Jamison v. Fluor Corporation et al

Filing 37

MEMORANDUM OPINION & ORDER: The Court GRANTS Defendant's #24 Motion to Dismiss Plaintiff's #22 First Amended Complaint. The Court further GRANTS Plaintiff leave to file a second amended Complaint no later than 8/31/2017. If Plaintiff fails to amend his Complaint by 8/31/2017, then his claims against Defendant will be DISMISSED with prejudice. (Ordered by Judge Jane J. Boyle on 7/28/2017) (ran)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MICHAEL JAMISON,
Plaintiff,
v.
FLUOR FEDERAL SOLUTIONS,
LLC, a South Carolina Limited Liability
Company,
Defendant.

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CIVIL ACTION NO. 3:16-CV-0441-B

MEMORANDUM OPINION & ORDER
Before the Court is Defendant Fluor Federal Solutions, LLC’s Motion to Dismiss Plaintiff
Michael Jamison’s First Amended Complaint. Doc. 24. For the following reasons, the Court
GRANTS Defendant’s Motion.
I.
BACKGROUND1
This is an employment dispute. Plaintiff was employed as a Safety, Security, and
Transportation Manager by Defendant’s predecessor-in-interest, Del-Jen, Inc. Doc. 22, Pl.’s Am.
Compl. ¶¶ 6, 15. He now maintains that Defendant, a Job Corps2 contractor, fired him in retaliation
for his participation in a November 2013 qui tam action. Doc. 22, Pl.’s Am. Compl. ¶¶ 7–11, 27–32.

1

The Court draws its factual account from the initial pleadings as well as the parties’ briefing on the
Motion at issue. Any contested fact is identified as the allegation of a particular party.
2

According to the parties, Job Corps is a federal program that provides educational and career
technical skills, training, and support services through a nationwide network of campuses offering career
development services to at-risk young men and women ages 16 through 24. Doc. 22, Pl.’s Am. Compl. ¶ 8.
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A.

Job Corps’s Operations
By way of background—and undisputed by the parties3—the United States Department of

Labor (DOL) contracts with private companies to run Job Corps centers. Id. ¶ 9. The Job Corps
center in this case is the North Texas Job Corps Center (NTJCC) in McKinney, Texas. Id. The
private companies contracting with the DOL to run the NTJCC are Defendant (along with its
predecessor-in-interest, Del-Jen, Inc.) and Career Opportunities, Inc. (COI). Id. ¶¶ 6, 9. As
Defendant explains, the DOL contracted with COI to operate the NTJCC, and COI in turn
subcontracted with Del-Jen, Inc.—and later Defendant—to provide certain personnel and services
at the NTJCC. Doc. 24, Def.’s Mot. to Dismiss 2, 2 n.1; see also Doc. 22, Pl.’s Ex. 2. As further
background: The DOL agreements with contractors at each center are performance-based and
measured against other centers in areas such as: (1) total number of students enrolled at the center;
(2) evaluations of students’ achievement of academic and vocational credentials; (3) initial job
placements; and (4) ongoing job placements following the initial placement. Doc. 22, Pl.’s Am.
Compl. ¶¶ 9–10; Doc. 24, Def.’s Mot. to Dismiss 2. Favorable performance, Plaintiff says, results in
incentive fees, bonuses, and contract extensions for the companies. Doc. 22, Pl.’s Am. Compl. ¶ 9.
Here, Plaintiff maintains that in operating the centers, companies such as Defendant and
COI must follow the requirements of 29 U.S.C. §§ 2881, et seq.; 20 C.F.R. Parts 638 and 670; the
DOL Job Corps Office “Policy and Requirements Handbook” (PRH); and guidelines and procedures
established by the Secretary of Labor (collectively, the Guidelines). Doc. 22, Pl.’s Am. Compl. ¶ 9;
see also Doc. 24, Def.’s Mot. to Dismiss 3. The Guidelines specifically mandate that students have

3

See Doc. 24, Def.’s Mot. to Dismiss 1–3.
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the following Job Corps qualifications: (1) legal residency status; (2) emotional stability without
objective behavioral problems; (3) no criminal record; (4) no use of illegal drugs; and (5) no face-toface court or institutional supervision or court-imposed fines while enrolled in Job Corps. Doc. 22,
Pl.’s Am. Compl. ¶ 12; Doc. 24, Def.’s Mot. to Dismiss 3. According to the parties, the Guidelines
also require program centers such as NTJCC to enforce a zero tolerance policy for students using
drugs and other controlled substances, committing any act of violence against another student (such
as assault, rape, or other bodily harm), or engaging in inappropriate sexual behavior. Doc. 22, Pl.’s
Am. Compl. ¶ 12; Doc. 24, Def.’s Mot. to Dismiss 3.
B.

