Court Opinion

ID: 2824000
Source: CourtListenerOpinion
Date Created: 2015-08-10 20:18:51.243265+00
Date Added: 2024-06-11T11:31:11.819139
License: Public Domain

PUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 14-1406

BRIAN K. SMITH,

                  Plaintiff – Appellant,

           and

UNITED STATES OF AMERICA ex rel. BRIAN K. SMITH,

                  Plaintiff,

           v.

CLARK/SMOOT/RUSSELL, a Joint Venture; CLARK CONSTRUCTION
GROUP, LLC; SMOOT CONSTRUCTION COMPANY OF WASHINGTON, D.C.;
H.J. RUSSELL AND COMPANY, INC., a/k/a H.J. Russell and
Company;   SHIRLEY   CONTRACTING    COMPANY,   LLC;   SHIRLEY
CONTRACTING COMPANY, LLC, d/b/a Metro Earthworks; SHELTON
FEDERAL GROUP, LLC; SHELTON/METRO, a Joint Venture; HSU
DEVELOPMENT,   INC.;  HSU   DEVELOPMENT,   INC.,  d/b/a   HSU
Builders,

                  Defendants – Appellees.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District Judge.
(8:13−cv−00009−RWT)

Argued:   March 24, 2015                     Decided:   August 10, 2015

Before WYNN, FLOYD, and HARRIS, Circuit Judges.
Affirmed in part, reversed in part, vacated in part, and
remanded for further proceedings by published opinion.  Judge
Wynn wrote the opinion, in which Judge Floyd and Judge Harris
concurred.

ARGUED: Jerry Alfonso Miles, II, DEALE SERVICES, LLC, Rockville,
Maryland, for Appellant.    Randall A. Brater, ARENT FOX LLP,
Washington, D.C., for Appellees. ON BRIEF: William W. Goodrich,
Patrick R. Quigley, Karen S. Vladeck, ARENT FOX LLP, Washington,
D.C., for Appellees.

                               2
WYNN, Circuit Judge

       To bring an action under the False Claims Act, a relator

must,    among   other    things,     file   his    complaint    under    seal   and

maintain that seal for a period of sixty days.                        Although the

False Claims Act complaint in this matter was properly filed

under seal, the relator’s attorney revealed to the relator’s

employer the existence of the complaint well before the end of

the sixty day waiting period.            Finding a violation of the seal

requirement, the district court dismissed the relator’s action

with prejudice.

        On appeal, we conclude that the dismissal of Smith’s case

with    prejudice   was    inappropriate       under   the    False     Claims   Act

because    the   seal     violation    did    not    incurably       frustrate   the

seal’s statutory purpose.           Furthermore, neither of the district

court’s    alternative     reasons     for   dismissing      Smith’s     claims—the

doctrine    of   primary    jurisdiction       and   failure     to    comply    with

Civil Procedure Rule 9(b)—warrant dismissal with prejudice.                       We

also conclude that the district court erred when it dismissed

Smith’s     retaliation      claim.          Accordingly,       we    reverse     the

dismissals and remand for further proceedings.

                                        I.

                                        A.

                                         3
       Relator        Brian       K.     Smith          worked        on        several     federal

construction projects in 2012 and 2013:                               the City Market on O

Street      project      (“City    Market”),            the   Smithsonian          Institution’s

National       Museum       of     African-American                History          and     Culture

(“African-American          Museum”),          and      the     Smithsonian         National          Zoo

project (“National Zoo”).                     Due to their size, these projects

were    subject      to   the     Davis-Bacon            Act,    40    U.SC.       §§    3141–3144,

3146, 3147.

       The Davis-Bacon Act requires contractors and subcontractors

performing federally funded or assisted contracts of more than

$2,000 to set forth stipulations in covered contracts agreeing

to pay their workers no less than the locally prevailing wages. 1

Id. § 3142.          The Secretary of Labor sets the prevailing wages,

which      fall   under    four        wage    schedules         (Building,             Residential,

Highway,      and     Heavy)      and     several          different            labor    categories

(painter,      plumber,        laborer,        bricklayer,         etc.).           Id.         When    a

dispute      arises       regarding           the       proper        classification             of    a

particular        type    of     work,        the       Department         of    Labor     makes       a

determination of the prevailing wage.                         29 C.F.R. § 5.11(a).

