McCrary v. Knox Cnty.
| Decision Date | 04 August 2016 |
| Docket Number | No. 2:16-cv-00095-JMS-DKL,2:16-cv-00095-JMS-DKL |
| Citation | 200 F.Supp.3d 782 |
| Parties | Zane E. MCCRARY, Plaintiff, v. KNOX COUNTY, INDIANA, Larry Holscher, individually and in his official capacity as a Knox County Commissioner, Rowe Sergeant, in his official capacity as a Knox County Commissioner, and Donnie Halter, in his official capacity as a Knox County Commissioner, Defendants. |
| Court | U.S. District Court — Southern District of Indiana |
Robert Peter Kondras, Jr., Hunt Hassler Kondras & Miller LLP, Terre Haute, IN, for Plaintiff.
Liberty L. Roberts, Church Church Hittle & Antrim, Fishers, IN, for Defendants.
Presently pending before the Court in this action brought under the False Claims Act, 31 U.S.C. § 3729, et seq. ("FCA") and the First Amendment to the United States Constitution, is Defendants' Motion to Dismiss Plaintiff Zane E. McCrary's Complaint. [Filing No. 11.] For the reasons detailed herein, the Court grants Defendants' Motion to Dismiss. [Filing No. 11.]
Federal Rule of Civil Procedure 8(a)(2)"requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ " Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (quoting Fed. R. Civ. P. 8(a)(2) ). "Specific facts are not necessary, the statement need only ‘give the defendant fair notice of what the...claim is and the grounds upon which it rests.’ " Erickson , 551 U.S. at 93, 127 S.Ct. 2197 (quoting Bell Atlantic v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).1
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). In reviewing the sufficiency of a complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal, Inc. v. City of Darien , 635 F.3d 883, 886 (7th Cir.2011). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chicago , 671 F.3d 611, 617 (7th Cir.2011). Factual allegations must plausibly state an entitlement to relief "to a degree that rises above the speculative level." Munson v. Gaetz , 673 F.3d 630, 633 (7th Cir.2012). This plausibility determination is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.
Consistent with the applicable standard of review set forth above, the following relevant factual allegations from Mr. McCrary's Complaint, [Filing No. 1], are taken as true for purposes of addressing the pending motion.
Mr. McCrary began working for the Knox County Highway Department in October of 2010. [Filing No. 1 at 1.] During the time relevant to this litigation, he held the position of "Operator," [Filing No. 1 at 2], and his "ordinary job responsibilities involved road construction work," [Filing No. 1 at 9]. Knox County receives funds from the federal government and the State of Indiana that are "specifically designated and dedicated for use by the Knox County Highway Department...for road repair, road construction, bridge repair, bridge construction and purchase of equipment and materials by the Knox County Highway Department." [Filing No. 1 at 4.]
On August 31, 2015, Mr. McCrary had been performing work on a county road when he was visited in person by his supervisor, Jerry Haggard. [Filing No. 1 at 2.] Mr. Haggard instructed Mr. McCrary to use his truck to grade a side road in Johnson Township. [Filing No. 1 at 2.] Mr. McCrary objected to this assignment, stating that he believed the road was not a county road, and he showed Mr. Haggard that the road in question was not depicted on the county map. [Filing No. 1 at 2.] Mr. McCrary told Mr. Haggard that the road was used by Defendant Knox County Commissioner Larry Holscher for his own private farming purposes. [Filing No. 1 at 2.] Mr. Haggard told Mr. McCrary that "Well Larry said do it," and instructed him to complete the work. [Filing No. 1 at 2.]
Mr. McCrary followed Mr. Haggard's instruction and graded the road. [Filing No. 1 at 2.] He used equipment belonging to Knox County to complete the job, and was paid by Knox County for the hour and a half he spent on this task. [Filing No. 1 at 2.] At the end of the work day, Mr. McCrary filled out a Knox County Highway Department timesheet, on which he described the grading work he had done. [Filing No. 1 at 2.] On that sheet, Mr. McCrary noted the road was graded for "Larry," that "Jerry said do it," and that the road was "not on map" and "not county's." [Filing No. 1 at 2.]
