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UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK

DR. JUDY WOOD on behalf §

of the UNITED STATES OF AMERICA §

§

Plaintiff, §

§

vs. §

§

SCIENCE APPLICATIONS §

INTERNATIONAL CORP.; APPLIED § Case No. 07CV3314 (GBD)

RESEARCH ASSOCIATES, INC.; §

BOEING, NuSTATS; COMPUTER §

AIDED ENGINEERING ASSOCIATES, §

INC.; DATASOURCE, INC.; §

GEOSTAATS, INC.; GILSANZ §

MURRAY STEFICEK LLP; HUGHES §APPLIEDRESEARCHASSOCIATES,INC.’S

ASSOCIATES, INC.; AJMAL ABBASI; § MEMORANDUM IN SUPPORT OF

EDUARDO KAUSEL; DAVID PARKS; § MOTION TO DISMISS PURSUANT TO

DAVID SHARP; DANIELE VENEZANO; § FED. R. CIV. P. 12(b)(1), 12(b)(6), AND 9(b)

JOSEF VAN DYCK; KASPAR WILLIAM; §

ROLF JENSEN & ASSOCIATES, INC.; §

ROSENWASSER/GROSSMAN §

CONSULTING ENGINEERS, P.C.; §

SIMPSON GUMPERTZ & HEGER, INC.; §

S. K. GHOSH ASSOCIATES, INC.; §

SKIDMORE, OWINGS & MERRILL, §

LLP; TENG & ASSOCIATES, INC.; §

UNDERWRITERS LABORATORIES, §

INC.; WISS, JANNEY, ELSTNER §

ASSOCIATES, INC.; AMERICAN §

AIRLINES; SILVERSTEIN PROPERTIES; §

and UNITED AIRLINES, §

§

Defendants. §

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ..................................................................................................... iv

INTRODUCTION........................................................................................................................ 1

I. The NIST Investigation ................................................................................................... 1

II. Relator’sComplaint......................................................................................................... 2

ARGUMENT................................................................................................................................ 4

I. False Claims Act, Section 3729 Claims.......................................................................... 4

II. Relator’sFCA ClaimsMustBe Dismissed Because This Court Lacks Subject

Matter Jurisdiction .......................................................................................................... 4

A. The Standard For Dismissal For Lack of Subject Matter Jurisdiction Under Rule

12(b)(1) .................................................................................................................. 5

B. The Court LacksSubjectMatterJurisdictionOverRelator’sFCAClaimsPursuant

to the Public Disclosure Bar .................................................................................. 5

i. Section 3730(e)(4) of the FCA Establishes a Public Disclosure Bar......... 6

ii. The Allegations in Relator's Complaint Have Been Publicly Disclosed .....

.................................................................................................................... 7

1. The Allegations and Transactions Underlying Relator's Complaint

Were Publicly Disclosed During the NIST Investigation and in

NCSTAR 1..................................................................................... 7

2. The Allegations Asserted in Relator's Complaint Were Publicly

Disclosed in a Prior Civil Hearing................................................. 9

3. The Allegations Underlying Relator's Complaint Were Publicly

Disclosed by Various News Sources ........................................... 10

iii. These Publicly Disclosed Allegations and Transactions are Substantially

Similar to the Allegations in Relator's Complaint ................................... 11

iv. Relator is Not an Original Source under Section 3730(e)(4) of the FCA....

.................................................................................................................. 12

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1. Relator Does Not Have Direct and Independent Knowledge of the

Information Upon Which Her FCA Claims are Based ................ 13

2. Relator's Compilation of Information in the Public Domain Does

Not Qualify Her as an Original Source........................................ 14

3. Relator's Wildly Speculative Conspiracy Theory Cannot Qualify

Her as an Original Source ............................................................ 15

III. Relator's Complaint Fails to State a Claim Upon Which Relief Can Be Granted ......

.......................................................................................................................................... 16

A. The Standard For Dismissal For Failure to State a Claim Upon Which Relief Can

Be Granted Under Rule 12(b)(6) ......................................................................... 16

B. Relator Fails to Allege That Defendants Knowingly Made or Submitted a Claim

Record or Statement That Was False................................................................... 19

C. Relator Fails to Identify an Existing Obligation For Defendant to Transmit Money

or Property to the Government ............................................................................ 23

D. Relator Allegations Are Implausible ................................................................... 24

IV. Relator's Complaint Also Must Be Dismissed For Failure to Plead Fraud With

Particularity.................................................................................................................... 25

A. Allegations Under the False Claims Act Must Satisfy the Requirements of Rule

9(b)....................................................................................................................... 25

B. Relator's Complaint Should Be Dismissed For Failure to Plead Any Particulars

Regarding a Single Fraudulent Claim.................................................................. 26

i. An FCA Complaint Must Allege Details Regarding Specific False Claims

Submitted to the Government .................................................................. 26

ii. Relator's Complaint Does Not Identify a Single False Claim That Was

Submitted to the Government .................................................................. 27

C. Relator's Complaint Should Be Dismissed For Failure to Plead Any Particulars

Regarding Defendants' Alleged Fraudulent Scheme That Resulted in the

Submission of False Claims................................................................................. 28

i. An FCA Complaint Must Allege Specific Details Regarding the

Fraudulent Scheme That Allegedly Led to the Submission of False Claims

.................................................................................................................. 28

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ii. Relator's Complaint Fails to Plead Any Particulars Regarding Defendants'

Alleged Fraudulent Scheme..................................................................... 28

1. Relator Fails to Explain How the Defendants Contributed to the

Alleged Fraudulent Nature of NCSTAR 1................................... 29

2. Relator Fails to Attribute Specific Instances of Fraud to Specific

Defendants ................................................................................... 30

3. Relator Fails to Specify to What Extent NIST Was Complicit With

the Defendants in the Alleged Fraud ......................................... 310

V. Relator's Claims are Frivolous and Should Be Dismissed ......................................... 31

VI. ARA Should be Awarded Attorneys' Fees and Expenses Pursuant to 31 U.S.C. §

3730(d)(4)........................................................................................................................ 33

CONCLUSION .......................................................................................................................... 34

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TABLE OF AUTHORITIES

Cases Page

United States ex rel. Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186

F.Supp.2d 458 (S.D.N.Y. 2002)........................................................................ 4, 11, 12, 14, 15, 25

Siteworks Contracting Corp. v. W. Sur. Co., 461 F.Supp.2d 205 (S.D.N.Y. 2006)....................... 4

Graubart v. Jazz Images, Inc, No. 02-CV-4645(KMK) 2006 WL 1140724 (S.D.N.Y. Apr. 27,

2006) ............................................................................................................................................... 5

United States ex rel. Smith v. Yale University, 415 F.Supp.2d 58 (D.Conn. 2006)............ 5, 13, 14

United States ex rel. Anti-Discrimination Ctr. of Metro New York, Inc. v. Westchester County,

495 F.Supp.2d 375 (S.D.N.Y. 2007)............................................................................................... 5

United States ex rel. Mikes v. Straus, 931 F.Supp. 248 (S.D.N.Y. 1996)................................. 6, 12

United States ex rel. Kreindler & Kreindler v. United Techs. Corp., 985 F.2d 1148 (2d Cir. 1993)

........................................................................................................................... 6, 11, 13, 15, 22, 31

United States ex rel. John Doe v. John Doe Corp., 960 F.2d 318 (2d Cir. 1992) ............ 6, 7, 8, 11

UnitedStatesexrel.Herbertv.Nat’lAcademyofSciences, Civil Action No. 90 2568, 1992 WL

247587 (D.D.C. Sept. 15, 1992) ......................................................................................... 6, 13, 20

United States ex rel. Phipps v. Comprehensive Cmty. Dev. Corp., 152 F.Supp.2d 443 (S.D.N.Y.

2001) ............................................................................................................................................... 6

United States ex rel. Aflatooni v. Kitsap Physicians Servs., 163 F.3d 516 (9th Cir.

1999)....................................................................................................................................8, 15, 16

Gold v. Morrison-Knudsen Co., 68 F.3d 1475 (2d Cir. 1995)............................................ 8, 19, 25

UnitedStatesexrel.HuangyanImp.&Exp.Corp.v.Nature’sFarmProds.,Inc., No. 00 Civ.

6593(SHS), 2004 WL 74310 (S.D.N.Y. Jan. 15, 2004) ................................................................. 9

Kevin Ryan v. Underwriters Labs., Inc., No. 1:06-cv-1770-JDT-TAB (S.D. Ind. filed Nov. 16,

2006) ............................................................................................................................................... 9

United States ex rel. Woods v. Empire Blue Cross and Blue Shield, No. 99 Civ. 4968(DC), 2002

WL 1905899 (S.D.N.Y. Aug. 19, 2002)....................................................................................... 11

United States ex rel. Pentagenv.CACIInt’l, No. 96 CIV. 7827(RWS), 1997 WL 473549

(S.D.N.Y. Aug. 18, 1997)............................................................................................................. 11

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United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13 (2d Cir. 1990) ............. 11, 19

United States ex rel. Mistick PBT v. Hous. Auth., 186 F.3d 376 (3rd Cir. 1999)......................... 11

United States ex rel. DeCarlo v. Kiewit/AFC Enters., Inc., 937 F.Supp. 1039 (S.D.N.Y. 1996).....

............................................................................................................................... 12, 13, 26, 27, 28

RockwellInt’lCorp.v.UnitedStates, 127 S.Ct. 1397 (2007)................................................ 12, 13

United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prud. Ins. Co., 944 F.2d 1149

(3d Cir. 1991)................................................................................................................................ 13

United States v. New York Med. Coll., 252 F.3d 118 (2d Cir. 2001)) .......................................... 14

UnitedStatesexrel.PentagenTechnologiesInt’lLtdv.CACIInt’lInc., No. 94 Civ. 2925(RLC),

1996 WL 11299 (S.D.N.Y. Jan. 4, 1996) ..................................................................................... 15

Arista Records LLC v. Lime Group LLC, No. 06 Civ. 5936 (GEL), 2007 WL 4267190 (S.D.N.Y.

Dec. 3, 2007)..................................................................................................................... 16, 17, 18

Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007)................................................... 16, 17, 24

Iqbal v. Hasty, 490 F.3d 143 (2d Cir. 2007)................................................................................. 17

In re Elevator Antitrust Litig., 502 F.3d. 47 (2d Cir. 2007) ......................................................... 17

United States ex rel. Unite Here v. Cintas Corp., No. C06-2413(PJH), 2007 WL 4557788

(N.D.Cal. Dec. 21, 2007).............................................................................................................. 17

Bradley v. Phillips Petroleum Co., No. H-05-3912, 2007 WL 4443877 (S.D.Tex. Dec 18, 2007)

....................................................................................................................................................... 17

Saidin v. New York City Dept. of Educ., 498 F.Supp.2d 683 (S.D.N.Y. 2007)............................ 18

First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763 (2d Cir. 1994)................................. 18

Ello v. Singh, No. 05 CV-9625(KMK), 2007 WL 3084979 (S.D.N.Y. Oct. 19, 2007)................ 18

Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67 (2d Cir. 1998) ........................................... 18

Robinson v. Mammoth Life and Accident Insur. Co., 454 F.2d 698 (7th Cir. 1971).................... 18

Brass v. Am. Film Techs., 987 F.2d 142 (2d Cir. 1993) ............................................................... 18

United States ex rel. Mikes v. Straus, 274 F.3d 687 (2d Cir. 2001).............................................. 19

Case 1:07-cv-03314-GBD Document 14 Filed 01/23/2008 Page 6 of 45
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Boisjoly v. Morton Thoikol, Inc., 706 F.Supp. 795 (D. Utah 1988).................................. 19, 21, 22

United States ex rel. Mikes v. Straus, 98 F.Supp.2d 517 (S.D.N.Y. 2000)................................... 19

United States ex rel. J. Cooper & Assocs. v. Bernard Hodes Group, Inc., 422 F.Supp.2d 225

(D.D.C. 2006) ............................................................................................................................... 19

United States v. Fiske, 968 F.Supp. 1347 (E.D.Ark. 1997)........................................ 20, 21, 22, 23

United States ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416 (9th Cir. 1991) .....

