United States Ex Rel. Bender v. North American Telecommunications, Inc.
750 F. Supp. 2d 1
D.D.C.2010Background
- Relator Bender sues under FCA on behalf of the United States against NATI, CTSI, PAE, and individual officers.
- NATI had a USDA maintenance contract (1997–2003); CTSI took over in 2003; PAE subcontracted electrical work.
- Amended Complaint alleges five FCA counts: I false response times for bonuses; II misrepresented repairs; III unlicensed electricians; IV improper overtime billing; V misrepresented work volume.
- U.S. elected not to intervene on September 27, 2007; this Court previously dismissed and allowed an Amended Complaint (Feb. 25, 2010).
- Amended Complaint filed April 26, 2010; Defendants NATI/CTSI/officers and PAE moved to dismiss; briefing completed by June 2010.
- Court grants PAE’s and NATI/CTSI/officers’ motions to dismiss; claims dismissed with prejudice for failure to state a claim and lack of Rule 9(b) specificity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Pleading sufficiency against PAE on I, II, IV, V? | Bender asserts PAE participated in same fraudulent scheme as NATI/CTSI. | PAE lacks specific facts tying it to false claims and dates; collective allegations insufficient. | Counts I, II, IV, V against PAE dismissed for lack of specificity. |
| Count III against PAE for unlicensed electricians pleading? | PAE employed unlicensed electricians, causing CTSI to certify compliance. | Plaintiff fails to identify false claims or which PAE employees caused claims. | Count III dismissed for failure to allege specific false claims and knowing violation. |
| Do Counts I, II, IV, V against NATI/CTSI/officers satisfy Rule 9(b)? | Plaintiff witnessed misconduct; documents unavailable; claims describe scheme. | Need time, place, and content of false claims; allegations are vague and non-specific. | Counts I, II, IV, V dismissed for lack of 9(b) specificity and knowledge requirement. |
| Do the FCA counts permit breach-of-contract style allegations without a false claim? | Alleged contract breaches could support FCA under implied certification theory. | FCA requires false claims to government; breach-of-contract-type theories insufficient. | Counts IV and V (and related theories) dismissed for failing to allege false government claims. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must be plausible, not merely possible)
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (U.S. 2009) (pleading must contain more than conclusory assertions)
- United States ex rel. Barrett v. Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28 (D.D.C. 2003) (Rule 9(b) specificity required for FCA fraud claims)
- United States ex rel. Joseph v. Cannon, 642 F.2d 1373 (D.C. Cir. 1981) (fraud allegations must state time, place, contents)
- United States ex rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251 (D.C. Cir. 2004) (identify precise false claims and involved parties)
- United States ex rel. Ervin and Assocs., Inc. v. Hamilton Sec. Group, 370 F. Supp. 2d 18 (D.D.C. 2005) (materiality and claim-presentment required for FCA)
- Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662 (U.S. 2008) (certification-based theories require critical government reliance)
- United States v. Sci. Applications Int’l Corp., 653 F. Supp. 2d 87 (D.D.C. 2009) (FERA retroactivity applies to pending claims, not cases)