US ex rel. Fallon v. Accudyne Corp., 93-C-801-S.

• Decision Date: 10 March 1995
• Docket Number: No. 93-C-801-S.,93-C-801-S.
• Citation: 880 F. Supp. 636
• Parties: UNITED STATES of America, ex rel. John FALLON, Robert Bradley, Jr., Pamela Carr, Kris Sheridan, Kelly Fallon and Atlantic States Legal Foundation, Relators/Plaintiffs, v. ACCUDYNE CORPORATION and Alliant Techsystems, Inc., Defendants.
• Court: U.S. District Court — Western District of Wisconsin

880 F. Supp. 636

UNITED STATES of America, ex rel. John FALLON, Robert Bradley, Jr., Pamela Carr, Kris Sheridan, Kelly Fallon and Atlantic States Legal Foundation, Relators/Plaintiffs, v. ACCUDYNE CORPORATION and Alliant Techsystems, Inc., Defendants.

No. 93-C-801-S.

United States District Court, W.D. Wisconsin.

March 10, 1995.

Mark A. Cameli, Asst. U.S. Atty., Madison, WI, for the U.S.

Dennis M. Grzezinski, Milwaukee, WI, for John Fallon, Kris Sheridan, Kelly Fallon, Atlantic States Legal Foundation.

Sandra J. Strebel, Speigel & McDiarmid, Washington, DC, for Robert Bradley Jr.

Bradley S. Weiss, Washington, DC, for Pamela Carr.

E. Grey Lewis, McDermott, Will & Emery, Washington, DC, for Accudyne Corp. and Alliant Techsystems, Inc.

MEMORANDUM AND ORDER

SHABAZ, District Judge.

Relators John Fallon, Robert Bradley, Jr., Pamela Carr, Kris Sheridan, Kelly Fallon and Atlantic States Legal Foundation commenced this action on behalf of the United States pursuant 31 U.S.C. § 3730(b) alleging that defendants knowingly made false claims for contract payments in violation of 31 U.S.C. § 3729(a)(1), (2) and (3). The matter is presently before the Court on defendants motion to dismiss one of plaintiffs' claims.

A complaint should be dismissed for failure to state a claim only if it appears beyond a reasonable doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In order to survive a challenge under Rule 12(b)(6) a complaint "must contain either direct or inferential allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984).

FACTS

The following is a summary of the relevant allegations of relators second amended complaint which are accepted as true for purposes of this motion.

Accudyne is and has been party to numerous contracts with the United States Department of Defense. Each such contract included a requirement that all work be performed in accordance with applicable federal, state and local environmental laws and regulations including the Clean Water Act, the Clean Air Act and the Resource Conservation and Recovery Act.

To obtain the contracts Accudyne submitted pricing information to the United States Department of Defense which falsely represented that Accudyne's cost to complete the contracts for which it bid would include all costs associated with environmental compliance. After being awarded the contracts Accudyne knowingly failed to comply with environmental requirements while performing them.

Accudyne then knowingly presented false representations, certifications and claims that it complied with the contractually incorporated environmental regulations in order to induce payment under the contracts. The Department of Defense relied upon the false representations and paid the contract claims.

MEMORANDUM

Defendants characterize relators claim as an effort to impose liability based solely on noncompliance with environmental statutes. This, they argue is not a claim within the language of the False Claims Act. Alternatively, to the extent that relators do state a claim defendants argue that it is pre-empted by the more specific remedial provisions of the environmental laws under the doctrine set forth in Middlesex County Sewerage Authority v. National Sea Clammers Assoc., 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981). Because the Court concludes that relators' allegations clearly fall within the language of the FCA and that the Sea Clammers doctrine is inapplicable to the facts of this case, the motion to dismiss must be denied.

Scope of the FCA

The broad objective of the False Claims Act is to provide a remedy for all fraudulent attempts to cause the government to pay sums of money. United States v. Neifert-White Co., 390 U.S. 228, 233, 88 S.Ct. 959, 962, 19 L.Ed.2d 1061 (1968). It provides in relevant part at 31 U.S.C. § 3729(a):

Any person who —

(1) knowingly presents, or causes to be presented, to an officer or employee of the United States government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval;

(2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government;

(3) conspires to defraud the government by getting a false or fraudulent claim allowed or paid; ...

is liable to the United States government for a civil penalty of not less than $5000 and not more than $10,000 plus three times the amount damages which the government sustained because of the act of that person....

The allegations of the second amended complaint unquestionably fall within this language. The complaint alleges that the contracts expressly required compliance with environmental regulations and that defendant knowingly failed to comply with such regulations and falsely certified that it had so complied in order to induce payments under the contracts. Such a claim is fundamentally no different than falsely representing that tests have been performed or falsely representing the results of product testing. See, e.g. Neal v. Honeywell Inc., 33 F.3d 860 (7th Cir.1994). Defendants' characterization of the claim as an attempt to sue for violations of environmental laws misses the point — it is not the violation of environmental laws that gives rise to an FCA claim but the false representations to the government that there has been compliance.

Defendants rely upon dicta in Neal discussing costs to the government which might result from a proliferation of FCA retaliation actions. In so doing, defendants ignore the more fundamental principle at the heart of Neal:

But the Supreme Court insists that we take statutes seriously, bending their language only when the text produces absurd results.

* * * * * *

The text of the law is not just evidence about how much one interest ... should be preferred over another; the text is the decision about what to do — a decision approved by the Constitution's own means, bi-cameral approval and presidential signature. No principle of statutory construction says that after identifying the statutes accommodation of competing interests, the Court should give a favored party a little extra.

33 F.3d at 862. As Neal recognizes, arguments concerning policy are irrelevant when a court is faced with the application of a clearly written statute. The allegations of false statements to induce payment by the government unquestionably state a claim within the language of the FCA.

Pre-emptive effect of environmental laws

Notwithstanding that a claim falls within the literal reading of a statute, it is sometimes held to be unavailable because another more detailed statute evidences Congressional intent to pre-empt the more general claim which relates to conduct for which the other statute provides a detailed remedy. Sea Clammers, 453 U.S. at 19-21, 101 S.Ct. at 2625-27; Brown v. General Services Administration, 425 U.S. 820, 834-35, 96 S.Ct. 1961, 1968-69, 48 L.Ed.2d 402 (1976).

But neither Brown nor Sea Clammers hold that a statutory claim is pre-empted by a subsequent statutory enactment which regulates conduct different from that supporting the original claim. Both Brown and Sea Clammers held that a section...