787 F.3d 1179
8th Cir.2015Background
- Bluebird Media applied for and received an NTIA broadband grant (2010) and later formed a joint venture with Missouri Network Alliance (MNA) to administer the grant through Bluebird Network; NTIA approved the sub-recipient arrangement and later route/institution changes.
- The grant required over $19 million in non-federal matching funds; Bluebird identified potential sources (Advantage Capital, Boone County National Bank, and a $10.5M in-kind State contribution) and ultimately met the match via the State contribution and joint-venture financing.
- Martin-owned GlenMartin was identified as a potential subcontractor and a Bluebird letter stated GlenMartin would have no management role; Bluebird’s board composition after the joint venture was five Bluebird-appointed and five MNA-appointed members.
- Martin Schell, VP of Operations, raised internal concerns about the Boone funding, the State in-kind match, rights-of-way acquisition, GlenMartin’s role, and service/redlining after MNA’s involvement; he was terminated in October 2011 with a service letter stating his position was eliminated.
- Schell filed a qui tam suit (False Claims Act) alleging (1) false statements in the grant application/inducement, (2) retaliation under 31 U.S.C. § 3730(h), and (3) a false Missouri service letter; the district court granted summary judgment for Bluebird on all claims.
- The Eighth Circuit affirmed: it lacked jurisdiction to review two earlier discovery/scheduling-order rulings (not properly appealed) and held Schell failed to raise genuine issues of material fact on the FCA false-claims, FCA-retaliation, and Missouri service-letter claims.
Issues
| Issue | Plaintiff's Argument (Schell) | Defendant's Argument (Bluebird) | Held |
|---|---|---|---|
| Jurisdiction over denial of motion to modify schedule and extension to respond | Court erred in denying those motions and that denial affected summary judgment | Schell failed to timely and properly appeal those interlocutory orders | No jurisdiction to review because notice of appeal did not identify those orders; statements filed later were untimely |
| FCA – False Claims (false statements/inducement) | Grant application contained material false statements (Boone funding, State contribution labeled in-kind despite exchange, GlenMartin’s managerial role, redirection of project) making claims actionable | Application disclosed proposed funding sources, NTIA was informed/approved joint venture and later route/institutions, State exchange was disclosed and approved; no evidence Bluebird knew statements were false when made | Summary judgment affirmed: Schell failed to present evidence that Bluebird knowingly made false statements material to NTIA’s award or payments |
| FCA – Retaliation (31 U.S.C. § 3730(h)) | Schell was terminated for complaining about alleged fraud and illegal conduct; service letter was pretext | Board lacked knowledge of protected complaints; termination decisions not shown to be motivated by protected activity | Summary judgment affirmed: no evidence decisionmakers knew of protected activity or that retaliation motivated firing |
| Missouri service-letter statute (Mo. Rev. Stat. § 290.140) | Service letter falsely stated position eliminated though actual reason was retaliatory discharge | Service letter accurately stated elimination; plaintiff offered no evidence contradicting reason | Summary judgment affirmed: plaintiff failed to show the service letter gave an untrue reason for discharge; only nominal damages possible and none warranted |
Key Cases Cited
- Rabushka ex rel. United States v. Crane Co., 122 F.3d 559 (8th Cir.) (summary-judgment standard in FCA context)
- In re Baycol Prods. Litig., 732 F.3d 869 (8th Cir.) (scope of FCA liability for false claims)
- Trustees of Elec. Salary Deferral Plan v. Wright, 688 F.3d 922 (8th Cir.) (notice-of-appeal jurisdictional requirements)
- Berdella v. Delo, 972 F.2d 204 (8th Cir.) (liberal construction of notices of appeal but must show intent)
- United States ex rel. Costner v. United States, 317 F.3d 883 (8th Cir.) (government knowledge/approval can defeat FCA liability for presentment/claims)
- Schuhardt v. Washington Univ., 390 F.3d 563 (8th Cir.) (elements and protection under FCA whistleblower provision)
- Wilkins v. St. Louis Hous. Auth., 314 F.3d 927 (8th Cir.) (standard for protected activity under FCA retaliation)
- Green v. City of St. Louis, Mo., 507 F.3d 662 (8th Cir.) (complaints about internal policy not necessarily protected FCA activity)
- Callantine v. Staff Builders, Inc., 271 F.3d 1124 (8th Cir.) (nominal damages for service-letter claims where letter issued but false)