Opinion ID: 786897
Heading Depth: 2
Heading Rank: 3

Heading: District Court's August 24, 2000 Ruling

Text: 19 On January 27, 1998 defendants moved to dismiss the second amended complaint for failure to state a claim on which relief could be granted and for failure to plead fraud with sufficient specificity. Before the district court ruled on this motion, however, it stayed the case for six months in order to await a Supreme Court ruling in another case deciding whether False Claims Act relators have standing. Once the Supreme Court answered that question in the affirmative, see Vt. Agency of Natural Res., 529 U.S. at 771-78, 120 S.Ct. 1858, the trial court proceeded to consider defendants' motion to dismiss, and rendered its decision on August 24, 2000. 20 With respect to the claims against Norden in Counts 1 and 2, the court granted the motion in part and denied it in part. It held that only the progress bills constituted claims for the purpose of subsection (a)(1), and that only the progress bills and certificates of indirect cost rates constituted records or statements for the purposes of subsections (a)(2) and (a)(7). To the extent that the § 3729(a)(1), (a)(2), & (a)(7) claims relied on these documents, the court denied the motion to dismiss. To the extent the claims relied on other documents — i.e., disclosure statements, contracts, and Present Responsibility Reports — the district court dismissed these claims with prejudice. 21 It also held that Drake's allegations of Norden's improper research and development charges were insufficiently specific to support his causes of action. To the extent that Drake's § 3729(a)(1), (a)(2), & (a)(7) claims relied on these charges, the trial court dismissed those claims without prejudice. Other than above specified, it held Counts 1 and 2 adequately stated claims against Norden for violations of § 3729(a)(1), (a)(2) & (a)(7). 22 The trial court dismissed entirely Drake's Count 3 claim against United Technologies for violations of § 3729(a)(7), and his Count 4 claim against both defendants for violations of § 3729(a)(3). It dismissed the former with prejudice, because it held that United Technologies had no monetary obligations to the government to begin with, making it impossible for that defendant to have violated § 3729(a)(7) (since § 3729(a)(7) imposes liability for making a false statement to avoid an obligation to pay money to the government). The court dismissed Count 4 without prejudice because it held this claim was pleaded with insufficient specificity. 23 In sum, the district court disposed of the numerous allegations in plaintiff's complaint in three different ways, as follows: (1) It dismissed with prejudice the § 3729(a)(1), (a)(2) & (a)(7) claims against Norden to the extent that they relied on disclosure statements, contracts, and Present Responsibility Reports, and the § 3729(a)(7) claim against United Technologies in its entirety. (2) It dismissed without prejudice the § 3729(a)(1), (a)(2) & (a)(7) claims against Norden to the extent that they relied on the insufficiently specific allegations of research and development charges, and the § 3729(a)(3) claim against both defendants in its entirety. Finally, (3) the district court left standing the § 3729(a)(1), (a)(2), & (a)(7) claims against Norden to the extent that these claims relied on progress bills and certificates of indirect cost rates and to the extent that they did not rely on the allegations of research and development charges. 24 By dismissing some of Drake's claims without prejudice, the court left open the possibility that plaintiff could replead them with greater specificity. At the end of its decision, the district court wrote: Relator shall file within 60 days a final amended complaint to conform the pleadings to this ruling within the confines of Fed.R.Civ.P. 15(c).