Plaintiff’s Allegations
Plaintiff asserts that on November 15, 2010, Del-Jen, Inc. entered into a Concurrent

Jurisdiction Agreement in which it agreed to notify the McKinney Police Department of any offenses
committed on NTJCC property. Doc. 22, Pl.’s Am. Compl. ¶ 13. The NTJCC Director, Omoniyi
Amoran, agreed to a substantially similar agreement on August 30, 2013. Id. ¶ 14; Doc. 24, Def.’s
Mot. to Dismiss 3.
Plaintiff was hired by Del-Jen, Inc. in August 2012 as the Safety, Security, and Transportation
Manager for NTJCC. Doc. 22, Pl.’s Am. Compl. ¶ 15; Doc. 24, Def.’s Mot. to Dismiss 1. In that
capacity, Plaintiff says, his job was to follow the Guidelines and ensure student safety from any type
of violence or drug abuse. Doc. 22, Pl.’s Am. Compl. ¶ 15.
Plaintiff claims that about a week after he started, he used a key given to him by Maria
Martin, his immediate supervisor and an employee of COI, to open a door in the security
department. Id. ¶ 17. Inside, Plaintiff avers, he observed various types of drugs and contraband
explicitly mentioned in the Guideline’s zero tolerance policy. Id. Plaintiff says that he was informed
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by Martin and Jeffrey Joseph, the lead security day supervisor, that the items in the room had been
taken from students without any disciplinary action or consequences. Id. Plaintiff claims that he was
also informed that NTJCC had its own amnesty policy. Id. ¶ 20. Under the policy, says Plaintiff,
students returning from off-campus could voluntarily turn over any contraband without being
reported, disciplined, or having the police called. Id. In addition, Plaintiff maintains, NTJCC had a
box located outside the security office used by students to voluntarily deposit contraband without
consequence. Id. ¶ 21.
Plaintiff alleges that over the course of his first two months at NTJCC, he observed 3–10
incidents per day ranging from physical violence to drug use. Id. ¶ 22. Plaintiff, in turn, reported the
incidents to the McKinney Police Department. Id. From August 2012 to December 2012, Plaintiff
or his staff contacted the Police about 50 times. Id. But at some point between September and
October of 2012, Martin told him to stop calling the police. Id. Plaintiff claims that other employees
informed him that, although he was doing a good job, he would be fired because “each student was
worth $50,000–$60,000 from the DOL” as long as they stayed in the program. Id. About four months
later, according to Plaintiff, Martin instructed other security staff not to contact Plaintiff when
incidents arose and moved all investigation responsibilities to the Equal Employment Opportunity
Commission (EEOC). Id. ¶¶ 23–24. Plaintiff also alleges that Martin and Amoran told him on several
occasions that he would be fired if he called the police again. Id. ¶ 25.
In November 2013, Plaintiff was one of four relators in a qui tam action filed in the Northern
District of Texas. Id. ¶ 27. After filing the qui tam suit, Plaintiff met with the United States
Attorney’s Office and the DOL Office of Inspector General. Id. ¶ 28.
In early December 2013, an employee notified Plaintiff that Martin was telling employees not
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to give any information to Plaintiff. Id. ¶ 29. Around the same time, Plaintiff was relieved of his
duties, stripped of his investigative powers, and barred completely from any management meetings.
Id. Plaintiff maintains that according to the employee, “there was every indication that the qui tam
filing and the information from the meeting with the U.S. Attorney’s Office had been leaked to
Defendant and the management at NTJCC.” Id.
In January 2014, Plaintiff submitted a written complaint to NTJCC’s human resources
department (the Internal Report) that detailed Plaintiff’s complaints. Id. ¶ 30. In the written
complaint, he discusses the instructions to not contact the police, his treatment, and Martin’s control
over student investigations, saying Martin “strategically manipulate[s] the investigation process of
[student incidents]” and “[uses] program longevity as the primary determining factor for discipline.”
Doc. 22, Pl.’s Am. Compl. Ex. 2, Internal Report 2. Plaintiff alleges that he was then told by another
employee that he would be fired if he complained to the DOL. Doc. 22, Pl.’s Am. Compl. ¶ 30.
Plaintiff was suspended in May 2014 and fired on June 20, 2014. Id. ¶¶ 31–32; Doc. 22, Pl.’s Ex. 3,
Notice of Termination. Based on that timeline, Plaintiff believes that he was fired in retaliation for
trying to shed light on Defendant’s activities by filing the qui tam suit and Internal Report. See Doc.
22, Pl.’s Am. Compl. ¶¶ 29–36.
C.

Procedural History
Plaintiff filed the present suit in February 2016, asserting a retaliatory discharge claim under

the False Claims Act (FCA), 31 U.S.C. § 3730(h). See Doc. 1, Pl.’s Compl. After some initial
confusion as to which entity ought to be the named defendant, Plaintiff amended his pleadings to
include the correct parties. Doc. 22, Pl.’s Am. Compl.
Defendant then moved to dismiss Plaintiff’s Amended Complaint under Federal Rules of
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Civil Procedure 9(b)4 and 12(b)(6) for failure to state a plausible claim for relief. Doc. 24, Def.’s Mot.
to Dismiss. Plaintiff responded. Doc 28, Pl.’s Resp. to Def.’s Mot. to Dismiss [hereinafter, Pl.’s Resp.].
And Defendant replied. Doc. 29, Def.’s Reply to Pl.’s Resp. [hereinafter Def.’s Reply]. The Motion
is thus ripe for the Court’s review.
II.
LEGAL STANDARDS
A.

