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. e du/thir dc ir c uit_2001/129Filed 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 Judge s

(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 submis sion of fraudulent legal bills for approval to the Unite d 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 discha rge cause of action under 31 U.S.C. S 3730(h) requires proof that the employee engaged in "protected conduct" and that th e

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

Claims Act litigation and retaliated against the em ployee.

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 Octo ber 1995. On August 2, 1995, Louis T. DeLucia, a partne r in Wilentz, Goldman & Spitzer's creditors' rights depa rtment, asked Hutchins to investigate certain client bills, with particular attention to the "high costs" of certain computerized research. After investigating the matt er and discussing it with the law firm's paralegal supervi sor, Marie Henneberry, Hutchins submitted a short memorandum t o DeLucia stating, "I was told that the fir m has a p olicy whereby actual Westlaw and LEXIS expenses are multi plied by 1.5 in order to arrive at the amount the client is invoiced for." Hutchins also expressed concer n to Henneberr y that paralegals were being used to perfor m secretarial tasks resulting in overcharging clients.

On September 22, 1995, over a month after submittin g 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" i nto their fraudulent billing practices. Wilentz, Goldman & Sp itzer countered they were upset over Hutchins's relations hips with other firm employees, and wanted to discuss an anonymous memorandum circulated in May 1995 containing disparaging comments about Andrew W agne r, the other paralegal in the creditors' rights depart ment. The law firm advised Hutchins that they believed he wro te the memorandum. After denying involvement, Hutchins wr ote a letter to Kim Haan, a paralegal in another departme nt whom he believed was the source of the accusation, stating,

You considered my prior uses of guerilla tac tics against the I.R.S., my ex-wife and her attorneys as evidence that I wrote the . . . [disparaging memorand um]. The I.R.S. has stolen my money, locked me up in court battles for a decade, ruined a relationship/ marriage

3engagement, harassed me and filed hundreds o f

thousands of dollars in tax liens against me . My ex- wife and her attorneys used perjured testimo ny and affidavits to induce the government courts t o 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 th e 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 dut y to resist abuses of government and to resist the ef fo rts of those who misuse government agencies and gover nme nt power for personal reasons. Her philosophy g uides my subtle warfare against tyrants. Its [sic] a great deal more appropriate than blowing up federal bui ldings

. . . .

I suppose I would hope that if you learn any thing from all of this it would be not to be so quick t o rush to judgment about people . . . and that you wou ld 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 mi ghtfile a defamation/slander lawsuit against you.

Haan reported to the firm personnel manager, Anne Riegle, that she was "terrified" by the letter. Rie gle noted that Haan was "visibly upset" believing that Hutchi ns might "do something to her." On Friday, September 27, 199 7, the

law firm decided to terminate Hutchins as a result of "the culmination of escalating problems with his superio rs and

with staff."

When informed of the decision to terminate Hutchins

, Haan asked the law firm to wait until after the wee kend to inform him. Because she was taking the law school admission test that weekend, Haan explained that sh e 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 Hutch ins was discharged. Wilentz, Goldman & Spitzer agreed.

On Monday, October 2, 1995, Hutchins requestedfiles from the accounting department reflecting the law f irm's

4billing of Westlaw and LEXIS expenses. The accounti ng

department denied him access. Two hours later , Hut chins

was informed that he was fired.

On October 18, 1995, Hutchins notified the United S tates Trustee by sworn affidavit that he believed Wilentz

, Goldman & Spitzer had engaged in fraudulent and unl awful billing practices. He filed a pro se qui tam compla int under S 3729 of the False Claims Act alleging W ilentz, G oldman & 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 employ ment because of his investigation into the firm's billin g practices.

The District Court dismissed Hutchins's qui tam cl aim under Fed. R. Civ. P. 12 (b)(6),1 and granted Wile ntz, 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 Cour t's final order dismissing his claims under 28 U.S.C.S 1291. We exercise plenary review over the District Court's g rant of summary judgment on Hutchins's retaliatory discharg e 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).

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1. United States ex rel. Hutchins v. W ilentz, Gold man & 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, Gold man & Spitzer, C.A. No. 96-5988, slip. op. at *15-16 (D.N.J. September 8, 1 998) ("Hutchins II") (granting defendant summary judgment on retaliatory discharge claim).

