Filed: Jul. 27, 2018
Latest Update: Mar. 03, 2020
Summary: FILED United States Court of Appeals Tenth Circuit PUBLISH July 27, 2018 UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker Clerk of Court FOR THE TENTH CIRCUIT _ MINDY ARMSTRONG, Plaintiff - Appellant, v. No. 17-1378 THE ARCANUM GROUP, INC., Defendant - Appellee. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-01015-MSK-CBS) _ Robert A. McGuire, III, Robert McGuire Law Firm, Lone Tree, Colorado for Plaintiff- Appellant. Chanda M. Feldkamp, Kelly &
Summary: FILED United States Court of Appeals Tenth Circuit PUBLISH July 27, 2018 UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker Clerk of Court FOR THE TENTH CIRCUIT _ MINDY ARMSTRONG, Plaintiff - Appellant, v. No. 17-1378 THE ARCANUM GROUP, INC., Defendant - Appellee. _ Appeal from the United States District Court for the District of Colorado (D.C. No. 1:16-CV-01015-MSK-CBS) _ Robert A. McGuire, III, Robert McGuire Law Firm, Lone Tree, Colorado for Plaintiff- Appellant. Chanda M. Feldkamp, Kelly & ..
More
FILED
United States Court of Appeals
Tenth Circuit
PUBLISH
July 27, 2018
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
_________________________________
MINDY ARMSTRONG,
Plaintiff - Appellant,
v. No. 17-1378
THE ARCANUM GROUP, INC.,
Defendant - Appellee.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:16-CV-01015-MSK-CBS)
_________________________________
Robert A. McGuire, III, Robert McGuire Law Firm, Lone Tree, Colorado for Plaintiff-
Appellant.
Chanda M. Feldkamp, Kelly & Walker, LLC, Denver, Colorado for Defendant-Appellee.
_________________________________
Before HARTZ, MURPHY, and McHUGH, Circuit Judges.
_________________________________
HARTZ, Circuit Judge.
_________________________________
Mindy Armstrong was employed by The Arcanum Group, Inc., which serves as a
placement agency to staff federal-government positions. She was placed with the Real
Estate Leasing Services Department of the Bureau of Land Management (BLM). After
she complained that BLM employees were falsifying lease-related records, the BLM
demanded that Arcanum remove her from the placement. Her Arcanum supervisor,
Steven Cota, could not find an alternative placement for Armstrong and therefore
terminated her employment. Armstrong sued Arcanum in the United States District
Court for the District of Colorado, claiming that Arcanum retaliated against her for her
falsification complaints, in violation of the antiretaliation provisions of the False Claims
Act (FCA) and the National Defense Authorization Act (NDAA). The district court
granted Arcanum summary judgment, and Armstrong appeals. We affirm because
Armstrong did not produce sufficient evidence that Cota had knowledge of her
complaints before he terminated her.
I. BACKGROUND
In May 2014, Arcanum contracted to provide the BLM with workers for three
positions. Arcanum hired Armstrong to be a BLM lease administrator. She began work
in July 2014. One of Armstrong’s duties was to prepare a quarterly report that the BLM
would submit to the Department of the Interior. Part of the task was to review leases to
check the accuracy of a spreadsheet of BLM leases called the Master Report. The BLM
leased some space from the General Services Administration (GSA) and some from
private lessors. Armstrong believed she found two systematic errors.
One error concerned the distinction between usable square feet (USF) and
rentable square feet (RSF). RSF includes the tenant’s share of common areas in the
measure of leased space, while USF excludes such areas. Before 2000 many BLM leases
referred to USF. But all later leases used RSF; and the GSA charged the BLM rent based
on RSF amounts. The BLM did not remeasure leased spaces to convert the older USF
2
leases to the RSF measure. Rather, it approximated the RSF value by multiplying the
USF value by 1.15 (the “blanket factor”) for use in various documents, including the
Master Report. Armstrong believed this was improper under governing GSA policies.
Second, Armstrong believed the Master Report incorrectly omitted measures of
no-cost space. When private lessors allowed the BLM, as part of a lease, to use certain
space for free (the lease reflected the space, but the BLM did not pay more for it), the
BLM did not include that space in its Master Report. (As best we can tell, lessors treat
leased spaced as no-cost space to keep within square-footage limits in bid specifications.)