....................................................................................................................................................... 20

United States v. Fox Lake State Bank, 366 F.2d. 962 (7th Cir. 1966)........................................... 21

Woodbury v. United States, 232 F.Supp. 49 (D.Or. 1964) ........................................................... 21

United States v. Schmidt, 204 F.Supp. 540 (D.Wis. 1962)........................................................... 21

United States ex rel. Ervin & Assoc., Inc. v. Hamilton Secs. Group, Inc., 370 F.Supp.2d 18

(D.D.C. 2005) ............................................................................................................................... 23

Taylor v. Gabelli, 345 F.Supp.2d 313 (S.D.N.Y. 2004)............................................................... 23

Zaro Licensing, Inc. v. Cinmar, Inc., 779 F.Supp. 276 (S.D.N.Y. 1991)..................................... 23

United States ex rel. Capella v. Norden Sys., Inc., No. 3:94-CV-2063 (EBB), 2000 WL 1336487

(D.Conn. Aug. 24, 2000) ........................................................................................................ 24, 28

Equitable Life Assur. Soc. of the United States v. Alexander Grant & Co., 627 F.Supp. 1023

(S.D.N.Y. 1985)............................................................................................................................ 24

United States ex rel. Smith v. New York Presbyterian Hosp., No. 06 Civ. 4056(NRB), 2007 WL

2142312 (S.D.N.Y. July 18, 2007) ......................................................................................... 25, 26

United States ex rel. Barmak v. Sutter Corp., No. 95 Civ. 7637(KTD), 2003 WL 21436213

(S.D.N.Y. June 20, 2003).................................................................................................. 25, 26, 27

Devaney v. Chester, 709 F.Supp. 1255 (S.D.N.Y. 1989) ............................................................. 26

McFarland v. Memorex Corp., 493 F.Supp. 631 (N.D. Cal. 1980).............................................. 26

Bly-Magee v. California, 236 F.3d 1014 (9th Cir. 2001) ............................................................. 26

Wang v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992).................................................................... 26

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United States ex rel. Monda v. Sikorsky Aircraft Corp., 2005 WL 1925903, No. Civ.

3:99CV1026(JBA) (D.Conn. Aug. 11, 2005)............................................................................... 26

United States ex rel. Karvelas v. Melrose–Wakefield Hosp., 360 F.3d 220 (1st Cir. 2004)) ...........

................................................................................................................................................. 26, 28

In re Cardiac Devices Qui Tam Litig., 221 F.R.D. 318 (D.Conn. 2004) ............................... 27, 28

United States ex rel. Clausen v. Lab. Corp. of America, Inc., 290 F.3d 1301 (11th Cir. 2002).......

....................................................................................................................................................... 27

United States ex rel. Vallejo v. Investronica, Inc., 2 F.Supp.2d 330 (W.D.N.Y. 1998)......... 27, 28

United States ex rel. Walsh v. Eastman Kodak Co., 98 F.Supp.2d 141 (D.Mass 2000)............... 27

Sternv.LeucadiaNat’lCorp., 844 F.2d 997 (2d Cir. 1988)........................................................ 28

O'Brien v. Nat'l Prop. Analysts Partners, 936 F.2d 674 (2d Cir.1991)........................................ 30

Center Cadillac, Inc. v. Bank Leumi Trust Co. of New York, 808 F.Supp. 213 (S.D.N.Y. 1992)....

....................................................................................................................................................... 30

Luce v. Edelstein, 802 F.2d 49, (2d Cir 1986).............................................................................. 30

Landy v. Mitchell Petroleum Tech. Corp., 734 F.Supp. 608 (S.D.N.Y. 1990)............................. 30

Fitzgerald v. First East Seventh St. Tenants Corp., 221 F.3d 362 (2d Cir. 2000)........................ 32

Mallard v. United States District Court, 490 U.S. 296 (1989)..................................................... 32

Tyler v. Carter, 151 F.R.D. 537 (S.D.N.Y. 1993) ........................................................................ 32

Tyler v. Carter, 41 F.3d 1500 (2d Cir. 1994)................................................................................ 32

Bloom v. United States Government, No. 02Civ.2352DABDF, 2003 WL 22327163 (S.D.N.Y.

Oct. 10, 2003) ............................................................................................................................... 32

Nance v. Kelly, 912 F.2d 605 (2d Cir. 1990)................................................................................ 32

Ostrer v. Aronwald, 567 F.2d 551 (2d Cir. 1977)......................................................................... 32

United States ex rel. Bain v. Georgia Gulf Corp., 208 Fed. Appx. 280 (5th Cir. 2006) .............. 33

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Statutes

NationalConstructionSafetyTeamAct(“NCSTA”),15U.S.C.§7301et seq............................. 2

False Claims Act ("FCA"), 31 U.S.C. §§ 3729-3731 ........... ..2, 4, 6, 7, 8, 9, 10, 12, 13, 16, 23, 32

28 U.S.C. § 1331............................................................................................................................. 4

Rules

Fed. R. Civ. P. 9(b) ......................................................................................................... 3, 7, 25, 26

Fed. R. Civ. P. 12(b)(1)........................................................................................................... 3, 5, 7

Fed. R. Civ. P. 12(b)(6)........................................................................................................... 3, 6, 7

Pleadings

Relator’sAmendedComplaint(Docket#8)............................................... 8, 13, 15, 22, 27, 29, 31

Websites

Relator's personal website available at www.drjudywood.com..................................................... 1

Michael Shermer, Fahrenheit 2777, SCIENTIFIC AMERICAN, May 23, 2005, available at

http://www.sciam.com/article.cfm?chanID=sa006&articleID=000DA0E2-1E15-128A9E1583414B7F0000 ..................................................................................................................... 10

Lev Grossman, Whythe9/11ConspiracyTheoriesWon’tGoAway, TIME, Sep. 03, 2006,

available at http://www.time.com/time/magazine/article/0,9171,1531304,00.html .................... 10

Benjamin Chertoff, et al., POPULAR MECHANICS, March 2005, available at

http://www.popularmechanics.com/technology/military_law/1227842.html .............................. 10

9/11 conspiracy theory website available at http://www.911closeup.com .................................. 15

9/11 conspiracy theory website available at http://www.media-criticism.com/911_video_fakes_

01_2004.html ................................................................................................................................ 15

9/11 conspiracy theory website available at http://www.thewebfairy.com/911 .......................... 15

9/11 conspiracy theory website available at http://www.911tvfakery.net; http://911hoax.com......

....................................................................................................................................................... 15

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Other

Nat’lInst.ofStandards&Tech.,U.S.Dep’tofCommerce,FinalReportontheCollapseofthe

World Trade Center Towers (2005),(“NCSTAR1”).................. 2,3, 7, 8, 9, 10, 12, 23, 28, 29, 30

Webster’sThirdNewInternationalDictionary(1976)................................................................. 13

H.R. Rep. No. 660, 99th Cong., 2d Sess. 22 (1986)...................................................................... 19

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INTRODUCTION

The image of commercial aircraft colliding with the World Trade Center Towers on the

morning of September 11, 2001 remains indelibly etched in the minds of every American. The

immediate aftermath of the crashes was horrific, as fire and smoke billowed from the buildings,

and within two hours, both buildings collapsed. All told, terrorists demolished a bold and

enduring symbol of American freedom and murdered nearly 3,000 innocent men, women and

children, both in the buildings and aboard the aircraft.

Relator believes that the events of September 11 were a hoax and that no aircraft struck

the World Trade Center Towers. Relator is attempting to misuse the False Claims Act to profit

from this tragedy in a most peculiar way. Relator alleges that the Defendants conspired with the

United States Government to demolish the World Trade Center Towers using lasers orbiting in

space and then created an elaborate cover story including the lie that aircraft struck the World

Trade Center.1 As part of this supposed conspiracy, Relator alleges that the Defendants

submitted false claims for payment to the United States Government. Ignoring the absurd nature

of Relator’s allegations, Defendants Applied Research Associates, Inc. (“ARA” or

“Defendants”) hereby move theCourttodismissRelator’sComplaint for lack of subject matter

jurisdiction, failure to state a claim upon which relief can be granted and failure to plead fraud

with particularity.

I. The NIST Investigation

Immediately following the terrorist attacks of September 11, the United States

Government began efforts to determine why the World Trade Center 1 and World Trade Center

2buildings(“WTC1”&“WTC2,”together“WTCTowers”)collapsed. On August 21, 2002,

1 Relator maintains a website, www.drjudywood.com, detailing her conspiracy theories.

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theNationalInstituteofStandardsandTechnology(“NIST”)announced its intent to conduct a

buildingandfiresafetyinvestigationoftheWTCdisaster(the“NIST Investigation”). On

October 1, 2002, the National Construction Safety Team Act (“NCSTA”)wassignedintolaw,

15 U.S.C. § 7301 et seq., and the NIST Investigation was subsequently conducted under the

NCSTA’sauthority. TheNIST Investigation was funded through the Federal Emergency

ManagementAgency(“FEMA”).Thespecificobjectives of the NIST Investigation included,

inter alia,to“[d]eterminewhyandhowWTC1andWTC2collapsedfollowing the initial

impacts of the aircraft andwhyandhowWTC7collapsed.”Nat’lInst.ofStandards&Tech.,

U.S.Dep’tofCommerce,FinalReport on the Collapse of the World Trade Center Towers

(2005), p. xxix (emphasis added) (hereinafter“NCSTAR1”). On October 26, 2005, NIST

released NCSTAR 1, which is at issue in this suit.

II. Relator’sComplaint

On April 25, 2007, Relator filed this action under seal pursuant to the qui tam provisions

of the False Claims Act, 31 U.S.C. §§ 3729-3731(“FCA”). Relator alleges that the WTC

Towersweredestroyedusing“DirectedEnergyWeapons”(“DEW”)and, therefore, any

conclusion that aircraft impacts and subsequent jet fuel fires caused the collapse of the WTC

Towers is not only wrong, but somehow fraudulent. Relator seems to allege that the Defendants

are liable to the Government under the FCA for manipulating the NIST Investigation and

providing false information to the Government. TheUnitedStatesinvestigatedRelator’s

allegations for less than two months and, on June 22, 2007, declined intervention. On September

12,2007,theCourtorderedthatRelator’sComplaintbeunsealedandserveduponDefendants.

