US ex rel. Windsor v. Dyncorp, Inc., Civ. A. No. 94-1605-A.

• Decision Date: 09 August 1995
• Docket Number: Civ. A. No. 94-1605-A.
• Citation: 895 F. Supp. 844
• Parties: UNITED STATES of America ex rel. Gilbert E. WINDSOR, Jr., Plaintiff, v. DYNCORP, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Virginia

895 F. Supp. 844

UNITED STATES of America ex rel. Gilbert E. WINDSOR, Jr., Plaintiff, v. DYNCORP, INC., et al., Defendants.

Civ. A. No. 94-1605-A.

United States District Court, E.D. Virginia, Alexandria Division.

August 9, 1995.

COPYRIGHT MATERIAL OMITTED

Quentin R. Corrie, Anderson & Corrie, Fairfax, VA, Candace S. McCall, Candace McCall, P.C., Fairfax, VA, David P. Towey, Adam Augustine Carter, Towey & Associates, Washington, DC, for Gilbert E. Windsor, Jr.

Howard V. Sinclair, R. Steven Holt, Arent Fox Kintner Plotkin & Kahn, Washington, DC (Dawn E. Oakley, Associate Group Counsel, Dyncorp, Reston, VA, of counsel), for Dyncorp, Fred Clarke, Scott Wood, Richard Riordan, William Gage, Daniel R. Bannister, Paul V. Lombardi and Carl H. McNair.

MEMORANDUM OPINION

ELLIS, District Judge.

Relator Gilbert Windsor brought this qui tam action against DynCorp, Inc. and various of its officers and employees (collectively, "DynCorp") for alleged violations of the False Claims Act ("FCA").¹ Principally at issue is the somewhat unusual question whether alleged violations by DynCorp of the Davis-Bacon Act's² reporting and classification requirements constitute "false claims" within the meaning of the FCA. Also at issue is whether Windsor's remaining, more conventional FCA claims are vulnerable to summary judgment on the basis of the existing factual record.

I.³

In 1989, the Department of the Army ("Army") entered into a five-year, fixed-price contract with a company named Becon Services, Inc. ("Becon") to have general repair, preventive maintenance, and construction services performed at its Ft. Belvoir, Virginia military base. In 1991, DynCorp acquired Becon and assumed its responsibilities under the contract. These responsibilities included, among others, performing routine preventive maintenance tasks on certain buildings and equipment identified in the contract, as well as responding to individual job orders submitted by the Army on an as-needed basis.

DynCorp hired Windsor in 1992 to be the electric shop foreman at Fort Belvoir. In this capacity, Windsor supervised workers who performed general electric and utilities work at the base. Over the course of his employment with DynCorp, Windsor became concerned that the company was not complying with certain wage and reporting requirements of the Davis-Bacon Act. He also believed that DynCorp was charging the Army for preventive maintenance services that were required under the contract, but that it was in fact not performing. He voiced these concerns to DynCorp's upper-management in late March 1993, but was dissatisfied by their response. DynCorp, it appears, was equally dissatisfied with Windsor. A month later, DynCorp fired him for "insubordination". The following July, Windsor brought this qui tam suit. The government investigated his claims, but chose not to intervene,⁴ and subsequently awarded a "follow on" contract to DynCorp. Pursuant to 31 U.S.C. § 3730(b)(2)(A), Windsor proceeded to prosecute this action on his own.

The Complaint contains three counts. In Count One, Windsor claims that DynCorp falsely asserted to the government that it was paying wages in compliance with the Davis-Bacon Act, when in fact it was violating the Act's reporting and wage requirements. In Count Two, he alleges that DynCorp fraudulently billed the government for preventive maintenance services that were never actually performed. And in Count Three, he claims that DynCorp failed to perform certain quality control measures that were required under the contract. Defendants seek summary judgment on all three counts.

II.

As an initial matter, DynCorp urges that summary judgment is appropriate because Windsor repeatedly violated the statutorily-mandated qui tam seal while it was in effect. See 31 U.S.C. § 3730(b)(2). Specifically, DynCorp contends that Windsor disclosed the allegations underlying this qui tam suit to at least three individuals while the matter was under seal and before the government had decided whether to intervene.⁵ For his part, Windsor denies under oath that he disclosed the allegations of the suit to anyone other than his lawyers while the seal was in effect.

