IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
February 24, 2009
MICHAEL CAMPION, PLAINTIFF
NORTHEAST UTILITIES, ET AL., DEFENDANTS
The opinion of the court was delivered by: Judge John E. Jones III
This matter is before the Court on the Motion to Dismiss (Doc. 39) of defendants Northeast Utilities ("NU"), NU Enterprises, Select Energy ("Select", and Northeast Generations Services ("NGS"), which seeks dismissal of plaintiff Michael Campion's claim under the anti-retaliation provision of the False Claims Act ("FCA") on the grounds that it is barred by the statute of limitations and that the complaint fails to state a claim upon which relief can be granted. For the reasons set forth below, the Court finds that Campion's claim is not time-barred, but that he has indeed failed to state a claim. Therefore, the motion will be granted, and this action will be dismissed.
I. STANDARD OF REVIEW
The defendants move pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss plaintiff Michael Campion's complaint as time-barred and for failure to state a claim upon which relief can be granted. In considering a motion to dismiss pursuant to Rule 12(b)(6), courts "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).
A Rule 12(b)(6) motion tests the sufficiency of the complaint against the pleading requirements of Rule 8(a). Rule 8(a)(2) requires that a complaint contain a short and plain statement of the claim showing that the pleader is entitled to relief, "in order to give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 1965. A plaintiff must make "a 'showing' rather than a blanket assertion of an entitlement to relief", and "without some factual allegation in the complaint, a claimant cannot satisfy the requirement that he or she provide not only 'fair notice,' but also the 'grounds' on which the claim rests." Phillips, 515 F.3d at 232 (citing Twombly, 127 S.Ct. at 1965 n. 3). "[A] complaint must allege facts suggestive of [the proscribed] conduct, and the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Twombly, 127 S.Ct. at 1965, 1969 n.8. Therefore, "stating a claim requires a complaint with enough factual matter (taken as true) to suggest the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 127 S.Ct. at 1965 n. 3).
On the other hand, "a complaint may not be dismissed merely because it appears unlikely that the plaintiff can prove those facts or will ultimately prevail on the merits." Id. at 231(citing Twombly, 127 S.Ct. 1964-65, 1969 n.8). Rule 8 "does not impose a probability requirement at the pleading stage, but instead simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element." Id. at 234.
Campion filed his original complaint in this action under seal on December 1, 2004, asserting qui tam and retaliation claims under the FCA. (Doc. 1.) Service of the complaint was delayed for an extended period of time to give the United States the opportunity to decide whether to intervene in the action. On December 4, 2007, the United States filed a notice of election to decline intervention. (Doc. 25.) On December 10, 2007, the Court issued an order unsealing the complaint and directing its service on the defendants. (Doc. 26.) However, on March 6, 2008, Campion filed an amended complaint which withdrew his qui tam claims and proceeds with only his retaliation claim under 31 U.S.C. § 3730(h). (Doc. 27-3.) In support of that claim, Campion alleges the following.
From 1995 to March 2004, Campion was employed by various entities as a boiler operator and eventually lead heating and cooling systems mechanic at the Tobyhanna Army Depot ("TAD") in Tobyhanna, Pennsylvania. (Compl. ¶ 5.) Relevant for purposes of the present motion, from June 2002 to March 2004, Campion was employed by defendant NGS. (Id. at ¶¶ 5, 134.) NGS is a subsidiary of defendants NU and NU Enterprises. (Id. at ¶¶ 10, 12.)
In 1999, HEC, Inc., which was later known as defendant Select, and which is also a subsidiary of NU and NU Enterprises, entered into a contract with the federal government to construct, operate, and maintain a heating system and install a lighting system at TAD. (Id. at ¶ 8.) Select later entered into contracts with the federal government to operate and maintain the cooling system at TAD and replace steam traps throughout TAD. (Id. at ¶¶ 17, 18.) At various times, Select subcontracted some of its obligations under these contracts to other entities, including to NGS from June 2002 to June 2004. (Id. at ¶¶ 9, 11.)
Campion alleges numerous false claims by NGS and other subcontractors of Select in the performance of these contracts, including the hiring of unqualified employees, unperformed work, double billing, falsified time sheets, and theft of equipment. (See id. at ¶¶ 23-132.) Campion alleges that he "complained, and tried to complain, about many of the allegations discussed above." (Id. at ¶ 135.) Campion "tried to meet" with NGS and Select supervisor Robert Gunderson; however, Gunderson informed fellow supervisor William Cannon, one of the main culprits of the alleged misconduct, of Campion's phone calls. (Id.) Cannon then "berated and mistreated" Campion because Campion "had gone over his head." (Id. at ¶ 136.) Nevertheless, Campion eventually met with Gunderson and notified him "of some of the allegations above, including but not limited to falsification of time sheets." (Id. at ¶ 138.)
Campion alleges that as a result of these complaints, he "was eventually demoted to a boiler operator with no management authority." (Id. at ¶ 139.) Campion also alleges that as a result of these complaints, Gunderson stated publicly that Campion "either had a drug or alcohol problem, or suffered from a learning disability", and that he "was physically assaulted at TAD by NGS employee Chuck Hazelton." (Id. at ¶¶ 140-41.)
