Bell v. Dean et al

Filing 29

MEMORANDUM OPINION AND ORDER: It is ORDERED that the 13 Motion to Dismiss is DENIED as to the official-capacity claims for injunctive relief, and as to Defendants in their individual capacities. Previously, the court granted the motion to dismiss c laims for money damages Defendants in their official capacities. (Doc. 26 .) On the whole, then, the 13 Motion to Dismiss has been GRANTED in part and DENIED in part. Signed by Honorable William Keith Watkins on 7/27/2010. (Attachments: # 1 Civil Appeals Checklist)(dmn)

Bell v. Dean et al

Doc. 29

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION M A R C U S BELL, P la in tif f , v. ELTON DEAN, et al., D e f e n d a n ts. ) ) ) ) ) ) ) )

C A S E NO. 2:09-CV-1082-WKW [WO]

M E M O R A N D U M OPINION AND ORDER P re v io u s ly, the court granted Defendants' Motion to Dismiss in part, permitted Mr. B e ll to amend his Complaint, and ordered additional briefing concerning what is required to s ta te a claim under the retaliation provision of the False Claims Act ("FCA"), as amended in 2009. (Doc. # 26.) Mr. Bell filed an Amended Complaint (Doc. # 27), and the parties s u b m itte d the required briefing. (Doc. # 27, Attach. 1; Doc. # 28.) Rather than rehashing th e factual and procedural history provided in the earlier opinion, the court will limit the d is c u s sio n to whether the Amended Complaint states a claim, and, if so, addressing the issue o f qualified immunity. I . DISCUSSION A . Stating a Claim As Mr. Bell notes, the revised language of the FCA retaliation provision requires o n ly that protected behavior have been done "in furtherance of other efforts to stop 1 or more v i o la t i o n s of this subchapter." 31 U.S.C.A. § 3730(h) (2009). No nexus to actual or th re a te n e d litigation is required, in contrast to the former version of the statute, which

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measured a retaliation claim by the likelihood of a substantive FCA suit being brought. In h is Amended Complaint, Mr. Bell alleges that he, in his position as Director of Title III P ro g ra m s at Alabama State University ("ASU"), filed a grant application with the U.S. D e p a rtm e n t of Education seeking the award of Title III funds for the 2008-2009 fiscal year. (Doc. # 27, ¶ 11.) After such funds had been received, Defendants pressured Mr. Bell to a p p ly the grant funds to specific projects that were not mentioned in the grant application and w o u ld not be legitimate uses of Title III funds. (Doc. # 27, ¶¶ 12-14.) Mr. Bell informed D e f e n d a n ts that their proposed uses were "not lawful," and that he would report any such m isu s e s to the Department of Education and request an audit. (Doc. # 27, ¶ 15.)

Significantly, the Amended Complaint explains that a document called a "Revised Activity to Expand Carry-Over Money" would have to be filed with the Department of Education in o rd e r obtain authorization for the use of Title III funds for purposes other than those m e n tio n e d in the original application. (Doc. # 27, ¶ 14.) At one meeting, Mr. Bell was s h o w n such a document, with entries requesting that funds be "carried over" for two projects th a t he did not believe qualified for Title III funding, because they involved renovations to n o n -in s tru c tio n a l buildings. (Doc. # 27, ¶ 17.) Mr. Bell does not allege that this document was ever actually submitted to the D e p a rtm e n t of Education, but he need not do so in order to state a claim under the retaliation p ro v is io n of the FCA. It does not require extensive analysis to conclude that Mr. Bell's A m e n d e d Complaint states a claim under the retaliation provision. His explicit threats to

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report what he viewed as unauthorized uses of funds, coupled with documents that would lik e ly constitute false claims if they were submitted to the Government, indicate that his a lle g e d actions were undertaken "in furtherance of other efforts to stop 1 or more violations o f " the FCA. § 3730(h). The allegations are sufficient to state a claim that Mr. Bell's " e f f o rts " were thus "in furtherance" of stopping violations of the FCA, in that he sought to p re v e n t the possible filing of false "carry over" applications to the Department of Education. Potentially, his efforts to stop the misuse of funds could also be viewed as an effort to p re v e n t a violation of the terms of the original grant application, although the court notes that M r. Bell has not alleged that Defendants intended any falsity or fraud when the original Title III application was filed. Nonetheless, as the court discussed in its earlier opinion, "false c e rtif ic a tio n s " that grant monies were used for their proper purpose may constitute false c la im s , and, even if no such false certifications were actually filed, Mr. Bell's efforts may n o n e th e le ss have been in furtherance of efforts to stop them from being filed. (See Doc. # 2 7 , Attach. 1, at 6 (arguing that such future false certifications were likely if misuse of funds o c c u r r e d ) .) Further, Mr. Bell points out that it is possible to violate the FCA without the actual m a k in g of a claim, if an entity " . . . knowingly conceals or knowingly and improperly avoids o r decreases an obligation to pay or transmit money or property to the Government." § 3729(a)(1)(G). Because ASU would have been required to repay any grant monies not u s e d for their originally authorized purpose, the knowing use of the funds for improper

