State ex rel. Standard Elevator Co. v. West Bay Builders, Inc.
130 Cal. Rptr. 3d 99
Cal. Ct. App.2011Background
- West Bay bid on Meadows Middle School public works project and listed division 5 subcontractors; last-minute bid changes substituted Standard Metal Fabrication for multiple steelwork subs, lowering the bid.
- Standard Metal Fabrication was unlicensed, lied about references, and could not secure bonds; West Bay removed Standard and substituted other subs.
- West Bay sued Standard for damages to recover costs to complete steelwork above Standard’s bid; Standard cross-claimed for improper substitutions under the Public Contract Code.
- Standard later filed a CECA (California False Claims Act) action alleging West Bay violated the Public Contract Code in substitutions and certified compliance in payment claims.
- Court granted summary judgment to West Bay, holding Standard’s CECA claim was based on publicly disclosed information and Standard was not an original source; attorney fees were awarded to West Bay for a frivolous/harassing suit.
- Judgment and fee award were affirmed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public disclosure bar applicability under CFCA | Standard contends not barred as original source | West Bay argues public disclosures in prior litigation bar CECA | Bar applies; claims barred |
| Whether CECA claim was properly dismissed as based on public disclosures | Standard’s CECA assertions differ from prior filings | Allegations substantially similar to prior disclosures | Properly granted summary judgment on public disclosure grounds |
| Attorney fees under CFCA § g(9) | Fees were improper or excessive | Claim was clearly frivolous/harassing | Fees awarded; claim clearly frivolous and harassing |
| Whether Standard was an original source of the information | Yes, directly knowledgeable | No, not original source | Standard not original source; bar remains |
| Prevailing party status for fee award | Not prevailing | West Bay prevailing under CFCA dismissal | West Bay prevailed for fee purposes |
Key Cases Cited
- Grayson v. State of California (Grayson), 142 Cal.App.4th 741 (Cal. App. 4th 2006) (public disclosure bar interpreted broadly; relator barred when allegations are substantially similar to public disclosures)
- Wohlner ex rel. Wohlner v. H&C Disposal Co., 109 Cal.App.4th 1668 (Cal. App. 2003) (public disclosure bar limits parasitic actions; similarity test)
- U.S. ex rel. Reagan v. East Texas Medical Ctr. Regional Healthcare Sys., 384 F.3d 168 (5th Cir. 2004) (civil litigation disclosures can trigger public disclosure bar)
- U.S. v. Alcan Electrical & Engineering, Inc., 197 F.3d 1014 (9th Cir. 1999) (public disclosure after allegations are publicly disclosed; not original source)
- Biddle v. Board of Trustees of Stanford Univ., 161 F.3d 533 (9th Cir. 1998) (public disclosure bar; original source requirement)
- Wells v. One2One Learning Foundation, 39 Cal.4th 1164 (Cal. 2006) (CFCA context; whistleblower incentives and public fisc protection)
- State ex rel. Harris v. PricewaterhouseCoopers, LLP, 39 Cal.4th 1220 (Cal. 2006) (FFCA/CFCA similarity guidance; interpretation of provisions)
- Grayson (above), 142 Cal.App.4th 741 (Cal. App. 2010) (See Grayson public disclosure analysis cited above)