Campion states that as a result of the assault and demotion, he hired an attorney who "reported improprieties at TAD to NU" and requested an investigation into Campion's treatment by Cannon, NGS, and Select. (Id. at ¶¶ 142-43.) NU reported that it was investigating the matter, but never told Campion or his attorney the results of the investigation. (Id. at ¶ 144.) Campion states that shortly thereafter, he "was accused of removing a generator from the work site" even though he had previously been authorized to remove it for his personal use and even though it was common practice at TAD to permit employees to remove equipment for personal use. (Id. at ¶ 145.) Campion further states that, during leave under the Family Medical Leave Act to care for his sick wife, he was terminated, the only reason given being "just cause." (Id. at ¶ 146.) Campion alleges that the true reason for his termination was "his actions in revealing the frauds that were occurring at TAD." (Id. at ¶ 147.) The sole count of Campion's complaint asserts that the discrimination, demotion, and eventual termination he sustained violated the anti-retaliation provision of the FCA, 31 U.S.C. § 3730(h).
The defendants move to dismiss Campion's complaint on the grounds that his claim is time-barred and that he has failed to state a claim upon which relief can be granted. Both grounds are discussed in turn below.
A. Statue of Limitations
The defendants first argue that Campion's complaint must be dismissed as time-barred. Campion's sole claim is asserted under the anti-retaliation provision of the FCA, 31 U.S.C. § 3730(h). In Graham County Soil and Water Conservation District v. Wilson, 545 U.S. 409, 422 (2005), the Supreme Court held that the FCA does not provide an express statute of limitations for a retaliation claims under § 3730(h), and therefore, courts must "borrow" the most closely analogous state limitations period.*fn1 The question thus becomes what is the most closely analogous Pennsylvania statute of limitations.
The defendants argue that the most closely analogous state statute of limitations is that found in Pennsylvania's Whistleblower Law, which provides that "[a] person who alleges a violation of this act may bring a civil action ... within 180 days after the occurrence of the alleged violation." 43 Pa. C.S. § 1424(a). Despite the use of the permissive "may," the Whistleblower Law's "180-day time limit is mandatory, and courts have no discretion to extend it." O'Rourke v. Pa. Dep't of Corr., 730 A.2d 1039, 1042 (Pa. Commw. Ct. 1999) (citing Perry v. Tioga County, 649 A.2d 186, 188 (Pa. Commw. Ct. 1994), appeal denied, 655 A.2d 995 (Pa. 1995)). Campion was terminated in March 2004, and therefore, if the Whistleblower Law's limitations period applies, his complaint must have been filed, at the latest, by September 27, 2004, to be timely. Campion did not file his complaint in this action until December 1, 2004, and therefore, if the 180-day limitations period applies, his complaint is untimely.
Campion argues that the Whistleblower Law does not provide the most closely analogous state statute of limitations, but rather that the statute of limitations for wrongful discharge actions should be applied. Under Pennsylvania law, an action for wrongful discharge is subject to the two-year personal injury "catchall" statute of limitations in 42 Pa. C.S.A. § 5524(7). See Gates v. Servicemaster Comm. Serv., 631 A.2d 677, 679 (Pa. Super. Ct. 1993); Anderson v. Consol. Rail Corp., 297 F.3d 242, 251 (3d Cir. 2002) (citing Raleigh v. Westinghouse Elec. Corp., 550 A.2d 1013, 1014 (1988), appeal denied, 563 A.2d 499 (Pa. 1989)). If the two-year personal injury catchall statute of limitations applies, Campion's complaint, which was filed approximately 240 days after his termination, is timely.
In Graham County, the Supreme Court provided a list of "likely analogous" statutes of limitations for each state, with the caveat, however, that "these are only the likely candidates for analogous state statutes of limitations; it may well not be an exhaustive or authoritative list of the possibilities." 545 U.S. 419 n.3; see also id. at 422 (stating "[t]he appropriate state statute of limitations to borrow ... is not within the scope of the question we granted certiorari to decide"). Courts have not felt constrained by this list of suggested analogous limitations periods and have found unlisted state statutes of limitations to be the most analogous to a § 3730(h) claim in a particular case. See, e.g., United States ex rel. Nichols v. Omni H.C., Inc., C.A. No. 4:02-CV-66, 2008 WL 906426, at *2 (M.D. Ga. Mar. 31, 2008); Rutz v. Village of River Forest, C.A. No. 03-C-1907, 2007 WL 3231439, at *4 (N.D. Ill. Oct. 25, 2007); Lehoux v. Pratt & Whitney, C.A. No. 05-210-P-S, 2006 WL 346399 (D. Me. Feb. 8, 2006). Even if the Graham County list of state statutes of limitations were controlling, it would not answer the question in this case. As the "likely analogous" Pennsylvania statute of limitations, the Court in Graham County listed both the two-year tort catchall limitations period of § 5524(7) and the 180-day limitations period of the Whistleblower Law. 545 U.S. 419 n.3. The parties' arguments in this case rest on both horns of this dilemma.
With no clear answer provided by controlling precedent, the Court must determine the appropriate statute of limitations to borrow. The Supreme Court has established a formula for making this determination. See Haggerty v. USAir, Inc., 952 F.2d 781, 784-85 (3d Cir. 1992); In re Data Access Sys. Sec. Litig., 843 F.2d 1537, 1542 (3d Cir. 1988). The first step is to "determine whether all claims arising out of the federal statute should be characterized in the same way, or whether they should be evaluated differently depending upon the varying factual circumstances and legal theories presented in each individual case."*fn2 Data Access Sys., 843 F.2d at 1542 (citing Agency Holding Corp. v. Malley-Duff & Assoc., Inc., 483 U.S. 143, 147 (1987); Wilson v. Garcia, 471 U.S. 261, 268 (1985)). "Once this characterization is made, the next inquiry is whether a federal or state statute of limitations should be used." Id. Finally, the court "must characterize the essence of the claim in the pending case" and decide which statute provides the appropriate limiting principle. Malley-Duff, 792 F.3d at 345 (quoting Wilson, 471 U.S. at 268).
