She Leaves No Stone Unturned: What FCA Litigants Can Expect From Justice-designate Ketanji Brown Jackson
Last Thursday, Judge Ketanji Brown Jackson was confirmed to serve as the Supreme Court’s newest justice. Given her prestigious career as a litigator and a federal jurist, there is no shortage of material to scrutinize, but what does her judicial record envisage for FCA litigants? We have only a small sample on which to draw any conclusions, but the length and detail of the two FCA opinions she authored as a district judge suggests that she is certainly familiar with the statute and is likely to approach any FCA case with the same calm, measured approach with which she responded to the barrage of questioning during her intense confirmation hearings. Indeed, this was demonstrated by her response to Senator Chuck Grassley’s line of FCA questioning on day two of her confirmation hearings, as Qui Notes previously discussed. Here we take a brief look at her two FCA opinions.
U.S. ex rel. Tran v. Comp. Sci. Corp., 53 F.Supp.3d 104 (D.D.C. 2014).
In Tran, the relator brought an action against three corporate defendants, alleging that they violated the FCA in connection with a contract to perform IT work for the US Citizenship and Immigration Service, a constituent service of DHS. Relator alleged that the defendants—a prime contractor and its two non-small-business subcontractors—conspired to circumvent DHS small business subcontracting requirements via a pass-through scheme, and then submitted false claims under the same contract. The defendants’ primary defense was that there was nothing inherently illegal about the pass-through arrangement, and the arrangement was lawful under specific regulations. Judge Jackson rejected this contention, reasoning that the regulations on which defendants relied were not applicable to the alleged conduct.
Judge Jackson went on to analyze each claim against each of the three defendants and permitted the FCA claims to go forward against the prime contractor and one subcontractor, finding that relator met its pleading burden with respect to those two defendants. In contrast, she found that relator failed to allege sufficient facts to establish the second subcontractor’s awareness of the alleged scheme, falling short of the pleading requirements of Rule 12(b)(6) and 9(b). She also struck the relator’s retaliation claims because he had failed to plead that he engaged in conduct that qualified as protected activity, nor did he allege facts to establish the requisition causal connection between his conduct and his termination. Notably, a few months later, Judge Jackson dismissed the case with prejudice—at the relator and remaining defendants’ request, and with DOJ’s blessing.
Pencheng Si v. Laogai Research Found., 71 F.Supp.3d 73 (D.D.C. 2014).
In Si, a former employee filed a qui tam action against two non-profits and their executive director, alleging that defendants made misrepresentations on federal grant applications to secure funding, submitted false claims and reverse false claims, and then fired the relator when he raised the alarm about the improper conduct.
Judge Jackson dismissed the relator’s first complaint for failing to meet Rule 8 and Rule 9(b) because he incorporated by reference all sixty-three paragraphs of factual background into each claim, making it impossible for her to ascertain which allegations pertained to which count. After getting a second bite at the apple with an amended complaint, Judge Jackson acknowledged that the relator’s new pleading featured ample specific examples of alleged wrongful conduct, but found that relator’s claims still failed to meet both Rule 12(b)(6) and 9(b) because with just one exception, relator had provided a “deluge of irrelevant examples of supposed misconduct” that did not in any way relate to claims made to the government for payment. As to the one exception, Judge Jackson explained that it did not pass muster because the relevant allegations were devoid of “facts from which this Court could infer that the [government] would not have awarded Corporate Defendants funding had they known [of the alleged misrepresentations].” Judge Jackson went on to find that the relator had stated a viable FCA retaliation claim by pleading he had engaged in protected activity and a causal connection between that activity and his termination.
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In both cases, Judge Jackson primarily applied long settled FCA law to the allegations, taking a balanced approach and (unsurprisingly) giving no indication of any bias towards relators or corporate defendants. She did not need to dive into the FCA’s thorny legal issues such as those that courts have grappled with since the Escobar opinion in 2016, nor has she considered an FCA motion for summary judgment or presided over a healthcare-related case. Nevertheless, examination of her two opinions reveals a thorough recitation of relevant allegations and consistently thoughtful application of legal standards. We fully expect that Judge Jackson, upon taking the bench, will apply the same approach in any FCA case that might reach SCOTUS, whenever that may be. Stay tuned as Qui Notes continues to report on potential FCA cases that could make their way to Court.
© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.