Fields v. Bi-State Development Agency of the Missouri-Illinois Metropolitan District et al

Filing 226

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED Bi-State's motion for summary judgment, 207 , is GRANTED. Fields' claims are DISMISSED with prejudice. An appropriate judgment will accompany this Memorandum and Order. Signed by District Judge Rodney W. Sippel on 11/14/18. (KEK)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
UNITED STATES OF AMERICA
ex rel. Eric Fields,
Plaintiff,
v.
THE BI-STATE DEVELOPMENT
AGENCY OF THE MISSOURIILLINOIS METROPOLITAN
DISTRICT, et al.,
Defendants.

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) Case No. 4:14 CV 1321 RWS
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MEMORANDUM & ORDER
Defendant Bi-State Development Agency (“Bi-State”) moves for summary
judgment in this False Claims Act case. [No. 207]. According to Relator Eric
Fields, Bi-State falsely certified that it was in compliance with the Hatch Act,
5 U.S.C. §§ 7321-7326, and the Uniform Relocation Act1, 42 U.S.C. § 4601, et
seq., to obtain federal funds for its operations and capital improvements.
Specifically, Fields argues that Bi-State purchased the Meridian Garage (the
“Meridian”) without an appraisal, as required by the Uniform Relocation Act, to
benefit a political contributor. However, after four years, Fields fails to provide any
evidence of false certifications made during or after Bi-State’s negotiation and
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The Uniform Relocation Assistance in Real Property Acquisition Policies Act of 1970.

purchase of the Meridian in December 2010. Bi-State could not have knowingly
submitted a false certification concerning Uniform Relocation Act compliance
before that time. Additionally, Fields fails to provide any admissible evidence
demonstrating that alleged Hatch Act violations occurred before or during the time
that Bi-State made certifications concerning Hatch Act compliance. As a result, I
will grant Bi-State’s motion for summary judgment.
BACKGROUND
Fields is a former employee of Bi-State who filed this False Claims Act suit
on July 28, 2014. Fields claims that former CEO of Bi-State, Bob Bear, directed
employees to participate in partisan campaigns and instituted a “pay to play”
scheme in violation of the Hatch Act. Fields alleges that Bear provided favorable
treatment to businesses and persons that contributed to Charley Dooley’s reelection campaign and Citizens for Modern Transit. Fields also alleges that BiState violated the Uniform Relocation Act when it purchased Eager Road
Associates, LLC’s (“Eager Road”) remaining one-third interest in the Meridian
parking garage. The Meridian is adjacent to Bi-State’s Brentwood I-64 Metrolink
light rail station. This parking garage was constructed as part of the Cross-County
Extension of Metrolink according to a letter from a prior CEO of Bi-State. (See
Larry Salci Memorandum, ECF Doc No. 222-2 at p. 48).

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Fields alleges that Bi-State made false certifications to the federal
government when it acquired funding for the Cross-County Extension. In support
of his complaint, Fields identifies federal grants received by Bi-State between 2006
and 2009 authorized under the American Recovery and Reinvestment Act
(ARRA), the Congestion Mitigation Air Quality (CMAQ) program, and section
5307 of U.S. Code Title 49. (No. 221 at 10-11). Fields alleges that, as a condition
of obtaining these funds, Bi-State submitted certifications that it was in compliance
with federal statutes as outlined in the Federal Transit Agency’s (FTA) master
agreement. (Id. At 4-5). In contrast, Bi-State purchased the Meridian with local
funds alone. Specifically, Bi-State allocated funds from a one half percent sales
tax. As approved by local voters in 2010, Proposition M increased that sales tax
from one quarter of a percent to one half percent.
Fields does not dispute that Bi-State used Proposition M funds as the direct
source of funding for this purchase.2 Instead, his underlying claim is that Bi-State
failed to disclose that it violated federal law in its federal grant certifications
(ARRA, CMAQ, § 5307). Specifically, Fields claims that Bi-State violated the
Hatch Act by requiring employees to contribute to political campaigns and by
2