As to the first step, characterization of the claim "entails an analysis of whether claims under a statute are enough alike so that a uniform statute of limitations should be applied to all of them, at least on a state-by-state basis." Haggerty, 952 F.2d at 784. Thus, if claims under the federal statute at issue are sufficiently similar, a court should "look to the federally-created cause of action for a broader analogy that could encompass all claims brought thereunder." Malley-Duff, 792 F.3d at 346-47. For example, in Haggerty, the Third Circuit held that all claims under the Employee Protection Program of the Airline Deregulation Act of 1978 must be subject to a uniformly borrowed statute of limitations because they "all arise out of a similar factual matrix" involving the same groups of potential plaintiffs and defendants. 952 F.2d at 785-86. On the other hand, if claims under the federal statute at issue are varied, a court should "pars[e] the particular factual allegations and legal theories supporting an individual federal claim" to determine the appropriate limitations period. Malley-Duff, 792 F.3d at 346-47. For example, in Gluck v. Unisys Corp., 960 F.2d 1168, 1180-81 (3d Cir. 1992), the Third Circuit held that three different Pennsylvania statutes of limitations applied to the plaintiffs' factually and legally distinct ERISA claims for past due benefits; bargained-for, but not yet due benefits; and benefits that fit into neither category. Where claims under the federal statute at issue are too varied, however, a prophylactic uniform characterization of the statute may be necessary "to avoid intolerable 'uncertainty and time-consuming litigation'", which results when almost every claim under a statute can be favorably analogized to more than one cause of action and potential litigants can never know with confidence what the applicable statute of limitations will be. Agency Holding, 483 U.S. at 150 (quoting Wilson, 471 U.S. at 272). For example, in Wilson, the Supreme Court held that because claims under the civil rights statute 42 U.S.C. § 1983 "encompass numerous and diverse topics and subtopics" and given the unique and broad nature of the remedy created by § 1983, "federal interests in uniformity, certainty, and the minimization of unnecessary litigation" supported the conclusion that all § 1983 claims should be characterized as involving claims for personal injury, and a state's personal injury statute of limitations should be applied to all § 1983 claims regardless of the specific factual allegations or legal theories in a case. 471 U.S. at 271-75.
The statute at issue here, 18 U.S.C. § 3730(h), created "a private cause of action for an individual retaliated against by his employer for assisting an FCA investigation or proceeding." Graham County, 545 U.S. at 412. The whistle-blower provision of the FCA provides in relevant part:
Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole. Such relief shall include reinstatement with the same seniority status such employee would have had but for the discrimination, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.
31 U.S.C. § 3730(h). "Congress enacted § 3730(h) to encourage any individuals knowing of Government fraud to bring that information forward," and "§ 3730(h) broadly protects employees who assist the government in prosecuting and investigating False Claims Act violations" from harassment, demotion, loss of employment, and any other form of retaliation. Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 186 (3d Cir. 2001) (citation omitted).
To state a claim under § 3730(h), a plaintiff must show that (1) he engaged in protected conduct and (2) that he was discriminated against because of his protected conduct. Id. Every FCA retaliation claim will share these two basic premises, but these essential elements are deceptively simple. The language of the statute itself encompasses a diverse array of conduct. Section 3730(h) prohibits retaliation in any of its varied forms, including discharge, demotion, suspension, threat, harassment, and "any other manner." The statute also protects a wide variety of conduct, "including investigation for, initiation of, testimony for, or assistance in" an FCA claim, and "[d]etermining what activities constitute 'protected conduct' is a fact specific inquiry", Hutchins, 253 F.3d at 187. Moreover, although a retaliation plaintiff need not develop a winning qui tam action, the plaintiff's protected conduct must have some "nexus" with the, at least potential, FCA claim to be furthered by such conduct. Hutchins, 253 F.3d at 187. The potential predicate FCA violations "encompass numerous and diverse topics and subtopics", Wilson, 471 U.S. at 273. See S. Rep. No. 99-345, at 9, reprinted in 1986 U.S.C.C.A.N. 5266, 5274 (stating "[t]he False Claims Act is intended to reach all fraudulent attempts to cause the Government to pay our sums of money or to deliver property or services. Accordingly, a false claim may take many forms...." and collecting cases demonstrating the diverse applications of the FCA).
Given the wide variety of retaliation prohibited by § 3730(h) and conduct protected by the statute, a claim thereunder might be analogized to a tort action for wrongful discharge*fn3 ; a whistleblower cause of action*fn4 ; statutory causes of action prohibiting retaliation against employees for engaging in protected activities*fn5 ; common law torts such as assault, battery, intentional infliction of emotional distress, and defamation*fn6 ; or negligence theories such as negligent hiring, retention, training, supervision, and referencing*fn7 . In certain circumstances a claim under § 3730(h) might be analogized to more narrow causes of action such as a contract action*fn8 , an action against a municipality*fn9 , or an action against another specific category of defendant*fn10 . This multitude of potentially analogous causes of action "inevitably breeds uncertainty and time-consuming litigation," Malley-Duff, 792 F.3d at 348 (quoting Wilson, 471 U.S. at 272), and weighs heavily in favor of choosing a uniform statute of limitations to apply to § 3730(h). Support for this conclusion is found in both the Third Circuit's and the Supreme Court's decisions to borrow a uniform limitations period for civil RICO claims in light of the similarly "numerous and diverse topics and subtopics" covered by the statute and the uncertainty engendered by wide variety of potentially applicable statutes of limitations. See Agency Holding, 483 U.S. at 149-50 (quoting A.J. Cunningham Packing Corp. v. Congress Fin. Corp., 792 F.3d 33, 337 (3d Cir. 1986) (Sloviter, J. concurring)); Malley-Duff, 792 F.3d at 348-49. As with the civil RICO statute in those case and § 1983 in Wilson, here,"federal interests in uniformity, certainty, and the minimization of unnecessary litigation" support the conclusion that claims under § 3730(h) should be characterized uniformly. Wilson, 471 U.S. at 275.
