Gartman v. Housing Authority of Jefferson Parish

Filing 11

ORDER AND REASONS: IT IS ORDERED that the defendant's 5 motion to dismiss for failure to state a claim is GRANTED in part, as to the due process claim, and DENIED in part, as to the retaliation claim under the False Claims Act. IT IS FURTHER ORDERED that the defendant's 5 motion to dismiss remaining claims for lack of subject matter jurisdiction is DENIED, as set forth in document. Signed by Judge Martin L.C. Feldman on 2/22/2018. (jls)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

ELIZABETH GARTMAN

CIVIL ACTION

v.

NO. 17-12375

HOUSING AUTHORITY OF
JEFFERSON PARISH

SECTION "F"

ORDER AND REASONS
Before
Parish’s

the

motion

Court
to

is

the

dismiss

Housing

Elizabeth

Authority
Gartman’s

of

Jefferson

complaint

for

failure to state a claim. The plaintiff alleges federal and state
law claims, but the motion is only directed to the federal law
claims. The defendant also moves to dismiss the remaining state
law claims for lack of subject matter jurisdiction if the Court
grants the defendant’s motion to dismiss the plaintiff’s federal
claims. For the following reasons, the defendant’s motion to
dismiss for failure to state a claim is GRANTED in part, as to the
federal

due

process

claim,

and

DENIED

in

part,

as

to

the

retaliation claim under the False Claims Act. The defendant’s
motion to dismiss for lack of subject matter jurisdiction is
DENIED.
Background
These due process and False Claims Act retaliation claims
arise out of the termination of an employee of a public agency,
and the lawsuit that followed.
1

The Housing Authority of Jefferson Parish is a public body
that

provides

housing

assistance

to

low

income

residents

in

Jefferson Parish, Louisiana through the administration of various
programs.

Participation

in

these

programs

is

determined

by

eligibility guidelines set by the U.S. Department of Housing and
Urban Development. HUD supplies HAJP with most of its funding, and
therefore, oversees HAJP’s activities and spending, and works
closely with HAJP employees.
HAJP hired Elizabeth Gartman on June 2, 2009 as an office
manager. On June 12, 2012, Gartman and HAJP entered into an
employment

agreement

setting

forth

the

terms

of

Gartman’s

employment. The agreement provided that Gartman was an at-will
employee, and could be terminated with or without cause and with
or without notice by the Executive Director. In early 2016, HAJP
did not renew its employment contract with the Executive Director.
Gartman

was

appointed

Acting

Executive

Director

by

a

board

resolution on April 12, 2016. Her appointment was intended to last
for ninety days, but was extended indefinitely until a permanent
Executive Director was hired.
By the end of the year, Gartman’s relationship with her coworkers had deteriorated. In November 2016, Gartman contacted the
HUD fraud hotline within the Office of the Inspector General. She
reported that she suspected mismanagement and “apparent collusion”
between

the

director

of

the

New
2

Orleans

HUD

Office,

Cheryl

Williams, and members of the HAJP Board. Although reports to the
hotline are expected to be kept confidential, Williams was informed
of Gartman’s call and confronted Gartman. Shortly thereafter,
according

to

the

complaint,

Gartman

was

forced

to

complete

unnecessary and burdensome tasks by the HUD and the HAJP board and
experienced delays from both bodies in critical moments relating
to HAJP’s funds. Additionally, HUD required Gartman to submit a
Corrective Action Plan that addressed HAJP’s failure to comply
with HUD rules and regulations pertaining to funding. From November
2016 until February 2017, Gartman alleges that she complied with
HUD’s request, but that prompted criticism and harassment from
HAJP board members. She was terminated by the HAJP Board of
Commissioners on February 21, 2017, allegedly as a result of her
cooperation with HUD and alerting OIG to her suspicions regarding
the relationship between certain HAJP board members and certain
HUD employees.
Gartman brought this lawsuit against HAJP, alleging that she
was retaliated against in violation of the False Claims Act, 31
U.S.C. § 3730(h), and in violation of her federal due process
rights. She also made several claims under state law. On January
18, 2018, HAJP moved to dismiss the complaint for failure to state
a claim, pursuant to Fed. Rule of Civ. Proc. 12(b)(6). The motion
to dismiss was directed solely at Gartman’s federal law claims.
HAJP also moved to dismiss for lack of subject matter jurisdiction,
3

