United States ex rel. Onnen v. Sioux Falls Indep. Sch. Dist. #49-5
| Decision Date | 21 September 2011 |
| Docket Number | CIV. 07-4174 |
| Parties | UNITED STATES ex rel. Matt Onnen, Plaintiff, v. SIOUX FALLS INDEPENDENT SCHOOL DISTRICT #49-5, a local government agency, and DARIN DARBY, DEANNA BARTH, KENT ALBERTY, DEBBIE HOFFMAN, and DOUG MORRISON, the duly elected,qualified, and acting Members of the Sioux Falls School Board, individually and in their official capacities, and PAMELA HOMEN, the duly appointed, qualified, and acting Superintendent of Schools of the Sioux Falls Independent School District, in her individual and official capacities, Defendants. |
| Court | U.S. District Court — District of South Dakota |
(Defendants' Motion for Judgment on the
Pleadings, or in the Alternative, for Summary
Judgment, Doe. 105)1
On August 15, 2011, the Defendants filed a Motion for Judgment on the Pleadings or Alternatively for Summary Judgment,2 along with a Statement of Undisputed Material Facts3 anda Supporting Brief.4 Defendants also filed supporting Affidavits.5 Thereafter, Plaintiff filed his Affidavits opposing the Defendants' Motion,6 along with his Response to Defendants' Statement of Undisputed Material Facts and Statement of Undisputed Material Facts7 and a Brief in Response to the Defendants' Motion.8 The Defendants filed a Reply Brief9 and the Second Affidavit of Anthony Hohn.10 The parties submitted supplemental briefs on the limited issue of the Sioux Falls School District's respondeat superior liability for allegedly false claims made by STL11 Additionally, the Court heard oral arguments during the pre-trial conference which was held on Monday, September 12, 2011. The Court has considered the parties' written and oral arguments.
Onnen worked as Registrar at Southeast Technical Institute (STI) before he was terminated on August 30, 2007. The Sioux Falls School Board ratified his termination on September 10, 2007. Onnen appealed the board decision to the Circuit Court, Second Judicial Circuit, Minnehaha County, South Dakota, on November 6, 2007, pursuant to SDCL 13-46-1. The Circuit Court determined Onnen was terminated for incompetence and affirmed the board decision on January 25, 2010. Onnen appealed the Circuit Court decision to the South Dakota Supreme Court. On August 3, 2011, the South Dakota Supreme Court affirmed, Onnen v. Sioux Falls School Dist. #49-5, 2011 WL 3359670 (SD 2011).
On November 19, 2007, Onnen filed his qui tam Complaint which commenced this federal litigation under the False Claims Act. The False Claims Act provides for a 60 day period during which the pleadings are sealed to provide an opportunity for the United States to intervene. He filed an Amended Complaint on November 21, 2007.12 He filed a Second Amended Complaint on March 7, 2008,13 After extensions of the 60 day time period to decide, the United States on August 5, 2008, declined to intervene.
On December 1, 2008, the Defendants filed a Motion to Dismiss. On May 28, 2009, Defendants' Motion to Dismiss was granted without prejudice to allow Onnen to file another Amended Complaint which complied with Fed. R. Civ. P. 9(b) pleading requirements. Onnen moved to amend his Complaint and Defendants opposed his motion. On December 7, 2009, the Defendants asked Judge Piersol to consider new authority. On December 17, 2009, Judge Piersol filed an Order which allowed Onnen to amend. On December 17, 2009, Judge Piersol filed another Order, after considering the new authority, refusing to dismiss Onnen's Complaint. Judge Piersol directed Onnen to file his Complaint within five business days from December 17, 2009. Because Onnen did not, the Defendants moved to dismiss. On August 9, 2010, Judge Piersol filed an Order which denied Defendants' Motion to Dismiss and directed Defendants to answer the Supplemented Amended Complaint which Onnen filed on January 4, 2010.14 After further sparring about sanctions and motions to amend and correct pleadings and still another Motion to Dismiss, on February 18, 2011, Judge Piersol filed an Order which granted in part and denied in part the pending Motion to Dismiss.15 On March 4, 2011, Defendants filed their Answer to Onnen's SupplementedAmended Complaint. On April 27, 2011, the case was reassigned and on April 28, 2011, a Scheduling Order was filed which established September 26, 2011, as the date for the trial to begin. On August 15, 2011, the pending Motions for Judgment on the Pleadings and for Summary Judgment were filed. Onnen resists the motions. The matter has been fully briefed and oral argument was heard during the pre-trial conference on September 12, 2011.
Under Rule 56(c)(2) of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if the movant can show that there is no genuine issue as to any material fact and that [the movant] is entitled to judgment as a matter of law. In determining whether summary judgment should be granted, the facts and the inferences from those facts are viewed in the light most favorable to the nonmoving party, and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law.16 "Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists."17 In determining whether a genuine issue of material fact exists, the Court views the evidence presented based upon which party has the burden of proof under the underlying substantive law.18 Summary judgment is appropriate in a False Claim Act case if "the plaintiff lacks sufficient evidence to show that any false or fraudulent claims have been made."19 "Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed 'to securethe just, speedy, and inexpensive determination of every action.'"20 "The nonmoving party 'must do more than simply show that there is some metaphysical doubt as to the material facts,' and ' [w]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no 'genuine issue for trial.'"21
The False Claims Act (FCA) is found at 31 U.S.C. § 3729-33. It provides in part: §3729(a) Liability for certain acts.
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is liable to the United States Government for a civil penalty of not less than $ 5,000 and not more than $10,000, as adjusted by the Federal Civil Penalties Inflation Adjustment Act of 1990.... plus three times the amount of damages which the Government sustains because of the act of that person.
The False Claims Act was "originally passed during the Civil War in response to overcharges and other abuses by defense contractors...""22 The False Claims Act and its qui tarn component was intended to "help the government uncover fraud and abuse by unleashing a posse of ad hoc deputies to uncover and prosecute frauds against the government."23 In 1958, the United States Supreme Court cautioned that the FCA was not designed to punish every type of fraud committed upon the government.24
In Harrison, however, the Court cited the legislative history to the 1986 amendments to the FCA and noted the FCA should be broadly construed.25 "[E]ach and every claim submitted under a contract, loan guarantee, or other agreement which was originally obtained by means of false statements or other corrupt or fraudulent conduct, or in violation of any statute or applicable regulation constitutes a false claim."26 The Court acknowledged that in cases where violation of a statute or regulation is the basis for the FCA claim "the courts in these cases will not find liability merely for non-compliance with a statute or regulation."27 Instead liability for false certification is imposed if compliance with the statute or regulation was a prerequisite to gaining the benefit and the defendant affirmatively certified compliance.28
Onnen must establish several elements to recover under the FCA. Specifically, Onnen must show:
(1) the Defendants submitted a claim for payment to the federal government;
(2) the claim was false or fraudulent; and (3) the Defendants submitted the claim "knowing" that it was false or fraudulent.29 To meet this required showing, Onnen must plead the alleged fraud with particularity.30
The Eighth Circuit also recently reiterated that 31
Onnen was employed by Southeast Technical Institute (STI). He asserts the false claims were made by persons also employed by STI. STI is governed by the Sioux Falls School District (SFSD), but STI is a post-secondary technical school for which the SFSD does not contribute any of its own money. Pursuant to state statute (SDCL § 13-39-39.1) all funding for...
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