Further support for application of a uniform statute of limitations is found in the broad purpose of the FCA's anti-retaliation provision and another analogous Supreme Court decision. In Reed v. United Transportation Union, 488 U.S. 319, 325-26 (1989), the Supreme Court held that the Labor-Management Report and Disclosure Act's core purpose of protecting free speech and assembly rights in the union context suggested that all claims arising out of § 101(a)(2) of that statute be characterized in the same way. The Court noted that "[t]hough § 101(a)(2) creates personal rights, a union member vindicating those rights also serves public goals in that he necessarily renders a substantial service to his union as an institution and to all of its members, contributing to the improvement or preservation of democracy within the union." Id. (citation and internal punctuation omitted). The Court concluded that "[t]ime-consuming litigation as to the collateral question of the appropriate statute of limitations" would interfere with these goals. Id. at 326. Similarly in this case, although a § 3730(h) plaintiff seeks to vindicate his personal right to be free from retaliation, this action is intrinsically linked to the FCA's broad public purpose of combating fraud against the government. See Hutchins, 253 F.3d at 186 (quoting S. Rep. No. 99-345 at 35, 1986 U.S.C.C.A.N. at 5299) ("'[F]ew individuals will expose fraud if they fear their disclosures will lead to harassment, demotion, loss of employment or any other form of retaliation.' Therefore, § 3730(h) broadly protects employees who assist the government in prosecuting and investigating False Claims Act violations."). Costly and time-consuming litigation over the appropriate statute of limitations is entirely antithetical to the FCA, the core purpose of which is to save money. The effectiveness of the FCA's anti-retaliation provision would also be impeded if employees were forced to expend resources litigating such collateral matters, especially when the retaliation that forms the basis for a § 3730(h) is likely to have affected their source of income. See Wilson, 471 U.S. at 275 (stating § 1983's "legislative purpose to create an effective remedy for the enforcement of federal civil rights is obstructed by uncertainty in the applicable statute of limitations, for scarce resources must be dissipated by useless litigation on collateral matters"). Drawn-out litigation over the "most analogous" statute of limitations could, in fact, itself become a means continuing to retaliate against an employee.
In conclusion, federal interests in avoiding the uncertainty and unnecessary litigation engendered by the somewhat arbitrary process of choosing one of many potentially analogous limitations periods, as well as consideration of the broad public purpose of the FCA's anti-retaliation provision, compel the conclusion that courts must select a uniform statute of limitations to apply to all claims arising under § 3730(h).
Having determined that "a uniform limitations period is appropriate, the court must decide whether this period should be derived from a state or a federal source." Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 357 (1991). The "longstanding" and "settled" practice is to borrow a limitations period from analogous state law. North Star Steel Co. v. Thomas, 515 U.S. 29, 34 (1995) (citations omitted). In "rare", Graham County, 545 U.S. at 415, and "limited", Agency Holding, 483 U.S. at 148, cases "when the state limitations periods with any claim of relevance would frustrate or interfere with the implementation of national policies, or be at odds with the purpose or operation of federal substantive law, we have looked for a period that might be provided by analogous federal law, more in harmony with the objectives of the immediate cause of action," North Star, 515 U.S. at 34 (citations omitted). However, this is "'a closely circumscribed and narrow exception to the general rule,'" and applies "only 'when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking.'" Id. at 34-35 (quoting Reed, 488 U.S. at 324).
The need for a uniform limitations period does not require the adoption of a federal limitations period. See Kingvision, 366 F3d at 222 ("There is a difference between uniformity in construing the substantive elements of a statue in order to characterize a claim for statute of limitations purposes and the next step of determining what limitations period to adopt for a particular type of claim."); Gavalik v. Continental Can Co., 812 F.2d 834, 844 n.20 (3d Cir. 1987) ("Garcia cannot be read ... to eliminate the "settled practice," to which the Supreme Court refers in the course of its opinion, of adopting a local time limitation which governs state actions most analogous to the federal claim when Congress has failed to provide a specific time limitation."). Nor does "the mere fact that state law fails to provide a perfect analogy to the federal cause of action ... justify the use of a federal statute of limitations." Agency Holding, 483 U.S. at 147-48. The conclusion that a uniform statute of limitations should apply to claims under a federal statute "ultimately may result in the selection of a single federal or of a single variety of state actions." Lampf, 501 U.S. at 357.
In Graham County, although the Court did not reach the issue of determining the appropriate statute of limitations to borrow, the Court noted that "no party points to a reason why we should [borrow a federal limitations period], and we can think of none", and the Court held that "the most closely analogous state statute of limitation" applies to § 3730(h) claims. 545 U.S. at 415, 422 (emphasis added). As in Graham County, the parties here have not indicated any reason to depart from the settled rule that the appropriate statute of limitations should be borrowed from state law, and therefore, the Court will look to Pennsylvania law for the most analogous limitations period.
