Bender v. North American Telecomunications Inc.

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, : : ex rel. : : ROBERT KEITH BENDER, : : Plaintiff, : : v. : Civil Action No. 06-1432 (GK) : NORTH AMERICAN TELECOMMUNI- : CATIONS, INC., et al. : : Defendants. :

MEMORANDUM OPINION

Plaintiff-Relator Robert Bender brings this qui tam suit under

the False Claims Act (“FCA”), 31 U.S.C. §§ 3729 et seq., on behalf

of the United States against seven Defendants. This matter is

before the Court on Defendants’ Motions to Dismiss the Amended

Complaint pursuant to Fed. R. Civ. P. 12(b)(6) [Dkt. Nos. 51-52].

Upon consideration of the Motions, Oppositions, Replies, and

the entire record herein, and for the reasons set forth below, the

Motion to Dismiss the Amended Complaint of Defendant PAE Government

Services, Inc. is granted and the Motion to Dismiss the Amended

Complaint of Defendants North American Telecommunications, Inc.

(“NATI”), Capitol Technology Services, Inc. (“CTSI”), Chang D.

Hwang, John G. Carothers, Heys S. Hwang, and James W. Ruest is

granted. I. BACKGROUND1

Plaintiff is an electrician formerly employed by Defendant

NATI. From October 1, 1997, to March 31, 2003, NATI had an

Operations and Maintenance contract with the United States

Department of Agriculture (“USDA” or the “Government”) to maintain

four USDA buildings in Washington, D.C. Under the contract, NATI

was responsible for day-to-day maintenance of the buildings.

Defendant CTSI took over the contract on April 1, 2003. Defendant

PAE Government Services, Inc. (“PAE”) is a subcontractor of CTSI

and performed electrical work on the buildings. Plaintiff was never

employed by either CTSI or PAE. The other four defendants are or

were officers or employees of NATI and CTSI: Chang D. Hwang,

President of NATI; John G. Carothers, former Operations Coordinator

for NATI and CTSI; Heys S. Hwang, President of CTSI; and James W.

Ruest, project Manager at CTSI.

The Amended Complaint alleges five violations of the FCA.

Count I alleges that NATI and CTSI falsified response times to

service calls in order to claim the monthly bonuses provided for in

their contract. Count II alleges that NATI and CTSI misrepresented

non-reimbursable repairs as reimbursable repairs. Count III alleges

1 For purposes of ruling on a motion to dismiss, the factual allegations of the complaint must be presumed to be true and liberally construed in favor of the plaintiff. Aktieselskabet AF 21. November 2001 v. Fame Jeans Inc., 525 F.3d 8, 15 (D.C. Cir. 2008); Shear v. Nat’l Rifle Ass’n of Am., 606 F.2d 1251, 1253 (D.C. Cir. 1979). Therefore, the facts set forth herein are taken from the Amended Complaint.

-2- that NATI, CTSI, and PAE charged the USDA for work performed by

employees who did not possess the qualifications required by the

governing contract. Count IV alleges that NATI and CTSI billed the

USDA for overtime work that their contracts excluded from overtime

status. Count V alleges that NATI and CTSI misrepresented the

amount of work they performed.

On August 14, 2006, Plaintiff filed his Complaint [Dkt. No.

1]. On September 27, 2007, The United States filed a Notice of

Election to Decline Intervention [Dkt. No. 22].2 On May 14, 2008,

all of the Defendants except PAE filed a joint Motion to Dismiss

pursuant to Rule 12(b)(6)[Dkt. No. 31]. On the same date, PAE filed

a separate Motion to Dismiss [Dkt. No. 32]. Upon consideration of

these Motions, along with Plaintiff’s Oppositions [Dkt. Nos. 34-35]

and Defendants’ Replies [Dkt. Nos. 36-37], the Court dismissed the

Complaint with leave to file an Amended Complaint on February 25,

2010 (“February 25 Opinion”) [Dkt. Nos. 47-48]. United States ex

rel. Bender v. N. American Telecomms., Inc. et al., 686 F. Supp. 2d

46 (D.D.C. 2010).

