Court Opinion

ID: 185889
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Date Created: 2011-02-05 02:37:56+00
Date Added: 2024-06-11T12:05:57.344236
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       United States Court of Appeals
                  FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 25, 2003                      Decided March 28, 2003

                               No. 02-7035

     UNITED STATES OF AMERICA EX REL. JOSEPH T. SIEWICK,
                        APPELLANT

                                     v.

          JAMIESON SCIENCE AND ENGINEERING, INC., ET AL.,
                           APPELLEES

          Appeal from the United States District Court
                  for the District of Columbia
                           (92cv00045)

  Joseph J. Aronica argued the cause for appellant. With
him on the briefs were Robert B. Norris and David T.
Fischer.
  William H. Carroll argued the cause for appellees. With
him on the brief was Mitchell I. Batt.

 Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
                               2

  Before: GINSBURG, Chief Judge; SENTELLE and RANDOLPH,
Circuit Judges.
  Opinion for the Court filed by Circuit Judge RANDOLPH.
  RANDOLPH, Circuit Judge: This appeal from an order of the
district court, Oberdorfer, J., granting summary judgment
raises the question whether a corporate shareholder and
director may be considered the ‘‘employer’’ of a corporate
employee within the meaning of the False Claims Act, 31
U.S.C. § 3730(h).
   From May 1990 to December 1991, Dr. Joseph T. Siewick
worked as a physicist for Jamieson Science and Engineering,
Inc. (JSE), a Maryland corporation engaged in contract work
for the Department of Defense’s Strategic Defense Initiative
Organization and its successor, the Ballistic Missile Defense
Organization. Dr. John A. Jamieson, who supervised Dr.
Siewick, owned 85 percent of the shares of the company,
served as the president and chairman of the board of di-
rectors, ran day-to-day operations, set salaries, and made
hiring and firing decisions. On November 11, 1991, Dr.
Siewick received a 30–day notice of termination after he
questioned Dr. Jamieson and Vincent O’Connor, one of JSE’s
officers, about what Dr. Siewick believed to be improper
billing practices. The following January, Dr. Siewick filed a
complaint under the False Claims Act. 31 U.S.C. §§ 3729–
3733.1 One of the claims, and the only one relevant to this
appeal, was that JSE, O’Connor, and Dr. Jamieson2 violated
§ 3730(h) by discharging Dr. Siewick for his inquiries into
JSE’s billing practices.
  On April 16, 2001, Dr. Jamieson and O’Connor moved to
dismiss, arguing that neither of them was an ‘‘employer’’
within the meaning of § 3730(h). The district court granted
  1  Several of his claims were dismissed on summary judgment in
1998. See United States ex rel. Siewick v. Jamieson Sci. & Eng’g,
214 F.3d 1372 (D.C. Cir. 2000).
  2   Jamieson’s Estate was substituted as a defendant on January
6, 2000. For consistency we refer to the defendant as Dr. Jamie-
son.
                                 3

the motion with respect to O’Connor but denied it with
respect to Dr. Jamieson, concluding that an additional factual
inquiry was necessary to determine if Dr. Siewick and Dr.
Jamieson had an employment relationship. After discovery,
Dr. Jamieson moved for summary judgment, which the court
denied on the ground that there were unresolved facts relat-
ing to whether Dr. Jamieson was Dr. Siewick’s employer.
Dr. Jamieson moved for reconsideration in light of our inter-
vening opinion in Yesudian ex rel. United States v. Howard
Univ., 270 F.3d 969 (D.C. Cir. 2001). On reconsideration the
district court granted summary judgment, holding that under
Yesudian whether Dr. Jamieson was Dr. Siewick’s employer
was a legal question, and that, as a matter of law, Dr.
Jamieson was not Dr. Siewick’s employer. See United States
ex rel. Siewick v. Jamieson Sci. & Eng’g, 191 F. Supp. 2d 17
(2002). Pursuant to Federal Rule of Civil Procedure 54(b),
the district court certified the dismissal of the wrongful
termination claim as final. Dr. Siewick then filed this appeal.
   A district court may grant summary judgment when there
is ‘‘no genuine issue of material fact and TTT the moving party
is entitled to judgment as a matter of law.’’ FED R. CIV. P.
56(c). The applicable law here is the whistleblower section of
the False Claims Act: an ‘‘employee who is discharged TTT by
his TTT employer because of lawful acts done by the employee
on behalf of the employee or others in furtherance of an
action under this section TTT shall be entitled to all relief
necessary to make the employee whole.’’ 31 U.S.C.
§ 3730(h). We have interpreted this section to impose liabili-
ty only upon employers. See Yesudian, 270 F.3d at 972.
  Dr. Siewick’s primary argument is that whether Dr. Jamie-
son was Dr. Siewick’s employer is a factual issue, which, until
resolved, precludes a grant of summary judgment. Our
precedents are otherwise. The existence of an employment
relationship is a question of law, not of fact; it calls for a legal
conclusion. See Holt v. Winpisinger, 811 F.2d 1532, 1536
n.31 (D.C. Cir. 1987); cf. Meyer v. Holley, 123 S. Ct. 824, 829
(2003). Our decision in Yesudian did not hold differently.
The case was on appeal from a district court’s judgment
setting aside a verdict imposing § 3730(h) liability upon a
                                4

