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District Court Reversed on Whistleblower and FCA Claims

The Court of Appeals for the District of Columbia Circuit reversed and remanded the summary denial of a False Claims Act retaliation claim because the relator's allegations were sufficient to overcome the presumption she was merely acting in accordance with her employment obligations. The federal district court granted the contractor's motion for summary judgment, finding the relator, a former employee, failed to put the contractor on notice that she had gone beyond the scope of her employment duties and was engaged in activity protected under the FCA ( 55 CCF ¶79,551). As the contractor's General Service Administration contracts manager, the relator's job was to ensure compliance with government contracts. Therefore, her retaliation claim could not succeed unless she alerted the contractor of her protected conduct by acting outside her normal job responsibilities, notifying a party outside the usual chain of command, advising the contractor to hire counsel, or taking "any [other] action which a factfinder reasonably could conclude would put [the contractor] on notice that litigation [was] a reasonable possibility."

Protected Conduct

The appellate court found the relator's alleged actions were not of the sort "typically [performed] as part of a contract administrator's job." According to the relator, she repeatedly disobeyed her supervisor's orders to stop investigating the contractor's pricing and product sourcing practices and, less than two weeks before she was fired, contacted a more senior supervisor to allege specific FCA violations and make a plea to "save" the contractor from "legal trouble." If proven, these facts were sufficient to support a finding the contractor knew about the relator's protected conduct and fired her, at least in part, because of it.

Judicial Review of Proposed Settlement

The DC Circuit also reversed and remanded the dismissal of the relator's FCA claims. The government moved to dismiss the claims over the relator's objection after another relator, the contractor, and the government proposed to settle the qui tam action. The district court granted the motion, holding 31 USC 3730(c)(2)(A) gave the government "an unfettered right" to dismiss a qui tam action ( 54 CCF ¶79,252). However, §3730(c)(2)(B) provides that the "[g]overnment may settle [a qui tam] action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the circumstances." The appellate court concluded the two conditions needed to trigger the operation of §3730(c)(2)(B) were present: the government and the contractor agreed to settle the case and the relator objected. The court rejected the argument application of §3730(c)(2)(B) was at odds with the government's "unfettered" dismissal power recognized by the court's precedent because allowing dismissal without judicial review would render §3730(c)(2)(B) a nullity. In addition, application of §3730(c)(2)(B) was constitutional because settlement decisions were not immune from review and, by requesting the district court to retain jurisdiction to enforce the settlement agreement, the government consented to judicial involvement in the settlement process. ( U.S. ex rel. Schweizer, et al. v. Océ N.V., et al., CA-DC, 56 CCF ¶79,796)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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