2 The United States, pursuant to 31 U.S.C. § 3730(b)(1), requests that if either Plaintiff or Defendants move to dismiss, the Court solicit the Government’s written consent before granting approval. Notice of Election to Decline Intervention, at 1 [Dkt. No. 22]. However, that provision pertains to voluntary dismissals only, and does not prevent the Court from dismissing an action for failure to state a claim. United States ex rel. Fletcher v. Fahey, 121 F.2d 28, 29 (D.C. Cir. 1941).

-3- On April 26, 2010, Plaintiff proceeded to file his Amended

Complaint [Dkt. No. 50]. On May 10, 2010, all Defendants except PAE

filed a Motion to Dismiss the Amended Complaint (“NATI Motion”)

[Dkt. No. 51]. On the same date, PAE filed its separate Motion to

Dismiss the Amended Complaint (“PAE Motion”) [Dkt. No. 52]. On June

7, 2010, Plaintiff filed his respective Oppositions [Dkt. Nos. 54-

55]. On June 14, 2010, Defendants filed their separate Replies

[Dkt. Nos. 58-59].

II. STANDARD OF REVIEW

To survive a motion to dismiss under Rule 12(b)(6), a

plaintiff need only plead “enough facts to state a claim to relief

that is plausible on its face” and to “nudge[ ] [his or her] claims

across the line from conceivable to plausible.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007). “[O]nce a claim has been stated

adequately, it may be supported by showing any set of facts

consistent with the allegations in the complaint.” Id. at 563. A

complaint will not suffice, however, if it “tenders ‘naked

assertions’ devoid of ‘further factual enhancement.’” Ashcroft v.

Iqbal, 129 S.Ct. 1937, 1948 (2009) (citing Twombly, 550 U.S. at

557).

Under the Twombly standard, a “court deciding a motion to

dismiss must not make any judgment about the probability of the

plaintiffs’ success . . . must assume all the allegations in the

-4- complaint are true (even if doubtful in fact) . . . [and] must give

the plaintiff the benefit of all reasonable inferences derived from

the facts alleged.” Aktieselskabet AF 21. November 2001 v. Fame

Jeans Inc., 525 F.3d 8, 17 (D.C. Cir. 2008) (internal quotation

marks and citations omitted).

To prove a violation of the FCA, a plaintiff must show either

that the defendant (1) “knowingly presents, or causes to be

presented [to the Government] a false or fraudulent claim for

payment or approval,” 31 U.S.C. § 3729(a)(1), or (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.” 31

U.S.C. 3729(a)(2).3 A “claim” includes “any request or demand . .

3 As part of the Fraud Enforcement and Recovery Act of 2009 (“FERA”), Pub. L. No. 111-21, 123 Stat. 1617 (2009), Congress made a number of changes to the FCA. FERA includes a retroactivity clause which states that a new subsection would apply to all FCA “claims” pending as of June 7, 2008. 123 Stat. at 1625 (codified as a note following 31 U.S.C. § 3729). However, as courts that have considered this clause have noted, “claims” refers only to a defendant’s request for payment, and not to pending cases. See United States v. Sci. Applications Int’l Corp., -- F. Supp. 2d -- No. CV-04-1543, 2009 WL 2929250 at * 14 (D.D.C. Sept. 14, 2009) (“Congress did not intend ‘claims’ . . . to mean ‘cases.’”); United States ex rel. Sanders v. Allison Engine Co., -- F. Supp. 2d -- No. 95-CV-970, 2009 WL 3626773 at *4 (S.D. Ohio, Oct. 27, 2009) (“[A] plain reading of the retroactivity language reveals that the relevant change is applicable to ‘claims’ and not to ‘cases.’”).

As the original Complaint was filed on August 14, 2006, there are no allegations here of any pending claims by the Defendants on June 7, 2008. Therefore, the retroactivity clause does not apply, and the prior version of the FCA (last amended in 1994) will be (continued...)