On December 28, 2007, Relator served her Amended Complaint (“Complaint”)upon

Defendants. Relator’sFirst,Secondand Third Causes of Action allege violations of §§

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3729(a)(1), (2), and (7) of the FCA, respectively. All three claims are asserted against all 27

named Defendants.

Aside from the preposterous and offensive natureofRelator’sallegations,Relator’s

Complaint is legally deficient and fails to support the relief sought. First, this Court lacks subject

matter jurisdiction over Relator’sFCAclaims because they are statutorily barred by the public

disclosure bar, as Relator’sallegationsarebasedentirelyoninformationinthepublicdomain

and Relator is not an original source.

Second,Relator’sComplaintfailstostateaclaim uponwhichrelief can be granted.

Relator’s allegation thatDefendants conspired with the Governmentis fundamentally

inconsistentwithRelator’sallegationthatDefendantsdefrauded the Government or knowingly

submitted false claims. This flaw is fatal to all three ofRelator’sFCAclaims.Inaddition,

Relator’sThirdCauseofActionfailstoallegetheessentialelementsofa§(a)(7)claimand,

therefore, fails to state a valid claim.

Moreover,Relator’sComplaint fails to allege fraud with the particularity required under

Fed. R. Civ. P. 9(b). Relator does not identify with particularity a single false claim that was

allegedly submitted to the Government by any of the Defendants. Relator further fails to provide

any particulars regarding the underlying conduct thatallegedly resulted in Defendants’

submission of false claims for payment. As Relator does not specify how the Defendants

contributed to the fraudulent nature of NCSTAR 1, what fraudulent actions any Defendant

engaged in, or the extent of Government complicity in any alleged fraud, her Complaint fails to

satisfy the particularity requirements of Rule 9(b).

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Finally,Relator’sallegationsarenothingmorethanadelusionalconspiracytheoryand

are egregiously frivolous. This alone justifies dismissal ofRelator’sclaims.For these reasons,

Relator’sComplaintmustbedismissedunderRules12(b)(1), 12(b)(6) and 9(b).

ARGUMENT

I. False Claims Act, Section 3729 Claims

Relator alleges Defendants violated §§ 3729(a)(1), (2), and (7) of the FCA, which impose

liability on any person who: “knowinglypresents,orcausestobepresented,toanofficeror

employeeoftheUnitedStatesGovernment... afalseorfraudulentclaim forpaymentor

approval,”31U.S.C.§3729(a)(1); “knowinglymakes,uses,orcausestobemade or used, a

false record or statement to get a false or fraudulent claim paid or approved by the

Government,”31 U.S.C. § 3729(a)(2); or“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

moneyorpropertytotheGovernment,”31U.S.C.§3729(a)(7).However, before a Court has

jurisdiction to consider an action by an individual alleging violations of any of these sections,

that individual must satisfy certain specific statutory criteria which Relator in this case fails to

meet.

II. Relator’sFCA Claims Must Be Dismissed Because This Court Lacks Subject

Matter Jurisdiction

It is axiomatic that United States District Courts are courts of limited jurisdiction. United

States ex rel. Alcohol Found., Inc. v. Kalmanovitz Charitable Found., Inc., 186 F.Supp.2d 458

(S.D.N.Y. 2002). Federal courts must have a valid basis to assert jurisdiction over the subject

matter of a plaintiff’sclaimsbeforeadjudicatinga case. Siteworks Contracting Corp. v. W. Sur.

Co., 461 F.Supp.2d 205, 207-208 (S.D.N.Y. 2006). Section 1331 of the United States Code

grantsfederalcourtsjurisdictionover“allcivilactionsarisingunderthe... laws... of the United

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States.” 28U.S.C.§ 1331. Section 3730 of the FCA establishes the jurisdiction of federal

district courts over FCA claims. See Alcohol Found., 186 F.Supp.2d at 461.

A. The Standard For Dismissal For Lack of Subject Matter Jurisdiction Under

Rule 12(b)(1)

Federal Rule of Civil Procedure 12(b)(1) requires dismissal of a case when the court

lacks jurisdiction over the subject matter. Graubart v. Jazz Images, Inc, No. 02-CV-4645(KMK)

2006 WL 1140724, at *2 (S.D.N.Y. Apr. 27, 2006). Plaintiffs bear the burden of proving that

subject matter jurisdiction exists by a preponderance of the evidence. Id. In ruling on a motion

todismissforlackofsubjectmatterjurisdiction,thecourt“mustacceptastrueallmaterial

factual allegations in the Complaint,”but cannot draw any inferences favorable to the plaintiff.

Id. (citations omitted). If the defendant presents a factual challenge to subject matter

jurisdiction, the court may “weighandconsiderevidenceoutsidethepleadingstodetermine

whether subject matter jurisdiction exists.”United States ex rel. Smith v. Yale University, 415

F.Supp.2d 58, 69 (D.Conn. 2006) (citations omitted); Graubart, 2006 WL 1140724 at * 2. The

court must dismiss a case “forlackofsubjectmatterjurisdictionunderRule12(b)(1)ifitlacks

the statutoryorconstitutionalpowertoadjudicateit.”United States ex rel. Anti-Discrimination

Ctr. of Metro New York, Inc. v. Westchester County, 495 F.Supp.2d 375, 379 (S.D.N.Y. 2007)

(citations omitted).

B. This Court Lacks Subject Matter Jurisdiction OverRelator’sFCAClaims

Pursuant to the Public Disclosure Bar

The public disclosure bar precludes subject matter jurisdiction in an FCA action if (1)

therehasbeenapriorpublicdisclosureoftheinformationonwhichtherelator’sclaimsare

based, and (2) the relator is not an original source of the information on which her claims are

based. BecauseRelator’sFCAclaimsarebasedonpubliclydisclosedinformationand Relator is

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not an original source, the Court lacks subject matter jurisdiction and Relator’sclaimsmustbe

dismissed.

i. Section 3730(e)(4) of the FCA Establishes a Public Disclosure Bar

Under § 3730(e)(4), federal courts lack subject matter jurisdiction over FCA actions

based on allegations or transactions that have been publicly disclosed, unless the relator is an

original source of the allegations in her complaint. United States ex rel. Mikes v. Straus, 931

F.Supp. 248, 252 (S.D.N.Y. 1996). “Section3730(e)(4)isintendedtobar‘parasiticlawsuits’

based upon publicly disclosed information in which would-be relators seek remuneration

althoughtheycontributednothingtotheexposureofthefraud.”United States ex rel. Kreindler

& Kreindler v. United Techs. Corp., 985 F.2d 1148, 1157 (2d Cir. 1993) (internal quotations and

citations omitted). The statutorybar“wasdesignedtoprecludequi tam suits based on

information that would have been equally available to strangers to the fraud transaction had they

chosen tolookforitasitwastotherelator.”Id. (citing United States ex rel. John Doe v. John

Doe Corp., 960 F.2d 318, 322 (2d Cir. 1992)).Congress“wantedtoavoidthesituationofa

person merely marshaling public information to bring a qui tam action.”United States ex rel.

Herbertv.Nat’lAcademyofSciences, No. 90-2568, 1992 WL 247587, at *4 (D.D.C. Sept. 15,

1992).

Specifically, § 3730(e)(4)(A) of the FCA states:

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

public disclosure of allegations or transactions in a criminal, civil, or

administrative hearing, in a congressional, administrative, or Government

Accounting Office report, hearing, audit, or investigation, or from the news

media, unless the action is brought by the Attorney General or the person bringing

the action is an original source of the information.

Under this Section, the court must first determinewhetherthe“allegationsortransactions”upon

whichtheclaimsarebasedwere“publiclydisclosed”inoneoftheidentified manners. United

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States ex rel. Phipps v. Comprehensive Cmty. Dev. Corp., 152 F.Supp.2d 443, 453 (S.D.N.Y.

2001). Then, if the Complaint is based on publicly disclosed information, the Court must

determine if the relator is an original source. Id. If there was a public disclosure and the relator

is not an original source, the case must be dismissed.

ii. TheAllegationsinRelator’sComplaintHaveBeenPubliclyDisclosed

Allofthe“allegationsortransactions”assertedinRelator’sComplaint were publicly

disclosed prior to her filing this suit. Relator’s allegations are based entirely on information

made available to the public through an administrative investigation and resulting report, prior

civil actions and the news media. Because this information was equally available to any member

of the public asitwastoRelator,Relator’sFCA claimsarebarredand this case must be

dismissed.

1. The Allegations and Transactions Underlying Relator’s

Complaint Were Publicly Disclosed During the NIST

Investigation and in NCSTAR 1

The FCA claimsassertedinRelator’s Complaint are based on information disclosed

during the NIST Investigation and in NCSTAR 1. Information disclosed pursuant to an

administrative investigation or in an administrative report is publicly disclosed for the purposes

of the public disclosure bar. § 3730(e)(4)(A); John Doe, 960 F.2d at 323-324.

DuringNIST’sInvestigation,bothRelatorandDr.MorganReynolds2submitted public

RequestsForCorrection(“RFC”)whichdisclosedthe allegation that DEWs, rather than aircraft

impacts, caused the collapse of the WTC Towers. Dr. Morgan Reynolds submitted his RFC on

March8,2007allegingthatNCSTAR1wasfraudulentbecause“NISTreliedonobviously

2 Dr. Reynolds is the Relator in a nearly identical FCA suit, United States ex rel. Dr.

Morgan Reynolds v. SAIC, Inc., No. 07CV4612 (S.D.N.Y. filed May 31, 2007), currently

pendingbeforethisCourt(herinafterthe“ReynoldsSuit”).ARAisalsonamedasaDefendant

in the Reynolds Suit.

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fraudulent data (e.g. faked videos)”depictingaircraftstrikingtheWTCTowers.See Aff. of

Wm. David Byassee In Supp. ofAppliedResearchAssociates,Inc.’sMotiontoDismiss

Pursuant to Fed. R. Civ. P. 12(b)(1),12(b)(6),and9(b)(“Aff."), ¶ 4, Ex. A, RFC of Dr. Morgan

Reynolds to NIST, March 8, 2007, p. 6. Similarly, on March 16, 2007, Relator submitted an

RFC ofNCSTAR 1assertingitwas“fraudulent,misleading,ordeceptive”becauseit

erroneously concluded that aircraft impacts caused the collapse of the WTC Towers. See

Compl., Ex. A, RFC from Dr. Judy Wood to NIST, p. 43 (Docket #8). Relator asserts that her

RFCcontainsinformation“confirmingtheexistenceofsignificantevidenceof‘Unusualenergy

impacts’thatareconsistentwithDirectedEnergyWeapons(DEW)havingbeenusedasacausal

factor in the destruction of the World Trade Center complexon11September,2001.”Id. Thus,

Relator’sRFCpubliclydisclosedherallegationspriortothedateRelatorfiledherComplaint.

See, e.g. United States ex rel. Aflatooni v. Kitsap Physicians Servs., 163 F.3d 516 (9th Cir. 1999)

(relator’sclaims were publicly disclosed where relator had disclosed his allegations to the news

mediapriortofilingsuit).AstheseRFCswerebothsubmittedpursuanttoan“administrative...

investigation”andhave been publicly available on the internet since their submission, they

constitute public disclosures under § 3730(e)(4)(A). See John Doe, 960 F.2d at 323 (disclosure

pursuant to administrative investigations bars FCA claims).

