Opinion ID: 2966946
Heading Depth: 4
Heading Rank: 2

Heading: Investigation for a Qui Tam Action

Text: Even had Eberhardt not made explicit claims that he would bring a qui tam suit against IDC, his investigatory actions nevertheless rose to the level of protected activity. Other circuits have held that an employee need not have actually filed a qui tam suit or even known about the protections of section 3730(h) in order to engage in protected activity. See, e.g., United States ex rel. Yesudian v. Howard University, 153 F.3d 731, 740 (D.C. Cir. 1998) (stating that section 3730(h)'s inclusion of an `investigation for . . . an action filed or to be filed' within its protective cover . . . manifests Congress' intent to protect employees while they are collecting information about a possible fraud, before they have put all the pieces of the puzzle together). These courts require that litigation need only be a distinct 8 possibility, Neal v. Honeywell, Inc., 33 F.3d 860, 864 (7th Cir. 1994); Childree v. UAP/AG Chem., Inc., 92 F.3d 1140, 1146 (11th Cir. 1996), or similarly require that the plaintiff must be investigating matters which are calculated, or reasonably could lead, to a viable FCA action, United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1269 (9th Cir. 1996). In short, these courts interpret the to be filed phrase within section 3730(h) to mean the equivalent of an action that reasonably could be filed. Yesudian, 153 F.3d at 741. Eberhardt's investigation reasonably could have led to the filing of a qui tam action and is therefore protected activity under the statute. IDC relies on the proposition that the actions of an employee who is assigned to investigate fraudulent activity is not sufficient under the statute because (1) it is not on behalf of the employee and therefore not protected activity, and (2) it does not put the employer on notice that the employee is engaged in protected activity. See, e.g., United States ex rel. Ramseyer v. Century Healthcare Corp. , 90 F.3d 1514, 1522 (10th Cir. 1996); Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). Thus, if an employee is assigned the task of investigating fraud within the company, courts have held that the employee must make it clear that the employee's actions go beyond the assigned task. For example, the Tenth Circuit stated: Our citation to these cases should not be read to suggest that an individual whose job entails the investigation of fraud is automatically precluded from bringing a section 3730(h) action. However, we do note that such persons must make clear their intentions of bringing or assisting in an FCA action in order to overcome the presumption that they are merely acting in accordance with their employment obligations. Ramseyer, 90 F.3d at 1523 n.7 (emphasis added). Without taking such measures, the employee fails to put defendants on notice that she was acting `in furtherance of' an FCA action-- e.g., that she was furthering or intending to further an FCA action rather than merely warning the defendants of the consequences of their conduct. Id. The Fifth Circuit voiced similar concerns about notice when an employee's actions are consistent with his job duties. The court 9 pointed out that the employee never characterized his concerns as involving illegal, unlawful, or false-claims investigations and consequently that there was no evidence that [the employee] expressed any concerns to his superiors other than those typically raised as part of a contract administrator's job. Robertson , 32 F.3d at 951. Thus, an action did not lie because there was no notice to the employer. This circuit cited Robertson for the proposition that [s]imply reporting [the] concern of a mischarging to the government to [one's] supervisor does not suffice to establish that [an employee] was acting `in furtherance of' a qui tam action. Zahodnick, 135 F.3d at 914 (citing Robertson, 32 F.3d at 951). Thus, the Yesudian/Honeywell/Childree/Hopper line of cases suggests that Eberhardt was engaged in protected activity on the basis of his internal investigation of fraud presenting the reasonable possibility of litigation, whereas the Ramseyer/Robertson line of cases suggests that Eberhardt's claim would fail because IDC was not on notice that Eberhardt's investigation could lead to a qui tam action. These two positions, however, are not necessarily inconsistent. This court holds that an employee tasked with the internal investigation of fraud against the government cannot bring a section 3730(h) action for retaliation unless the employee puts the employer on notice that a qui tam suit under section 3730 is a reasonable possibility. Such notice can be accomplished by expressly stating an intention to bring a qui tam suit, but it may also be accomplished by any action which a factfinder reasonably could conclude would put the employer on notice that litigation is a reasonable possibility. Such actions would include, but are not limited to, characterizing the employer's conduct as illegal or fraudulent or recommending that legal counsel become involved. These types of actions are sufficient because they let the employer know, regardless of whether the employee's job duties include investigating potential fraud, that litigation is a reasonable possibility. It would not be enough to [s]imply report[ the] concern of a mischarging to the government to [one's] supervisor, Zahodnick, 135 F.3d at 914, nor would it be enough to investigatenothing more than [the] employer's non-compliance with federal or state regulations. Yesudian, 153 F.3d at 740. The investigation must concern `false or 10 fraudulent' claims, or it does not fall under the False Claims Act. Id. But once an investigation involves such claims and the employee expresses concern to his employer that there actually is a likelihood of fraud or illegality, then the notice requirement is met.2 In the instant case, Eberhardt testified not only that he characterized the billings as illegal during the course of the investigation, but also that he advised McCoubrey to obtain counsel both for IDC and for himself. It was permissible for the jury to determine that these types of actions put IDC on notice that a suit under the False Claims Act would be a reasonable possibility. Because there was evidence that Eberhardt engaged in protected activity, that IDC had notice, and that IDC discriminated against Eberhardt as a result of the protected activity, it cannot be said as a matter of law that there was insufficient evidence to satisfy a prima facie case under section 3730(h). Accordingly, the district court did not err in denying IDC's motions for judgment as a matter of law.