Opinion for the Court filed by Senior Circuit Judge RANDOLPH.
RANDOLPH, Senior Circuit Judge:
Stephanie Schweizer sued Océ North America, Inc., her former employer, under the False Claims Act's qui tam and retaliation provisions, 31 U.S.C. § 3730(b) & (h). The government moved to dismiss the qui tam claims after reaching a settlement agreement with Océ.
Océ sells copying and printing products. It had two supply contracts with the General Services Administration: one for copiers, printers, and document management software; the other for larger digital printing systems. The contracts required Océ to provide government customers with the same discount offered to certain private sector purchasers. See 48 C.F.R. § 552.238-75. The contracts also required Océ to sell to the government only goods made in the United States or other countries designated under the Trade Agreements Act, 19 U.S.C. § 2501 et seq. We refer to these provisions as the price reduction and country-of-origin clauses, respectively.
Océ hired Schweizer in December 2004 to serve as a "GSA contracts manager" in
In early 2005 Schweizer began to suspect that Océ was violating the price reduction clauses.
Schweizer sought to correct the violations, consistent with her duties as GSA contracts manager. She provided Frost with records documenting the private sector discounts, which she said were causing Océ "not to be in compliance with the [contracts]." Frost allegedly responded by forbidding Schweizer from investigating the matter and stating that management would "destroy" her if she disobeyed.
A second set of concerns arose in November 2005 as Océ was planning to merge with Imagistics, a rival print and document management company. In preparation for the merger, Océ officials asked Schweizer to determine whether Imagistics' products complied with the contracts' country-of-origin clauses. Schweizer replied that they did not. She explained in an e-mail to Bryan Beauchamp, Océ's vice president of business development, that most Imagistics products were manufactured in China, a country not certified under the Trade Agreements Act. Beauchamp agreed with Schweizer's assessment. Despite this understanding, Frost directed Schweizer to add Imagistics' products to Océ's government contract listings just a few days later. When Schweizer refused, Frost allegedly told her not to pursue the issue any further and again threatened to "destroy" her if she did not comply.
Schweizer did not heed Frost's warning. Instead, she contacted Beauchamp, Frost's superior, in early December 2005. Schweizer informed Beauchamp of Frost's actions, her pricing investigation, and her belief that Océ was violating the False Claims Act. She also alleged that many of Océ's own products were made in China, rather than in the Netherlands as stated in the contracts. Beauchamp referred Schweizer to Océ's human resources director, Gerald Whelan, who then directed her to meet with in-house counsel, Dan Harper. That meeting resulted in a further referral to Kenneth Weckstein, Océ's outside counsel for government contracting issues. In each of these conversations Schweizer reiterated her claim that Océ was violating the False Claims Act.
On December 6, 2005, Schweizer made a final, emotional plea to Beauchamp. She complained that the meetings with Whelan, Harper, and Weckstein were not productive, and that Beauchamp was "her last hope in terms of ... saving the company" from "legal trouble." Beauchamp suspended Schweizer two days later, and terminated her employment on December 15. In a letter memorializing these actions,
Schweizer filed a three-count complaint against Océ in April 2006. The first two counts rely on the False Claims Act's qui tam provisions, which permit private citizen "relators" to sue on behalf of the United States. See 31 U.S.C. §§ 3729(a), 3730(b) (2006).
The government declined to intervene in the case after conducting an extensive investigation of Schweizer's qui tam claims. See 31 U.S.C. § 3730(a) & (b)(2). Nonetheless, it remained an active participant in settlement discussions. These talks came to fruition in September 2009, when Océ, Vee, and the government—but not Schweizer—reached an agreement to dispose of Counts I and II. The agreement required Océ to pay $1.2 million, plus interest, to the government, with nineteen percent of that total set aside for Schweizer and Vee. In return, Océ received a partial release from liability and a promise
Schweizer opposed the settlement and the motion to dismiss. She argued that the settlement understated the extent of Océ's violations, and thus could not satisfy the criteria set forth in 31 U.S.C. § 3730(c)(2)(B). That provision allows the government to "settle [a qui tam] action... 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." Id. § 3730(c)(2)(B). The government offered two responses. First, it asserted that the district court could dismiss Counts I and II over Schweizer's objection pursuant to § 3730(c)(2)(A) without reviewing the settlement.