As noted above, the defendants contend that the most closely analogous state statute of limitations is the 180-day limitations period under Pennsylvania's Whistleblower Law. 43 Pa. C.S. § 1424(a). This argument has some surface appeal. Section 3730(h) is also a "whistleblower" law, and both the federal and state statutes protect employees against discharge and discrimination in retaliation for reporting or assisting in the investigation of employer wrongdoing. Compare 31 U.S.C. § 3730(h) with 43 Pa. C.S. § 1423. The analogy ends at this level of generality, however. The FCA's anti-retaliation provision applies broadly to any employee-employer relationship. See Lytle v. Capital Area Intermediate Unit, C.A. No. 1:05-CV-0133, 2008 WL 2777403, at *1-2 (M.D. Pa. July 14, 2008); see also S. Rep. No. 99-345 at 34, 1986 U.S.C.C.A.N. at 5299 (stating § 3730(h)'s "definitions of 'employee' and 'employer' should be all-inclusive"). On the other hand, Pennsylvania's Whistleblower Law applies only to employees of government entities. See 43 Pa. C.S. § 1433 (defining "employee" for purposes of the law as "[a] person who performs a service ... for a public body" and defining "public body" as specified government entities); Holewinski v. Children's Hosp. of Pittsburgh, 649 A.2d 712, 715 (Pa. Super. Ct. 1994); Krajsa v. Keypunch, Inc., 622 A.2d 355, 359-60 (Pa. Super. Ct. 1993). Thus, Pennsylvania's Whistleblower Law affords no protection to plaintiffs like Campion. This severe limitation on the scope of the Pennsylvania Whistleblower Law precludes the conclusion that it provides the most closely analogous limitations period. Other courts have similarly concluded that state whistleblower laws of more limited scope do not provide the closest analogy to the broad anti-retaliation provision of the FCA. See, e.g., United States ex rel. McKenna v. Senior Life Mgmt., Inc., 429 F. Supp. 2d 695, 697-98 (S.D.N.Y. 2006); United States ex rel. Smith v. Yale Univ., 415 F. Supp. 2d 58, 99-100 (D. Conn. 2006).
In arguing for application of the Whistleblower Law's limitations period, the defendants rely heavily on the opinion of the court in United States ex rel. Repko v. Guthrie Clinic, P.C., C.A. No 4:04-CV-1556, 557 F. Supp. 2d 522, 528-29 (M.D. Pa. 2008) (McClure, J.), which stated that "Pennsylvania's most closely analogous statue would be its whistleblower law," and cited to Graham County for the proposition that the Supreme Court has found the Whistleblower Law to be state statute most closely analogous to § 3730(h). This Court must respectfully disagree with our colleague's decision in Repko. As an initial matter, and as Campion points out, the issue of the appropriate statute of limitations was not fully addressed in that case, as the plaintiff there had abandoned his retaliation claim. See id. at 528. Moreover, as stated above, the Supreme Court in Graham County did not hold that the Whistleblower Law provides the most closely analogous limitations period. The Court merely provided a list of "likely analogous" statutes of limitations, explicitly noting that "these are only the likely candidates for analogous state statutes of limitations; it may well not be an exhaustive or authoritative list of the possibilities." Graham County, 545 U.S. 419 n.3. In addition, the Court's list of "likely candidates" included both the 180-day limitations period of the Whistleblower Law and the two-year personal injury catchall limitations period of § 5524(7). Id. For the reasons discussed above, the Court concludes that the Whistleblower Law does not provide the most closely analogous limitations period to be applied uniformly to all § 3730(h) claims.
Campion contends that Pennsylvania's limitations period for a wrongful discharge claim should be applied. Again, this argument has some initial appeal. Section 3730(h) prohibits retaliatory discharge, and in this case, Campion alleges that he was discharged wrongfully. Several courts addressing the issue have held that the other state's common law tort claim for wrongful discharge is the most closely analogous cause of action to § 3730(h). See Smith, 415 F. Supp. 2d at 100-01 (so holding and collecting cases). However, the Court must reject Campion's argument for two reasons. First, wrongful discharge does not provide the most appropriate uniform limitations period for § 3730(h). For example, wrongful discharge would not be the most closely analogous cause of action in any case where the plaintiff was, in fact, not discharged but only "demoted, suspended, threatened, harassed, or in any other manner discriminated against" in retaliation for protected conduct. See Rutz, 2007 WL 3231439, at *4 (declining to apply limitations period for retaliatory discharge under Illinois law, in part, because the plaintiff "was not actually discharged in retaliation for his actions, which is an essential element of an action for retaliatory discharge"). More importantly, however, there is no cause of action under Pennsylvania law for wrongful discharge in retaliation for whistleblowing. In the very case relied on by Campion, the Pennsylvania Supreme Court reviewed the precedent concerning the common law tort of wrongful discharge and stressed the limited nature of this cause of action:
From these cases, we glean that, as a general proposition, the presumption of all non-contractual employment relations is that it is at-will and that this presumption is an extremely strong one. An employee will be entitled to bring a cause of action for a termination of that relationship only in the most limited of circumstances where the termination implicates a clear mandate of public policy in this Commonwealth.
McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283, 287 (Pa. 2000). In that case, the court held that violation of federal law, without more, is insufficient to overcome the strong presumption in favor of the at-will employment relationship and create a cause of action for wrongful discharge. Id. at 287-90. Thus, in this case, Campion's allegations that the defendants violated the FCA does not implicate any Pennsylvania cause of action. Moreover, based on the Pennsylvania Supreme Court's narrow construction of a wrongful discharge claim, multiple Pennsylvania courts have held that state law does not recognize such a cause of action based on termination in retaliation for whistleblowing. See, e.g., Holewinski, 649 A.2d at 715; Krajsa, 622 A.2d at 358-59. Wrongful discharge cannot provide the most closely analogous limitations period because there is no such cause of action under Pennsylvania law in a case such as this one.
The Court finds that the most closely analogous state limitations period which may be uniformly applied to claims under § 3730(h) is the residual statute of limitations for personal injury actions, in Pennsylvania, set forth in 42 Pa. C.S.A. § 5524(7). In numerous cases, the Supreme Court and Third Circuit have borrowed the state limitations period for personal injury actions where, as with § 3730(h), a federal statute has no precise analogy in state law and encompasses a wide variety of potential claims. See, e.g., Reed, 488 U.S. at 334 (holding personal injury statute of limitations applies to claims under § 101(a)(2) of the LMRDA); Owens v. Okure, 488 U.S. 235, 249-50 (1989) (clarifying that general or residual personal injury statute of limitations applies to § 1983 claims); Goodman v. Lukens Steel Company, 482 U.S. 656, 661-62 (1987) (holding personal injury statute of limitations applies to claims under 42 U.S.C. § 1981); Wilson, 471 U.S. at 276 (holding personal injury statute of limitations applies to § 1983 claims); Disabled in Action of Pa. v. Se. Pa. Transp. Auth., 539 F.3d 199, 208 (3d Cir. 2008) (holding personal injury statute of limitations applies to claims under Title II of the ADA and Section 504 of the Rehabilitation Act). The reasoning of such cases supports the same conclusion here.
Like the statutes at issue in these cases, § 3730(h) encompasses a diverse variety of conduct, and the residual personal injury statute of limitations is broad enough to be uniformly applied to the wide spectrum of potential claims. See Owens, 488 U.S. at 249 (rejecting application of intentional tort limitations period as too narrow). In addition, like such statutes, § 3730(h) creates a unique federal remedy, which, as discussed above, has no precise counterpart in Pennsylvania law. The residual personal injury limitations period provides a practical solution, see id. at 242 (stating choice of appropriate limitations period "is essentially a practical inquiry"), which avoids the "somewhat arbitrary" choice of one imperfect analogy over another, Wilson, 471 U.S. at 272 & n.24. At the same time, however, claims of discharge, threats, harassment, or other manner of discrimination under § 3730(h) are generally analogous to tort claims for personal injury. See id. at 277 (recognizing that although § 1983 encompasses a "broad range of potential tort analogies, from injuries to property to infringement of individual liberty," claims under the statute "plainly sound in tort"). Moreover, claims under § 3730(h) are quite analogous to employment discrimination and retaliation claims under other federal statutes to which the personal injury statute of limitations has been held to apply. See, e.g., Goodman, 482 U.S. at 661-62 (applying personal injury statute of limitations to employment discrimination claims under § 1981); Livingston ex rel. Livingston v. Borough of McKees Rocks, 223 Fed. Appx. 84, 89 (3d Cir. 2007) (applying personal injury statute of limitations to § 1983 claim of First Amendment retaliation based on plaintiff's whistleblowing); Burkhart v. Widener Univ., Inc., 70 Fed. Appx. 52, 53 (3d Cir. 2003) (applying personal injury statute of limitations to claims under the anti-retaliation provision of the ADA). Finally, although not controlling on this issue, Pennsylvania's personal injury catchall was one of two "likely candidates for analogous state statutes of limitations" identified by the Supreme Court in Graham County. 545 U.S. at 419 n.3. For these reasons, the Court holds that Pennsylvania's residual statute of limitations for personal injury actions, 42 Pa. C.S.A. § 5524(7), provides the most closely analogous statue of limitations for § 3730(h).*fn11
Pennsylvania's residual statute of limitations for personal injury actions provides that such actions must be commenced within two years of injury. 42 Pa. C.S.A. § 5524(7). Therefore, in this case, Campion's complaint, which was filed approximately eight months after his termination, is timely, and this action will not be dismissed as time-barred.
B. Failure to State a Claim
The defendants also move to dismiss Campion's complaint for failure to state a claim upon which relief can be granted. The defendants' argument proceeds on two grounds: (1) that NU, NU Enterprises, and Select are not "employers" of Campion in the context of § 3730(h) and therefore are not proper defendants in this action and (2) that Campion has failed to state the essential elements of a § 3730(h) cause of action. For the reasons discussed below, the Court finds that both of the defendants' arguments are correct, and Campion's complaint will therefore be dismissed.
1. Northeast Utilities, NU Enterprises, and Select Energy Are Not Proper Defendants
By its terms, § 3730(h) applies only to an "employee" who is retaliated against by his or her "employer." Neither term is defined in the statute. However, courts in this circuit have limited application of § 3730(h) to "the conventional master-servant relationship as understood by common-law agency doctrine," Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 322-23 (1992). See, e.g., United States ex rel. Watson v. Conn. Gen. Life Ins. Co., 87 Fed. Appx. 257, 261-62 (3d Cir. 2004); Lytle, 2008 WL 2777403 at *1; Shapiro v. Sutherland, 835 F. Supp. 836, 837 (E.D. Pa. 1993). "In Darden, the Supreme Court articulated the test for deciding if a party qualifies as an employee." Watson, 87 Fed. Appx. at 261. According to Darden:
In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party. 503 U.S. at 323-24 (quoting Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-752 (1989). Under this test "'all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.'" Id. at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. 254, 258 (1968)).
