Halldorson v. Sandi Grp.

• Decision Date: 29 March 2013
• Docket Number: Civil Action No. 06–1618 (EGS).
• Citation: 934 F.Supp.2d 147
• Parties: Andrew HALLDORSON, Plaintiff, v. The SANDI GROUP and Rubar S. Sandi, Defendants.
• Court: U.S. District Court — District of Columbia

934 F.Supp.2d 147

Andrew HALLDORSON, Plaintiff,

v.The SANDI GROUP and Rubar S. Sandi, Defendants.

Civil Action No. 06–1618 (EGS).

United States District Court, District of Columbia.

March 29, 2013.

Carla Denette Brown, Charlson Bredehoft Cohen Brown & Sakata, P.C., Reston, VA, Jesselyn Alicia Radack, Government Accountability Project, Washington, DC, for Plaintiff.

David Barger, Greenberg Traurig, LLP, McLean, VA, for Defendants.

MEMORANDUM OPINION

EMMET G. SULLIVAN, District Judge.

This case is before the Court on defendant The Sandi Group's Motion to Dismiss Counts III and IV of the Third Amended Complaint and defendant Rubar S. Sandi's Motion to Dismiss Counts II, III, and IV of the Third Amended Complaint. Upon consideration of the motions, the responses and replies thereto, the applicable law, the entire record, and for the reasons explained below, defendants' motions will be GRANTED.

I. BACKGROUND

Plaintiff Andrew Halldorson brought this case originally as a qui tam action on behalf of the United States under the False Claims Act, 31 U.S.C. § 3729 et seq.¹ Plaintiff alleged, inter alia, that defendants submitted false claims to the United States in connection with certain contracts in Iraq and Afghanistan. On March 16, 2011, the United States filed a notice of intervention, stating that it would intervene for the limited purpose of settlement and to file a stipulation of dismissal. ECF No. 39.

In the Amended Complaint, which was the operative complaint at the time the settlement was reached, Halldorson alleged two retaliation claims. ECF No. 37. Specifically, in Count III, titled “False Claims Retaliation,” Halldorson alleged that he “was an employee who was discharged, suspended, threatened, harassed, and in other manners discriminated against in the terms and conditions of employment by his employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of a False Claims Act action under this section.” Amend. Compl. ¶ 59. In Count IV of the Amended Complaint, titled “State Law Retaliation,” Halldorson alleged that he “threatened to disclose, to a supervisor or to a public body, an activity, policy or practice of the Defendant that was in violation of law, rule, or regulation. This violation created and presented a substantial and specific danger to public health and safety.” Amend. Compl. ¶ 61. He further alleged that he “provided information to a public body conducting an inquiry into this violation” and that he “objected to and refused to participate in, this violation.” Amend. Compl. ¶¶ 62–63.

On April 18, 2011, the parties filed a joint stipulation of dismissal (“Stipulation”). ECF No. 42. The Stipulation stated that the parties had entered into a settlement agreement effective April 5, 2011 (“Settlement Agreement”) that resolved nearly all of the claims set forth in the relators' Amended Complaint. The Stipulation further stated that the Amended Complaint would be dismissed with prejudice to the Relators, except that “Relators' claims for reasonable attorneys' fees, expenses and costs pursuant to 31 U.S.C. § 3730(d) are not dismissed.” The Stipulation also stated that “Halldorson's claims for retaliation under state and federal law against TSG Group [defined in the Stipulation as The Sandi Group, Dr. Rubar S. Sandi, and Corporate Bank Financial Services], including claims pursuant to 31 U.S.C. § 3730(h), are not dismissed.”

The Settlement Agreement was not filed on the docket in this case, though it was referenced in the Stipulation of Dismissal and plaintiff's Third Amended Complaint (TAC ¶ 59), and was attached to The Sandi Group's motion to dismiss. In the Settlement Agreement, Halldorson released TSG Group (defined as all defendants at the time: Corporate Bank Financial Services, Inc., Dr. Rubar S. Sandi, and The Sandi Group)

from any civil monetary claim [Halldorson] may have on behalf of [himself] or of the United States that was alleged or could have been alleged in the Civil Action, or that is in any way related to the subject matter of the Civil Action, including but not limited to claims under the False Claims Act, 31 U.S.C. §§ 3729–3722, or the common law theories of recovery, except for claims for attorneys' fees, expenses and costs pursuant to 31 U.S.C. § 3730(d), and claims for retaliation under state and federal law, including claims pursuant to 31 U.S.C. § 3730(h).

