United States of America et al v. Oregon Health and Sciences University

Filing 60

Opinion and Order: The Court GRANTS Defendant's Motion 54 to Dismiss. The Court also GRANTS Plaintiff-Relators leave to file no later than April 28, 2017, an Amended Complaint to the extent that they can allege claims for unjust enrichment and/or payment by mistake that do not arise from the express contracts at issue. Signed on 04/11/2017 by Judge Anna J. Brown. See attached 20 page Opinion and Order for full text. (bb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

UNITED STATES OF AMERICA,
ex rel., RICHARD DOUGHTY,

3:13-CV-01306-BR
OPINION AND ORDER

Plaintiff-Relaters,

v.
OREGON HEALTH AND SCIENCES
UNIVERSITY,
Defendant.

BILLY J. WILLIAMS
United States Attorney
NEIL J. EVANS
ALEXIS LIEN
Assistant United States Attorneys
1000 S.W. Third Avenue
Suite 600
Portland, OR 97204
[phone]
Attorneys for Plaintiff
SHELLEY D. RUSSELL
Crispin Employment Lawyers
1834 S.W. 5gth Avenue
Suite 200
Portland, OR 97221-1455
[phone]

1 - OPINION AND ORDER

ELIZABETH FARRELL
0324 S.W. Abernethy Street
Portland, OR 97239
[phone]

Attorneys for Relator
ROBERT C. WEAVER, JR.
JOY ELLIS
PATRICK J. CONTI
Garvey Schubert Barer
121 S.W. Morrison Street
11th Floor
Portland, OR 97204
[phone]
MICHAEL J. VERNICK
JESSICA L. ELLSWORTH
MARTA A. THOMPSON
MORGAN L. GOODSPEED
Hogan Lovells US LLP
555 13'" Street N.W.
Washington, DC 20004
[phone]

Attorneys for Defendant
BROWN, Judge .

This matter comes before the Court on Defendant's Motion
(#54) to Dismiss.

The Court concludes the record is sufficiently

developed that oral argument on the pending Motion is not
warranted.

For the reasons that follow,

the Court GRANTS

Defendant's Motion and GRANTS Plaintiff-Relators leave to file an
Amended Complaint to the extent that they can allege claims for
unjust enrichment and/or payment by mistake that do not arise
from the express contracts at issue.

2 - OPINION AND ORDER

BACKGROUND

On July 30, 2013, Relator Richard Doughty filed a qui tam
action pursuant to 31 U.S.C.

§

3729 against Defendant Oregon

Health and Sciences University (OHSU) alleging Defendant violated
the False Claims Act (FCA), 31 U.S.C.

§

3729(a) (1) and (a) (2),

when it applied improper reimbursement rates to certain
federally-sponsored projects.
On October 18, 2016, the United States elected to intervene
in this matter.
On October 28, 2016, the United Stat;.!"s filed a Complaint in
.

.

.

Intervention alleging three claims for violation of the FCA, a
claim for payment by mistake, and a claim for unjust enrichment
relating to Defendant's application of improper reimbursement
rates to certain federally-sponsored projects.
On January 17, 2017, Defendant filed a Motion to Dismiss on
the grounds that OHSU is an arm of the State and, as such, is not
a "person" subject to liability under the FCA and that PlaintiffRelators' implied-contract claims are barred by their express
contract claims.
The Court took Defendant's Motion under advisement on
March 1, 2017.

3 - OPINION AND ORDER

STANDARDS
I.

Dismissal for Lack of Jurisdiction Pursuant to Rule 12(b) (1)

Plaintiff has the burden to establish that the court has
subject-matter jurisdiction.
726, 728

(9th cir. 2009).

Robinson v. Geithner, 359 F. App'x

See also Ass'n of Am. Med. Coll. v.

United States, 217 F.3d 770 (9th Cir. 2000).
When deciding a motion to dismiss for lack of subject-matter
jurisdiction under Rule 12 (b) (1), the court may consider
affidavits and other evidence supporting or attacking the
plaintiff's jurisdictional allegations.
F.3d 1108, 1114 n.1 (9th Cir. 2013).

Rivas v. Napolitano,

714

The court may permit

discovery to determine whether it has jurisdiction.

Laub v.

United States Dep't of lnterior, 342 F.3d 1080, 1093 (9th Cir.
2003).

When a defendant's motion to dismiss for lack of

jurisdiction "is based on written materials rather than an
evidentiary hearing, the plaintiff need only make a prima facie
showing of jurisdictional facts to withstand the motion to
dismiss."