Moreover,NCSTAR 1 is indisputably an “administrative ... report” under§

3730(e)(4)(A),andconstitutesa“publicdisclosure”ofall“transactions”containedtherein.See

Gold v. Morrison-Knudsen Co., 68 F.3d 1475, 1476-77(2dCir.1995)(“administrativereports”

constitute public disclosure). As described above, NCSTAR 1 is the final reportofNIST’s

Investigation into the collapse of the WTC Towers, and “describeshowtheaircraftimpactsand

subsequent fires led to the collapse of the towers after terrorists flew jet fuel laden commercial

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airliners into the buildings.”NCSTAR1,p.xiii. The report also describes“how NIST reached

itsconclusions,”includingNIST’suseofprivatesectortechnicalexpertstoassist the

Investigation. Id. NISTisanonregulatoryagencyoftheU.S.DepartmentofCommerce’s

Technology Administration, and the NIST Investigation was conducted pursuant to the NCSTA

and funded by the U.S. Congress through FEMA. NCSTAR 1, p. xxix. Thus, all information

contained in NCSTAR 1 is publicly disclosed for the purposes of the FCA.

2. The Allegations Asserted in Relator’s Complaint Were

Publicly Disclosed in a Prior Civil Hearing

IntheSecondCircuit,“informationispubliclydisclosedwhenitisavailabletoanyone

whowishestoconsultacourtfile.” United States ex rel. Huangyan Imp. & Exp. Corp. v.

Nature’sFarm Prods., Inc., No. 00 Civ. 6593(SHS), 2004 WL 74310, at *3 (S.D.N.Y. Jan. 15,

2004) (internal quotations and citations omitted). The allegation that the NIST Investigation is

fraudulent and that the collapse of the WTC Towers was not caused by aircraft impacts was also

publicly disclosed in Kevin Ryan v. Underwriters Labs., Inc., No. 1:06-cv-1770-JDT-TAB (S.D.

Ind. filed Nov. 16, 2006)(the“RyanSuit”). See Aff., ¶ 5, Ex. B, Ryan Suit Compl. Plaintiff

Ryan sued Underwriters Laboratories (also a defendant in the instant case) for wrongful

termination when Ryan was terminated after sending an electronic message to NIST claiming

that the NIST Investigation was flawed and did not support the conclusion that aircraft impacts

and subsequent fires caused the collapse of the WTC Towers. Id. at 5. Ryan’scomplaint

publicly disclosed the allegation that:“[t]he official government explanation of the WTC

buildingcollapseswasflawed,i.e.thegovernment’sexplanationthattheimpactoftheaircraft

and the fires from the jet fuel caused the unprecedented collapse of the steel framed WTC Twin

TowersandtheWTCBuilding7wasnotsupportedbyascientificanalysisoftheevidence.”Id.

at 3. Thus, Relator’sidenticalallegationswerepubliclydisclosedpriorto her filing this suit.

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3. The Allegations Underlying Relator’s Complaint Were

Publicly Disclosed by Various News Sources

Relator’sallegationthat because the collapse of the WTC Towers was not caused by

aircraft impacts, NCSTAR 1 is fraudulent, although ludicrous, is not original. Numerous news

sources have reported various alternate explanations for the ultimate collapse of the WTC

Towers.

3

For example, in March 2005, over a year before the Relator filed this suit, POPULAR

MECHANICS published a cover story entitled Debunking the 9/11 Myths, in which the magazine

“examine[d]theevidenceandconsult[ed]theexpertstorefutethemostpersistentconspiracy

theories of September 11,”including the claim that the collapse of the WTC Towers was caused

by“controlleddemolition.”Benjamin Chertoff, et al.4 Thus,Relator’sallegationthat aircraft

impacts did not cause the collapse of the WTC Towers has been further publicly disclosed for the

purposes of § 3730(e)(4)(A).

Furthermore,Relator’sallegationthat DEWs were used to destroy the WTC Towers is in

no way original. In February of 2002, the American Free Press published an article entitled

“LaserBeam WeaponsandtheCollapseoftheWorldTradeCenter,”in which the author

assertedthat“alaserbeam weapon, employing technology originally developed in the Soviet

Union,mayhavecausedthecollapseofthetowers.”Aff., ¶ 6, Ex. C, Christopher Bollyn, AM.

FREE PRESS, Feb. 14, 2002. Similarly, in a two-part radio interview conducted on January 21 and

28, 2004, activist Jim Hoffman detailed his theory that high-energy lasers were used to destroy

the WTC Towers. Aff., ¶ 7, Ex. D, Edited Transcript of YourEyesDon’tLie:CommonSense,

3

See, e.g. Michael Shermer, Fahrenheit 2777, SCIENTIFIC AMERICAN, May 23, 2005,

available at http://www.sciam.com/article.cfm?chanID=sa006&articleID=000DA0E2-1E15-

128A-9E1583414B7F0000; Lev Grossman, Whythe9/11ConspiracyTheoriesWon’tGoAway,

TIME, Sep. 03, 2006, available at http://www.time.com/time/magazine/article/

0,9171,1531304,00.html.

4

Available at http://www.popularmechanics.com/technology/military_law/1227842.html.

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Physics, and the World Trade Center Collapse, An Interview of Jim Hoffman by Bonnie

Faulkner on Guns and Butter. These public disclosures preclude Relator from parroting these

allegations in her current FCA Complaint. See Alcohol Found., 186 F.Supp.2d at 458; United

States ex rel. Woods v. Empire Blue Cross and Blue Shield, No. 99 Civ. 4968(DC), 2002 WL

1905899 (S.D.N.Y. Aug. 19, 2002) (FCA claim based on information disclosed in television

program and newspaper barred).

iii. These Publicly Disclosed Allegations and Transactions are

Substantially Similar to the Allegations in Relator’sComplaint

Thepublicdisclosurebarapplieswhenanactionisbased“inanypartuponpublicly

disclosedallegationsortransactions.” Kreindler, 985 F.2d at 1159 (See also United States ex

rel.Pentagenv.CACIInt’l, No. 96 CIV. 7827(RWS), 1997 WL 473549, at *6 (S.D.N.Y. Aug.

18,1997)(“Thejurisdictionalbarwillapplyiftheactionisbasedinanypartonpublic

information,evenifitalsoreliesoninformationobtainedthroughindependentinvestigation”).

Moreover, Relator need not have actually based her allegations on publicly disclosed information

for the bar to apply.“Publicdisclosureoftheallegationsdivestsdistrictcourtsofjurisdiction

over qui tam suits, regardless of where the relator obtained his information.”John Doe, 960 F.2d

at 324 (citing United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir.

1990) (“[I]ftheinformationonwhichaqui tam suit is based is in the public domain, and the qui

tam plaintiff was not a source of that information, thenthesuitisbarred”)). Thus, Relator’s

claims are barred if they are substantially similar to allegations or transactions that are in the

public domain. See United States ex rel. Mistick PBT v. Hous. Auth., 186 F.3d 376, 386 (3rd Cir.

1999) (recognizingthatallcircuitsotherthantheFourthCircuithaveheldthat“basedupon”

means“supportedby”or“substantiallysimilarto”)(citingJohn Doe, 960 F.2d at 324).

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In this case, Relator’sallegationsarebaseduponand substantially similar, if not

identical, to allegations and transactions in the public domain. Relator’sRFC,Dr.Reynolds’

RFC and Relator’sComplaintall assert that NCSTAR 1 is fraudulent because DEWs were the

true cause of the collapse of the WTC Towers. Furthermore, every allegationinRelator’s

Complaint, which cites extensively to NCSTAR 1, is based on information publicly disclosed in

NCSTAR 1. Similarly, the Ryan Suit, along with various news sources, previously disclosed

into the public domain the allegation that the NIST Investigation and NCSTAR 1 may be

incorrect (or fraudulent) in concluding that the collapse of the WTC Towers was caused by

aircraft impacts.Finally,evenRelator’sspecificallegationthatDEWscausedthecollapseofthe

WTC Towers was merely borrowed from the public domain. Thus,becauseRelator’sallegations

havebeenpubliclydisclosed,Relator’sclaimsarebarredunlessshe is an original source.

iv. Relator is Not an Original Source Under Section 3730(e)(4) of the

FCA

BecauseRelator’sclaims are based on publicly disclosed information, she can pursue this

litigation only if the Court determines that she is an original source of the information upon

which her claims are based. Mikes, 931 F.Supp. at 253. In the Second Circuit, to qualify as an

originalsourceofpubliclydisclosedinformation,arelatormust“(1)havedirectandindependent

knowledge of the information on which the allegations are based; (2) have voluntarily provided

such information to the government prior to filing suit; and (3) have directly or indirectly been a

sourcetotheentitythatpubliclydisclosedtheallegationsonwhichthesuitisbased.”5Alcohol

Found., 186 F.Supp.2d at 462 (citing United States ex rel. DeCarlo v. Kiewit/AFC Enters., Inc.,

5 FollowingtheSupremeCourt’sholdinginRockwellInt’lCorp.v.UnitedStates, 127

S.Ct. 1397 (2007) that a relator must be an original source of the allegations in her complaint

rather than the allegations that were publicly disclosed, the third prong of this test may no longer

be valid law.

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937 F.Supp. 1039, 1048 (S.D.N.Y. 1996); Kreindler, 985 F.2d at 1158-59). An original source

must have“firsthandknowledgeoffraudulentmisconduct”orbe“eithercloseobserversor

otherwiseinvolvedinthefraudulentactivity.”DeCarlo, 937 F.Supp. at 1048 (citations omitted).

Relator does not fit that description.

1. Relator Does Not Have Direct and Independent Knowledge of

the Information Upon Which Her FCA Claims are Based

Under§3730(e)(4)(B),“originalsource”means“anindividualwhohasdirect and

independent knowledge of the information on which the allegations are based ....” (emphasis

added). “Direct” knowledgeis“marked by [the]absenceofan intervening agency,

instrumentality,orinfluence:immediate.” United States ex rel. Stinson, Lyons, Gerlin &

Bustamante, P.A. v. Prud. Ins. Co.,944F.2d1149,1160(3dCir.1991)(quotingWebster’sThird

New InternationalDictionary640(1976)). “‘Independentknowledge’isthatwhichisnot

dependentonpublicdisclosures.”Smith, 415 F.Supp.2d at 72. Thus, to qualify as an original

source,Relator“mustshowthatprivateinformationformsthesubstantialbasisof[her]specific

allegationsoffraud.”Herbert, 1992 WL 247587, at *5.

Relator asserts that she is an original source of the allegations in her Complaint because

she submitted an RFC to NIST on March 16, 2007 asserting that DEWs caused the collapse of

the WTC Towers. See Compl. ¶ 55; see also Compl., Ex. A. However, Relator never alleges

any direct or independent knowledge of the information on which she bases her allegations.

Relator never alleges she witnessed any of the events of September 11. More importantly,

RelatorneverallegesshewasinanywayinvolvedinNIST’sInvestigation,orthatshehasany

direct knowledge of the alleged conspiracy she describes. See Rockwell, 127 S.Ct. 1397 (relator

was not original source of fraud that allegedly took place after relator was no longer employed);

Herbert, 1992 WL 247587, at *7 (relator did not have direct or independent knowledge

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regarding contract negotiations at which he was not present). Thus, as Relator lacks any firsthand knowledge supporting her claims, she is not an original source.