supervisor at Howard University. This court affirmed,
agreeing that as a matter of law a supervisor was not an
‘‘employer’’ as used in § 3730(h). See Yesudian, 270 F.3d at
972.
   Dr. Siewick, while acknowledging that JSE was his employ-
er, maintains that Dr. Jamieson was also his employer in light
of Dr. Jamieson’s majority ownership of JSE and his control
of JSE’s operations. The False Claims Act does not define
the term ‘‘employer.’’ In the absence of explicit statutory
language to the contrary, we therefore infer that Congress
intended ‘‘employer’’ in § 3730(h) to have its ordinary, com-
mon law meaning. See United States v. Texas, 507 U.S. 529,
534 (1993); Nationwide Mut. Ins. Co. v. Darden, 503 U.S.
318, 322–23 (1992). Dr. Siewick thinks a Senate Report on
the provision supports another meaning of ‘‘employer.’’ The
Report stated that ‘‘[a]s is the rule under other Federal
whistleblower statutes as well as discrimination laws, the
definition[ ] of TTT ‘employer’ should be all-inclusive.’’ S. REP.
NO. 99–345, at 34 (1986). Inclusive of what? As far as we
can tell, the Report signified only that both public and private
entities should be considered employers under § 3730(h).
Dr. Siewick cites nothing suggesting that the term ‘‘employ-
er’’ as used in discrimination laws or in other whistleblower
statutes means something different than what it meant at
common law, and the precedents are to the contrary. See,
e.g., Coupar v. U.S. Dep’t of Labor, 105 F.3d 1263, 1266–67
(9th Cir. 1997); Gary v. Long, 59 F.3d 1391, 1395, 1399 (D.C.
Cir. 1995); Birkbeck v. Marvel Lighting Corp., 30 F.3d 507
(4th Cir. 1994).
   Neither Dr. Jamieson’s ownership nor his control of JSE
make him Dr. Siewick’s ‘‘employer’’ within its common law
meaning. See Int’l Bhd. of Painters & Allied Trades Union
v. George A. Kracher, Inc., 856 F.2d 1546, 1548 (D.C. Cir.
1988); cf., e.g., Kwatcher v. Massachusetts Serv. Employees
Pension Fund, 879 F.2d 957, 960 (1st Cir. 1989). The
corporation only is the employer of the corporation’s employ-
ees. See Meyer v. Holley, 123 S. Ct. at 829; Int’l Bhd. of
Painters & Allied Trades Union, 856 F.2d at 1548. A
corporation is a distinct entity from its shareholders, see
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Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163–
63 (2001), and corporate officers, even when they may seem to
function as an employer, act only as agents on behalf of the
corporation, see Int’l Bhd. of Painters & Allied Trades Un-
ion, 856 F.2d at 1548. The principle applies with no less
force when an individual has a significant ownership interest
in the corporation and substantially controls its actions. See
Connors v. P & M Coal Co., 801 F.2d 1373, 1375–76 (D.C. Cir.
1986).
   A footnote in Dr. Siewick’s brief asserts that the corporate
veil should be pierced because JSE allegedly engaged in
fraud. But his complaint did not even allege that JSE’s
corporate form was a sham. See United States v. Andrews,
146 F.3d 933, 940 (D.C. Cir. 1998); see also Labadie Coal Co.
v. Black, 672 F.2d 92, 96–97 (D.C. Cir. 1982). The district
court correctly held that an allegation of fraud against the
United States in violation of the False Claims Act does not
amount to an allegation that the corporate form was a fraud.
‘‘The difference between being a fraud and conducting one is
important. Even a fully-capitalized, Fortune 500 corporation
can embark on a fraud, but that would not make its corporate
form a sham or its shareholders personally liable.’’ Andrews,
146 F.3d at 940.
                                                     Affirmed.