Mavrix Photo, lnc. v. Brand Tech., lnc., 647 F.3d

1218, 1223 (9th Cir. 2011) (citation omitted).
II.

Dismissal for Failure to State a Claim Pursuant to Rule
12 (b) (6)

To survive a 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."
[Bell Atlantic v.
Twombly, 550 U.S. 554,] 570, 127 S. Ct. 1955
[(2007)]. A claim has facial plausibility when
4 - OPINION AND ORDER

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 556.
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.
Ibid.
Where a complaint pleads facts 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 557, 127 S. Ct. 1955 (brackets omitted).
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009).
Atlantic, 550 U.S. at 555-56.

See also Bell

The court must accept as true the

allegations in the complaint and construe them in favor of the
plaintiff.

Novak v.

U;S.,

795 F.3d 1012, 1017

(9th Cir. 2015).

"In ruling on a 12 (b) (6) motion, a court may generally
consider only allegations contained in the pleadings, exhibits
attached to the complaint, and matters properly subject to
judicial notice."

Akhtar v. Mesa,

2012) (citation omitted).

698 F. 3d 1202, 1212 (9th Cir.

A court, however,

"may consider a

writing referenced in a complaint but not explicitly incorporated
therein if the complaint relies on the document and its
authenticity is unquestioned."

Swartz v. KPMG LLP, 476 F.3d 756,

763 (9th Cir. 2007) (citation omitted).

DISCUSSION
I.

Plaintiff-Relators' FCA Claims

As noted, Defendant moves to dismiss Plaintiff-Relators' FCA

5 - OPINION AND ORDER

claims on the ground that Defendant is an arm of the state and,
as such, it is not a "person" subject to FCA liability.
Plaintiff-Relators, in turn, assert Defendant is not an arm
of the state and even if it is, the United States may bring FCA
actions against states and arms of the state.
The FCA provides in pertinent part that "any person who
. knowingly presents, or causes to be presented, a false or
fraudulent claim for payment or approval .
United States Government."

31 U.S.C.

§

. is liable to the

3729(a).

The FCA defines

a claim in relevant part as
any request"or demand, whether under a contract or
otherwise, for money or property and whether or
not the United States has title to the money or
property, that-(i) is presented to an officer, employee, or
agent of the United States; or
(ii) is made to a contractor, grantee, or
other recipient, if the money or property is
to be spent or used on the Government's
behalf or to advance a Government program or
interest.
31 U.S.C. § 3729(b) (2).

The FCA authorizes a private person (a

relator) to bring a qui tam civil action "for a violation of
section 3729 for the person and for the United States Government
. in the name of the Government."

31 U.S.C. § 3730(b) (1).

In Vermont Agency of Natural Resources v. U.S. ex rel.
Stevens, 529 U.S. 765 (2000), the Supreme Court addressed whether
a state or a state agency is a person within the meaning of the

6 - OPINION AND ORDER

FCA.

In Stevens the relator brought a qui tam action against the

Vermont Agency of Natural Resources

(VANR) alleging VANR had

submitted false claims to the Environmental Protection Agency.
The United States declined to intervene in the action.

VANR

moved to dismiss the action on the ground that VANR, a state
agency, was not.a person subject to liability under the FCA.
district court denied the motion.

The

The Second Circuit affirmed.

The Supreme Court accepted certiorari, reversed the Second
Circuit, and concluded the FCA "does not subject a State (or
state agency) to liability in [FCA} actions."

Id. at 787.

In

reaching its conclusion the Supreme Court "appl[ied] to

[§ 3729(a) its] longstanding interpretive presumption that
'person' does not include the sovereign."
omitted) .

Id. at 780

(citations

The Court noted "the FCA was enacted .

with the

principal goal of stopping the massive frauds perpetrated by
large [private] contractors during the Civil War.
provision -

the precursor to today's

§

Its liability

3729(a) - bore no

indication that States were subject to its penalties."
781-82 (quotation and citations omitted).

Id.

at

The Court acknowledged

the liability provision of the original FCA "has undergone
various changes" but noted those changes do not "suggest[] a
broadening of the term 'person' to include States."

Id. at 782.

The Court also examined "[s]everal features of the current
statutory scheme" and concluded those features "further support

7 - OPINION AND ORDER

the conclusion that States are not subject to qui tam liability."
Id. at 783.

Accordingly, the Supreme Court has made clear that

the term "person" in the FCA does not include states or arms of
the state.
A.

Defendant is an arm of the state.