Rule 12(b)(6)
Rule 12(b)(6) authorizes the court to dismiss a plaintiff’s complaint for “failure to state a

claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In considering a Rule 12(b)(6)
motion to dismiss, “[t]he court accepts all well-pleaded facts as true, viewing them in the light most
favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.
2007)(quoting Martin K. Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464, 467 (5th Cir.
2004)). The court will “not look beyond the face of the pleadings to determine whether relief should
be granted based on the alleged facts.” Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir. 1999).
To survive a motion to dismiss, a plaintiff must plead “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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). “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. “The plausibility standard is not akin to a ‘probability

4

As addressed below, the Court concludes that Rule 9(b)’s heightened pleading standard does not
apply to Plaintiff’s claim. See infra pp. 7–8.
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requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
When well-pleaded facts fail to achieve this plausibility standard, “the complaint has alleged—but
it has not shown—that the pleader is entitled to relief.” Id. at 679 (internal quotation marks and
alterations omitted).
B.

Heightened Standard of Review
Defendant argues that the Court should use Federal Rule of Civil Procedure 9(b)’s

heightened pleading standard because the FCA is an anti-fraud statute. Doc. 24, Def.’s Mot. to
Dismiss 9. Rule 9(b) states that when “alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b) (emphasis added). Plaintiff
argues the Court should instead apply the ordinary pleading standard under Rule 8(a), which
requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.”
Fed. R. Civ. P. 8(a)(2); Doc. 28, Pl.’s Resp. 11.
The Fifth Circuit has not addressed the issue specifically. But most courts that have,
including fellow district courts in the Fifth Circuit, have held that FCA retaliatory discharge claims
under 31 U.S.C. § 3730(h) “‘need only meet the Rule 8(a) standard.’” Guerrero v. Total Renal Care,
Inc., No. EP-11-cv-449-KC, 2012 WL 899228, at *3 (W.D. Tex. Mar. 12, 2012) (quoting Thomas
v. ITT Educ. Servs., Inc., No. 11-544, 2011 WL 3490081, at *3 (E.D. La. Aug. 10, 2011)).5
5

See also United States ex rel. Sanchez v. Lymphatx, Inc., 596 F.3d 1300, 1304 (11th Cir. 2010) (internal
quotation marks and citations omitted) (“Because her retaliation claim did not depend on allegations of fraud,
Sanchez’s complaint only needed a short and plain statement of the claim showing that [she was] entitled
to relief.”); Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1103 (9th Cir. 2008) (quoting United
States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 238 n.23 (1st Cir. 2004)) (“[U]nlike a FCA
violation claim, a FCA retaliation claim ‘does not require a showing of fraud and therefore need not meet the
heightened pleading requirements of Rule 9(b).’”); United States ex rel. Sikkenga v. Regence Bluecross Blueshield
of Utah, 472 F.3d 702, 729 (10th Cir. 2006); United States ex rel. Williams v. Martin-Baker Aircraft Co., 389
F.3d 1251, 1259–60 (D.C. Cir. 2004).
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The Court agrees with that reasoning.6 A retaliatory discharge claim under 31 U.S.C.
§ 3730(h) does not rely on a showing of fraud. See Guerrero, 2012 WL 899228, at *3 (“These courts
of appeal reasoned that because retaliation claims under the FCA are not dependant on allegations
of fraud, Rule 9(b)’s heightened standard should not be applied.”). Thus, Rule 8(a)’s ordinary
pleading standard, not Rule 9(b)’s heightened standard, applies. See id. (collecting cases); see also
McCrary v. Knox Cty., 200 F. Supp. 3d 782, 786 n.1 (S.D. Ind. 2016); United States ex rel. Wood v.
Allergan, Inc., — F. Supp. 3d —, 2017 WL 1233991, at *36 (S.D.N.Y. 2017); United States v. N.
Adult Daily Health Care Ctr., 205 F. Supp. 3d 276, 297 (E.D.N.Y. 2016).
C.

Retaliatory Discharge Under the False Claims Act
The purpose of the FCA is to combat fraud against the government. Robertson v. Bell

Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994); see generally 31 U.S.C. § 3729. With that

