402 F.Supp.3d 162
D. Md.2019Background
- GLS (Global Linguist Solutions) held large government contracts (Contract 1 and 2) to supply linguists to U.S. military/intelligence in the Middle East; Relators are 29 former GLS linguists who allege they were placed on sham subcontractor payrolls and mistreated in Kuwait.
- Relators allege two primary schemes: (1) subcontractor fraud — GLS used Small Business Defendants as fronts to meet small‑business subcontracting requirements while GLS performed the work; and (2) visa/documentation/Alshora scheme — GLS used a Kuwaiti firm (Alshora) to obtain/responsibilize visas and then engaged in conduct (passport confiscation, coerced confessions, visa cancellations) that trapped linguists in Kuwait and exposed them to criminal charges.
- Relators filed a qui tam False Claims Act (FCA) suit (Counts I–III) and a standalone TVPRA claim (Count IV); the United States declined to intervene. Seven defendants moved to dismiss on jurisdictional, pleading, public‑disclosure, extraterritoriality, and statute‑of‑limitations grounds.
- The court exercised nationwide (FCA) personal jurisdiction over TigerSwan and Shee Atika (national‑contacts test) and exercised pendent jurisdiction over the TVPRA claims because they arise from the same nucleus of operative facts.
- The court denied dismissal of most FCA claims (Counts I–II) on public‑disclosure and Rule 9(b) grounds, found Relators qualify as "original sources," dismissed the reverse‑false‑claim Count III, and allowed certain TVPRA claims to proceed while dismissing TVPRA claims against some defendants for lack of requisite knowledge.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over out‑of‑state Small Business Ds (TigerSwan, Shee Atika) | National contacts (FCA’s nationwide service) met; defendants had U.S. contacts and participated in contracts | Defendants lack sufficient contacts with Maryland; litigation there is unfairly burdensome | Court applies national‑contacts test under FCA, finds sufficient U.S. contacts and denies dismissal on personal jurisdiction and pendent TVPRA jurisdiction |
| Public‑disclosure bar / Original‑source exception (subcontractor fraud and TVPRA/Alshora claims) | Relators are original sources: they voluntarily provided independent, material pre‑suit information and have direct, firsthand knowledge | Defendants point to CWC hearing, media coverage, and prior lawsuits as public disclosures barring the suit | Public disclosures (CWC hearing, media, prior suits) put government on notice, but Relators’ firsthand, materially‑adding disclosures satisfy the original‑source exception; subcontracting and TVPRA‑based FCA claims survive |
| Sufficiency of FCA fraud pleading (Rule 9(b)) — who, what, when, how; presentment/materiality/scienter | Relators pleaded detailed, particularized facts (sham contracts, repeated reassignments, Houck’s testimony, ongoing submissions of claims) to satisfy 9(b) and FCA elements | Defendants argue group pleading, lack of specific false claim presentments, collective scienter, and lack of materiality | Court finds Rule 9(b) satisfied for Counts I–II (subcontracting, implied‑certification/TVPRA/NISPOM theories); plausible scienter, materiality, and presentment inferred; denies dismissal |
| Reverse false claim (31 U.S.C. § 3729(a)(1)(G)) | Relators allege defendants concealed obligations and avoided repayment | Defendants: no specific, established contractual/statutory obligation to pay back; government’s right to recoup overpayments is not an "obligation" under § 3729(b)(3) | Court dismisses Count III: relators failed to plead an "obligation" as required for a reverse‑false‑claim theory |
| TVPRA claims and extraterritoriality (passport confiscation §1592 and forced labor §1589) | Relators allege forced labor, passport confiscation, coerced confessions, and restricted movement in Kuwait; seek civil relief (including restitution) | Defendants argue §1592 does not apply extraterritorially and some defendants lack knowledge; DBA or other remedies preempt some relief | Court holds TVPRA applies extraterritorially to government contractors via 18 U.S.C. §3271; §1589 and §1592 claims survive against GLS and DynCorp (sufficient knowledge/venture allegations), but §1592/§1589 dismissed as to defendants lacking plausible knowledge; restitution not categorically barred; DBA preemption left for factual development |
| Statute of limitations | Relators invoke equitable tolling and the extended FCA window (10 years) | Defendants argue many alleged violations are time‑barred (six‑year rule) | Court declines to dismiss on statute grounds at pleading stage — equitable tolling and extended period issues present and not clearly resolved on face of complaint |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must raise claims above speculative level)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts/personal jurisdiction analysis)
- Universal Health Servs., Inc. v. U.S. ex rel. Escobar, 136 S. Ct. 1989 (2016) (implied‑certification theory and materiality under the FCA)
- RJR Nabisco, Inc. v. European Cmty., 136 S. Ct. 2090 (2016) (two‑step framework for extraterritoriality)
- U.S. ex rel. Beauchamp v. Academi Training Ctr., 816 F.3d 37 (4th Cir. 2016) (public‑disclosure bar and original‑source discussion)
- U.S. ex rel. May v. Purdue Pharma L.P., 737 F.3d 908 (4th Cir. 2013) (pre‑2010 public‑disclosure bar is jurisdictional; interpretation of "based upon")
- U.S. ex rel. Grant v. United Airlines Inc., 912 F.3d 190 (4th Cir. 2018) (presentment pleading: specific claims or pattern of conduct)
- United States v. Neifert‑White Co., 390 U.S. 228 (1968) (FCA reaches a broad range of frauds on the government)
- Muchira v. Al‑Rawaf, 850 F.3d 605 (4th Cir. 2017) (TVPRA §1589 forced‑labor analysis; threats of legal process and passport confiscation can constitute coercion)
- Roe v. Howard, 917 F.3d 229 (4th Cir. 2019) (TVPRA remedies and extraterritorial application under §3271)