International Game Technology v. Dist. Ct.

• Decision Date: 27 March 2008
• Docket Number: No. 48932.,48932.
• Citation: 179 P.3d 556
• Parties: INTERNATIONAL GAME TECHNOLOGY, INC., A Nevada Corporation, Petitioner, v. The SECOND JUDICIAL DISTRICT COURT OF the State of Nevada, In and for the COUNTY OF WASHOE, and The Honorable Connie J. Steinheimer, District Judge, Respondents, and James McAndrews, Real Party in Interest.
• Court: Nevada Supreme Court

179 P.3d 556

INTERNATIONAL GAME TECHNOLOGY, INC., A Nevada Corporation, Petitioner, v. The SECOND JUDICIAL DISTRICT COURT OF the State of Nevada, In and for the COUNTY OF WASHOE, and The Honorable Connie J. Steinheimer, District Judge, Respondents, and James McAndrews, Real Party in Interest.

No. 48932.

Supreme Court of Nevada.

March 27, 2008.

Jones Vargas and John P. Desmond and Molly Malone Rezac, Reno, for Petitioner.

John S. Bartlett, Carson City; Mark L. Mausert, Reno, for Real Party in Interest.

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

In this original petition for extraordinary relief, we examine statutory provisions that afford remedies to whistleblowers who are retaliated against for lawfully disclosing information regarding purportedly fraudulent activity in furtherance of Nevada's False Claims Act¹ (FCA). In particular, we address whether the FCA's anti-retaliation remedies are limited to those whistleblower employees whose employers pressured or attempted to pressure them into participating in the reported fraudulent activity.

In the underlying matter, a former employee filed a complaint for FCA whistleblower protections, alleging that his employer had retaliated against him for disclosing allegedly fraudulent activity. The employee, however, did not allege that his employer had pressured or attempted to pressure him into participating in the reported activity. In a motion to dismiss the employee's complaint, the employer argued that dismissal was required because, under NRS 357.250(2)(b), the employee was not entitled to recover unless he asserted and proved that the employer had in some manner pressured him to participate in the allegedly fraudulent activity. When the district court denied the motion to dismiss, the instant petition for a writ of mandamus followed.

Thus, in this writ petition, we are asked to compel the district court to dismiss a whistleblower complaint seeking protections against retaliatory employment actions that purportedly resulted from an employee's lawful disclosure of allegedly fraudulent activity. But the statute under which dismissal is sought, NRS 357.250(2)(b), applies only when the employee has actually participated in the purportedly fraudulent activity, thereby preventing any such employee from recovering unless he or she can show that the employer pressured him or her into that activity. As a result, the employee here was not obliged to allege in his complaint that his employer pressured him to participate in fraudulent activity. Instead, such an assertion of employer pressure becomes necessary for recovery only upon a showing that the employee participated in the fraudulent activity. Accordingly, we deny this petition.

PROCEDURAL HISTORY AND FACTS

Before filing the underlying whistleblower protection complaint, real party in interest James McAndrews worked for petitioner International Game Technology, Inc. (IGT). While working for IGT, McAndrews came to believe that IGT falsified tax records in order to fraudulently conceal or decrease the amount of sales and use tax it owed to the state, and he therefore instituted a district court action under Nevada's FCA to recover for the state and himself the monies allegedly owed.² Ultimately, we issued an opinion regarding McAndrews' action, determining that, because the Nevada tax department has primary responsibility over the revenue statutes and McAndrews' claims merely connoted his disagreement with IGT's interpretation of those statutes, McAndrews had failed to state a claim under the FCA.³ Accordingly, we directed the district court to dismiss McAndrews' FCA action.⁴

After our opinion issued, McAndrews filed the underlying whistleblower protection complaint against IGT, based on the FCA's anti-retaliation provisions, NRS 357.240 (describing prohibited employer actions) and 357.250 (governing employer liability). According to McAndrews' complaint, immediately after he filed the earlier FCA action, IGT responded by suspending all of his work-related duties and barring him from its premises, except to receive paychecks. His employment remained suspended, McAndrews alleged, until we issued the opinion resolving his FCA action, at which time his employment was terminated. McAndrews asserted that, in suspending and terminating his employment, IGT had retaliated against him for filing the FCA action, in violation of the FCA's anti-retaliation provisions.