6

Defendant relies on Sealed Appellant I v. Sealed Appellee I, 156 F. App’x 630, 632 (5th Cir. 2005) to
show that courts have applied Rule 9(b) to FCA retaliation claims. In that case the Fifth Circuit affirmed a
district court’s dismissal of a plaintiff’s qui tam suit alleging: (1) violations of the FCA for fraud; and
(2) retaliatory discharge. Id. In analyzing the FCA fraud claim, the Fifth Circuit applied Rule 9(b). Id. at
633–34. But in addressing the retaliatory discharge claim, the Fifth Circuit affirmed the district court’s
dismissal on the grounds that the plaintiff failed to allege “that he was engaged in a protected activity”
without specifying which pleading standard was in play. See id. at 634–35. The Court disagrees with
Defendant’s reading of Sealed Appellant I. If anything, the Fifth Circuit’s deliberate mention of Rule 12(b)(6)
for retaliation claims after addressing other FCA claims under Rule 9(b) suggests that different standards
apply. In any event, the Court concludes that the Fifth Circuit has not specifically addressed which pleading
standard applies to FCA retaliation claims.
Defendant also cites to two more cases for the same proposition. See Haynes v. Breathing Ctr. of Hous.,
No. 4:15-cv-02569, 2016 WL 3418852, at *5 (S.D. Tex. June 21, 2016) (summarily rejecting defendant’s
Rule 9(b) motion to dismiss FCA retaliation claim after conducting thorough analysis of defendant’s Rule
12(b)(6) motion to dismiss and then denying it) and Roop v. Melton, No. 3:12-cv-00116-GHD-SAA, 2013
WL 5349153, at *5 (N.D. Miss. Sept. 24, 2013) (denying defendant’s motion to dismiss general fraud claims
under the FCA pursuant to Rule 9(b) together with retaliation claim without specifying which standard
applied to retaliation claim). But much like Sealed Appellant I, these cases never specify which pleading
standard applies to FCA retaliation claims. Embracing Defendant’s position would require an inferential leap
that cuts against authority from other district courts in this Circuit, as well as that of other circuits around
the country. The Court declines to do so.
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in mind, its whistleblower provision “protects employees who take steps to uncover and report an
employer’s fraudulent submission of claims to the government.” Guerrero, 2012 WL 899228, at *3.
In particular, the statute states:
Any employee, contractor, or agent shall be entitled to all relief necessary to make
that employee, contractor, or agent whole, if that employee, contractor, or agent is
discharged, demoted, suspended, threatened, harassed, or in any other manner
discriminated against in the terms and conditions of employment because of lawful
acts done by the employee, contractor, agent or associated others in furtherance of
an action under this section or other efforts to stop 1 or more violations of this
subchapter.
31 U.S.C. § 3730(h).
III.
ANALYSIS
To adequately state an FCA retaliation claim, Plaintiff must demonstrate that: (1) he
participated in a protected activity; (2) Defendant was aware that he engaged in the activity; and
(3) he was discriminated against as a result of participation in the activity. United States ex rel. George
v. Bos. Sci. Corp., 864 F. Supp. 2d 597, 603–04 (S.D. Tex. 2012).
As a quick recap, Plaintiff alleges that Defendant retaliated against him in violation of the
FCA by firing him for: (1) his role as a relator in a qui tam action; and (2) internally reporting what
he perceived as violations of the Guidelines. Doc. 22, Pl.’s Am. Compl. ¶¶ 29–36. Defendant, by
contrast, argues that Plaintiff’s Amended Complaint should be dismissed because it fails to allege any
facts demonstrating that Defendant was aware of Plaintiff’s participation in a protected activity. Doc.
24, Def.’s Mot. to Dismiss 1, 10–17. Nonetheless, Plaintiff still bears the burden to plausibly allege
all three elements. See Twombly, 550 U.S. at 570.
The Court considers the first two elements in turn. As discussed below, the Court concludes
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that Plaintiff failed to adequately allege that Defendant was aware of his participation in a protected
activity. For that reason, the Court does not reach the question of whether Plaintiff was
discriminated against as a result of his actions.
A.

Participation in a Protected Activity
The scope of protected activities under the FCA was broadened in 2009 when Congress

passed the Fraud Enforcement and Recovery Act. See generally Fraud Enforcement and Recovery Act
of 2009, Pub. L. No. 111-21, § 4(d), 123 Stat. 1617, 1624–25. The breadth of activities protected
by the statute now includes all “lawful acts done . . . in furtherance of an action under this section
or other efforts to stop 1 or more violations of this subchapter.” 31 U.S.C. § 3730(h) (emphasis added).
Plaintiff alleges that he engaged in two protected activities: (1) serving as a relator in a qui
tam action; and (2) internally reporting what he perceived as violations of the Guidelines. Doc. 22,
Pl.’s Am. Compl. ¶¶ 29–36.7 Defendant acquiesces that Plaintiff engaged in a protected activity by
serving as a relator in a qui tam action but does not address whether Plaintiff’s internal reporting also
qualifies as a protected activity. Doc. 24, Def.’s Mot. to Dismiss 10–11.
The Court agrees with Defendant that filing a qui tam suit is a protected activity. Robertson,
32 F.3d at 951. As to Plaintiff’s internal reporting, “[t]he Fifth Circuit recognizes internal complaints

7

The Court notes that Plaintiff’s First Amended Complaint expressly states: “Plaintiff’s filing of the
Qui Tam was protected activity under the statute.” Doc. 22, Pl.’s Am. Compl. ¶ 34. There is no such express
mention of Plaintiff’s internal reporting as a protected activity. Nevertheless, Plaintiff does mention his
Internal Report just one page earlier and allege that he was warned that further complaints would lead to his
termination. Id. ¶ 30. And Plaintiff’s briefing argues that both his internal reporting and role as relator in a
qui tam action were protected activities. Doc. 28, Pl.’s Resp. 19–20. The Court therefore reads Plaintiff’s
Amended Complaint to allege two protected activities. As addressed below, however, the Court’s liberal
reading has no impact on its ultimate conclusion here: Plaintiff’s Internal Report did not make Defendant
aware of his engagement in a protected activity. See infra pp. 11–20. Therefore, it cannot plausibly give rise
to an FCA claim for retaliatory discharge.
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that ‘concern false or fraudulent claims for payment to the government’ as protected activity under
the [FCA], but requires that the complaints raise concerns about fraud.” George, 864 F. Supp. 2d at
605 (citing United States ex rel. Patton v. Shaw Servs., L.L.C., 418 F. App’x 366, 372 (5th Cir. 2011)).
As addressed more fully below, it’s unclear whether Plaintiff’s Internal Report rises to that level. But
Defendant challenges Plaintiff’s internal reporting at the second step of the analysis here, arguing
that the complaint was insufficient to make Defendant aware that Plaintiff engaged in a protected
activity. See Doc. 24, Def.’s Mot. to Dismiss 14–17. So the Court will address it at that step, too.
Accordingly, the Court: (1) concludes that Plaintiff engaged in a protected activity by serving
as a relator in a qui tam action; and (2) assumes without deciding that Plaintiff engaged in a
protected activity when he filed his Internal Report. The Court next considers whether Defendant
was aware that Plaintiff engaged in a protected activity.
B.

