U.S. ex rel. Hinden v. Unc/Lear Services, Inc.

Decision Date15 March 2005
Docket NumberNo. CIV.02-00107 ACK/BMK.,CIV.02-00107 ACK/BMK.
Citation362 F.Supp.2d 1203
PartiesUNITED STATES of America, Plaintiff, by Curtiss HINDEN, for himself as well as for the United States of America, Plaintiff-Relator, Plaintiffs, v. UNC/LEAR SERVICES, INC.; Lear Siegler Management Services Corp.; and Joseph A. Smith, Defendants.
CourtU.S. District Court — District of Hawaii

Mark K. Haugen, Honolulu, HI, for Curtiss Hinden.

Mark K. Haugen, Honolulu, HI, Rachel S. Moriyama, Office of the United States Attorney, Honolulu, HI, Patricia Davis, U.S. Department of Justice, Washington, DC, Michael F. Hertz, U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, for United States of America.

Barbara A. Petrus, Anne T. Horiuchi, Goodsill Anderson Quinn & Stifel LLLP, Honolulu, HI, Michael J. Nardotti, Jr, T. Michael Guiffre, Patton Boggs LLP, Washington, DC, for UNC/Lear Services, Inc., Lear Siegler Management Services, Corp., UNC Lear Siegler, Inc., Joseph A. Smith, Doe Corporations 1-10, Doe Partnerships 1-10, Doe Entities 1-10, John Does 1-10, defendants.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS

KAY, District Judge.

BACKGROUND
I. Factual History

Plaintiff-Relator Curtiss Hinden ("Plaintiff") is a former employee of Defendant Lear Siegler Services, Inc. ("Defendant"). At times relevant to this case, Defendant was engaged in contracts with the United States for the maintenance, repair, and refitting of helicopters used by the United States Army and the National Guard. In the course of his employment at Defendant's work-site located on Oahu, Plaintiff performed work on helicopters under various contracts with the United States. While working under these contracts, Plaintiff alleges that Defendant's local management directed workers, including Plaintiff, to cut corners on the performance of the contracts to save time and money. Plaintiff alleges that although Defendant did not perform all of the work required under the applicable contracts Defendant submitted claims for full payment certifying that Defendant had performed all of its contractual obligations. Plaintiff alleges that he asked Defendant's local manager, Joseph Smith, to allow him to perform his work in conformance with the contractual specifications. Plaintiff claims that he was instructed to do as he was told and was thereafter subjected to harassment and other retaliatory conduct. Plaintiff further alleges that Defendant continued to cut corners on the work performed at the Oahu work site, so Plaintiff reported the situation to Defendant's management in Oklahoma.

Defendant terminated Plaintiff's employment on or about December 8, 1997. Plaintiff filed his Complaint on February 19, 2002. The Complaint states qui tam claims against Defendants under the False Claims Act, 31 U.S.C. 3729, et seq., based on allegations that Defendants committed fraudulent claims practices against the United States. Counts I through IV of the Complaint allege qui tam claims against Defendants for various fraudulent claims practices against the United States Government and also include Plaintiff's claim for attorneys' fees and costs under 31 U.S.C. § 3730(d). Count V of the Complaint sets forth Plaintiff's claim for retaliation under 31 U.S.C. § 3730(h).

On June 21, 2004, Defendant entered into a settlement agreement with the Government whereby Defendant agreed to pay $4,100,000.00 to settle the Government's qui tam claims. The settlement agreement expressly reserves Plaintiff's claims against Defendant for retaliatory discharge, legal fees and costs under 31 U.S.C. § 3730(h) claim and Plaintiff's claim for attorneys' fees, expenses and costs under 31 U.S.C. § 3730(d).

II. Procedural History

On February 19, 2002, Plaintiff filed his Complaint stating qui tam claims against Defendants under the False Claims Act ("FCA") (31 U.S.C. §§ 3729, et seq.). As required under 31 U.S.C. § 3730(b)(2), Plaintiff's Complaint was filed under seal and the Government was served to allow the Government to determine whether it would intervene in the case. From April 2002 through June 2004, the Government requested and received eight extensions of time to continue its investigation to determine whether to intervene in the case.

On June 18, 2004, the Government filed a Notice of Election to Intervene. Also on June 18, 2004, this Court ordered that the seal on the Government's Notice of Intervention and Plaintiff's Complaint be lifted.

On June 21, 2004, Defendant agreed to pay $4,100,000.00, of which the Government agreed to pay $779,000 to Plaintiff, to settle the Government's qui tam claims set forth in Plaintiff-Complaint. The Settlement Agreement expressly reserves Plaintiff's claim for attorneys' fees and costs under 31 U.S.C. § 3730(d) and his claim against Defendant for retaliatory discharge, legal fees and costs under 31 U.S.C. § 3730(h).