In his statement of facts, Fields states, without reference to any testimony or documents, that
“Proposition M funds were used to purchase the Meridien [sic] Garage, provide non-Federal
match for Federal grants, and support Metro Operations in St. Louis City and St. Louis County,
Missouri.” (No. 222 at ¶ 20). Fields argues that Bi-State “commingle[d]” these local funds with
“Federal funds out of multiple accounts,” but he offers no evidence to support this assertion nor
any precedent demonstrating that such “commingling” constitutes a claim for payment to the
federal government. (No. 221 at 1).
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instituting a “pay to play” scheme. Fields also alleges that Bi-State violated the
Uniform Relocation Act by failing to conduct an appraisal before purchasing Eager
Road’s interest in the Meridian. Fields does not identify when Bi-State made
certifications under ARRA, CMAQ, and § 5307, but he indicates that these federal
funds were received for the Cross-County Extension between 2006 and 2009.
Bi-State previously filed two motions for summary judgment in this case
arguing that it did not qualify as a “person” that can be sued under the False
Claims Act, [No. 44] and that it was protected by sovereign immunity, [No. 115]. I
denied these motions. U.S. ex rel. Fields v. Bi-State Dev. Agency of the MissouriIllinois Metro. Dist., No. 4:14 CV 1321 RWS, 2015 WL 5158398, at *15 (E.D.
Mo. Sept. 2, 2015); 2016 WL 4944097, at *3 (E.D. Mo. Sept. 16, 2016). The
Eighth Circuit affirmed my ruling because Bi-State is comparable to a local
government entity rather than a state agency. 872 F.3d 872 (8th Cir. 2017), cert.
denied sub nom., 138 S. Ct. 677, (2018) (citing Barket, Levy & Fine, Inc. v. St.
Louis Thermal Energy Corp., 948 F.2d 1084, 1086 (8th Cir. 1991)).
Bi-State now moves a third time for summary judgment, on the basis that
Fields has provided no evidence that it submitted a false certification to the federal
government.

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LEGAL STANDARD
Summary judgment is appropriate if the evidence, viewed in the light most
favorable to the nonmoving party, demonstrates that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a matter of
law. Lynn v. Deaconess Med. Ctr., 160 F.3d 484, 486 (8th Cir. 1998) (citing Fed.
R. Civ. P. 56(c)). The party seeking summary judgment bears the initial
responsibility of identifying the basis of its motion and those portions of the
affidavits, pleadings, depositions, answers to interrogatories, and admissions on
file which it believes demonstrates the absence of a genuine issue of material fact.
Celotext Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party makes
and supports such a motion, the nonmoving party may not rest on his pleadings. Id.
at 324. Instead, the nonmoving party must produce sufficient evidence to support
the essential elements on which he bears the burden of proof. Id. at 324.
ANALYSIS
In support of its motion for summary judgment, Bi-State argues that it only
used local (Proposition M) funds to purchase the Eager Road’s interest in the
Meridian Garage. It provides an affidavit from its Chief Financial Officer Kathy S.
Klevorn stating that Bi-State withdrew $6,000,000 from its Proposition M account.
(No. 209-1 at ¶ 9). The affidavit states that $5,860,000 of those funds were wired
to Touchstone Title for the purchase itself, fully accounting for the purchase cost.

