United States Ex Rel. Ziebell v. Fox Valley Workforce Development Board, Inc.

806 F.3d 946, 2015 U.S. App. LEXIS 20521, 2015 WL 7567016
CourtCourt of Appeals for the Seventh Circuit
DecidedNovember 25, 2015
Docket14-1780
StatusPublished
Cited by15 cases

This text of 806 F.3d 946 (United States Ex Rel. Ziebell v. Fox Valley Workforce Development Board, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit 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. Ziebell v. Fox Valley Workforce Development Board, Inc., 806 F.3d 946, 2015 U.S. App. LEXIS 20521, 2015 WL 7567016 (7th Cir. 2015).

Opinion

SYKES, Circuit Judge.

In 2003 LuAnn Ziebell began working at the Fox Valley Workforce Development Board, Inc., a state job-training agency serving central Wisconsin with funding from the federal government. She was fired in 2008. Almost two years later, she filed a qui tam action alleging that the Board violated the False Claims Act, 31 U.S.C. §§ 3729 et seq., by improperly contracting services through a subsidiary corporation. As best we can tell, her claim relies on a theory known as “false certification”; she alleges that the Board made false certifications of regulatory compliance as a predicate to receiving federal funds. She also alleges that she was fired in retaliation for engaging in activity protected by the Act. The district court found both claims factually deficient and entered summary judgment for the Board.

Ziebell’s qui tam claim faces a jurisdictional hurdle. To prevent parasitic lawsuits, the False Claims Act blocks jurisdiction over qui tam claims that are based on information already in the public domain. Here, the alleged improprieties by the Board were revealed in a routine audit performed by its supervising state agency, which counts as a “public disclosure” under the Act. An exception applies if Ziebell can show that she was the “original source” of the information. She has not done so. Accordingly, we dismiss Ziebell’s qui tam claim for lack of jurisdiction. On the retaliation claim, we affirm the judgment for the Board. There’s no evidence that Ziebell was fired in retaliation for engaging in protected activity.

I. Background

The Fox Valley Workforce Development Board was formed in 2000 under the auspices of the Workforce Investment Act of 1998, see 29 U.S.C. §§ 2801 et seq., a federal job-training program that provides funding to state-level investment boards, which in turn channel funds to area-designated workforce “development boards.” The development boards are multi-stake-holder bodies whose representatives are appointed by local elected officials.

During the time period relevant here, the Fox Valley Board provided job-training services in the Wisconsin counties of Calumet, Fond du Lac, Green Lake, Outa-gamie, Waupaca, Waushara, and Winnebago. Ziebell was hired as an executive assistant in 2003 and the following year was promoted to finance director. During Zie-bell’s entire tenure with the Board, she reported to its executive director, Cheryl Welch.

Development boards provide services through subcontractors selected via a competitive bidding process. The Fox Valley Board contracted out a particular basket of services — called Adult and Dislocated Worker Services — to a firm known as Career Pros. That company dissolved in the summer of 2004. The Board responded to this event by creating its own subsidiary, Workforce Economics, Inc., which subsumed the former Career Pros staff. This had the desirable effect of maintaining continuity of service, but it took the agency out of regulatory compliance. Under federal rules implementing the Workforce *950 Investment Act, development boards are not supposed to directly provide services.

In September 2007 the Wisconsin Department of Workforce Development (“DWD”), the state agency responsible for overseeing the area development boards, conducted a routine audit of the Board’s activities. The audit report criticized the Board for providing services through its own subsidiary and recommended an end to the practice. In a letter dated February 1, 2008, Welch acknowledged the problem and advised DWD that the Board would return to competitive bidding for Adult and Dislocated Worker Services. The letter, also stated that Workforce Economics would not bid on services for the remainder of 2008 or for 2009.

The Board thereafter solicited bids but received only two. Of those two, one covered only four of the counties in the Board’s service area, while the other bidder was deemed too inexperienced to competently provide the required services. As a result, by the time the full Board met on May 15, 2008, Welch had decided to continue providing services through Workforce Economics.

Ziebell attended the May 15 meeting with copies of the DWD audit report and Welch’s responsive letter in hand. She did not ask to speak but instead “tried to create a disturbance” by speaking to other board members while the meeting was in progress. She hoped that by disrupting the meeting she would prompt someone to inquire about the documents she brought with her, at which point she would expose Welch’s plot to stick with Workforce Economics, the Board’s in-house service provider. Things didn’t unfold that way. Rather, Welch explained the problem with the bids and suggested that the Board allow Workforce Economics to bid to provide the necessary services. The board members and local elected officials agreed. Ziebell had no influence on the decision.

Four days later Welch and the Board’s Chief Operating Officer called Ziebell to a. meeting and fired her. Welch read from a script listing the reasons for the termination decision. These included (among other reasons): (1) Ziebell had admitted to skipping work to play golf; (2) she had disrupted the May 15 board meeting; (3) she chose not to further her formal education; and (4) she submitted mileage-reimbursement forms that contained some irregularities. After reading the script, Welch asked Ziebell if she preferred to resign. Ziebell rejected that suggestion, saying, “[tjhere is no way in Hell I am going to resign. If you want to terminate me, you will have to pay the consequences.”

In July Ziebell filed a complaint with DWD alleging unlawful retaliation for engaging in activity protected by the False Claims Act. Almost two years later she brought this qui tarn action on behalf of herself and the United States alleging that the Board violated the Act. She also alleged that the Board fired her in retaliation for activity protected under the Act. The United States declined to participate in the qui tarn claim. While the suit was pending, the U.S. Department of Labor conducted its own review of Wisconsin’s workforce development programs and found various compliance deficiencies by a number of area workforce development boards. There were no findings of fraud. The Labor Department reported its findings to the DWD, which has since been working with federal authorities to alleviate the remaining concerns.

The district court granted summary judgment for the Board, concluding that Ziebell’s claims lacked factual support. This appeal followed.

*951 II. Analysis

The False Claims Act prohibits the submission of a false or fraudulent claim for payment to the government. 31 U.S.C. § 3729(a). Under the Act, private citizens may file civil actions on behalf of the United States to recover money the government paid because of a false or fraudulent claim. Id. § 3730(b)(1). The Act incentiv-izes these 'qui tam suits by allowing prevailing “relators” (the citizen plaintiffs) to recover a share of the enhanced recovery allowed under the statute. Id.

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806 F.3d 946, 2015 U.S. App. LEXIS 20521, 2015 WL 7567016, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-ziebell-v-fox-valley-workforce-development-board-ca7-2015.