Pickens v. Kanawha River Towing, C-1-93-790.

Citation916 F. Supp. 702
Decision Date23 January 1996
Docket NumberNo. C-1-93-790.,C-1-93-790.
CourtUnited States District Courts. 4th Circuit. Southern District of West Virginia
PartiesEarl O. PICKENS, Plaintiff, v. KANAWHA RIVER TOWING, et al., Defendants.

COPYRIGHT MATERIAL OMITTED

James Burdette Helmer, Jr., Helmer Lugbill Martins & Neff, Cincinnati, OH, Meredith Lynn Lawrence, Crestview Hills, KY, for Earl O. Pickens.

Todd Matthew Powers, Schroeder Maundrell Barbiere & Powers, Cincinnati, OH, Thomas W. Pettit, Vinson Mesh Pettit Colburn & Damron, Huntington, WV, for Kanawha River Towing Inc., Campbell Transportation Company Inc.

Thomas W. Pettit, Vinson, Meek, Lewis & Pettit, L.C., Huntington, WV, for G & C Towing Inc.

Glenn Virgil Whitaker, Victor A. Walton, Jr., Vorys, Sater, Seymour & Pease, Cincinnati, OH, Ridgway M. Hall, Crowell & Moring, Washington, DC, for GLR Constructors, Dillingham Construction Company NA, Inc., Harbert International, Inc.

Glenn Virgil Whitaker, Victor A. Walton, Jr., Vorys, Sater, Seymour & Pease, Cincinnati, OH, for SJ Groves & Son Co., Guy F. Atkinson Const.

Gerald Francis Kaminski, U.S. Attorney, Cincinnati, OH, for the United States.

ORDER

SPIEGEL, Senior District Judge.

MOTIONS CONSIDERED

This matter is before the Court on Defendants Kanawha River Towing and Campbell Transportation Company's (hereinafter "KRT") Motion to Dismiss (doc. 31), to which the Relator Earl Pickens responded (doc. 33), and KRT replied (doc. 37), and Defendant G & C Towing Incorporated's Motion to Dismiss (doc. 35), to which Mr. Pickens responded (doc. 42). The Court held a hearing on the motions on December 14, 1995.

BACKGROUND

The Relator Earl Pickens filed a two count Complaint on behalf of the United States under the False Claims Act ("FCA"). 31 U.S.C. § 3729 et seq. This Qui Tam action was filed under seal in November 1993. The United States investigated the claims and chose not to intervene. Thereafter, the Complaint was unsealed and served upon the Defendants in July 1995.

Mr. Pickens alleges that the Defendants violated the Federal Water Pollution Control Act (more commonly referred to as the Clean Water Act ("CWA")), 33 U.S.C. § 1251 et seq. Mr. Pickens accuses the Defendants of polluting the Ohio River during the construction and repair of the Gallipolis Lock and Dam. Defendant GLR Constructors,1 a joint venture between Guy F. Atkinson Construction Co., Dillingham Construction Co., Habert International, Inc., and S.J. Groves and Sons Company, contracted with the United States to complete the Gallipolis project. Defendants KRT and G & C Towing allegedly were subcontractors of GLR Constructors on the Gallipolis Dam project. KRT has employed Mr. Pickens since March 1992. He previously worked for G & C Towing. KRT purchased the assets of G & C Towing. KRT then assumed G & C Towing's duties under G & C Towing's contract with GLR Constructors.

These subcontractors allegedly provided helper boat services during the construction project. In providing said services, Mr. Pickens claims that the tugboat M/V Muskogee dumped its bilge into the Ohio River. Mr. Pickens further alleges that the Defendants failed to keep records of the products discharged from the vessel as allegedly required by the CWA.

RELATOR CLAIM

Count I alleges that the Defendants submitted false claims under 31 U.S.C. § 3729(a)(2). Specifically, Mr. Pickens alleges that GLR's contract with the United States requires that work on the project be completed in compliance with the CWA. KRT and G & C Towing's subcontracts also require compliance with the CWA. KRT and G & C Towing made false statements by submitting their bills to GLR without acknowledging they breached the contract by violating the CWA. Pickens asserts that when GLR submitted their invoice for payment it certified that it was in compliance with the contract. Accordingly, when GLR sought payment, while it was not in compliance with the contract, it submitted a false claim.

In Count II, Pickens alleges a "reverse false claim" under 31 U.S.C. § 3729(a)(7). A reverse false claim occurs when a defendant omits information that it is required to provide or maintain in order to avoid a payment obligation to the United States. Pickens alleges that the Defendants failed to report their pollution, or keep transfer records as required by the CWA and its regulations. By failing to maintain these records, the Defendants were able to avoid the payment of fines owed to the United States under the CWA. Such avoidance is a reverse false claim.