On September 22, 2015, Mr. McCrary was called to a meeting with Knox County Highway Department Superintendent Donny Mize and Commissioner Holscher to discuss the comments he had written on the timesheet. [Filing No. 1 at 2-3.] Regarding these statements, Commissioner Holscher said, "If this gets in the wrong hands, we can be in trouble." [Filing No. 1 at 3.] Mr. McCrary was suspended without pay for five days. [Filing No. 1 at 3.] The written suspension form he received stated that he was being suspended for making "false accusations against supervisor and commissioner about existing county road." [Filing No. 1 at 3.]
Following his five-day suspension, Mr. McCrary was not allowed to return to work. [Filing No. 1 at 3.] On or about October 7, 2015, Mr. McCrary was asked to attend a meeting with Commissioner Holscher, Defendant Donnie Halter (a Knox County Commissioner), Defendant Rowe Sergeant (a Knox County Commissioner), Superintendent Mize, and two Knox County Sheriff's Deputies at the Knox County Highway Department Office. [Filing No. 1 at 3.] Commissioner Holscher, speaking for the group, asked Mr. McCrary to explain what he had written on his timesheet. [Filing No. 1 at 3.] After telling his side of the story, Mr. McCrary was asked to leave the room so that the group could discuss the situation, and when he was brought back in, he was informed that he could resign from his position or he would be terminated. [Filing No. 1 at 3.] He refused to resign. [Filing No. 1 at 3.] Two to three days later, Mr. McCrary received a phone call from the Highway Department secretary asking that he return his work uniforms. [Filing No. 1 at 3.] When Mr. McCrary went to the Highway Department office to do so, he was given a written notice of termination. [Filing No. 1 at 3.]
Mr. McCrary initiated this action on March 15, 2016, asserting: (1) a claim under the whistleblower provision of the FCA, 31 U.S.C. § 3730(h) ; (2) a claim under the whistleblower provision of the Indiana False Claims Act, I.C. 5–11–5.5–8 ("Indiana FCA"); (3) a claim for retaliation in violation of the First Amendment under 42 U.S.C. § 1983 ; and (4) a claim for tortious interference with a contractual relationship under Indiana law. [Filing No. 1 at 6-10.] He seeks reinstatement and damages. [Filing No. 1 at 10.]
Mr. McCrary asserts that he was terminated for "investigating an act of fraud against the Knox County government and for making actual written and verbal reports...about misuse of Knox County Highway Department labor, equipment and resources by Knox County Commissioner Larry Holscher, specifically, and by the Knox County Highway Department generally." [Filing No. 1 at 4.] Defendants ask the Court to dismiss all of Mr. McCrary's claims pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. [Filing No. 11.]
Defendants argue that in order to state a claim for retaliation under the FCA, Mr. McCrary must allege that he was terminated because he engaged in conduct protected by the statute, and in doing so must provide a factual basis to show that Knox County submitted a false or fraudulent claim to the federal government. [Filing No. 12 at 6-10.] They assert that Mr. McCrary has not made any such allegations, and that "[a] local government's ‘misuse of [its] labor, equipment, and resources' is not a ‘false claim’ under the Federal False Claims Act, and thus, any report of such is not protected activity...." [Filing No. 12 at 9.]
In response, Mr. McCrary argues that "[r]etaliation claims under the False Claims Act are certainly not so narrow that they must be based only upon facts where a plaintiff reports an employer for the act of submitting an invoice or a claim for payment to the federal government." [Filing No. 13 at 7.] He contends that any proof of actual or possible misuse of federal funds is sufficient to form the basis of an FCA retaliation claim. [Filing No. 13 at 7.] He further argues that the notes on his timesheet and his subsequent oral remarks in the meetings with county officials constitute protected conduct under the FCA because he believed in good faith, and a reasonable employee in similar circumstances would believe, that his employer was committing fraud against the government. [Filing No. 13 at 8-9.] Therefore, he asserts, his termination was in violation of the FCA retaliation provision. [Filing No. 13 at 8-9.]
On reply, Defendants maintain that "reporting or investigating the suspected misuse of funds is not an activity covered by the [FCA]," and that "to state a claim under the whistleblower provision a plaintiff must allege facts to show that he was investigating or reporting a false claim for payment by the federal government." [Filing No. 14 at 2; Filing No. 14 at 5.]
The FCA was originally enacted in 1863 in order to punish and prevent fraud by defense contractors against the federal government, which had become a serious problem during the Civil War. See Universal Health Servs., Inc. v. United States , ––– U.S. ––––, 136 S.Ct. 1989, 1996, 195...
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