REGGIE B. WALTON, United States District Judge.
The plaintiff/relator, Issa Conteh, brings this qui tam action against the defendant, IKON Office Solutions, Inc. ("IKON"), under the False Claims Act, 31 U.S.C. §§ 3729(a)(1)-(a)(3) (2006). See Amended Complaint ("Am.Compl.") ¶¶ 36-53. The plaintiff/relator alleges that IKON violated the False Claims Act by falsely reporting to the Federal Deposit Insurance Company ("FDIC") that IKON provides its employees with fringe benefits as mandated by the Service Contract Act (the "SCA"), 41 U.S.C. §§ 351-58 (2006),
The following facts are alleged by the plaintiff/relator in his amended complaint, to a large degree, based merely "on information and belief." Am. Compl. ¶¶ 11, 26, 29, 32, 34-35, 52-53.
From September 2007 to November 2010, the plaintiff/relator "was employed by IKON as a General Clerk II in furtherance of IKON's contract with the FDIC." Id. ¶ 8. On or about May 11, 2007, prior to employing the plaintiff/relator, IKON entered into a contract with the FDIC to provide "copying and other document services. . . that required payment of specific wages and benefits [to employees] under the [SCA]."
"From 2007 through 2010[, the plaintiff/relator] was employed by IKON on its FDIC Contract as a General Clerk II at IKON's Arlington, Virginia facility." Id. ¶ 22. As a General Clerk II, he was entitled to "wages at $15.32 per hour, and . . . Health & Welfare [fringe benefits] [of] $3.35 per hour or $134.00 per week or $580.66 per month." Id. ¶ 23 (first alteration in original). Prior to his employment with IKON, the plaintiff/relator was employed "on the same FDIC contract requirement for four . . . other government contractors . . . and all previous employers paid the required SCA fringe benefits." Id. ¶ 27.
Id. ¶ 29. At some unknown time, the plaintiff/relator "discussed IKON's failure/refusal to pay fringe benefits with several other [unidentified] employees at the Arlington facility. . . . [and they] stated that IKON was not paying them [the] required SCA fringe benefits [either]." Id. ¶ 33; see also id. ¶ 28. "Based on these discussions, [the plaintiff/relator] concluded that IKON was not paying any of the other twenty-one . . . employees the required SCA fringe benefits." Id. ¶ 33.
Additionally, at some unknown time, "Mr. Johnson told [the plaintiff/relator] that he [Johnson] was responsible for collecting the time information from employees for pay purposes, and that he was also responsible for preparing and submitting IKON['s] invoices to the government." Id.
Based on a less detailed version of the above factual allegations,
A Rule 12(b)(6) motion tests whether the amended complaint "state[s] a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss [under Rule 12(b)(6)], an amended complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In making this assessment, a plaintiff/relator receives the "benefit of all inferences that can be derived from the facts alleged." Am. Nat'l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C.Cir.2011) (internal quotation marks and citation omitted). But raising a "sheer possibility that a defendant has acted unlawfully" fails to satisfy the facial plausibility requirement. Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Rather, a claim is facially plausible "when the plaintiff[/relator] pleads factual content that allows the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). While the Court must "assume [the] veracity" of any "well-pleaded factual allegations" in the amended complaint, conclusory allegations "are not entitled to the assumption of truth." Id. at 679, 129 S.Ct. 1937.
