United States of America ex rel. Hassan Foreman v. AECOM
454 F.Supp.3d 254
S.D.N.Y.2020Background
- AECOM held a cost-plus-fixed-fee Maintenance & Operational Support (MOSC) contract with the U.S. Army for Afghanistan (begun 2010), receiving roughly $1.9 billion to date.
- Relator Hassan Foreman, an AECOM finance employee (supervisor), alleged five categories of misconduct: improper labor billing/timesheets; artificially inflated man-hour utilization (MHU) reporting; poor purchase/return/accounting of government property (including "parts-only" work orders and duplicate purchases); a noncompetitive payroll vendor switch to Bluefish; and travel-policy violations.
- Foreman filed a qui tam FCA suit; the United States declined to intervene. AECOM moved to dismiss the Third Amended Complaint.
- Key factual allegations: routine pre-signed/incorrect timesheets, MHU reported below the 85% contract requirement but reported via nonstandard reports, failures to account for/return excess or recoverable parts, and a related payroll-provider change tied to AECOM management. Foreman alleges he was terminated after reporting some issues.
- The court evaluated public-disclosure, materiality, specificity, and retaliation theories and granted defendants' motion to dismiss the TAC, with leave to seek permission to file another amended complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public-disclosure bar | Foreman alleged original-source status and that government documents cited were not public disclosures outside government. | Defendants argued the DCAA/DCMA/Army audits and DOD IG reports publicly disclosed the same allegations, invoking the bar. | Court: Cannot resolve public-disclosure bar at dismissal; only DOD IG report was clearly public and it did not disclose the TAC's material allegations; other documents appear internal/confidential. |
| Materiality of false certifications (labor, MHU, property) | False certifications about compliance were material because the contract required compliance and government guidance emphasized these requirements. | Defendants: Government knew of violations yet continued to pay and extend the contract; continued payment shows non-materiality. | Court: Dismissed FCA claims for labor/MHU/property—government's knowledge and continued payment/extensions show lack of materiality. |
| Bluefish subcontract (competitive selection) | Foreman alleged the Bluefish award was a crony, noncompetitive subcontract and that management concealed the prior relationship. | Defendants: Selection was justified (Wells Fargo closed product) and plaintiff pled only conclusory facts; no specifics showing noncompetitive award. | Court: Dismissed claim—complaint failed to plead how Bluefish was noncompetitive or particulars of fraud under Rule 9(b). |
| Conversion / reverse-false-claim & retaliation | Foreman alleged failure to return excess property/overpayments (conversion & reverse FCA) and termination in retaliation for reporting violations. | Defendants: Complaints lack identification of specific property/obligation and lack facts that AECOM knew of protected activity or that reported matters exposed fraud. | Court: Conversion and reverse-false-claim dismissed for failure to identify specific property/obligation. Retaliation dismissed—travel reports were not FCA-protected and Foreman did not plausibly allege AECOM knew of his IG complaint. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes pleading-pleading plausibility standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (applies plausibility standard to complaints)
- Universal Health Servs., Inc. v. United States, 136 S. Ct. 1989 (materiality standard for implied false-certification FCA claims)
- United States ex rel. Doe v. John Doe Corp., 960 F.2d 318 (2d Cir.) (public disclosure can occur when government investigators reveal fraud to "innocent" employees)
- United States ex rel. Rost v. Pfizer, Inc., 507 F.3d 720 (1st Cir.) (1986 FCA amendments refocus bar on public disclosures)
- United States ex rel. McBride v. Halliburton Co., 848 F.3d 1027 (D.C. Cir.) (government payment/award-fee despite knowledge can show non-materiality)
- United States ex rel. Kolchinsky v. Moody's Corp., 238 F. Supp. 3d 550 (S.D.N.Y.) (continued government payment can negate materiality)