Potts v. Ctr. for Excellence in Higher Educ., Inc.

• Decision Date: 06 November 2018
• Docket Number: No. 17-1143,17-1143
• Citation: 908 F.3d 610
• Parties: Debbi POTTS, a Colorado Resident, Plaintiff - Appellant, v. CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana Corporation, f/k/a CollegeAmerica Denver, Inc., Defendant - Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

908 F.3d 610

Debbi POTTS, a Colorado Resident, Plaintiff - Appellant,

v.CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana Corporation, f/k/a CollegeAmerica Denver, Inc., Defendant - Appellee.

No. 17-1143

United States Court of Appeals, Tenth Circuit.

FILED November 6, 2018

Brandon J. Mark, Parsons Behle & Latimer, Salt Lake City, Utah (Logan R. Martin, Westerfield & Martin, Denver, Colorado, with him on the briefs), for Plaintiff-Appellant.

Steven M. Gombos, Ritzert & Leyton, P.C., Fairfax, Virginia (Raymond W. Martin, Wheeler Trigg O’Donnell, LLP, Denver, Colorado, David A. Obuchowicz and Jacob C. Shorter, Ritzert & Leyton, P.C., Fairfax, Virginia, with him on the brief), for Defendant-Appellee.

Before LUCERO, PHILLIPS, and MORITZ, Circuit Judges.

PHILLIPS, Circuit Judge.

The False Claims Act imposes liability on any person who knowingly defrauds the federal government. See 31 U.S.C. § 3729(a). The Act includes a provision protecting whistleblower employees from specified retaliatory acts by their employer. 31 U.S.C. § 3730(h)(1)–(2). We now consider whether this anti-retaliation statute applies when no retaliatory discrimination occurs until after employment ends. We conclude that it does not. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm the district court’s dismissal of Debbi Potts’s retaliation claim.

BACKGROUND

From January 2009 until July 2012, when she resigned, Debbi Potts worked as the campus director of the Cheyenne, Wyoming campus of CollegeAmerica Denver, Inc. (CollegeAmerica), a predecessor of the Center for Excellence in Higher Education, Inc. (the Center). Potts alleges that she resigned because CollegeAmerica’s business practices were unethical. In particular, she alleges that CollegeAmerica violated its accreditation standards and "actively deceiv[ed]" its accreditor to maintain accreditation. Appellant’s App. at 10 ¶ 12.

In September 2012, Potts and CollegeAmerica entered a written agreement by which CollegeAmerica agreed to pay Potts $7,000 and support her unemployment claim, and Potts agreed to (1) "refrain from personally (or through the use of any third party) contacting any governmental or regulatory agency with the purpose of filing any complaint or grievance," (2) "direct any complaints or issues against CollegeAmerica ... to CollegeAmerica’s toll free compliant [sic] number," and (3) "not intentionally with malicious intent (publicly or privately) disparage the reputation of CollegeAmerica." Appellant’s App. at 44.

Despite the agreement, Potts disparaged the Center in an e-mail she sent to another former employee of the Center.¹ After learning of this, the Center sued Potts in Colorado state court for violating the agreement. For relief, the Center sought back the $7,000 it had paid to Potts under the agreement.

In February 2013, Potts sent a written complaint to the Center’s accreditor, the Accrediting Commission of Career Schools and Colleges (ACCSC), concerning the Center’s alleged deceptions in maintaining its accreditation. After learning this, the Center amended its state-court complaint to add one sentence in support of its existing, sole claim (for breach of contract): "Potts also violated the contract by filing a complaint with the ACCSC." Appellant’s App. at 50.

In response, Potts sued the Center in the United States District Court for the District of Colorado, alleging that the Center’s state claim violated the False Claims Act’s anti-retaliation provision. See 31 U.S.C. § 3730(h)(1). In particular, Potts alleged that her complaint to the Center’s accreditor was protected activity under the False Claims Act because it revealed violations of accreditation standards, which would have disqualified the Center from receiving federal student financial aid. Potts further alleged that the Center had retaliated against her under the Act by amending its state claim to allege that Potts had breached the agreement by sending the complaint to ACCSC.

The Center filed a motion under Federal Rule of Civil Procedure 12(b)(6) to dismiss Potts’s federal suit. After a hearing, the district court granted the motion, concluding that a former employee—one whose allegedly protected acts had occurred exclusively after employment ended—could not rely on the False Claims Act’s anti-retaliation provision. Potts v. Ctr. for Excellence in Higher Educ., Inc. , 244 F.Supp.3d 1138, 1144 (D. Colo. 2017). Potts appealed.

