United States ex rel. Conteh v. Ikon Office Solutions, Inc.

Decision Date08 May 2015
Docket NumberCivil Action No. 12–1074 RBW
PartiesUnited States of America, ex rel. Issa Conteh, Plaintiff/Relator, v. IKON Office Solutions, Inc., Defendant.
CourtU.S. District Court — District of Columbia

Richard Ethelbert Patrick, Daryle A. Jordan, Jordan Patrick & Cooley LLP, Fairfax, VA, for Plaintiff/Relator.

Andy Liu, Crowell & Moring, L.L.P., Washington, DC, for Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON, United States District Judge

The plaintiff/relator, Issa Conteh, brings this qui tamaction against the defendant, IKON Office Solutions, Inc. (IKON), under the False Claims Act, 31 U.S.C. §§ 3729(a)(1)(a)(3) (2006). SeeAmended Complaint (“Am.Compl.”) ¶¶ 36–53. The plaintiff/relator alleges that IKON violated the False Claims Act by falsely reporting to the Federal Deposit Insurance Company (“FDIC”) that IKON provides its employees with fringe benefits as mandated by the Service Contract Act (the “SCA”), 41 U.S.C. §§ 351–58 (2006),1even after being advised that it was violating the SCA by not providing these benefits, see id.¶¶ 1, 11–35. Currently before the Court is [IKON's] Motion to Dismiss and Request for Hearing (“Mot.”) under Federal Rules of Civil Procedure 12(b)(6)for failure to state a claim upon which relief can be granted, and Rule 9(b) for failure to plead fraud with sufficient particularity. Upon careful review of the parties' submissions,2the Court concludes for the reasons below that it must grant IKON's motion to dismiss the plaintiff/relator's False Claims Act claim and deny its motion for a hearing, as a hearing is unnecessary.

I. BACKGROUND

The following facts are alleged by the plaintiff/relator in his amended complaint, to a large degree, based merely “on information and belief.” Am. Compl. ¶¶ 11, 26, 29, 32, 34–35, 52–53.

From September 2007 to November 2010, the plaintiff/relator “was employed by IKON as a General Clerk II in furtherance of IKON's contract with the FDIC.” Id.¶ 8. On or about May 11, 2007, prior to employing the plaintiff/relator, IKON entered into a contract with the FDIC to provide “copying and other document services ... that required payment of specific wages and benefits [to employees] under the [SCA].”3 Id.¶ 1. IKON “failed to provide such wages and fringe benefits, and, after being advised of its violation of the SCA and its contract with the FDIC, [it] submitted invoices to the FDIC indicating compliance with the SCA and its contract with [the] FDIC.” Id.¶ 1. IKON “knowingly, ... and in reckless disregard and/or deliberate ignorance of the truth or falsity of the information, submitted to the government, bills, invoices[,] and statements to [the] FDIC and potentially other government agencies, without regard to whether or not the billings were in compliance with the SCA....” Id.¶ 19. Furthermore, IKON “received payment from the government in response to those billings.” Id.Thus, IKON “misrepresented to the United States that it was in compliance with the SCA, when it was not[;] .... [s]pecifically, ... [IKON] failed to provide [the plaintiff/relator] and other employees any fringe benefits in violation of the SCA.” Id.¶ 20.

A. Facts Alleged in Paragraphs Twenty–Two Through Thirty–Five of the Amended Complaint

“From 2007 through 2010[, the plaintiff/relator] was employed by IKON on its FDIC Contract as a General Clerk II at IKON's Arlington, Virginia facility.” Id.¶ 22. As a General Clerk II, he was entitled to “wages at $15.32 per hour, and ... Health & Welfare [fringe benefits] [of] $3.35 per hour or $134.00 per week or $580.66 per month.” Id.¶ 23 (first alteration in original). Prior to his employment with IKON, the plaintiff/relator was employed “on the same FDIC contract requirement for four ... other government contractors ... and all previous employers paid the required SCA fringe benefits.” Id.¶ 27.

On several occasions during [the plaintiff/relator's] employment, [he] notified several IKON officials that IKON was not paying a benefit to which he and other employees were entitled under the SCA. He initially brought the failure to pay [the] SCA['s] fringe benefits to the attention of a representative in IKON's Human Resources office. When [the plaintiff/relator's] concerns were not addressed, he brought the matter to the attention of two ... other IKON officials/managers: Ted Tuck, the contract Project Manager, and Lyndon Johnson, [the plaintiff/relator's] immediate supervisor. These individuals were agents and employees of IKON. On each occasion that [the plaintiff/relator] spoke to the supervisors, [he] advised them that the SCA required [IKON] to provide fringe benefits, and that all prior contractors for whom he had worked, provided fringe benefits for its employees. Accordingly, [IKON] had actual notice of the SCA requirement to provide fringe benefits, or, had a duty to research the issue. On information and belief, [IKON] ignored [the plaintiff/relator's] inquiries and notices.