       In    this    matter,      the     complaint           named     several         defendants.

However,      only    Defendants         Shirley         Contracting            Co.,     LLC,    which

       1
       For purposes of the Davis-Bacon Act (and this opinion),
the term “wages” includes the basic hourly rates of pay,
overtime, fringe benefits, and other forms of compensation.

                                                    4
does business as Metro Earthworks (“Shirley/Metro”), and Clark

Construction Group, LLC (“Clark”) (collectively, “Defendants”)

are properly before us because Smith did not raise the dismissal

of the other defendants on appeal.                 See, e.g., United States v.

Al–Hamdi, 356 F.3d 564, 571 n.8 (4th Cir. 2004).

     Defendants     are     construction               companies    that    performed

construction      work     on     one     or           more    of   the     projects.

Shirley/Metro, a subsidiary of Clark, employed Smith.                           Smith

believed that Defendants failed to pay him the required Davis-

Bacon Act wages for the work he performed on the City Market,

African-American Museum, and National Zoo projects.

                                         B.

     On the City Market project, Smith was employed from April

through     late-August    2012     as        a    bobcat      operator,     flagman,

jackhammer operator, roller, and unskilled general laborer.                        He

alleges that his City Market wages should have been paid under

the Heavy wage schedule but Defendants misclassified his work

under   a   lower-paying    schedule.             He    also   alleges     Defendants’

outright failure to pay certain fringe benefits due, regardless

of the applicable schedule.

     On the African-American Museum project, Smith worked from

August 27 until November 13, 2012, as a flagman and a general

laborer.     The contract for the African-American Museum project

included two different Davis-Bacon Act wage schedules, Building

                                         5
and Heavy, with the latter generally paying more for the same

labor category.           Smith received appropriate payment under the

Building schedule, but alleges that he should have been paid

under       the   higher-paying        Heavy       schedule    for     his    work     as    a

flagman.

       In September 2012, Smith lodged an oral complaint with the

Department of Labor’s Wage and Hour Division, alleging that on

both    projects        his    pay    was     less    than     the     Davis-Bacon          Act

required.         The Department of Labor initiated an investigation,

and Smith alleges that the investigator concluded that he was

not being paid appropriate wages under the Davis-Bacon Act.

       On    November     14,    2012,       Defendants       temporarily      reassigned

Smith and his team members to a residential contract that was

not subject to the Davis-Bacon Act.                     This transfer resulted in

decreased wages, increased commuting costs, and a substantially

longer commute.          After working at the residential site for two

weeks, Smith began working on the National Zoo project, where he

worked as a general laborer, flagman, and shoveler.                                  Between

December 24 and December 31, 2012, Smith was scheduled to work

only eight hours, which he alleges was a reduction.

                                              C.

       On     January     2,    2013,    Smith       filed     a     False    Claims        Act

complaint,         alleging,         inter     alia,      that        (1)     Defendants’

certification       of    Davis-Bacon        Act     compliance      on     payrolls    they

                                               6
submitted for payment constituted false claims because he was

not paid appropriate wages on the City Market, African-American

Museum, and National Zoo projects; and (2) the November 2012

reassignment and the alleged December 2012 hours reduction were

retaliatory.

        As required by Section 3730(b)(2), Smith’s attorney filed

the complaint under seal in camera.                    The next day, however,

Smith’s attorney called defendant Clark’s in-house counsel to

inform him that he had recently filed a False Claims Act case in

which    Clark   was    a    defendant.       During    this       phone       call,   the

attorney requested that Clark cease retaliating against Smith.

[J.A. 247-48]        When Clark’s in-house counsel asked for a copy of

the   complaint,      Smith’s    attorney     told     him       that    he    could   not

provide a copy because it had to remain under seal for sixty

days.     The next day, Smith’s attorney contacted a Shirley/Metro

human resources employee to request Smith’s employment records

and   stated     that   he    had   recently    filed        a    False       Claims   Act

complaint in which Shirley/Metro was a defendant.

