United States ex rel. Simmons v. Samsung Elecs. Am., Inc., Case No. PWG–11–cv–2971.
| Decision Date | 01 July 2015 |
| Docket Number | Case No. PWG–11–cv–2971. |
| Citation | 116 F.Supp.3d 575 |
| Parties | UNITED STATES of America, ex rel. Robert SIMMONS, Plaintiff, v. SAMSUNG ELECTRONICS AMERICA, INC., Defendant. |
| Court | U.S. District Court — District of Maryland |
Nathan M. Peak, Ashcraft and Gerel LLP, Landover, MD, Thomas H. Barnard, Office of the U.S. Attorney, Baltimore, MD, for Plaintiff.
Relator Robert Simmons ("Relator" or "Simmons") moves for an award of 22% of the $2.3 million settlement between the United States and Samsung Electronics America, Inc. ("Samsung"), pursuant to the qui tam relator's share provisions of the False Claims Act ("FCA"), 31 U.S.C. § 3730(d)(1). Relator's Mot., ECF No. 38. Simmons contends that his contribution to the Government's settlement with Samsung entitles him to 22% of the settlement proceeds. Relator's Mem. 1, ECF No. 38–1. The Government opposes Simmons's motion and files a cross-motion, arguing that an award of 16% of the settlement is appropriate. Gov't Mot. & Mem., ECF Nos. 41, 41–1. For the reasons set forth below, the cross-motions shall be granted in part and denied in part, and the Relator shall receive an 18% share of the settlement proceeds.
Simmons, who worked as a Solutions Architect at Samsung from June 2007 to July 2011, filed a qui tam complaint against Samsung and Summit Government Group, LLC ("Summit") on October 18, 2011, alleging that Samsung and Summit violated the FCA by submitting false claims for Samsung computer products sold to the United States under Summit's General Services Administration ("GSA") contract that were not compliant with the Trade Agreements Act. Compl. ¶ 2, ECF No. 1. Concurrently, pursuant to 31 U.S.C. § 3730(b)(2), Simmons provided the Government with a "written disclosure of substantially all material evidence and information [he] possess[ed]." 31 U.S.C. § 3730(b)(2) ; Relator Statement 5, Gov't Mem. Ex. 1, ECF No. 41–3. During the course of its investigation, the Government twice met with Simmons: interviewing him on November 21, 2011 in Baltimore, Maryland and again on February 7, 2012 in Washington, D.C. Relator's Mem. 5, 7; Gov't Mem. 2, 4.
On January 16, 2014, the Government partially intervened against Samsung and declined to intervene with respect to Summit.1 ECF No. 16. On July 17, 2014, the Government and Simmons filed a joint stipulation of dismissal as to Samsung following the execution of a settlement agreement between Samsung, Simmons, and the Government. ECF No. 30. The settlement agreement provides that Samsung shall pay a settlement amount of $2.3 million to the Government, and that Simmons claims entitlement under 31 U.S.C. § 3730(d) to a share of the settlement award. Settlement Agr., ECF No. 30–1. On August 15, 2014, I dismissed the original Complaint with prejudice and retained jurisdiction to decide Simmons's share amount. ECF No. 31. He subsequently filed a Motion for Immediate Award of Statutory Minimum Relator Share on August 27, 2014, ECF No. 32, which I denied as moot, ECF No. 37, after the parties filed a Joint Stipulation of Resolution, stating that the Government "informed the Relator that authority was granted to pay Relator the 15 percent of the $2,300,000 settlement with Samsung." ECF No. 36.
The parties continued to discuss a final resolution of Simmons's share, but failed to reach an agreement, although the Government paid Simmons $345,000, or 15% of the settlement. Gov't Mem. 1. Simmons, however, insisted that he be paid more. Subsequently, the parties filed the pending cross-motions regarding the appropriate share to which Simmons was entitled. Simmons filed a reply and opposition, ECF No. 42, such that his motion has been fully briefed. The Government did not file a reply, but the time for doing so has passed. See Loc. R. 105.2(a). Having reviewed the filings, I find that a hearing is not necessary. See Loc. R. 105.6. Upon careful consideration of the briefing and the exhibits submitted by the parties, I conclude that Simmons is entitled to an award of an 18% share of the settlement reached between the Government and Samsung.
Under the FCA, when the Government intervenes and settles a qui tam case, a relator receives between 15% and 25% of the proceeds of the settlement of the claim. 31 U.S.C. § 3730(d)(1). The FCA states that the amount awarded to the realtor is based on "the extent to which the person substantially contributed to the prosecution of the action," id., but otherwise does not specify any criteria for this determination. The parties acknowledge that the actual percentage awarded largely is left to the Court's informed discretion. See Relator's Mem. 13; Gov't Mem. 8.