5III.

A.

The False Claims Act provides:

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

(1) knowingly presents, or causes to be pr e sented, 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 fo r payment or approval;

(2) knowingly makes, uses or causes to be ma de or used, a false record or statement to get a f alse claim or fraudulent claim paid or approved by the

Government;

(3) conspires to defraud the Government by g etting a false or fraudulent claim allowed or paid;

* * *

(7) knowingly makes, uses, or causes to be m ade 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 fo r a civil penalty of not less than $5,000 and not more than $10,000, plus three times the amount of dama ges 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 dama ges suffered as the result of fraudulent claims which c ause government money to be expended from the United Sta tes Treasury. Alternatively, a private plaintiff may br ing a qui tam action3 on behalf of the government to recover losses

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3. In Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 768 n.1 (2000) (inter nal ci tations omitted), the United States Supreme Court set forth the historica l foundations of the

6incurred 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. B ut 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 priv ate 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 Clai ms 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 th e False Claims Act.4 To establish a prima facie case under the False

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qui tam suit stating, "qui tam is short for the Lat in 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 we ll 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 h ad suf fered injury began bringing actions in the royal courts o n both their own and

the Crown's behalf. Suit in this dual capacity w as a device for getting their private claims into the respected r oy al 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 expl icitly provided for qui tam suits. These were of two types: those th at allowed injured parties to sue in vindication of their own i nter 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 t hey had not suffered

the injury themselves.

Id. at 775 (internal citations omitted).

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

presented or caused to be presented to an agent of the United States a claim for payment; (2) the claim wa s false or fraudulent; (3) the defendant knew the claim was false or fraudulent; and (4) the United States suffer ed dam ages as a result of the false or fraudulent claim. Young-Mo ntenay, 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 r ustee and the United States Bankruptcy Courts are gover nment agents for purposes of the False Claims Act. Additi onally, it is clear that inflating the Westlaw and LEXIS expen ses was unlawful under the Bankruptcy Code.

The crux of the dispute is whether the submission o f these fraudulent bills was a "false claim for payme nt 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 connec tion with the law firm's inflated legal bills, the submi ssion of these bills for approval by the Bankruptcy Court vi olates

the False Claims Act.

Although not linguistically implausible, we find no support for this reading from the jurisprudence int erpreting the False Claims Act. Rainwater v. United States , 356 U.S. 590, 592 (1958) ("It seems quite clear that the obj ective of Congress was broadly to protect the funds and prope rty of the Government from fraudulent claims."); United St ates ex rel. Marcus v. Hess, 317 U.S. 537, reh'g denied, 31 8 U.S. 799 (1943). Nor have we been able to find any case establishing that a false statement to the gover nm ent which does not cause the government economic loss gives r ise to False Claims Act liability. United States ex r el. Hopper v.

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Any person who-

(1) knowingly presents, or caused to be pr e sented, 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 . . . .

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

attaches liability, not to underlying fraudulent ac tivity, but to the `claim for payment.' ") (quoting United Stat es v. Rivera, 55 F.3d 703, 709 (1st Cir . 1995)), cert. d enied, 519 U.S. 1115 (1997).

"Not all false statements made to the federal gover nment are claims within the meaning of the False Claims A ct." United States v. Greenberg, 237 F . Supp. 439, 442 (S.D.N.Y. 1965) (citing United States v. Howell, 318 F .2d 16 2 (9th Cir. 1963)). "Even under a somewhat broader definition, only `actions which have the purpose and effect of causi ng the government to pay out money are clearly`claims' wit hin the purpose of the Act.' " United States v. Lawson, 522 F. Supp. 746, 750 (D.N.J. 1981) (quoting United States v. Si lver, 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-Whit e 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 Sup reme Court traced the legislative history of the False C laims Act stating,

The False Claims Act was originally adopted following a series of sensational congressional invest igations into the sale of provisions and munitions to the W ar Department. Testimony before Congr ess paint ed 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 frau d 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 r eveals that

9it 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 t he statute expands the False Claims Act's scope of lia bility to include actions not contemplated by Congress. His argument neglects the statutory definition of the t erm "claim" which provides,

