Simoneaux et al v. E.I. du Pont de Nemours & Company

Filing 309

RULING granting 286 Motion for Reconsideration, and the Court shall certify its 47 Ruling denying DuPont's Motion for Summary Judgment. Signed by Judge Shelly D. Dick on 1/20/2016. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

JEFFREY M. SIMONEAUX

CIVIL DOCKET

VERSUS

12-219-SDD-EWD

E.I. du PONT de NEMOURS & COMPANY

RULING
Before the Court is Defendant E.I. du Pont de Nemours and Company’s (“DuPont”)
Motion to Reconsider1 the Court’s denial of Dupont’s Motion to Certify Appeal of the
Court’s Ruling Denying Dupont’s Motion for Summary Judgment. The Motion is opposed2
and the parties have briefed the issue extensively3. After reviewing the memoranda of the
parties and the applicable law, DuPont’s Motion to Reconsider shall be GRANTED, and
the Court shall certify its Ruling denying DuPont’s Motion for Summary Judgment.4
I.

FACTUAL BACKGROUND
It is undisputed that during relevant time periods the process equipment at

DuPont’s plant in Burnside, Louisiana was leaking sulfur dioxide (SO2), sulfur trioxide
(SO3), and sulfuric acid mist (collectively “sulfuric leaks”). To ameliorate the leaks while
awaiting new process equipment, DuPont designed and installed a vacuum hose system
intended to capture and recover the fugitive emissions.5 Simoneaux, a DuPont employee,

1

Rec. Doc. 286.
Rec. Doc. 290.
3
Rec. Doc. 294; Rec. Doc. 302; and Rec. Doc. 305. 
4
Rec. Doc. 47. At the close of oral argument, the Court issued oral reasons denying DuPont’s Motion for
Summary Judgment. Rec. Doc. 27. 
5
 It was also undisputed that the subject leaks were not permitted emission. 
2

1 

claims that the vacuum recovery system was ineffective and that DuPont had an
obligation under the Toxic Substances Control Act (TSCA) to report the sulfuric leaks to
the EPA.6

Simoneaux claims that DuPont knowingly concealed its TSCA reporting

obligation in order to avoid paying environmental penalties to the Government, thus giving
rise to a reverse false claim under the False Claims Act (FCA).
To prevail on a reverse false claim under the FCA, the Plaintiff must show that the
Defendant knowingly and improperly concealed or avoided an obligation to pay or
transmit money to the Government.7 The central issue in this case is the meaning and
interpretation of the term obligation as used in the FCA. Dupont contends that regulatory
fines and penalties which have not actually been levied or imposed are not “obligations”
under the FCA.8 This was the legal issue presented by DuPont on summary judgment9
and the sole issue which DuPont again seeks to certify for appeal.10
II.

PROCEDURAL BACKGROUND AND POSTURE
The complicated procedural background and unique posture of this case factor

significantly into the Court’s analysis. On April 4, 2014, the Court denied DuPont’s
summary judgment motion seeking dismissal of Simoneaux’s reverse false claim action
as a matter of law.11 DuPont argued that, because statutory penalties under the TSCA
are contingent on an order by the EPA Administrator, Simoneaux could not satisfy the

6

 Simoneaux claimed that the sulfuric leaks posed a substantial risk to people or the environment under the
TSCA.
7
 31 USC § 3729(a)(1)(G). 
8
According to DuPont, “In this case, the central issue for summary judgment is a controlling question of
law, namely, does the term “obligation”, as defined in 31 USC § 3729(a)(1)(G), include liability for fines and
penalties under regulatory statutes, even where such fines or penalties have not actually been imposed on
a party?” DuPont’s Motion to Certify Appeal, Rec. 48-1, p.2.
9
Rec. Doc. 27; Rec. Doc. 42.
10
Rec. Doc. 48.
11
Rec. Doc. 47. 