2. Relator’sCompilationofInformationinthePublicDomain

Does Not Qualify Her as an Original Source

Moreover, the mere compilation of various publicly available sources to conjure

allegations does not render a relator an original source of the resulting allegations. Alcohol

Found., 186 F.Supp.2d at 458. The relator in Alcohol Foundation filed an FCA suit against

various entities involved in the production, distribution, and sale of alcoholic beverages alleging

that the defendants violated the FCA by advertising alcoholic beverages without warning

consumers of the associated health risks and, therefore, the resulting medical treatment bills

submitted to the Government were fraudulent. Id. at 460. The relator asserted that it was an

originalsourceundertheFCA “becauseoftheworkitdidinresearchingandcompiling

scientificandgovernmentpublications.”Id. at 461. The court in Alcohol Foundation held that

therelator’s“independentinvestigation”didnotgiveitdirectandindependentknowledgeofthe

allegationscontainedinthecomplaintand,therefore,therelatorwasnot“transformed”intoan

original source. Id. at 462-63. Importantly, the court held that the FCA was designed to

incentivize“insiders”to“vindicatethepecuniaryrightsoftheUnitedStates,”andnotasatool

“availabletothosepursuingalesspecuniaryandmoreexpansivesocialagenda.”Id. at 464-65.

Thus,intheSecondCircuit,“arelatormustpossess,attheveryleast,substantive,orcore,

information about the particular fraud in order to qualify as an original source.” Smith, 415

F.Supp.2d at 72-73 (citing United States v. New York Med. Coll., 252 F.3d 118, 121 (2d Cir.

2001)).

Like the relator in Alcohol Foundation,Relator’sallegationsarebasedsolelyona

compilation of publicly available information. Indeed, Relator admits in her RFC that:

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“Requesterobtainedtheinformationthat is the subject of this Request for Correction from

NIST’swebsiteathttp://wtc.nist.gov/reports_october05.htm in or about the month of June,

2006.” Compl.,Ex.A,RFCofDr.JudyWood,p.4.Moreover, Relator is not the original

source of any information publicly disclosed in the Ryan Suit or in news stories. See, e.g. United

States ex rel. Pentagen TechnologiesInt’lLtd.v.CACIInt’lInc., No. 94 Civ. 2925(RLC), 1996

WL 11299, at *8 (S.D.N.Y. Jan, 4, 1996) (“theSecondCircuitholdsthatthepartydivulging the

information deemed publicly disclosed by litigation papers, such as depositions, is the original

sourceofthatinformation”)(citingKreindler, 985 F.2d at 1159). Relator cannot now be heard

toarguethatshehas“directandindependentknowledge”ofthispublicly available information.

Relator’seffortstoresearchandcompilevariouspublicsourcesofinformationto pursue her

peculiar social agenda do not transform her into an original source.6Alcohol Found., 186

F.Supp.2d at 461.

3. Relator’s Wildly Speculative Conspiracy Theory Cannot

Qualify Her as an Original Source

Moreover, a relator cannot satisfy the original source requirement with baseless

speculation and conjecture. Aflatooni,163F.3dat526.“[B]ecausethepurposeoftheFCA is to

encourageindividualswithtrue‘knowledge’ofallegedwrongdoingtocomeforwardand

provide such information to the Government, the purposes of the Act would not be served by

allowing a relator to maintain a qui tam suit based on pure speculationorconjecture.”Id. Thus,

to avoid dismissal, Relator must demonstrate first-hand knowledge of a factually supported

claim, rather than wild speculation about what might have happened on September 11.

6 Moreover, unlike Relator in Alcohol Foundation, whose allegations were at least

factually and legallynovel,Relator’sclaimsarenodifferentthanthosesetforthoncountless

September 11 “conspiracy theory” websites. See, e.g. http://www.911closeup.com;

http://www.media-criticism.com/911_video_fakes_01_2004.html;

http://www.thewebfairy.com/911; http://www.911tvfakery.net; http://911hoax.com.

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Relator’sclaimsarenotbasedonfactual information at all, let alone factual information

of which Relator has direct and independent knowledge. Instead, Relator’sallegationsarebased

onadelusionalfantasyof“rogue”Governmentagents, illusory aircraft, countless deceived

eyewitnesses, faked video evidence and weapons that exist only in science fiction. Relator’s

Complaintallegesnothingmorethantheoreticalpossibilities,and“doesnotpointtoanyother

evidenceintherecordwhichsuggeststhat[she]has‘information,’asopposedtospeculation.”

Aflatooni, 163 F.3d at 526. Thus, because Relator is not an original source of the allegations

asserted in her Complaint, this case must be dismissed as a matter of law.

III. Relator’sComplaintFails to State a Claim Upon Which Relief Can Be Granted

Relator’sComplaintallegesthreeseparateCausesofActionunder§§3729(a)(1),(2)and

(7) of the False Claims Act. Relator’sComplaintfailstostateaclaimunderanyofthesethree

SectionsoftheFCA.First,Relator’sComplaintdoesnotallegethatDefendants knowingly

submitted or used a claim, statement or record that was false or fraudulent. Moreover, Relator

fails entirely to plead the elements of a claim under § (a)(7) because Relator has not identified a

pre-existing obligation for Defendants to pay money or transmit property to the Government.

Finally, Relator has failed to set forth sufficient facts to show that her allegations are plausible.

Forthesereasons,Relator’sclaimsmustbedismissed.

A. The Standard For Dismissal For Failure to State a Claim Upon Which Relief

Can Be Granted Under Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) authorizes dismissal of a complaint for failure to

state a claim upon which relief can be granted. A complaint may be dismissed under Rule

12(b)(6) when“itfailstoplead‘enoughfactstostateaclaimtoreliefthatisplausibleonits

face’.”Arista Records LLC v. Lime Group LLC, No. 06 Civ. 5936(GEL), 2007 WL 4267190, at

*4, (S.D.N.Y. Dec. 3, 2007) (citing Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974

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(2007)).IntheSecondCircuit,complaintsmustmeet“aflexible‘plausibilitystandard,’which

obliges a pleader to amplify a claim with some factual allegations in those contexts where such

amplification is needed to render the claim plausible.”Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d

Cir. 2007) (emphasis in original). Thecomplaintmustsetforth“morethanlabelsand

conclusions, and a formulaic recitation of the elements of a cause of action will notdo.”Arista

Records, 2007 WL 4267190, at *4 (citing Twombly, 127 S.Ct. at 1964-65). Furthermore,

allegationsthatconsistofnothingmore“thanalistoftheoreticalpossibilities,whichonecould

postulatewithoutknowinganyfactswhatever”areinsufficientunderRule12(b)(6). In re

Elevator Antitrust Litig., 502 F.3d 47, 50-51 (2d Cir. 2007).

To avoid dismissal under Rule 12(b)(6), the complaint must set forth sufficient facts to

“nudge[][theplaintiff’s]claimsacrossthelinefromconceivabletoplausible.”Twombly, 127

S.Ct. at 1974; see also In re Elevator Antitrust Litig., 502 F.3d at 50. For example, in Twombly,

the Supreme Court held that a plaintiff alleging antitrust violations must set forth evidence of

illegal collusion beyond mere parallel conduct, as parallel conduct is“justasmuchinlinewitha

wide swath of rational and competitive business strategy unilaterally prompted by common

perceptionsofthemarket.” Twombly, 127 S.Ct. 1964; see also Elevator Antitrust Litig., 502

F.3d at 51. Thus, an antitrust plaintiff must show some evidence that collusion was the cause of

parallel conduct rather than some equally plausible alternate explanation. Id. The Court in

Twombly emphasized that the plausibility standard serves to prevent costly discovery that may

“pushcost-conscious defendants to settle even anemic cases”whentheplaintiff’sclaimshaveno

plausible chance of success. Id. at 1967. Moreover, the heightened pleading requirement

announced in Twombly applies to FCA complaints. United States ex rel. Unite Here v. Cintas

Corp., No. C06-2413(PJH), 2007 WL 4557788, at *4 (N.D.Cal. Dec. 21, 2007); Bradley v.

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Phillips Petroleum Co., No. H-05-3912, 2007 WL 4443877, at *6 (S.D.Tex. Dec. 18, 2007)

(“BecausetherequirementsofRule 9 are more stringent than those for Rule 8, the Supreme

Court's decision in Twombly applies with at least equal force to the Rule 9 pleading

requirements”).AsRelator’sComplaintfailstosatisfyRule12(b)(6)becauseitdoesnotcontain

sufficient facts to satisfy the plausibility standard, it must be dismissed.

In evaluating a motion to dismiss under Rule 12(b)(6), all well-pleaded facts alleged in

the complaint are taken as true and all reasonable inferences are indulged in favor of the plaintiff.

Arista Records, 2007 WL 4267190, at *5 (citations omitted). However, well-pleaded facts must

be distinguished from conclusory statements; conclusory allegations without supporting factual

averments are not sufficient to state a claim on which relief can be granted. Id. Similarly, the

Courtneednotacceptastrue“unwarranteddeductionsoffact.”Saidin v. New York City Dept. of

Educ., 498 F.Supp.2d 683, 687 (S.D.N.Y. 2007) (citing First Nationwide Bank v. Gelt Funding

Corp., 27 F.3d 763, 771 (2d Cir. 1994)). To adjudicate a Rule 12(b)(6) motion, the court may

consider the facts stated in the complaint, documents attached to or incorporated in the

complaint, and matters of public record. Ello v. Singh, No. 05-CV-9625(KMK), 2007 WL

3084979, at *4 (S.D.N.Y. Oct. 19, 2007) (citations omitted); Pani v. Empire Blue Cross Blue

Shield, 152 F.3d 67, 75 (2d Cir. 1998) (citations omitted). Moreover, a court may properly base

itsrulingon“commonknowledge”andmattersofwhichtheCourtmaytakejudicial notice.

Robinson v. Mammoth Life and Accident Insur. Co., 454 F.2d 698, 699 (7th Cir. 1971) (court

properly decided Rule 12(b)(6) motion based on common knowledge of the risk of robbery in the

neighborhood in which the plaintiff worked); Brass v. Am. Film Techs., Inc., 987 F.2d 142, 150

(2d Cir.1993)(citationsomitted).Thus,inthiscase,inevaluatingthesufficiencyofRelator’s

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Complaint,theCourtcantakejudicialnoticeof“commonknowledge”relatedtotheeventsof

September 11.

B. Relator Fails to Allege That Defendants Knowingly Made or Submitted a

Claim, Record or Statement That Was False

The purpose of the FCA is to prevent and redress situations in which fraudis“being

perpetrated against the Government.” Dick, 912 F.2d at 18 (quoting H.R. Rep. No. 660, 99th

Cong., 2d Sess. 22 (1986)). Because the Government is the real party in interest in any FCA

suit, any allegation of fraud lodged against a Government agency in an FCA suit is tantamount to

the Government suing itself. Yet, this is precisely what Relator has alleged. BecauseRelator’s

allegations of Government complicity are inconsistent with the alleged falsity or fraudulence of

Defendants’claims,statementsandrecords,RelatorhasfailedtostateaclaimundertheFCA.

