Court Opinion

ID: 2803752
Source: CourtListenerOpinion
Date Created: 2015-05-27 19:01:22.014361+00
Date Added: 2024-06-11T11:51:25.390301
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 13-2342

RONALD P. YOUNG; RAMONA YOUNG,

                Plaintiffs – Appellants,

     v.

CHS MIDDLE EAST, LLC,

                Defendant – Appellee.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:13-cv-00585-GBL-JFA)

Argued:   January 28, 2015                 Decided:   May 27, 2015

Before MOTZ, GREGORY, and WYNN, Circuit Judges.

Reversed and remanded by unpublished opinion. Judge Wynn wrote
the opinion, in which Judge Motz and Judge Gregory joined.

ARGUED: Robert Scott Oswald, THE EMPLOYMENT LAW GROUP, P.C.,
Washington, D.C., for Appellants.        John Kirk Train, IV,
WEINBERG, WHEELER, HUDGINS, GUNN & DIAL, LLC, Atlanta, Georgia,
for Appellee. ON BRIEF: Nicholas Woodfield, THE EMPLOYMENT LAW
GROUP, P.C., Washington, D.C., for Appellants.   Julie C. Hall,
WEINBERG, WHEELER, HUDGINS, GUNN & DIAL, LLC, Atlanta, Georgia;
Carlos M. Recio, Washington, D.C., for Appellee.
Unpublished opinions are not binding precedent in this circuit.

                                2
WYNN, Circuit Judge:

     The    False     Claims      Act’s    whistleblower     provision   prohibits

retaliation “because of lawful acts done . . . in furtherance of

an action” under, or otherwise “to stop 1 or more violations

of,” the False Claims Act.                 31 U.S.C. § 3730(h).          Plaintiffs

Ronald and Ramona Young contend that they sufficiently alleged

that their former employer, CHS Middle East (“CHS”), terminated

them because they undertook lawful acts “in furtherance of an

action” under, or otherwise “to stop 1 or more violations of,”

the False Claims Act.               Id.     Particularly in light of United

States ex rel. Omar Badr v. Triple Canopy, Inc., 775 F.3d 628

(4th Cir. 2015), we agree and conclude that the district court

erred in dismissing the Youngs’ suit for failure to state a

claim.     Accordingly, we reverse.

                                           I.

     Accepting the facts pled as true, as we must on a motion to

dismiss, CHS had a $61.5 million services agreement with the

U.S. Department of State to provide medical services to non-

military    personnel        in    Iraq.        The   contract   required   CHS   to

“ensure” that its staff was “properly trained and certified.”

J.A. 99.     Pursuant to that contract, CHS hired the Youngs, both

experienced        nurses,    to    work    as    “Medical   Surgery     Registered

Nurses.”     Id.

                                            3
      When he began work in September 2011 at Forward Operating

Base Shield in Iraq, Ronald Young noticed that CHS attempted to

utilize    expired    medicine.        He       informed    his   supervisors        that

“using     them     was    illegal”    and        “violated       CHS’     contractual

requirements      with    the   Department        of   State.”      J.A.      100.    By

November 2011, Ronald Young was transferred to Sather Air Force

Base (“Sather”), where his critical care skills were needed.

      Ramona Young also worked at Sather, beginning in October

2011, where she expressed concern “about the lack of equipment

and   properly      trained     medical     personnel.”           J.A.     100.      She

informed    a     supervisor    that     such      shortcomings        were    “totally

misleading,” put her nursing license “on the line,” and amounted

to    a   “breach    of    CHS’s   contract         for     properly     trained     and

qualified staff.”         J.A. 100-01.

      At a staff meeting, Ramona Young shared her concerns that

Sather was “not properly staffed, [ ] did not have qualified

staff, and that according to CHS’s contract we would have . . .

properly trained and qualified [staff].”                   J.A. 101.     Both of the

Youngs allegedly mentioned that the failings they witnessed were

“a total breach of contract.”                   J.A. 101.     The Youngs observed

various additional failings and escalated their concerns to CHS

employees not stationed in Iraq.

