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Odoms v. YMCA of Bucks County

United States District Court, Third Circuit

June 27, 2013



Tucker, C.J.

Patricia Odoms (“Plaintiff” or “Odoms”) brings suit against her former employer, the YWCA of Bucks County (“Defendant” or “YWCA”), alleging retaliatory discharge under the section 3730(h) of the False Claims Act (Count I), a state law claim under the Pennsylvania Whistleblower Law, 43 P.S. § 1424 et seq., (Count II), and a wrongful discharge claim arising under a public policy exception to Pennsylvania’s at-will employment status (Count III). Presently before the court is the YWCA’s motion to dismiss Odom’s federal claim under the False Claims Act and accordingly remand her state law claims.

I. Factual and Procedural Background

Defendant employed Plaintiff for approximately seven months as Chief Executive Officer of the YWCA of Bucks County. (Compl. at ¶ 11). During this time, Plaintiff discovered that Defendant was involved in illegally misappropriating federal funds from the Office of Children and Youth. (Compl. at ¶ 22). Plaintiff discovered the grant was improperly billed for 60% to 70% of Defendant’s administrative costs despite only a fraction of time allotted for projects authorized by the grant. (Compl. at ¶ 23). Plaintiff notified Defendant of the illegal activity multiple times. (Compl. at ¶¶ 16, 19, 25, 27, 31, 34). In response, Defendant reprimanded Plaintiff by removing her privileges to speak with her superiors and accusing her of attempting to destroy the company. (Compl. at ¶ 28). Plaintiff alerted the Defendant’s Board of Directors and the Financial/Executive Committee and was told to omit any findings of misappropriations from her report to the Office of Children and Youth. (Compl. at ¶¶ 35-36). Despite the objections by the Defendant, Plaintiff disclosed her findings to the Office of Children and Youth. (Compl. at ¶¶ 36-39). Three days after informing the Defendant of her disclosure she was suspended, which eventually led to her being terminated. Defendant’s reason for the termination was poor performance. (Compl. at ¶ 43). Subsequent to her termination, Plaintiff filed this action, claiming her termination was the result of her disclosure to the Office of Children and Youth. Defendant in turn submitted a motion to dismiss arguing that Plaintiff fails to follow the procedural requirements for filing a claim under the False Claims Act (“FCA”) and, alternatively, fails to plead sufficient facts to make out a FCA claim.

II. Standard of Review

Defendant moves to dismiss Count I of Plaintiff’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). In reviewing a motion to dismiss for failure to state a claim, the Court is “required to accept all well-pleaded allegations in the complaint as true and to draw all reasonable inferences in favor of the non-moving party. The inquiry is not whether plaintiffs will ultimately prevail in a trial on the merits, but whether they should be afforded an opportunity to offer evidence in support of their claims.” Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). To be considered “well pleaded” the complaint “requires a ‘showing, ’ rather than a blanket assertion, of entitlement to relief.” Id. at 1965 n. 3. The Court further explained that a complaint's “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Id. The Supreme Court mandates the plaintiff must have “nudged [their] claim across the line from conceivable to plausible, or the complaint must be dismissed.” As that Court held, the Plaintiff need not prove the case at this stage but must demonstrate more than a “sheer” possibility that the defendant has acted unlawfully.” Id.

III. Discussion

The central issue before the Court is the YWCA’s motion to dismiss Plaintiff’s FCA claim. Defendant asserts that Plaintiff improperly filed her claim because she did not follow the procedural guidelines under § 3730(b)(2) which requires the claim first be filed in camera under seal. Furthermore, the YWCA argues that Plaintiff’s claim for relief is insufficiently plead and should be dismissed. In order to rule on the motion to dismiss, it is necessary the Court decide whether Plaintiff was required to follow the procedural requirements outline in §3730(b)(2) and whether Plaintiff has plead enough facts to substantiate her FCA claim.

a. Plaintiff has exercised the procedural requirements necessary to state a claim under the False Claims Act.

Defendant argues that Plaintiff’s complaint “should be filed in-camera, shall remain under seal for at least sixty days and shall not be served on the defendant until the Court so orders.” 31 U.S.C. § 3730(b). However, Defendant disregards the fact that Plaintiff’s claim arises under § 3730(h) for retaliatory conduct and is not a §3730(b) qui tam claim. As provided, “[s]ection 3730(h) retaliation claims, unlike § 3730(b) qui tam claims, are not subject to the procedural requirements of § 3730(b)(2).” U.S. ex rel. Pilon v. Martin Marietta Corp., 60 F.3d 995, 1000 (2d Cir. 1995). A distinct difference between the § 3730(b) claim and the § 3730(h) claim is the influence of the United State’s government in the litigation. Under §3730(b), “[w]hether or not the United States intervenes, the relator can't dismiss the suit without permission of the United States and the court.” U.S. ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 852 (7th Cir. 2009). In contrast under § 3730(h) “the aggrieved employee is in charge and may pursue, settle, or dismiss the litigation; the plaintiff's errors affect only himself. An ex-employee is free to represent himself in retaliatory-discharge litigation, but a relator in a qui tam action may proceed only through counsel.” Id.

While the Court acknowledges that the aforementioned case law from the Second and Seventh Circuits are non-binding, such cases are persuasive and provide guidance in resolving the present matter. Moreover, Defendant presents no precedent to support his assertion that § 3730(b) and § 3730(h) should follow the same procedure. As such, the Court finds its argument to be unavailing.

b. Plaintiff makes out a sufficient claim under § 3730(h) of the FCA.

In finding the Plaintiff properly filed a retaliatory claim under §3730(h), the Court now looks to the elements of the claim. In proving a 3730(h) claim, the Plaintiff must first prove she engaged in “protected conduct, ” (i.e., acts done in furtherance of an action under § 3730). Second, Plaintiff must also prove that she was discriminated against because of this “protected conduct.” Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 186 (3d Cir.2001). In order to satisfy the second prong the ...

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