Opinion ID: 149112
Heading Depth: 3
Heading Rank: 2

Heading: Claims Concerning Contracts 07 and 29

Text: In contrast, the Government's claims concerning Contracts 07 and 29 do not meet that standard because they have little to do with Miller's claims concerning Contract 20A. As we noted in Meijer, Inc. v. Biovail Corp., 533 F.3d 857 (D.C.Cir. 2008), ordinarily [t]he underlying question [in analyzing relation back] is whether the original complaint adequately notified the defendants of the basis for liability the plaintiffs would later advance in the amended complaint. Id. at 866 (citing 6A Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice & Procedure § 1497 (if the alteration of the original statement is so substantial that it cannot be said that defendant was given adequate notice of the conduct, transaction, or occurrence that forms the basis of the claim .. . then the amendment will not relate back)). This focus upon notice is in tension with the requirement that a complaint alleging a violation of the FCA be filed under seal and not served on the defendant until the court so orders. 31 U.S.C. § 3730(b)(2). We have not had occasion to address this tension before because in no prior case in this circuit had the Government kept the complaint under seal and refrained from serving it on the defendant until after the statute of limitations had run. [2] The Second Circuit, however, considered this tension when it held the FCA, before it was amended, did not implicitly permit relation back: The secrecy required by § 3730(b) is incompatible with Rule 15(c)(2) [now 15(c)(1)(B)], because (as is well-settled) the touchstone for relation back pursuant to [that] Rule[] is notice. United States v. Baylor Univ. Med. Ctr., 469 F.3d 263, 270 (2006). Under the statute as amended to allow relation back, the inquiry cannot be whether the defendant had actual notice of the claim before the statute of limitations had run because the FCA specifically requires that the complaint be filed under seal. The timely filed private party's complaint, however, still limits the permissible scope of the Government's later-filed complaint because, as mentioned above, the statute requires that in order to relate back a new claim must arise from the same conduct, transactions, or occurrences as did the timely complaint. Cases concerning relation back under Rule 15, despite their focus upon notice to the defendant, are useful in analyzing relation back under the FCA because the standards in the FCA and in Rule 15 are substantively identical. As we have seen, the FCA allows relation back only to the extent that the claim of the Government arises out of the conduct, transactions, or occurrences set forth, or attempted to be set forth, in the prior complaint, 31 U.S.C. § 3731(c); Rule 15(c)(1)(B) allows relation back only to the extent the new pleading asserts a claim or defense that arose out of the conduct, transaction, or occurrence set outor attempted to be set outin the original pleading. Relation back generally is improper when the new pleading asserts a new ground for relief supported by facts that differ in both time and type from those the original pleading set forth, Mayle v. Felix, 545 U.S. 644, 650, 125 S.Ct. 2562, 162 L.Ed.2d 582 (2005); attempts to introduce a new legal theory based on facts different from those underlying the timely claims, United States v. Hicks, 283 F.3d 380, 388 (D.C.Cir.2002); or, although it shares `some elements and some facts in common' with the original claim ... its effect is `to fault [the defendants] for conduct different from that identified in the original complaint,' Jones v. Bernanke, 557 F.3d 670, 674 (2009) (quoting Meijer, 533 F.3d at 866). Courts have refused to relate back amendments alleging the separate publication of a libelous statement, the breach of an independent contract, the infringement of a different patent, or even a separate violation of the same statute. 6A Wright, Miller, & Kane, supra, § 1497 (footnotes deleted) (collecting cases). For example, in United States ex rel. Bledsoe v. Community Health Systems, 501 F.3d 493 (2007), the Sixth Circuit applied the relation back provisions of Rule 15 in a qui tam case involving claims for reimbursement from Medicare and Medicaid submitted under certain Current Procedural Terminology (CPT) codes used for billing medical services. The timely documents alleged improper billing under Code 94799 for services related to emergency room and 02 Equip./Daily but the amended complaint also alleged improper[] billing... under that [same] code for a `call back' charge for which no procedure is associated; the court held the latter allegation did not relate back because the former allegation would not have alert[ed] the defendant that billing related to call backs was involved. Id. at 518-19. The timely documents also made several allegations of improper billing under CPT code 99201, including allegations concerning miscoding of supplies, but the amended complaint added allegations of improper billing for cardiopulmonary resuscitation