Decided: February 25, 2016
The Fourth Circuit vacated the portion of the district court’s order dismissing plaintiff’s weapons qualification claims under the public disclosure bar and remanded for further proceedings.
In 2005, the U.S. Department of State hired defendant, Academi, as a contractor to provide security services for embassy workers stationed across the Middle East. Their agreement required Academi’s workers to maintain proficiency with several firearms and to submit marksmanship scores to the State Department on a regular basis.
Plaintiffs, serving as relators under the False Claims Act, 31 U.S.C. §§ 3729-3733 (“FCA”), filed their complaint with the Eastern District of Virginia on April, 2011, alleging that Academi submitted false reports to the State Department. On May 24, 2011, plaintiffs filed their first amended complaint, which included additional allegations that Academi fraudulently billed the State Department for security services performed by contractors who had not been tested for, or achieved, requisite marksmanship scores.
While this first-amended complaint was pending, two former firearms instructors contacted plaintiffs’ counsel with additional information about the weapons qualification scheme and filed a separate complaint against Academi alleging wrongful termination. See Winston v. Academi Training Ctr. Inc., No. 1:12cv767, ECF No. 1 (E.D. Va. July 12, 2012). The Winston complaint, which was made available to the public, detailed Academi’s failure to comply with the marksmanship testing requirements. The information included in the complaint generated a significant amount of publicity. On November 19, 2012, the plaintiffs in this case filed a second-amended complaint, which expanded the allegations as to the weapons qualification scheme by adding paragraphs from the Winston complaint.
The district court granted Academi’s motion to dismiss plaintiffs’ qui tam actions based on the public disclosure bar provided by the post-2010 amended version of the FCA. The district court found the publicity generated by the instructor’s complaint qualified as a public disclosure under the statutory scheme. Relying on Rockwell International Corp. v. United States, 549 U.S. 457 (2007), it further concluded that the most recent complaint was the proper pleading for analysis for purposes of the statutory timing benchmark. Since the public disclosure occurred before plaintiff’s most recent amended complaint, the district court held the public disclosure bar applied to plaintiffs’ claims.
The Court found that the district court misinterpreted Rockwell when it adopted the view that only the most recent pleading should control the public-disclosure bar’s timing. The Court reasoned that in Rockwell, the Supreme Court only focused on the relator’s last pleading because that was where the relevant fraud had been pled. As such, the district court should have evaluated the relevant fraud claim under the pleading that first alleged the fraud in this case, which was the first amended complaint.
The Court rejected Academi’s argument that that second-amended complaint was the first pleading that described with specificity the weapons qualification scheme. Instead, the court held that the facts alleged in the first-amended complaint were sufficient for purposes of the public disclosure bar. As such, because the first-amended complaint was filed before the Winston complaint and the publicity generated from the Winston complaint, the Court held public disclosure bar was not triggered in this case.
Finally, the Court also held that another FCA case, U.S. ex. rel. Davis v. U.S. Training Ctr., Inc., No. 1:08cv1244 (E.D. Va. Filed Dec. 1, 2008) did not trigger the public disclosure bar, nor was is a preclusive first-filed action, because it alleged fraud claims that were distinct and unrelated to the weapons qualification scheme at issue in this case.
Accordingly, the Court vacated and remanded the judgment of the district court.
Megan Clemency