For purposes of this section, "claim" includ es any request or demand whether under a contract o r otherwise, for money or property which is ma de to a contractor, grantee, or other recipient if t he United States Government provides any portion of th e 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 ac tivity

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 fo r restitution to the government of money taken from i t by fraud." 317 U.S. at 551. It was not intended to imp ose liability for every false statement made to the gov ernment.5 Costner v. URS Consultants, Inc., 153 F .3d 667, 67 7 (8th Cir. 1998) ("[O]nly those actions by the claimant w hich have the purpose and effect of causing the United States to pay out money it is not obligated to pay, or those acti ons which intentionally deprive the United States of money it is lawfully due, are properly consider ed `claims' wit hin the meaning of the FCA.").

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5. Extending the False Claims Act to reach any fals e statement made to the government, regardless of any impact on the Uni ted States Treasury, would appear to impermissibly expand standing doctr ine and essentially permit any plaintiff to sue on behalf of the govern ment when false or misleading statements are made to any gover nment a gent including the courts, the legislature or any law enfor cement off icer.

10For 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 wit hin 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 sol ely to the payment or approval of a claim for money or pr oper ty 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 do es not attach. United States v. Bornstein, 423 U.S. 303, 3 09 n.4 (1976) (" `The conception of a claim against the go vernment 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 Cou rt stated the Bankruptcy Court was merely acting as an interm ediary in approving defendant's false claims. The court no ted, "[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 reimb ursing a non-fraudulent party, and the suit is filed becau se the funds wind up in the hands of an improper claimant. " Hutchins I, slip. op. at *4. The District Court not ed that the Bankruptcy Court, as intermediary, did not have sim ilar control over the funds. Permitting this claim, said the District Court, would mean the False Claims Act wou ld "apply whenever an individual submits a gover nment approved false claim to a third party who happens t o owe an unrelated debt to a government agency." Id. at * 4-5.

In its amicus curiae brief, the gover nment contend s the District Court improperly implied that a False Clai ms Act plaintiff who alleges the defendant caused an inter mediary

to submit a false claim on its behalf must establis h that the intermediary had control over the gover nment funds . To the extent the District Court's opinion implies an "int ermediary 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

11government funds for any period of time but whether the

defendant causes, or will cause, the intermediary t o 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 reco gnize 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. a t 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 th at the

defendant violated the False Claims Act. Ther efore , we reiterate that the proper inquiry under the False C laims Act

is whether the defendant made fraudulent claims tha t caused economic loss to the United States Tr easury

.

D.

On appeal, Hutchins contends Wilentz, Goldman & Spitzer's submission of fraudulent legal bills to t he Bankruptcy Court constitutes a reverse false claim in violation of S 3729(a)(7). He argues that if the go vernment were a creditor to a bankrupt estate, it would suff er "economic loss" by reason of the estate paying infl ated legal

bills.

The False Claims Act recognizes that a party may be liable for a reverse false claim if he "knowingly m akes, uses, or causes to be made or used, a false recor d or st atement 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 Wi lentz, Goldman & Spitzer submitted inflated legal bills.

As noted, the District Court dismissed Hutchins's c laim on a Fed. R. Civ. P. 12(b)(6) motion. Our r eview t herefore is limited to reviewing the claims alleged in his comp laint.6

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6. See, e.g., Mahone v. Addicks Utility Dist. of Ha rris County, 836 F.2d 921, 935 (5th Cir. 1988) ("It is black-letter law t hat `[a] motion to

dismiss

12Because 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 & Spitz er 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, sus pended, threatened, harassed, or in any other manner discriminated against in the terms and condi tions of employment by his or her employer because of lawful acts done by the employee on behalf of the e mployee or

others in furtherance of an action under thi s section, including investigation for, initiating of, testimony for,

or assistance in an action filed or to be fi led under this section, shall be entitled to all relief nec essary to make the employee whole.

This so called "whistleblower" provision protects employees who assist the government in the investig ation and prosecution of violations of the False Claims A ct. Neal v. Honeywell Inc., 33 F.3d 860, 861 (7th Cir. 1994)

. Congress enacted S 3730(h) "to encourage any indivi duals knowing of Government fraud to bring that informati on forward." S. Rep. No. 99-345, at 4 (1986), reprinte d in 1986 U.S.C.C.A.N. 5266. "[F]ew individuals will expose f raud 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) br oadly protects employees who assist the gover nment in prosecuting and investigating False Claims Act viol ations.

