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Kakeh v. United Planning Organization

September 9, 2009


The opinion of the court was delivered by: Gladys Kessler United States District Judge


Plaintiff Mohammed Amin Kakeh ("Plaintiff") brings this whistleblowing case against his former employer, the United Planning Organization, Inc. ("UPO"). Plaintiff alleges violations of the District of Columbia Whistleblower Protection Act ("WPA"), D.C. Code §§ 2-223.01 et seq. (Count I); wrongful discharge under District of Columbia common law (Count II); retaliation in violation of the District of Columbia Human Rights Act ("DCHRA"), D.C. Code § 2-1402.61 (Count III); retaliation in violation of the federal False Claims Act ("FCA"), 31 U.S.C. § 3730(h) (Count IV); and retaliation in violation of the District of Columbia False Claims Act ("DCFCA"), D.C. Code § 2-308.16 (Count V).

On February 28, 2008, Defendant's Motion for Summary Judgment was granted as to Count II. On November 25, 2008, Plaintiff's Consent Motion to Dismiss Count III was granted. A jury trial was held between December 3, 2008 and December 23, 2008. On December 23, 2008, the jury returned a verdict for Plaintiff, and the Court entered judgment in the amount of $891,546 plus costs [Dkt. Entry Dec. 23, 2008].

This matter is now before the Court on three post-trial motions: (1) Plaintiff's Motion to Alter Judgment [Dkt. No. 176], (2) Defendant's Motion for Judgment as a Matter of Law [Dkt. No. 178], and (3) Defendant's Motion to Amend, Alter the Judgment, or for New Trial, or, in the Alternative, Motion for a Remittitur [Dkt. No. 180]. Upon consideration of the Motions, Oppositions, Replies, and the entire record herein, and for the reasons set forth below, Defendant's Motion for Judgment as a Matter of Law is denied, Defendant's Motion to Amend, Alter the Judgment, or for New Trial, or, in the Alternative, Motion for a Remittitur is granted in part and denied in part, and Plaintiff's Motion to Alter Judgment is granted in part and denied in part.

I. Background*fn1

UPO is a private non-profit corporation in the District of Columbia. According to its mission statement, the organization's objective is "[t]o provide leadership, support, and advocacy to low income and other eligible residents of Washington, D.C., to assist them in achieving self-sufficiency and self-determination, and to enhance generally the quality of life in the local community." Plaintiff was hired as UPO's Controller on June 28, 1998.

UPO contracted with the District of Columbia to manage two anti-poverty programs. It operated the Head Start program, which provides educational services to low-income children and their families. In the District of Columbia, the federal government provided 80 percent of the program's operating funds, and the District provided the remaining 20 percent. The federal government disbursed its 80 percent share of the program costs to the D.C. Department of Human Services ("DHS"), which added the remaining 20 percent and then disbursed the full funding to UPO.

UPO also administered the Community Service Block Grant ("CSBG") program. The CSBG program was funded entirely by the federal government. The federal Department of Health and Human Services ("DHHS") disbursed the program funds to DHS, and DHS in turn disbursed the funds to UPO. UPO then allocated funds to service providers and oversaw their use of the funds.

Between October 1, 2002 and September 30, 2003, DHS disbursed funds from the CSBG grant to UPO on a reimbursement basis: DHS disbursed the funds after UPO provided DHS with receipts showing that expenditures were incurred for purposes that were legitimate under the CSBG grant. If UPO did not spend all of the grant-allocated money within the fiscal year, it was required to notify DHS that it had a surplus. Once it had notified DHS, it could either return these surplus funds to the granting agency or use them for other allowable expenditures.

The CSBG grant for fiscal year 2003 budgeted specific amounts that could be spent on other programs. During trial, Dana Jones, UPO's present Executive Director, who was hired to begin work on April 1, 2004, testified that, unless there was express written permission from DHS, surplus funds could be applied to other programs only up to the expenditure limit that was budgeted in the grant. See Def.'s Mot. at 4 ("If included in the original budget, CSBG funds can be used to pay for costs related to other grant programs.").

Tunde Eboda, CSBG Program Manager at DHS, also testified that Defendant needed written permission to "apply surplus CSBG funds to non-enumerated cost overruns" in other programs. See id. at 4 ("Only allowable costs can be charged to the grant."). Gladys Mack, UPO's Deputy Executive Director, and Sheila Shears, UPO's Chief Financial Officer, testified that the Iowa Group, a firm hired by Eboda to investigate UPO's financial practices, informed them in March 2004 about this permission requirement. Pl.'s Opp'n at 11.

Eboda testified that UPO did not have this permission until September 29, 2004. Mack testified that Defendant had oral permission, but not written permission.*fn2

Plaintiff testified that in October 2003, he discovered $748,000 in expenditures that had been improperly billed to the CSBG grant for fiscal year 2003. He believed that this billing practice constituted fraud. On October 20, 2003, Plaintiff wrote a memorandum to Mack, Shears, and Ben Jennings, who was then UPO Executive Director, informing them of this discovery. On the same day, he met with them to detail his concerns.

Plaintiff testified that Jennings ordered him to change the designation of expenditures from "expenditures without a funding source" to "allowable CSBG expenditures." Id. at 5. Plaintiff testified that he believed this to be an illegal order because the change would constitute "fraudulent billing." Id.

Plaintiff then discovered several other expenditures that were mistakenly classified: Jennings had charged four luxury cars to grants using a credit card with a 21 percent interest rate, a $120,000 loan had been made to a member of UPO's Board of Trustees ("Board") using grant funds, a van was assigned to Mack, two sport utility vehicles were purchased for a Board member and charged to grants, officers and Board members had fifty-six cell phones, employees and Board members had been paid $200,000 in advances for traveling expenses, and a $65,000 trip to Hawaii for employees, Board members, and their families had been billed to a grant. Id. at 5, 6.