      The Youngs allege that “Mr. Young [] told [CHS’s director

of international operations] that ‘CHS management at Sather is

                                            4
defrauding the government.’”                   J.A. 104.       The Youngs pled that

Ronald    Young        told    CHS’s   director       of    international        operations

that     “CHS     list[ed]       emergency         medical    technicians        as    scrub

technicians       for        surgery    even       though    they    had    no    surgical

experience.”           Id.      And “Mrs. Young emphasized ‘the potential

liability’ of reporting false employee staffing at Sather to the

State Department.”            Id.

       The Youngs allege that CHS staff began treating them poorly

because    of     their       whistleblowing.         On     December     20,    2011,   the

Youngs contacted the State Department to raise their concerns

regarding CHS.           Two days later, CHS terminated the Youngs.                      The

Youngs returned to the United States on December 24, 2011.

       In July 2012, the Youngs filed this case in state court,

and it was then removed to the Eastern District of Virginia.

There, the district court granted CHS’s motion to dismiss the

Young’s first amended complaint for failure to state a claim but

permitted them to file a second amended complaint, which they

did.     On October 28, 2013, the court again granted CHS’s motion

to     dismiss,    this        time    with    prejudice.           The    Youngs     timely

appealed        from     this       dismissal,       which    we     review      de   novo,

construing the facts and inferences to be drawn therefrom in the

light most favorable to the nonmoving party, here the Youngs.

Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011).

                                               5
                                            II.

                                            A.

     The False Claims Act discourages fraud against the federal

government    by   imposing        liability          on    “any     person    who    .   .   .

knowingly    presents,       or    causes        to    be     presented,      a   false       or

fraudulent    claim       for     payment       or     approval.”          31     U.S.C.       §

3729(a)(1)(A).        Central        to    this       case,    the    False     Claims     Act

includes a whistleblower provision.

     The    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).     In other words, among other things, it “protect[s]

employees while they are collecting information about a possible

fraud,    before     they    have     put    all       the    pieces     of     the   puzzle

together.”    United States ex rel. Yesudian v. Howard Univ., 153
F.3d 731, 739 (D.C. Cir. 1998).

     To    survive    a     motion    to    dismiss,          plaintiffs      bringing        an

anti-retaliation suit under the False Claims Act must plausibly

allege that (1) they engaged in a protected activity; (2) the

employer knew about these acts; and (3) the employer discharged

them as a result of these acts.                   Eberhardt v. Integrated Design

& Const., Inc., 167 F.3d 861, 866 (4th Cir. 1999).                                   Notably,

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

                                            6
relatively low notice-pleadings muster.                  See, e.g., Mendiondo v.

Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008);

United States ex rel. Williams v. Martin-Baker Aircraft Co., 389
F.3d 1251, 1259-60 (D.C. Cir. 2004). 1

                                        B.

     The sole element on which CHS based its motion to dismiss

and on which the district court ostensibly dismissed the case 2 is

the first: the requirement that the Youngs plausibly allege that

they engaged in protected activity.                  Applying the law to the

second    amended   complaint,     we   conclude         that   the   Youngs    have

plausibly alleged that element.

     To survive CHS’s motion to dismiss, the Youngs needed to

plead that they engaged in protected activity, i.e., that they

acted “in furtherance of an action under” the False Claims Act

or undertook “other efforts to stop 1 or more violations” of the

False Claims Act.       31 U.S.C. § 3730(h).                Protected activities

include    collecting   information          about   a    possible    fraud,    even

before    the   plaintiff   puts   together          “all   the   pieces   of    the

puzzle.”     Mann v. Heckler & Koch Defense, Inc., 630 F.3d 338,

343-44 (4th Cir. 2010) (quotation marks and citation omitted).

     1
       This contrasts with the higher Rule 9(b) standard that
applies to straight-up Fraud Claims Act fraud claims. Id.
     2
          The district court stated its reasoning orally from the
bench.

                                        7
By contrast, protected activities exclude “those in which ‘an

employee . . . fabricates a tale of fraud to extract concessions

from    the    employer,       or     .    .     .       just    imagines         fraud    but     lacks

proof.’”       Id. (quoting Neal v. Honeywell Inc., 33 F.3d 860, 864

(7th Cir. 1994)).