As noted, Defendant asserts it is an arm of the state
and, as such, is not subject to the FCA.

Although Plaintiff-

Relators assert Defendant is not an arm of the state, they do not
cite any Ninth Circuit cases in which a court has held Defendant
or any other Oregon state university is not an arm of the state.
The Court notes Defendant is a public corporation
created by the State of Oregon and defined by the Oregon
Legislature as a governmental entity.
353.020

See Or. Rev. Stat. §

("The university shall be a governmental entity

performing governmental functions and exercising governmental
powers.") .
The Ninth Circuit's test for whether an entity is an
arm of the state for FCA purposes mirrors the test for whether an
entity is entitled to sovereign immunity under the Eleventh
Amendment.

See Stoner v. Santa Clara Cty. Office of Educ.,

502

F. 3d 1116, 1122 (9th Cir. 2007) ("To effectuate Congress's
presumed intent, we must interpret the term 'person' under

§

3729

in a way that avoids suits against 'state instrumentalities' that
are effectively arms of the state immune from suit under the
8 - OPINION AND ORDER

Eleventh Amendment.").

See also U.S. ex rel. Ali v. Daniel,

Mann, Johnson & Mendenhall, 355 F.3d 1140, 1147 (9th Cir. 2004)
("The arm-of-the-state test for sovereign immunity is used to
determine immunity from a wide variety of claims and is the
proper analysis to be undertaken when determining immunity under
the FCA. ") .
Under the arm-of-the-state test the court examines the
following factors:
(1) whether a money judgment would be satisfied
out of state funds; (2) whether the entity
performs central governmental functions;
(3) whether the entity may sue or be sued;
(4). whether the entity has the power to take
property in its own name or only in the name of
the state; and (5) the corporate status of the
entity.
Ali, 355 F.3d at 1147 (citation omitted).

Every court that has

addressed the issue and conducted an arm-of-the-state analysis
has concluded OHSU is an arm of the State of Oregon entitled to
Eleventh Amendment immunity.

See, e.g., Kessler v. Or. Health &

Sci. Univ., No. 1:13-1022, 2013 WL 5819030, at *2 (D. Or.
Oct. 29, 2013) ("The Court .

finds that OHSU is an

instrumentality of the state for purposes of sovereign immunity.
Thus, OHSU is protected from this suit [by] the Eleventh
Amendment."); Daniel v. Am. Bd. of Emergency Med.,
127, 165 (W.D.N.Y. 1997) ("The court .

. finds

988 F. Supp.

[OHSU] is an arm

or instrumentality of the state of Oregon, entitled to Eleventh
Amendment protection.")
9 - OPINION AND ORDER

In addition, courts have concluded OHSU

is entitled to state sovereign immunity because it is an arm of
See, e.g., Horton v. Or. Health & Sci. Univ., 359 Or.

the state.

168, 221 (2016) ("OHSU is an arm of the state and, for that
reason, may invoke the doctrine of sovereign immunity."); Thomas
v. Mettie, No. 3:14-554, 2015 WL 667629, at *3 & n.3 (D. Or.
Feb. 17, 2015) ("Because the pleadings of pro se litigants are to
be construed liberally, this Court could substitute OSU or OHSU
as defendants.

Even if this Court were to do so, however, both

entities are entitled to state sovereign immunity, and sovereign
immunity is not abrogated in federal court for claims seeking
money damages under Title I of the ADA."); Clarke v. Or. Health
Scis. Univ.,

343 Or. 581, 610

(2007) (OHSU is entitled to state

sovereign immunity).
Although the question of state sovereign immunity
differs from the question whether an entity is an arm of the
state for Eleventh Amendment purposes, the Ninth Circuit has
explained courts "must examine [the arm-of-the-state] factors in
light of the way [state] law treats the governmental [entity]"
when evaluating whether an entity is an arm of the state for
Eleventh Amendment purposes.
Dist., 963 F.2d 248, 251

(9~

Belanger v. Madera Unified Sch.
Cir. 1992).

In Clarke the Oregon

Supreme Court concluded in its evaluation of state sovereign
immunity that OHSU is charged with and performs state functions,
exercises governmental powers, is subject at least in part to the
10 - OPINION AND ORDER

control of the state, has only such powers and duties as the
state entrusts to it by statute, and has a governance structure
that makes it accountable to the state government.

The court's

conclusions shed light on the nature of how Oregon courts treat
OHSU.
This Court adopts the analysis and reasoning of
Kessler, Daniel, Thomas, and Horton.