pursuant to Fed. Rule of Civ. Proc. 12(b)(1), in the case the Court
granted the motion to dismiss and only the state law claims
remained.
I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted. Such a motion is rarely
granted because it is viewed with disfavor. See Lowrey v. Tex. A
& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997)(quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure,
a pleading must contain a "short and plain statement of the claim
showing that the pleader is entitled to relief." Ashcroft v. Iqbal,
556 U.S. 662, 678-79 (2009)(citing Fed. R. Civ. P. 8). "[T]he
pleading standard Rule 8 announces does not require 'detailed
factual allegations,' but it demands more than an unadorned, thedefendant-unlawfully-harmed-me accusation." Id. at 678 (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
In considering a Rule 12(b)(6) motion, the Court “accept[s]
all well-pleaded facts as true and view[s] all facts in the light
most favorable to the plaintiff.” See Thompson v. City of Waco,
Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel. Magee
v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th
4

Cir.

2012)(en

banc)).

But,

in

deciding

whether

dismissal

is

warranted, the Court will not accept as true legal conclusions.
Id. at 502-03 (citing Iqbal, 556 U.S. at 678).
To survive dismissal, “‘a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that
is plausible on its face.’” Gonzalez v. Kay, 577 F.3d 600, 603
(5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal quotation
marks omitted). “Factual allegations must be enough to raise a
right to relief above the speculative level, on the assumption
that all the allegations in the complaint are true (even if
doubtful

in

fact).”

Twombly,

550

U.S.

at

555

(citations

and

footnote omitted). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable

inference

that

the

defendant

is

liable

for

the

misconduct alleged.” Iqbal, 556 U.S. at 678 (“The plausibility
standard is not akin to a ‘probability requirement,’ but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.”). The Court’s task “is to determine whether the
plaintiff stated a legally cognizable claim that is plausible, not
to evaluate the plaintiff’s likelihood of success.” Thompson v.
City of Waco, Texas, 764 F.3d 500, 503 (5th Cir. 2014)(citation
omitted). This is a “context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. “Where a complaint pleads facts
5

that are merely consistent with a defendant’s liability, it stops
short

of

the

line

between

possibility

and

plausibility

of

entitlement to relief.” Id. at 678 (internal quotations omitted)
(citing Twombly, 550 U.S. at 557). “[A] plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’”, thus,
“requires

more

than

labels

and

conclusions,

and

a

formulaic

recitation of the elements of a cause of action will not do.”
Twombly,

550

U.S.

at

555

(alteration

in

original)

(citation

omitted).

II.
Gartman alleges that the HAJP retaliated against her, in
violation of the False Claims Act, 31 U.S.C. § 3730(h), after she
reported mismanagement and collusion on the HUD fraud hotline and
cooperated with HUD members following her reports. The False Claims
Act makes it a crime to present a false or fraudulent claim for
payment

or

approval

by

the

federal

1

government. 1

31

U.S.C.

§

The False Claims Act makes it a crime when a person: “(A)
knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval; (B) knowingly makes,
uses, or causes to be made or used, a false record or statement
material to a false or fraudulent claim; (C) conspires to commit
a violation of subparagraph (A), (B), (D), (E), (F), or (G); (D)
has possession, custody, or control of property or money used, or
to be used, by the Government and knowingly delivers, or causes to
be delivered, less than all of that money or property; (E) is
authorized to make or deliver a document certifying receipt of
property used, or to be used, by the Government and, intending to
6

3729(a).

It

also

creates

a

cause

of

action,

known

as

the

whistleblower statute, for employees who are retaliated against
after attempts to stop a violation of the FCA. 31 U.S.C. § 3730(h);
U.S. ex rel. Bias v. Tangipahoa Parish School Bd., 816 F.3d 315,
323 (5th Cir. 2016). “To survive a motion to dismiss, a plaintiff
alleging injury under Section 3730(h)(1) must show (1) he engaged
in protected activity, (2) his employer, or the entity with which
he has contracted or serves as an agent, knew about the protected
activity,

and

(3)

he

was

retaliated

against

because

of

his

protected activity.” Id. The defendant only contests that Gartman
engaged

in

a

protected

activity,

contending

that

reporting

misappropriation and collusion and cooperating with HUD are not
protected activities. Accordingly, whether Gartman stated a claim
turns on whether her conduct is protected under the FCA.
The whistleblower provision is “intended to encourage those
with

knowledge

of

fraud

to

come

forward.”