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purposes would constitute a violation of this subsection as well. Mr. Bell's efforts would a lle g e d ly be in furtherance of efforts to stop such a violation, all potential false claims aside. D e f e n d a n ts' response seems to be that because Mr. Bell has not alleged that any false c la im was actually made, or would certainly have been made absent his intervention, he can s t a t e no claim for retaliation. (Doc. # 28, at 4.) But that was not the law even before the 2 0 0 9 amendment, and it is plainly not the law now. Moreover, Mr. Bell has now alleged the e x is te n c e of actual documents (the carry-over applications) drafted by at least some D e f e n d a n ts and proposed for submission to the Government, that would, taking the facts in th e light most favorable to Mr. Bell, have constituted false claims under the "false c e rtif ic a tio n " theory. Defendants do not respond to the argument concerning

§ 3729(a)(1)(G). Accordingly, Mr. Bell has stated a claim for a violation of the revised v e rs io n of subsection 3730(h). B . Qualified Immunity In their motion to dismiss, Defendants contend that because they are state officials, th e y are entitled to qualified immunity from Mr. Bell's claims when sued in their individual c a p a c itie s . The court has not discovered any Eleventh Circuit case law on the issue whether q u a lif ie d immunity applies to a False Claims Act retaliation suit. The court recognizes that, in general, qualified immunity applies to both statutory and constitutional claims against state o f f ic ia ls . See Penley v. Eslinger, 605 F.3d 843, 849 (11th Cir. 2010). But, in the only a p p e lla te decision to have addressed the issue head-on, the Fifth Circuit held that qualified

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immunity does not apply to FCA retaliation claims. Samuel v. Holmes, 138 F.3d 173, 178 (5 th Cir. 1998). That court found that "qualified immunity seems particularly ill-suited in [the FCA] context, given the goals of the FCA" of discouraging fraud and abuse. Id. Defendants offer no rejoinder to Samuel in their reply brief. (Doc. # 19, at 5-6.) The court f in d s the Fifth Circuit's opinion in Samuel persuasive and chooses to follow it. While q u a lif ie d immunity is an understandable doctrine when applied to the split-second decisions o f law enforcement officers in the field, it is difficult to discern what purpose it would serve to permit retaliation against whistleblowers by public employers on the basis that the law was n o t "clearly established" as to what constituted protected conduct. Such retaliation, if s u f f ic ie n t to actually violate the statute, has no conceivably legitimate purpose, and applying th e judicially created doctrine of qualified immunity to bar it would seem at odds with the p u rp o s e of the FCA, and specifically with the purpose of the retaliation provision, as recently e x p a n d e d by Congress.1 Accordingly, the court finds at this stage that qualified immunity is not available as a defense to Defendants in their individual capacities. III. CONCLUSION F o r the foregoing reasons, it is ORDERED that the motion to dismiss (Doc. # 13) is

The Eleventh Circuit has twice cited Samuel as an example of a case in which qualified immunity was not available to public officials, both times in cases holding that qualified immunity was available under other statutes. See Tapley v. Collins, 211 F.3d 1210, 1215 n.9 (11th Cir. 2000) (Wiretap Act); Gonzalez v. Lee County Housing Auth., 161 F.3d 1290, 1300 n.34 (11th Cir. 1998) (Fair Housing Act retaliation provision). Neither case, however, indicated express disagreement with Samuel, and in Gonzalez, the court emphasized that its "opinion in this case should not be construed to address whether qualified immunity is available in actions brought under statutes other than [the one at issue in that case]." 161 F.3d at 1300 n.34.

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DENIED as to the official-capacity claims for injunctive relief, and as to Defendants in their in d iv id u a l capacities. Previously, the court granted the motion to dismiss claims for money d a m a g e s Defendants in their official capacities. (Doc. # 26.) On the whole, then, the motion to dismiss (Doc. # 13) has been GRANTED in part and DENIED in part. D O N E this 27th day of July, 2010.

/s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE

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