The plaintiff/relator's amended complaint alleges three violations of the False Claims Act, which necessarily implicates the heightened pleading requirement of Rule 9(b). United States ex rel. Totten v. Bombardier Corp., 286 F.3d 542, 551-52 (D.C.Cir.2002) ("[T]he False Claims Act is self-evidently an anti-fraud statute, [thus,] complaints brought under it must comply with Rule 9(b)."). Rule 9(b), among several other purposes, "safeguard[s] potential defendants from frivolous accusations of moral turpitude." United States ex rel. Head v. Kane Co., 798 F.Supp.2d 186, 193 (D.D.C.2011); see Shields v. Wash. Bancorporation, 90-CV-1101(RCL), 1992 WL 88004, at *4 (D.D.C. Apr. 7, 1992) ("The purposes of 9(b) are threefold: to provide fair notice to the defendants of the claims against them, to prevent attacks on defendants' reputations when the claim for fraud is unsubstantiated, and to prevent plaintiffs from bringing . . . suits purely for their settlement value."). IKON argues that the amended complaint yet again fails to satisfy the particularity requirements of Rule 9(b) because it fails to identify: (1) "a single false claim or statement"; (2) "a . . . date and location" for when the plaintiff/relator allegedly told his supervisor of IKON's violation of the Act; (3) a "link to [IKON's employees] billing process"; (4) when IKON "caused to be submitted, or facilitated the submission of false and fraudulent documents" beyond the vague timeframe of "several years"; and (5) any "factual allegations concerning the alleged conspiracy other than that it is between IKON and unnamed employees." Mem. at 2-3, 9, 12, 14. In response, the plaintiff/relator argues that the allegations in his amended complaint are sufficient because he has "alleged that the relevant documents are within the control of [IKON]," Opp'n at 8, (citing Am. Compl. ¶¶ 17, 34), and therefore he has sufficiently satisfied the requirements of Rule 9 because, as drafted, his "allegations are sufficient to put [IKON] on notice of its alleged fraud," id. However, even construing all of the facts alleged in the amended complaint as true, including the facts the plaintiff/relator
It is not the alleged underlying violation of the SCA that implicates the False Claims Act, but rather IKON's purported: (1) knowing presentment of false or fraudulent claims reporting compliance with the SCA for payment or approval by the FDIC and other unknown agencies, 31 U.S.C. § 3729(a)(1) (emphasis added); and (2) making, using, or causing to be made or used, false records or statements showing its compliance with the SCA to get false or fraudulent claims paid or approved by the FDIC and other unknown agencies, id. § 3729(a)(2) (emphasis added). However, the plaintiff/relator's claims can survive the motion to dismiss only if he plausibly pleads that IKON violated the SCA by failing to provided its employees with the fringe benefits mandated by the SCA. See Head, 798 F.Supp.2d at 195 ("It is axiomatic that a plaintiff[/relator] bringing an action for fraud under the [False Claims Act] must, first and foremost, allege that an actual `false claim' was presented to the [g]overnment." (citing U.S. ex rel. Totten v. Bombardier Corp., 286 F.3d 542, 551 (D.C.Cir.2002))).
Pursuant to the SCA, private contractors must: "(1) pay a `prevailing wage' to employees who work on federal contracts; (2) contribute a certain amount to pay fringe benefits for covered employees (`health and welfare'); (3) provide covered employees a minimum number of paid holidays and vacation days; and (4) notify employees of their rights under the statute." 41 U.S.C. §§ 351(a)(1)-(4);
For the reasons discussed below, the Court agrees that the plaintiff/relator has failed to adequately plead, based on "information and belief" or otherwise, a violation of the SCA, and thus, has failed to adequately plead a violation of the False Claims Act.
