United States Ex Rel. Garzione v. PAE Government Services, Inc.
670 F. App'x 126
4th Cir.2016Background
- Relator Anthony Garzione sued PAE Government Services under the False Claims Act (FCA), alleging PAE submitted false claims related to procurement of water bottles and retaliated by terminating his employment for protected FCA activity.
- District court granted PAE’s Rule 12(b)(6) motion to dismiss Garzione’s complaint for failure to state a claim.
- Garzione asserted liability under an implied false certification theory and alleged the required elements of an FCA claim (false statement, scienter, materiality, and government payment causation).
- The complaint also asserted an FCA retaliation (whistleblower) claim, alleging protected activity, employer knowledge, and adverse action.
- The Fourth Circuit reviewed the dismissal de novo, applying Twombly/Iqbal plausibility standards and Rule 9(b)’s heightened pleading requirements for fraud.
- The Fourth Circuit affirmed the dismissal, concluding the complaint failed to state plausible FCA claims and did not satisfy Rule 9(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PAE submitted false or misleading claims under an implied false certification theory | Garzione argued PAE omitted violations of statutory/regulatory/contractual requirements when submitting claims, making representations misleading and actionable | PAE argued the complaint did not plausibly allege a knowing violation of a requirement material to payment or meet fraud pleading standards | Court held Garzione failed to plead facts sufficient to state a plausible implied false certification FCA claim and dismissed it |
| Whether Garzione pleaded a viable FCA retaliation claim | Garzione claimed he engaged in protected activity, employer knew, and was terminated as a result | PAE maintained the complaint did not adequately allege protected activity or causation and failed Rule 9(b)/Twombly standards | Court held retaliation claim was inadequately pleaded and affirmed dismissal |
Key Cases Cited
- Kensington Volunteer Fire Dep’t v. Montgomery Cty., 684 F.3d 462 (4th Cir.) (standard of review for Rule 12(b)(6) dismissals)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908 (4th Cir.) (elements of an FCA claim)
- Universal Health Servs., Inc. v. United States, 136 S. Ct. 1989 (Supreme Court) (implied false certification theory explained)
- Smith v. Clark/Smoot/Russell, 796 F.3d 424 (4th Cir.) (Rule 9(b) and FCA retaliation pleading requirements)
- United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370 (4th Cir.) (who, what, when, where, how of fraud pleading)
- Eberhardt v. Integrated Design & Constr., Inc., 167 F.3d 861 (4th Cir.) (what constitutes notice of protected activity for FCA retaliation)