Filed: Nov. 06, 2018
Latest Update: Mar. 03, 2020
Summary: FILED United States Court of Appeals PUBLISH Tenth Circuit UNITED STATES COURT OF APPEALS November 6, 2018 Elisabeth A. Shumaker FOR THE TENTH CIRCUIT Clerk of Court _ DEBBI POTTS, a Colorado resident, Plaintiff - Appellant, v. No. 17-1143 CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana corporation, f/k/a CollegeAmerica Denver, Inc., Defendant - Appellee. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-01779-RBJ) _ Brandon J. Mark, Parson
Summary: FILED United States Court of Appeals PUBLISH Tenth Circuit UNITED STATES COURT OF APPEALS November 6, 2018 Elisabeth A. Shumaker FOR THE TENTH CIRCUIT Clerk of Court _ DEBBI POTTS, a Colorado resident, Plaintiff - Appellant, v. No. 17-1143 CENTER FOR EXCELLENCE IN HIGHER EDUCATION, INC., an Indiana corporation, f/k/a CollegeAmerica Denver, Inc., Defendant - Appellee. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-01779-RBJ) _ Brandon J. Mark, Parsons..
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FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS November 6, 2018
Elisabeth A. Shumaker
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
DEBBI POTTS, a Colorado resident,
Plaintiff - Appellant,
v. No. 17-1143
CENTER FOR EXCELLENCE IN
HIGHER EDUCATION, INC., an Indiana
corporation, f/k/a CollegeAmerica Denver,
Inc.,
Defendant - Appellee.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:16-CV-01779-RBJ)
_________________________________
Brandon J. Mark, Parsons Behle & Latimer, Salt Lake City, Utah (Logan R. Martin,
Westerfield & Martin, Denver, Colorado, with him on the briefs), for Plaintiff-Appellant.
Steven M. Gombos, Ritzert & Leyton, P.C., Fairfax, Virginia (Raymond W. Martin,
Wheeler Trigg O’Donnell, LLP, Denver, Colorado, David A. Obuchowicz and Jacob C.
Shorter, Ritzert & Leyton, P.C., Fairfax, Virginia, with him on the brief), for Defendant-
Appellee.
_________________________________
Before LUCERO, PHILLIPS, and MORITZ, Circuit Judges.
_________________________________
PHILLIPS, Circuit Judge.
_________________________________
The False Claims Act imposes liability on any person who knowingly defrauds
the federal government. See 31 U.S.C. § 3729(a). The Act includes a provision
protecting whistleblower employees from specified retaliatory acts by their employer.
31 U.S.C. § 3730(h)(1)–(2). We now consider whether this anti-retaliation statute
applies when no retaliatory discrimination occurs until after employment ends. We
conclude that it does not. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm
the district court’s dismissal of Debbi Potts’s retaliation claim.
BACKGROUND
From January 2009 until July 2012, when she resigned, Debbi Potts worked as
the campus director of the Cheyenne, Wyoming campus of CollegeAmerica Denver,
Inc. (CollegeAmerica), a predecessor of the Center for Excellence in Higher
Education, Inc. (the Center). Potts alleges that she resigned because
CollegeAmerica’s business practices were unethical. In particular, she alleges that
CollegeAmerica violated its accreditation standards and “actively deceiv[ed]” its
accreditor to maintain accreditation. Appellant’s App. at 10 ¶ 12.
In September 2012, Potts and CollegeAmerica entered a written agreement by
which CollegeAmerica agreed to pay Potts $7,000 and support her unemployment
claim, and Potts agreed to (1) “refrain from personally (or through the use of any
third party) contacting any governmental or regulatory agency with the purpose of
filing any complaint or grievance,” (2) “direct any complaints or issues against
CollegeAmerica . . . to CollegeAmerica’s toll free compliant [sic] number,” and
2
(3) “not intentionally with malicious intent (publicly or privately) disparage the
reputation of CollegeAmerica.” Appellant’s App. at 44.