Awareness of Participation in Protected Activity
“A successful [FCA] retaliation claim requires Defendant to have known Plaintiff engaged

in a protected activity.” Guerrero, 2012 WL 899228, at *7 (citing Patton, 418 F. App’x at 371–72;
Robertson, 32 F.3d at 951). Thus, Plaintiff’s First Amended Complaint must sufficiently plead that
Defendant was on notice that Plaintiff had engaged in a protected activity. See George, 864 F. Supp.
2d at 607–08.
“‘Notice can be accomplished by expressly stating an intention to bring a qui tam suit, but it
may also be accomplished by any action which a factfinder reasonably could conclude would put the
employer on notice that litigation is a reasonable possibility.’” George, 864 F. Supp. 2d at 608
(quoting Williams, 389 F.3d at 1262). Said differently, an employer may be put on notice indirectly.
In that case, “[t]he employer need not know that the employee has filed or is contemplating such
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an action. Rather, the employer must know that the employee was engaged in protected
activity—that is, investigation or other activity concerning potentially false or fraudulent claims that
reasonably could lead to a FCA investigation.” Id. (internal citations and quotation marks omitted).
In moving to dismiss, Defendant maintains that Plaintiff’s First Amended Complaint does
not sufficiently plead that: (1) Defendant was aware of Plaintiff’s involvement in the qui tam action;
and (2) Plaintiff’s Internal Report put Defendant on notice of possible qui tam litigation. Doc. 24,
Def.’s Mot. to Dismiss 11–17. Plaintiff, placing emphasis on the temporal relationship between his
actions and termination, responds that the facts alleged in his First Amended Complaint are
sufficient to demonstrate that Defendant knew that he engaged in a protected activity. Doc. 28, Pl.’s
Resp. 16–17, 21–23. The Court addresses Defendant’s potential knowledge of each activity in turn.
1.

Qui Tam Action

Defendant argues that Plaintiff’s First Amended Complaint is “devoid of any factual
allegations that [it] had any knowledge of [Plaintiff’s] qui tam suit.” Doc. 24, Def.’s Mot. to Dismiss
11. The Court agrees to the extent that Plaintiff’s First Amended Complaint does not include an
express factual allegation that Defendant knew about the qui tam action. Indeed, just one
allegation—identified by Defendant in its Motion—even suggests that Defendant might have been
on notice of Plaintiff’s involvement in the qui tam. Id. Defendant offers three arguments, which are
addressed below, as to why that allegation in insufficient. Id. at 11–14.
Plaintiff does not respond to Defendant’s arguments other than by generally noting the low
bar needed to satisfy Rule 12(b)(6)’s plausibility standard. See Doc. 28, Pl.’s Resp. 21–23. Instead,
he points to four other allegations in his First Amended Complaint as examples of “roadblocks” put
in place by Defendant, supposedly because it knew that he was engaged in a protected activity:
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(1) Martin instructed Plaintiff not to do his duties or report instances to the McKinney police;
(2) Martin instructed security staff working under Plaintiff not to report violations to Plaintiff;
(3) Martin threatened to fire Plaintiff for carrying out his duties; and (4) Martin stripped Plaintiff of
his investigative authority and transferred it to the EEOC. Doc. 28, Pl.’s Resp. 21–23; see also Doc.
22, Pl.’s Am. Compl. ¶¶ 19–26.
Plaintiff seems to argue that the Court should infer that Defendant was aware of Plaintiff’s
involvement in the qui tam suit because those events allegedly took place. In effect then, Plaintiff
points to allegations8 in his First Amended Complaint to ask the Court a rhetorical question—Why
would Defendant put these “roadblocks” in Plaintiff’s way if it did not know that he filed the qui tam
action? But there’s a problem with that theory: Plaintiff filed his qui tam action in November 2013,
which—based on the chronology of events as pled in Plaintiff’s First Amended Complaint—was after
those instances took place. See Doc. 22, Pl.’s Am. Compl. ¶ 27. So as a temporal matter, the
allegations Plaintiff identifies as “roadblocks” do not plausibly demonstrate that Defendant was on
notice of the qui tam action.9 Thus, Plaintiff’s proffered response falls flat.
Turning back to arguments presented by the Motion at hand, however, Defendant does
identify an allegation that could suggest that Defendant was on notice of the qui tam action:
29.

In early December 2013, Plaintiff was told by an employee, Mr.
Klinger, that Martin was telling employees not to give any
information to Plaintiff and that there was every indication that the
Qui Tam filing and the information from the meeting with the US

8

But notably, not the allegation attacked by Defendant’s Motion.