In this case, consideration of these factors compels the conclusion that Campion was not an "employee" of NU, NU Enterprises, or Select for purposes of § 3730(h). Campion alleges only that he was an employee of NGS. He does not allege that NU, NU Enterprises, or Select had any right to control his work or assign him work, provided him tools, or had any role in his payment, the provision of his benefits, or his tax treatment. In fact, Campion's complaint makes clear that these defendants were several steps removed from any employer-employee relationship. Campion alleges that NU and NU Enterprises are the parent companies of Select, which contracted with the government to provide services at TAD and which in turn subcontracted some of this work to its sister entity NGS, which in turn, employed Campion. The relationship between Campion and NU, NU Enterprises, and Select is thus attenuated at best, and Campion's allegations provide no basis to conclude that he was an "employee" of any of these entities.
Campion argues that his claim against NU, NU Enterprises, and Select should be allowed to proceed under an "integrated enterprise" theory. Even assuming that such a theory applies in the context of § 3730(h)*fn12 , the allegations of Campion's complaint are insufficient to allow the conclusion that NGS, NU, NU Enterprises, and Select are an integrated enterprise. The integrated enterprise test looks to four characteristics of affiliated corporations to determine whether they should be treated as a single employer: "interrelation of operations; common management; centralized control of labor relations; and common ownership or financial control."*fn13 Pearson., 247 F.3d at 486 (citing Radio & Television Broad. Techs. Local Union 1264 v. Broad. Serv. of Mobile, 380 U.S. 255, 256 (1965)). "No single factor is dispositive; rather, single employer status under this test 'ultimately depends on all the circumstances of the case.'" Id. (quoting NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1122 (3d Cir. 1982)). "The heart of the inquiry is whether there is an absence of an arm's length relationship among the companies." Nesbit, 347 F.3d at 84 (citations omitted).
In this case, Campion alleges that NU and NU Enterprises owns both NGS and Select. However, "[s]ole ownership alone is never enough to establish parent liability." Martin v. Safeguard Scientifics, Inc., 17 F. Supp. 2d 357, 363 (E.D. Pa. 1998) (citation omitted). Other than the conclusory allegation that "NGS, NU, NU Enterprises and Select are interrelated companies," Campion makes no further factual averments from which it could be found that these entities are an integrated enterprise. Instead, Campion argues that the Court should "require each defendant to prove that they have not assumed responsibility for the liabilities of NGS." (Doc. 44-2 at 14.) However, Campion may not shift the burden to the defendants in this manner. Although the integrated enterprise test is a factual question, Pearson., 247 F.3d at 496, Campion must set forth in his complaint some factual allegations to support his claim and may not rely on mere legal labels and conclusions. Twombly, 127 S.Ct. at 1965; see also Papasan v. Allain, 478 U.S. 265, 286 (1986) ("Although for the purposes of this motion to dismiss we must take all the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation."); Hunt v. U.S. Tobacco Co., 538 F.3d 217, 227 (3d Cir. 2008) ("A court need not credit a complaint's 'bald assertions' or 'legal conclusions' when deciding a motion to dismiss."). Campion's complaint sets forth insufficient facts to allow the conclusion that NGS, NU, NU Enterprises and Select are interrelated companies, and therefore, his claims against the latter three entities will be dismissed.
2. Campion Has Failed to State a § 3730(h) Claim
The defendants also move to dismiss Campion's complaint for failure to state a claim upon which relief can be granted. The Third Circuit has succinctly described the elements of a § 3730(h) as follows:
A plaintiff asserting a cause of action under § 3730(h) must show (1) he engaged in "protected conduct," (i.e., acts done in furtherance of an action under § 3730) and (2) that he was discriminated against because of his "protected conduct." In proving that he was discriminated against "because of" conduct in furtherance of a False Claims Act suit, a plaintiff must show that (1) his employer had knowledge he was engaged in "protected conduct"; and (2) that his employer's retaliation was motivated, at least in part, by the employee's engaging in "protected conduct." At that point, the burden shifts to the employer to prove the employee would have been terminated even if he had not engaged in the protected conduct.
Hutchins, 253 F.3d at 186 (citations and footnote omitted). The defendants argue that Campion has failed to allege that he engaged in protected activities and, even assuming he did so, that his employer had insufficient knowledge of such activities.
The first element of an FCA retaliation claim is that the plaintiff engaged in protected conduct. Section 3730(h) itself specifies that "protected conduct" includes "investigation for, initiation of, testimony for, or assistance in an action filed or to be filed" under the FCA. Thus, "'protected conduct' requires a nexus with the 'in furtherance of' prong." Hutchins, 253 F.3d at 187 (quoting McKenzie v. BellSouth Telecomm., Inc., 219 F.3d 508, 515 (6th Cir. 2000)). "This inquiry involves determining 'whether plaintiff's actions sufficiently furthered 'an action filed or to be filed under' the False Claims Act and, thus, equate to "protected conduct."'" Id. The protected conduct element does not require an employee to have developed a winning qui tam action or even to actually file an FCA action, as "[t]he False Claims Act was enacted to encourage parties to report fraudulent activity and was intended to 'protect employees while they are collecting information about a possible fraud, before they have put all the pieces of the puzzle together.'" Id. at 187-88 (quoting Yesudian, 153 F.3d at 740). Thus, "[u]nder the appropriate set of facts, [protected conduct] can include internal reporting and investigation of an employer's false or fraudulent claims"; however, "[m]ere dissatisfaction with one's treatment on the job is not, of course, enough. Nor is an employee's investigation of nothing more than his employer's non-compliance with federal or state regulations." Id. (citing Yesudian, 153 F.3d at 740, 742). "To be covered by the False Claims Act, the plaintiff's investigation must concern 'false or fraudulent' claims," Yesudian, 153 F.3d at 740, and there must "at least be a distinct possibility that a viable FCA action could be filed," Dookeran v. Mercy Hosp. of Pittsburgh, 281 F.3d 105, 108 (3d Cir. 2002).