Despite the agreement, Potts disparaged the Center in an e-mail she sent to
another former employee of the Center.1 After learning of this, the Center sued Potts
in Colorado state court for violating the agreement. For relief, the Center sought back
the $7,000 it had paid to Potts under the agreement.
In February 2013, Potts sent a written complaint to the Center’s accreditor, the
Accrediting Commission of Career Schools and Colleges (ACCSC), concerning the
Center’s alleged deceptions in maintaining its accreditation. After learning this, the
Center amended its state-court complaint to add one sentence in support of its
existing, sole claim (for breach of contract): “Potts also violated the contract by filing
a complaint with the ACCSC.” Appellant’s App. at 50.
In response, Potts sued the Center in the United States District Court for the
District of Colorado, alleging that the Center’s state claim violated the False Claims
Act’s anti-retaliation provision. See 31 U.S.C. § 3730(h)(1). In particular, Potts
alleged that her complaint to the Center’s accreditor was protected activity under the
False Claims Act because it revealed violations of accreditation standards, which
would have disqualified the Center from receiving federal student financial aid. Potts
further alleged that the Center had retaliated against her under the Act by amending
1
We are uncertain when Potts sent this e-mail.
3
its state claim to allege that Potts had breached the agreement by sending the
complaint to ACCSC.
The Center filed a motion under Federal Rule of Civil Procedure 12(b)(6) to
dismiss Potts’s federal suit. After a hearing, the district court granted the motion,
concluding that a former employee—one whose allegedly protected acts had occurred
exclusively after employment ended—could not rely on the False Claims Act’s anti-
retaliation provision. Potts v. Ctr. for Excellence in Higher Educ., Inc.,
244 F. Supp.
3d 1138, 1144 (D. Colo. 2017). Potts appealed.
DISCUSSION
A. Standard of Review
We review de novo a district court’s dismissal for failure to state a claim under
Federal Rule of Civil Procedure 12(b)(6). United States ex rel. Lemmon v. Envirocare
of Utah, Inc.,
614 F.3d 1163, 1167 (10th Cir. 2010). “We accept as true all well-
pleaded factual allegations in the complaint and view them in the light most
favorable to the [plaintiff].” Sec. & Exch. Comm’n v. Shields,
744 F.3d 633, 640
(10th Cir. 2014). Here, the district court dismissed Potts’s claim based on the court’s
construction of the False Claims Act. We review de novo a district court’s statutory
construction. United States ex rel. Little v. Triumph Gear Sys., Inc.,
870 F.3d 1242,
1246 (10th Cir. 2017), cert. denied,
138 S. Ct. 1298 (2018).
B. Statutory Interpretation
When interpreting a statute, “our primary task is to ‘determine congressional
intent, using traditional tools of statutory interpretation.’” United States ex rel.
4
Sikkenga v. Regence Bluecross Blueshield of Utah,
472 F.3d 702, 710 (10th Cir.
2006) (quoting McGraw v. Barnhart,
450 F.3d 493, 498 (10th Cir. 2006)). We begin
with the language of the statute itself. Lawson v. FMR LLC,
571 U.S. 429, 440
(2014). “Our first step in interpreting a statute is to determine whether the language
at issue has a plain and unambiguous meaning with regard to the particular dispute in
the case.” Ceco Concrete Constr., LLC v. Centennial State Carpenters Pension Tr.,
821 F.3d 1250, 1258 (10th Cir. 2016) (quoting Robinson v. Shell Oil Co.,
519 U.S.
337, 340 (1997)). Our inquiry ends there “if the statutory language is unambiguous
and ‘the statutory scheme is coherent and consistent.’”
Robinson, 519 U.S. at 340
(quoting United States v. Ron Pair Enters., Inc.,
489 U.S. 235, 240 (1989)). We
evaluate statutory language by examining “the language itself, the specific context in
which that language is used, and the broader context of the statute as a whole.” Ceco
Concrete
Constr., 821 F.3d at 1258 (quoting
Robinson, 519 U.S. at 341).
