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United States ex rel Folliard v. CDW Technology Services

June 28, 2010


The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge


Plaintiff-relator Brady Folliard ("relator") brings this qui tam action under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729 et seq., on behalf of the United States against defendants CDW Technology Services, Inc. ("CDWTS") and CDW Government, Inc. ("CDWG") (collectively "CDW"). Defendants now move to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), arguing that another qui tam complaint, filed two years before the instant complaint, deprives the Court of subject matter jurisdiction under the "first-to-file" bar of 31 U.S.C. § 3730(b)(5). For the reasons discussed herein, defendant's motion will be granted.


The Court need not repeat the facts and procedural history previously set forth in a prior Memorandum Opinion, see United States ex rel. Folliard v. CDW Tech. Servs., Inc., No. 07-CV- 2009, 2010 WL 1541224, at *1-*3 (D.D.C. Apr. 21, 2010), but will limit its discussion to those facts that relate only to this motion.


In 2005, Joseph Liotine filed a qui tam suit under the FCA against CDWG in the U.S. District Court for the Southern District of Illinois. See Compl., United States ex rel. Liotine v. CDW-Government, Inc., No. 05-CV-033 (S.D. Ill. filed Jan. 19, 2005) ("Liotine Compl."). Paragraph 70(F) of the Liotine complaint alleges that CDW violated the FCA in part by

[s]elling non trade compliant items such as certain Tektronix printers (from 1999 to 2001) and accessories which originated from non trade compliant countries. While the government could purchase such items through an open market card, the items could not be listed in the GSA schedule. Despite this, Defendant knowingly listed approximately 20-25 similar items (such as certain HP backup tapes) which were created or assembled in non-trade compliant countries. Because Defendant deliberately placed every item into one database, trade compliant and non trade compliant goods were commingled.

Id. ¶ 70(F).


Relator Folliard filed the instant suit in 2007. The gravamen of Folliard's complaint is that from 2007 to the present, CDW submitted false claims to the government by selling Hewlett-Packard ("HP") computer products and supplies in contravention of the Trade Agreements Act ("TAA"), 19 U.S.C. §§ 2501 et seq., through the GSA Advantage and Solutions for Enterprise-Wide Procurement ("SEWP") websites maintained by the General Services Administration ("GSA") and the National Aeronautics and Space Administration ("NASA"), respectively. As alleged in the complaint, when federal agencies make purchases for public use pursuant to acquisition contracts, they may only buy products from "designated" countries as specified in the TAA and its related regulations. See Folliard, 2010 WL 1541224, at *1. The Court previously dismissed Folliard's claims relating to the GSA procurement portal under Federal Rule of Civil Procedure 12(b)(6). See id. at *14.

Defendants now argue that Folliard's lawsuit is barred under 31 U.S.C. § 3730(b)(5), which provides that "no person other than the Government may... bring a related action based on the facts underlying" an earlier-filed qui tam action. In response, Folliard argues that his complaint is distinguishable from Liotine's because they allege different types of fraud involving different federal contracts and agencies. (See Pl.'s Opp'n to Defs.' Mot. to Dismiss ["Pl.'s Opp'n"] at 2, 5.) The United States, which has not intervened in this case, filed a statement of interest that largely echoes Folliard's position. Defendants respond that Folliard's argument elevates form over substance, and that in light of the analysis of § 3730(b)(5) in United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214 (D.C. Cir. 2003), Folliard's claims are barred because they are based on the "same material elements of fraud" as Liotine's. See id. at 217.


The parties agree that Hampton's analysis of the first-to-file rule governs the instant motion, but defendants advocate for dismissal by arguing that Hampton is controlling, while relator retorts that Hampton is distinguishable. Applying the controlling law to the allegations by Folliard and by Liotine, the Court is persuaded that Hampton and the statutory text require dismissal of Folliard's claims.

In Hampton, the D.C. Circuit found that the plaintiff's FCA qui tam action, in which she alleged that the defendants had engaged in Medicare home health care billing fraud, was barred by an earlier-filed action that alleged a similar fraudulent scheme by one of the same defendants. See 318 F.3d at 218-19. The Court of Appeals concluded that § 3730(b)(5) served to bar "'actions alleging the same material elements of fraud' as an earlier suit, even if the allegations [of the later-filed complaint] 'incorporate somewhat different details.'" Id. at 217 (quoting United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1189 (9th Cir. 2001)) (emphasis added). In so doing, the Court rejected "another possible test, one barring claims based on 'identical facts.'" Id. at 218. Acknowledging that there is no bright line rule for ...

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