Robertson

v.

Bell

defraud the Government, makes or delivers the receipt without
completely knowing that the information on the receipt is true;
(F) knowingly buys, or receives as a pledge of an obligationor
debt, public property from an officer or employee of the
Government, or a member of the Armed Forces, who lawfully may not
sell or pledge property; or (G) knowingly makes, uses, or causes
to be made or used, a false record or statement material to
an obligation to pay or transmit money or property to the
Government, or knowingly conceals or knowingly and improperly
avoids or decreases an obligation to pay or transmit money or
property to the Government.” 31 U.S.C. § 3729(a).
7

Helicpopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). An
activity only qualifies as a protected activity if it is “in
furtherance of uncovering fraud or potential fraud against the
government. U.S., ex rel. Johnson v. Kaner Medical Group, P.A.,
641 Fed. Appx. 391, 395 (5th Cir. 2016)(unpublished)(internal
quotations omitted). The activity must be related to “matters that
reasonably could lead to a viable claim under the Act.” U.S. ex
rel. George v. Boston Scientific Corp., 864 F.Supp.2d 597, 605
(S.D. Tex. 2012); e.g., Hoyte v. Am. Nat. Red Cross, 518 F.3d 61,
66 (D.C. 2008); U.S. ex rel Gray v. Lockheed Martin Corp., Civ.
Action

No.

05-4201,

2010

WL

672017,

at

*2

(E.D.

La.

2010)(unpublished). But a whistleblower is not required to file a
lawsuit against her employer to receive protection under the law. 2
Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th
Cir. 1994). The Fifth Circuit has held that raising concerns of
the employer’s conduct to a supervisor is only a protected activity
if the conduct relates to the presentation of false claims to the

2

The False Claims Act allows private parties to bring an action
on the government’s behalf, called a qui tam action. 31 U.S.C. §
3730(b),(c). Qui tam plaintiffs have a higher burden than those
bringing retaliation claims. U.S., ex rel. Johnson v. Kaner Medical
Group, P.A., 641 Fed. Appx. 391, 395 (5th Cir. 2016)(unpublished).
The Fifth Circuit has explained that it would be unfair to protect
a qui tam plaintiff who filed an “expensive and time-consuming
lawsuit” while ignoring a plaintiff who reported his concerns to
superiors, allowing for a “quick, voluntary and efficient
disclosure of fraud.” Robertson v. Bell Helicopter Textron, Inc.,
32 F.3d 948, 951 (5th Cir. 1994)(quoting Neal v. Honeywell, Inc.,
826 F.Supp. 266, 273 (N.D. Ill. 1993)).
8

government. 3 Id. Nonetheless, a complaint up the chain of command
that

does

not

allege

fraudulent

or

illegal

activity

may

be

insufficient; simply reporting displeasure in an employer’s action
is outside the statute’s protection. See Thomas v. ITT Educations
Services,

Inc.,

517

Fed.

Appx.

259,

263

(5th

Cir.

2013)(unpublished); Robertson, 32 F.3d 948 (holding that reporting
concerns to superiors of improper spending was not protected
activity

when

the

plaintiff

never

used

the

terms

“illegal,”

“unlawful,” or “qui tam actions”).
The

defendant

contends

that

Gartman

does

not

explicitly

allege that any of her actions are protected activity. But Gartman
is not required to state that her actions are protected as long as
she alleges facts that allow the Court to draw the reasonable
inference that she was engaged in a protected activity. See Iqbal,
556

U.S.

at

678.

The

defendant

further

alleges

that

because

reporting allegations of mismanagement and collusion could not
lead to a viable claim under the False Claims Act, it is not a
protected activity. The defendant misses the mark. Black’s Law

3

In Kaner Medical Group, 641 Fed. Appx. 391, 395 (5th Cir. 2016),
the plaintiff sent two emails to her supervisors raising concerns
about KMG’s billing of Medicare-Medicaid patients. Even though the
patients were involved in programs run by the government, the
defendant was seeking payment from the patients themselves, not
presenting false claims to the government. The court found that
the plaintiff could not demonstrate how investigations of the
direct billing of patients was in furtherance of uncovering or
preventing fraud against the government.
9

Dictionary defines collusion as “an agreement to defraud another
or to do or obtain something forbidden by law.” 4 By alleging that
she reported concerns that employees of HAJP, which is virtually
fully funded by the federal government, are engaging in fraudulent
or illegal activity with employees of HUD, a federal agency,
Gartman alleged facts that could reasonably lead to a viable FCA
claim.