C. The False Claims Act
The False Claims Act imposes liability on any person who knowingly makes a
false claim for payment to the federal government. 31 U.S.C. § 3729(a). Because
“employees will often be in the best position to report frauds perpetrated by their
employers,” the statute includes a whistleblower provision to protect employees from
retaliation. McBride v. Peak Wellness Ctr., Inc.,
688 F.3d 698, 703 (10th Cir. 2012).
The two key subsections of the anti-retaliation provision provide as follows:
(1) In general.—Any employee . . . shall be entitled to all relief necessary
to make that employee . . . whole, if that employee . . . is discharged,
demoted, suspended, threatened, harassed, or in any other manner
5
discriminated against in the terms and conditions of employment because of
lawful acts done by the employee . . . or associated others in furtherance of
an action under this section or other efforts to stop 1 or more violations of
this subchapter.
(2) Relief.—Relief under paragraph (1) shall include reinstatement with the
same seniority status that employee . . . would have had but for the
discrimination, 2 times the amount of back pay, interest on the back pay,
and compensation for any special damages sustained as a result of the
discrimination, including litigation costs and reasonable attorney’s fees. An
action under this subsection may be brought in the appropriate district court
of the United States for the relief provided by this subsection.
31 U.S.C. § 3730(h)(1), (2).
We must decide what persons qualify as “employees” under § 3730(h)(1). We
conclude that “employees” includes only persons who were current employees when
their employers retaliated against them. If that condition is met, it doesn’t matter
whether the employee remains a current employee of the employer when suing. So
the label “former employee” itself means nothing—what matters is the employee’s
employment status when the employer retaliates.
We reach this conclusion by examining the wording of § 3730(h)(1). That
subsection sets forth the qualifying retaliatory acts—discharge, demotion,
suspension, threats, harassment, or any other manner of discrimination in the terms
and conditions of employment. Of these six categories of retaliatory acts, four, by
their nature or wording, must occur during employment (as must the protected
activity). Obviously, a former employer cannot discharge, suspend, or demote a
former employee. Nor can a former employer discriminate against a former employee
in the terms and conditions of employment.
6
Potts acknowledges this but asserts, as a general matter, that a former
employer can threaten or harass its former employees (we note, as anyone can
threaten or harass anyone else). From this, she argues that under § 3730(h)(1) the
term “employee” is ambiguous about whether it protects former employees who are
threatened or harassed by their former employers. Under Potts’s view, § 3730(h)(1)
covers this situation, even when the whistleblowing comes after employment ends.
The district court acknowledged the truism that “a company could threaten or
harass a former employee just as it could a current employee[.]” Appellant’s App.
at 144. But it concluded that “it would be anomalous for two of the six listed
retaliatory acts to cover former employees while the rest do not.”
Id. at 144–45. In
treating the six retaliatory acts the same, the district court relied on the associated-
words canon (noscitur a sociis).
Id. at 145 (citing Dole v. United Steelworkers of
Am.,
494 U.S. 26, 36 (1990) (“The traditional canon of construction, noscitur a
sociis, dictates that ‘words grouped in a list should be given related meaning.’”
(quoting Massachusetts v. Morash,
490 U.S. 107, 115 (1989)))).
We agree that the associated-words canon applies here. This canon recognizes
“the observed phenomenon that birds of a feather flock together.” Antonin Scalia &
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 195 (2012). “When
several nouns or verbs or adjectives or adverbs—any words—are associated in a
context suggesting that the words have something in common, they should be
assigned a permissible meaning that makes them similar.”
Id. “The canon especially
holds that ‘words grouped in a list should be given related meaning.’”
Id. In view of
7
this, and with Congress having snugly embedded “threatened” and “harassed” within
the other four retaliatory acts needing to occur during employment, we cannot apply
a different temporal range for those two terms than applies for their four neighbors.
On just that basis, we would affirm.2
But we buttress this conclusion by applying the ejusdem generis canon to
§ 3730(h)(1)’s listing. Ejusdem generis applies here because Congress “has tacked on
a catchall phrase at the end of an enumeration of specifics[.]” Scalia &
Garner, supra,
at 199. As an example, the authors use “dogs, cats, horses, cattle, and other
animals.”