      On January 23, 2013, Smith’s attorney served the Government

with a copy of the complaint.                 And on February 7, 2013, an

attorney    representing        Shirley/Metro     contacted             the   Government

regarding      the    communications      his   client           had    received       from

Smith’s attorney.           Recognizing that there was “little point in

maintaining the fiction of a seal when the defendants are aware

                                          7
of the filing,” the Government moved for a partial lifting of

the    seal.      J.A.   169.         In   its     memorandum    in   support    of   the

motion, the Government noted that a partial lifting “may allow

the government to better evaluate the relator’s claims and speed

the determination about whether the government will intervene in

this    case.”      J.A.     169.          Smith’s    attorney    consented      to   the

Government’s       motion,      and    the       district    court    granted    it   on

February 20, 2013.

       After requesting and receiving an extension on the deadline

by which it had to decide whether to intervene, the Government

ultimately elected not to intervene in the case.                            Defendants

then    jointly     filed      a   motion        to   dismiss    pursuant   to    Civil

Procedure Rules 12(b)(1) and 12(b)(6).                      After hearing arguments

regarding the motion to dismiss, the district court dismissed

all ten counts contained in the complaint with prejudice.                         Smith

appeals only the dismissals of Counts I (Knowingly Presenting

False    Claims    to    the    Government),          II   (Knowingly   Making    False

Statements or Records to the Government), and IV (violation of

False Claims Act Anti-Retaliation Provision).

                                             II.

       Smith first argues that the district court erred when it

dismissed Counts I and II with prejudice.                        The district court

grounded its dismissal of those counts primarily upon the “very

                                              8
serious matter” of the “violation of the statutory seal.”                                  J.A.

488.      Smith’s attorney undoubtedly violated the False Claims

Act’s    seal     requirement         by   publicly         discussing      the    complaint.

Am. Civil Liberties Union v. Holder, 673 F.3d 245, 254 (4th Cir.

2011)     (recognizing         that    “the    seal         provisions       [prevent]     the

relator . . . from publicly discussing the filing of the qui tam

complaint”); U.S. ex rel. Lujan v. Hughes Aircraft Co., 67 F.3d

242,     244    (9th    Cir.     1995)      (holding         that    plaintiff         “clearly

violated the seal provision . . . by making statements to [a

newspaper about] the existence and nature of her qui tam suit”).

The    real     dispute   here    centers         on   whether       the    district     court

properly dismissed Smith’s case in response to the violation.

        The     procedural      requirements           of    the     False     Claims      Act,

including       its    seal     provision,        “are       not    jurisdictional,           and

violation        of    those    requirements           does        not   per      se   require

dismissal.”        Lujan, 67 F.3d at 245.               Further, “[n]o provision of

the     False    Claims    Act        explicitly       authorizes          dismissal     as    a

sanction for disclosures in violation of the seal requirement.”

Id.     Thus, the False Claims Act, on its face, neither mandates

nor expressly supports dismissal with prejudice.

        But we recognize that every other circuit to consider this

issue has read such authority into the False Claims Act.                                  See,

e.g., U.S. ex rel. Summers v. LHC Grp., Inc., 623 F.3d 287 (6th

Cir. 2010) (holding that violation of the seal requirements bars

                                              9
qui tam plaintiffs from qui tam status); Lujan, 67 F.3d 242 (9th

Cir. 1995) (creating a ‘no harm, no foul’ balancing test for

determining whether seal violation warrants dismissal); United

States ex rel. Pilon v. Martin Marietta Corp., 60 F.3d 995, 998

(2d    Cir.   1995)    (adopting      a   test    that   analyzes     whether    seal

violations      “incurably      frustrated”       the    provision’s         statutory

purpose).       Because we find its rationale to be persuasive, we

join the Second Circuit and hold that a violation that results

in    an   incurable    and   egregious        frustration     of   the   “statutory

objectives      underlying      the   filing      and    service     requirements,”

Pilon, 60 F.3d at 998, merits dismissal with prejudice under the

False Claims Act.