A plaintiff asserting a cause of action underS 3730 (h) must show (1) he engaged in "protected conduct," (i .e., acts

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

to be evaluated only on the pleadings.' ") (quoting Ja ckson 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).

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

he was discriminated against because of his "pr ote cted

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. 5 300). 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 wa s engaged in "protected conduct"; and (2) that his em ployer's retaliation was motivated, at least in part, by the employee's engaging in "protected conduct."7 Id.; s ee also Zahodnick v. Int'l Bus. Machines Corp., 135 F .3d 9 11, 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 protec ted conduct. Mikes v. Strauss, 889 F. Supp. 746, 754 (S .D.N.Y. 1995).

At issue here is whether Hutchins engaged in"protec ted conduct," and whether Wilentz, Goldman & Spitzer wa s on notice that he was pursuing (i.e., acting in furthe rance 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 Cl aims Act suit. First, he cites the memorandum he wrote to Lo uis DeLucia concerning the law firm's"practice" of overcharging clients for Westlaw and LEXIS research costs.

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7. The requirement that employers have knowledge th at 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 Appea ls for the Seventh Circuit has noted, knowledge on the part of the emp loyer is necessary because,

Some employees will cry "fraud" to make pest s of themselves, in the hope of being bought off with higher salarie s or more desirable assignments. Others will perceive the disapp ointments of daily life

as "retaliation" and file suits that have so me settlement value because of the high costs of litigation and the possibility of

error.

Neal, 33 F.3d at 863.

14Second, he points to his inquiry to Marie Henneberr y, the

paralegal supervisor, about this billing practice a s well as the practice of using paralegals to perfor m secret arial functions resulting in inflated client bills. Final ly, he cites his request for billing documents from the accounti ng department.

In granting defendant's motion for summary judgment

, the District Court found Hutchins failed to engage in "protected conduct" and that Wilentz, Goldman & Spi tzer was not on notice of potential False Claims Act lit igation

when it fired him. The court found Hutchins's inves tigation and reporting of the Westlaw and LEXIS billing prac tice was not "protected conduct" because,

plaintiff only looked into the firm's resear ch costs because his supervisor, defendant DeLucia, a sked him to. The memo and all research involved, was therefore, the product of a specific assignment given t o him by his supervisor. It was not the result of pla intiff 's independent investigation prompted by a susp icion of fraud upon the government.

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

[T]he record is clear that at no point did p laintiff complain or express any objection to the fir m's alleged policy of inflating research costs. He merel y performed the limited billing research his supervisor asked of him, wrote his findings down in an inter off ice 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 p ut it on notice, that he was investigating alleged wr ongdoings and might be reporting them. Plaintiff 's as sertions that he knew about unlawful practices, standing a lone, without facts to support a finding that defe ndantfired him in retaliation for investigating and pos sibly reporting what he discovered, do not constit ute enough evidence to support his federal claim in thi s action.

Id. at *16.

15A.

An employee must engage in "protected conduct" in o rder to assert a claim under S 3730(h). In addr essing w hat activities constitute "protected conduct," the "cas e law indicates that `protected [conduct]' r equires a ne xus with the `in furtherance of ' prong of [a False Claims A ct] 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 a ction filed or to be filed under' the [False Claims Act] and, thus , equate to `protected [conduct].' " Id. at 516. Section 373 0(h) specifies that "protected conduct" includes "invest igation 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 l aw indicates that "the protected conduct element . . . does not require the plaintiff to have developed a winning q ui tam action . . . . It only requires that the plaintiff engage[ ] in `acts . . . in furtherance of an action under[the F alse Claims Act].' " Yesudian, 153 F.3d at 739 (quoting 31 U.S.C. S 3730(h)). Under the appropriate set of facts, the se activities can include internal reporting and inves tigation of an employer's false or fraudulent claims. Id. at 74 2 ("[It] would [not] . . . be in the interest of law-abiding employers for the [False Claims Act] to force employees to re port their concerns outside the corporation in or der to gain whistleblower protection. Such a requir ement would bypass internal controls and hotlines, damage corporate ef forts at self-policing, and make it difficult for corporatio ns and

boards of directors to discover and corr ect on the ir 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 inves tigating matters which are calculated, or reasonably could l ead to a viable [False Claims Act] action."); Neal, 33 F.3d at 864. "Mere dissatisfaction with one's treatment on the j ob is not, of course, enough. Nor is an employee's investigati on of nothing more than his employer's non-compliance wit h federal or state regulations." Y esudian, 153 F.3d at 740