The FCA requires a relator to file his qui tam complaint in camera and under seal, as well as to refrain from serving the defendant until so ordered by the court. 31 U.S.C. § 3730(b)(2). The seal remains in effect for at least 60 days, during which time the government may investigate the claim and make an informed decision whether to take control of the litigation. Id. These procedures reflect Congress' desire to permit the government to investigate the allegations without "tipping off" the alleged wrongdoers, while also protecting the defendants from damaging reputational injuries associated with possibly baseless public accusations. Erickson v. American Institute of Bio. Sciences, 716 F.Supp. 908, 912 (E.D.Va.1989). To ensure effectuation of these goals, compliance with the FCA's filing and service requirements is mandatory. Id. at 911; X Corp. v. Doe, 805 F.Supp. 1298, 1301 n. 3 (E.D.Va.1992).

Erickson held that dismissal was the appropriate remedy for failure to comply with the FCA's procedural requirements where the relator not only neglected to file the qui tam complaint in camera and under seal, but also immediately served the defendant with a copy of the complaint. 716 F.Supp. at 911. As that opinion notes, no cure or remedy existed for the filing and service errors there in issue, and hence, dismissal was proper. Id. at 912. DynCorp contends that Windsor's breach of the seal similarly warrants dismissal of this action. Windsor, on the other hand, argues that even assuming, arguendo, that he disclosed some information about the suit to certain individuals, dismissal is inappropriate since no publicity resulted, and the government's investigation was not obstructed.

The short answer to this dispute is that there is a material issue of fact concerning whether Windsor actually disclosed the contents of the qui tam complaint to third parties prior to the lifting of the seal. Also disputed, apparently, is the identity of those to whom disclosures may have been made, as well as the substance of the alleged disclosures. In short, whether disclosures occurred, and if so, whether they warrant dismissal of this case are matters that require further factual development. To be sure, not every technical or minor, remediable violation of the seal requires automatic dismissal of a qui tam action. Consider, for example, a relator who makes a single disclosure regarding merely the existence of the qui tam action to a spouse or other disinterested party. In that event, circumstances may not justify the harsh remedy of dismissal. On the other hand, where, as here, the relator is alleged to have made improper disclosures to the defendant's own employees, the severity of the dismissal remedy may well be warranted. But because genuine issues of fact remain disputed, summary judgment on this issue is inappropriate.

III.

Because the seal issue is not now ripe for disposition, analysis appropriately focuses next on whether the individual counts, beginning with Count One, survive summary judgment. In Count One, Windsor makes two claims: He claims that DynCorp violated the Davis-Bacon Act by (1) failing to submit timely payroll reports to the Army, and (2) misclassifying workers in certain instances, thereby underpaying them.

The contract between DynCorp and the Army called for a portion of the work to be done under the Davis-Bacon Act, 40 U.S.C. § 276a.⁶ The Davis-Bacon Act is a protective labor law that, among other things, requires certain federal government contracts "for construction, alteration, and/or repair ... of public buildings or public works of the United States" to contain a provision "stating the minimum wages to be paid various classes of laborers and mechanics." Id. Pursuant to corresponding regulations issued by the Department of Labor, the contracting government agency, prior to entering into a given contract, makes an initial determination regarding whether the contract is subject to the Davis-Bacon Act. See Universities Research Ass'n v. Coutu, 450 U.S. 754, 760, 101 S.Ct. 1451, 1456, 67 L.Ed.2d 662 (1981). If the contract is determined to be subject to the Act's provisions, then the agency, through its contracting officer, must determine the appropriate minimum wage for each of the various classes of mechanics and laborers predicted to be needed for the contract. 29 C.F.R. § 5.5. Those minimum wages must be based upon wage rates determined by the Secretary of Labor, 40 U.S.C. § 276a, and "the correctness of the Secretary's wage rate determination is not subject to judicial review." Coutu, 450 U.S. at 761 n. 10, 101 S.Ct. at 1457 n. 10. The contracting agency's determination of minimum wages is then included in the request for contract bids. After opportunity for administrative review of the contracting agency's minimum wage and classification determinations, this data is ultimately incorporated into the contract.

In addition to the requirement that a contractor subject to the Davis-Bacon Act pay the specified wages, Department of Labor regulations require the contractor to maintain payroll records containing "the name, address, and social security number of each worker, his or her correct classification, hourly rates of wages paid ..., daily and weekly number of hours worked, deductions made and actual wages paid." 29 C.F.R. § 5.5(a)(3)(i). The contractor must also submit copies of these payroll records on a weekly basis to the contracting agency, 29 C.F.R. § 5.5(a)(3)(ii)(A), along with a statement certifying that the payroll information is correct and complete and that the workers have been paid "not less than the applicable wage rates ... for the classification of work performed." 29 C.F.R. § 5.5(a)(3)(ii)(B). Regulations further provide that falsification of the certifications may...