2 

FCA’s obligation requirement necessary to establish a prima facie case. In denying
summary judgment, the Court applied 2009 amendments to the FCA12 which codified a
definition of the term “obligation” as follows:
an established duty, whether or not fixed, arising from an express or implied
contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or
similar relationship, from statute or regulation, or from the retention of any
overpayment.13

Finding the statutory definition of “obligation” to be clear and unambiguous, the
Court strictly construed the statutory definition and found that, because the TSCA gives
rise to an obligation to report chemical leaks14 and the failure to do so would result in the
imposition of a fine or penalty15, whether fixed or not, the 2009 Congressional definition
of obligation had been satisfied; therefore, the Court denied DuPont’s summary judgment
motion.

Subsequently, DuPont sought certification of the Court’s April 4, 2014 Ruling

pursuant to 28 U.S.C. § 1292.16

The Court denied DuPont’s request for certification,

finding that “DuPont ha[d] failed to demonstrate [that there was] a substantial ground for
difference of opinion as to the Court’s Ruling” within the Fifth Circuit.17

12

Fraud Enforcement and Recovery Act of 2009 (“FERA”), Pub. L. No. 111-21, 123 Stat 1617 (2009).
31 U.S.C. § 3729(b)(3).
It is also noteworthy that the reverse false claim provisions of the FCA were recodified as part of the 2009
amendments, and provide for liability for any person who:
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
knowing and improperly avoids or decreases an obligation to pay or transmit money or property to
the Government…. 31 USC § 3729(a)(1)(G). 
14
Pursuant to 15 U.S.C. § 2607, any person who manufactures, processes, or distributes a chemical
substance in commerce and who obtains information that reasonably supports the conclusion that such
substance presents a substantial risk of injury to health or to the environment shall immediately inform the
Administrator of the EPA of such information, “unless such person has actual knowledge that the
Administrator has been adequately informed of such information.” 15 U.S.C. § 2607(e).
15
Failure to provide substantial risk information is unlawful, 15 U.S.C. § 2614, and results in a mandatory
penalty up to $37,500 for each violation, 15 U.S.C. § 2615(a)(1). 28 CFR § 85.3.
16
Rec. Doc. 48.
17
Rec. Doc. 66, p. 6.
13

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The matter proceeded to trial and after hearing evidence for two weeks, the jury
returned a verdict for DuPont and the Court entered a Judgment in accordance with the
jury’s verdict.18 However, subsequently the Court set aside the verdict and judgment
under Rule 60(b)(3) upon finding by clear and convincing evidence that DuPont obtained
the verdict through “fraud…, misrepresentation, or other misconduct” such that the
Relator was prevented from fully and fairly presenting his case.19
Facing a lengthy and costly re-trial, DuPont urges the Court to reconsider its 2014
Ruling20 denying DuPont’s Motion to certify for appeal the denial of its Motion for
Summary Judgment.21 DuPont submits that new jurisprudence from the Eastern District
of Louisiana and the Fifth Circuit Court of Appeal warrant reconsideration of the Court’s
earlier Ruling denying certification. Simoneaux disagrees with DuPont’s position, arguing
that reconsideration is not warranted because the newer decisions do not clarify the
applicable substantive law at issue. Building upon this premise, Simoneaux further
contends that DuPont has once again failed to show a substantial ground for difference
of opinion necessary for interlocutory certification.

The Court is reluctant to reward

DuPont with a second bite at the apple but, owing to the time and expense of a second
trial and an intervening case decided by another District Court (within the Fifth Circuit)
which suggests grounds for a difference of opinion on a controlling issue, the Court will
grant DuPont’s motion for the following reasons.

18

Rec. Doc. 212.
Rec. Doc. 263.
20
Rec. Doc. 66.
21
Rec. Doc. 27. DuPont filed a second Motion for Summary Judgment (Rec. Doc. 53) which is not the
subject of the present Motion re-urging certification.
19

4 

III.

