Wilkins v. St. Louis Housing Authority

• Decision Date: 31 December 2002
• Docket Number: No. 02-1471.,No. 02-1332.,02-1332.,02-1471.
• Citation: 314 F.3d 927
• Parties: Randolph WILKINS, Appellee/Cross-Appellant, v. ST. LOUIS HOUSING AUTHORITY, Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 927

314 F.3d 927

Randolph WILKINS, Appellee/Cross-Appellant, v. ST. LOUIS HOUSING AUTHORITY, Appellant/Cross-Appellee.

No. 02-1332.

No. 02-1471.

United States Court of Appeals, Eighth Circuit.

Submitted: November 7, 2002.

Filed: December 31, 2002.

Larry D. Hale, argued, St. Louis, MO, for appellant.

William E. Muench, argued, St. Louis, MO (John D. Lynn, on the brief), for appellee.

Before RILEY, BEAM, and SMITH, Circuit Judges.

BEAM, Circuit Judge.

In this action arising under the whistleblower protection provision of the False Claims Act ("FCA"), 31 U.S.C. § 3730(h), the St. Louis Housing Authority ("SLHA") appeals from the district court's¹ submission to the jury of a special verdict form and from its denial of SLHA's motions for judgment as a matter of law. Randolph Wilkins cross-appeals from the district court's calculation of double back-pay damages under the statute. We affirm.

I. BACKGROUND

SLHA is a municipal corporation created by the City of St. Louis to administer and operate its public housing developments. SLHA receives funding from the United States Department of Housing and Urban Development ("HUD") pursuant to an annual contributions contract. In 1992, HUD established the Public Housing Management Assessment Program ("PHMAP") in an effort to standardize and objectively measure the management performance of public housing agencies that it funds. As part of that program, SLHA is required to submit annual performance certifications and suggested scores in eight categories or "indicators." 24 C.F.R. §§ 901.10 to 901.45. HUD then combines these certifications and suggestions with its own data and, after confirmatory review, assigns final grades for each indicator and an overall percentage score for the reporting period. Agencies with scores of 90% or better are designated "high performers"; those with scores from 60% to 89% are designated "standard"; and agencies with scores below 60% are designated "troubled." 24 C.F.R. § 901.115.

Wilkins joined SLHA in 1996 as a Quality Control Evaluator for Public Safety. He was responsible for evaluating the performance of public safety officers and other aspects of SLHA's security division. While working in that capacity Wilkins became concerned about, and eventually reported to HUD, various deficiencies in SLHA's security operations and the misreporting of those deficiencies. HUD subsequently hired Quadel, an outside agency, to evaluate SLHA. Based on Quadel's report and on a failing PHMAP score of 18.5%² for fiscal year 1997, HUD designated SLHA a "troubled" agency in March 1998. Consequently, HUD assigned a Troubled Agency Recovery Center ("TARC") team to help SLHA improve its performance and required SLHA to enter into a formal agreement governing strategies for improvement.³

Shortly thereafter, Wilkins was promoted⁴ to Manager of Security Operations and given primary responsibility for tracking and reporting SLHA's performance in all four components of Indicator 8,⁵ the PHMAP category for security. He continued to report SLHA's noncompliance with HUD security regulations, both to his supervisors within SLHA and directly to members of the TARC team, and to express concerns that PHMAP scores would be falsely reported. As Wilkins's communications increased and the time for 1998 PHMAP reporting drew near, Wilkins was first temporarily reassigned from SLHA's main office to a satellite location, and then suspended for two weeks without pay.⁶ During that time, SLHA compiled and reported PHMAP data for 1998, certifying a suggested overall score of 37.1%, which reflected an improvement from the previous year of almost twenty percentage points.

Wilkins returned to work in December 1998 and was told to report directly to SLHA Executive Director Thomas Costello. He resumed his efforts to expose what he believed to be fraudulent PHMAP reporting practices, informing TARC team-member Tom Atzmiller that the 1998 scores were inaccurate. Atzmiller wrote to Costello and expressed concern over SLHA's compliance with security regulations. And once again, HUD's confirmatory review of SLHA's report resulted in a corrected PHMAP score of 14.25%, less than half the reported score of 37.1%, and well below the corrected score for 1997, 18.5%. Not only had SLHA failed to improve by the ten points required under 24 C.F.R. § 901.200, its performance had declined.

