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

• Citation: 244 F.Supp.3d 1138
• Decision Date: 24 March 2017
• Docket Number: Civil Action No. 16–cv–01779–RBJ
• Parties: Debbi POTTS, a Colorado resident, Plaintiff, v. CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana Corporation f/k/a CollegeAmerica Denver, Inc., Defendants.
• Court: U.S. District Court — District of Colorado

244 F.Supp.3d 1138

Debbi POTTS, a Colorado resident, Plaintiff,
v.
CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana Corporation f/k/a CollegeAmerica Denver, Inc., Defendants.

Civil Action No. 16–cv–01779–RBJ

United States District Court, D. Colorado.

Signed March 24, 2017

244 F.Supp.3d 1139

Zachary Steven Westerfield, Logan Ross Martin, Westerfield & Martin, LLC, Denver, CO, Brandon Jay Mark, Parsons Behle & Latimer, Salt Lake City, UT, for Plaintiff.

Gerald Matthew Ritzert, Steven Martin Gombos, Ritzert & Leyton, P.C., Fairfax, VA, Raymond W. Martin, Wheeler Trigg O'Donnell, LLP, Denver, CO, for Defendants.

ORDER

R. Brooke Jackson, United States District Judge

This order addresses defendant's motion to dismiss [ECF No. 11]. For the reasons given below, the motion is GRANTED.

BACKGROUND

Debbi Potts worked as a campus director for CollegeAmerica, a predecessor to the Center for Excellence in Higher Education ("the Center"), for several

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years until resigning on July 16, 2012. ECF No. 1 at ¶¶ 7, 13. The Center operates a number of for-profit colleges in the United States. Id. ¶ 8. Ms. Potts claims she resigned because she was upset by the Center's business practices, which she believes violate Title IV of the Higher Education Act of 1965. Id. ¶ 13. A month later, the Center's Chief Executive Officer negotiated an agreement ("the Agreement") with Ms. Potts regarding unpaid wages, unemployment compensation, and other employment matters. Id. ¶ 17. Under the Agreement, Ms. Potts received $7,000 in exchange for a promise to (1) "refrain from ... contacting any governmental or regulatory agency with the purpose of filing any complaint or grievance" concerning the Center's business practices; (2) "direct any complaints or issues against [the Center] that may arise with disgruntled staff, students, or the public at large to" the Center's complaint hotline; and (3) "not intentionally with malicious intent ... disparage the reputation of" the Center. Id. ¶ 21; ECF No. 12 at 4. Nevertheless, on February 27, 2013 Ms. Potts filed a complaint with the Center's accrediting agency alleging that the Center provided false information to the agency in violation of the False Claims Act ("FCA"). ECF No. 1 at ¶ 22.

On March 25, 2013 the Center filed a lawsuit in state court against Ms. Potts for breach of the Agreement. Id. ¶ 34. The Center initially claimed only that Ms. Potts violated the Agreement's non-disparagement provision by publishing written statements to another former employee of the Center. ECF No. 12 at 5. But when the Center later learned of Ms. Potts' report to the accrediting agency, it moved to amend its complaint. Id. Its motion was granted, and on February 4, 2014 the Center filed an amended complaint alleging that Ms. Potts also violated the Agreement by reporting the Center to the accrediting agency. ECF No. 1 at ¶¶ 36–37.

On July 12, 2016 Ms. Potts filed suit in this Court claiming that the Center violated the FCA's anti-retaliation provision by harassing her with the state court lawsuit. Id. ¶ 1. Ms. Potts claims she engaged in protected activity when she reported the Center to its accrediting agency, and the Center unlawfully retaliated by amending its complaint to punish her for this protected activity. Id. ¶ 55–56. Defendants have responded with a motion to dismiss. ECF No. 11.