After discovering these expenditures, Plaintiff changed their designation from "allowable" to "unallowable." Plaintiff testified that Shears instructed him to charge the CSBG grant for these expenditures and that he considered this instruction to be an illegal order. Id. at 6.

After receiving this instruction, Plaintiff responded by contacting Eboda and informing him that Defendant had charged unallowable expenditures to the CSBG grant. Eboda testified that as a result of Plaintiff's disclosures, he investigated Defendant's finances and discovered several unallowable expenditures that had been improperly charged to the CSBG grant.

Plaintiff testified that on March 1, 2004, Eboda told a meeting that included Shears that Plaintiff had assisted him with the investigation. Later that month, at another meeting attended by Shears, Plaintiff provided the Iowa Group with financial statements showing that UPO had attempted to bill unallowable expenditures to the grant. Plaintiff's version of the financial statements contradicted the version submitted by Shears: Plaintiff's version included a much larger deficit. Eboda testified that it was clear that the statements with the larger deficit were Plaintiff's. Pl.'s Opp'n at 7.

On an unspecified date, Shears held a meeting that included Plaintiff, Mack, and Jennings. At this meeting, Jennings asked Plaintiff why he had provided the financial statements to the Iowa Group. Id. at 8.

On March 11, 2004, Eboda recommended to UPO's Board that Jennings, Shears, and Mack be removed. Eboda testified that he reached this decision as a result of the information that Plaintiff had provided to him. The Board decided to remove only Jennings. Id.

On the same date, Shears wrote a letter of resignation to Jennings, stating her concern that Plaintiff "has been allowed to continue in his position, given his repeated acts of insubordination." Def.'s Mot., Ex. 4 (labeled "Pl. Ex. 30"). The letter referred to Plaintiff's release of financial statements that were "significantly altered from any previously reviewed by management." Id. Shears sent a copy of this letter to Mack.

On March 12, 2004, Mack became Acting Executive Director. She told Plaintiff to change financial statements so that "unallowable" expenditures could be charged to the grant. On March 21, 2004, Shears wrote an email to Plaintiff and Mack stating that expenditures charged to the grant are "lower than budgeted, even though there appears to be more than enough related expenses."

Id., Ex. 5 (labeled "Pl. Ex. 80"). Her email specifically asked Plaintiff to provide details about "what deferred revenues are on the balance sheet that should be reversed." Id.

On March 25, 2004, Mack wrote an email to Plaintiff, reminding him of the urgency of the need to change the classification of expenditures. Referring to a line of credit that had been extended to Defendant by M & T bank, she wrote, "Amin, we are out of time. I hope you are sensitive to this. Our continued supportive relationship with the bank depends on these tasks being completed." Id., Ex. 6 (labeled "Pl. Ex. 35"). She stated that she was "requesting that [Plaintiff] book all adjustments that we are currently aware of, including restoring the CSBG revenues...." Id.

Plaintiff testified that he believed Mack's request was an illegal order and that he refused to comply with it. Mack testified that she believed his refusal to be an act of insubordination and that she informed Jones of this belief.

On April 1, 2004, Defendant appointed Jones to be Executive Director. Jones testified that when he arrived at UPO, "the house was on fire," meaning that UPO was in great disarray. Id. at 9. Defendant states that Jones "considered outsourcing the financial management functions as an option before he even began his work at UPO." Id.

Eboda testified that he told Jones that Plaintiff had assisted in the investigation that led to Jennings' resignation. On April 5, 2004, Plaintiff met with Eboda, Jones, and Alexis Roberson, a member of the Board's Ad Hoc Management Committee. Pl.'s Opp'n at 11-12. At this meeting, Eboda reiterated that Plaintiff had assisted in the investigation and had provided information that helped to instigate the DHS and DHHS audit of UPO's financial practices. Id. at 12.

On April 6, 2004, Plaintiff met with Jones, Mack, Shears, Monica Beckham, UPO's General Counsel, and employees of F.S. Taylor, a private certified public accounting firm. At this meeting, the F.S. Taylor employees proposed certain modifications to Defendant's financial statements. Mack and Shears agreed to these modifications, but Plaintiff did not. Plaintiff testified that in April 2004, Jones ordered him to charge what he considered to be unallowable expenditures to the grant.

On April 11, 2004, Plaintiff wrote a memorandum to Jones stating that he had "emphasized" at the April 6, 2004 meeting that "the 1.9 million from the CSBG unspent revenue could not be used to cover the deficit of UPO." Def.'s Mot., Ex. 10 (labeled "Pl. Ex. 41"). Plaintiff believed that UPO needed written approval prior to allocating the surplus funds to the deficit, and he did not believe that UPO had received such permission. Plaintiff wrote that

The second "valid" adjustment of applying money to the UPO deficit is invalid because this needs an advance approval from the CSBG state office to apply the revenue to UPO's deficit and that hasn't happened yet. As you can see the total "valid" adjustment of $3 million has to be reversed. UPO is in a deficit situation.


In the April 11, 2004 memorandum, Plaintiff also stated that the director of Head Start had asked him to remove three items that UPO had charged to the grant in fiscal year 2003, but that F.S. Taylor had recommended that UPO not remove those charges "until the auditors ask for such changes." Id. Jones responded to F.S. Taylor's recommendation by stating, "I'm not going to tell them either." Id. Plaintiff ...

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