Accordingly, the Court

concludes Defendant is an arm of the state.and, as such, is not a
"person" within the meaning of the FCA.
B.

The·United.States may not bring an FCA action against
Defendant.

Plaintiff-Relators assert even if Defendant is an arm
of the state, the United States may, nevertheless, bring an FCA
action against Defendant because the holding in Vermont Agency of
Natural Resources v. U.S. ex rel. Stevens applies only to FCA
cases brought by private individuals.

Plaintiff-Relators rely on

Justice Ginsberg' s. concurring opinion in Stevens to support their
assertion.

As noted, Justice Ginsberg's concurrence is not the

opinion of the majority in Stevens.

This Court, however, is

required to follow the majority opinion in Stevens, which does
not support Plaintiff-Relators' assertion.
In Stevens the United States declined to intervene in
the qui tam action.

The Supreme Court's analysis of the FCA's

application to the state agency did not hinge on the fact that

11 - OPINION AND ORDER

the FCA action was brought by a private individual.

As noted,

the majority "appl[ied] to [§ 3729(a) its] longstanding
interpretive presumption that 'person' does not include the
sovereign."

Id. at 780 (citations omitted).

"the FCA was enacted .

The Court observed

. with the principal goal of stopping

the massive frauds perpetrated by large [private] contractors
during the Civil War.

Its liability provision - the precursor to

today's§ 3729(a) - bore no indication that States were subject
to its penalties."
omitted).

Id. at 781-82 (quotation and citations

The Court acknowledged the :Liability provision of the

original FCA "has undergone various changes," but it found those
changes do not "suggest[] a broadening of the term 'person' to
include States."

Id. at 782.

The Court also examined "[s]everal

features of the current statutory scheme" and concluded those
features "further support the conclusion that States are not
subject to qui tam liability."

Id. at 783.

The Court stated

"various features of the FCA, both as originally enacted and as
amended, far from providing the requisite affirmative indications
that the term 'person' included States for purposes of qui tam
liability, indicate quite the contrary."

Id. at 787.

There is

not any indication that the Court's analysis or conclusion would
have differed if the United States had intervened in the matter.
In addition, although the Ninth Circuit has not
directly addressed this issue, it has indicated it would not

12 - OPINION AND ORDER

interpret Stevens to permit FCA actions by the United States
against arms of the state.

See, e.g., Donald v. Univ. of Cal.

Bd. of Regents, 329 F.3d 1040, 1042 n.3

(9th Cir. 2003) ("While it

is undisputed that private individuals cannot bring qui tam suits
against state entities under the FCA after Stevens, it is
somewhat unclear whether suits brought by the United States are
barred.

Nothing in the Court's opinion [in Stevens] purports to

limit its scope solely to qui tam suits brought by private
parties.") .
The Court notes the Stevens Court does not suggest its
outcome would differ if the United States had intervened in
matter as it did here.

th~t

The Court, therefore, concludes the

United States may not bring an FCA action against an arm of the
state such as Defendant.
Accordingly, the Court grants Defendant's Motion to
Dismiss Plaintiff-Relators' FCA claims.
II.

Plaintiff-Relaters' Quasi-Contract Claims

Plaintiff-Relators assert their Fourth and Fifth Claims in
"the alternative, and without waiving rights under the [FCA] ."
Compl. at

~~

94, 100.

Plaintiff-Relators assert the following in their Fourth
Claim for payment by mistake:
In seeking and receiving indirect cost
reimbursements for the at-issue .
grants that
were calculated based on the improper application
13 - OPINION AND ORDER

of the ONPRC F&A Rate; by improperly charging
costs for the non-ONPRC programs portion of
Building #637 to the ONPRC P51 grant .
. ; and
by charging an OCA to the ONPRC, the Government
made payments to OHSU based on a mistaken and
erroneous understanding that OHSU was entitled to
those funds.
This erroneous belief was material to the
Government's calculation of the amount of federal
grant funds to be paid to OHSU.
If the Government
had known that it was being charged by OHSU more
than it was entitled to, it would not have paid
those funds to OHSU.
Compl. at 'IT'il 95:-96.

