United States Ex Rel. Simoneaux v. E.I. Dupont De Nemours & Co.
843 F.3d 1033
| 5th Cir. | 2016Background
- Relator Jeffrey Simoneaux filed a qui tam suit under the False Claims Act (FCA) against his former employer, E.I. duPont, alleging (1) a reverse‑false‑claims violation for failing to report sulfur dioxide/ trioxide leaks under TSCA §8(e) and thereby avoiding a penalty, and (2) unlawful retaliation under 31 U.S.C. § 3730(h).
- The EPA had not assessed any civil penalty against duPont and had initiated no proceedings to assess one.
- DuPont moved for summary judgment arguing unassessed regulatory penalties are not an “obligation” under the reverse‑FCA provision; the district court denied summary judgment, relying on its reading of FERA’s amended definition of “obligation.”
- After trial and a Rule 60(b)(3) order for a new trial, the district court certified the denial of summary judgment for interlocutory appeal under 28 U.S.C. § 1292(b); the Fifth Circuit granted leave to appeal.
- The Fifth Circuit considered whether (a) FERA altered prior circuit precedent (Bain and Marcy) so that unassessed statutory penalties constitute an “obligation” under 31 U.S.C. § 3729(a)(1)(G), and (b) it could review duPont’s separate argument that Simoneaux failed to engage in protected activity for retaliation purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an unassessed statutory regulatory penalty is an “obligation” under the reverse‑FCA after FERA | Simoneaux: FERA’s definition of “obligation” ("whether or not fixed") includes contingent/unassessed penalties | duPont: FERA’s use of “established” means duty to pay must exist (not merely potential); Bain/Marcy remain good law | Reversed denial of summary judgment: unassessed regulatory penalties are not an “established” obligation under the FCA; Bain/Marcy control |
| Whether TSCA §2615(a)(1) creates a mandatory duty to pay such that obligation exists at the statutory level | Simoneaux: TSCA’s “shall be liable” language establishes a duty to pay immediately upon violation | duPont: TSCA grants EPA discretion (remit/compromise/consider factors), so penalties are contingent | Held: TSCA penalties are discretionary/contingent; ‘‘shall be liable’’ does not create an established duty to pay before assessment |
| Whether FERA’s amendment to “obligation” abrogated case law holding contingent penalties are not obligations | Simoneaux: FERA clarified ‘‘whether or not fixed’’ to include contingent obligations | duPont & U.S. (amicus): Congress left ‘‘established’’ duty requirement; FERA did not authorize treating unassessed penalties as obligations | Held: FERA did not eliminate the established‑duty requirement; legislative history and post‑FERA caselaw support limiting scope to established duties |
| Whether this Court may consider on interlocutory appeal duPont’s argument that retaliation claim fails because there is no viable underlying FCA claim | duPont (on appeal): retaliation fails because underlying FCA claim is nonviable | Simoneaux: duPont did not raise that theory in district court; issue not fairly included in certified order | Held: Dismissed appeal for lack of appellate jurisdiction on retaliation issue because the nonviability theory was not fairly included in the certified order |
Key Cases Cited
- United States ex rel. Bain v. Georgia Gulf Corp., 386 F.3d 648 (5th Cir.) (unassessed regulatory penalties are not obligations under the reverse‑FCA)
- United States ex rel. Marcy v. Rowan Cos., 520 F.3d 384 (5th Cir.) (Bain controls; government must choose whether to impose penalty)
- In re Deepwater Horizon, 753 F.3d 570 (5th Cir.) (statutory penalty language may be ‘‘mandatory’’ only after violation is established; distinguishable statutory schemes)
- United States v. Q Int’l Courier, Inc., 131 F.3d 770 (8th Cir.) (duty must be fixed and immediately due under earlier interpretation)
- United States ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189 (10th Cir.) (obligation need not be fixed in some contexts; contrasts in authority addressed by FERA)
- United States v. Bourseau, 531 F.3d 1159 (9th Cir.) (pre‑FERA authority on scope of ‘‘obligation’’)
- United States ex rel. Customs Fraud Investigations, LLC v. Victaulic Co., 839 F.3d 242 (3d Cir.) (distinguishes duties that are statutorily imposed, e.g., customs duties, which can create FCA liability)