Leases with no-cost space thus had area measurements differing from those in the Master
Report. Armstrong believed GSA policies made this improper as well.
Armstrong told Barbra Burns-Fink—an Arcanum employee working at the BLM
as a realty specialist—that lease data were being falsified. Burns-Fink suggested that
Armstrong raise her concerns with Terry Baker, the team lead for the Real Estate Leasing
Services Department, but Armstrong did not do so at that time. At a team meeting a
week later, however, Armstrong asked to speak to Baker privately. Baker responded that
she had heard of Armstrong’s accusations and insisted that no fraud was occurring. After
the meeting another BLM employee met with Armstrong and showed her a BLM policy
provision authorizing the use of the blanket-factor conversion, though Armstrong still did
not believe that BLM staff had the authority to overrule other operative rules.
Two days later, on October 3, 2014, Baker had two meetings with Armstrong
during which they discussed Armstrong’s falsification claims and Armstrong expressed
“confus[ion] as to what [her] actual job duties were.” Aplt. App., Vol. 2 at 271
3
(Armstrong deposition). Later that day Baker emailed Tina Hamalak, who was the BLM
contracting officer for the Arcanum contract, to complain about Armstrong. The email
requested that Armstrong be removed from her BLM position for a variety of reasons,
including Armstrong’s falsification accusation, her inadequate Excel skills, her failure to
ask Baker for guidance when she was confused about her role, and her inability to adjust
to the BLM’s “unstructured environment.” Id. at 346.
Hamalak called Cota’s assistant Chelsea Peterson to tell her to remove Armstrong
from the BLM position, and Peterson relayed the message to Cota. Cota called Hamalak
to ask about the reasons for removal, but Hamalak provided no details and her confirming
email said only that Armstrong was “not working out.” Id. at 348. Before Armstrong’s
termination, Hamalak did not send Cota or anyone else at Arcanum a copy of Baker’s
email complaining about Armstrong. Cota checked whether Arcanum had any other
open positions suitable for Armstrong. Finding none, he decided, without consulting
anyone else, to terminate Armstrong. He held an exit interview with Armstrong later that
afternoon. After he informed her that she was being terminated, she told him—for the
first time—of her falsification complaints. He apparently did not indicate that he had
previously heard of the complaints; and he testified at his deposition that he had not heard
of her complaints until she told him.
Armstrong’s district-court complaint alleged that Arcanum retaliated against her in
violation of the FCA, 31 U.S.C. § 3730(h), and the NDAA, 41 U.S.C. § 4712(a), and
wrongfully discharged her in violation of Colorado common law. The district court
granted Arcanum summary judgment on the FCA and NDAA claims, and then declined
4
to exercise supplemental jurisdiction over her state-law claim. 1
II. ANALYSIS
A. The Governing Statutes’ Knowledge Requirement
The FCA is the federal government’s “primary tool for redressing fraud claims
against the Government.” Claire M. Sylvia, The False Claims Act: Fraud Against the
Government § 1:1, at 3 (3d ed. 2016) (hereafter Sylvia). It “supplements the
Government’s enforcement efforts by authorizing private citizens with information about
fraud to initiate a civil action [a ‘qui tam’ action] on the Government’s behalf.” Id. This
“provides the Government a powerful means of combating fraud through an action for
multiple damages and penalties.”
Id. To protect whistleblowers, the FCA has an
antiretaliation provision that imposes liability on an employer if an employee is
“discriminated against in the terms and conditions of employment because of lawful acts
done by the employee . . . in furtherance of . . . efforts to stop 1 or more violations of [the
FCA].” 31 U.S.C. § 3730(h)(1) (emphasis added). 2 Such lawful acts are commonly
1
The decision to decline jurisdiction over the state-law claim is not an issue on appeal.
2
The full text of § 3730(h)(1) is as follows:
Any employee, contractor, or agent shall be entitled to all relief necessary
to make that employee, contractor, or agent whole, if that employee,
contractor, or agent is discharged, demoted, suspended, threatened,
harassed, or in any other manner discriminated against in the terms and
conditions of employment because of lawful acts done by the employee,
contractor, agent or associated others in furtherance of an action under this
section or other efforts to stop 1 or more violations of this subchapter.