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

F.3d at 914 ("Simply reporting his concern of a mis charging to the government to his supervisor does not suffic e 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. 199 6).

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 b lunt the incentive to investigate and report activity that m ay lead to

viable False Claims Act suits. The False Claims Act was enacted to encourage parties to report fraudulent a ctivity and was intended to "protect employees while they a re collecting information about a possible fraud, befo re they have put all the pieces of the puzzle together ." Y esudian, 153 F.3d at 740 (citing Neal, 33 F .3d at 864).

B.

As noted, the False Claims Act also requir es emplo yees to prove they were discriminated against"because of " their "protected conduct." To meet this r equirement, a p laintiff must show his employer had knowledge that he was engaged in "protected conduct" and that the employe r retaliated against him because of that conduct. Sev eral courts of appeals have held that the knowledge pr o ng of S 3730 liability requires the employee to put his e mployer on notice of the "distinct possibility" of False Cl aims 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 sui t, "there would be no basis to conclude that the emplo yer 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] mu st have mirrors the kind of activity in which the [employee ] must be engaged. What [the employer] must know is that[the

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

activity that reasonably could lead to a False Clai ms Act case."8 Yesudian , 153 F.3d at 742.

"Merely grumbling to the employer about job dissatisfaction or regulatory violations does not s atisfy the requirement - just as it does not constitute protec ted conduct in the first place." Id. at 743. As one cou rt has stated, the inquiry into whether an employee puts h is 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 agains t 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, litigat ion 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 b e rather than as a precursor to litigation," Luckey v. Baxte r Healthcare Corp., 183 F.3d 730, 733 (7th Cir.), cer t. denied, 528 U.S. 1038 (1999), the employer is on notice of the "distinct possibility" of litigation when an employ ee takes actions revealing the intent to report or assist th e government in the investigation of a False Claims A ct

violation.

___________________________________________________ ______________

8. We note that the "protected conduct" and notice requirements are separate elements of a prima facie case of r etalia tion under S 3730. But as several circuits have recognized, the inquiry in to these elements involves a similar analytical and factual investiga tion. See, e.g., Yesudian, 153 F.3d at 742.

18C.

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 notic e that the employee was engaging in "protected conduct."9 Because the inquiry into these questions is intense ly factual, we will examine reported cases that r evie w whether an employee engaged in "protected conduct" and whet her this conduct was sufficiently linked to the investi gation 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 epor ted this activity to her supervisor and to her employer's of fice of legal counsel. The employer's legal counsel then no tified the United States Army which conducted an investigation and found plaintiff 's fraud allegations wer e true. Th e Court of Appeals for the Seventh Circuit found the plaintiff engaged in "protected conduct" and put her employer on noti ce of the "distinct possibility" of False Claims Act liti gation when she reported the fraud to her employer's legal coun sel. Specifically, the court noted that plaintif f "cond ucted her own investigation and reported her findings through corporate channels, leading to two additional inves tigations: 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 Universit y who

___________________________________________________ ______________

9. As noted a prima facie case of retaliation under S 3730 requires proof that the plaintiff (1) engaged in "pr otected condu ct," (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 otect ed 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 o tected conduct"; and (2) that his employer's retaliation was motivat ed, at least in part, by the plaintiff 's engaging in "pr otected conduct."