STANDARD OF REVIEW

A motion to dismiss for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6) must be viewed in the light most favorable to the party opposing the motion. Great Lakes Steel v. Deggendorf, 716 F.2d 1101, 1105 (6th Cir.1983). "The court must accept as true all the well-plead allegations in the complaint under attack." Id. The court may grant the motion only "if it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claims which would entitle them to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957); Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir.1988); Balderaz v. Porter, 578 F.Supp. 1491, 1494 (S.D.Ohio 1983).

DISCUSSION

The main issue raised by the motions to dismiss is whether Pickens' allegations constitute "false" claims. First, does a subcontractor submit a false claim by receiving payment for services that were not in compliance with the contract. Second, is the failure to log or report a pollution incident a reverse "false" claim. The Defendants also raise several preliminary issues that the Court will first address.

PREEMPTION

The Defendants argue that Mr. Pickens' claims under the FCA are preempted by the more specific remedial provisions of the CWA under Middlesex County Sewerage Authority v. National Sea Clammers Assoc., 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981). In other words, a specific act with comprehensive enforcement provisions precludes enforcement of that statute by a separate act. We find this argument unpersuasive in this context.

Generally federal law disfavors preemption of one federal law by another, unless there is an "express manifestation of preemptive intent." United States v. General Dynamics, 19 F.3d 770, 774 (2d Cir.1994). Courts should give effect to two statutes that overlap unless there is a "`positive repugnancy' between the two laws." Connecticut National Bank v. Germain, 503 U.S. 249, 253, 112 S.Ct. 1146, 1149, 117 L.Ed.2d 391 (1992) (quoting Wood v. United States, 16 Pet. 342, 363, 10 L.Ed. 987 (1842)).

Furthermore, Sea Clammers appears to be limited to attempts to enforce a more specific federal statute by use of 42 U.S.C. § 1983. Section 1983 creates a general means for remedying violations of federal rights by state actors, but does not create any substantive rights. United States ex rel. Fallon v. Accudyne Corporation, 880 F.Supp. 636, 639 (W.D.Wis.1995) hereinafter Fallon I (citing Albright v. Oliver, ___ U.S. ___, ___, 114 S.Ct. 807, 811, 127 L.Ed.2d 114 (1994)). In other words, the utilization of § 1983 would be redundant if the statute that creates the right to be vindicated already provides specific remedies. Accordingly, implied preemption is only appropriate for purely remedial acts2 when the statute to be enforced provides its own specific and detailed remedies.

The False Claims Act is not a purely remedial statute. It provides remedies for different conduct than the conduct covered by the CWA. Id. The FCA provides a remedy for defrauding the government, while the CWA provides a remedy for water pollution. In addition, the FCA provides for relief distinctive from the CWA. The FCA provides for fraud damages and statutory penalties, while under the CWA the Court can compel clean-up as well as award damages for environmental contamination.3

RULE 9(b)

KRT and G & C Towing also argue that Mr. Pickens has failed to plead the elements of fraud with particularity as required by Rule 9 of the Federal Rules of Civil Procedure. The Court recognizes that we have applied Rule 9(b) to qui tam actions in the past since such actions are essentially claims of fraud. See e.g., Burch ex rel. United States v. Piqua Engineering, Inc., 145 F.R.D. 452, 454 n. 2 (S.D.Ohio 1992). Rule 9(b) has an exception when the relevant information is in the exclusive possession of the opposing party. Wilkins ex rel. United States v. State of Ohio, 885 F.Supp. 1055, 1061 (S.D.Ohio 1995).

The Sixth Circuit requires that a fraud claim include the following information: (1) the time; (2) the place; (3) the specific content of the fraud; and (4) the identities of the parties participating in the fraud. Michaels Building Co. v. Ameritrust Co., 848 F.2d 674, 679 (6th Cir.1988). In other words, the pleading must place the defendant on notice of the specific misconduct or fraudulent acts of which the plaintiff complains. Burch, 145 F.R.D. at 455.

KRT argues that the Mr. Pickens' Complaint "falls woefully short" of the requirements of Rule 9(b). The Court disagrees. KRT cites Paragraphs 30 and 36 of the Complaint which merely repeat the language of the FCA. KRT, however, ignores the rest of the Complaint which details the alleged misconduct. Mr. Pickens provides a description of the parties involved, the exact contract at issue, and the provision of the contract that pertains to the misconduct alleged and the approximate time of the misconduct. All of which provides the Defendants adequate notice of the alleged fraud.

COUNT I

The Defendants, KRT and G & C Towing, argue that Mr. Pickens failed to allege that the Defendants made any affirmative false representations to the government. KRT relies on United States ex rel. Stevens v. McGinnis, Inc., 1994 WL 799421 (S.D.Ohio Oct. 26, 1994), for the proposition that a subcontractor does not violate the FCA when it submits false invoices to a government contractor for payment. KRT's reliance...

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