The district court dismissed Counts I and II after holding a hearing. United States ex rel. Schweizer v. Océ N.V., 681 F.Supp.2d 64 (D.D.C.2010). It declined to review the settlement, concluding that § 3730(c)(2)(A) gave the government "an unfettered right to dismiss" qui tam claims. 681 F.Supp.2d at 65-66 (quoting United States ex rel. Hoyte v. Am. Nat'l Red Cross, 518 F.3d 61, 65 (D.C.Cir.2008) (quoting Swift v. United States, 318 F.3d 250, 252 (D.C.Cir.2003))). Although this approach bypassed § 3730(c)(2)(B), the district court read Hoyte and Swift as requiring that result. 681 F.Supp.2d at 66. The expansive reading of § 3730(c)(2)(A) in those decisions, the court explained, had "already effectively rendered ... § 3730(c)(2)(B) a dead letter." Id. To this the district court added a second justification for ignoring § 3730(c)(2)(B): its probable unconstitutionality. In the court's view, § 3730(c)(2)(B) impermissibly undermined the Executive's power "to conduct litigation on behalf of the United States" by giving courts the last word on settlement. Id. at 67-68 (citing U.S. CONST. art. II, § 3 (The President "shall take Care that the Laws be faithfully executed.")).
As to Count III, Schweizer's retaliation claim, Océ moved for summary judgment and the district court granted the motion. United States ex rel. Schweizer v. Océ N. Am., Inc., 772 F.Supp.2d 174 (D.D.C.2011). It held that Schweizer had not put Océ on notice that she was acting in furtherance of a False Claims Act suit. Id. at 178-81. The court based this conclusion on precedent indicating that employees whose job responsibilities include fraud prevention "must `overcome the presumption that they are merely acting in accordance with their employment obligations' to put their employers on notice." United States ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1261 (D.C.Cir.2004) (quoting Yuhasz v. Brush Wellman, Inc., 341 F.3d 559, 568 (6th Cir.2003)). According to the district court, Schweizer did not rebut this presumption—and thus did not
Schweizer argues that the district court erred in dismissing her qui tam claims without determining whether the settlement was "fair, adequate, and reasonable." The quotation comes from 31 U.S.C. § 3730(c)(2)(B): the "Government 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 government's reply, and Océ's, is that judicial approval of the settlement is not required in light of 31 U.S.C. § 3730(c)(2)(A), which states that the "Government may dismiss [a qui tam] action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion." We have held that § 3730(c)(2)(A) provides the government with "an unfettered right to dismiss" qui tam claims, Swift, 318 F.3d at 252; see also Hoyte, 518 F.3d at 65, and that the only function of a hearing under § 3730(c)(2)(A) "is simply to give the relator a formal opportunity to convince the government not to end the case," Swift, 318 F.3d at 253.
As a preliminary matter, Schweizer claims the government may not invoke § 3730(c)(2)(A) because it never properly intervened in the case. She points out that the Act prescribes only two ways for the government to intervene: during an initial sixty-day window (subject to extension by the district court), § 3730(b)(4); or "at a later date upon a showing of good cause," § 3730(c)(3). Because the government declined to intervene during the initial sixty-day period, and did not invoke subsection (c)(3) or show good cause in its later filing, it never became a party to the suit. Thus, Schweizer concludes, the government could not properly move for dismissal.
Schweizer's view of the Act's intervention provisions is not accurate. Intervention is necessary "only if the government wishes to `proceed with the action.'" Swift, 318 F.3d at 251 (quoting 31 U.S.C. § 3730(b)(2) & (b)(4)(A)). Here, the government did not seek to proceed with the qui tam portion of the case; it sought to end it. It follows that the government did not have to intervene before filing its motion. Swift, 318 F.3d at 251-52. Nothing in United States ex rel. Eisenstein v. City of New York, 556 U.S. 928, 129 S.Ct. 2230, 173 L.Ed.2d 1255 (2009), which addressed the government's party status for purposes of the Federal Rules of Appellate Procedure, is to the contrary. Nor does it matter that the government moved to dismiss outside the initial sixty-day intervention period. See Hoyte, 518 F.3d at 63-65.
The settlement agreement here falls squarely within § 3730(c)(2)(B): the government reached an agreement with the defendant to "settle the action ... notwithstanding the objections of the person initiating the action." In that circumstance, the statute required the district court to "determine, after a hearing, [whether] the proposed settlement [was] fair, adequate, and reasonable under all the circumstances." 31 U.S.C. § 3730(c)(2)(B). Océ and the government maintain that this conclusion is at odds with the government's "unfettered" dismissal power recognized in Swift and Hoyte. If the decision to dismiss is free
The full answer to the government's and Océ's point is simply that the language of § 3730(c)(2)(B) leaves no space for their interpretation. Neither the government nor Océ attempts to parse the statutory text. That § 3730(c)(2)(B) speaks in terms, not of a settlement, but of a "proposed settlement," signifies that an agreement between the government and the qui tam defendant needs judicial approval to become effective. Otherwise it remains just a proposal. Also significant is the absence of any language in § 3730(c)(2)(B) indicating that judicial approval is necessary only in some special category of cases. There are but two conditions to trigger the section's operation: (1) the government and the defendant agree to settle the case and (2) the relator objects. Both conditions existed in this case.
