiff investigated 

and tried to verify the requests for funding and over the 

course of several months reported his findings to his 

superiors. The court found this activity was not pr otected 

because plaintiff " `did nothing to r ebut his supervisor's 

testimony regarding their lack of knowledge that he was 

conducting investigations outside the scope of his job 

responsibilities in furtherance of a qui tam action.' " Id. 

(quoting district court opinion). The court r easoned that 

plaintiff "never characterized his concer ns as involving 

illegal, unlawful, or false-claims investigations . . . . [There 

is] no evidence that [plaintiff] expr essed any concerns to his 

superiors other than those typically raised as part of a 

contract administrator's job." Id. 

Even though an employee's job duties include 

investigating or reporting fraud, the employee may still 

engage in "protected conduct" and put his employer on 

notice of the "distinct possibility" of False Claims Act 

litigation. In Eberhardt, 167 F .3d at 868, the Court of 

Appeals for the Fourth Circuit stated an employee can put 

his employer on notice 

 by expressly stating an intention to bring a qui tam 

 suit, . . . [or by engaging in] any action which a fact 

 finder reasonably could conclude would put the 

 employer on notice that litigation is a reasonable 

 possibility. Such actions would include, but ar e not 

 limited to, characterizing the employer's conduct as 

 illegal or fraudulent or recommending that legal 

 counsel become involved. These types of actions ar e 

 sufficient because they let the employer know, 

 regardless of whether the employee's job duties include 

 investigating potential fraud, that litigation is a 

 reasonable possibility. 

In Eberhardt, 167 F.3d at 868, a senior staff vicepresident whose job duties included organizing his 

 24 
employer's accounting system engaged in "pr otected

conduct" and put his employer on notice of the"distinct 

possibility" of False Claims Act litigation when he began 

investigating his employer's charges to the United States 

State Department for work not actually perfor med. 

Although plaintiff 's job duties required him to investigate 

fraud, the court found he engaged in "protected conduct." 

The court reasoned plaintiff reported to his employer that 

the charges were "illegal." Id. Additionally, he informed his 

employer that it was advisable to obtain legal counsel. The 

court concluded these activities were sufficient to put his 

employer on notice of potential False Claims Act litigation. 

Id.; see also Mann, 49 F. Supp.2d at 1316 (employee whose 

job duties included reporting and investigating compliance 

with Medicare regulations did not put employer on notice of 

False Claims Act litigation when she reported billing 

overcharges to supervisor because this r eporting was part 

of her regular job duties, however when she r eported this 

information to her employer's legal department she engaged 

in protected conduct). 

D. 

We fail to see how Hutchins engaged in "pr otected 

conduct." Similarly, we do not believe that W ilentz, 

Goldman & Spitzer was on notice of the "distinct 

possibility" of False Claims Act litigation and r etaliated 

against Hutchins because of his "protected conduct." 

Hutchins never threatened to report his discovery of the 

firm's Westlaw and LEXIS billing practices to a government 

authority, nor did he file a False Claims Act suit until after 

he was terminated. Childree, 92 F.3d at 1146. Furthermore, 

Hutchins never informed his supervisors he believed this 

billing practice was "illegal," Ramseyer , 90 F.3d at 1523, or 

that the practice was fraudulently causing gover nment 

funds to be lost or spent. Robertson, 32 F .3d at 951. Nor 

did he advise his employer that corporate counsel be 

involved in the matter. Eberhardt, 167 F.3d at 869. Rather, 

in a single memorandum he stated, "I was told thefirm has 

a policy whereby actual Westlaw and LEXIS expenses are 

multiplied by 1.5 in order to arrive at the amount the client 

is invoiced for." As held in Zahodnick , 135 F.3d at 914, 

 25 
"simply reporting [a] concern of mischarging . . . does not 

establish that [plaintiff] was acting in furtherance of a qui 

tam action." Hutchins's memorandum mer ely stated, as a 

matter of fact, the firm's policy of passing on Westlaw 

charges to clients. The memorandum did not inform 

Wilentz, Goldman & Spitzer that he intended to use this 

information in furtherance of a qui tam action or that he 

was going to report it to government authorities because he 

believed the law firm was defrauding the government. 

Robertson, 32 F.3d at 952; Mikes, 889 F. Supp. at 753 

(plaintiff must show employer was on notice that she was 

"laying the groundwork for legal action"). 

Nor did Hutchins's complaint to Marie Henneberry about 

the practice of paralegals performing secretarial tasks put 

the law firm on notice of the "distinct possibility" of False 

Claims Act litigation. Hutchins approached Henneberry 

only to "confirm basically that [another paralegal] had 

talked to her about [using paralegals for secr etarial tasks]," 

never advising Henneberry that he thought the practice was 

illegal or fraudulently causing loss of gover nment funds.10 

Similar to the plaintiff in Zahodnick, Hutchins "merely 

informed a supervisor of a problem and sought 

confirmation that a correction was made." 135 F.3d at 914. 