9

To the extent Plaintiff argues that the “roadblocks” were the result of his internal reporting, the
Court is similarly unpersuaded. As addressed below, Plaintiff’s internal reporting did not put Defendant on
notice that he engaged in a protected activity. But more importantly here, the report was filed after the qui
tam action. Doc 22, Pl.’s Am. Compl. ¶ 30. Thus, the same temporal restrictions apply.
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Attorney had been leaked out to the Defendant and the management
at NTJCC. Around the same time, Plaintiff was relieved of his duties,
stripped of his investigative powers, and barred completely from any
management meetings.
Doc. 22, Pl.’s Am. Compl. ¶ 29. As referenced, Defendant offers three arguments to which Plaintiff
does not respond as to why that allegation is insufficient to demonstrate notice.
First, Defendant avers that the statement Plaintiff relies on in Paragraph 29 is hearsay.
Perhaps. See Nifong v. SOC, LLC, — F. Supp. 3d —, 2017 WL 590290, at *3 n.3 (E.D. Va. Feb. 13,
2017) (excluding as hearsay in qui tam retaliation action coworker’s statement as to employer’s notice
of plaintiff’s protected activity). But the Court need not make that determination at this stage in the
proceedings. See Develder v. Hirschler, No. 2:09-cv-1803-EFB P, 2016 WL 319219, at *3 (E.D. Cal.
Jan. 27, 2016) (“As Rule 12(b)(6) challenges are determined entirely on the pleadings, defendant’s
attempt to challenge whether plaintiff will be able to overcome a hearsay objection to this evidence
in support of his allegations is premature.”).
Second, Defendant argues that even if the allegation in Paragraph 29 is not hearsay, then it
requires an improper inferential leap because it is based on Klinger’s assumption of why Martin told
employees to refrain from giving Plaintiff information. Doc. 24, Def.’s Mot. to Dismiss 13. The Court
agrees. Plaintiff’s Amended Complaint does not allege that Martin or Defendant had notice of
Plaintiff’s qui tam suit; rather, it merely states that “there was every indication that the Qui Tam
filing and the information from the meeting with the US Attorney had been leaked out to the
Defendant and the management at NTJCC.” Doc. 22, Pl.’s Am. Compl. ¶ 29. In other words, and
as Defendant notes, Plaintiff assumes that Martin was aware of his protected activity because Martin
instructed Klinger not to give information to him. Doc. 24, Def.’s Mot. to Dismiss 13. The Court

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takes Plaintiff’s claim that Martin told employees to wall Plaintiff off as true, but finds that Plaintiff’s
assumption does not necessarily follow; there are any number of plausible reasons why Martin might
have chosen to do so. As a result, Plaintiff’s allegation is insufficient to plausibly demonstrate that
Defendant was on notice that litigation was a possibility. See George, 864 F. Supp. 2d at 607–08.
Third, Defendant contends that even if Paragraph 29 sufficiently alleges that Martin had
notice of Plaintiff’s protected activity, Martin is an employee of COI, not Defendant, and therefore
her notice cannot plausibly be imputed to Defendant. Doc. 24, Def.’s Mot. to Dismiss 13–14. To
start, and as noted above, Plaintiff need not allege some smoking gun instance when Defendant was
put on notice of his activities—indirect or constructive notice is sufficient. See Schuhardt v. Wash.
Univ., 390 F.3d 563, 568 (8th Cir. 2004) (emphasis added) (“A plaintiff must show the employer had
actual or constructive knowledge of the protected activity in order to establish a prima facie case of
retaliation [under § 3730(h)].”). That said, it’s somewhat unclear whether Martin’s knowledge or
notice can be imputed to Defendant—while she is employed by a separate corporate entity, COI,
that entity’s operations and personnel are seemingly alloyed with Defendant’s. Compare Defer LP v.
Raymond James Fin., Inc., 654 F. Supp. 2d 204, 218 (S.D.N.Y. 2009) (refusing to aggregate the
knowledge of separate entities on the basis that they share the same parent company), with In re
Marsh & Mclennan Cos., Inc. Sec. Litig., 501 F. Supp. 2d 452, 482–83 (S.D.N.Y. 2006) (imputing
subsidiary company’s scienter to parent company when factual allegations established that parent was
familiar with subsidiary’s operations and alleged misconduct).
While Defendant urges that such imputation is impermissible as a matter of law, the Court
need not take a stance on the matter to render a decision here. Because even assuming that Martin
could impute her knowledge to Defendant, Plaintiff’s First Amended Complaint, taken as true, fails
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to show that she plausibly did. In short, Plaintiff fails to sufficiently address: (1) the relationship
between COI and Defendant; and (2) how as a result of that relationship, Martin’s
knowledge—assuming she had any—of Plaintiff’s engagement in protected activities was passed on
to Defendant. See Doc. 22, Pl.’s Am. Compl. ¶¶ 29–35.
All in all, Plaintiff’s allegations stemming from his role as a relator in a qui tam action fail to
demonstrate that Defendant was sufficiently on notice that litigation was a possibility. See George,
864 F. Supp. 2d at 607–08. Thus, the allegations are insufficient to form the basis of a plausible
retaliation claim. See Guerrero, 2012 WL 899228, at *7 (internal citations omitted) (explaining that
a plaintiff’s allegations “must show that the employer was on notice of the distinct possibility of qui
tam litigation.”).
2.