In addition, allowing dismissal without judicial review of the settlement would render § 3730(c)(2)(B) a nullity and thus contravene "the longstanding canon of statutory construction that terms in a statute should not be construed so as to render any provision of that statute meaningless or superfluous." Beck v. Prupis, 529 U.S. 494, 506, 120 S.Ct. 1608, 146 L.Ed.2d 561 (2000); see also Abourezk v. Reagan, 785 F.2d 1043, 1054 (D.C.Cir.1986). The government insists this is not so because, in most cases, the Attorney General voluntarily "choos[es]" to follow § 3730(c)(2)(B). Only in "unusual circumstances" does the Attorney General override it by invoking § 3730(c)(2)(A).
We reject the government's argument. Section 3730(c)(2)(B) contains no opt-out clause for rare cases or unusual circumstances. It does not permit the Attorney General to decide when there shall be a hearing on the settlement: the statute says that the government "may" settle a matter over a relator's objection "if the court" holds a hearing and finds the "proposed settlement" reasonable. The meaning is clear. The government may not settle a case when the relator objects unless the court approves the settlement. This is the way the Supreme Court read the statute in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). The Court stated that § 3730(c)(2)(B) "prohibits the Government from settling [a] suit over [a] relator's objection without a judicial determination of `fair[ness], adequa[cy] and reasonable[ness].'" Id. at 772, 120 S.Ct. 1858 (quoting 31 U.S.C. § 3730(c)(2)(B)).
Océ and the government claim that § 3730(c)(2)(B) should apply only when the government asks to "mak[e] the settlement part of the judgment in the case." If the government does not do so, they say, then § 3730(c)(2)(A) gives it an unfettered right to dismiss the case. The argument draws upon Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). There the Court explained that when parties settle a suit filed in federal court, they typically must resort to contract law remedies, rather than court
Even if we credited the argument, it would not help the government or Océ. The government's motion to dismiss "request[ed] that the Court retain jurisdiction to ... enforce the terms of the settlement agreement by and between the parties." The district court granted the motion and its order expressly "retain[ed] jurisdiction to determine the award to relator Schweizer, if any, from the proceeds of the settlement." These developments put the district court's power and prestige behind the settlement agreement, thereby triggering § 3730(c)(2)(B) even under the government's and Océ's interpretation of the statute.
Océ offers another argument against applying § 3730(c)(2)(B): it says the provision violates the separation of powers and is therefore unconstitutional. (The government does not join in the argument.
According to Océ, "[t]he decision of when, and under what circumstances, a False Claims Act action should be settled falls within the core and exclusive powers of the Executive Branch." For support, Océ points to Article II, § 3, of the Constitution, which states that the President "shall take Care that the Laws be faithfully executed." We mentioned the Take Care Clause in Swift when we interpreted § 3730(c)(2)(A). Decisions to dismiss under § 3730(c)(2)(A), we said, were analogous to decisions not to prosecute, which are committed to the Executive Branch's absolute discretion. Swift, 318 F.3d at 252 (citing Heckler v. Chaney, 470 U.S. 821, 831-33, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985)). Océ asserts that settlement decisions
Although decisions not to prosecute may be immune from review, the same cannot be said of decisions to dispose of a pending case. Compare Heckler, 470 U.S. at 833, 105 S.Ct. 1649, with Rinaldi v. United States, 434 U.S. 22, 29-30 & n. 15, 98 S.Ct. 81, 54 L.Ed.2d 207 (1977). We recognized this distinction in Swift, stating that some limitations on the Executive Branch's dismissal authority may be valid "despite the separation of powers." 318 F.3d at 252 (citing United States v. Cowan, 524 F.2d 504, 513 (5th Cir.1975)). For instance, the government "might be subject to Rule 41(a)(2)," which conditions dismissal "upon such terms and conditions as the court deems proper," if it filed a § 3730(c)(2)(A) motion "after the complaint had been served and the defendant answered." Id. at 252-53. Two factors make the case for judicial review even stronger here.
