SCOTT v. PACIFIC ARCHITECTS AND ENGINEERS (PAE), INC., 1:13-cv-01844

Background

Relators Patricia Scott and John L. Tudbury worked for PAE in Lebanon on INL-funded civilian police training contracts and allege that PAE routinely billed the U.S. Government for hours not actually worked from ~Dec 2007–Dec 2011.
Alleged schemes included falsified GSA-139 timesheets, labeling nonwork (e.g., sightseeing, mall visits, gym) as "team building," marking absent employees as "available," and billing for trainings that did not occur; managers Thomas Barnes and Dan Moritz are identified as endorsing "creative billing."
Additional allegations: early submission/ fabrication of timesheets, improper use of government-funded drivers, hiring underqualified personnel, and steering employees to purchase expensive airfare for kickbacks.
Both relators allege retaliation: they were terminated (or left) after raising concerns; Scott claims her termination was driven by PAE despite a stated DoS position elimination; Tudbury’s departure facts are inconsistent.
PAE moved to dismiss under Rules 9(b) and 12(b)(6); the court considered the second amended complaint and the relators’ material disclosure statements.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Relators pleaded a viable FCA presentment claim (31 U.S.C. § 3729(a)(1)(A))	PAE submitted false invoices claiming hours not worked using fabricated timesheets and managerial direction to bill nonwork.	Allegations are too generalized and fail to meet Rule 9(b) particularity requirements.	Denied — court finds allegations sufficiently particular (who, what, when, where, how) to state a plausible presentment claim.
Whether Relators pleaded a viable false statements/records claim (31 U.S.C. § 3729(a)(1)(B))	Timesheets and records were false and material to government reimbursement.	Overlaps with presentment; insufficient specificity.	Denied — court finds complementary § 3729(a)(1)(B) claim pleaded with adequate particularity.
Whether Relators stated a "reverse" false claim (31 U.S.C. § 3729(a)(1)(G))	PAE invoiced for medical exam expenses but failed to reimburse employees, thereby avoiding an obligation to return funds to the government.	Theory improperly converts every presentment claim into a reverse claim; allegations do not show an independent obligation to repay.	Granted — § 3729(a)(1)(G) claim dismissed without prejudice as inadequately pleaded/ redundant.
Whether relators stated FCA retaliation claims (31 U.S.C. § 3730(h))	Both relators engaged in protected activity by investigating and reporting billing fraud and suffered adverse actions.	Scott’s complaints fall within her job duties; her termination was caused by DoS; Tudbury left voluntarily, so no actionable retaliation.	Mixed — Scott’s retaliation claim survives (sufficient notice and causation alleged); Tudbury’s claim dismissed without prejudice (contradictory facts and insufficient details).

Key Cases Cited

Ashcroft v. Iqbal, 556 U.S. 662 (complaint must plead factual content showing plausible liability)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
United States ex rel. Heath v. AT&T, Inc., 791 F.3d 112 (Rule 9(b) purpose and flexible application)
United States ex rel. Williams v. Martin-Baker Aircraft Co., Ltd., 389 F.3d 1251 (Rule 9(b) scope in FCA cases)
United States v. Sci. Applications Int'l Corp., 626 F.3d 1257 (what makes a claim false under FCA)
United States ex rel. Morsell v. Symantec Corp., 130 F. Supp. 3d 106 (9(b) particulars and false statements element)
United States ex rel. Totten v. Bombardier Corp., 286 F.3d 542 (false statements provision purpose)
Shekoyan v. Sibley Int'l, 409 F.3d 414 (elements of FCA retaliation claim)
United States ex rel. Yesudian v. Howard Univ., 153 F.3d 731 (limits on protected activity for FCA retaliation)