5
referred to as “protected activity.” 3
We agree with the parties that one element of a § 3730(h) claim is that the
retaliator know of the whistleblower’s protected activity. See U.S. ex rel. Sikkenga v.
Regence Bluecross Blueshield of Utah, 472 F.3d 702, 729 (10th Cir. 2006) (citing
legislative history stating that a § 3730(h) “whistleblower must show the employer had
knowledge the employee was engaged in ‘protected activity’”); Sylvia § 5:23, at 393
(“The requirement that the defendant have been aware of the plaintiff’s protected activity
is essential . . . .”). Otherwise, the retaliation could not have been “because of” the
protected activity.
Similarly, the antiretaliation provision of the NDAA, 41 U.S.C. § 4712(a)(1),
prohibits a government contractor from discriminating against an employee “as a reprisal
for disclosing . . . information that the employee reasonably believes is . . . a violation of
law, rule, or regulation related to a Federal contract.” 4 Again, we agree with the parties
3
Because we affirm on other grounds, we need not address whether Armstrong's
complaints were protected activity or whether Arcanum had legitimate nonretaliatory
reasons to terminate her.
4
The complete text of the version of § 4712(a)(1) in effect before 2017 stated:
An employee of a contractor, subcontractor, or grantee may not be
discharged, demoted, or otherwise discriminated against as a reprisal for
disclosing to a person or body described in [§ 4712(a)(2)] information that
the employee reasonably believes is evidence of gross mismanagement of a
Federal contract or grant, a gross waste of Federal funds, an abuse of
authority relating to a Federal contract or grant, a substantial and specific
danger to public health or safety, or a violation of law, rule, or regulation
related to a Federal contract (including the competition for or negotiation of
6
that one element of a § 4712(a)(1) claim is that a plaintiff’s protected activity “‘was a
contributing factor in the employer’s decision to take an adverse employment action.’”
Aplt. Br. at 50; Aplee. Br. at 48 (both quoting Miller v. Abbott Labs., Civil Action No.
3:14CV-00363-JHM, 2015 WL 3773114, at *7 (W.D. Ky. June 17, 2015)). Protected
activity can play that role only if the employer knew of the activity. See Craine v. Nat’l
Sci. Found., 687 F. App’x 682, 685, 692 (10th Cir. 2017) (upholding agency’s decision
that protected activity of § 4712 plaintiff was not a contributing factor to plaintiff’s
termination because disciplinary process began before decisionmakers knew of protected
activity). Also, we note that § 4712(c)(6) incorporates the “legal burdens of proof
specified in [5 U.S.C. § 1221(e)]” for determining in administrative or judicial
proceedings whether discrimination prohibited by § 4712 has occurred. And 5 U.S.C.
§ 1221(e)(1) includes a knowledge requirement. See 5 U.S.C. § 1221(e)(1) (“The
employee may demonstrate that the disclosure or protected activity was a contributing
factor in the personnel action through circumstantial evidence, such as evidence that . . .
(A) the official taking the personnel action knew of the disclosure or protected activity;
and (B) the personnel action occurred within a period of time such that a reasonable
a contract) or grant.
41 U.S.C. § 4712(a)(1) (2012). Section 4712(a)(2) lists various people and entities
disclosures to whom are protected; these include various legislative and law-enforcement
personnel and (as relevant here) “management official[s] or other employee[s] of [a]
contractor, subcontractor, or grantee who [have] the responsibility to investigate,
discover, or address misconduct.” Id. § 4712(a)(2)(A)–(G).
7
person could conclude that the disclosure or protected activity was a contributing factor
in the personnel action.”); Kerrigan v. Merit Sys. Prot. Bd., 833 F.3d 1349, 1354–55
(Fed. Cir. 2016) (applying knowledge requirement of § 1221(e)(1)), cert. denied, 137 S.
Ct. 2180 (2017); Horton v. Dep’t of Navy,
66 F.3d 279, 284 (Fed. Cir. 1995) (same),
superseded by statute on other grounds as recognized in El v. Merit Sys. Prot. Bd., 663 F.
