U.S. ex rel. Marlar v. Bwxt Y-12, L.L.C., 07-6051.

• Citation: 525 F.3d 439
• Decision Date: 13 May 2008
• Docket Number: No. 07-6051.,07-6051.
• Parties: UNITED STATES of America, ex rel. Claudia MARLAR; and Claudia Marlar, Plaintiffs-Appellants, v. BWXT Y-12, L.L.C., Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

525 F.3d 439

UNITED STATES of America, ex rel. Claudia MARLAR; and Claudia Marlar, Plaintiffs-Appellants, v. BWXT Y-12, L.L.C., Defendant-Appellee.

No. 07-6051.

United States Court of Appeals, Sixth Circuit.

Argued: May 1, 2008.

Decided and Filed: May 13, 2008.

ARGUED:

Leonard Egan, Washington, D.C., for Appellants. Glenn V. Whitaker, Vorys, Sater, Seymour & Pease, LLP, Cincinnati, Ohio, for Appellee.

ON BRIEF:

Leonard Egan, Washington, D.C., Ronald J. Zuker, Vaughan & Zuker, Knoxville, Tennessee, Stephen R. Felson, Cincinnati, Ohio, for Appellants. Glenn V. Whitaker, Michael J. Bronson, Victor A. Walton, Jr., Vorys, Sater, Seymour & Pease, LLP, Cincinnati, Ohio, Kenneth M. Brown, BWXT Y-12, Oak Ridge, Tennessee, John C. Burgin, Jr., Kramer Rayson, LLP, Knoxville, Tennessee, for Appellee.

Before: KENNEDY and MARTIN, Circuit Judges; HOOD, District Judge.^*

OPINION

KENNEDY, Circuit Judge.

Ms. Claudia Marlar filed this action against her former employer, BWXT Y-12, L.L.C. ("BWXT"), alleging that it had violated the False Claims Act ("FCA") by defrauding the United States government, in violation of 31 U.S.C. § 3729(a)(1)-(3), and by discharging her in retaliation for whistleblowing, in violation of 31 U.S.C. § 3730(h). The district court held that Ms. Marlar's claim of fraud was not pleaded with specificity, and therefore her cause of action was dismissed for failure to comply with Federal Rule of Civil Procedure 9(b). The district court also held that Ms. Marlar failed to allege the elements necessary to establish a cause of action for retaliation, and therefore dismissed her complaint for failure to comply with Federal Rule of Civil Procedure 8(a). Ms. Marlar claims that both determinations are in error. We find that the district court properly dismissed Ms. Marlar's fraud complaint, as Ms. Marlar failed to identify a single false claim and did not establish the specifics of the alleged fraud. We find, however, that Ms. Marlar adequately pleaded a cause of action for retaliation. We therefore affirm in part and reverse in part the district court's decision and we remand for further proceedings consistent with this opinion.

BACKGROUND

I. Factual Background

Ms. Marlar sued BWXT for allegedly defrauding the United States government and discharging her in retaliation for whistleblowing. Her complaint alleges that BWXT operates the Y-12 nuclear power facility in Oak Ridge, Tennessee pursuant to a contract with the United States Department of Energy ("DOE"). The contract at issue in this case began November 1, 2000 and covered a five-year operational period. The compensation paid to BWXT by DOE had fixed elements as well as performance-based elements. Each month, BWXT would report its performance to date to DOE. BWXT would then receive partial, quarterly payments based upon its reports. At the end of the fiscal year, BWXT would submit a certified Completion Form regarding its performance as well as a self-evaluation, and DOE would reconcile this with previous payments to determine whether any further performance-based compensation was due. If the contractual performance objectives were not met or only partially met, then DOE had discretion to adjust BWXT's compensation downward.

One contractual, performance-based element was BWXT's reports from its Environment, Safety, and Health division. The Environment, Safety, and Health division was responsible for evaluating and reporting work-related accidents, injuries, and illnesses. Reportable instances included "all new work-related injuries that result[ed] in: (1) death; (2) days away from work; (3) restrictions on work; (4) transfer to another job; ([5]) medical treatment beyond first aid; or ([6]) loss of consciousness." J.A. at 13 (Compl.¶ 24). "Medical treatment beyond first aid include[d] the administration of any prescription drug (except those used for diagnostic purposes) or of non-prescription drugs at above normal dosages or strengths." J.A. at 14 (Compl. ¶ 27). BWXT received greater compensation for fewer reports of work-related accidents, injuries, and illnesses.

These contractual, performance measurements regarding work-related injuries and illnesses were consistent with BWXT's other reporting duties. For instance, BWXT was required to complete standard OSHA forms to record covered work-related injuries and illnesses.

Ms. Marlar is a certified nurse practitioner who worked in BWXT's Occupational Health Services division ("OHS"). OHS was a subdivision of BWXT's Environment, Safety, and Health division. Ms. Marlar was employed by BWXT from April 8, 2002 until she was terminated on January 16, 2004.