19worked in the purchasing department engaged in"prot ected

conduct" when he reported to upper-level University officials that his supervisor was engaged in fraudu lent activity. The plaintiff reported, among other thing s, that his supervisor submitted false time and attendance r ec ords, received bribes from vendors, and made payments to vendors who did not provide services to the Univers ity. The court held the plaintiff engaged in "pr otected con duct" and put the University on notice of the "distinct possi bility" of a False Claims Act suit because he repeatedly advised his superiors that he had evidence of false recor ds. H e wrote several letters to his supervisors and to the Unive rsity President and Vice-President detailing what he beli eved was illegal conduct that fraudulently resulted in the l oss of government money. He also collected evidence from employees to corroborate his claims and took photog raphs of evidence. The Court of Appeals for the D.C. Cir cuit held these reporting actions put the University administ ration, and plaintiff 's immediate supervisors, on notice o f the "distinct possibility" of False Claims Act litigati on. Id. at 744-45; see also Hopkins v. Actions, Incorp. of Bra zoria County, 985 F.Supp. 706, 709-10 (S.D.T ex. 1997) (h olding plaintiff who reported to chairman of company that employees were illegally using Medicare funds for p ayroll costs, as well as informed him that she intended to report this activity to the government, engaged in"protect ed conduct" that put employer on notice of the "distin ct possibility" of litigation).

Not all complaints by employees to their supervisor s put employers on notice of the "distinct possibility" o f 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 em ployer on notice of potential False Claims Act litigation when he reported to his supervisors that the company was bi lling the government for various helicopter pr ojects wit hout properly substantiating the charges. The court note d the plaintiff "never used the terms `illegal,' `unlawfu l' or `qui tam action' in characterizing his concerns about[the] c harges." Id. at 951; see also Mann, 49 F.Supp.2d at 1307.

In Zahodnick, 135 F.3d 911, the Court of Appeals fo r the Fourth Circuit found a managing engineer at IBM who se

20job duties included assembling cost information for

proposals to the Defense Intelligence Agency did no t engage in "protected conduct" and failed to put his employ er on notice of the "distinct possibility" of a False Cla ims Act suit. In Zahodnick, plaintiff engineer r eported to his s upervisor 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 any one that he was pursuing a qui tam action. Simply r e porting his concern of mischarging to the gover nment to his supervisor does not establish that Zahodnick was acting "in furtherance of " a qui tam actio n.

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 oce ssing complaints about telephone service and closing "tro uble reports" once telephone repairs wer e made, did not engage in "protected conduct" nor put her employer on noti ce of potential False Claims Act litigation when she comp lained to her supervisors that BellSouth was falsifying r eports. It was BellSouth's policy that if repairs wer e not ma de within twenty-four hours of being reported, the customer w as entitled to a refund for the period of time that te lephone service was disrupted. Plaintiff alleged that vario us 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. P laintiff complained to her supervisors about this practice a nd on one occasion showed her supervisor a newspaper arti cle about a consumer fraud investigation by the Florida state attorney general. She also refused to falsify repai r records. The court found the plaintiff did not engage in "pr otected conduct" reasoning that "when McKenzie br ought her complaints to the attention of the BellSouth audito r and her supervisors, legal action was not a reasonable or distinct possibility . . . because [her complaints were] not

21sufficiently connected to exposing fraud or false c laims

against the federal government." Id. at 516-17. Th e 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 Flo rida 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 McKenzi e shows awareness of consumer fraud, the `in furthera nce of ' language requires more than mer ely reporting wrong doing to supervisors." Id. at 516. The court stated that McKenzie's "numerous complaints on the matter wer e directed a t the stress from and pressure to falsify records, not to ward an investigation into fraud on the federal gover nment ." Id. at 517. Therefore, McKenzie did not put BellSouth on n otice of the "distinct possibility" that she might pursue a False Claims Act suit or inform the government that BellS outh's fraudulent conduct was causing an economic loss to the government.

These cases are illustrative of the general rule th at a successful cause of action under S 3730 r equires a n employee to prove that he engaged in "pr otected co nduct,"

that is conduct in furtherance of a False Claims Ac t suit, and that his employer was on notice of the "distinc t possibility" of False Claims Act litigation and r e taliated against him because of his "protected conduct." As noted, this is a fact specific inquiry.

2.