App’x 921, 925 (Fed. Cir. 2016).
Thus, we turn to whether Armstrong presented sufficient evidence to satisfy the
knowledge requirement. Armstrong argues that the record contains sufficient evidence to
support a reasonable inference that Cota knew that she had complained to the BLM about
what appeared to be falsification of records. In the alternative, she argues that Arcanum
can be liable even if Cota did not have actual knowledge. We reject her arguments.
B. Cota’s Knowledge
To begin with, Armstrong asserts that “Burns-Fink routinely communicated with
[Cota and Peterson] about goings-on at BLM,” and that based on this “habit of keeping
Cota apprised,” a jury “could reasonably infer that Burns-Fink also told Cota about the
far more serious matter of Armstrong making accusations of fraud . . . .” Aplt. Br. at 36
(emphasis added). But Cota testified at his deposition that before deciding to fire
Armstrong he did not speak with Burns-Fink and that if Peterson had talked to Burns-
Fink, Peterson had not informed Cota of the conversation. And when we look at the
evidence Armstrong points to as showing that Burns-Fink and Cota routinely
communicated with one another, it turns out to be more supportive of Cota’s testimony
than contradictory. The only evidence of oral communication is Cota’s testimony that he
8
visited the BLM office about once a month “to see how things were going,” Aplt. App.,
Vol. 3 at 450, and that Burns-Fink reported to him on her training of Armstrong when
Armstrong began work. Armstrong’s only other evidence of communications between
Burns-Fink and Cota or Peterson consists of a few emails, in which Burns-Fink reported
on the status of Armstrong’s federal security background check, when Armstrong would
get her work computer, a planned training program for Burns-Fink and Armstrong, and a
serious medical incident of Armstrong’s. What is missing from those emails, however, is
any communication speaking of Armstrong’s falsification complaints. Armstrong makes
no effort to explain why a communication on that “far more serious matter” would not
have been at least alluded to in an email. A party opposing a summary-judgment motion
cannot rest on mere speculation or suspicion. See Bird v. W. Valley City, 832 F.3d 1188,
1199 (10th Cir. 2016). For a jury to infer from this evidence that Burns-Fink told Cota
about the falsification claims would be improper speculation.
The only other evidence that Armstrong relies on to show Cota’s knowledge of her
falsification complaints (despite his sworn denial) is his deposition testimony that before
Armstrong’s termination he had been doing some research into issues of “space
management” and “common spaces allocations.” Aplt. App., Vol. 3 at 469. In her
opening brief, Armstrong contends that if Cota was doing this research, someone,
probably Burns-Fink, must have told him about Armstrong’s assertions of falsification.
But Cota had good reasons independent of Armstrong for trying to learn about the issues.
He said that he felt he needed to understand them because Armstrong and other Arcanum
employees were working on related matters for the federal government. His testimony
9
was as follows:
Q. Did you ever investigate Barbra Burns-Fink’s conduct?
A. I researched—what was it?—space management, common spaces
allocations to an extent.
Q. When did you do that?
A. I think I was working on that while [Armstrong] was still there.
Q. You were working on researching a space allocation—
A. Yeah.
Q. —while [Armstrong] was still employed?
A. Uh-huh.
Q. Why were you doing that?
A. Because I have space—spacial [sic] data managers working at GSA
[the General Services Administration], because I needed to know
how that worked as a process to answer some questions, including
questions that [Armstrong] had asked.
Id. Although Cota indicated that Armstrong had asked him questions about space
management, there is no evidence that those questions were presented in the context of a
claim of falsification of records. In particular, Armstrong has never said that she
personally told Cota about her falsification concerns before her exit interview.
Cota’s testimony that he had conducted his own research into space management
is too thin a reed to support a reasonable inference that he knew before the exit interview
that Armstrong had accused the BLM of falsifying lease data. Indeed, two days after
attending Cota’s deposition, Armstrong essentially conceded as much at her own
deposition. When asked if she had “reason to believe that prior to the termination
meeting on October 3rd with [Cota], that [Cota] knew that you had accused Barbra
10
Burns-Fink and/or Terry Baker of falsification of data,” she responded, “Prior to that day,
no.” Aplt. App., Vol. 2 at 292–93. She reached that conclusion despite having recently
heard Cota testify about his research on space management.