Ms. Marlar alleges that during her tenure at BWXT, the company engaged in "systematic and significant underreporting of work-related injuries and illnesses and time missed from work." BWXT allegedly underreported such incidents so as to inflate its performance-based compensation under the DOE contract. BWXT, therefore, purportedly submitted false and fraudulent "monthly reports, [yearly] Completion Forms and [ ] annual self-evaluation[s]." J.A. at 18 (Compl.¶ 54), being given prescription drugs as a result of work-related injuries, but the medical records of the employees did not include those prescriptions. Ms. Marlar also alleges that in May of 2003, an unidentified employee had received an injection of a prescription drug due to a work-related head injury, and yet the injection was not noted in that employee's medical records. Ms. Marlar additionally provides other examples of purportedly improper reporting in 2002 and 2003 that generally fall into the category of failure to include receipt of a prescription drug in the unidentified recipient-employee's medical records. Ms. Marlar's other allegations generally concern unidentified, non-medical employees improperly making medical judgments regarding an employee's working condition so as to avoid reporting injures and illnesses.

After Ms. Marlar informed her management of her concerns regarding these allegedly improper reporting practices, BWXT terminated Ms. Marlar. Ms. Marlar alleges that, throughout her time at BWXT, she continually "objected to her superiors" about the sorts of incidents related previously. When an open forum for employee grievances was held, Ms. Marlar took the opportunity to again raise her objections to the allegedly improper reporting. Ms. Marlar asserts that because she persisted in questioning BWXT's reporting, she was placed on administrative leave on September 11, 2003. BWXT charged Ms. Marlar with insubordination, a charge which Ms. Marlar believes to be false.

On October 13, 2003, while on administrative leave, Ms. Marlar wrote to Mr. Dennis Ruddy, BWXT's president and general manager, regarding her placement on administrative leave. She told Mr. Ruddy "that she had learned that her computer had been `cleaned out' because she refused to participate in illegal activities at OHS. She stated that the illegal activities included the underreporting of occupational injuries and illnesses resulting in large incentive payments to BWXT under the contract." J.A. at 19 (Compl. ¶ 60).

Ms. Marlar was eventually fired after writing to Mr. Ruddy. First, an employee relations representative contacted Ms. Marlar to gather additional information regarding "the circumstances of [Ms. Marlar's] being put on administrative leave and her allegations of underreporting." J.A. at 19 (Compl. ¶ 62). Ms. Marlar responded by writing a memo to the representative "reiterating that there was under-reporting of work-related injuries and illnesses and detailing the events of [the day Ms. Marlar was placed on administrative leave], when the alleged insubordination occurred." J.A. at 20 (Compl. ¶ 63). Ms. Marlar then received a letter, dated January 16, 2004, informing her that BWXT "`determined that [her] allegations of inappropriate activity within [her] department that would lead to a retaliatory discharge [we]re unfounded.'" J.A. at 20 (Compl. ¶ 64). The letter also informed Ms. Marlar that she was terminated for insubordination. Ms. Marlar, however, maintains that she "was terminated because [she] br[ought] the underreporting of work-related injuries and illnesses to the attention of her superiors including the senior management of BWXT." J.A. at 20 (Compl. ¶ 64).

II. Procedural Background

Ms. Marlar filed this qui tam suit against BWXT on September 8, 2004. She alleged that BWXT had violated 31 U.S.C. § 3729(a)(1)-(3) by submitting false reports and certifications regarding work-related injuries and illnesses, thereby increasing its performance-based, contractual compensation and defrauding DOE. Ms. Marlar also alleged that BWXT violated 31 U.S.C. § 3730(h) when it terminated her in retaliation for activities she took regarding BWXT's purported defrauding of the United States government.

BWXT filed a Rule 12(b)(6) motion to dismiss Ms. Marlar's complaint for failure to state a claim. It asserted that Ms. Marlar failed to plead her allegations of fraud against DOE with sufficient particularity, as required by Rule 9(b). It further contended that Ms. Marlar failed to allege facts to sustain an action for retaliation under § 3730(h).

The district court agreed with BWXT, and therefore dismissed Ms. Marlar's suit. The district court found that Ms. Marlar's claims of fraud were not pleaded with sufficient particularity. Specifically, it found her complaint insufficiently particular because Ms. Marlar "did not identify any specific claims that were submitted to the United States, [nor did she] indicate the dates [o]n which those claims were presented." J.A. at 59 (Dist. Ct. Op. at 11). The district court also found that the complaint was too general and over-relied upon allegations made on "information and belief." J.A. at 59 (Dist. Ct. Op. at 11).

The district court also found that Ms. Marlar failed to adequately plead her retaliation claim, and therefore similarly dismissed that claim. The...