The FCAdoesnotdefinetheterms“false”or“fraudulent.”However,“[i]t is self-evident

that the FCA is an anti-fraudstatute.”Gold, 68 F.3d at 1476. In the Second Circuit, a claim is

only actionableundertheFCAifit“isaimedatextractingmoneythegovernment otherwise

wouldnothavepaid.”United States ex rel. Mikes v. Straus, 274 F.3d 687, 696 (2d Cir. 2001)

(citations omitted). ThelanguageoftheFCA “plainlylinksthewrongfulactivitytothe

government’sdecisiontopay.” Id. “Onlyifthegovernment gets something less than or

different from that which it expected can it be said to have suffered the kind of injury necessary

toinvokeFCAliability.”Boisjoly v. Morton Thoikol, Inc., 706 F.Supp. 795, 809 (D.Utah 1988).

Thus, if the Government remits payment with full knowledge of the allegedly fraudulent nature

of the claims submitted, the Government has not been defrauded and an FCA action will not lie.

See, e.g. United States ex rel. Mikes v. Straus, 98 F.Supp.2d 517, 527 (S.D.N.Y. 2000) (FCA

actionsmaybevexatious“wherethegovernment’sundisputedpriorknowledgeofinformation

allegedtoconstitutefrauddefeatedanyinferenceofafalseclaim”); United States ex rel. J.

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Cooper & Assocs. v. Bernard Hodes Group, Inc., 422 F.Supp.2d 225, 239 (D.D.C. 2006) (“A

claim [undertheFCA]isfrivolousandvexatiousifthegovernment’sawarenessofthe

circumstancesconstitutingtheallegedtransgressionmakesanylegalclaimoffrauduntenable”);

Herbert, 1992 WL 247587, *8 (FCA suit was frivolous and vexatious due, in part, to clear

evidence that the Government was aware of, and consented to, the allegedly fraudulent actions of

the defendant).

In a case with similar facts to the instant case, the Eastern District of Arkansas held that

an FCA complaint that alleged joint wrongdoing by the defendant and the Government failed to

state a claim under the FCA. United States v. Fiske, 968 F.Supp. 1347 (E.D. Ark. 1997). The

court in Fiske heldthattherelator’scomplaintfailedtostateaclaimunder the FCA because the

relator’s“finger,inessence,point[ed] attheDepartmentofJustice.” Id. at 1355. Defendant

Fiske was the independent counsel in the Whitewater investigation for approximately six months

before being replaced by Kenneth Starr. Id. at 1348. The relator filed suit under the FCA

alleging that Fiske wrongfully accepted payment from the Department of Justice under a statute

that was no longer in effect and that Fiske failed to disclose a conflict of interest. Id. The United

States subsequentlyintervenedandmovedtodismisstherelator’sFCAclaims.Id. at 1349. The

court held that Fiske’sclaimsfor payment werenotfalsebecause“theUnitedStatesappointed

[Fiske] and thus represented to him that he would be paid hissalary,”and the relator did not

allege that Fiske deceived the Government. Id. at 1352. Moreover, the Government chose Fiske

for the investigation after thoroughly investigating and acquiescing to any alleged conflict of

interest. Id. at 1354. The court recognized that Government knowledge alone is not a complete

defense. Id. at 1352 (citing United States ex rel. Hagood v. Sonoma County Water Agency, 929

F.2d 1416, 1421 (9th Cir. 1991)). “However,itisobviousthat[therelator’s]fundamental

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argument is with the Department of Justice itself, not with [Fiske]. [The relator] is left in the odd

position of arguing that the Department of Justice –a party which [the relator] has not sued –

defraudeditself.” Becausetheessence of the relator’sallegation in Fiske was that the

Government fraudulently conducted the Whitewater investigation, the complaint failed to state a

valid claim against Fiske under the FCA. Id.

Similarly, in Boisjoly, the court held that allegations of Government knowledge of an

allegedly fraudulent scheme failed to state a claim under the FCA. In Boisjoly, the relator

Engineer worked for the defendant Contractor and was involved in the development of Solid

RocketMotors(“SRM”)forNASAforuseonthespaceshuttle.706 F.Supp. at 798. Following

the explosion of the Space Shuttle Challenger in 1986, the Engineer filed an FCA suit against the

Contractor alleging that both the Contractor and NASA knew that certain seals and joints used

on the SRM were defective and likely to cause catastrophic accidents and, therefore, the

Contractor’ssubsequentclaimsforpaymentwerefalse. Id. ThecourtgrantedtheContractor’s

motion to dismiss, holding that theContractor’sclaimsforpaymentwerenotfalseor fraudulent.

Id. “BecauseFCAliability requires an element of fraud or falsity, courts have disallowed FCA

claims where the Government knew, or was in possession at the time of the claim, of the facts

thatmaketheclaimfalse.”Id. at 809 (citing United States v. Fox Lake State Bank, 366 F.2d

962, 965 (7th Cir. 1966); Woodbury v. United States, 232 F.Supp. 49, 54-55 (D.Or. 1964);

United States v. Schmidt, 204 F.Supp 540 (D.Wis. 1962)). The court found that the documents

incorporatedintothecomplaintdemonstrated“acloseinterplaybetween[theContractor]and...

NASA”andthat“[f]romaveryearlydate,NASAwasawareofthecharacteristicsthatformthe

‘defect’uponwhich[theEngineer’s]FCA claim [was]based.” Id. Thus,because“the

complaintitselfallege[d]NASA’sknowledgeoftheclaimed defects in the same sentences in

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whichthosedefects[were]identified,”theEngineer’scomplaintfailedtostateaclaimunderthe

FCA. Id.

Under Boisjoly, Government knowledge can negate falsity under the FCA. See also

Kreindler, 985 F.2d at 1156-57. However, the court in Boisjoly went a step further, holding that

any allegation of Government knowledge in the complaint automatically bars an FCA action.

706 F.Supp. at 810. The Second Circuit declined to follow this part of Boisjoly’sholding and

held in Kreindler thatthepotentialfalsityofaclaim“isnotautomatically exonerated by any

overlappingknowledgebygovernmentofficials.” 985F.2dat1156(emphasis added).

However, the court in Kreindler found that the ruling in Boisjoly was“warranted on the facts of

thatcase.”Id.

Here, Relator alleges more than mere knowledge on the part of the Government; Relator

alleges that NIST orchestrated the fraud alleged in her Complaint. Relator alleges that the NIST

Investigation was fraudulent because NIST “improperly and fraudulently curtail[ed] the scope of

its investigation.” Compl., ¶ 21. Relator further alleges that NIST intentionally chose

contractors with familiarity with DEWs “inordertoproduceareportthatsoughttogotoany

length necessary to avoid, disguise, omit and otherwise divert attention away from the actual and

intendeddestructionoftheWTCcomplex”usingDEWs. Compl., ¶ 53. Finally, Relator alleges

that“NIST... contributedtoand/orfacilitatedthefraudulentschemehereindescribed.”Compl.,

¶ 54.

Thus,evenassumingthevalidityoftheRelator’sallegations,Relatorhasfailedtostate

an actionable claim under the FCA. ItisclearfromRelator’sComplaintthat,justasinFiske,

Relator’sfundamentalallegationsare aimed more at NIST than at Defendants. Moreover, as in

Boisjoly, Relator alleges that NIST was fully aware of the alleged facts that allegedly rendered

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Defendants’claimsfalse.Relator does not allege that Defendants deceived the Government.

Nor does Relator allege that Defendants fraudulently extracted money from the Government or

that the Government received anything other than what it expected under its contract with

Defendants. Relator essentially alleges that NIST desired to falsify NCSTAR 1, NIST

contracted with Defendants to conduct a fraudulent investigation, Defendants did exactly what

NIST requested by creating false records and statements, and Defendants subsequently submitted

claims for payment. This scenario, while perhaps actionable under some other legal theory, does

not present a claim for relief under the FCA. See United States ex rel. Ervin & Assoc., Inc. v.

Hamilton Secs. Group, Inc., 370 F.Supp.2d 18, 43-44(D.D.C.2005)(“Notallfalsestatementsor

records are actionable under theFalseClaimsAct”).Just like the relator in Fiske, Relator is

merely unsatisfied with the NIST Investigation and has improperly invoked the FCA in an

attempttochallengeNIST’sconclusions.Thus,Relator’sComplaintfails to state a claim against

Defendants under the FCA and must be dismissed.

C. Relator Fails to Identify an Existing Obligation For Defendants to Transmit

Money or Property to the Government

Relator’sThirdCauseofActionispremisedonaviolationof§3729(a)(7)oftheFCA.

The essential elements of a § (a)(7) claim are: (1) the defendant made, used, or caused to be

made or used a false record or statement; (2) to conceal, avoid or decrease an obligation to pay

the Government; and (3) the defendant knew the record or statement was false. Taylor v.

Gabelli, 345 F.Supp.2d 313, 331-32 (S.D.N.Y. 2004). ThisSectionisknownasthe“reverse

falseclaims”provision. Id. Relator’sThirdCauseofActionmerelyrecitesthelanguageof§

(a)(7) without supporting her conclusory allegations with any well-pleaded facts. Relator does

not identify anywhere in her Complaint any specific false record or statement made to avoid any

specific obligation to transmit property to the Government. This deficiency alone is sufficient to

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justify dismissal pursuant to Rule 12(b)(6). Zaro Licensing, Inc. v. Cinmar, Inc., 779 F.Supp.

276,284(S.D.N.Y.1991)(“Parrotingstatutorylanguagewhilegenerallyreferringthereader

backtotheprevious100paragraphsinacomplaintisinadequate”).

Furthermore, to support a reverse false claim action, Relator must make a specific

allegation that at the time of the false statement or record, Defendants had an independent legal

duty to make a payment or transmit property to the United States. United States ex rel. Capella

v. Norden Systems, Inc., No. 3:94-CV-2063(EBB), 2000 WL 1336487, at *10 (D.Conn. Aug. 24,

2004) (relatormustallege“apresentlyexistingobligationtopaythegovernment”)(citations

omitted). Relator has failed to plead the existence of any legal duty on the part of Defendants to

pay money or transmit property to the Government. Again, this deficiency alone warrants

dismissal for failure to state a claim. Equitable Life Assur. Soc. of the United States v. Alexander

Grant & Co., 627 F.Supp. 1023, 1028 (S.D.N.Y. 1985) (complaint dismissed under Rule

12(b)(6) because it failed to allege the essential elements of a RICO claim). Thus,Relator’s

Third Cause of Action must be dismissed for failure to state a claim under § (a)(7) of the FCA.

D. Relator’sAllegations Are Implausible

Relator has failed entirely to satisfy the plausibility standard announced by the Supreme

Court in Twombly. Relator asserts that DEWs must have been used to destroy the WTC Towers

because they may exist. Yet, Relator fails entirely to demonstrate how her theory is any more

plausible than any other theory (e.g. controlled demolition, a missile attack, a localized

earthquake), let alone how her conspiracy theory is at least as plausible as countless eyewitness

accounts and recorded evidence of aircraft striking the Towers. Relator’sallegationsare little

more than speculation at what might theoretically be possible, and fly in the face of the

commonly understood and accepted events of September 11. Because Relator’sformalized

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Complaint and invocation of the FCA does not transform her utter fantasy into a cognizable legal

claim, her Complaint must be dismissed for failure to state a claim upon which relief can be

granted.

