The opinion of the court was delivered by: Lamberth, District Judge.
This matter comes before the court upon a motion by the
Massachusetts Housing Finance Agency ("MHFA") to dismiss K & R
Limited Partnership's ("K & R") qui tam complaint for failure
to state a claim upon which relief can be granted. For the
following reasons, the Agency's motion shall be denied.
On March 27, 1999, K & R filed a complaint under seal pursuant
to the qui tam provisions of the False Claims Act,
31 U.S.C. § 3730, et seq., (the "FCA") alleging that the MHFA submitted
false claims for payment to the United States Department of
Housing and Urban Development ("HUD") each month beginning in
April, 1993. Specifically, K & R asserts that the MHFA never
lowered the amount it submitted to HUD for monthly interest
reduction payments for 66 separate housing projects, even after
lower interest bonds decreased the monthly mortgage payments
that the MHFA was required to make on the projects. After
investigating the contentions found in K & R's complaint, the
United States' filed a Notice of Election to Decline
Intervention in the proceeding against the MHFA. On April 12,
2000, this Court entered an order noting the Government's
On June 19, 2000, in accordance with the Government's request,
K & R served its complaint upon the MHFA. Subsequently, on
September 14, 2000, pursuant to Rule 12(b)(6) of the Federal
Rules of Civil Procedure, the MHFA filed a motion to dismiss K &
R's complaint for failure to state a claim upon which relief can
be granted. This court today denies the MHFA's motion.
The MHFA argues that K & R's complaint should be dismissed for
three reasons. First, the MHFA holds that as a state agency it
is not a "person" subject to liability under the FCA. Second,
the MHFA claims that, as a governmental entity, it is
presumptively immune from the punitive damages mandated by the
FCA. Third, the MHFA contends that the qui tam provisions of
the FCA, which allowed K & R to bring its complaint against the
Agency, violates the separation of powers doctrine.
If a plaintiff has failed "to state a claim upon which relief
can be granted," a court may grant a defendant's motion to
dismiss. Fed.R.Civ.P. 12(b)(6); see also Hishon v. King &
Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59
(1984); Sparrow v. United Air Lines, Inc., 216 F.3d 1111, 1114
(D.C.Cir. 2000). In evaluating a motion to dismiss, a court must
construe the complaint in the light most favorable to the
plaintiff and give the plaintiff "the benefit of all inferences
that can be derived from the facts alleged." Schuler v. United
States, 617 F.2d 605, 608 (D.C.Cir. 1979); see also Scheuer v.
Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).
"However, legal conclusions, deductions or opinions couched as
factual allegations are not given a presumption of
truthfulness." Wiggins v. Hitchens, 853 F. Supp. 505, 508 n. 1
(D.C. 1994) (citing 2A Moore's Federal Practice, § 12.07, at 63
(2d ed. 1986) (footnote omitted); Haynesworth v. Miller,
820 F.2d 1245, 1254 (D.C.Cir. 1987)).
C. The MHFA is a "Person" Under the FCA.
The FCA allows a private party to bring a qui tam civil
action against "[a]ny person who . . . knowingly presents, or
causes to be presented, to an officer or employee of the United
States Government . . . a false or fraudulent claim for payment
or approval." 31 U.S.C. § 3729(a). In Vermont Agency of Natural
Resources v. U.S., ex rel. Stevens, the Supreme Court
conclusively determined, after a review of the historical
background and the text of the statute, that "the False Claims
Act does not subject a State (or state agency) to liability."
529 U.S. 765, 788, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). In
its motion, the MHFA asserts that K & R's complaint should be
dismissed, because it is a "state agency" free from liability
under the FCA. This Court disagrees.
While this Court agrees with the MHFA that an Eleventh
Amendment analysis is not needed to determine if States and
state agencies are beyond the scope of the FCA, this Court does
believe that a determination of whether the MHFA is an entity
covered by Eleventh Amendment immunity is not only justified,
but is also proper in light of the Supreme Court's reasoning in
Stevens. In that case, as part of its analysis for determining
what entities are liable under the FCA, the Supreme Court relied
on the "longstanding presumption that `person' does not include
the sovereign." Id. at 780, 120 S.Ct. 1858. Because "the
States' immunity from suit is a fundamental aspect of the
sovereignty which the States enjoyed before the ratification of
the Constitution, and which they retain today," Alden v.
Maine, 527 U.S. 706, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999), it
can be deduced that those ...