RULE 54(B) MOTION FOR RECONSIDERATION
A. LEGAL STANDARD
Pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, district courts have

discretion to reconsider interlocutory rulings “at any time before the entry of a judgment
adjudicating all [of] the claims and all [of] the parties’ rights and liabilities.”22 A Rule 54(b)
Motion for Reconsideration is left to the broad discretion of the Court.23 Nevertheless,
“rulings should only be reconsidered where the moving party has presented substantial
reasons for reconsideration.”24 Within the Middle District, “three major grounds” have
been recognized as justifying reconsideration: “(1) an intervening change in controlling
law; (2) the availability of new evidence; and (3) the need to correct clear error or prevent
manifest injustice.”25
B. ANALYSIS
DuPont contends that intervening jurisprudence presents a change in controlling
law warranting reconsideration and certification for appeal. The Court is unpersuaded
that the intervening jurisprudence cited by DuPont mandates a different conclusion.
However, owing to the time and expense of retrial, the Court will reconsider its earlier
denial of an interlocutory appeal solely to minimize the time and expense risks presented
by the unique procedural posture of this case.

22

Fed. R.Civ.P. 54(b); Livingston Downs v. Jefferson Downs, 259 F.Supp.2d 471, 474-75 (M.D.La.
2002)(citing Zapata Gulf Marine Corp. v. P.R. Mar. Shipping Auth., 925 F.2d 812, 815 (5th Cir. 1991)).
While DuPont’s instant Motion was not technically advanced before “entry of judgment”, the Court will treat
DuPont’s Motion as timely because the Court vacated its earlier Judgment.
23
McClung v. Gautreaux, 2011 WL 4062387, *1 (M.D.La. Sept. 13, 2011)(quoting Brown v. Wichita County,
Tex, No. 05-108, 2011 WL 1562567, *2 (N.D. Tex. April 26, 2011)).
24
State of Louisiana v. Sprint Communications Co., 899 F.Supp. 282, 284 (M.D.La. 1995).
25
Kumasi v. Unknown Cochran, 2015 WL 5033594, *2 (M.D.La. Aug. 25, 2015)(quoting J.M.C. v. La. Bd.
of Elementary and Secondary Educ., 584 F.Supp.2d 894, 896 (M.D.La. Oct. 20, 2008)(quoting Shields v.
Shetler, 120 F.R.D. 123, 126 (D.Colo. 1998)).

5 

IV.

28 U.S.C. § 1292(B) RECONSIDERATION
A. LEGAL STANDARD
28 U.S.C. § 1292(b) permits a district court to certify for appeal an “order not

otherwise appealable,” when the Court is” of the opinion that such order involves a
controlling question of law as to which there is substantial ground for difference of opinion
and that an immediate appeal from the order may materially advance the ultimate
termination of the litigation...”.
“The burden of demonstrating the necessity of an interlocutory appeal is on the
moving party.”26 Although the decision to permit an interlocutory appeal is within the
discretion of the court,27

the Fifth Circuit instructs that “[i]nterlocatory appeals are

generally disfavored, and statutes permitting them must be strictly construed.”28
B. ANALYSIS
The question of whether TSCA requirements give rise to an obligation under the
FCA is a controlling question of law, the determination of which may materially advance
the ultimate termination of this litigation. Hence, the Court’s analysis once again turns on
whether there is a substantial ground for difference of opinion regarding this controlling
question of law.
Courts have determined that there is a substantial ground for difference of
opinion in instances where:
‘[A] trial court rules in a manner which appears contrary to the rulings of all
Courts of Appeals which have reached the issue, if the circuits are in dispute

26

In re L.L.P. & D. Marine, Inc., 1998 WL 66100, at *1 (citing Orson, Inc. v. Miramax Film Corp., 867 F.Supp.
319, 320 (E.D.Pa. 1994), aff’d in part, vacated in part on other grounds, 79 F.3d 1358 (1996)).
27
Cheney v. U.S. Dist. Court for Dist. of Columbia, 542 U.S. 367, 405, n. 9, 124 S.Ct. 2576, 159 L.Ed.2d
459 (2004).
28
Mae v. Hurst, 613 Fed.Appx. 314, 318 (5th Cir. 2015)(unpublished)(quoting Allen v. Okam Holdings, Inc.,
116 F.3d 153, 154 (5th Cir. 1997)(per curiam)).