Here, the plaintiff/relator's amended complaint is largely devoid of any factual support, and instead, he asserts he must plead the necessary facts to demonstrate IKON's SCA violation—"the name of each employee[,] the correct work classification, wage rate and fringe benefits provided, and [the] number of daily and weekly hours worked by each employee subject to the SCA, [("paystubs")
The plaintiff/relator's assertion that he must plead the facts specific to his underlying violation of the SCA because he lacks access to the "paystubs . . . [since] they are solely within [IKON's] possession and control," Opp'n at 7; see also Am. Compl. ¶¶ 17, 34, is disingenuous given that he has attached his own paystubs—some of the very documents he claims are available only to the defendant, see Am. Compl., Ex. 4 ("IKON Paystubs"). The plaintiff/relator simply cannot credibly assert, as he has in his amended complaint the claim, that the paystubs are solely within the possession and control of IKON as pretext for his necessity to plead his case based on "information and belief," while also attaching several of them to the very same amended complaint. And while perhaps the plaintiff/relator does not have immediate access to the paystubs of the twenty-one other IKON employees whom he also alleges "IKON was not paying . . . the required SCA fringe benefits,"
In addition to the plaintiff/relator's failures to adequately plead lack of access to necessary documents "that would show whether the required benefits were paid," Am. Compl. ¶ 17, his amended complaint also fails because his allegations are directly contradicted by his own exhibits. As pleaded, the plaintiff/relator alleges that during the relevant time period, the Department of Labor's Wage Determination "set forth the [General Clerk II] employees' wages at $ 15.32 per hour . . .,"
Although at this stage of the proceedings the Court must generally assume the truth of the plaintiff/relator's allegations that IKON was not providing its employees with fringe benefits in violation of the SCA, it "need not `accept as true the complaint's factual allegations insofar as they contradict exhibits to the complaint'. . . ." Klay v. Panette, 758 F.3d 369, 377 (D.C.Cir.2014) (citation omitted). Therefore, because the plaintiff/relator's SCA allegations as pleaded are contradicted by his own exhibits, IKON's motion to dismiss both Counts One
Although the Court has already concluded that the plaintiff/relator has failed to adequately plead that IKON violated the SCA and thus failed to plead a violation of the False Claims Act, it will nonetheless address the plaintiff/relator's third claim, which alleges also a violation of 31 U.S.C. § 3729(a)(3). This provision provides that "[a]ny person who conspires to defraud the Government by getting a false or fraudulent claim allowed or paid. . . is liable to the United States Government for a civil penalty. . . ." 31 U.S.C. § 3729(a)(3). To succeed on this claim, a plaintiff/relator
U.S. ex rel. Westrick v. Second Chance Body Armor, Inc., 685 F.Supp.2d 129, 140 (D.D.C.2010). Thus, at the motion to dismiss stage of a case, a plaintiff/relator must "identify any agreement between the parties to defraud the government." Id. at 141 (citing United States ex rel. El Amin v. George Wash. Univ., 26 F.Supp.2d 162, 165 (D.D.C.1998)). A claim fails under Rule 9(b) when there are no specific allegations of an agreement or the commission of an overt act. Id. (citing Corsello v. Lincare, Inc., 428 F.3d 1008, 1013 (11th Cir.2005)). Here, the plaintiff/relator alleges, based on only information and belief, that IKON "knowingly made[,] or caused to be made[,] false statements to the FDIC certifying[,] or causing others to certify[,] that IKON [] was in compliance with the SCA . . . when . . . IKON knowingly and willfully failed to comply with the SCA. . . ." Am. Compl. ¶ 52. The plaintiff/relator further alleges that IKON's "[o]fficers and employees individually and collectively agreed . . . to present . . . false or fraudulent statements, billing invoices and records to the FDIC and potentially other agencies." Id. ¶ 53 (emphasis added).
The plaintiff/relator's allegations of conspiracy, based on nothing other than conclusory assertions, fail to plead specific factual information regarding the alleged conspiracy. Instead, the plaintiff/relator states in mere conclusory terms that employees "individually and collectively agreed" to submit fraudulent documents. Am. Compl. ¶ 53. However, the plaintiff/relator provides no information as to how he arrived at the conclusion that the employees collectively agreed to engage in any unlawful conduct, and whether this
For the reasons set forth above, the Court concludes that the plaintiff/relator has again failed to adequately plead his claims of fraud with the degree if particularity required by the Federal Rule of Civil Procedure 9(b). Accordingly, IKON's motion to dismiss will be granted and its motion for a hearing will be denied as unnecessary.