897 F. Supp. 2d 1058
W.D. Wash.2012Background
- Parties moved for partial summary judgment on multiple FCA and common-law claims.
- Klein sues Omeros and Demopulos under FCA et al. alleging Nura’s SBIR grant ineligible; remaining claims include successor liability and timekeeping.
- Klein seeks relief for alleged wrongful discharge in violation of public policy and breach of whistleblower policy promises.
- Defamation counterclaims by Demopulos center on Klein’s Yahoo! Posts, including a URL linking to the complaint and a biotech article, plus statements about tax evasion and CEO pay.
- Court addresses statute of limitations, successor liability, evidentiary issues, and the defamation and breach-of-promise theories; grants/denies motions accordingly.
- Court ultimately denies Klein’s SBIR claim as time-barred only to the extent discussed, denies summary judgment on others, and grants Klein’s defamation relief except for the biotech-article posting exception.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| tolling under § 3731(b)(2) for qui tam claims | Klein can rely on Hyatt tolling. | Omeros argues Eisenstein overruled Hyatt; tolling not available. | Statute of limitations does not bar Klein’s SBIR SBIR eligibility claim. |
| whether federal common law governs successor liability under FCA | Federal common law applies with traditional exceptions. | State law or broader labor-law exceptions could apply; needs ruling. | Court declines to adopt the broadened labor-law exception; four traditional exceptions apply; motion denied for summary judgment on this claim. |
| admissibility of hearsay concerning timekeeping claim | Sunset Bay/agency-principal exception renders Bergmann statement admissible. | Statement lacks proper agent/employee scope. | Admissible under 801(d)(2)(D); summary judgment denied for timekeeping claim. |
| wrongful discharge under public policy | Reports to audit committee implicated broader public policies (1933 Act, WSSA) beyond FCA. | Public policies not clearly evidenced; FCA suffices. | Genuine issues of material fact; wrongful-discharge claimDENIED. |
| defamation counterclaims viability (posting URL and biotech article) | Posting URL is not republication; statements are opinions; some statements true. | Some statements defamatory; need malice and falsity; privilege issues. | URL posting not republication; some statements treated as opinions; other claims insufficient; favorable for Klein except biotech-article posting which is denied as to defamation. |
Key Cases Cited
- United States ex rel. Hyatt v. Northrop Corp., 91 F.3d 1211 (9th Cir.1996) (tolling provision applicable to qui tam plaintiffs)
- United States v. Eisenstein, 556 U.S. 928 (Supreme Court 2009) (United States not a party to intervene; Rule implications for FCA actions)
- Atchison, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358 (9th Cir.1997) (four traditional exceptions to successor non-liability adequate for FCA context)
- New York v. Nat’l Servs. Indus., Inc., 352 F.3d 682 (2d Cir.2003) (substantive choice of law in federal common-law contexts; labor-law distinctions avoided)
- Cambridge Townhomes, LLC v. Pac. Star Roofing, Inc., 209 P.3d 863 (Wash. 2009) (state-law approach to successor liability in Washington context)
- G-K-G, Inc. v. EEOC, 39 F.3d 740 (7th Cir.1994) (federal common-law approach to employee protective doctrines)
- Hubbard v. Spokane County, 50 P.3d 602 (Wash. 2002) (public-policy elements in wrongful discharge claims under Washington law)
- Bestfoods, 524 U.S. 51 (Supreme Court 1998) (corporate veil and liability principles under federal law)
- City of Los Angeles v. San Pedro Boat Works, 635 F.3d 440 (9th Cir.2011) (public-policy considerations in Washington/Federal interplay)
- Mohr v. Grant, 108 P.3d 768 (Wash. 2005) (defamation by omission—falsy impressions and required falsity analysis)