As held in Luckey, "An employer is entitled to treat a 

suggestion for improvement as what it purports to be rather 

than a precursor to litigation." 183 F .3d at 733. Because 

Hutchins's single discussion with Henneberry did not allege 

fraud, illegality or a potential False Claims Act suit, we fail 

to see how the conversation put Wilentz, Goldman & 

Spitzer on notice of the "distinct possibility" of False Claims 

Act litigation. McKenzie, 219 F.3d at 516 (plaintiff "must 

sufficiently allege activity with a nexus to a qui tam action, 

or fraud against the United States Government"). 

Hutchins claims that aside from his "r eporting" (the 

memorandum to DeLucia and his conversation with 

Henneberry), he was involved in the initial investigation of 

a potential False Claims Act suit. See Y esudian, 153 F.3d at 

740 (Section 3730(h) "protect[s] employees while they are 

_________________________________________________________________ 

10. Hutchins told Henneberry that he thought the practice was 

"unethical." 

 26 
collecting information about a possible fraud, before they 

have put all the pieces of the puzzle together ."). He 

contends his discussion with Marie Henneberry about the 

Westlaw and LEXIS charges and his r equest for billing 

documents from the accounting department constituted 

"investigation" that put Wilentz, Goldman & Spitzer on 

notice of the "distinct possibility" of False Claims Act 

litigation. We disagree. 

Hutchins's "investigation" was in response to a specific 

assignment from Louis DeLucia who asked him to 

determine why certain clients' computerized r esearch costs 

were so high. Hutchins's inquiry to Henneberry about the 

practice was not the result of his independent suspicions 

that the firm was involved in fraud. As held in Eberhardt, 

167 F.3d at 868, if an employee is assigned the task of 

investigating fraud within the company, that employee 

must make it clear that his investigatory and r eporting 

activities extend beyond the assigned task in or der to allege 

retaliatory discharge under S 3730(h). We see no evidence 

that Hutchins engaged in any conduct, beyond what was 

specifically asked of him in accordance with his job duties, 

that gave any indication that he was investigating fraud for 

a potential False Claims Act suit. He did not communicate 

that he was going to report the activity to government 

officials nor that he was contemplating his own qui tam 

suit. Robertson, 32 F.3d at 952. He did not use the terms 

"illegal" or "fraud" nor did he attempt to discuss the billing 

practice with corporate counsel. Eberhar dt, 167 F.3d at 

869; Neal, 33 F.3d at 865. Rather , he merely performed the 

task he was asked to complete by his supervisor . Ramseyer, 

90 F.3d at 1523; Mann, 49 F. Supp.2d at 1316. 

Hutchins contends his "investigation" into W estlaw and 

LEXIS billing was not part of his job duties. He ar gues that 

unlike the plaintiffs in Robertson, Ramseyer and Eberhardt, 

his job description as a paralegal did not contain 

"monitoring or reporting" activities, nor was he a "fraud 

investigator." Nonetheless, his inquiry into the Westlaw and 

LEXIS billing was in furtherance of his job duties. Because 

he performed the investigation at the direct request of his 

supervisor, there was no reason to believe that Hutchins 

would use the information he obtained to bring a qui tam 

 27 
suit. Eberhardt, 167 F.3d 868 ("[An] employee must make it 

clear that [his] actions go beyond the assigned task."); 

Robertson, 32 F.3d at 952 (employee not engaged in 

"protected conduct" because his "actions were consistent 

with the performance of his [job] duty"). 

As S 3730(h) makes clear, without notice of an employee's 

intent to file or assist in a False Claims Act suit, an 

employer does not engage in prohibited r etaliatory conduct 

under S 3730(h) when it terminates or demotes that 

employee. McKenzie, 219 F.3d at 516. Here, Wilentz,

Goldman & Spitzer was not on notice that Hutchins was 

contemplating a qui tam suit. Regardless of his job

description, Hutchins's "investigation" into the firm's billing 

practice resulted from a direction fr om his employer. 

Finally, we do not believe Hutchins's request for billing 

documents from the accounting department was pr otected 

investigatory conduct that put the law fir m on notice of the 

"distinct possibility" of False Claims Act litigation and 

therefore evidence that the law fir m retaliated against him. 

As the record makes clear, W ilentz, Goldman & Spitzer 

decided to fire Hutchins before he r equested these

documents. Because the law firm was unawar e of 

Hutchins's request for these documents when it decided to 

fire him, it did not retaliate against him in violation of 

S 3730(h) because of his "investigation" into the firm's 

accounting files. 

Hutchins has failed to assert a prima facie case of

retaliatory discharge under S 3730(h). By failing to prove 

that he engaged in "protected conduct" and that he put his 

employer on notice of the "distinct possibility" of False 

Claims Act litigation, Hutchins, as a matter of law, cannot 

prove a violation of S 3730(h). W e agree with the District 

Court that Wilentz, Goldman & Spitzer did not terminate 

Hutchins in retaliation for his "investigation" in furtherance 

of a False Claims Act suit. 

V. 

For the foregoing reasons, we will affir m the District 

Court's dismissal of Hutchins's qui tam claims. We also will 

 28 
affirm its grant of summary judgment for W ilentz, Goldman 

& Spitzer on the retaliatory discharge claims. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 29