Id. They then ask whether wild animals, horseflies, and protozoa qualify as
“other animals.”
Id. Ultimately, they treat the catchall phrase as meaning “other
similar animals,” noting that ejusdem generis “implies the addition of similar after
the word other.”
Using that same approach in examining § 3730(h)(1), we read its residual
clause as including “similar discriminations” as discharge, demotion, suspension,
threats, and harassment.3 Discriminatory acts similar to threats and harassment are
actionable only if those acts occur in the terms and conditions of employment.
Id. We
2
Under Potts’s interpretation, a former employee could wait years upon years
before whistleblowing and then sue if the employer allegedly retaliated in one of the
six listed manners under § 3730(h)(1). In our view, any such open-ended litigation
option also weighs against her interpretation.
3
This aligns with the district court’s view that “reading ‘employee’ to mean
‘current employee’ is especially fitting in light of § 3730(h)(1)’s catchall residual
clause, which covers ‘other’ actions that likewise ‘discriminate[] . . . in the terms and
conditions of employment.’” Potts,
244 F. Supp. 3d at 1142 (alterations in original)
(quoting 31 U.S.C. § 3730(h)(1)).
8
can’t see why close cousins to threats and harassment would count only during
employment (i.e., when in the terms and conditions of employment), but threats and
harassment would continue to count years after employment ends.
Next, addressing whether an additional, independent ground supports
affirmance, we turn to the words “in the terms and conditions of employment” at the
end of the residual clause. The question is whether these words modify only “in any
other manner discriminate against,” or whether they also reach back and modify each
of the five preceding retaliatory acts.4 Here, we apply the series-qualifier canon—
“[w]hen there is a straightforward, parallel construction that involves all nouns or
verbs in a series, a prepositive or postpositive modifier normally applies to the entire
series.” Scalia &
Garner, supra, at 147. On this point, we conclude that the six verbs
are parallel—discharged, demoted, suspended, threatened, harassed, or discriminated
against. We do not believe the prepositive “in any other manner” or the postpositive
“in the terms and conditions of employment” makes the verb string not parallel.5
4
Potts contends that the last-antecedent canon applies to tie “in the terms and
conditions of employment” solely to “in any manner discriminated against.”
Appellant’s Br. at 29 (citing Mansur v. PFL Life Ins. Co.,
589 F.3d 1315, 1320 (10th
Cir. 2009) (quoting Barnhart v. Thomas,
540 U.S. 20, 26–27 (2003)). This canon
does not apply—no relative pronoun and antecedent exist in the disputed language in
§ 3730(h)(1). See Scalia &
Garner, supra, at 144.
5
The nearest-reasonable-referent canon applies when the series is not parallel.
In that circumstance, the “prepositive or postpositive modifier normally applies only
to the nearest reasonable referent.” Scalia &
Garner, supra, at 152. As an example of
a nonparallel series, the authors point to this statutory language: “the provisions of
this act shall not be construed to prevent any person from manufacturing for his
domestic consumption at his home . . . wine or cider from fruit of his own
9
Even so, we agree with Potts that the series-qualifier canon’s ordinary result
doesn’t apply here. Though we can read as sensible “threaten in the terms and
conditions of employment” (e.g., an employer telling the whistleblowing employee
that it never advances nonloyal workers with the company unless they retract their
whistleblowing) and “harass in the terms and conditions of employment” (e.g., an
employer strictly enforcing work rules against a whistleblowing employee but not
against others), we cannot sensibly read “discharge (or demote or suspend) in the
terms and conditions of employment.” So though the continuing-series canon
ordinarily would give a different result, we conclude that “in the terms and conditions
of employment” modifies only “in any other manner discriminated against.”
Subsection 3730(h)(2) also supports this conclusion that “employees” under
§ 3730(h)(1) includes persons who were current employees when retaliated against.
The listed remedies for an employer’s violation of subsection 3730(h)(1) all relate to
an employment relationship. Under subsection 3730(h)(2), the available relief “shall
include” reinstatement with the same seniority status, two times the back pay, interest
raising . . . .”