Internal Report

As referenced, to state a plausible FCA retaliation claim, Plaintiff must allege that Defendant
was on notice that he was “investigating fraud.” George, 864 F. Supp. 2d at 607. With that in mind,
the Court turns to Defendant’s second challenge, namely that Plaintiff’s Internal Report was
insufficient to put Defendant on notice. Doc. 24, Def.’s Mot. to Dismiss 14–17. Plaintiff does not
respond to this point aside from reemphasizing that: (1) under some circumstances, an internal
complaint can confer notice; and (2) he filed an internal complaint. See Doc. 28, Pl.’s Resp. 21–23.
“Courts have found [the FCA’s] notice prong satisfied based on allegations that the employee
complained directly to [his] supervisors.” George, 864 F. Supp. 2d at 608. In considering Defendant’s
challenge, however, the Court notes that there are two potentially conflicting lines of reasoning at
play. On one hand, “‘an employee may put her employer on notice of possible False Claims Act
litigation by making internal reports that alert the employer to fraudulent or illegal conduct.’”
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Guerrero, 2012 WL 899228, at *7 (quoting Lymphatx, 596 F.3d at 1304). Said differently, “‘if an
employee wants to impute knowledge to the employer . . . [s]he must specifically tell the employer
that [s]he is concerned about possible fraud.’” George, 864 F. Supp. 2d at 608 (quoting United States
ex rel. Smith v. Yale Univ., 415 F. Supp. 2d 58, 105 (D. Conn. 2006)). On the other hand, “no ‘magic
words—such as illegal or unlawful—are necessary to place the employer on notice of protected
activity.’” Id. (quoting Fanslow v. Chi. Mfg. Ctr., Inc., 384 F.3d 469, 484 (7th Cir. 2004)).
So an internal report must concern possible fraud against the government, but need not
necessarily mention fraud. That can be a fine line depending on the substance of the internal report
as a whole—if there’s not much there, then the lack of “magic words” may well be outcome
determinative. See Robertson, 32 F.3d at 951 (finding plaintiff’s internal report did not constitute
protected activity in part because it “never used the terms ‘illegal,’ ‘unlawful,’ or ‘qui tam action’”).
At bottom, an internal report must still “put the employer on notice that litigation is a reasonable
probability.” George, 864 F. Supp. 2d at 608. “It is insufficient for the relator to show that the
employer knew that the whistleblower had concerns about compliance with the law; she must show
that the employer was on notice of the distinct possibility of qui tam litigation.” United States ex rel.
Gonzalez v. Fresenius Med. Care N. Am., 748 F. Supp. 2d 95, 104 (W.D. Tex. 2010).
Defendant argues that Plaintiff’s Internal Report did not put Defendant on notice that he
engaged in activities that could reasonably lead to an FCA case because it just addresses compliance
with the Guidelines and never mentions potential fraud against the government. Doc. 24, Def.’s Mot.
to Dismiss 15–17. As mentioned above, Plaintiff does not counter Defendant’s argument. But his
First Amended Complaint does allege that he submitted a written complaint to both COI and
Defendant that: (1) set forth violations of the Guidelines that Plaintiff observed; and (2) asserted
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that Defendant’s amnesty program violated the Guidelines. Doc. 22, Pl.’s Am. Compl. ¶ 30.
The Internal Report was attached to Plaintiff’s First Amended Complaint and therefore may
be considered by the Court under Rule 12(b)(6) as part of the pleadings. See King v. Life School, 809
F. Supp. 2d 572, 578 (N.D. Tex. 2011) (“In the 12(b)(6) context, pleadings include attachments to
the complaint.”). It alleged, in pertinent part:
Mrs. Martin (and Mr. Amoran by his failure to end this practice) has established a corrupt
system of investigation that violates the PRH, the Concurrent Jurisdiction Agreement
between the North Texas Job Corps Center and the McKinney Police Department, state,
local, and federal law, including laws designed to protect students’ civil rights. Mr. Amoran
is aware of Mrs. Martin’s malfeasance but seems to be doing nothing to stop it. I once
attempted to advise Mrs. Martin of federal and state laws she was violating. Her response to
me was: “We are the federal government.” This flippant response seems to underscore her
disregard for policy and law.
Doc. 22, Pl.’s Ex. 2, Internal Report.
Those are serious allegations. Yet the Court struggles to see how they would put Defendant
on notice that qui tam litigation was a distinct possibility. See Gonzalez, 748 F. Supp. 2d at 104. That’s
particularly true given the Internal Report’s closing paragraph, which expressly states the relief that
Plaintiff sought:
I request respectfully that a neutral investigator be assigned to investigate this matter
expediently. I’m also requesting that my original job duties be reinstated immediately,
without interference, while these serious allegations are investigated. Thank you.
Doc. 22, Pl.’s Ex. 2, Internal Report.
Nowhere does Plaintiff allege fraud or otherwise mention the possibility of litigation—he just
asks for someone to look into his concerns about Martin and Amoran’s compliance with the law. To
be sure, magic words are unnecessary to put an employer on notice of possible litigation. But
Plaintiff’s express request for an investigation alone flips that tenet: By saying exactly what he wanted