On July 6, 2004, the Government filed a Notice of Written Consent to Dismissal of Qui Tam Action With Prejudice in which the Government notified the Court of the written consent of the Attorney General to the dismissal of the qui tam action with prejudice, except as to Plaintiff's claim for attorneys' fees and costs under 31 U.S.C. § 3730(d) and his claim against Defendant for retaliatory discharge, legal fees and costs under 31 U.S.C. § 3730(h). On August 2, 2004, this Court Ordered that the qui tam action be dismissed as stipulated by the parties.

On October 7, 2004, this Court granted Plaintiff's Ex Parte Motion to Lift Seal and Permit Service of Complaint.

On January 5, 2005, Plaintiff filed a Motion for Default Judgment Against Defendant.

On January 24, 2005, Defendant filed a Memorandum in Opposition to Plaintiff's Motion for Default. Also on January 24, 2005, Defendant filed a Motion to Dismiss Plaintiff-Relator's Complaint.

On February 11, 2005, a hearing was held before Magistrate Judge Barry M. Kurren. At the hearing, Defendant's Counsel agreed to obtain an agreement to accept service for Defendant by February 15, 2005; Plaintiff agreed to make a demand; Defendant agreed to respond; and Plaintiff agreed to provide documents regarding attorneys' fees for a Status Conference on remaining issues set for March 30, 2005.

On February 24, 2005, Plaintiff filed his Opposition to Defendant's Motion to Dismiss.

On February 25, 2005, Magistrate Judge Barry M. Kurren filed an Order Denying Plaintiff's Motion for Default Judgment.

STANDARD

II. Dismissal for Failure to State a Claim Upon Which Relief Can Be Granted

Under the Federal Rules of Civil Procedure, Rule 12(b)(6), in deciding a motion to dismiss for failure to state a claim upon which relief can be granted, this Court must accept as true the plaintiff's allegations contained in the complaint and view them in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Wileman Bros. & Elliott, Inc. v. Giannini, 909 F.2d 332, 334 (9th Cir.1990); Shah v. County of Los Angeles, 797 F.2d 743, 745 (9th Cir.1986). Thus, the Complaint must stand unless it appears beyond doubt that the plaintiff has alleged no facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988). A Complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory or (2) insufficient facts alleged under a cognizable legal theory. Balistreri, 901 F.2d at 699, Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 533-34 (9th Cir.1984).

In essence, as the Ninth Circuit has stated, "[t]he issue is not whether a plaintiff's success on the merits is likely but rather whether the claimant is entitled to proceed beyond the threshold in attempting to establish his claims." De La Cruz v. Tormey, 582 F.2d 45, 48 (9th Cir.1978), cert. denied, 441 U.S. 965, 99 S.Ct. 2416, 60 L.Ed.2d 1072 (1979). The Court must determine whether or not it appears to a certainty under existing law that no relief can be granted under any set of facts that might be proved in support of plaintiff's claims. Id.

DISCUSSION
I. Counts I Through IV

Counts I through IV of Plaintiff's Complaint allege that Defendant violated the FCA by submitting false claims to the United States Government for payment of services, time, and attendance. (Compl. at ¶¶ 9-43). On June 21, 2004, the parties, including Plaintiff, settled all claims contained in Plaintiff's Complaint, except for his request for attorneys' fees, expenses, and costs under 31 U.S.C. § 3730(d) and his claim for retaliatory discharge, legal fees and costs under 31 U.S.C. § 3730(h). (Settlement Agreement at ¶¶ III.1, III.4, and III.7). On July 6, 2004, the Government filed a Notice of Written Consent to Dismissal of Qui Tam Action With Prejudice and notified this Court of the written consent of the Attorney General to the dismissal of the qui tam action with prejudice except as to Plaintiff's claims against Defendants for retaliatory discharge and legal fees and costs related to Plaintiff's claim. On August 2, 2004, this Court ordered that the qui tam action be dismissed as stipulated by the parties (including Plaintiff).

Plaintiff now requests that his claim under 31 U.S.C. § 3730(d) for attorneys' fees and costs be determined prior to the dismissal of Counts I through IV of his Complaint. (Pl.'s Mem. in Opp'n to Def.'s Mot. to Dismiss at 5). However, Counts I through IV of Plaintiff's Complaint were dismissed with prejudice, pursuant to Rule 41 of the Federal Rules of Civil Procedure, by this Court's Order dated August 2, 2004. Plaintiff is barred from relitigating these claims by the doctrine of res judicata. "Res judicata bars relitigation of all grounds of recovery that were asserted, or could have been asserted, in a previous action between the parties, where the previous action was resolved on the merits." United States ex. rel Barajas v. Northrop Corp., 147 F.3d...

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