       The    False    Claims     Act’s    seal     provision       serves     several

purposes: “(1) to permit the United States to determine whether

it    already    was    investigating       the    fraud     allegations      (either

criminally      or    civilly);   (2)     to    permit   the   United     States   to

investigate the allegations to decide whether to intervene; (3)

to prevent an alleged fraudster from being tipped off about an

investigation; and, (4) to protect the reputation of a defendant

in that the defendant is named in a fraud action brought in the

name of the United States, but the United States has not yet

                                          10
decided whether to intervene.” Am. Civil Liberties Union, 673

F.3d at 250. 2

      Here, the seal violation did not incurably frustrate these

purposes.        Although    Smith’s     attorney’s      breach    of    the   seal

requirement tipped off Defendants, the Government was still able

to investigate the alleged fraud and determine whether it was

already    investigating      the    same     issue.     The   Government      even

suggested that the fact that Defendants knew about the False

Claims    Act    claim    would     allow     for   early   responses     to   the

Government’s     questions,        allowing    it   to   “better   evaluate    the

relator’s claims and speed the determination about whether [to

intervene].”      See Appellant’s Br. at 22.             Additionally, because

the   seal   violation      involved     disclosure      between   the    parties

rather    than   the     public,    Defendants’     reputations     suffered    no

harm.     Accordingly, the False Claims Act does not support the

district court’s dismissal of Smith’s claims with prejudice. 3

      2But see Lujan, 67 F.3d at 247 (concluding that “protecting
the rights of defendants is not an appropriate consideration
when evaluating the appropriate sanction for a violation of the
seal provision”).
      3We in no way minimize the significance of the violation in
this case: By directly informing the Defendants of Smith’s qui
tam claim, Smith’s attorney risked serious interference with the
Government’s opportunity to investigate the alleged fraud. That
risk appears not to have materialized in this case.      But such
disclosures have the potential to frustrate the purposes of the
seal provision in a way that merits dismissal with prejudice,
(Continued)
                                        11
                                               III.

       The district court offered two additional rationales for

dismissing the case: (1) the doctrine of primary jurisdiction,

and (2) Rule 9(b) pleadings deficiencies.                            We address each in

turn.

                                                A.

       The district court stated that if its other reasons for

dismissal were inadequate, it “would still dismiss or at least

stay    [the    case]        pending     the    outcome       of    any    inquiry      by    the

Department         of    Labor”     regarding        “the     appropriate        wage    scale”

under the Davis-Bacon Act.                  J.A. 489.         It stated that it would

take this step as “a simple matter of prudence.”                                      J.A. 489.

This particular prudential judicial maneuver is known as the

doctrine of primary jurisdiction.

       The     doctrine        of   primary          jurisdiction         “is    designed      to

coordinate administrative and judicial decision-making by taking

advantage of agency expertise and referring issues of fact not

within    the      conventional          experience      of    judges      or    cases    which

require      the    exercise        of    administrative           discretion.”          Envtl.

Tech. Council v. Sierra Club, 98 F.3d 774, 789 (4th Cir. 1996).

The    doctrine         of   primary     jurisdiction         “requires         the   court    to

and qui tam claimants are well advised to comply strictly with
the FCA’s seal requirements.

                                                12
enable a ‘referral’ to the agency, staying further proceedings

so as to give the parties reasonable opportunity to seek an

administrative ruling.”                  Reiter v. Cooper, 507 U.S. 258, 268

(1993).           Notably,        such     a     referral        of    an    issue        to    an

administrative            agency       “does         not     deprive        the     court       of

jurisdiction; it has discretion either to retain jurisdiction

or,    if   the    parties        would    not       be    unfairly      disadvantaged,         to

dismiss the case without prejudice.”                         Id. at 268-69.         We review

a   district      court’s     primary          jurisdiction       determination        for      an

abuse of discretion.              Envtl. Tech. Council, 98 F.3d at 789.

       Here,      Smith    alleges       two    types       of   fraud     under    the    False

Claims Act.         First, he alleges that he was misclassified (that

is, paid under the wrong Davis-Bacon Act wage schedule) on the

African-American Museum project.                      Smith’s allegations involving

misclassification implicate primary jurisdiction:                                 Pursuant to

Davis-Bacon Act regulations, the Administrator of the Wage and

Hour   Division      of     the    Department         of     Labor    is    responsible        for

resolving      “disputes          of     fact    or        law   concerning        payment     of

prevailing wage rates, overtime pay, or proper classifications.”