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from his Internal Report (an internal investigation), Plaintiff made it unreasonable to expect
something more in the form of qui tam litigation. Put another way, some words, such as express
requests for discrete forms of relief that do not involve litigation, might make it less reasonable for
an employer to expect qui tam litigation.
Here, Plaintiff’s Internal Report complains of his coworkers’ and supervisors’ noncompliance
with the law. Those complaints, coupled with Plaintiff’s express request for a single form of relief in
the form of an internal investigator, were insufficient to put Defendant “on notice of the distinct
possibility of qui tam litigation.” Gonzalez, 748 F. Supp. 2d at 104; see also George, 864 F. Supp. 2d
at 608 (internal quotation marks and citations omitted) (“Internal reporting has been held to
constitute protected activity, but if an employee wants to impute knowledge to the employer for
purposes of the second prong of the [FCA retaliation] analysis, he must specifically tell the employer
that he is concerned about possible fraud.”).
Defendant also asserts a second argument—which, again, Plaintiff does not counter (see Doc.
28, Pl.’s Resp. 21–23)—as to why Plaintiff’s Internal Report was insufficient to confer notice: It was
made in furtherance of his job duties. Doc. 24, Def.’s Mot. to Dismiss 17. Defendant is correct that,
generally speaking, internal reports consistent with an employee’s job responsibilities are insufficient
to put an employer on notice that an employee is engaged in protected activity. Sealed Appellant I,
156 F. App'x at 635. That makes sense—how could an employer suspect that an employee was
engaged in a protected activity if he or she was conducting investigations that were a part of his or
her job? See id. Yet Defendant is misguided in arguing that Plaintiff’s Internal Report was carried out
as part of his job.
“Plaintiff’s job was to follow the requirements of [the Guidelines] and to the greatest extent
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possible ensure the safety of the students from any type of violence and drug abuse.” Doc. 22, Pl.’s
Am. Compl. ¶ 15. Those duties might entail some internal reporting, but such internal reports would
center on student violence and drug use. The Internal Report in question, by contrast, addressed
Plaintiff’s coworkers’ and supervisors’ compliance with the Guidelines or other applicable law. The
Court therefore concludes that in filing his Internal Report, Plaintiff “expressed concerns to his
supervisors outside of those that were part of his duties.” Sealed Appellant I, 156 F. App'x at 635.
Nevertheless, and as addressed above, Plaintiff’s Internal Report was still insufficient to place
Defendant “on notice of the distinct possibility of qui tam litigation.” Gonzalez, 748 F. Supp. 2d at
104. The Court—taking that determination together with Plaintiff’s deficient allegations that
Defendant was on notice of his role in a qui tam action (see supra pp. 12–16)—therefore finds that
Plaintiff’s First Amended Complaint fails to adequately allege that Defendant knew that Plaintiff
“had engaged in any activity protected by the FCA—an essential element of an FCA retaliation
claim.” United States ex rel. Ligai v. ESCO Tech., Inc., 611 F. App’x 219, 220 (5th Cir. 2015) (per
curiam). For that reason, the Court concludes that Plaintiff has failed to plead facts sufficient to state
a plausible FCA retaliation claim, and accordingly GRANTS Defendant’s Motion to Dismiss (Doc.
24).
IV.
CONCLUSION
The Court notes that “‘district courts often afford plaintiffs at least one opportunity to cure
pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the
plaintiffs advise the court that they are unwilling or unable to amend in a manner that will avoid
dismissal.’” In re Am. Airlines, Inc. Privacy Litig., 370 F. Supp. 2d 552, 568 (N.D. Tex. 2005) (quoting
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Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002))
(emphasis added). While Plaintiff has already amended his Complaint once, “this is the first time the
[C]ourt has addressed whether [his] pleadings sufficiently state a claim on which relief can be
granted.” Id.
So to ensure that the Court’s final decision is based not on the sufficiency of his pleadings but
the merit of his claims, the Court GRANTS Plaintiff leave to replead. See id. at 567–68. Plaintiff may
replead his theory that Defendant knew that Plaintiff was involved in a qui tam action, but not his
theory that the Internal Report put Defendant on notice of the possibility of qui tam litigation, which
is incurable—the deficiency rests in the Report itself, not Plaintiff’s pleadings. Plaintiff’s amended
pleading should also take into account all other pleading deficiencies identified here and in
Defendant’s briefing.10
For the reasons stated above, the Court GRANTS Defendant’s Motion to Dismiss Plaintiff’s
First Amended Complaint (Doc. 24). The Court further GRANTS Plaintiff leave to file a second
amended Complaint no later than August 31, 2017. If Plaintiff fails to amend his Complaint by
August 31, 2017, then his claims against Defendant will be DISMISSED with prejudice.

10

Defendant’s Motion to Dismiss asserts two additional theories as to why Plaintiff’s First Amended
Complaint is deficient, namely that it is devoid of allegations of: (1) false claims or certifications to the
government; and (2) misrepresentations of compliance with statutory, regulatory, or contractual authority.
Doc. 24, Def.’s Mot. to Dismiss 18–21. As to the first point, and as Plaintiff notes in his Response, Plaintiff’s
FCA retaliation claim need not allege false or fraudulent claims to the government. See Guerrero, 2012 WL
899228, at *3; see also Doc. 28, Pl.’s Resp. 25. Turning to Defendant’s second point, the Court disagrees:
Plaintiff’s First Amended Complaint plainly alleges statutory, regulatory, and contractual violations. See Doc.
22, Pl.’s Am. Compl. ¶ 21. Nonetheless, to the extent that Defendant’s arguments on these points go towards
the general factual sufficiency of Plaintiff’s allegations, Plaintiff should take those challenges into
consideration when repleading.
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SO ORDERED.
SIGNED: July 28, 2017.

_________________________________
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE

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