Gartman’s

complaint

to

the

HUD

fraud

hotline

was

sufficiently related to the presentation of false claims to the
government and alleges sufficiently improper conduct under the FCA
to preserve her retaliation claim through the pleading stage.

III.
Next, the Court turns to whether Gartman alleged sufficient
facts to state a claim under her federal due process rights.
Gartman alleges that her termination from employment violated her
due process rights. A state cannot deprive an employee with a
property right in continued employment of their property without
due process. Cleveland Bd. of Educ. V. Loudermill, 470 U.S. 532,
538 (1985); Wallace v. Shreve Mem’l Library, 79 F.3d 427, 429 (5th
Cir. 1996)(“A public employee who has a property interest in her

4

Collusion, BLACK’S LAW DICTIONARY 1719 (10th ed. 2014); see also
collusion,
MERRIAM-WEBSTER
(Online
ed.)
https://www.merriamwebster.com/dictionary/collusion (defining collusion as a “secret
agreement or cooperation especially for an illegal or deceitful
purpose”).
10

job cannot be fired without due process of law.”). Louisiana law
determines the nature of the property right in employment. Frazier
v. Garrison I.S.D., 980 F.2d 1514, 1529 (5th Cir. 1993). Under
Louisiana Law, an employee has a property interest in employment
if: (1) she contracted with her employer to only be terminated for
cause; or (2) if she is a “permanent classified employee.” Wallace,
79 F.3d at 429.
Gartman’s employment agreement provides that she is an atwill, not a for-cause, employee. In her complaint and again in her
opposition, she concedes that she is an unclassified employee. In
the

motion

to

dismiss,

HAJP

also

classified

Gartman

as

an

unclassified employee. However, the defendant referred to her as
a classified employee during pre-suit discussions. On a 12(b)(6)
motion to dismiss, the Court may only rely on “the complaint, its
proper attachments, ‘documents incorporated into the complaint by
reference, and matters of which a court may take judicial notice.’”
Randall D. Wolcott, M.D., P.A. v. Sebelius, 635 F.3d 757, 763 (5th
Cir. 2011) (quoting Dorsey v. Portfolio Equities, Inc., 540 F.3d
333, 338 (5th Cir. 2008)). The Court considers the plaintiff’s
allegations as to her employment status in the complaint; the
defendant’s

past

assertions

are

irrelevant.

Because

Gartman

herself alleged that she is an at-will and unclassified employee,
she does not have a property interest in employment and her
employment may be terminated without due process.
11

IV.
Gartman asserts several claims under Louisiana law. 5 The Court
has original jurisdiction over plaintiff’s False Claims Act and
due process claims, and supplemental jurisdiction over the state
law claims. 28 U.S.C. §§ 1331, 1367(a). If the Court dismisses the
federal

law

claims,

it

may

decline

to

exercise

supplemental

jurisdiction over the remaining state law claims. 28 U.S.C. §
1367(a); see United Mine Workers of America v. Gibbs, 383 U.S.
715, 725-26 (1966). The defendant moved to dismiss these claims
for lack of subject matter jurisdiction under Rule 12(b)(1), if
the Court dismissed her federal claims.
However, the Court finds that the plaintiff has an actionable
claim under the False Claims Act, and therefore will continue to
exercise supplemental jurisdiction over the plaintiff’s state law
claims.
Accordingly, IT IS ORDERED: that the defendant’s motion to
dismiss for failure to state a claim is GRANTED in part, as to the
due process claim, and DENIED in part, as to the retaliation claim
under the False Claims Act. IT IS FURTHER ORDERED: that the

5

Specifically, Gartman claims a breach of the employment
agreement,
slander
and
defamation,
detrimental
reliance,
intentional interference with contractual relations, intentional
infliction of emotion distress in the workplace, improper
termination of benefits, and unfair trade practices.
12

defendant’s motion to dismiss remaining claims for lack of subject
matter jurisdiction is DENIED.

New Orleans, Louisiana, February 22, 2018

_____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

13