The district court denied the plaintiffs’ motion for leave to amend their complaint alleging they were terminated from the jobs after engaging in protected activity, finding the second amended complaint did not fundamentally address the deficiencies that led to the original dismissal and would therefore be futile. The plaintiffs argued they engaged in protected activity when they raised questions about certain billing practices, but the court found these questions were reasonably within the bounds of their job duties and did not put their employer on notice that they engaged in protected activity, even if the answers to those questions incidentally suggested potential fraud. The court noted the plaintiffs did not frame their questions as being fraud-related, did not collect evidence, did not step outside their usual reporting structure to address their concerns, and did not warn the agency of the alleged fraud.
Relators Charles Hutchins and Joyce Subhi, moving forward without counsel, sought leave to amend their complaint alleging DynCorp International Inc. had violated the False Claims Act. Previously, all but one of the relators’ claims had been dismissed and the relators sought to continue their case pro se at plaintiffs, not relators.
Previously, most of the claims were dismissed without prejudice and the relators were given until December 31, 2018, to move for leave to amend their complaint. At that time, however, the relators’ counsel withdrew from the case and the court gave the relators six months to obtain new counsel, as they could not continue an FCA action pro se.
To date, the relators had not been able to retain counsel. Appearing as plaintiffs, they sought leave to amend and proceed pro se on only their claims for unlawful retaliation. While the plaintiffs cannot pursue a case on behalf of the United States pro se, they argued that their retaliation claims belong to them in their individual capacities. DynCorp conceded that the plaintiffs could represent themselves, but noted that the court had already dismissed the retaliation claims and argued the plaintiffs had not shown how further litigation would alter that outcome.
In their original complaint, the relators alleged DynCorp violated the FCA in relation to its contract with the Army under the LOGCAP program. During their employment with DynCorp, the plaintiffs were responsible for administering the company’s LOGCAP subcontracts. Hutchins alleged he was fired after investigating whether certain buses failed to satisfy the Army’s requirements and were billed erroneously. Subhi alleged that she was fired for complaining about improper medical care, improper medical billing, and the hiring of unqualified subcontractors. The plaintiff argued that they were responsible for ensuring contract compliance and therefore in a unique position to identify potential fraud.
In response, DynCorp argued that the plaintiffs merely acted within their regular job duties when they complained internally about DynCorp practices and thus failed to provide the company with notice they were engaged in protected activity. In other words, DynCorp argued it lacked the requisite scienter to support a claim of retaliation. The defendant argued the plaintiffs did not describe the activities as fraudulent in reporting to their superiors; they did not advise DynCorp to seek legal counsel; they did not step outside the usual chain of command to express their concerns; and they did not warn the Army of the alleged fraud until after they had been terminated.
In their proposed second amended complaint, the plaintiffs attempted to narrow the scope of their duties as subcontracts senior managers to show that their investigations did not fall within their job descriptions and therefore provided notice to DynCorp that they were engaging in protected activity. The plaintiffs explained that they managed only subcontracts and had no responsibilities or duties related to monitoring, enforcing, coordinating, invoicing or compliance activities connected with the prime contract; that they were not hired to investigate fraud or over-billing or any other form of crime; and that they did not communicate or otherwise interface with the Army’s CO or other officials, and in fact were prohibited from such contacts to ensure that DynCorp spoke with one voice to the government.
That said, the court noted that Hutchins still alleged that he reviewed information and documents provided to assure subcontractors’ compliance with the executed subcontract, which was required for payment by the United States, and Subhi alleged that she closely advised DynCorp International personnel on legal requirements, client contract requirements and government regulations.
The plaintiffs also attempted to expand on their argument that they gave DynCorp notice. Hutchins alleged DynCorp maintained duplicative waste management vehicles, and that the Army would not knowingly pay for subcontractors to remove waste and delivery water while simultaneously paying DynCorp to have waste management and water delivery vehicles sitting on each camp. Hutchins claimed he raised these concerns with a project controls manager, who forwarded his questions to DynCorp’s project controls and accounting and finance offices. Hutchins asserted that this showed DynCorp was on notice that he engaged in protected activity.
Subhi also asserted that she raised questions about the duplicative waste management vehicles and that she noted and questioned the funding for equipment that was never purchased and the invoicing for physicals and immunizations that subcontractors were supposed to pay for. Because DynCorp was allegedly not permitted to use approved funding under her subcontract for these non-approved purposes, Ms. Subhi argues that her questions on this subject also put DynCorp on notice that she was engaged in protected conduct. Finally, both plaintiffs alleged that DynCorp directed employees to drive unused waste management vehicles around bases to add miles to their odometers so that they would appear to be in use. Without providing any specifics, both plaintiffs argued that when questions were asked by Hutchins, Subhi, and other supplier management personnel about this practice, DynCorp was put on notice that these individuals were engaged in protected conduct.
The court agreed with DynCorp that neither plaintiff demonstrated that they engaged in activity beyond their job duties or had otherwise put DynCorp on notice that they engaged in protected activity. For example, Hutchins’ questions about how DynCorp billed certain duplicative waste management vehicles fell within his job duties and were not signal that he asked for more than job appropriate information. Further, both plaintiffs alleged that billing practices were the subject of general collective discussion between employees and managers during regular department meetings, and therefore the court found these queries within the bounds of the regular jobs. In general, the court found no support for the contention that the plaintiffs’ activities were visible as protected activity.
The court explained that asking job-related questions or questions about the subject of a meeting, without more, does not become FCA protected activity, even if the answers to those questions incidentally indicate fraud. When the plaintiffs suspected fraud, they did not collect evidence; they did not describe the activities as fraudulent when reporting to their superiors; they did not advise DynCorp to seek legal counsel; they did not step outside the usual chain of command to express their concerns; and they did not warn the Army of the alleged fraud until after they had been terminated.
For those reasons, the court found the second amended complaint did not overcome the deficiencies in the first amended complaint, which was dismissed, and therefore would be futile.