-5- . for money or property” made to a recipient if the Government

provides or reimburses the recipient any portion of the money

requested. 31 U.S.C. § 3729(c). The knowledge requirement is

satisfied if a person “has actual knowledge of the information,

acts in deliberate ignorance of the truth or falsity of the

information, or acts in reckless disregard of the truth or falsity

of the information.” 31 U.S.C. § 3729(b). Finally, the Complaint

must allege materiality. See United States ex rel. Ervin and

Assocs., Inc. v. Hamilton Sec. Group, 370 F. Supp. 2d 18, 36

(D.D.C. 2005) (“The great weight of case law holds that the

materiality of a false record or statement is an element of False

Claims Act liability.”).

“[B]ecause the False Claims Act is self-evidently an anti-

fraud statute, complaints brought under it must comply with Rule

9(b) [of the Federal Rules of Civil Procedure]” in order to state

a claim. United States ex rel. Totten v. Bombardier Corp., 286 F.3d

542, 551-52 (D.C. Cir. 2002). Rule 9(b) requires that “[i]n

alleging fraud or mistake, a party must state with particularity

the circumstances constituting fraud or mistake.” Fed. R. Civ. P.

9(b). Thus, to satisfy Rule 9(b), a FCA relator must state the

time, place, and contents of the false representations, the facts

3 (...continued) used throughout the remainder of this opinion.

-6- misrepresented, and what was obtained or given up as a consequence

of the fraud. United States ex rel. Joseph v. Cannon, 642 F.2d

1373, 1385 (D.C. Cir. 1981).

III. ANALYSIS4

A. Plaintiff’s Claims Against PAE Are Dismissed

The Amended Complaint alleges that “each of the above-named

Defendants have caused the submission of false claims” in Counts I,

II, and V. Am. Compl. ¶¶ 188, 195, 257. In Counts III and IV, the

Amended Complaint alleges, in substance, that PAE used false

records in the preparation of fraudulent claims submitted by

others, knew of the fraudulent claims, and acted in deliberate

ignorance of that knowledge. Id. at ¶¶ 219-222, 236-239. PAE argues

that Plaintiff fails to allege any facts relating to PAE’s

wrongdoing under Counts I, II, IV, and V. PAE Mot. 5-7. PAE further

argues that, in Count III, Plaintiff fails to allege a knowing

violation of the False Claims Act and fails to identify any

4 The applicable statute of limitations under the FCA is six years. 31 U.S.C. § 3731(b) (“A civil action under Section 3730 may not be brought more than six years after the date on which the violation of Section 3729 is committed.”). See United States ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., 474 F. Supp. 2d 75, 89 (D.D.C. 2007) (holding that the statute of limitations applies to relators when the Government does not intervene). The original Complaint was filed on August 14, 2006. The Plaintiff concedes that potential FCA violations that occurred prior to August 14, 2000, are time-barred. Pl.’s Opp’n. to NATI Mot. at 11. The Court therefore dismisses any allegations of claims accruing prior to August 14, 2000.

-7- particular false claim. Id. at 8-13. For these reasons, PAE seeks

dismissal of the Amended Complaint.

As noted in the February 25 Opinion, a “complaint must make

specific allegations against each individual defendant rather than

collective allegations against ‘each of the above-named

Defendants,’ since one of the main rationales behind Rule 9(b)’s

particularity requirement is to ‘guarantee all defendants

sufficient information to allow for preparation of a response.’”

United States ex rel. Bender, 686 F. Supp. 2d at 50 (quoting United

States ex rel. Joseph, 642 F.2d at 1385). Therefore, Plaintiff must

specifically allege facts giving rise to liability for each

defendant individually. See United States ex rel. Grynberg v.

Alaska Pipeline Co., Civ. No. 95-725, 1997 WL 33763820, at *4

(D.D.C. Mar. 27, 1997) (dismissing FCA claim where complaint

alleged only that “each Defendant engaged in at least one of the

[alleged] practices”).

The allegations against PAE in Plaintiff’s original Complaint

were dismissed because the allegations contained in Counts I, II,

IV, and V were “silent regarding PAE’s liability.” United States ex

rel. Bender, 686 F. Supp. 2d at 50. In an effort to correct this

deficiency, Plaintiff has merely inserted in his Amended Complaint

the single sentence that, under Counts I, II, IV, and V, CTSI and

NATI’s fraudulent “practice[s] continued by PAE employees.” Am.