29 C.F.R. § 5.11(a). 4

       4
       See also U.S. ex rel. Windsor v. DynCorp, Inc., 895 F.
Supp. 844, 851 (E.D. Va. 1995) (“[I]t is impossible to determine
whether DynCorp submitted a false claim to the government
without first determining whether DynCorp actually misclassified
an employee [under the Davis-Bacon Act] in a given instance.”).

                                                13
       Second, Smith alleges that he was paid a wage that did not

correlate with any Davis-Bacon Act wage schedule on the City

Market and National Zoo projects.                These allegations do not seem

to implicate primary jurisdiction.                   To assess the merit of these

claims, the district court need only compare Smith’s pay stub

with   the     applicable      Davis-Bacon      wage        schedules      to    determine

whether the pay matches up.               See, e.g., U.S. ex rel. Wall v.

Circle    C    Const.,    L.L.C.,   697       F.3d    345,    354    (6th       Cir.    2012)

(holding      that     primary   jurisdiction          referral      was    unnecessary

because “the core dispute here involve[d] misrepresentation, not

misclassification”).

       Although it may be proper for a district court to invoke

the doctrine of primary jurisdiction in the face of this mixed

picture and thereby stay or dismiss the matter without prejudice

pending an agency determination, the district court dismissed

Smith’s       entire    complaint      with     prejudice.           Relying       on    the

doctrine of primary jurisdiction to dismiss Smith’s suit with

prejudice would constitute an abuse of discretion and thus also

does not support the district court’s dismissal order.

                                          B.

       The     district     court’s     third         and    final      rationale         for

dismissing Counts I and II is inadequate pleading under Civil

Procedure      Rule    9(b).     Yet    this     rationale,         like    the    others,

provides no basis for dismissing Smith’s fraud claims.

                                          14
       Rule 9(b) of the Federal Rules of Civil Procedure provides

that “[i]n all averments of fraud or mistake, the circumstances

constituting         fraud    or      mistake        shall        be     stated       with

particularity.         Malice, intent, knowledge, and other condition

of mind of a person may be averred generally.”                         Fed. R. Civ. P.

9(b).    We treat a lack of compliance with Rule 9(b)’s pleading

requirements as a failure to state a claim under Rule 12(b)(6),

which    we   review    de   novo.        Harrison       v.    Westinghouse      Savannah

River Co., 176 F.3d 776, 783 n.5 (4th Cir. 1999).

       “Rule 9(b) requires that ‘[a False Claims Act] plaintiff

must, at a minimum, describe the time, place, and contents of

the false representations, as well as the identity of the person

making    the   misrepresentation          and     what    he    obtained      thereby.’”

United States v. Triple Canopy, Inc., 775 F.3d 628, 634 (4th

Cir.    2015)   (quoting     United       States    ex    rel.    Wilson    v.    Kellogg

Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008)).                               And

generally, “[a] court should hesitate to dismiss a complaint

under Rule 9(b) if the court is satisfied (1) that the defendant

has been made aware of the particular circumstances for which

she    will   have    to   prepare    a    defense        at    trial,   and    (2)   that

plaintiff has substantial prediscovery evidence of those facts.”

Harrison, 176 F.3d at 784.

       Our review of Smith’s complaint leads us to conclude that

Smith did indeed allege the “who, what, when, where and how of

                                           15
the    alleged    fraud.”           J.A.    491.        In     his    long   and   detailed

complaint,       Smith    alleged,         for   example,       that     “Defendants,      by

virtue of Davis-Bacon Act noncompliant compensation and billing

practices, have been defrauding the United States Government,

District of Columbia, and other state and local governments and

instrumentalities         in    a    variety       of    ways,       including,     but   not

limited to, knowingly providing false information via certified

payrolls in exchange for payment . . . .”                              J.A. 17.     Smith’s

complaint detailed which Defendants were awarded and working on

which government contracts, including details about where the

construction work that was the subject of the contracts was to

occur, the award date for the contracts, and even some contract

numbers.    See J.A. 21-24.

       Smith’s     complaint         specified          which        government    entities

funded pertinent contracts on which he worked and alleged that

all were funded in part by the United States.                           Smith’s complaint

stated that Defendants “certif[ied] compliance with the Davis

Bacon    Act”     and    “have      received       payment       in     relation    to    the

reliance of cognizant government agencies . . . upon falsely

certified payrolls and other Davis Bacon Act certifications made

in    relation    to     []    performance”        of    the    identified        contracts.