Although reporting "fraudulent" and "illegal" activ ity to an employer may satisfy the "protected conduct" and no tice requirements in many S 3730(h) cases, in some insta nces where an employee's job duties involve investigatin g and reporting fraud, the employee's burden of proving h e engaged in "protected conduct" and put his employer on notice of the "distinct possibility" of False Claim s Act litigation is heightened. As the Court of Appeals f or the Fourth Circuit held in Eberhar dt v. Integrated Des ign & Constr., Inc., 167 F.3d 861, 868 (4th Cir. 1999), " If an employee is assigned the task of investigating frau d within

22the company, courts have held that the employee mus t

make it clear that the employee's actions go beyond the assigned task [in order to allege retaliatory disch arge under S 3730(h)]." The court stated that when an employee is assigned the task of investigating fraud, "such per sons must make clear their intentions of bringing or ass isting in a [False Claims Act] action in order to overcome th e presumption that they are merely acting in accordan ce with their employment obligations." Id. This r equiremen t 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 wi ll 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 cl inical director of a mental health facility, whose r espon sibilities included monitoring compliance with applicable Medi caid 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 c ourt reasoned that these reports to her supervisors, wit hout more, did not put defendants on notice of a potenti al qui tam suit because the reporting was part of plaintif f 's job duties. The court stated,

Plaintiff never suggested to defendants that she intended to utilize [their] non compliance i n furtherance of a [False Claims Act] action. Plaintiff gave no suggestion that she was going to report s uch noncompliance to government officials, nor d id she provide any indication that she was contempl ating her own qui tam action. Rather, the monitoring a nd reporting activities described in plaintif f 's complaint [i.e., reporting to her superiors] wer e exa ctly those activities plaintiff was required to underta ke in fulfillment of her job duties, and plaintif f took no steps to put defendants on notice that she was act ing"in furtherance of " a [False Claims Act ] actio n.

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

23Army Helicopter Improvement Program, who was

responsible for ensuring that costs wer e properly charged to the government and requests for additional governme nt funding were properly substantiated, did not engage in "protected conduct" when he reported to his superio rs that certain requests for additional government funding were not properly substantiated. In Robertson, plaintiff inv estigated and tried to verify the requests for funding and ov er the course of several months reported his findings to h is superiors. The court found this activity was not pr otected because plaintiff " `did nothing to r ebut his supe rvisor'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 eason ed that plaintiff "never characterized his concer ns as inv olving illegal, unlawful, or false-claims investigations . . . . [There is] no evidence that [plaintiff] expr essed any con cerns 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 Claim s Act litigation. In Eberhardt, 167 F .3d at 868, the Cou rt of Appeals for the Fourth Circuit stated an employee c an put his employer on notice

by expressly stating an intention to bring a qui tam suit, . . . [or by engaging in] any action w hich a fact finder reasonably could conclude would put t he employer on notice that litigation is a reas onable possibility. Such actions would include, but ar e not limited to, characterizing the employer's co nduct as illegal or fraudulent or recommending that l egal counsel become involved. These types of acti ons ar e sufficient because they let the employer kno w, regardless of whether the employee's job dut ies include investigating potential fraud, that litigati on is a reasonable possibility.

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

24employer's accounting system engaged in "pr otected

conduct" and put his employer on notice of the"dist inct 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 in vestigate fraud, the court found he engaged in "protected con duct." The court reasoned plaintiff reported to his employ er that the charges were "illegal." Id. Additionally, he i nformed his employer that it was advisable to obtain legal coun sel. The

court concluded these activities were sufficient to put his employer on notice of potential False Claims Act li tigation. Id.; see also Mann, 49 F. Supp.2d at 1316 (employee whose job duties included reporting and investigating com pliance with Medicare regulations did not put employer on n otice of False Claims Act litigation when she reported billi ng overcharges to supervisor because this r eporting w as part of her regular job duties, however when she r eport ed 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 ilent z, Goldman & Spitzer was on notice of the "distinct possibility" of False Claims Act litigation and r e taliated against Hutchins because of his "protected conduct. " Hutchins never threatened to report his discovery o f the firm's Westlaw and LEXIS billing practices to a gov ernment authority, nor did he file a False Claims Act suit until after he was terminated. Childree, 92 F.3d at 1146. Furth ermore, 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 nm ent funds to be lost or spent. Robertson, 32 F .3d at 9 51. Nor did he advise his employer that corporate counsel b e involved in the matter. Eberhardt, 167 F.3d at 869. Rather, in a single memorandum he stated, "I was told thefi rm 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 a t 914,

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

establish that [plaintiff] was acting in furtheranc e of a qui tam action." Hutchins's memorandum mer ely stated, as a matter of fact, the firm's policy of passing on Wes tlaw 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 be cause he believed the law firm was defrauding the government

. Robertson, 32 F.3d at 952; Mikes, 889 F. Supp. at 7 53 (plaintiff must show employer was on notice that sh e was "laying the groundwork for legal action").