-8- Compl. ¶¶ 73, 90, 102, 153, 171. Aside from this conclusory

statement regarding PAE’s practices, Plaintiff fails to allege the

date of any fraud perpetrated by PAE or any other information

regarding specific fraudulent claims submitted or prepared by PAE.

It is insufficient to allege a scheme against one defendant

and merely ascribe similar behavior to another. See U.S. v. N.Y.

City Health and Hosp. Corp., No. 95 Civ. 7649(LMM), 2000 WL

1610802, at *3 (Oct. 27, 2000 S.D.N.Y.) (dismissing the complaint

as to defendants against whom plaintiff made no specific factual

allegations but whom plaintiff claimed must have been engaged in

the same conduct as other defendants because they operated under

the same contract). Therefore, Counts I, II, IV, and V must be

dismissed against PAE for failure to state a claim.

Count III alleges that PAE employed unlicensed electricians,

thereby causing CTSI to falsely certify to the USDA that it was in

compliance with its contractual obligation to use only licensed

electricians. Am. Compl. ¶¶ 104-22, 211-22. Now, Plaintiff does

make specific allegations against PAE. In particular, Plaintiff has

responded to the finding in the February 25 Opinion that Plaintiff

had failed to specify which PAE employees were allegedly unlicensed

by naming several of the unlicensed employees. See Am. Compl. ¶¶

109-112.

-9- Nonetheless, the Amended Complaint, like the Complaint before

it, fails to identify what particular false claims were allegedly

submitted by PAE, the content of any such false claims, and “who

precisely was involved in the fraudulent activity.” United States

ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1257

(D.C. Cir. 2004); see also United States ex rel. Brown v. Aramark

Corp., 591 F. Supp. 2d 68, 74 (D.D.C. 2008) (“[A] relator must

provide details that identify particular false claims for payment

that were submitted to the government.”). Plaintiff merely alleges

that the “work of unlicensed and/or unqualified electricians . . .

was billed by PAE to CTSI, and then by CTSI to USDA.” Am. Compl. ¶

113. Whether or not PAE’s conduct violated its contract, Plaintiff

has not made any allegation that PAE submitted or caused to be

submitted any claim containing false or fraudulent information.

Further, the Amended Complaint, like the Complaint before it,

does not allege that PAE acted to knowingly cause CTSI to submit

false claims to the USDA, as required by 31 U.S.C. § 3729(b).5 For

5 “If a subcontractor . . . makes a false statement to a private entity and does not intend the Government to rely on that false statement as a condition of payment, the statement is not made with the purpose of inducing payment of a false claim ‘by the Government.’ In such a situation, the direct link between the false statement and the Government's decision to pay or approve a false claim is too attenuated to establish liability.” Allison Engine Co. v. United States ex rel. Sanders, -- U.S. –- 128 S. Ct. 2123, 2130 (2008), superseded by statute, Pub. L. No. 111-21, 123 Stat 1617 (2009).

-10- example, there is no allegation that PAE was aware of CTSI’s

contract requiring it to employ only licensed electricians, or that

CTSI’s contract even applied to PAE as a subcontractor. See United

States ex rel. Alexander v. Dyncorp., Inc., 924 F. Supp. 292, 303

(D.D.C. 1996) (noting that FCA plaintiffs need to state facts from

which the court can infer a knowing violation on the part of the

defendants).

Thus, because it fails to meet Rule 9(b)’s particularity

requirement, as well as the FCA’s knowledge requirement, Count III

must be dismissed against PAE for failure to state a claim.

B. Plaintiff’s Claims Against NATI, CTSI, Chang D. Hwang, John G. Carothers, Heys S. Hwang, and James W. Ruest Are Dismissed

The remaining Defendants filed a joint Motion to Dismiss. Each

count will be addressed in turn.

1. Count I Is Dismissed

Count I alleges that Defendants falsified response times to

service calls in order to obtain contractual bonuses for prompt

service. Am. Compl. ¶ 52. Defendants argue that Count I of the

Amended Complaint “fails to supply any of the specifics this Court

already ruled must be produced.” NATI Mot. 9. Defendants contend

that the Amended Complaint does not allege the content of the false

claims, identify the employees who made them, state how many times

-11- or when the false claims were submitted, or describe any specific

false bonus claims submitted. Id.