STANDARD OF REVIEW

To survive a 12(b)(6) motion to dismiss, the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While the Court must accept the well-pleaded allegations of the complaint as true and construe them in the light most favorable to the plaintiff, Robbins v. Wilkie , 300 F.3d 1208, 1210 (10th Cir. 2002), purely conclusory allegations are not entitled to be presumed true, Ashcroft v. Iqbal , 556 U.S. 662, 681, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). However, so long as the plaintiff offers sufficient factual allegations such that the right to relief is raised above the speculative level, he has met the threshold pleading standard. See Twombly , 550 U.S. at 556, 127 S.Ct. 1955.

ANALYSIS

In support of its motion to dismiss, the Center argues: 1) the FCA's anti-retaliation provision does not apply to post-employment retaliation; 2) Ms. Potts' claim is barred by the statute of limitations; 3) Ms. Potts waived her right to bring an FCA retaliation claim; and 4) Ms. Potts fails to allege an element of her retaliation claim—that the Center knew she was acting in

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furtherance of the FCA by reporting the Center to the agency. ECF No. 12 at 2–3. I agree that the first argument is dispositive, so I need not address the Center's three other defenses.

A. Post–Employment Retaliation .

The FCA imposes liability on organizations that knowingly defraud the government. See 31 U.S.C. § 3729(a)(1)(A)–(B). Because employees are often in the best position to identify and report fraud, the FCA contains a whistleblower provision that protects them from retaliation by these organizations. Id. § 3730(h)(1). This anti-retaliation provision states:

Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent 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, contractor, agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of this subchapter.

Id.

The main issue in this case is whether § 3730(h)(1) covers a former employee's actions and her former employer's subsequent retaliation against her. The FCA does not define "employee, contractor, or agent," so Ms. Potts advances two arguments for why this provision should apply to her. First, she argues that the FCA's legislative history dictates that it covers former employees. ECF No. 27 at 6–7. Second, she argues that even if § 3730(h)(1) applies only to current employees, she is technically a contractor and is therefore still covered. Id. at 12–13. Neither argument is persuasive.

1. Section 3730(h)(1) Does Not Cover Post–Employment Retaliation.

Before 2009, the FCA's anti-retaliation provision covered "employees" only. 31 U.S.C. § 3730(h)(1) (2006). In 2009, however, Congress amended § 3730(h)(1) to expand its scope to include "contractors" and "agents" as well. Fraud Enforcement and Recovery Act of 2009, Pub. L. No. 111–21, § 4, 123 Stat. 1617, 1624–25 (2009). Ms. Potts relies on pre- and post-amendment legislative history to argue that § 3730(h)(1) applies to former employees who suffer post-employment retaliation. ECF No. 27 at 6, 13 (citing S. Rep. No. 99–345, at 34 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5299, and S. Rep. No. 110–507, at 27 (2008)).

"Statutory interpretation, as we always say, begins with the text...." Ross v. Blake , ––– U.S. ––––, 136 S.Ct. 1850, 1856, 195 L.Ed.2d 117 (2016). The Court may consider legislative history only if the statute at hand is ambiguous. United States v. O'Brien , 686 F.2d 850, 852 (10th Cir. 1982). "A statute is ambiguous if it is reasonably susceptible to more than one interpretation." Nat'l Credit Union Admin. Bd. v. Nomura Home Equity Loan, Inc. , 764 F.3d 1199, 1226 (10th Cir. 2014).

Ms. Potts' legislative history argument thus presupposes that § 3730(h)(1) can be read in multiple reasonable ways, but the text is unambiguous. The dictionary definition of "employee" is "[a] person who works for an employer," i.e., a current employee. Employee, n. , Oxford English Dictionary Online, http://www.oed.com/view/Entry/61374 (emphasis added). Section 3730(h)(1)'s use of the word "employee" without modification—such as specifying "current or former employee"—suggests that this word carries its default meaning. See

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Walters v. Metro. Educ. Enterprises, Inc. , 519 U.S. 202, 207, 117 S.Ct. 660, 136 L.Ed.2d 644 (1997) ("In the absence of an indication to the contrary, words in a statute are assumed to bear their ‘ordinary,...