41 F. Supp. 3d 796
N.D. Cal.2014Background
- Relators sue under federal FCA and CFCA against Kiewit Pacific Co. and Kiewit Infrastructure Group for allegedly false certifications on the Sepulveda Pass Widening Project (I-405) in Los Angeles.
- Project funded by a $189,900,000 ARRA grant and state funds via LACMTA; SSL, LLC and Sure-cast, LLC provided materials and subcontracted fabrication activities.
- MSE wall 1897 began to shift in Oct–Nov 2011; six panels detached in Nov 2011; media reports and investigations followed in 2011–2012.
- Relators allege misrepresentations in certifications, including lack of underdrains, inoperable drains, falsified QA reports, and damaged reinforcing mesh, but emphasize fraud claims rather than wall failure causes.
- Court previously granted dismissal of the First Amended Complaint for public disclosure bar and related deficiencies; Second Amended Complaint adds detailed investigation disclosures and direct information obtained by Relators.
- Court grants in part and denies in part the motion to dismiss and grants a stay, with various dismissals of non-viable claims and a scheduling conference.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public disclosure bar applicability | Relators contend information was not publicly disclosed in a manner triggering the bar. | Disclosures (media reports, investigations, public pleadings) placed government on notice of fraud. | Public disclosure bar applies; however, Relators plausibly qualify as original sources. |
| Original source requirement post-2010 amendments | Relators argue they meet both pre- and post-2010 original source definitions. | Amendments either limit or do not extend original source to relators here. | Relators plausibly satisfy both pre- and post-2010 definitions, obtaining direct and independent information. |
| Claims against Kiewit Infrastructure Group and reverse/conspiracy | SSL alleged various involvement by Kiewit Infrastructure Group and related conspiracies. | Claims lack specificity and are not properly pleaded. | Claims against Kiewit Infrastructure Group, reverse false claim, and conspiracy are dismissed. |
| Retaliation under 3730(h) against defendants | SSL seeks retaliation relief under § 3730(h) as contractor/agent. | Only individuals can pursue retaliation claims under the statute. | SSL's retaliation claim is dismissed; as to individual defendants, liability under § 3730(h) is not extended to non-employers. |
| FCA/CFCA claims against individual defendants; defamation | Relators maintain individual defendants participated in false claims and defamation. | Pleadings are too conclusory under Rule 9(b) and claims lack sufficiency. | FCA/CFCA claims against individual Defendants and defamation claim are dismissed; no leave to amend. |
Key Cases Cited
- United States ex rel. Alcan Elec. & Eng’g, Inc. v. U.S., 197 F.3d 1014 (9th Cir. 1999) (public disclosure bar analysis; sufficiency of public information to trigger bar)
- Bates v. Mortgage Elec. Registration Sys., Inc., 694 F.3d 1076 (9th Cir. 2012) (public disclosure bar and original source interpretation)
- Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994) (X+Y=Z formulation for public disclosure of transactions)
- Horizon West v. U.S. ex rel. Horizon W., Inc., 265 F.3d 1011 (9th Cir. 2001) (public disclosure test for aiding government investigations)
- U.S. ex rel. Found. Aiding The Elderly v. Horizon W., Inc., 275 F.3d 1189 (9th Cir. 2001) (public disclosures can supply basis for government pursuit of investigation)
- Wang v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992) (public disclosure analysis of prior disclosures vs. new allegations)
- U.S. ex rel. Devlin v. State of California, 84 F.3d 358 (9th Cir. 1996) (original source standard pre-amendment)
- Zuress v. Donley, 606 F.3d 1249 (9th Cir. 2010) (interpretation for original source and Legislative history relevance)