While Rule 9(b) is “not intended to be a formalistic bar to

sub-standard pleadings,” an FCA Plaintiff must set out the details

of the specific scheme, supply the time, place, and content of

false representations, and link that scheme to claims for payment

made to the United States. United States ex rel. Brown v. Aramark

Corp., 591 F. Supp. 2d 68, 75 (D.D.C. 2008); United States ex rel.

Barrett v. Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28, 35

(D.D.C. 2003).

Although the Amended Complaint does describe how the alleged

scheme was carried out, it contains no allegations as to any

specific false claims submitted by any Defendant. Nor does the

Amended Complaint offer any specific information as to the time or

place of false representations. Rather, the Amended Complaint

merely alleges that NATI and CTSI employees submitted claims with

false completion times for service calls “on numerous occasions.”

Am. Compl. ¶ 55.

The Court is sympathetic to Plaintiff’s difficulty in gaining

access to documents that may provide details about specific false

claims submitted to the Government. See Opp’n to NATI Mot. 16-17.

Plaintiff points out that, as an electrician, he had no access to

the types of documents that would confirm the improprieties he

-12- regularly observed. Id. However, Rule 9(b) is clear in requiring

plaintiffs to allege specific times, places, and contents of false

representations. See United States ex rel. Lee v. SmithKline

Beecham, Inc., 245 F.3d 1048, 1051 (9th Cir. 2001) (finding that,

although “Rule 9(b) may not require [plaintiff] to allege, in

detail, all facts supporting each and every false” claim, plaintiff

must be specific enough to give defendants notice of the particular

misconduct alleged); United States ex rel. Barrett, 251 F. Supp. 2d

at 35 (“While a complaint that covers a multi-year period may not

be required by Rule 9(b) to contain a detailed allegation of all

facts supporting each and every instance of submission of a false

claim, some information on the false claims must be included.”).

Critically, plaintiffs must provide “defendants sufficient

information to allow for preparation of a response.” United States

ex rel. Joseph, 642 F.2d at 1385.

In only one instance does Plaintiff attempt to overcome the

lack of specificity by describing an incident in “the Summer of

2002,” when he “personally witnessed NATI employee Daniel Thayer .

. . locking the times of service calls in order to make them appear

as if they had been completed with the times applicable for a

bonus.” Am. Compl. ¶ 70. Plaintiff goes on to allege that he

confronted Daniel and Kenneth Thayer about the incident, but

neither gave any response. Id. at ¶ 71. While these allegations do

-13- present some specific facts, the crucial fact Plaintiff fails to

allege is whether any NATI employee filed a false claim with the

Government based on the conduct described. Without an allegation of

a false claim submitted to the Government, Plaintiff cannot

overcome the requirements of Rule 9(b). See United States ex rel.

Barrett, 251 F. Supp. 2d at 35 (a viable complaint must allege

“that claims for payment were made to the federal government”).

Therefore, Count I must be dismissed for failure to state a claim.

2. Count II Is Dismissed

Count II alleges that NATI and CTSI, through named Defendants

and other employees, fraudulently accumulated minor repairs until

the aggregated repairs reached a dollar threshold entitling

Defendants to extra compensation. Am. Compl. ¶¶ 192-93. Defendants

argue that the Amended Complaint fails to allege specific false

claims, dates of specific false claims, or employees who submitted

such false claims under Count II. NATI Mot. 10-14.

Many of Plaintiff’s allegations in Count II neglect to allege

specific instances of employees submitting false claims. Rather

than allege any particular times or examples of claims falsely

submitted for additional compensation, Plaintiff relies on words

like “routinely,” “occasionally,” and “frequently.” Am. Compl. ¶¶

92-93, 98. These allegations alone do not set out the time of the

false representations with sufficient specificity. See United

-14- States ex rel. Totten, 286 F.3d at 552; United States ex rel.

Joseph, 642 F.2d at 1385 (plaintiffs must provide “all defendants

sufficient information to allow for preparation of a response.”).