Id. (quoting Harris v. Commonwealth,
128 S.E. 578, 579 (Va. 1925)).
The question was whether “at his home” modified manufacturing, or consumption, or
both.
Id. The authors concluded that “both manufacturing and consumption are
nouns, but are not nouns in parallel; the second is in a prepositional phrase modifying
the first.”
Id. at 153. So the authors interpreted “at his home” as modifying its closest
neighbor, consumption.
Id. By contrast, § 3730(h)(1)’s list uses six present-tense,
passive verbs, each performing the same grammatical function.
10
on back pay, and special damages resulting from the discrimination.6 Potts points to
“shall include” as a way out from under the employment-related-relief limitation.
Appellant’s Br. at 48 (quoting 31 U.S.C. § 3730(h)(2)). Though the “shall include”
allows unspecified other employment-related relief, we do not construe it to reach
relief beyond employment-related relief.
Potts argues against this interpretation by pointing us to the anti-retaliation
provision in the Sarbanes-Oxley Act, 18 U.S.C. § 1514A(a). Indeed, that Act’s
language parallels the False Claims Act’s language quoted above:
Whistleblower Protection for Employees of Publicly Traded
Companies.—No company . . . may discharge, demote, suspend,
threaten, harass, or in any other manner discriminate against an
employee in the terms and conditions of employment because of
any lawful act done by the employee [to assist in an investigation
into an alleged violation of federal law relating to fraud against
shareholders].
18 U.S.C. § 1514A(a). Potts cites two circuit cases noting the obvious similarity in
language to the False Claims Act. But those cases involve a different issue, the
availability of noneconomic damages. See Jones v. Southpeak Interactive Corp. of
Del.,
777 F.3d 658, 672 (4th Cir. 2015) (allowing noneconomic damages for
violation of the Sarbanes-Oxley Act whistleblower provision relying on similar relief
and language from the False Claims Act); Halliburton, Inc. v. Admin. Review Bd.,
771 F.3d 254, 265 (5th Cir. 2014) (same).
6
In our view, this reference to “discrimination” ties back to subsection (h)(1)’s
“discriminated against in the terms and conditions of employment.”
11
More importantly, Potts argues that the Department of Labor shares her view
that this similar statutory language from the Sarbanes-Oxley Act applies to “former
employees” like her—those persons retaliated against solely after the employment
ended. Appellant’s Br. at 16. In support, she cites one of the Department’s
regulations:
As used in this part:
....
(e) Complainant means the employee who filed a complaint under the
Act or on whose behalf a complaint was filed.
(f) Covered person means any company, including any subsidiary or
affiliate whose financial information is included in the consolidated
financial statements of such company, or any nationally recognized
statistical rating organization, or any officer, employee, contractor,
subcontractor, or agent of such company or nationally recognized
statistical rating organization.
(g) Employee means an individual presently or formerly working for a
covered person, an individual applying to work for a covered person, or
an individual whose employment could be affected by a covered person.
29 C.F.R. § 1980.101 (emphasis added). We are uncertain whether this regulation
means to protect former employees whose whistleblowing occurs solely after
employment. In other words, this regulation may simply recognize what we have
already conceded here—that a former employee could sue for retaliatory
discrimination occurring during employment. For the reasons stated above, we cannot
conclude that the False Claims Act language reaches that variety of “former
employee” who suffered retaliatory discrimination after her employment ended.
12
Potts provides no other answer to our statutory interpretation apart from
contending that our reading would run counter to Robinson v. Shell Oil Co.,
519 U.S.
337 (1997). In that case, the Court interpreted Title VII’s anti-retaliation provision:
It shall be an unlawful employment practice for an employer to
discriminate against any of his employees or applicants for
employment, . . . because he has opposed any practice made an unlawful
employment practice by this subchapter, or because he has made a
charge, testified, assisted, or participated in any manner in an
investigation, proceeding, or hearing under this subchapter.
42 U.S.C. § 2000e-3(a).
In Robinson, a fired employee later filed an Equal Employment Opportunity
Commission (EEOC) complaint alleging race
discrimination. 519 U.S. at 339.