The second element of an FCA retaliation claim is that the plaintiff was retaliation against because of his protected conduct. To establish this element, the plaintiff must show, inter alia, that his employer had knowledge that he was engaged in protected conduct. Hutchins, 253 F.3d at 186. "[T]he knowledge prong of § 3730 liability requires the employee to put his employer on notice of the 'distinct possibility' of False Claims Act litigation." Id. at 188 (citations omitted). This notice requirement "is essential because without knowledge an employee is contemplating a False Claims Act suit, there would be no basis to conclude that the employer harbored § 3730(h)'s prohibited motivation, i.e., retaliation," and because it prevents nuisance suits. Id. at 186 n.7, 188. "What the employer must know is that the employee is engaged in protected activity -- that is, in activity that reasonably could lead to a False Claims Act case.... Merely grumbling to the employer about job dissatisfaction or regulatory violations does not satisfy the requirement -- just as it does not constitute protected conduct in the first place." Id. (citations and internal punctuation omitted). "[T]he inquiry into whether an employee puts his employer on notice is whether the employee engaged in conduct from which a fact finder could reasonably conclude that the employer could have feared that the employee was contemplating filing a qui-tam action against it or reporting the employer to the government for fraud." Id.
In this case, Campion generally alleges that he "complained, and tried to complain, about many of the allegations" contained in his complaint. Specifically, Campion states that he attempted to meet with NGS supervisor Robert Gunderson "to report illegal acts of all the employees," but that Gunderson notified fellow NGS supervisor William Cannon these attempts, and Cannon "berated and mistreated" Campion. Nevertheless, Campion states that he eventually met with Gunderson and notified him "of some of the allegations ..., including but not limited to falsification of time sheets." Campion also states that after being demoted and physically assaulted, allegedly as a result of these complaints, he hired an attorney to represent him who "reported improprieties at TAD to NU" and requested an investigation into Campion's treatment by Cannon, NGS, and Select.
The Court finds that these allegations are insufficient to constitute protected activity or notice to the defendants of the distinct possibility of FCA litigation.*fn14
Campion's purported protected activity and notice consist entirely of telling a supervisor about "some" allegations, including falsification of time sheets, on one occasion and hiring an attorney who demanded an investigation into his treatment on the job. Campion's merely reporting his concern about mischarging the government to his supervisor does not suffice to establish that he was acting "in furtherance of" a qui tam action. See Hutchins, 253 F.3d at 188, 190, 193 (citing Zahodnick v. Int'l Bus. Machines Corp., 135 F.3d 911, 914 (4th Cir. 1997)). Campion fails to connect his activity to an FCA claim, as there is no allegation that he informed his supervisor that he was concerned that the conduct complained of was causing government funds to be lost, or that Campion gave any indication that he may ultimately initiate an FCA action or report NGS's activities to the government. See id. at 189-90, 193 (citing Yesudian, 153 F.3d at 744-45; United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1523 (10th Cir. 1996); Robertson v. Bell Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994)). In fact, as one of the few clear allegations regarding this issue indicates, Campion's complaints to his employer were focused on his perceived mistreatment at work. This purpose, unconnected to exposing fraud or false claims against the federal government, is insufficient to establish protected conduct or notice of the distinct possibility of a qui tam claim. See id. at 191 (citing McKenzie, 219 F.3d at 517 (holding that plaintiff's complaints to her supervisor regarding falsified time reports did not place employer on requisite notice because the "numerous complaints on the matter were directed at the stress from and pressure to falsify records, not toward an investigation into fraud on the federal government")). As noted above, "[m]ere dissatisfaction with one's treatment on the job is not, of course, enough. Nor is an employee's investigation of nothing more than his employer's non-compliance with federal or state regulations." Id. at 187-88 (quoting Yesudian, 153 F.3d at 740). These are precisely the allegations of Campion's complaint, and they fail to state a § 3730(h) claim.
Campion argues that, at this stage of the proceedings, he is not required to prove his case. That is so. But vague and conclusory allegations that he "tried to complain" about "some of the allegations" and hired an attorney who "reported improprieties" and asserted Campion's dissatisfaction with his treatment on the job are insufficient to state a claim upon which relief can be granted under § 3730(h). Therefore, Campion's complaint will be dismissed.
For the foregoing reasons, the defendants' motion to dismiss will be granted.
The Court finds that Campion's complaint is not time-barred. However, because the allegations of the complaint are insufficient to demonstrate that Campion engaged in protected activity or that the defendants were on notice of the distinct possibility of FCA litigation, Campion's § 3730(h) claim will be dismissed for failure to state a claim upon which relief can be granted. Campion's claim against NU, NU Enterprises, and Select is dismissed for the additional reason that he was not an employee of these entities, and therefore, they cannot be held liable under § 3730(h). Because the essential and unalterable allegations of Campion's complaint are insufficient to state a claim, amendment of the complaint would be futile, and therefore dismissal will be with prejudice. Phillips, 515 F.3d at 236. An appropriate order will be entered.