J.A. 25.         Smith’s complaint included charts detailing Davis-

Bacon pay and fringe benefit rates and what Defendants actually

and     deliberately          wrongly       paid    him        under     the      identified

                                             16
contracts.         Smith     alleged      that,     “[a]s          a     result      of     these

misrepresentations, the federal government has been damaged by

paying a higher amount for wages that were not paid to Brian

Smith and potentially other affected employees.”                              J.A. 34.         And

Smith’s     complaint       identified       several          other         employees          whom

Defendants       allegedly       misclassified          and    underpaid            under       the

Davis-Bacon Act.         See J.A. 42-45.

     In sum, Smith’s complaint identified who committed fraud—

Defendants;      alleged     that   the     Davis-Bacon            Act      applied       to    the

pertinent contracts; contended that Defendants paid Smith and

others    less    than     the    Davis-Bacon      Act        required,            specifically

identifying      Smith’s     pay    and     comparing         it       to    the     applicable

Davis-Bacon Act pay scales; and alleged that Defendants falsely

certified    their       compliance    with       the    Davis-Bacon               Act    to   the

Government,      which     caused     the    Government            to       make    improperly

inflated payments to Defendants.                   These allegations pass Rule

9(b) muster.       See, e.g., Harrison, 352 F.3d at 921.                             That rule

therefore could not properly serve as a basis to dismiss Smith’s

claims with prejudice. 5

     5 Smith’s attorney orally moved to amend the complaint to
address the district court’s Rule 9(b) concerns.  The district
court ostensibly denied this motion. Because Smith had already
satisfied Rule 9(b), we affirm the district court’s denial of
this motion as moot.

                                            17
      Having      reviewed    all    of        the    district    court’s        stated

rationales for dismissing Smith’s complaint with prejudice, we

find ourselves unable to affirm any.                  We therefore reverse the

district court’s dismissal of Counts I and II.

                                       IV.

      Count IV of Smith’s complaint sought relief under the False

Claims Act’s anti-retaliation provision, 31 U.S.C. § 3730(h).

The district court dismissed Count IV with prejudice, holding

that Smith failed to successfully allege retaliation.

      The    False   Claims    Act’s       whistleblower         provision,      which

Congress broadened in 2009, prohibits retaliation “because of

lawful acts done . . . in furtherance of an action under this

section or other efforts to stop 1 or more violations of this

subchapter.”       31 U.S.C. § 3730(h).              To plead retaliation under

Section 3730(h), a plaintiff must allege that (1) he engaged in

protected activity, (2) the employer knew about the activity,

and   (3)   the   employer    took   adverse         action    against    him     as   a

result.     Glynn v. EDO Corp., 710 F.3d 209, 214 (4th Cir. 2013).

These allegations need pass only Civil Procedure Rule 8(a)’s

relatively     low   notice-pleadings           muster—in      contrast     to    Rule

9(b)’s    specificity   requirements           discussed      above.     See,     e.g.,

Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th

                                          18
Cir.   2008);       United     States      ex    rel.       Williams       v.    Martin-Baker

Aircraft Co., 389 F.3d 1251, 1259-60 (D.C. Cir. 2004).

       Here, the district court assumed that Smith satisfied the

first prong—protected activity—but concluded that he failed to

demonstrate that Defendants knew of his conduct or took adverse

action against him because of those acts—the second and third

prongs.    In its ruling from the bench, the district court noted

no “factual basis for alleging that the defendants were aware

that [Smith] was pursuing a claim of a fraudulent false claim

with    the        United     States.”               J.A.       493   (emphasis       added).

Accordingly,        it   held       that     “there        cannot     be   any     sufficient

pleading of the employers taking action as a result of acts that

it never had knowledge of and there’s been no allegation that

they did have knowledge of them.”                    J.A. 493.

       It strains credulity to believe that Congress would require

a   defendant       to      have    knowledge         of    a    sealed     action     for     a

retaliation claim to survive the pleading stage.                                What’s more,

the statute in its current form plainly does not limit protected

activity to “lawful acts done . . . in furtherance of an action”

under the False Claims Act, but rather expressly includes “other

efforts to stop 1 or more violations” of the False Claims Act.