C. Armstrong’s Alternative Theories of Knowledge
Armstrong also presents several arguments why Arcanum can be liable even if
Cota lacked knowledge of the falsification allegations. First, she says that Arcanum can
be liable because Cota “remained deliberately ignorant of BLM’s retaliatory motive,” so
he had constructive knowledge of that motive when he terminated Armstrong. Aplt. Br.
at 38. She cites no authoritative support for this theory of liability. But even if the theory
is valid, it fails in this case for lack of evidence of deliberate ignorance. There is no
dispute that when Cota learned that the BLM wanted Armstrong removed, he called the
BLM to request an explanation but was rebuffed. All he received before terminating
Armstrong was a follow-up email stating, “Armstrong is not working out and we would
like to terminate her effective immediately.” Aplt. App., Vol. 2 at 348. Armstrong
suggests that because Arcanum’s contract with BLM provided only specified
circumstances permitting a contract employee’s removal, 5 Cota had the right to demand
an explanation and his failure to do so constituted deliberate ignorance. But Cota’s
undisputed testimony was that it was “fairly typical” for clients not to provide reasons
5
The contract states: “The Government may withdraw a previously issued approval or
assignment of Contractor personnel to this contract and direct that the individual be
removed from the contract based upon the individual not meeting Government
expectations or requirements for personal, professional, or performance standards.” Aplt.
App., Vol. 1 at 218.
11
why they wanted contract employees removed. Aplt. App., Vol. 3 at 447. And
Armstrong fails to explain what would have induced Cota to want to be ignorant of the
reason for the BLM’s action or, more strikingly, what would have motivated Cota to
make a request for information that he did not actually want.
Armstrong next argues that even if Cota himself was ignorant of Armstrong’s
falsification complaints, Arcanum is charged “under agency principles” with knowledge
because Burns-Fink (another Arcanum employee working at the BLM) knew of the
complaints and she was a “management-level employee” of Arcanum. Aplt. Br. at 39
(internal quotation marks omitted). She relies on Kramer v. Wasatch County Sheriff’s
Office, 743 F.3d 726, 755 n.19 (10th Cir. 2014). In that Title VII employment-
discrimination case we said that an employer would be charged with knowledge that an
employee had been sexually harassed by a coworker if a “management-level employee”
knew of the harassment.
Id. The alleged problem in Kramer was that the employer had
not protected the plaintiff from sexual harassment despite “knowing” of that harassment.
There was an ongoing problem at the office—sexual harassment—and the issue was in
what circumstances the employer was responsible for not dealing with the problem. That
situation is readily distinguishable from the one before us. Motive was not an issue in
Kramer. In contrast, in our case the issue is whether a decision was motivated by a desire
to retaliate for protected activity. The knowledge of someone who had no role in the
decision is irrelevant to the motive for the decision. If no one in the termination
decisionmaking process knew of the plaintiff’s protected activity, then the protected
activity could not be the cause of the termination. A fellow circuit court expressed the
12
point well in another FCA retaliation case in which the only ones with knowledge of the
protected activity were not involved in the decisionmaking:
The broad (and unprecedented) doctrine of constructive knowledge that [the
plaintiff] urges would defeat the specific statutory requirement that an
employee’s termination be ‘because of’ her protected conduct. The law is
clear that it is the decisionmakers’ knowledge that is crucial. . . .
[C]ompanies are not liable under the False Claims Act for every scrap of
information that someone in or outside the chain of responsibility might
have.
Halasa v. ITT Educ. Servs., Inc., 690 F.3d 844, 848 (7th Cir. 2012). Thus, even if we
make the questionable assumption that Burns-Fink was a management-level employee,
Armstrong’s argument must fail.