In January 1999, Wilkins's title was changed to Security Monitor/Coordinator, but he retained responsibility for monitoring and reporting on various components of the PHMAP report. In June 1999, Cheryl Lovell replaced Costello as SLHA Executive Director. She met with all SLHA personnel in July 1999 to discuss large-scale workforce reduction plans, which included plans to privatize security operations by October 1999. As a result, Wilkins lost administrative oversight of SLHA security officers, and instead monitored security performance through the reports of private security contractors. He continued to complain to his supervisors about security problems and the private contractors' noncompliance with reporting requirements, and he again informed HUD personnel that SLHA's reported PHMAP scores for fiscal year 1999 were incorrect. He intensified his efforts in November and December 1999, sending letters to HUD and to his SLHA supervisors that described breakdowns in crime-reporting processes and fraudulent PHMAP reporting practices. Finally, after Wilkins's numerous attempts to expose SLHA's failing performance and false reporting with respect to tracking and reporting crime, screening of potentially dangerous applicants, enforcement of HUD lease provisions relating to crime and drug-related activity, particularized security risks in elderly living facilities, and unsafe security conditions generally, SLHA fired Wilkins on December 31, 1999.

At the time of his termination, Wilkins was fifty-one years old and earning an annual salary of $39,000. He began seeking related employment, but did not apply with any of the private contractors who had taken over security for SLHA because he considered the pay inadequate. In October 2000, he was hired by the United States Department of Defense in a security position with an annual salary of $40,000. On June 28, 2001, Wilkins was terminated from this position as well. He earned approximately $30,000 during his nine months of work for the department. Since his termination, Wilkins has sought employment in security and law enforcement, but only with federal executive branch agencies in the St. Louis area. He has been unable to find a suitable position.

On May 12, 2000, before Wilkins began working for the Department of Defense, he filed this action in the district court. He alleged that SLHA violated the whistleblower protection provision of the FCA when it terminated him in retaliation for his statements to HUD concerning SLHA's security deficiencies and PHMAP reporting practices. The case was tried before a jury, which found, via special verdict form, that SLHA terminated Wilkins as a direct result of his statements to SLHA and HUD personnel, and that Wilkins suffered $79,170 in lost wages. The district court after discounting Wilkins' mitigating income, awarded statutorily-authorized double back-pay damages in the amount of $98,340. The court also awarded front pay in the amount of $10,000.⁷ Finally, the court denied SLHA's motions for judgment as a matter of law. SLHA appeals from the special verdict form and from the denial of its motions. Wilkins cross-appeals from the calculation of back-pay damages.

II. DISCUSSION

This appeal raises two basic issues: whether there was sufficient evidence that Wilkins's conduct amounted to protected activity under the anti-retaliation provision of the FCA, and whether, in the instant case, the statute required the district court to double the back-pay damages before or after subtracting Wilkins's interim earnings. Before we reach those substantive issues, however, we must consider the extent of our jurisdiction under the statute.

A. Jurisdiction Under 31 U.S.C. § 3730(h)

The anti-retaliation provision of the FCA provides a cause of action in federal district court for employees who are "discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee... in furtherance of a [civil action for false claims]." 31 U.S.C. § 3730(h) (emphasis added). Because our jurisdiction is limited to actions between employees and employers, we must decide whether a municipal corporation like SLHA is an "employer" who can be sued under the statute.

The Supreme Court held in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 787, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000), that a state cannot be a "person" subject to suit under the qui tam provision of the FCA, 31 U.S.C. § 3729. The court premised its holding on two basic presumptions. First, it noted the "longstanding interpretive presumption that `person' does not include the sovereign." Id. at 780, 120 S.Ct. 1858. Second, it found that, because the treble-damages component of the qui tam statute is "essentially punitive in nature," state liability would be inconsistent with the "presumption against imposition of punitive damages on governmental entities."⁸ Id. at 784-85, 120 S.Ct. 1858. The Court reasoned that, since Congress has failed to overcome these presumptions by expressing a clear intent to subject states to liability, states are not persons under the statute. Id. at 787, 120 S.Ct. 1858.

Stevens has given rise to much litigation and divided authority in the lower courts over its application to local governments and municipal entities like SLHA. Some of our sister circuits have extended Stevens "immunity" to local governments in the qui tam context. See United States ex rel. Dunleavy v. County of Delaware, 279...