31 U.S.C. § 3730(h).                While we have not yet spelled out the

contours      of     “other        efforts      to    stop”       a   False       Claims     Act

violation,     it     plainly       encompasses         more      than     just    activities

                                                19
undertaken in furtherance of a False Claims Act lawsuit.                                      See

id.;       see   also    U.S.     ex        rel.    Grenadyor       v.    Ukrainian       Vill.

Pharmacy, Inc., 772 F.3d 1102, 1108 (7th Cir. 2014) (Posner, J.)

(indicating        that        amended       statute       covers        more    than     prior

version).         Thus, even assuming for the sake of argument that

Smith       provided      no     “factual          basis    for     alleging       that       the

defendants were aware that [Smith] was pursuing a claim of a

fraudulent false claim,” J.A. 493 (emphasis added), that would

not     necessarily        mean        he     has    pled     no      plausible         factual

underpinning for a retaliation claim. 6                      Further, Smith pled that

Defendants knew that he had pursued an investigation with the

Department of Labor, and the facts salient to that investigation

make up the bulk of the facts supporting Smith’s False Claims

Act qui tam claims.                This suffices to fulfill the knowledge

prong.

        Turning     to    the     third        prong       required       to    make    out     a

retaliation claim, the district court made only the conclusory

statement that the defendants did not “[take] action against

       6
       Neither the district court nor the parties appear to have
recognized that 31 U.S.C. § 3730(h) was amended, much less the
amendment’s potential import.     Regardless, we must apply the
correct law, here the amended version of the statute. See Kamen
v. Kemper Fin. Servs., Inc., 500 U.S. 90, 99 (1991) (“When an
issue or claim is properly before the court, the court is not
limited to the particular legal theories advanced by the
parties, but rather retains the independent power to identify
and apply the proper construction of governing law.”).

                                               20
[Smith] as a result of those acts.”             J.A. 493.       Upon reviewing

Smith’s complaint, however, we cannot reach the same conclusion.

        An employer undertakes a materially adverse action opening

it up to retaliation liability if it does something that “well

might     have   ‘dissuaded   a    reasonable    worker       from   making     or

supporting a charge of discrimination.’”              Burlington Northern &

Santa Fe Ry. v. White, 548 U.S. 53, 67–68 (2006) (quoting Rochon

v. Gonzales, 438 F.3d 1211, 1219 (D.C. Cir. 2006)).                  Here, Smith

alleged that after lodging a complaint with the Department of

Labor that resulted in an investigation, he was transferred to a

lower-paying job site that substantially increased his commute

time and transportation costs.          This action might well dissuade

a reasonable worker from whistleblowing.              And while Defendants

muster a couple of easily distinguishable cases to support their

argument to the contrary, none of those mandates a holding that

reassignments that increase commute time and costs and decrease

pay     are   insufficient,   as   a   matter    of    law,     to    support    a

retaliation claim.

        We hold that Smith has successfully pled retaliation under

Section 3730(h).      The district court thus erred when it granted

Defendants’ motion to dismiss that claim.

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                                              V.

     In    sum,    we    hold    that    the       district       court     erred   when     it

dismissed       Counts      I,   II,    and       IV    of   Smith’s      complaint        with

prejudice.       In light of this holding, the district court’s award

of costs to Defendants is also improper.                           Cf. Kollsman, a Div.

of Sequa Corp. v. Cohen, 996 F.2d 702, 706 (4th Cir. 1993)

(holding    that       defendant       was    a    prevailing       party     eligible      to

receive costs where there had been a dismissal with prejudice);

Fed. R. Civ. P. 54 (“Unless a federal statute, these rules, or a

court    order    provides       otherwise,            costs--other       than    attorney’s

fees--should be allowed to the prevailing party.”).

     For    the     aforementioned           reasons,        we    affirm    the    district

court’s    denial      of    Smith’s     oral      motion     to    amend,       reverse    the

order granting a dismissal with prejudice as to counts I, II,

and IV—the only counts on appeal, vacate the costs order, and

remand     to    the     district       court          for   further      proceedings       in

accordance with this opinion.

                                             AFFIRMED IN PART, REVERSED IN PART,
                                                   VACATED IN PART, AND REMANDED
                                                         FOR FURTHER PROCEEDINGS

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