Robinson’s employer knew about the EEOC filing some time before it allegedly gave
a poor evaluation of him to a prospective employer.
Id. So the Court had to decide
whether “the term ‘employees’ in [42 U.S.C. § 2000e-3(a)], includes former
employees, such that petitioner may bring suit against his former employer for
postemployment actions allegedly taken in retaliation for petitioner’s having filed a
charge with the Equal Employment Opportunity Commission.”
Id.
The Court began by noting that “[t]he plainness or ambiguity of statutory
language is determined by reference to the language itself, the specific context in
which that language is used, and the broader context of the statute as a whole.”
Id. at
341 (citations omitted). For three reasons, the Court concluded unanimously that
“employee” was “ambiguous as to whether it excludes former employees.”
Id.
13
First, the Court noted that “there is no temporal qualifier in the statute such as
would make plain that [§ 2000e-3(a)] protects only persons still employed at the time
of the retaliation.”
Id. Second, the Court noted that “Title VII’s definition of
‘employee’ likewise lacks any temporal qualifier and is consistent with either current
or past employment”—simply defining employee as “an individual employed by an
employer.”
Id. at 342 (quoting 42 U.S.C. § 2000e(f)). Third, the Court noted that “a
number of other provisions in Title VII use the term ‘employees’ to mean something
more inclusive or different than ‘current employees.’”
Id. Having found “employee”
ambiguous, the Court resolved the ambiguity in favor of that term’s including former
employees.
Id. at 345. Because it was more consistent with the broader context of
Title VII and the purpose of the anti-retaliation provision, the Court held that the
provision applied to post-employment retaliation against former employees.
Id.
at 346.
As we have discussed, the False Claims Act, by its list of retaliatory acts,
temporally limits relief to employees who are subjected to retaliatory acts while they
are current employees. Thus, this subsection expressly sets a temporal limitation—
the retaliatory discrimination must occur during the employment. Section 2000e-3(a)
has no corresponding limitation.7
7
Potts describes “the exact text of Title VII’s anti-retaliation provision, 42
U.S.C. § 2000e-3, [as] somewhat different from the text of § 3730(h).” Appellant’s
Br. at 20. For the reasons given, we believe that Potts understates the statutory
differences. In effect, Potts asserts that the Court would have decided Robinson the
same even with § 3730(h)(1)–(2)’s language—we disagree.
14
Nor has Potts addressed how Robinson’s remaining considerations would
weigh in her favor. The district court noted that “Ms. Potts identifies no other
provisions of the [False Claims Act] in which ‘employees’ means anything other than
‘current employees.’” Potts,
244 F. Supp. 3d at 1144. On appeal, Potts cites 31
U.S.C. § 3730(h) as prohibiting employers from discharging whistleblowing
employees. But this argument relies on a point the district court agreed with—that
current employees terminated for protected activity occurring during employment
may pursue their rights (though then of course as former employees) under
§ 3730(h)(1). See
id. at 1142. Potts points to nothing in the False Claims Act
speaking to the other kind of former employee—one like herself whose protected
activity exclusively postdates the employment relationship.
We conclude that the False Claims Act’s anti-retaliation provision
unambiguously excludes relief for retaliatory acts occurring after the employee has
left employment.8 So our inquiry ends there.9 Because Potts alleges that the Center
8
The same result applies whether the whistleblowing occurs during
employment, or as in Potts’s case, after employment.
9
We have no occasion to reach the policy arguments Potts makes in favor of
protecting whistleblowers. Because § 3730(h)(1) unambiguously provides no remedy
for a former employee’s post-employment whistleblowing, these policy arguments
are for Congress.
15
retaliated against her after she resigned her employment, she cannot have a
cognizable claim under the statute.10
CONCLUSION
For the foregoing reasons, we affirm the district court’s dismissal of Potts’s
retaliation claim.
10
Because we rule on this basis, we have no need to rule on the Center’s other
defenses—that Potts’s claim failed to meet the three-year statute of limitations set
forth at 31 U.S.C. § 3730(h)(3) and that Potts inadequately pleaded a claim.
16