United States of America v. Odyssey Marketing Group, Inc., et al.

Filing 36

ORDER denying 15 Motion to Dismiss for Failure to State a Claim. Signed by District Judge Terrence W. Boyle on 2/16/2016. (Romine, L.)

IN THE UNITED STA TES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
No. 5:15-CV-510-BO

UNITED STATES OF AMERICA,
Plaintiff,
v.
ODYSSEY MARKETING GROUP, INC.,
RODERICK JAMES MACKENZIE, TERRI A.
MACKENZIE, XZONDRIA DENISE BROWN,
AND SONIA IVELISSE WRIGLESWORTH,
Defendants.

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ORDER

This matter is before the Court on co-defendants Odyssey Marketing Group, Inc., Terri
A. MacKenzie, and Roderick James MacKenzie's joint motion to dismiss the complaint under
Federal Rules of Civil Procedure 9(b) and 12(b)( 6). The appropriate responses and replies have
been filed, and the matter is ripe for ruling. For the following reasons, defendants' motion is
DENIED. [DE 15].
BACKGROUND
Plaintiff, United States of America, brought suit against defendants for submission of
false claims under the False Claims Act, false statements to get a claim paid under the False
Claims Act, conspiracy to get a false claim paid under the False Claims Act, payment under
mistake of fact/restitution, and unjust enrichment/restitution. Defendant Odyssey Marketing
Group, Inc. (hereinafter "Odyssey") is a Georgia-based company, which was hired to provide
services to the United States Army at Fort Bragg in Fayetteville, North Carolina, as well as other
bases. Defendants Terri and Roderick MacKenzie are the president and vice president of

Odyssey, respectively. Odyssey and the MacKenzies filed a joint motion to dismiss under
Federal Rules of Civil Procedure 9(b) and 12(b)(6).
DISCUSSION
I.

Rule 9(b)
Federal Rule of Civil Procedure 9(b) imposes a heightened pleading standard for fraud or

mistake, requiring a party to "state with particularity the circumstances constituting fraud or
mistake," but allowing state of mind to be pled generally. Fed R. Civ. P. 9(b). The Fourth Circuit
has held that this "more stringent particularity requirement" commands a plaintiff bringing a
claim under the False Claims Act to "describe the time, place, and contents of the false
representations, as well as the identity of the person making the misrepresentation and what he
obtained thereby." United States v. Triple Canopy, Inc., 775 F.3d 628, 634 (4th Cir. 2015)
(quoting United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F .3d 3 70, 3 79 (4th Cir.
2008) ). However, while claims of fraud or mistake do have a heightened pleading standard, "[a]
court should hesitate to dismiss a complaint under Rule 9(b) if the court is satisfied (1) that the
defendant has been made aware of the particular circumstances for which she will have to
prepare a defense at trial, and (2) that plaintiff has substantial prediscovery evidence of those
facts." United States ex rel. Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784
(4th Cir. 1999).
Here, plaintiff has pled sufficient facts to meet the Rule 9(b) standard. First, plaintiffs
complaint "describe[s] the time, place, and contents of the false representations." Triple Canopy,
77 5 F .3d at 634. Plaintiff has provided specific contract numbers which it claims "were false and
supported by false records and false statements," including contracts 0208, 0016, and 0049. [DE
1, para. 152]. Plaintiff also provided details concerning specific false invoices, providing several

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as exhibits and thus establishing the time, place, and contents of these false representations as
well. [DE 1-22, 1-25, 1-26, 1-27]. Plaintiff also described an allegedly false utility payment
claim made on April 2, 2010 for $712,418.85. [DE 1, para. 140-42]. From the information in
plaintiffs complaint, defendants are on notice of the time, place, and contents of the allegedly
false representations.
Second, plaintiffs complaint adequately describes "the identity of the person(s) making
the misrepresentation." Triple Canopy, 775 F.3d at 634. Each of the three contracts at issue was
made with movant defendant Odyssey, of which movant defendants Terri and Roderick
MacKenzie are executives. [DE 1, para. 152]. The allegedly false invoices were also submitted
by Odyssey. [DE 1, para. 119]. Plaintiff alleges the personal involvement of both MacKenzies as
well, including claims that Ms. MacKenzie submitted "at least five fraudulent invoices" and that
both MacKenzies were involved in the creation of contract 0208. [DE 1, para. 158].
Finally, plaintiffs complaint describes what those defendants making the alleged
misrepresentations "obtained thereby." Triple Canopy, 775 F.3d at 634. Plaintiff has discussed at
length the contracts at issue, including which resulted in payments, as well as the amounts
received from allegedly fraudulent invoices and the utility payment.
In short, though it is likely there will be additional factual development to come in
discovery, plaintiffs complaint satisfies Rule 9(b)'s heightened pleading standard. From the
complaint, defendants are certainly "made aware of the particular circumstances for which [they]
will have to prepare a defense at trial," and it is apparent plaintiff "has substantial prediscovery
evidence of those facts." Harrison, 176 F.3d at 784. Accordingly, Rule 9(b) is satisfied.

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II.

Rule 12(b)(6)
Federal Rule of Civil Procedure l 2(b )(6) permits dismissal of a matter if it fails "to state

a claim upon which relief can be granted." See Fed. R. Civ. P. 12(b)(6). A Rule 12(b)(6) motion
to dismiss challenges the legal sufficiency of a plaintiff's complaint. Francis v. Giacomelli, 588
F .3d 186, 192 (4th Cir. 2009). When acting on the motion, the Court is to "view the complaint in
a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.
1993). The court "must accept as true all of the factual allegations contained in the complaint."

Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell At/. Corp. v. Twombly, 550 U.S. 544,
555-56 (2007)). However, the Court need not accept a complaint's "legal conclusions, elements
of a cause of action, and bare assertions devoid of further factual enhancement." Nemet

Chevrolet Ltd. v. Consumeraffairs.com, Inc., 591F.3d250, 255 (4th Cir. 2009). Although
complete and detailed factual allegations are not required, "a plaintiff's obligation to provide the
'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions." Twombly,
550 U.S. at 555 (citations omitted). "Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citing Twombly, 550 U.S. at 555).
As described above, though additional facts may need to be developed through discovery,
plaintiff has fulfilled its obligation "to provide the 'grounds' of [its] 'entitle[ment] to relief'" and
not just plead "labels and conclusions." See Twombly, 550 U.S. at 555 (citations omitted).
Therefore, accepting as true all of plaintiff's allegations as the Court is required to do at this
stage of the proceedings, the Court finds that plaintiff has satisfied Rule 8 of the Federal Rules of
Civil Procedure and has alleged enough facts to state a facially plausible fraud claim.

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Defendants' motion to dismiss under Rule 12(b)( 6) is denied. Thus, defendants' motion fails
under both Rules (9)(b) and 12(b)(6).
CONCLUSION
For the reasons above, defendants' motion to dismiss is DENIED. [DE 15].

SO ORDERED, this _ihay of February, 2016.

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