First, judicial scrutiny of settlement agreements and similar devices is fairly common. Federal Rule of Criminal Procedure 48(a) permits the government to "dismiss an indictment, information, or complaint" only "with leave of court." Courts have upheld this provision even though it restricts executive authority and "vest[s] some discretion in the court." Rinaldi, 434 U.S. at 29 n. 15, 98 S.Ct. 81; see also Cowan, 524 F.2d at 513. Other examples include judicial oversight of plea agreements, see FED.R.CRIM.P. 11(c)(3)(A) ("[T]he court may accept the agreement, reject it, or defer a decision until the court has reviewed the presentence report."); antitrust consent decrees, see 15 U.S.C. § 16(e)(1) ("Before entering any consent judgment proposed by the United States under this section, the court shall determine that the entry of such judgment is in the public interest."); class action settlements, see FED.R.CIV.P. 23(e) ("The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court's approval."); and settlements in shareholder derivative suits, see FED.R.CIV.P. 23.1(c) ("A derivative action may be settled, voluntarily dismissed, or compromised only with the court's approval."). Océ claims these provisions are irrelevant because they "protect other parties who are absent or potentially lack the savvy or representation to protect themselves." But § 3730(c)(2)(B) does similar work—it protects the relator.
In any event, here the government invoked the court's supervisory powers. By urging the district court to "retain jurisdiction to ... enforce the terms of the settlement agreement by and between the parties," the government consented to judicial involvement in the settlement process. Cf. Kokkonen, 511 U.S. at 380-81, 114 S.Ct. 1673. The same general principle—that a court cannot become a partner in enforcement without first examining the reasonableness of the request—applies when parties call on courts to issue preliminary injunctions, see Mills v. District of Columbia, 571 F.3d 1304, 1308 (D.C.Cir. 2009), and consent decrees, United States
We therefore hold that § 3730(c)(2)(B) is constitutional as applied to this case. Since the district court dismissed Counts I and II without finding the settlement agreement fair, adequate, and reasonable, we reverse and remand the case for a § 3730(c)(2)(B) hearing.
Schweizer also argues that the district court erred in granting Océ summary judgment on her retaliation claim. Our review is de novo. Bush v. District of Columbia, 595 F.3d 384, 387 (D.C.Cir. 2010).
Section 3730(h), added in 1986, was "designed to protect persons who assist the discovery and prosecution of fraud and thus to improve the federal government's prospects of deterring and redressing crime." Neal v. Honeywell Inc., 33 F.3d 860, 861 (7th Cir.1994), abrogated on other grounds by Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409, 416-17, 125 S.Ct. 2444, 162 L.Ed.2d 390 (2005). At the time Schweizer's claim accrued, the provision read:
31 U.S.C. § 3730(h) (2006).
This language states two basic elements: (1) acts by the employee "in furtherance of" a suit under § 3730—acts also known as "protected activity"; and (2) retaliation by the employer against the employee "because of" those acts. United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731, 736 (D.C.Cir.1998). For reasons we will explain in a moment, it is important to recognize that when § 3730(h) speaks of acts "in furtherance of an action under this section" it is not referring only to qui tam actions. Section 3730 authorizes qui tam actions, see 31 U.S.C. § 3730(b), but it also provides that "the Attorney General may bring a civil action under this section," id. § 3730(a). In other words, an employee's actions may further a qui tam suit or a suit by the United States under the False Claims Act.
Decisions of this court and others have expounded on the elements of a False Claims Act retaliation claim. We have, for instance, divided the causation question
To come within § 3730(h), an employee does not have to alert his employer to the prospect of a False Claims Act suit. Yesudian, 153 F.3d at 742. The employee has no obligation to give such a warning because § 3730(h) does not require the employee to "`know' that the investigation he was pursuing could lead to a False Claims Act suit." Id. at 741; see also Childree v. UAP/GA AG CHEM, Inc., 92 F.3d 1140, 1145-46 (11th Cir.1996); United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1269 (9th Cir.1996); Neal, 33 F.3d at 864. In terms of § 3730(h), an employee can be acting "in furtherance of an action under this section"—can be engaging in protected activity—although the employee is not contemplating bringing a qui tam suit, is not even aware that there is such a thing as a qui tam action, and has no idea whether his—the employee's—investigation or other acts, if made known to the government, might cause the Attorney General to sue his employer under the False Claims Act. From this, it follows that the employer may incur liability under § 3730(h) even if the employer has no inkling that a False Claims Act suit may be in the offing. As our court stated in Yesudian, "the kind of knowledge the defendant must have mirrors the kind of activity in which the plaintiff must be engaged." 153 F.3d at 742.