This brings us to Armstrong’s final effort to establish Arcanum’s liability despite
Cota’s lack of knowledge of protected activity. She invokes the cat’s-paw theory that we
have recognized in other discrimination contexts. “Under a cat’s-paw theory of recovery
(also known as ‘subordinate bias’ or ‘rubber stamp’ theory), an employer who acts
without discriminatory intent can be liable for a subordinate’s discriminatory animus if
the employer uncritically relies on the biased subordinate’s reports and recommendations
in deciding to take adverse employment action.” Thomas v. Berry Plastics Corp., 803
F.3d 510, 514 (10th Cir. 2015). Reviewing a claim for employment discrimination under
the Uniformed Services Employment and Reemployment Rights Act, the Supreme Court
held as follows: “[I]f a supervisor performs an act motivated by [discriminatory] animus
that is intended by the supervisor to cause an adverse employment action, and if that act
is a proximate cause of the ultimate employment action, then the employer is liable under
[the statute].” Staub v. Proctor Hosp.,
131 S. Ct. 1186, 1194 (2011) (footnote omitted).
13
(We leave for another day whether our test is more restrictive than Staub’s proximate-
cause standard.) The Court “express[ed] no view as to whether the employer would be
liable if a co-worker, rather than a supervisor, committed a discriminatory act that
influenced the ultimate employment decision.” Id. at 1194 n.4.
We quote in full Armstrong’s argument concerning why the evidence here fits the
cat’s-paw theory:
Cota’s reliance on Hamalak’s assertion that Armstrong was “not working
out” was clearly blind reliance. Hamalak, in turn, was merely a middleman
passing along the instruction of Terry Baker, who was truly calling the
shots for BLM. Just as Baker had instructed Hamalak to have Cota hire
Armstrong, so too did Baker instruct Hamalak to have Armstrong removed.
While Baker was not [an Arcanum] employee, [Arcanum] does not dispute
that Baker was a supervisor of Armstrong’s on the ground at BLM.
Additionally, the evidence would permit a jury to find that Burns-Fink—
who was [an Arcanum] employee—both precipitated and facilitated
Baker’s retaliation against Armstrong. Ample evidence in the record
supports a finding that Burns-Fink exercised supervisory authority over
Armstrong.
Aplt. Br. at 40–41 (citations omitted).
We are not persuaded. Even if Hamalak and Baker could be considered
supervisors or co-employees of Armstrong, their discriminatory intent cannot be
attributed to Arcanum. Cat’s-paw liability rests on principles of agency law. See Staub,
131 S. Ct. at 1191 (looking to general principles of agency law to determine whether the
employer can be liable based on the “discriminatory motive of one of the employer’s
agents” and “the act of another agent [who had fired the employee]”). Because Hamalak
and Baker were BLM employees and not agents of Arcanum, their discriminatory intent,
if any, cannot be considered in a cat’s-paw analysis of Arcanum’s liability.
14
What about the involvement of Burns-Fink? Armstrong acknowledges that she
(Armstrong) personally told Baker on at least two occasions that she thought the BLM
was falsifying records and that it was promptly after the final occasion that Baker
requested Armstrong’s removal from the job. Armstrong’s one-sentence argument in her
brief hardly explains how Burns-Fink influenced Baker’s request insofar as it was
motivated by Armstrong’s falsification complaints. And it is not our role to develop her
arguments for her. See United States v. Wooten, 377 F.3d 1134, 1145 (10th Cir. 2004)
(“The court will not consider . . . issues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation.” (internal quotation marks
omitted)). 6
III. CONCLUSION
We AFFIRM the judgment below.
6
In her reply brief Armstrong argues that Cota literally knew of her falsification
complaints before she was terminated, because her formal termination occurred after the
exit interview in which she told Cota of those complaints. This argument comes too late.
Not only was it never raised in district court, but it was not presented in Armstrong’s
opening brief on appeal, and she makes no request for plain-error review. We therefore
need not address the argument. See Home Loan Inv. Co. v. St. Paul Mercury Ins. Co.,
827 F.3d 1256, 1268 (10th Cir. 2016) (“[T]he omission of an issue in an opening brief
generally forfeits appellate consideration of that issue.” (internal quotation marks
omitted)); Evanston Ins. Co. v. Law Offices of Michael P. Medved, P.C.,
890 F.3d 1195,
1199 (10th Cir. 2018) (if argument is forfeited by failure of party to raise it below, we
will ordinarily not consider it on appeal if the party does not request plain-error review).
15