IV. Relator’sComplaintAlso Must Be Dismissed For Failure to Plead Fraud With

Particularity

A. Allegations Under the False Claims Act Must Satisfy the Requirements of

Rule 9(b)

Federal Rule of Civil Procedure 9(b)requiresthat“[i]nallavermentsoffraudormistake,

the circumstances constituting fraud or mistake shall be stated with particularity.”In this Circuit,

“[i]tiswell-establishedthattheheightenedpleadingstandardofRule9(b)... appliestosuits

undertheFCA.” United States ex rel. Smith v. New York Presbyterian Hosp., No. 06 Civ.

4056(NRB), 2007 WL 2142312, at *6 (S.D.N.Y. July 18, 2007) (citing Gold, 68 F.3d at 1476-

77). To comply with Rule 9(b), a complaint must:“(1)specifythestatementsthattheplaintiff

contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were

made,and(4)explainwhythestatementswerefraudulent.” United States ex rel. Barmak v.

Sutter Corp., No. 95 Civ. 7637(KTD), 2003 WL 21436213, at *4 (S.D.N.Y. June 20, 2003).

Essentially, Relator must setforththe“who,what,when,andwhere”oftheallegedfraud.Id.

TheprimarypurposesofRule9(b)’srequirementofparticularityare:“(1)ensuringthat

defendantshavesufficientnoticeofplaintiff’sclaims;(2)discouragingstrikesuits;and(3)

preventing the filing of suits that simply hope to uncover the basis for some previously

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unspecifiedwrongdoing.” Smith, 2007 WL 2142312, at *6.

7

Failure to plead fraud with

particularitysubjectsacomplainttodismissal,andadismissalwithprejudice“isappropriate

under Rule 9(b)wherethereisa‘good reason’to deny the plaintiff leave to amend, including

whereitappearsthatanyamendmentwouldbefutile.”Id. at *7 (citations omitted).

B. Relator’sComplaintShould BeDismissed For Failure to Plead Any

Particulars Regarding a Single Fraudulent Claim

i. An FCA Complaint Must Allege Details Regarding Specific False

Claims Submitted to the Government

Evidenceofanactualfalseclaimis“thesine qua non ofaFalseClaimsActviolation.”

United States ex rel. Monda v. Sikorsky Aircraft Corp., 2005 WL 1925903, No. Civ.

3:99CV1026(JBA), at *3 (D.Conn. Aug. 11, 2005) (quoting United States ex rel. Karvelas v.

Melrose–Wakefield Hosp., 360 F.3d 220, 225 (1st Cir. 2004)). An FCA claim must contain

“allegations,statedwithparticularity, of the actual false claims submitted to the government that

constitutetheessentialelementofanFCAquitam action.” Karvelas, 360 F.3d at 232. To

properly allege an FCA action, Relator’sComplaintmust,ataminimum,specifytheclaims that

Relator contends were fraudulent, identify who submitted them, state where and when the claims

were submitted, and explain why the claims were fraudulent. Barmak, 2003 WL 21436213, at

7 Rule9(b)’sheightenedpleadingrequirementsalsoreflect“thedesiretosparedefendants

the harm to their reputations attendant to an allegation of fraud absent concrete factual

circumstances supporting the allegations.”DeCarlo, 937 F.Supp. at 1049-50 (quoting Devaney

v. Chester, 709 F.Supp. 1255, 1260 (S.D.N.Y. 1989)). In addition, Rule 9(b) prevents fraud

claims from being used as a pretext for conducting fishing expeditions during discovery.

McFarland v. Memorex Corp., 493 F.Supp. 631, 636-37 (N.D. Cal. 1980). Moreover, Rule

9(b)’sparticularityrequirementisconsistentwiththeFCA’spurposeofencouraginginsiders

with first-hand knowledge of fraud to blow the whistle. See Alcohol Foundation, 186 F.Supp.2d

464-65; Bly-Magee v. California,236F.3d1014,1019(9thCir.2001).“Qui tam suits are meant

to encourage insiders privy to a fraud on the government to blow the whistle on the crime.

Because insiders privy to a fraud on the government should have adequate knowledge of the

wrongdoingatissue,suchinsidersshouldbeabletocomplywithRule9(b).”Bly-Magee, 236

F.3d at 1019 (quoting Wang v. FMC Corp., 975 F.2d 1412, 1419 (9th Cir. 1992)) (emphasis

added in Bly-Magee; internal quotation marks omitted).

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*4; DeCarlo, 937 F.Supp. at 1049-50.

8 An FCA claim that does not specify the false claims for

payment allegedly submitted to the Government must be dismissed.

ii. Relator’sComplaintDoesNotIdentifyaSingleFalseClaimThatWas

Submitted to the Government

Relator’sFCAclaimsmustbedismissedbecauseRelatorfailstoidentify a single false

claim that any Defendant allegedly submitted for payment. See United States ex rel. Walsh v.

Eastman Kodak Co.,98F.Supp.2d141,147(D.Mass2000)(“Withoutcitingasinglefalseclaim

arising from an allegedly false invoice, Relator has not met even a bare-bones Rule 9(b)test.”)

Relator’s32-page Complaint contains sparse references to any false claims and merely makes

conclusory allegations without any factual support. General allegations thatthe“variouscost

reports, requisitions, billing statements and/or requests for reimbursement submitted by the

defendant NIST participants ... all contained false claims for reimbursement and made false

statements to NIST,”Compl., ¶ 56, do not meet the pleading standards required under the FCA.

Relator’sComplaint does not identify any specific date that any Defendant allegedly submitted a

false claim for payment, the name of a single employee who submitted a false claim for payment,

8 “Rule9(b)’sdirectivethat‘thecircumstancesconstitutingfraudormistakeshallbestated

withparticularity’doesnotpermitaFalseClaimsActplaintiffmerelytodescribeaprivate

scheme in detail but then to allege simply and without any stated reason for his belief that claims

requesting illegal payments must have been submitted, were likely submitted or should have

beensubmittedtotheGovernment.”In re Cardiac Devices Qui Tam Litig., 221 F.R.D. 318, 336

(D.Conn. 2004) (citing United States ex rel. Clausen v. Lab. Corp. of America, Inc., 290 F.3d

1301, 1311 (11th Cir. 2002). See also United States ex rel. Vallejo v. Investronica, Inc., 2

F.Supp.2d 330, 336 (W.D.N.Y. 1998) (dismissing FCA claims for failure to satisfy Rule 9(b)

where plaintiff alleged false statements were made during certain months and at certain locations

butfailedtoallege“exactlywhereandwhenthosestatementsweremade,”“thedateordateson

whichthesestatementsweremade,”or“theindividualsresponsibleformakingthestatements”);

Barmak,2003WL21436213,at*6(dismissingFCAclaimsbecausecomplaintdidnot“outline

thewho,what,when,andwhere”offraudulentclaimssubmittedtothegovernment);DeCarlo,

937 F.Supp. at 1050-51 (dismissing FCA claims where complaint failed to refer to specific

employees who may have been involved in submitting false claims and lacked specificity in

describing the respective dates of instances of fraud).

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or the substance of any false claim or why the claim was false. See DeCarlo, 937 F.Supp. at

1051 (dismissing FCA claim because it did not allege the exact date the false claim was made,

the place where the alleged fraud took place, the identity of the person who submitted the false

claim, to whom the claim was submitted to or the general substance of the allegedly false claim).

Relator’s“[c]onclusoryallegationsoffraudwillnotsufficeunderRule9(b).” Vallejo, 2

F.Supp.2d at 337 (citing Sternv.LeucadiaNat’lCorp., 844 F.2d 997, 1004 (2d Cir. 1988).

Thus, as Relator’sComplaint fails to plead fraud with the particularity required by Rule 9(b), it

must be dismissed.

C. Relator’sComplaintShould BeDismissed For Failureto Plead Any

Particulars Regarding Defendants’ Alleged Fraudulent Scheme That

Resulted in the Submission of False Claims

i. An FCA Complaint Must Allege Specific Details Regarding the

Fraudulent Scheme That Allegedly Led to the Submission of False

Claims

In addition to specifying the false claims submitted to the Government, an FCA

complaint must detail the underlying conduct that allegedly resulted in the submission of false

claims. See Cardiac Devices, 221 F.R.D. at 337 (FCA complaint that alleges only a general

scheme of fraud that might have resulted in the submission of a false claim is insufficient);

Capella, 2000 WL 1336487, at *11 (General allegations of conspiracy do not meet particularity

requirements of Rule 9(b)). “Underlyingschemesandotherwrongfulactivitiesthatresult in the

submission of fraudulent claims are included in the‘circumstances constituting fraud or mistake’

thatmustbepledwithparticularitypursuanttoRule9(b).”Karvelas, 360 F.3d at 232.

ii. Relator’sComplaintFailsto Plead Any ParticularsRegarding

Defendants’Alleged Fraudulent Scheme

Not only doesRelator’sComplaintfailcompletely to identify a single specific false claim

for payment that any Defendant submitted to the Government, Relator fails to plead with

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particularity the underlying fraudulent conduct that generated the allegedly false claims. Relator

fails entirely to specify how any Defendant contributed to the alleged fraudulent nature of

NCSTAR 1. Moreover, Relator fails to attribute specific instances of fraud to any individual

Defendant, instead alleging fraud against all of the 27 named Defendants generally. Finally,

Relator does not specify what role any of the Defendants played in the alleged Government-led

conspiracytofabricatetheeventsofSeptember11.Relator’sfailureto articulate specifically the

fraudulent conduct that preceded Defendant’sallegedsubmissions of false claims for payment

requires dismissal of her FCA claims.

1. Relator Fails to Explain How the Defendants Contributed to

the Alleged Fraudulent Nature of NCSTAR 1

NCSTAR 1 was prepared solely by NIST. Indeed, NCSTAR1states:“Thecontentof

thereportsandrecommendations... aresolelytheresponsibilityofNIST.” NCSTAR1,p.

xxxii. Thus, Relator has not, and indeed cannot, attribute a single allegedly fraudulent word in

NCSTAR 1 to any of the Defendants.

Relator also fails to provide any detail to support her allegation that somehow Defendants

contributed to the allegedly fraudulent nature of NCSTAR 1. Relator merely alleges that NIST

personnelwere“misledbythedefendants’fraudulentactsand/oromissions”andthatDefendants

submittedfalsestatementswiththeintentof“steeringNISTawayfromaconsiderationofwhat

caused the destruction of WTC1,2; which, as elsewhere elaborated upon, was the use on 9/11/01

of exotic weaponry known as directed energy weapons.”Compl.,¶¶2, 5. Ultimately, Relator

allegesthatNISTfalsifiedNCSTAR1“atthebehestandwiththeurging,backingand/or

combined manipulative power of the defendants, acting singularly, collectively, overtly, covertly

andotherwise.”Compl., ¶ 52. Yet, Relator fails to provide a single detail regarding Defendant’s

role in this alleged conspiracy or identify a single false claim made in the furtherance of this

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supposed conspiracy. Nowhere does Relator specify a Defendant, provide an employee’sname,

a date, the content of any discussions or communications, or any other particulars indicative of a

conspiracy. Without specific allegations regarding their supposedly fraudulent conduct in

relation to NCSTAR 1, Defendants are unable to properlydefendagainstRelator’sclaims.See

O'Brien v. Nat'l Prop. Analysts Partners, 936 F.2d 674, 676 (2d Cir.1991) (the particularity

requirementofRule9(b)servesto“provideadefendantwithfairnoticeofaplaintiff'sclaim”)

2. Relator Fails to Attribute Specific Instances of Fraud to

Specific Defendants

Relator’s32-page Complaint purports to describe an immensely large and complex

conspiracy undertaken by 27 co-conspirators(andtheUnitedStatesGovernment).Yet,Relator’s

Complaint does not even attempt to identify what specific fraudulent actions are attributable to

any individual Defendant. Rule 9(b) requires Relator to“connectthe allegations of fraud to each

individualdefendant.”Center Cadillac, Inc. v. Bank Leumi Trust Co. of New York, 808 F.Supp.