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(Id.) On this basis, Bi-State argues that it did not make any claim for payment to
the federal government, within the meaning of the False Claims Act.
False Claim Act liability arises when a person “knowingly presents, or
causes to be presented, a false or fraudulent claim for payment or approval” to the
federal government. 31 U.S.C. § 3729(a)(1). The knowledge requirement can be
met if a defendant acts with “actual knowledge”, “deliberate indifference,” or
“reckless disregard” of the truth. 31 U.S.C. § 3729(b)(1)(A)(i)-(iii). The false or
fraudulent requirement can be met when a defendant “certifie[d] compliance with a
statute or regulation as a condition to government payment,” yet had knowingly
failed to comply with such statute or regulation. U.S. ex rel. Conner v. Salina Reg’l
Health Ctr., Inc., 543 F.3d 1211, 1217-18 (10th Cir. 2008) (distinguishing claims
of “factual falsity” where a defendant submits “an incorrect description of goods or
services provided” and “legal falsity” where a defendant certifies compliance).
Normally this type of “legal falsity” claim arises when a defendant certifies
that it is in compliance with certain federal laws, but the defendant has already
violated those laws. See id. Under this “express false certification theory” a
defendant who “falsely certifies compliance with a particular statute, regulation[,]
or contractual term,” is liable “where compliance is a prerequisite to payment.”
Mikes v. Straus, 274 F.3d 687, 698 (2d Cir. 2001). Under the “implied false
certification theory,” in contrast, the defendant may be in compliance with the

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relevant laws at the time of certification. But the defendant subsequently violates a
“statutory, regulatory, or contractual requirement” and makes a claim for payment
after such violation. See Universal Health Servs., Inc. v. United States, 136 S. Ct.
1989, 1999-2001 (2016) (validating the “implied false certification theory” as
applied to defendants who make a misleading representation about the services and
goods they are providing in their claim of payment).
In this case, Fields has produced no evidence showing that Bi-State made
1) any claims for payment or 2) any certification of compliance with the Uniform
Relocation Act during or after its purchase of the Meridian in 2010. Such evidence
is necessary to demonstrate liability under either the “express” or “implied” false
certification theories. As a result, Bi-State is entitled to judgment on Fields’
Uniform Relocation Act-related claims.
Additionally, Fields submits no admissible evidence showing that Bi-State
made claims for payment during or after the time that it allegedly violated the
Hatch Act. Fields states in his complaint that he was ordered to volunteer for
political campaigns that were meant to benefit Bi-State. (No. 27 at 4). He also
claims that he was coerced and compelled by Metro’s Senior VP Engineering to
solicit campaign contributions for County Executive Charlie Dooley. (Id. at 5).3
Fields cannot rest on his pleadings alone, Celotext Corp. v. Catrett, 477 U.S. 317,
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Fields submits a sworn affidavits, but does not repeat these claims in his affidavit, and he does
not submit any deposition testimony that he made under oath.
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324, and he does not provide any evidence that he actually was coerced in this way
or ordered to volunteer for political campaigns. Fields submits an affidavit, signed
by him, stating various additional Hatch Act violations. (No. 222-1 at 3-5).
However, he makes these statements without demonstrating any personal
knowledge of their contents. (See, e.g., id. at 3-4 (“Examples of the violations
include: a. Loaning out the Senior V.P. of Government Affairs to the Proposition A
campaign. b. Using campaign contributions as a selection factor for hiring the
$5.9M Vandeventer Bridge replacement team in 2009, . . .”)).
More importantly, Fields does not provide any dates for these alleged
violations of the Hatch Act. It appears that many, if not all, of these alleged actions
took place after the time when Bi-State allegedly made false certifications to obtain
ARRA, CMAQ, and § 5307 funds between 2006 and 2009. When considering all
of these materials, Fields has not presented admissible evidence to demonstrate
that any Hatch Act violations occurred before the time when Bi-State allegedly
made false certifications to the federal government. Fields has not produced
sufficient evidence to support the essential elements on which he bears the burden
of proof. Celotext Corp. v. Catrett, 477 U.S. 317, 324.
As a result, there is no issue of material fact in this case and Bi-State is
entitled to summary judgment.
Accordingly,

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IT IS HEREBY ORDERED Bi-State’s motion for summary judgment,
[No. 207], is GRANTED. Fields’ claims are DISMISSED with prejudice. An
appropriate judgment will accompany this Memorandum and Order.

________________________________
RODNEY W. SIPPEL
UNITED STATES DISTRICT JUDGE
Dated this 14th day of November, 2018.

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