United States ex rel. Jajdelski v. Kaplan, Inc.

834 F. Supp. 2d 1182, 2011 WL 2669485, 2011 U.S. Dist. LEXIS 73322
CourtDistrict Court, D. Nevada
DecidedJuly 7, 2011
DocketCase No. 2:05-CV-01054-KJD-GWF
StatusPublished
Cited by1 cases

This text of 834 F. Supp. 2d 1182 (United States ex rel. Jajdelski v. Kaplan, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Nevada primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. Jajdelski v. Kaplan, Inc., 834 F. Supp. 2d 1182, 2011 WL 2669485, 2011 U.S. Dist. LEXIS 73322 (D. Nev. 2011).

Opinion

ORDER

KENT J. DAWSON, District Judge.

Presently before the Court is Defendant’s Motion to Dismiss (# 121). Plaintiff filed an Opposition (# 123) to which Defendant filed a Reply (# 124). Specifically, Defendant seeks that the Court dismiss with prejudice Plaintiffs cause of action pursuant to Fed.R.Civ.P. 12(b)(6) and 9(b) for failure to state a claim upon which relief can be granted.

J. Background

Plaintiff, a qui tam relator, originally filed this action in the Southern District of California on June 23, 2004, alleging that Defendant had violated the United States False Claims Act (“FCA”) through actions taken by Heritage College in Las Vegas, Nevada. Plaintiff also alleged that Defendant was liable for retaliation and wrongful termination under California law for terminating Plaintiffs employment because he was investigating the alleged actions of Defendant.

Defendant owns and operates post-secondary educational and vocational institutions throughout the United States and maintains an office in San Diego, California. On May 8, 2003, Defendant purchased Heritage College (“Heritage”), a post-secondary school founded in 1990 in Las Vegas, Nevada. Prior to this acquisition, Defendant had no ownership interest in Heritage. Defendant also owns Marie College, a post-secondary institution in San Diego, California. In early 2003, Plaintiff was hired to work at Defendant’s San Diego office. In August 2003 Plaintiff was transferred to Heritage College. However, he maintained his domicile in San Diego, California. Plaintiff alleges [1184]*1184that on or about October 25, 2003, he discovered information showing that Heritage had violated the FCA by filing fraudulent student financial aid requests. Plaintiff claims employees and officers of Kaplan also had personal knowledge of these alleged fraudulent actions; however, Plaintiff failed to provide specific allegations regarding the time frame in which the employees acquired such knowledge. Plaintiff amended his initial Complaint once in July 2004 and again in December 2004, but did not expand his claims beyond the original FCA and employment claims. In August 2005, pursuant to Plaintiffs request, this case was transferred to the District of Nevada. Then, on November 29, 2007, Plaintiff filed a Third Amended Complaint, which once again, did not expand the original FCA and employment claims. Nearly a year later, on November 4, 2008, the Department of Justice made a determination not to intervene in this action, leaving Plaintiff to pursue the matter on his own.

In May 2009, in response to Plaintiffs Third Amended Complaint, Defendant filed a Motion to Dismiss, arguing that Plaintiff had failed to provide any allegations making Defendant responsible for the allegedly fraudulent activity at Heritage. That same month, on May 13, 2009, Plaintiff filed a motion with the MDL Panel, seeking to have this case transferred to the Southern District of Florida to be consolidated with three other cases pending against Kaplan. Although the MDL Panel transferred the three other cases to Florida in June 2009, it declined to transfer this case on the grounds that this case was simply a “potential tag-along action,” and on April 14, 2010 the MDL Panel officially denied Plaintiffs transfer request. Prior to his unsuccessful attempt to have this case transferred to the MDL court, Plaintiff filed a Motion to Sever and Transfer on December 12, 2009, seeking to sever the employment claims from the FCA claims and have them transferred to the Southern District of California. Then on January 5, 2010, the final deadline for filing a response to Defendant’s Motion to Dismiss, Plaintiff filed a Fourth Amended ■ Complaint, in which he added, for the first time in the nearly six year history of this action, a claim alleging new incentive compensation violations.

The Court denied the Motion to Transfer and Sever and the Motion for Leave to File an Amended Complaint, and granted Kaplan’s Motion to Dismiss. In issuing the Order (# 112), the Court permitted Plaintiff one final attempt to plead a valid FCA cause of action against Kaplan (to be called the “Fourth Amended Complaint”), but ordered that the newly amended complaint cure only the defects in the FCA claims and was not to contain incentive compensation claims nor addition new claims. Plaintiff filed his Fourth Amended Complaint (# 116) on June 18, 2010. Defendant then filed its currently pending Motion to Dismiss (# 121) on July 21, 2010.

II. Legal Standard

Pursuant to Fed.R.Civ.P. 12(b)(6), a court may dismiss a Plaintiffs complaint for “failure to state a claim upon which relief can be granted.” A properly pled complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 [1185]*1185L.Ed.2d 209 (1986)). “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 129 S.Ct. at 1949 (internal citation omitted).

In Iqbal, the Supreme Court recently clarified the two-step approach district courts are to apply when considering motions to dismiss. First, the Court must accept as true all well-pled factual allegations in the complaint; however, legal conclusions are not entitled to the assumption of truth. Id at 1950. Mere recitals of the elements of a cause of action, supported only by conclusory statements, do not suffice. Id at 1949. Second, the Court must consider whether the factual allegations in the complaint allege a plausible claim for relief. Id at 1950. A claim is facially plausible when the plaintiffs complaint alleges facts that allow the court to draw a reasonable inference that the defendant is hable for the alleged misconduct. Iqbal, 129 S.Ct. at 1949. Where the complaint does not permit the court to infer more than the mere possibility of misconduct, the complaint has “alleged — but not shown — that the pleader is entitled to relief.” Id (internal quotation marks omitted). When the claims in a complaint have not crossed the line from conceivable to plausible, plaintiffs complaint must be dismissed. Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

III. Analysis

Defendant’s Motion to Dismiss must be granted as to Plaintiffs FCA claims because Plaintiff has failed to meet the heightened pleading requirements of Rule 9(b), which applies to claims under the FCA.

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Bluebook (online)
834 F. Supp. 2d 1182, 2011 WL 2669485, 2011 U.S. Dist. LEXIS 73322, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-jajdelski-v-kaplan-inc-nvd-2011.