Plaintiff-Relators also assert in their

Fifth Claim for unjust enrichment:
In seeking· and receiving indirect cost recoveries
for the at-issue .
. grants that were calculated
based on the improper application of the ONPRC F&A
Rate; by.improperly charging costs for the nonONPRC programs portion of Building #637 to the
ONPRC P51 grant.
. ; and by charging an OCA to
the ONPRC, OHSU received money from the Government
to which it was not entitled and therefore was
unjustly enriched. The circumstances of these
payments are such that, in equity and good
conscience, OHSU should not retain these payments,
the amount of which is to be determined at trial.
The Government conferred, and OHSU accepted,
monies under such circumstances that in equity and
good conscience OHSU should not be permitted to
retain.
It would be inequitable, and OHSU would
be unjustly enriched, if OHSU was permitted to
retain the funds that belong to the Government.
Compl. at 'IT'il 101-02.
Defendant asserts the Court should dismiss PlaintiffRelators' Fourth and Fifth Claims because those claims are based
on and governed by the express contracts alleged by PlaintiffRelators.

Defendant notes courts have rejected implied- and

14 - OPINION AND ORDER

quasi-contract claims when an enforceable, express contract
governs the subject matter of the dispute and defines the rights
of the parties.

See, e.g., Mosier v. Stonefield Josephson, Inc.,

815 F. 3d 1161, 1172 (9th Cir. 2016) ("As a matter of law, a
quasi-contract action for unjust enrichment does not lie [when],
as here, express binding agreements exist and define the parties'
rights." (internal quotation marks and alteration omitted)); U.S.
ex rel. Westinghouse Elec. Supply Co. v. Ahearn, 231 F.2d 353,

356 (9th Cir. 1955).("The terms of the express contract control.
There cannot be an implied contract either in law or in fact
contrary in terms to a controlling express ·contract.") ; ilrnett v.
Bank of Am., N.A.,

874 F. Supp. 2d 1021, 1035 (D. Or. 2012)

(dismissing unjust-enrichment claim "because a valid contract
the mortgage - covers the services at issue" and the defendant
"expressly admitted being party to the contract"); Prestige Homes
Real Estate Co. v. Hanson,

951 P.2d 193, 195 (Or. App. 1997)

("[T]here cannot be a valid legally enforceable contract and an
implied contract covering the same services.").
Plaintiff-Relators assert in their Response that courts
permit parties to plead quasi- or implied-contract claims in the
alternative to FCA claims.
As Defendant notes, however, courts have allowed limited
pleading of equitable claims in the alternative to FCA or
express-contract claims when the equitable claims are alleged to

15 - OPINION AND ORDER

have arisen from provisions in an express contract.

For example,

in United States v. Savannah River Nuclear Solutions, LLC, the
United States filed a complaint against two government
contractors and asserted three claims for violation of the FCA
and claims for common-law breach of contract, unjust enrichment,
and payment by mistake.

No. 1:16-cv-00825-JMC, 2016 WL 7104823,

at *1 (D.S.C. Dec. 6, 2016).

The defendants filed a motion to

dismiss all of the government's claims for failure to state a
claim.

The court held the government had stated claims for

violation of the FCA and for breach of contract.

The court,

however, agreed with the defendants' assertion that the
government could not bring claims for unjust enrichment and
payment by mistake "the face of an express contract that governs
the conduct underlying the allegations."

Id., at *27.

Although

the government asserted it brought its claims for unjust
enrichment and payment by mistake in the alternative to its FCA
and breach-of-contract claims, the court explained:
A plaintiff may not recover on a claim that is
quasicontractual in nature in the face of an
express contract that governs the matter under
dispute.
See Boldt Co. v. Thomason Elec., 820 F.
Supp. 2d 703, 707 (D.S.C. 2007) ("While parties are
permitted .
to pursue quasi-contractual
claims when there is no valid contract between the
parties, or there is some question as to whether
the contract is enforceable or applies to the
dispute, when the parties agree .
that a valid
and enforceable contract exists which covers the
dispute between them, such a claim is superfluous."); Swanson v. Stratos, 564 S.E.2d 117
(S.C. 2002) ("If the tasks the plaintiff is seeking
16 - OPINION AND ORDER

compensation for under a quantum meruit theory are
encompassed within the terms of an express
contract which has not been abandoned or
rescinded, the plaintiff may not recover under
quantum meruit.").
Furthermore, when there is no
dispute that an express contract covers the issue
and the parties merely disagree regarding the
interpretation of the contract, the plaintiff may
not maintain the quasicontractual claim even on an
alternative basis.
This rule applies regardless
whether the defendant is a party to the contract.

Id., at *26 (citations omitted).