Id.¶ 29. At some unknown time, the plaintiff/relator “discussed IKON's failure/refusal to pay fringe benefits with several other [unidentified] employees at the Arlington facility .... [and they] stated that IKON was not paying them [the] required SCA fringe benefits [either].” Id.¶ 33; see also id.¶ 28. “Based on these discussions, [the plaintiff/relator] concluded that IKON was not paying any of the other twenty-one ... employees the required SCA fringe benefits.” Id.¶ 33.

Additionally, at some unknown time, “Mr. Johnson told [the plaintiff/relator] that he [Johnson] was responsible for collecting the time information from employees for pay purposes, and that he was also responsible for preparing and submitting IKON['s] invoices to the government.” Id.¶ 30 (second alteration in original). And, IKON “submitted invoices under the contract on or about every two weeks from September 2007 to at least November 2010.” Id.¶ 38.

B. Procedural Background

Based on a less detailed version of the above factual allegations,4the plaintiff/relator filed a complaint under seal on June 29, 2012. Compl. ¶ 25. On May 15, 2013, the United States declined to intervene in this case, ECF No. 7, the Court ordered that the case be unsealed, Order, ECF No. 8, and subsequently granted IKON's first motion to dismiss, dismissing the original complaint without prejudice pursuant to Federal Rule of Civil Procedure 9(b), and granted the plaintiff/relator leave to amend his complaint. United States ex rel. Conteh v. IKON Office Solutions, Inc.,27 F.Supp.3d 80, 90 (D.D.C.2014)(Walton, J.). The plaintiff/relator filed his amended complaint on April 18, 2014, realleging that IKON violated the False Claims Act, 31 U.S.C. §§ 3729(a)(1)(a)(3), Am. Compl. ¶¶ 36–53, and seeking [j]udgment against ... IKON for triple the damages sustained by the United States,” plus civil penalties and payment of costs and attorney's fees, id.¶¶ A–B (Prayer for Relief). IKON has not moved to dismiss the amended complaint again under Federal Rules of Civil Procedure 12(b)(6)and 9(b).

II. STANDARDS OF REVIEW

A Rule 12(b)(6)motion tests whether the amended complaint “state[s] a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “To survive a motion to dismiss [under Rule 12(b)(6)], an amended 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 Bell Atl. Corp. v. Twombly,550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In making this assessment, a plaintiff/relator receives the “benefit of all inferences that can be derived from the facts alleged.” Am. Nat'l Ins. Co. v. FDIC,642 F.3d 1137, 1139 (D.C.Cir.2011)(internal quotation marks and citation omitted). But raising a “sheer possibility that a defendant has acted unlawfully” fails to satisfy the facial plausibility requirement. Iqbal,556 U.S. at 678, 129 S.Ct. 1937. Rather, a claim is facially plausible “when the plaintiff[/relator] pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.” Id.(citing Twombly,550 U.S. at 556, 127 S.Ct. 1955). While the Court must “assume [the] veracity” of any “well-pleaded factual allegations” in the amended complaint, conclusory allegations “are not entitled to the assumption of truth.” Id.at 679, 129 S.Ct. 1937.

Fraud claims, however, are also subject to the heightened pleading requirement of Rule 9(b), which provides that [i]n alleging fraud ..., a party must state with particularity the circumstances constituting fraud....” Fed. R. Civ. P. 9(b). Rule 9(b)is not an antithesis of Rule 8(a)'s ‘short and plain statement’ requirement, but rather a supplement to it.” Baker v. Gurfein,744 F.Supp.2d 311, 315 (D.D.C.2010)(Walton, J.) (quoting United States ex rel. Williams v. Martin–Baker Aircraft Co.,389 F.3d 1251, 1256 (D.C.Cir.2004)). To satisfy Rule 9(b)'s heightened standard, ‘the pleader [must] ... state the time, place and content of the false misrepresentations, the fact misrepresented ... [,] what was retained or given up as a consequence of the fraud,’ and “identify individuals allegedly involved in the fraud.” Williams,389 F.3d at 1256(first alteration in original) (citations omitted). Rule 9(b)'s particularity requirement serves several purposes,” including ensuring that ‘all defendants [have] sufficient information to allow for preparation of a response.’ Id.(citation omitted). Accordingly, in order to withstand a motion to dismiss for failure to plead a False Claims Act claim with the degree of particularity required by Rule 9(b), an [amended] complaint must ... provide a defendant with notice of the who, what, when, where, and how with respect to the circumstances of the fraud.” Stevens v. InPhonic, Inc.,662 F.Supp.2d 105, 114 (D.D.C.2009)(Walton, J.) (quoting Anderson v. USAA Cas. Ins. Co.,221 F.R.D. 250, 253 (D.D.C.2004)(quoting DiLeo v. Ernst &...

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