DISCUSSION

A. Standard of Review

We review de novo a district court’s dismissal for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). United States ex rel. Lemmon v. Envirocare of Utah, Inc. , 614 F.3d 1163, 1167 (10th Cir. 2010). "We accept as true all well-pleaded factual allegations in the complaint and view them in the light most favorable to the [plaintiff]." Sec. & Exch. Comm’n v. Shields , 744 F.3d 633, 640 (10th Cir. 2014). Here, the district court dismissed Potts’s claim based on the court’s construction of the False Claims Act. We review de novo a district court’s statutory construction. United States ex rel. Little v. Triumph Gear Sys., Inc. , 870 F.3d 1242, 1246 (10th Cir. 2017), cert. denied , ––– U.S. ––––, 138 S.Ct. 1298, 200 L.Ed.2d 473 (2018).

B. Statutory Interpretation

When interpreting a statute, "our primary task is to ‘determine congressional intent, using traditional tools of statutory interpretation.’ " United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah , 472 F.3d 702, 710 (10th Cir. 2006) (quoting McGraw v. Barnhart , 450 F.3d 493, 498 (10th Cir. 2006) ). We begin with the language of the statute itself. Lawson v. FMR LLC , 571 U.S. 429, 440, 134 S.Ct. 1158, 188 L.Ed.2d 158 (2014). "Our first step in interpreting a statute is to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case." Ceco Concrete Constr., LLC v. Centennial State Carpenters Pension Tr. , 821 F.3d 1250, 1258 (10th Cir. 2016) (quoting Robinson v. Shell Oil Co. , 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997) ). Our inquiry ends there "if the statutory language is unambiguous and ‘the statutory scheme is coherent and consistent.’ " Robinson , 519 U.S. at 340, 117 S.Ct. 843 (quoting United States v. Ron Pair Enters., Inc. , 489 U.S. 235, 240, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) ). We evaluate statutory language by examining "the language itself, the specific context in which that language is used, and the broader context of the statute as a whole." Ceco Concrete Constr. , 821 F.3d at 1258 (quoting Robinson , 519 U.S. at 341, 117 S.Ct. 843 ).

C. The False Claims Act

The False Claims Act imposes liability on any person who knowingly makes a false claim for payment to the federal government. 31 U.S.C. § 3729(a). Because "employees will often be in the best position to report frauds perpetrated by their employers," the statute includes a whistleblower provision to protect employees from retaliation. McBride v. Peak Wellness Ctr., Inc. , 688 F.3d 698, 703 (10th Cir. 2012). The two key subsections of the anti-retaliation provision provide as follows:

(1) In general. —Any employee ... shall be entitled to all relief necessary to make that employee ... whole, if that employee ... is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee ... or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.

(2) Relief. —Relief under paragraph (1) shall include reinstatement with the same seniority status that employee ... would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorney’s fees. An action under this subsection may be brought in the appropriate district court of the United States for the relief provided by this subsection.

31 U.S.C. § 3730(h)(1), (2).

We must decide what persons qualify as "employees" under § 3730(h)(1). We conclude that "employees" includes only persons who were current employees when their employers retaliated against them. If that condition is met, it doesn’t matter whether the employee remains a current employee of the employer when suing. So the label "former employee" itself means nothing—what matters is the employee’s employment status when the employer retaliates.

We reach this conclusion by examining the wording of § 3730(h)(1). That subsection sets forth the qualifying retaliatory acts—discharge, demotion, suspension, threats, harassment, or any other manner of discrimination in the terms and conditions of employment. Of these six categories of retaliatory acts, four, by their nature or wording, must occur during employment (as must the protected activity). Obviously, a former employer cannot discharge, suspend, or demote a former employee. Nor can a former employer discriminate against a former employee in the terms and conditions of employment.

Potts acknowledges this but asserts, as a general matter, that a former employer can threaten or harass its former employees (we note, as anyone can threaten or harass anyone else). From this, she argues that under § 3730(h)(1) the term "employee" is ambiguous about whether it protects former employees who are threatened or harassed by their former employers. Under Potts’s view, § 3730(h)(1) covers this situation, even when the whistleblowing comes after employment ends.

The district court acknowledged the truism that "a company could threaten or harass a former employee just as it could a current employee[.]" Appellant’s App. at 144. But it concluded that "it would be anomalous for two of the six listed retaliatory acts to cover former employees while the rest do not." Id. at 144–45. In treating the six retaliatory acts the same, the...