LAMPKIN v. PIONEER EDUCATION, LLC et al

Filing 51

OPINION. Signed by Judge Renee Marie Bumb on 4/8/2021. (dmr)

[Docket No. 42]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
UNITED STATES OF AMERICA ex
rel. SHARON LAMPKIN,
Plaintiff,

Civil No. 16-1817 (RMB/KMW)

v.
PIONEER EDUCATION LLC, et al.,

OPINION

Defendants.
APPEARANCES:
FRANKLIN J. ROOKS
MORGAN ROOKS, P.C.
525 ROUTE 73 NORTH, SUITE 104
MARLTON, NEW JERSEY 08053
On behalf of Plaintiff/Relator Sharon Lampkin
JARED A JACOBSON
JACOBSON & ROOKS, LLC
525 ROUTE 73 NORTH, SUITE 104
MARLTON, NEW JERSEY 08053
On behalf of Plaintiff/Relator Sharon Lampkin
RICHARD L. GOLDSTEIN
MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN, PA
15000 MIDLANTIC DRIVE, SUITE 200
P.O. BOX 5429
MOUNT LAUREL, NEW JERSEY 08054
On behalf of Defendants Pioneer Education LLC and Jolie
Health & Beauty Company
ANTHONY J. LABRUNA, JR.
U.S. ATTORNEY’S OFFICE
970 BROAD STREET, SUITE 700
NEWARK, NEW JERSEY 07102
On behalf of Interested Party the United States of America

RENÉE MARIE BUMB, United States District Judge
This matter comes before the Court on the Motion for Leave to
File

a

Second

Amended

Complaint

[Docket

No.

42]

brought

by

Plaintiff/Relator Sharon Lampkin (“Relator”). For the reasons
expressed below, the Court will grant Relator’s Motion, in part,
and deny it, in part.
I.

BACKGROUND
The Court incorporates the recitation of the relevant facts

from its previous Opinion, as the facts have not changed. [See
Docket No. 38, at 2-4.] In short, Relator alleges that Defendants
Pioneer Education, LLC; Pioneer Education Manager, Inc.; and the
Jolie Health and Beauty Academy (“Defendants”) violated the False
Claims Act (“FCA”) by falsifying certain records in order to
continue to receive funding under Title IV of the Higher Education
Act of 1965 (Counts I, II, and III). [See Docket 42-3, ¶¶ 143222.] She further alleges that Defendants violated the FCA by
retaliatorily discharging her after she complained about these
alleged improprieties (Count IV). [Id., ¶¶ 223-48.]
The Court dismissed without prejudice an earlier version of
Relator’s Complaint, which alleged the same Counts. [See Docket
Nos. 38-39 (Opinion and Order granting Defendants’ earlier Motion
to

Dismiss).

Complaint),

Compare
with

Docket

Docket

No.

No.
42-3

35

(Relator’s

(Relator’s

First

Proposed

Amended
Second

Amended Complaint).] Relator timely filed a Motion for Leave to
2

File a Second Amended Complaint on September 21, 2020. [Docket No.
42.] Defendants timely responded in opposition on November 16,
2020. [Docket No. 50.] Relator did not file a reply brief.
II.

JURISDICTION
The Court exercises subject matter jurisdiction pursuant to

28 U.S.C. § 1331, as Relator’s claims arise under federal law,
namely the FCA, 31 U.S.C. § 3728-33.
III. STANDARD
A. Motion for Leave to File an Amended Complaint Standard
FEDERAL RULE

OF

CIVIL PROCEDURE 15(a)(2) provides that a “court

should freely give leave [to amend] when justice so requires.”
However, if a proposed amendment is futile, the request for leave
to amend may be denied. See Arab Africa Int’l Bank v. Epstein, 10
F.3d 168 (3d Cir. 1993); Garvin v. City of Philadelphia, 354 F.3d
215, 222 (3d Cir. 2003). A proposed amendment is futile if it “is
frivolous

or

advances

a

claim

or

defense

that

is

legally

insufficient on its face.” Harrison Beverage Co. v. Dribeck Imps.,
Inc., 133 F.R.D. 463, 468 (D.N.J. 1990) (citation omitted). In
making such a determination, the court shall apply the Rule
12(b)(6) motion to dismiss standard. In re Burlington Coat Factory
Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997).
To withstand a 12(b)(6) motion to dismiss, “a complaint must
contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
3

556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007)). “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.” Id. at 662. “[A]n unadorned, the defendantunlawfully-harmed-me accusation” does not suffice to survive a
motion to dismiss. Id. at 678. “[A] plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’ 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 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).
When reviewing a plaintiff’s complaint under the motion to
dismiss standard, the district court “must accept as true all wellpled factual allegations as well as all reasonable inferences that
can be drawn from them, and construe those allegations in the light
most favorable to the plaintiff.” Bistrian v. Levi, 696 F.3d 352,
358 n.1 (3d Cir. 2012). When undertaking this review, courts are
limited
attached

to
to

the

allegations

the

complaint,

found

in

matters

the

complaint,

of

public

exhibits

record,

and

undisputedly authentic documents that form the basis of a claim.
See In re Burlington Coat Factory, 114 F.3d at 1426; Pension
Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192,
1196 (3d Cir. 1993).

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IV.

DISCUSSION
Relator’s Proposed Second Amended Complaint (“SAC”), like her

Amended Complaint before it, alleges four Counts. [See Docket No.
42-3.] The Court previously dismissed all four Counts without
prejudice. Because Counts I, II, and III are subject to a different
analysis than Count IV, the Court will address the groups of Counts
in turn.
A.