When Plaintiff does describe specific instances of misconduct

in Count II, he fails to allege that false claims were actually

submitted to the Government. In particular, Plaintiff alleges five

instances from 2000 through 2003 in which Defendants accumulated

minor repairs in order to achieve the minimum threshold for

additional reimbursement. Am. Compl. ¶ 94. However, Plaintiff makes

no allegation that any claim submitted to the Government based on

the aggregate repairs actually contained any false or fraudulent

information. Without this critical allegation, Plaintiff has failed

to allege any statutory false claim with sufficient particularity.

United States ex rel. Barrett, 251 F. Supp. 2d at 35.6 Count II

must be dismissed for failure to state a claim.

3. Count III Is Dismissed

Count III alleges that Defendants billed the USDA for work

performed by unlicensed employees in violation of a contractual

clause. Am. Compl. ¶¶ 211-12. However, the Amended Complaint

6 Plaintiff also alleges that a memorandum, dated February 6, 1998, states that “NATI is pushing to get more MRWO because they can ‘double dip’ the Government and make extra money.” Am. Compl. ¶ 89. For the reasons noted above, FCA violations that occurred prior to August 14, 2000, are time-barred. See supra note 4, at 7. Therefore, any allegations relating to claims accruing before February 6, 1998 are not relevant.

-15- contains no allegation that Defendants actually submitted a claim

to the USDA reflecting that the employees were licensed.7 See

Martin v. Arc of Dist. of Columbia, 541 F. Supp. 2d 77, 82-83

(D.D.C. 2008) (dismissing an FCA claim based on an allegation that

defendant did not comply with the government’s requirement for

hiring experienced employees because plaintiff made no allegation

that a fraudulent claim was submitted); United States ex rel. Ervin

and Assocs., Inc. v. Hamilton Sec. Group, 370 F. Supp. 2d 18, 36

(D.D.C. 2005) (“[A] relator must produce evidence that the

7 Although Plaintiff has not raised the theory of “implied certification” in his papers, it is clear that, in certain circumstances, this Circuit permits an FCA claim based on the theory that a bill submitted to the government impliedly certified that laws, regulations, or contractual provisions were complied with. See United States v. TDC Mgmt. Corp., 288 F.3d 421, 426 (D.C. Cir. 2002) (finding liability for false claims based on “reports in support of payment that omitted information indicating that [defendant] was acting in a manner that was contrary to the core terms of the Program.”).

However, courts may infer a false claim from a bill silent as to compliance with contractual provisions “only where certification [of compliance] was a prerequisite to the government action sought.” United States ex rel. Siewick v. Jamieson Science and Engineering, Inc., 214 F.3d 1372, 1376 (D.C. Cir. 2000). This crucial element has been described as requiring that “[c]ertification of compliance with the statute or regulation alleged to be violated must be so important to the contract that the government would not have honored the claim presented to it if it were aware of the violation.” United States ex rel. Barrett, 251 F. Supp. 2d at 33. Plaintiff has made no such allegation here. See id. at 35 (dismissing plaintiffs’ claim due to failure to allege that defendant’s violation rose “to the level of affecting the government’s decision to pay”). Plaintiff similarly fails to make this allegation in either Counts IV or V.

-16- defendant actually submitted false demands for payment or submitted

false records or statements in order to get a false claim paid.”).

Whether Count III alleges breach of contract or common law fraud is

irrelevant since a qui tam plaintiff has no standing to bring such

causes of action under the statute. See, e.g., United States ex

rel. Long v. SCS Bus. & Tech. Inst., 999 F. Supp. 78, 92 (D.D.C.

1998) (common law cause of action distinct from claims under FCA)

rev’d on other grounds, 173 F.3d 870 (D.C. Cir. 1999). Hence, Count

III must be dismissed.

4. Count IV Is Dismissed

Count IV alleges that NATI and CTSI, through named Defendants

and other employees, billed the USDA for overtime that did not

qualify for overtime status, id. at ¶ 226, and then gave employees

“Compensation Time” in lieu of monetary compensation. Id. at ¶ 228.

