Richard M. Yuhasz v. Brush Wellman, Inc.

341 F.3d 559, 20 I.E.R. Cas. (BNA) 585, 57 Fed. R. Serv. 3d 342, 2003 U.S. App. LEXIS 17036, 2003 WL 21976038
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 20, 2003
Docket02-3087
StatusPublished
Cited by298 cases

This text of 341 F.3d 559 (Richard M. Yuhasz v. Brush Wellman, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Richard M. Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 20 I.E.R. Cas. (BNA) 585, 57 Fed. R. Serv. 3d 342, 2003 U.S. App. LEXIS 17036, 2003 WL 21976038 (6th Cir. 2003).

Opinion

OPINION

GIBBONS, Circuit Judge.

Relator Richard M. Yuhasz brought a qui tam action against defendant-appellant Brush Wellman, Inc. (Brush), claiming that Brush violated the False Claims Act (FCA), 81 U.S.C. § 3729 et seq., and wrongfully terminated him in retaliation for his allegations of wrongdoing. After the United States declined to intervene, Brush moved to dismiss the case pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure, and the district court granted the motion. For the reasons set forth below, we affirm the judgment of the district court.

I.

Relator Yuhasz was employed as a laboratory manager for Brush at Brush’s bronze alloy manufacturing facility in Lo-rain, Ohio, between September 1996 and January 2000. At this facility, Brush produces “ ‘super’ alloys, spinodal alloys, and other specialty alloys” that are supplied to the United States both directly and through intermediaries, including distributors, for use in aerospace and military aviation. Some of the alloys, supplied under requirements of and pursuant to contracts with the United States, are subjected to further processing and manufacturing before being delivered to the United States.

*562 Yuhasz was hired to design and establish, and then operate as manager, a testing laboratory for its Lorain facility. The laboratory was established to conduct chemical, mechanical, and physical testing of Brush’s alloys. At the laboratory, Yu-hasz established the specifications for the laboratory equipment and both conducted and supervised testing procedures.

In order to claim or receive payments under government contracts, Brush must submit “certifications of compliance with technical specifications stating, representing, and warranting that the alloys were in strict conformity with specifications and that [Brush] was, thereby, legally entitled to claim and receive payment.” These certifications include certification pursuant to Aerospace Materials Specifications, certification as to compliance with “QQC” specifications (a government standard), and certification pursuant to the specifications of the American Society for Testing and Materials.

On April 14, 2000, Yuhasz filed this qui tam action, alleging that Brush violated the FCA by making false certifications by itself or through intermediaries and that Brush wrongfully terminated him in retaliation for his allegations of improper conduct. After investigating Yuhasz’s allegations, the United States declined to intervene on July 11, 2001. On September 7, 2001, Brush moved to dismiss the case for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The district court granted Brush’s motion to dismiss on December 14, 2001. On January 8, 2002, Yuhasz filed his notice of appeal.

II.

A district court’s grant of a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is reviewed de novo. Goad v. Mitchell, 297 F.3d 497, 500 (6th Cir.2002). Pursuant to Rule 12(b)(6), an action may be dismissed if the complaint fails to state a claim upon which relief can be granted. When considering a motion to dismiss, all well-pleaded allegations in the complaint are treated as true, and the dismissal of the complaint is deemed proper “only ‘if it appears beyond doubt that the plaintiff can prove no set of facts in support of its claims that would entitle it to reliefi.]’ ” Id. (citing Kostrzewa v. City of Troy, 247 F.3d 633, 638 (6th Cir.2001)); see also Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

III.

According to the FCA:

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 ... is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person.

31 U.S.C. § 3729. The purpose of the FCA is “to encourage any individual knowing of Government fraud to bring that information forward.” United States ex rel. McKenzie v. BellSouth Telecomm., Inc., 123 F.3d 935, 938 (6th Cir.1997) (McKenzie I) (quoting S.Rep. No. 99-345 (1986), reprinted in 1986 U.S.C.C.A.N. 5266); see also United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir.1990) (“ ‘[T]he purpose of the qui tam provisions of the False Claims Act *563 is to encourage private individuals who are aware of fraud being perpetrated against the Government to bring such information forward.’ ”) (quoting H.R.Rep. No. 99-660, at 22 (1986)). If, as in this case, the government does not assert its statutory right to take over the case, the relator can recover between twenty-five and thirty percent of any monies recovered from a settlement or judgment, in addition to reasonable expenses and attorneys’ fees and costs. 31 U.S.C. § 3730(d)(2).

Yuhasz claims that Brush, by itself or through intermediaries, submitted fraudulent certifications and claims for payment to the United States and received payment from the United States for alloys not meeting government specifications, in violation of the FCA. Specifically, Yuhasz alleges that Brush

had actual knowledge and/or acted in deliberate disregard or ignorance of the truth or falsity of: (i) alloy product that was off-specification due to defects such as cracks; (ii) false and fraudulent certifications of compliance with technical specifications; (iii) improper traceability ■and identifiability controls with respect to lots of alloy bar stock; (iv) beryllium contamination in alloys, rendering such alloys off-specification; (v) [Brush’s] failure to perform requisite tests on the alloys, such as the mereurious nitrate testing; and, (vi) the fact that requisite internal controls were not in place, rendering alloy products untraceable and unidentifiable.

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341 F.3d 559, 20 I.E.R. Cas. (BNA) 585, 57 Fed. R. Serv. 3d 342, 2003 U.S. App. LEXIS 17036, 2003 WL 21976038, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richard-m-yuhasz-v-brush-wellman-inc-ca6-2003.