The court noted the government

alleged in its complaint that the express contract at issue
governed its equitable claims.
Indeed, [defendant] FFS could ·only have been
enriched unjustly and payments to [both
defendants] could only have been mistaken if the
. contract provided that the [Department of
Energy] was not required to cover the costs at
issue.
Thus,
. the Government has
alleged the existence of an enforceable contract
that covers the issues underlying its claims for
unjust enrichment and payment by mistake as to
both [of the defendants], and the Government
therefore may not pursue the quasicontractual
claims against them.

Id.

(citations omitted).

The court pointed out that

[t]he fact that the Federal Rules of Civil
Procedure permit a plaintiff to plead alternative
inconsistent theories of liability does not alter
the analysis:
the undisputed allegation of an
enforceable contract that covers the underlying
issues forces the court to conclude that these two
counts of the complaint fail to state a claim for
which relief could be granted.
See Kellogg Brown
& Root Servs., 800 F. Supp. 2d at 160 (citing
United States v. Sci. Applications Int'l Corp.,
555 F. Supp. 2d 40, 59 (D.D.C. 2008); United
States ex rel. Purcell v. MWI Corp., 254 F. Supp.
2d 69, 79 (D.D.C. 2003)).
The fact that the
federal government retains the right to raise
common law claims like any other plaintiff .
17 - OPINION AND ORDER

does not mean that the government is entitled to
proceed with common law claims where private
plaintiffs would be barred.
Id., at *27.

Thus, the court ultimately granted the defendants'

motion to dismiss the government's claims for unjust enrichment
and payment by mistake.
Here, as in Savannah, the basis for Plaintiff-Relators'
claims for payment by mistake and unjust enrichment arise from
the express contracts the government alleged in its Complaint.
In fact,

Defendant could only have been enriched unjustly and

payments to Defendant could only have been mistaken if the
express contracts did not set out specific rates and methods for
charging costs.

Indeed, Plaintiff-Relators incorporate by

reference all of the allegations in the Complaint relating to the
express contracts that form the basis for their FCA claims
against Defendant and do not allege any other basis for unjust
enrichment or payment by mistake.

In addition, Plaintiff-

Relators do not allege the express contracts are invalid or
nonbinding.

The Court, therefore, concludes Plaintiff-Relators

have not stated claims for unjust enrichment or payment by
mistake.
Accordingly, the Court grants Defendant's Motion to Dismiss
Plaintiff-Relators' claims for unjust enrichment and payment by
mistake for failure to state a claim.

18 - OPINION AND ORDER

III. Leave to Amend
Plaintiff-Relators assert in their Response to Defendant's
Motion to Dismiss that if the Court grants Defendant's Motion to
Dismiss Plaintiff-Relators' FCA claims on the ground that
Defendant is not subject to liability under the FCA,

Plaintiff-

Relators should be allowed to file an Amended Complaint-inIntervention to assert FCA claims against unidentified
individuals in their personal capacity.
Defendant, in turn, asserts the Court, in the exercise of
its discretion, should deny Plaintiff-Relators' request to amend
their Complaint to assert claims against unidentified individuals
because the request comes almost four years after Doughty filed
the original Complaint.
The record reflects the government was aware of and began to
investigate Doughty's Complaint no later than October 2013, and
the Supreme Court's decision in Stevens was entered in 2000.
Accordingly, the .government has had nearly four years to
investigate and to make allegations against individuals in their
personal capacity in this matter, but has not done so.
e.g., Kourtis v. Cameron, 385 F. App'x 863, 867

See,

(9th Cir. 2009)

("The district court did not abuse its discretion [when it]
denied [the plaintiffs'] motion for leave to file a second
amended complaint adding new defendants almost four years after
those potential defendants should have been known to [the

19 - OPINION AND ORDER

plaintiffs] .n).

The Court agrees and, in the exercise of its

discretion, declines to grant Plaintiff-Relators' request to file
an Amended Complaint to assert FCA claims against unidentified
individuals in their personal capacity.
The Court, however, grants leave to Plaintiff-Relators to
file no later than April 28, 2017, an Amended Complaint to the
extent that they can allege claims for unjust enrichment and/or
payment by mistake that do not arise from the express contracts.

CONCLUSION

For these reasons, the Court GRANTS Defendant's Motion (#54)
to Dismiss.

The Court also GRANTS Plaintiff-Relators leave to

file no later than April 28, 2017, an Amended Complaint to the
extent that they can allege claims for unjust enrichment and/or
payment by mistake that do not arise from the express contracts
at issue.
IT IS SO ORDERED.
DATED this 11th day of April, 2017.

ANNA J. BROWN
United States District Judge

20 - OPINION AND ORDER