IGT moved to dismiss the whistleblower protection complaint, arguing that NRS 357.250(2)(b) holds an employer liable only if it harassed, threatened with demotion or termination, or otherwise coerced the complaining employee into participation in fraudulent activity, and McAndrews had not alleged that IGT had in any way pressured him into participating in the asserted fraudulent activity. McAndrews opposed dismissal, arguing that IGT's interpretation led to an absurd result.

In response to the parties' arguments, the district court interpreted NRS 357.250(2)(b) as ambiguous and then, based on legislative intent, construed the statute to require only that an employee be harassed or threatened with termination or demotion in order to recover. Consequently, the court denied the motion to dismiss, and IGT filed the instant petition for a writ of mandamus.

DISCUSSION

A writ of mandamus is available to compel the performance of an act that the law requires as a duty resulting from an office, trust, or station⁵ or to control an arbitrary or capricious exercise of discretion.⁶ Writ relief is not available, however, when an adequate and speedy legal remedy exists.⁷ Accordingly, because an appeal from the final judgment typically constitutes an adequate and speedy legal remedy, we generally decline to consider writ petitions that challenge interlocutory district court orders denying motions to dismiss.⁸

Even when writ relief is available because an appeal from the final judgment is not an adequate and speedy legal remedy, this court's general policy, as stated in State ex rel. Department of Transportation v. Thompson,⁹ is to decline to consider writ petitions challenging district court orders denying motions to dismiss because such petitions rarely have merit, often disrupt district court case processing, and consume an "enormous amount" of this court's resources. Nonetheless, we have indicated that we will consider petitions denying motions to dismiss when either (1) no factual dispute exists and the district court is obligated to dismiss an action pursuant to clear authority under a statute or rule, or (2) an important issue of law needs clarification and considerations of sound judicial economy and administration militate in favor of granting the petition.¹⁰

In this case, an appeal is not an adequate and speedy legal remedy, given the early stages of litigation and policies of judicial administration.¹¹ Moreover, as the parties suggest, this petition raises an important legal issue in need of clarification, involving public policy, of which this court's review would promote sound judicial economy and administration. Accordingly, we will exercise our discretion and consider this petition to address the following question of statutory construction: does NRS 357.250(2)(b) limit FCA anti-retaliation remedies to situations in which the employer pressured or attempted to pressure the whistleblower into participating in fraudulent activity? Statutory interpretation is a question of law that we review de novo, even in the context of a writ petition.¹²

The FCA's anti-retaliation statutes, NRS 357.240 and NRS 357.250

As we have previously recognized, the FCA's purpose is to expose and combat attempted fraud against the government; through it, private citizens are encouraged to disclose information regarding wrongful claims for governmental funds.¹³ Modeled after the corresponding federal act,¹⁴ Nevada's FCA entitles the private plaintiff to between 15 and 50 percent of any recovery and certain whistleblower protections.¹⁵

Two FCA whistleblower protection statutes are pertinent to this matter: NRS 357.240 and 357.250. The first statute, NRS 357.240, proscribes two types of employer actions. In subsection 1, employers are prohibited from adopting or enforcing rules that prevent employees from disclosing information or otherwise acting to further FCA purposes. The second part of that statute, NRS 357.240(2), bars employers from retaliating against employees for actions taken to further FCA purposes: "[a]n employer shall not discharge, demote, suspend, threaten, harass, deny promotion to or otherwise discriminate against an employee . . . because of lawful acts done by him . . . in disclosing information . . . in furtherance of an action pursuant to this chapter."

The other statute, NRS 357.250, with emphasis added, then describes employer liability for the retaliatory conduct prohibited by NRS 357.240(2):

Liability of employer for violations of NRS 357.240; entitlement of employee to remedies.

1. An employer who violates subsection 2 of NRS 357.240 is liable to the affected employee in a civil action for all relief necessary to make him whole. . . .

2. An employee is entitled to the remedies provided in subsection 1 only if:

(a) He voluntarily disclosed information . . . or voluntarily acted in furtherance of an action pursuant to this chapter; and

(b) He was harassed, threatened with termination or demotion, or otherwise coerced by his employer into any participation in fraudulent activity.

Thus, NRS 357.240 prohibits an employer from retaliating against an employee for his lawful, FCA-related actions, and NRS 357.250 imposes liability for such retaliatory conduct. We conclude that subsection 2 of NRS 357.250, however, qualifies or limits the liability imposed in subsection 1 by providing that an employee may recover for retaliatory conduct only if (a) the employee voluntarily engaged in the protected whistleblower activity, and (b) to...