6 

on the question and the Court of Appeals of the circuit has not spoken on
the point, if complicated questions arise under foreign law, or if novel and
difficult questions of first impression are presented.’ But simply because a
court is the first to rule on a question or counsel disagrees on applicable
precedent does not qualify the issue as one over which there is substantial
disagreement.29

At the time the Court entered its Ruling denying DuPont’s summary judgment
motion, no other district court within the Fifth Circuit had applied the newly defined term,
obligation, to a reverse FCA claim premised on facts arising after the 2009 FCA
amendments. Therefore, the issue before the Court was res nova. However, the simple
fact that this Court was the first to rule on the proper interpretation of the 2009
amendments to a reverse FCA claim does not render it an issue over which there is
substantial disagreement necessitating an interlocutory appeal.
DuPont contends that intervening jurisprudence30 indicates a difference of opinion
regarding the interpretation of the term “obligation” after the 2009 FCA amendments.
Having reviewed the three decisions relied on by DuPont, the Court finds that one, U.S.
ex rel. Guth v. Roedel Parsons Koch Blache Balhoff & McCollister,31 lends support for
DuPont’s position. The other two cases relied on by DuPont to advance its contention
that there is a substantial ground for a difference of opinion are not applicable.32 Only the
Guth case presents a reverse false claim arising after the 2009 FCA amendments.

29

Mosaic Underwriting Service, Inc. v. Moncla Marine Operations, L.L.C., 2013 WL 2903083, *9(E.D. La
June 12, 2013) (quoting Ryan, 444 F.Supp.2d 718, 723-24 (N.D. Tex 2006) (citation omitted) (quoting 4
Am.Jur.2d Appellate Review § 128 (2005)).
30
U.S. ex rel. Spicer v. Westbrook, 751 F.3d 354 (5th Cir. 2014); U.S. ex rel. McClain v. Fluor Enterprises,
Inc., 605 F.Supp.3d 705 (E.D. La 2014); and U.S. ex rel. Guth v. Roedel Parsons Koch Blache Balhoff &
McCollister, 2014 WL 7274913 (E.D.La. Dec. 18, 2014).
31
U.S. ex rel. Guth v. Roedel Parsons Koch Blache Balhoff & McCollister, 2014 WL 7274913 (E.D.La. Dec.
18, 2014) aff’d, U.S. ex rel Guth v. Roedel Parsons Koch Blache Balhoff & McCollister, 2015 WL 5693302
(5th Cir. Sept. 29, 2015).
32
U.S. ex rel. Spicer v. Westbrook, 751 F.3d 354 (5th Cir. 2014), and U.S. ex rel. McClain v. Fluor
Enterprises, Inc., 605 F.Supp.3d 705 (E.D. La 2014). Factually and substantively, neither case involves a

7 

The relator in Guth asserted several claims under the FCA against a private law
firm engaged to do expropriation work for the government. Inter alia, the Relator in Guth
claimed that alleged double billing by the firm created an obligation to refund the double
payments to the government under the reverse false claim provision of the FCA.33
Although the Guth court acknowledged that the FCA had been “reorganized” in 2009 by
FERA, the Court did not address the statutory definition of obligation enacted by the 2009
FCA amendments in its analysis.34 Instead, the court relied solely upon the Fifth Circuit’s
2008 decision, U.S. ex rel. Marcy v. Rowan Cos., Inc., as binding authority for the types
of obligations that could support a reverse FCA claim.