Settlement Agreement, ECF No. 76–2, at ¶ 6.

Following settlement, plaintiff Halldorson filed an unopposed motion for leave to file a Second Amended Complaint, which the Court granted. ECF Nos. 50–51. In the motion for leave to amend, Halldorson stated that the proposed amendment “eliminate[d] a state law retaliation claim (leaving only the statutory claim for retaliation under FCA Section 3730(h)); [and] eliminate [d] Dr. Rubar Sandi as a Defendant....” ECF No. 50 at 1. In arguing that amendment was in the interests of justice, Halldorson contended that amendment would “expedite and streamline further proceedings by narrowing the action to the pending Section 3730(h) claim and particularizing the allegations that pertain to the sole remaining claim.” Id. at 2. In the Second Amended Complaint (“SAC”), Halldorson alleged one count of False Claims Act retaliation, pursuant to 31 U.S.C. § 3730(h), against defendant The Sandi Group. See SAC ¶¶ 45–46. No other claims were alleged and no other parties were named as defendants in the Second Amended Complaint.

After the Second Amended Complaint was filed, plaintiff and the sole remaining defendant The Sandi Group engaged in mediation. Following mediation, Halldorson obtained new counsel and filed a motion for leave to file a Third Amended Complaint (“Third Amended Complaint” or “TAC”). ECF No. 70. The Court granted leave to amend over objection on March 16, 2012. The Third Amended Complaint includes the FCA retaliation claim under Section 3703(h) that was included in the Second Amended Complaint. See TAC, Count I. The Third Amended Complaint also includes several new claims and purports to bring Dr. Sandi back into the litigation. Count II, alleged against Dr. Sandi, seeks compensatory and punitive damages for Dr. Sandi's alleged tortious interference with Halldorson's business expectancies. See TAC, Count II. Count III alleges fraudulent misrepresentation against The Sandi Group and Dr. Sandi and seeks compensatory and punitive damages. See TAC, Count III. Count IV, asserted against The Sandi Group and Dr. Sandi, alleges that defendants intentionally inflicted emotional distress on Halldorson and seeks compensatory and punitive damages. See TAC, Count IV.

Defendants have separately moved to dismiss the new counts in the Third Amended Complaint. The motions are ripe for the Court's decision.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.Cir.2002). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation marks and citations omitted). “[W]hen ruling on defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Atherton v. D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C.Cir.2009) (quoting Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007)). The court must also grant the plaintiff “the benefit of all inferences that can be derived from the facts alleged.” Kowal v. MCI Commc'ns Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994). A court need not, however, “accept inferences drawn by plaintiffs if such inferences are unsupported by the facts set out in the complaint.” Id. In addition, “[t]hreadbare recitals of elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Only a complaint that states a plausible claim for relief survives a motion to dismiss. Id.

III. DISCUSSION

Defendant The Sandi Group moves to dismiss Counts III and IV of the Third Amended Complaint. Dr. Sandi moves to dismiss Counts II, III and IV of the Third Amended Complaint. The parties' arguments are discussed below. Because of the substantial similarity between the arguments made in the motions to dismiss and plaintiff's arguments in opposition, defendants will be referred to collectively where possible.

A. Effect of the Settlement Agreement

The Sandi Group argues that the Settlement Agreement released all of the new claims (Count III and IV) asserted against it in the Third Amended Complaint. Dr. Sandi argues that the Settlement Agreement released all claims asserted against him (Counts II, III and IV) in the Third Amended Complaint.

1. Whether the Court may consider the terms of the Settlement Agreement

As an initial matter, the parties dispute whether the Court may properly consider the Settlement Agreement in connection with defendants' Motions to Dismiss. In ruling on a 12(b)(6) motion to dismiss, the Court “may consider only the facts alleged in the complaint, [and] any documents either attached to or incorporated in the complaint,” EEOC v. St. Francis Xavier Parochial School, 117 F.3d 621, 624 (D.C.Cir.1997), or those “documents upon which the plaintiff's complaint necessarily relies ... produced not by the plaintiff in the complaint but by the defendant in a motion to dismiss,” Hinton v. Corrections Corp. of Amer., 624 F.Supp.2d 45, 46 (D.D.C.2009); accord Kaempe v. Myers, 367 F.3d 958, 965 (D.C.Cir.2004) (court may consider documents appended to a motion to dismiss if their authenticity is not disputed and they are referred to in the complaint). The Court may also consider matters of which it may take...