Nor did Hutchins's complaint to Marie Henneberry ab out the practice of paralegals performing secretarial t asks put the law firm on notice of the "distinct possibility " of False Claims Act litigation. Hutchins approached Henneber ry only to "confirm basically that [another paralegal] had talked to her about [using paralegals for secr etar ial tasks]," never advising Henneberry that he thought the pract ice was illegal or fraudulently causing loss of gover nment funds.10 Similar to the plaintiff in Zahodnick, Hutchins "me rely 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 trea t a suggestion for improvement as what it purports to b e rather than a precursor to litigation." 183 F .3d at 733. Because Hutchins's single discussion with Henneberry did no t allege fraud, illegality or a potential False Claims Act s uit, 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 (plaintif f "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" (t he

memorandum to DeLucia and his conversation with Henneberry), he was involved in the initial investi gation of a potential False Claims Act suit. See Y esudian, 1 53 F.3d at 740 (Section 3730(h) "protect[s] employees while th ey are

___________________________________________________ ______________

10. Hutchins told Henneberry that he thought the pr actice was

"unethical."

26collecting information about a possible fraud, befo re 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 bill ing documents from the accounting department constitute d "investigation" that put Wilentz, Goldman & Spitzer on notice of the "distinct possibility" of False Claim s Act litigation. We disagree.

Hutchins's "investigation" was in response to a spe cific assignment from Louis DeLucia who asked him to determine why certain clients' computerized r esear ch costs were so high. Hutchins's inquiry to Henneberry abou t the practice was not the result of his independent susp icions

that the firm was involved in fraud. As held in Ebe rhardt, 167 F.3d at 868, if an employee is assigned the tas k of investigating fraud within the company, that employ ee must make it clear that his investigatory and r epo rting activities extend beyond the assigned task in or de r to allege retaliatory discharge under S 3730(h). We see no ev idence that Hutchins engaged in any conduct, beyond what w as specifically asked of him in accordance with his jo b duties, that gave any indication that he was investigating fraud for a potential False Claims Act suit. He did not commu nicate that he was going to report the activity to governm ent 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 perfo rmed the task he was asked to complete by his supervisor . R amseyer, 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 Eb erhardt, his job description as a paralegal did not contain "monitoring or reporting" activities, nor was he a "fraud investigator." Nonetheless, his inquiry into the We stlaw and LEXIS billing was in furtherance of his job duties. Because he performed the investigation at the direct reques t of his supervisor, there was no reason to believe that Hut chins would use the information he obtained to bring a qu i tam

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

clear that [his] actions go beyond the assigned tas k."); Robertson, 32 F.3d at 952 (employee not engaged in "protected conduct" because his "actions were consi stent with the performance of his [job] duty").

As S 3730(h) makes clear, without notice of an empl oyee'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 w as contemplating a qui tam suit. Regardless of his job description, Hutchins's "investigation" into the fi rm's billing practice resulted from a direction fr om his employ er.

Finally, we do not believe Hutchins's request for b illing documents from the accounting department was pr ote cted investigatory conduct that put the law fir m on not ice of the "distinct possibility" of False Claims Act litigati on and therefore evidence that the law fir m retaliated ag ainst him. As the record makes clear, W ilentz, Goldman & Spit zer 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 deci ded to fire him, it did not retaliate against him in viola tion of S 3730(h) because of his "investigation" into the f irm's accounting files.

Hutchins has failed to assert a prima facie case of retaliatory discharge under S 3730(h). By failing t o 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 termi nate Hutchins in retaliation for his "investigation" in furtherance

of a False Claims Act suit.

V.

For the foregoing reasons, we will affir m the Dist rict Court's dismissal of Hutchins's qui tam claims. We also will

28affirm 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