Counts I, II, and III

The

Court

incorporates

its

discussion

from

its

previous

Opinion of the relevant laws and precedent regarding implied false
certification legal falsity FCA claims. [See Docket No. 38, at 813.] That analysis concluded with the Court’s dismissal of Counts
I, II, and III because they “fail[ed] under [Universal Health
Servs. v. U.S. ex rel. Escobar’s] materiality standard because
they [were] devoid of any substantive allegation to support a
finding of finding of materiality.” [Id. at 12.] Specifically, the
Court noted that
the Amended Complaint does not specify whether the
[Department of Education (“DOE”)] would have ceased
payment of Title IV funds if it learned about any, or
all, of the alleged falsifications of student records
(Count I), falsifications of [satisfactory academic
progress] (Count II), and enrollment of ineligible
students (Count III). Although Relator alleges that
false statements “caused the Department of Education to
pay various claims under Title IV HEA Programs that it
would not have paid but for Defendants’ fraud,” the
Amended Complaint lacks any allegations in support of
this conclusory declaration of materiality.

5

[Id. at 12-13 (internal citations omitted).]
In

her

SAC,

Plaintiff

does

not

adequately

address

this

deficiency. Although the SAC adds numerous allegations, none of
them provide a basis for the ultimately conclusory allegations
that “[h]ad it known about the [allegations] . . . , the Department
of Education would have suspended Defendants’ receipt of Title IV
funds.” [Docket No. 42-3, ¶ 172; see also id., ¶¶ 197, 218-19.]
These amendments simply do not meet the “demanding” materiality
standard. Escobar, 136 S. Ct. at 2003. As noted in the previous
Opinion,

“[t]he

FCA’s

materiality

standard

is

‘rigorous’

and

‘demanding[,]’ and the statute is not meant to be an ‘all-purpose
antifraud statute . . . or a vehicle for pushing garden-variety
breaches of contract or regulatory violations.’” [Docket No. 38,
at 12 (quoting Escobar, 136 S. Ct. at 2002-03).] To protect against
this, the FCA does not call for liability for “every undisclosed
violation of an express condition of payment.” Escobar, 136 S. Ct.
at 2001. Rather, “materiality ‘look[s] to the effect on the likely
or

actual

behavior

of

the

recipient

of

the

alleged

misrepresentation.’” [Docket No. 38, at 12 (quoting Escobar, 136
S. Ct. at 2002).] Here, Relator’s allegations with respect to the
alleged fraud’s effect on the DOE’s behavior are still conclusory.
Therefore, because Relator’s SAC does not state a claim as to

6

Counts I, II, and III, her attempt to amend her complaint is futile
and the Court will deny her Motion with respect to those Counts.1
B.

Count IV

Again,

the

Court

incorporates

its

previous

Opinion’s

discussion of the standard for a retaliatory discharge claim under
the FCA. [See Docket No. 38, at 14-15.] The Court previously held
that Relator had not adequately alleged that she “(1) engaged in
protected

conduct,

and

(2)

was

terminated

.

.

.

because

of

engagement in the protected conduct.” [Id. at 14 (citing Hutchins
v. Wilentz, Goldman & Spitzer, 253, F.3d 176, 186 (3d Cir. 2001)
(emphasis added)).] Relator’s SAC adds sufficient new allegations
to

adequately

previous

address

Opinion.

the

deficiencies

Specifically,

the

noted
addition

in

the
of

Court’s

Relator’s

allegation that she, after complaining to Defendants about her
concerns, notified Defendants that she was considering “getting a
lawyer to look into the illegal activity at the school.” [Docket
No. 42-3, ¶ 240.] These allegations are sufficient to alleviate
the Court’s previous concern that Relator had failed to allege
“that her employer had any awareness that he concerns had anything
to do with, or raised the possibility of, a contemplated FCA suit.”

1

To the extent that discovery obtained in the course of prosecuting
Relator’s retaliatory discharge claim shows that further amendment
of Counts I, II, and III would not be futile, Relator will be
permitted to seek leave to amend her Complaint again.
7

[Docket No. 38, at 14.] Therefore, Relator’s SAC satisfies the
first requirement of an FCA retaliatory discharge claim.
Moreover, the SAC also adequately alleges that her protected
activity was the cause of her termination. According to the SAC,
Relator’s employment was terminated less than a month after she
allegedly notified Defendants that she was considering hiring an
attorney. This fact is sufficient to suggest “a clear connection”
between the protected activity and the adverse employment action,
which this Court had previously found to be lacking. [See Docket
No. 38, at 14-15.] However, the Court notes that Relator’s SAC
omits a relevant detail that was included in the Amended Complaint:
namely, that Relator was the subject of a student complaint and
that, after being disciplined for the behavior alleged in the
student’s complaint, Relator confronted the student about it. This
all

allegedly

occurred

soon

before

Relator’s

employment

was

terminated. Why this exculpatory fact was not included in the SAC
is concerning. Nevertheless, the Court will not address the issue
at this stage. Rather, because Relator’s SAC, governed by Rule 11,
adequately alleges a prima facie retaliatory discharge claim under
the FCA, the Court will grant Relator’s Motion with respect to
that claim.
V.

CONCLUSION
For the reasons expressed above, the Court will grant, in

part, and deny, in part, Relator’s Motion for Leave to File a
8

Second Amended Complaint. Specifically, the Court will grant the
Motion with respect to Count IV of the SAC. Conversely, the Court
will deny the motion without prejudice with respect to Counts I,
II, and III. An accompanying Order shall issue.

Date

RENÉE MARIE BUMB
United States District Judge

9