Specifically, the Guth court

focused on the following language from Marcy—a direct quote and the holding from an
earlier Fifth Circuit opinion, U.S. ex rel. Bain v. Georgia Gulf Corp.:
[t]he reverse false claims act does not extend to the potential or contingent
obligations to pay the government fines or penalties which have not been
levied or assessed (and as to which no formal proceedings to do so have
been instituted) and which do not arise out of an economic relationship
between the government and the defendant (such as a lease or a contract
or the like) under which the government provides some benefit to the
defendant wholly or partially in exchange for an agreed or expected
payment or transfer of property by (or on behalf of) the defendant to (or for
the economic benefit of) the government.35

Relying on the foregoing, the Guth court held that the relator’s reverse FCA claim was
“predicated on ‘potential or contingent obligations to pay the government [amounts] which
have not been levied or assessed (and to which no formal proceedings to do so have

claim brought under the reverse FCA post-2009 amendments. The allegations in McClain and the false
claim for payment allegation in Spicer preceded the 2009 amendments to the FCA.
33
31 U.S.C. § 3729(a)(1)(G).
34
2014 WL 7274913, n. 20.
35
Id. at *7. (quoting Marcy, 520 F.3d at 391) (quoting U.S. ex rel. Bain v. Ga. Gulf Corp., 386 F.3d 648,
657 (5th Cir. 2004)(emphasis omitted)). 

8 

been instituted).’”36 Additionally, the Guth court found that the relator had no relationship
with the government as contemplated by the Reverse False Claim provision. Therefore,
the relator’s claim was dismissed for failure to plead a violation of 31 U.S.C. §
3729(a)(1)(G). In an unpublished opinion, the Fifth Circuit affirmed the Guth decision.37
The Court finds that, in light of Guth, there is a lack of consensus on whether the
2009 promulgation of a statutory definition of the term obligation alters the analysis of
reverse FCA claims. In its prior Ruling, this Court found that Fifth Circuit jurisprudence
preceding the 2009 FCA amendments, including Bain and Marcy, had been superseded
and no longer served as binding authority for what qualifies as an “obligation” in reverse
FCA claims. In construing the statutory definition of obligation, the Court determined that
an obligation included a duty to pay a fine or penalty under regulatory statutes, such as
the TSCA, even though those fines may not be fixed. While this Court considers its
analysis accurate, the recent decision in Guth demonstrates that, within this Circuit, there
is a substantial ground for difference of opinion as to whether Bain and Marcy still serve
as binding precedent for the proper meaning of an obligation in reverse FCA claims.
Hence, the Court finds that DuPont has satisfied its burden of establishing the three
necessary factors for interlocutory certification under 28 U.S.C. § 1292(b) and that an
immediate appeal would materially advance the ultimate termination of the litigation.

36

Id. (quoting Marcy, 520 F.3d at 391).
U.S. ex rel. Guth v. Roedel Parsons Koch Blache Balhoff & McCollister, 2015 WL 5693302 (5th Cir. Sept.
29, 2015). The Fifth Circuit explained that “[p]ursuant to 5th Cir. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited circumstances set forth in
5th Cir. R. 47.5.” In affirming the district court’s decision regarding the reverse FCA claim, the Fifth Circuit
found that the relator had failed to plead sufficient facts to allow the court to “‘draw the reasonable inference’
that Roedel Parsons double billed for unnecessary legal work” hence the court could likewise not “infer that
an obligation to refund the government ha[d] arisen.” Id. at *4. Even assuming that relator had successfully
established that such an obligation existed, the Fifth Circuit found that the district court had properly
dismissed the claim for failing to plead a plausible reverse FCA claim under § 3729(a)(1)(G) and also cited
to Marcy. Id.
37

9 

V.

CONCLUSION
Considering that the Court has found that its Ruling denying DuPont’s Motion for

Summary Judgment involves a controlling question of law as to whether there is a
substantial ground for difference of opinion, and that an immediate appeal from the Ruling
may materially advance the ultimate termination of this litigation, the Court hereby certifies
its April 14, 2014 Ruling denying DuPont’s summary judgment motion for appeal.
For the foregoing reasons, DuPont’s Motion to Reconsider38 shall be GRANTED,
and the Court shall certify its Ruling39 denying DuPont’s Motion for Summary Judgment.40
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on January 20, 2016. 

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

38

Rec. Doc. 286.
Rec. Doc. 47.
40
Rec. Doc. 27. 
39

10