213, 230 (S.D.N.Y. 1992) (citing Luce v. Edelstein, 802 F.2d 49, 54 (2d Cir. 1986); Landy v.

Mitchell Petroleum Tech. Corp., 734 F.Supp. 608, 620 (S.D.N.Y.1990)(“Wheremultiple

defendants are asked to respond to allegations of fraud, the complaint shall inform each

defendantofthenatureofhisallegedparticipationinthefraud”)). Relator’sComplaint

impermissiblyrelieson“sweepingreferencestoactsbyallorsomeofthedefendants”without

apprising the individual Defendants of what exactly they are accused. Center Cadillac, 808

F.Supp.at230.Thus,Relator’sComplaintfailstosatisfytherequirementsofRule9(b)and

must be dismissed.

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3. Relator Fails to Specify to What Extent NIST Was Complicit

With the Defendants in the Alleged Fraud

Finally, as outlined above, Relator’sComplaintcontainsconflictingallegationsthatNIST

was both complicit in the alleged conspiracy and defrauded by it. The central allegation of

Relator’sComplaintis that NCSTAR 1 is incorrect and fraudulent. Relator alleges that NIST

fraudulently narrowed the focus of its investigation to exclude any analysis of the structural

behavior of the WTC Towers after collapse became inevitable,

9 andthat“NIST... contributedto

and/or facilitated the fraudulent scheme herein described and which has succeeded, thus far, in

fraudulently presenting a false and misleading, fraudulent and illegal report on what caused the

destructionon9/11/01oftheWTCcomplex.”Compl.,¶54. However, these allegations assert

wrongdoing by NIST, not Defendants. Thisdistinctioniscrucial,asNIST’scomplicityinany

alleged conspiracy precludes a finding that Defendants knowingly submitted false claims under

the FCA. See Kreindler, 985 F.2d at 1157. Because Relator failed to properly plead the alleged

fraudwiththeparticularityrequiredbyRule9(b),Relator’sFCAclaimsmustbedismissed.

V. Relator’sClaimsareFrivolousandShouldBeDismissed

Asnotedabove,Relator’sComplaintispredicatedonherallegationthat“rogue

elements”within the United States Armed Forces destroyed the WTC Towers using lasers

orbiting in space and then tricked the world into believing aircraft struck the tower through some

typeof“psychologicaloperation.”Compl., ¶¶ 9, 10, 11.Relator’sallegationsdefine the concept

of a frivolous action. Notably, the Government, the real party in interest in this qui tam action,

9 InFootnote2ofNCSTAR1,NISTstatedthattheReport“includes little analysis of the

structural behavior of the tower after the conditions for collapse initiation were reached and

collapsebecameinevitable.”p.xxxvii.Relatorallegesthatwiththisstatement,NISTviolated

its“statutorymandate”by“openlynarrow[ing]andlimit[ing]itsstatedmandate.” Relatorstates

thatNIST’s“innocuoussoundingadmissionthat[it]didnotcarryoutitsstatutoryfunctionor

mandatewascausedbyfraudanddeceitandisthesubjectofthisQuiTamlawsuit.”Compl.,¶

6.

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explicitlyassertedthatsimilarallegationsassertedbyRelator’sattorneyintheHaasSuitwere

frivolous and should be dismissed. See Haas Suit, Aff. ¶ 8, Ex. E, Memo. In Supp. of

GovernmentDefs.’Motion to Dismiss in Haas v. Secretary, No. 07-CIV-3623(VM) (S.D.N.Y.

filed May 10, 2007), p. 9.

It is well settled that a district court can dismiss frivolous actions sua sponte. Fitzgerald

v. First East Seventh St. Tenants Corp., 221 F.3d 362 (2d Cir. 2000); Mallard v. United States

District Court, 490 U.S. 296 (1989); see also Tyler v. Carter, 151 F.R.D. 537 (S.D.N.Y. 1993)

(dismissing case sua sponte where plaintiff, a self-proclaimed “cyborg,”allegedthatvarious

public figures, including Jimmy Carter, Bill Clinton and Ross Perot, were engaged in a

conspiracy to reinstitute slavery and breed humans for recreational murder), af’d41 F.3d 1500

(2d Cir. 1994).Indeed,“ascourtsoffirst instance, district courts are especially likely to be

exposed to frivolous actions, and thus have an even greater need [than do appellate courts] for

inherentauthoritytodismisssuchactionsquicklyinordertopreservescarcejudicialresources.”

Fitzgerald, 221 F.3d at364.Moreover,thedistrictcourts’powertodismissfrivolousclaims

extends to both legally and factually frivolous claims. See, e.g. Bloom v. United States

Government, No. 02Civ.2352DABDF 2003 WL 22327163, at *5 (S.D.N.Y. Oct. 10, 2003)

(factualallegationthatis“clearlybaseless... cannotsupportavalidcauseofaction”)(citing

Nance v. Kelly, 912 F.2d 605, 606 (2d Cir. 1990)). In Bloom,thisCourtdismissedtheplaintiff’s

complaint pursuant to Rule 12(b)(6) where the plaintiff allegedthat“the Government and its

agents conspired and attempted to lynch and murder [the plaintiff] by repeatedly drugging him

with a variety of substances over a nine-year period.”Id. at *1 The Court reasoned that “the

complaint fail[ed] to provide ‘the factual basis necessary to enable [the Government]

intelligently to prepare [its] defense.’”Id. at *5 (quoting Ostrer v. Aronwald, 567 F.2d 551, 553

Case 1:07-cv-03314-GBD Document 14 Filed 01/23/2008 Page 42 of 45
33

{D0474881.1}

(2d Cir. 1977)). Similarly, Defendants will be unfairly prejudiced if they are required to mount a

defense against Relator’spreposterous claims. Thus, because further litigation would only

needlessly consume judicial resources and waste the time and money of all the parties involved,

thisCourtshoulddismissRelator’sComplaint.

VI. ARAShouldbeAwardedAttorneys’Fees and Expenses Pursuant to 31 U.S.C. §

3730(d)(4)

Section3730(d)(4)providesforreasonableattorneys’feesandexpensestoaprevailing

defendant in a qui tam actionifthecourt“findsthattheclaimofthepersonbringingtheaction

was clearly frivolous,clearlyvexatious,orbroughtprimarilyforpurposesofharassment.”

A claim is frivolous if it has no arguable support in existing law or any reasonable based

suggestion for its extension. United States ex rel. Bain v. Georgia Gulf Corp., 208 Fed. Appx.

280, 283 (5th Cir. 2006). A claim is vexatious when the plaintiff brings the action for an

improper purpose, such as to annoy or harass the defendant. Id. Either of these grounds is

independently sufficient tosupportanawardofattorneys’feesunder § 3730(d)(4). Id.

In this case, this Court lacks subject matter jurisdiction overRelator’sclaimsbased upon

the public disclosure bar and because Relator is not an originalsource. GivenRelator’s

overwhelming failure to establish subject matter jurisdiction, this suit is frivolous and vexatious

and justifies an award to Defendants ofattorneys’fees and expenses. Moreover, Defendants

have had to face three cases arising out of the same conspiracy theory. Besides Relator’s case,

ARA has been named as a Defendant in the Haas Suit and the Reynolds Suit. Given the number

of cases in which Defendants have been named based upon these same facts, it is apparent that

the instant case was intended only to harass Defendants and garner further publicity forRelator’s

conspiracy theories. For this reason as well, Defendants shouldbeawardedattorneys’fees and

expenses.

Case 1:07-cv-03314-GBD Document 14 Filed 01/23/2008 Page 43 of 45
34

{D0474881.1}

CONCLUSION

For the reasons outlined above, the Court lacks subject matter jurisdiction over Relator’s

FCA claims. Furthermore, Relator’s Complaint fails to state a claim upon which relief can be

granted and fails to plead fraud with particularity under Rule 9(b). Finally,Relator’sComplaint

is egregiously frivolous. Accordingly, Defendants ARA respectfully requests the Court dismiss

the Complaint in its entirety. Further, ARA should be awarded attorneys' fees and expenses.

Dated: January 23, 2008

Denver, Colorado

s/ Wm. David Byassee

Adam S. Ennis

SDNY Bar No. AE9468

Jackson Kelly PLLC

Three Gateway Center, Suite 1340

Pittsburgh, PA 15222

Telephone: 412-434-8804

Facsimile: 412-434-8062

Email: aennis@jacksonkelly.com

Wm. David Byassee, Esq.

(admitted pro hac vice)

Jackson Kelly PLLC

1099 18th Street, Suite 2150

Denver, Colorado 80202

Telephone: 303-390-0188

Facsimile: 303-390-0177

Email: dbyassee@jacksonkelly.com

Counsel for Applied Research Associates, Inc.

Case 1:07-cv-03314-GBD Document 14 Filed 01/23/2008 Page 44 of 45
35

{D0474881.1}

CERTIFICATE OF SERVICE

I hereby certify that on this 23rd day of January 2008, I electronically filed the foregoing

APPLIED RESEARCH ASSOCIATES, INC.'S MEMORANDUM IN SUPPORT OF

MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(1), 12(b)(6) AND 9(b) with

the Clerk of Court using the CM/ECF system which will send notification of filing to the

following e-mail addresses:

Jerry V. Leaphart, Esq.

jsleaphart@cs.com

Counsel for Relator

Chad Everette Sjoquist, Esq.

csjoquist@zdlaw.com

Counsel for Skidmore, Owings & Merrill LLP

And I hereby certify that I have mailed or served the document or paper to the following

non-CM/ECF participants by U.S. Mail, first class, postage prepaid and addressed to the

following:

None.

s/ Wm. David Byassee

Adam S. Ennis

SDNY Bar No. AE9468

Jackson Kelly PLLC

Three Gateway Center, Suite 1340

Pittsburgh, PA 15222

Telephone: 412-434-8804

Facsimile: 412-434-8062

Email: aennis@jacksonkelly.com

Wm. David Byassee, Esq.

(admitted pro hac vice)

Jackson Kelly PLLC

1099 18th Street, Suite 2150

Denver, Colorado 80202

Telephone: 303-390-0188

Facsimile: 303-390-0177

Email: dbyassee@jacksonkelly.com

Counsel for Applied Research Associates, Inc.

Case 1:07-cv-03314-GBD Document 14 Filed 01/23/2008 Page 45 of 45