Plaintiff alleges that NATI and CTSI’s contract specified that

certain work conducted outside of normal business hours would not

be reimbursable as overtime. Id. at ¶¶ 125-130. Plaintiff claims

that Defendants billed the Government for overtime work that should

have fallen into this non-reimbursable category. ¶ 123. Defendants

argue, in substance, that Plaintiff does not allege any false

claims submitted to the Government. See NATI Mot. 15-17.

Plaintiff does allege several specific instances in which

Defendants submitted bills to the Government for overtime work that

-17- Plaintiff believes should not have been counted as overtime under

the contract. See Am. Compl. ¶¶ 124,8 135, 137. However, the claims

that Defendants submitted to the Government for payment were not in

and of themselves false or fraudulent. United States ex rel. Ervin

and Assocs., 370 F. Supp. 2d at 36. Indeed, Plaintiff’s description

of the bills submitted to the Government indicates that Defendants

very precisely described the work for which they sought overtime

reimbursement. See, e.g., Am. Compl. ¶ 135. At most, these

allegations describe a breach of contract claim, for which

Plaintiff has no standing under the False Claims Act. See United

States ex rel. Owens v. First Kuwaiti Gen. Trading & Contracting

Co., 612 F.3d 724, 728 (4th Cir. 2010) (the FCA “does not allow a

qui tam relator to shoehorn what is, in essence, a breach of

contract action into a claim that is cognizable under the False

Claims Act”) (internal quotations omitted); United States ex rel.

Hendow v. University of Phoenix, 461 F.3d 1166, 1171 (9th Cir.

2006) (“for a breach of contract . . . to give rise to an action

under the False Claims Act, it requires a false claim.”) (internal

8 Plaintiff refers to Exhibit A, which identifies eleven Monthly Status Reports, presumably submitted to the Government, which Plaintiff “personally knows involved overtime charges improperly billed to the Government.” Am. Compl. ¶ 124. Ten of these eleven Monthly Status Reports are irrelevant, as they are dated prior to the August 14, 2000. Any claims based upon those Monthly Status Reports are time-barred.

-18- quotations omitted); United States ex rel. Long, 999 F. Supp. 78,

92.

Plaintiff’s allegations that Defendants improperly awarded

employees Compensation Time in lieu of monetary payment similarly

fail to encompass an actual false or fraudulent claim. Plaintiff

alleges that NATI persisted in using Compensation Time, despite the

fact that its use was both illegal and contrary to the Collective

Bargaining Agreement between the local union and NATI. Am. Compl.

¶¶ 140-41. Regardless of the propriety of NATI’s use of

Compensation Time, Plaintiff makes no allegation that Defendants

made any misrepresentation to the Government in claiming payment,

as required by the False Claims Act.9 Therefore, Count IV must be

dismissed.

5. Count V Is Dismissed

Count V simply alleges that NATI failed to complete

maintenance tasks required by contract. Am. Compl. ¶¶ 243-44.

Plaintiff alleges that the Defendants’ failure to perform

preventative and other required maintenance at an acceptable level

rendered their bills to the Government false claims. Am. Compl. ¶¶

156-71. Count V is insufficient for the same reasons as Count IV.

Although Plaintiff details many pieces of equipment that did not

9 As noted supra note 7, at 15-16, Plaintiff has also failed to allege that the use of Compensation Time was “contrary to the core terms” of the contract. TDC Mgmt. Corp., 288 F.3d at 426.

-19- receive the maintenance required by NATI’s contract, Plaintiff does

not allege that claims were submitted to the Government containing

false or fraudulent information about such maintenance. As with

Count IV, the alleged conduct at most amounts to breach of

contract. Therefore, Count V must be dismissed.

IV. CONCLUSION

For the reasons set forth above, the Motion to Dismiss the

Amended Complaint of Defendant PAE is granted; the Motion to

Dismiss the Amended Complaint of Defendants NATI, CTSI, Chang D.

Hwang, John G. Carothers, Heys S. Hwang, and James W. Ruest is

granted. As Plaintiff has not sought leave to amend, the Amended

Complaint must be dismissed with prejudice.

An Order will issue with this opinion.

/s/ November 4, 2010 Gladys Kessler United States District Judge

Copies to: counsel of record via ECF

-20-