       In     United       States     v.        Triple          Canopy,      Inc.,        this     Court

recently       shed        additional          light       on     what       might        qualify    as

protected      activity.            775 F.3d 628.         In    Triple    Canopy,        the

government        alleged      that        a    security          contractor         with        primary

responsibility for ensuring the safety of servicemen and women

stationed at          an    airbase       in     a    combat       zone      knowingly       employed

guards      who    were      unable        to    use       their       weapons       properly       yet

presented         claims      to     the       government          for       payment        on     those

unqualified guards.                Id. at 632-633.               We reversed the dismissal

of the claim, holding that a plaintiff successfully “pleads a

false    claim      when      it    alleges           that      the    contractor,          with    the

requisite scienter, made a request for payment under a contract

and withheld information about its noncompliance with material

contractual requirements.”                      Id. at 636.                Logically, if making

false    implied       staffing       certifications                  to    the    government       can

constitute a False Claims Act violation, acts undertaken to, for

example, investigate, stop, or bring an action regarding such

false implied staffing certifications can constitute protected

                                                     8
activity     for      purposes       of    a    retaliation      claim.        31       U.S.C.    §

3730(h).

       Our review of the Youngs’ second amended complaint leads us

to conclude that they have plausibly pled the protected activity

element.        They alleged, for example, that under CHS’s “$61.5

million      contract        with    the       U.S.    State    Department         to     provide

medical      services        at     medical       facilities       in    Iraq,”         CHS     was

obligated       to    “[e]nsure       that      [certain       personnel]      are      properly

trained and certified prior to arrival in theater.”                                     J.A. 99.

The Youngs alleged that “Mr. Young [] told [CHS’s director of

international         operations]          that       ‘CHS    management      at    Sather       is

defrauding the government.’”                     J.A. 104.        The Youngs pled that

Robert      Young     told    CHS’s       director       of    international        operations

that     “CHS    list[ed]         emergency           medical    technicians         as       scrub

technicians          for    surgery       even        though    they    had    no       surgical

experience.”          Id.        And “Mrs. Young emphasized ‘the potential

liability’ of reporting false employee staffing at Sather to the

State Department.”            Id.

       In    holding         that     these       allegations          fail   to        state    a

retaliation claim, the district court expressly relied on Glynn

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

predated our recent Triple Canopy decision, which bolsters the

plausibility         of    the      Youngs’       protected      activity      allegations.

Specifically, in light of Triple Canopy, the Youngs’ falsified

                                                  9
staffing report allegations more clearly support their having

been engaged in protected activity.                         Further, the retaliation at

issue    in    Glynn     predated         Congress’s         broadening       of   31     U.S.C.

§ 3730(h)(1) to capture not only acts done “in furtherance of an

action”       under,    but    also       “other      efforts     to    stop       1    or   more

violations”       of,    the     False      Claims      Act.       Finally,        Glynn        had

reached summary judgment, when the plaintiffs had to proffer not

just allegations but evidence, which they failed to do.                                          By

contrast,      here,     we    are    reviewing        a     decision    on    a       motion    to

dismiss, and the Youngs’ allegations alone are our focus.

        At this stage, we are obligated to view only the Youngs’

pleadings, and to view them generously in the Youngs’ favor.

Pub. Employees’ Ret. Ass’n of Colo. v. Deloitte & Touche LLP,

551 F.3d 305, 311 (4th Cir. 2009).                          Doing so, we conclude that

the Youngs have sufficiently pled that they engaged in protected

activity, i.e., that they acted “in furtherance of an action”

under, or in an “effort[] to stop 1 or more violations of,” the

False Claims Act.              31 U.S.C. § 3730(h).                    While the Youngs’

allegations may well be insufficient to state a False Claims Act

fraud     claim        subject       to    Rule        9(b)’s     heightened            pleading

standards, they make no such claim.                          Instead, they make only a

retaliation       claim       subject      to        Rule     8(a)’s    notice         pleadings

standard.        And particularly in light of Triple Canopy, their

allegations suffice to survive CHS’s motion to dismiss.

                                                10
                                 III.

     For   the   reasons   explained    above,   the   district   court’s

dismissal of the Youngs’ second amended complaint is reversed,

and the case is remanded for further proceedings.

                                                  REVERSED AND REMANDED

                                  11