Some decisions have applied a different concept of notice when employees claim that "performance of their normal job responsibilities constitutes protected activity." Martin-Baker, 389 F.3d at 1261. In that situation, decisions such as Martin-Baker
Nevertheless we must apply Martin-Baker to this case. See LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C.Cir.1996) (en banc). Like the employee in Martin-Baker and the other employees in this line of cases from other circuits, Schweizer's job was to ensure compliance with government contracts. Her retaliation claim therefore cannot succeed unless she alerted Océ of her protected conduct by acting outside her normal job responsibilities, notifying a party outside the usual chain of command, advising Océ to hire counsel, or taking "any [other] action which a fact-finder reasonably could conclude would put [Océ] on notice that litigation [was] a reasonable possibility." Martin-Baker, 389 F.3d at 1261-62 (quoting Eberhardt, 167 F.3d at 868).
Schweizer repeatedly disobeyed the orders of Frost, her supervisor, to stop investigating Océ's pricing and product sourcing practices. She did so despite Frost's warnings that the company would "destroy" her if she did not comply. Specifically, Schweizer contacted Beauchamp, Frost's supervisor, on two separate occasions in early December 2005. The first time, she alleged a variety of specific False
These facts, if proven, would be sufficient to support a finding that Océ knew about Schweizer's protected conduct and fired her, at least in part, "because of" that conduct. See Yesudian, 153 F.3d at 736. Schweizer's actions were not of the sort "typically [performed] as part of a contract administrator's job." Martin-Baker, 389 F.3d at 1261 (quoting Robertson, 32 F.3d at 952). The company's termination letter indicating that Schweizer was fired for failing to follow orders and the chain of command made precisely this point. As a result, Schweizer's factual allegations are sufficient to overcome "the presumption that [she was] merely acting in accordance with [her] employment obligations." Id. (quoting Yuhasz, 341 F.3d at 568).
Océ argues that we should affirm on two other grounds. First, it claims that Schweizer did not engage in protected activity. The parties briefed this question in their summary judgment filings. Although the district court did not reach the issue, see 772 F.Supp.2d at 180, the parties have again raised it on appeal. We therefore may decide the issue. See Flynn v. Dick Corp., 481 F.3d 824, 833 n. 9 (D.C.Cir.2007); Davis v. U.S. Dep't of Justice, 968 F.2d 1276, 1280 (D.C.Cir.1992); see also Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 49 L.Ed.2d 826 (1976).
According to Océ, Schweizer did not conduct her own "meaningful investigation." Instead, she merely "jumped to conclusions and berated her superiors based on unfounded assumptions." From this Océ concludes that Schweizer did not undertake actions "in furtherance of" a False Claims Act suit. But on her version of the facts, Schweizer gathered evidence that Océ defrauded federal agencies, shared that evidence with her superiors, and warned them of potential False Claims Act liability. Internal reporting of this kind is a classic example of protected activity. See Yesudian, 153 F.3d at 741 n. 9. Accordingly, Océ is not entitled to summary judgment on protected activity grounds.
Second, Océ asserts that Schweizer was fired for legitimate, non-discriminatory reasons. Again, the district court did not reach this question. 772 F.Supp.2d at 180-81. Although the parties have briefed the issue on appeal, their arguments fail to address a basic question regarding the appropriate legal standard: what are courts to do when an employee has made out a prima facie case of retaliation, the employer has offered a non-retaliatory motive for its actions, and the employee has alleged that the employer's proffered motive is pretextual?
The familiar McDonnell Douglas burden-shifting framework, see McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), offers a possible solution. Under McDonnell Douglas, an employee first must make out a prima facie case of retaliation by showing "(1) that he engaged in statutorily protected activity; (2) that he suffered a materially adverse action by his employer; and (3) that a causal link connects the two." Jones v. Bernanke, 557 F.3d 670, 677 (D.C.Cir.2009). If the employee does
The First Circuit recently held that the McDonnell Douglas framework applies to § 3730(h) retaliation claims. See Harrington v. Aggregate Indus.-Ne. Region, Inc., 668 F.3d 25, 30-31 (1st Cir.2012).
For the reasons given above, we reverse the district court's dismissal of Counts I and II and its grant of summary judgment on Count III. The case is remanded for review of the settlement agreement pursuant to 31 U.S.C. § 3730(c)(2)(B) and consideration of the parties' remaining summary judgment arguments on Count III.
So ordered.