under [that] code; again the court held the latter allegations did not relate back because the original documents would not have alert[ed][the][d]efendants .. . that cardiopulmonary resuscitation procedures were involved. Id. at 513, 518-19. Although in each instance the allegations in the timely documents and in the amended complaint addressed improper billing under the same billing code, the court held the new allegations did not relate back because they did not arise from the same conduct, transaction or occurrence involved in the timely complaint. Id. at 519. In this case, all three contracts are similar only in that each was funded by the USAID and required work related to sewer systems in Egypt. The differences among them, however, are significant. Based upon the allegations in the complaint, the critical facts regarding each contract are the work to be performed, who was prequalified to participate in the bidding that was allegedly rigged, when the contract was awarded, who won the contract, and the amount of the winning bid. The following table summarizes these facts for each contract and thus shows the important differences. -------------------------------------------------------------------------------- Winning Contract Awarded bid Project Prequalified Recipient -------------------------------------------------------------------------------- 20A 1988 $114.9 19 km of George A. Fuller Harbert-Jones million underground Co., Fru-Con 20A Joint sewer pipe Construction Co., Venture in Cairo and Harbert-Jones 20A Joint Venture -------------------------------------------------------------------------------- 29 1989 $114.9 Wastewater At least Sadelmi Sadelmi U.S.A. million treatment U.S.A. and plant in Harbert-Jones 29 Cairo Joint Venture -------------------------------------------------------------------------------- 07 1990 $ 44.6 Sewer in Morrison-Knudsen, Harbert-Jones million Alexandria FruCo n, Maclean 07 Joint Grove, Tidewater, Venture and Harbert-Jones 07 Joint Venture -------------------------------------------------------------------------------- As reflected in the table, each contract required work to be performed on a different project and was awarded in a different year to a different winning bidder drawn from a different pool of prequalified bidders. Allegations concerning Contract 20A do not fairly encompass Contracts 07 or 29 because each contract is unique and no two involved the same conduct, transaction[], or occurrence[]. Miller and the Government argue the use of the plural in Miller's complaint conspired to rig the bidding for construction contracts paid for by the [USAID] (emphasis added)together with the allegation there was a club [] organized to control prices and the contention that discovery in this case will reveal [] other AID contracts, broadened the scope of the complaint beyond Contract 20A. As we held in Meijer, however, using the plural form does not cause new allegations to relate back when, as here, the new allegations do not involve conduct, transactions, or occurrences common to the timely pleading. See 533 F.3d at 866. As in Meijer, our decision here is impelled by more than the limited relevance of the plural form. Miller's allegations concerning any contracts beyond 20A were nothing more than `naked assertion[s]' devoid of `further factual enhancement,' viz., the existence of a price-fixing club, and that discovery would reveal other rigged contracts. Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)) (brackets in original). Allowing such broad and vague allegations to expand the range of permissible amendments after the limitation period has run would circumvent the statutory requirement in the FCA that the amendments arise[] out of the conduct, transactions, or occurrences in the original complaint, 31 U.S.C. § 3731(c); it would also, we note, circumvent the recent teachings of Iqbal and Twombly by allowing amendments to relate back to allegations that were themselves nothing more than naked assertions. That potential for abuse is avoided by the relation back provision in the FCA, the amendment of which postdates Twombly, cabining the scope of otherwise untimely amendments by imposing the same conduct, transactions, or occurrences requirement. 31 U.S.C. § 3731(c). Turning to Miller's claims concerning Contracts 07 and 29, we hold they are barred by the statute of limitations because he added them after the limitation period had run. Miller may not take advantage of the relation back provision in the FCA, which applies only to the Government's pleadings. See id. If his claims are to relate back then they must do so under Rule 15(c)(1)(B), which permits relation back for claims that arose out of the conduct, transaction, or occurrence set out... in the original pleading. We need not decide whether Rule 15(c)(1)(B) applies to claims made by a relator in litigation under the FCA because we have determined the claims concerning Contracts 07 and 29 do not meet that standard, which for our purposes is substantially the same as the standard in the amended FCA.