Courts traditionally treat the 15% minimum statutory share as a "finder's fee." United States ex rel. Alderson v. Quorum Health Grp., Inc.,
171 F.Supp.2d 1323, 1331 (M.D.Fla.2001).2 This 15% "incentive compensation" is paid to a relator " ‘even if that person does nothing more than file the action in federal court.’ " Id. at 1332 n. 29 (quoting 132 Cong. Rec. H9382–03 (Oct. 7, 1986) (statement of Rep. Berman)). Increased awards beyond 15% are provided for greater assistance, such as in " ‘those cases where the person carefully develops all the facts and supporting documentation necessary to make the case required by law, and where that person continues to play an active and constructive role in the litigation that leads ultimately to a successful recovery to the United States Treasury.’ " Id. at 1332 (quoting 132 Cong. Rec. H9282–03 (Oct. 7, 1986) (statement of Rep. Berman)). The maximum 25% award thus is reserved for relators who "actively and uniquely assist the government in the prosecution of the case." United States ex rel. Burr v. Blue Cross & Blue Shield of Fla., Inc., 882 F.Supp. 166, 168 (M.D.Fla.1995). Because the text of the FCA is silent with respect to criteria for awards above the 15% minimum and below the 25% maximum, courts frequently look to the legislative history of the FCA and the Department of Justice internal guidelines ("DOJ guidelines") to inform their calculation of the appropriate relator's share. E.g., Alderson, 171 F.Supp.2d at 1331. Although the aforementioned factors do not bind this Court, I will rely on them as useful and appropriate criteria to help determine Simmons's share.
The factors discussed in the legislative history of the FCA stem from the amendments to the act. They specify what to consider in determining the relator's share: (1) the significance of the information provided to the government by the qui tam plaintiff; (2) the contribution of the qui tam plaintiff to the result; and (3) whether the information in the suit provided by the relator was previously known to the government. S.Rep. No.99–345, at 28 (1996), reprinted in 1986 U.S.C.C.A.N. 5266, 5293.
With respect to the contribution of significant information by the qui tam plaintiff, Simmons's allegations, and the investigative leads contained therein, certainly were key to triggering the Government's investigation of, and eventual settlement with, Samsung. But Simmons was unable to provide further knowledge of the scheme beyond the allegations contained in the complaint and in the disclosure statement. Indeed, his disclosure statement stated that he learned of Samsung selling goods that were not TAA compliant "primarily through his colleague," whom I will refer to as "Mr. I." Relator Statement 5. Mr. I worked as Samsung's Federal Contract Manager and handled direct sales by Samsung to the federal government. Id. at 1. Simmons was employed by Samsung as a Solutions Architect role, based in Lexington, Kentucky, where he was responsible for technical architecture for customer solutions. Id. Although Simmons "worked closely" with Mr. I, id., he did not deal with Samsung's contracts and was not privy to and did not have first-hand knowledge of important documents, conversations, and other information that he could provide to the Government. This was apparent at the November 21, 2011 interview, when Simmons explained to the Government that he worked remotely out of his home in Kentucky while employed at Samsung, and that he worked mainly on enterprise accounts and only "sometimes became involved with government sales by helping Samsung understand the technical requirements." Buffone Decl. ¶ 4, Gov't Mem. Ex. 2, ECF No. 41–4. Simmons possessed limited personal knowledge to share with the Government about the details of how Samsung's government sales distribution chain worked, offering instead that Mr. I could join the interview because Mr. I held the key role in government sales. Id. ¶ 5. Moreover, Simmons stated that all documents in his disclosure statement were obtained from Mr. I. Id. ¶ 7. At the February 7, 2012 interview, Simmons again provided "only a general understanding [of the government sales distribution chain] and could not provide a detailed understanding of the contracts under which Samsung products were sold to the United States in violation of the TAA." Id. ¶ 9. Thus, although Simmons's allegations triggered the Government's investigation, he did not otherwise provide significant information to the Government to bolster the case against Samsung.
The second Senate factor—the qui tam plaintiff's contribution to the result—is discussed in Alderson, where the court determined that the relator's contribution to the settlement merited a 24% share because the relator "contributed decisively to nearly every aspect of the case from the initial investigation to the conclusion of mediation." Alderson, 171 F.Supp.2d at 1333. Here, Simmons notes that under the statutory scheme, the Government is expected to contribute more substantially to the resolution of a case in which it intervenes. Relator's Reply 2. As Simmons sees it, this means that he is expected to contribute less, and therefore he is entitled to a 22%...
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...“This 15% ‘incentive compensation' is paid to a relator ‘even if that person does nothing more than file the action in federal court.'” Id. (quoting U.S. ex Alderson, 171 F.Supp.2d at 1332 n.29 (internal quotation marks omitted)). By contrast, courts should award a percentage share above 15......