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United States of America Ex Rel v. Oce North America

March 25, 2011

UNITED STATES OF AMERICA EX REL
STEPHANIE SCHWEIZER, ET AL., PLAINTIFFS,
v.
OCE NORTH AMERICA, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth, Chief Judge

MEMORANDUM OPINION

Before the Court is defendants Oc© North America, Inc., Oc©-USA Holding, Inc., Oc© Imagistics, Inc., and Oc© N.V.'s Motion for Summary Judgment. Upon consideration of the Motion, the Opposition thereto, the Reply brief, applicable law, and the entire record, the Court will grant the Motion for the reasons that follow.

I.BACKGROUND

Defendant Oc© North America, Inc. ("Oc©") hired plaintiff Stephanie Schweizer in December 2004 as GSA Contracts Manager. Schweizer Dep. 131--34, July 21, 2010, ECF No. 103-4. Schweizer managed Oc©'s Schedule 30 and 76 contracts with the U.S. General Services Administration (GSA), which obligated Oc© to supply printers and related products to the federal government. Beauchamp Dep. 14, Aug. 3, 2010, EFC No. 103-8. Schweizer was responsible for "daily management and oversight" to "maintain[] the integrity of all contracts" and "assure contract compliance." Ex. 2 to Frost Dep. at 2, Aug. 5, 2005, ECF No. 105-1 [hereinafter Job Description]; Beauchamp Dep. 13--14. Her specific duties included being a point of contact for salespersons, Schweizer Dep. 131, 150--51, and for government officials, Job Description at 7, negotiating contract modifications, id. at 1, setting up and managing the GSA Advantage Program (the government electronic buy board), id., supporting the field sales effort by-among other things-developing price strategy, id. at 2, ensuring accuracy of product specifications and prices listed in the contracts, Schweizer Dep. 150--51, understanding government contract law and keeping abreast of new legislation, Job Description at 2, participating in the Coalition for Government Procurement and other similar associations, id., coordinating with senior management on GSA and related matters to assure contract compliance, id., and ensuring general legal and contractual compliance, Schweizer Dep. 131, 171--72.

Schweizer reported directly to Ronald Frost, Oc©'s Director of Government Contracting. Frost Dep. 9. On occasion, Frost's supervisor and Oc©'s Vice President of Business Development and Federal Sales, Bryan Beauchamp, assigned work to Schweizer directly. E.g., Schweizer Decl. ¶ 7, Sept. 20, 2010, ECF No. 105-5.

While performing her job, Schweizer began to suspect that Oc© was defrauding the federal government by deliberately failing to negotiate GSA contract modifications to reflect commercial price discounts, in violation of the contracts' price reduction clauses, and by deliberately certifying that some products were manufactured in the Netherlands despite actually being manufactured in China, in violation of the Trade Agreements Act, to which the Schedule 36 and 70 contracts were subject. Schweizer Decl. ¶¶ 4, 5, 7, 8.

Schweizer's suspicions regarding price reduction clause noncompliance developed from her monitoring the GSA Advantage Program and communicating about prices with co-workers, including Accounts Managers Nancy Vee and Sue Wohlford, and with her supervisor, Frost. Id.

¶¶ 3-6. Vee told Schweizer that she had offered on several occasions prices different from the established GSA contract prices, which Schweizer determined were not listed in GSA contract modifications. Id. ¶ 4. Schweizer obtained by email Wohlford's pre-sale pricing list, which contained different pricing than was reported to the government or listed in the GSA Advantage Program. Schweizer Dep. 272--74; Schweizer Decl. ¶ 5. Schweizer also found falsified documents that Oc©'s Contract Administrator, Kathleen Carey, had sent to the GSA. She reported this to Frost, who told her he "didn't want to talk about it" and "didn't want to hear about any documents that were falsified." Schweizer Dep. 156--59. In another conversation with Frost about "the corruption and the fraud in the company," Schweizer warned Frost of the risk of noncompliance with a GSA contract. Frost replied, "I know, that is one of the reasons why you're not to discuss these issues with anyone outside." Schweizer Dep. 270--71.

Schweizer's suspicions regarding Trade Agreements Act noncompliance developed from her review at Vice President Beauchamp's direction of Oc©'s Security and Exchange Commission (SEC) reports and product manufacturing information, Schweizer Dep. 228--31, and conversations with co-workers and Frost, Pl.'s Am. Interrog. Resp.No. 4, July 20, 2010, ECF No. 105-4. Schweizer's review revealed over three hundred products manufactured in China by Imagistics, a company that Oc© was planning to acquire. Schweizer Dep. 233. Co-workers told Schweizer that Oc© manufactured in China products that were listed on the GSA contract as being manufactured in the Netherlands. Pl.'s Am. Interrog. Resp. No. 4. Frost told Schweizer that Oc© "had been manufacturing in China for years" and that if Schweizer continued to pursue these issues, Oc© "would 'destroy' her." Id.

Schweizer decided that Oc©'s noncompliance constituted illegal fraud and a False Claims Act violation after speaking with Larry Allen, President of the Coalition for Government Procurement. Schweizer Dep. 245--46. Allen told Schweizer she "could go to jail" if she placed products manufactured in China on the GSA schedule. Id.

In early December 2005, Schweizer reported the Trade Agreements Act violations to Vice President Beauchamp, characterizing them as False Claims Act violations. Pl.'s Am. Interrog. Resp.No. 8. Beauchamp directed her to speak with Gerald Whelan, Oc©'s Human Resources Director. Id. Whelan then directed her to speak with Oc©'s in-house counsel, Dan Harper. Id. Harper directed her to speak with Oc©'s outside counsel, Kenneth Weckstein, who had more experience with government contracting. Id. In each conversation, Schweizer repeated her belief that Oc© was violating the False Claims Act by misrepresenting where its products were manufactured. Id. On December 8, 2005, Frost notified Schweizer that she was suspended without pay. Defs.' Statement of Undisputed Material Facts ¶ 48, Sept. 1, 2010, ECF No. 103-2. Later that month, Schweizer received a termination letter dated December 15, 2005, ascribing her termination to unprofessional conduct and poor performance. Schweizer Dep. 300. The letter explains that Schweizer's employment was terminated because she "engaged in indecent conduct (repeated cursing and yelling at other employees) . . . refused to follow orders from [her] supervisor and acted insubordinately to [her] supervisor . . . [and] failed to maintain necessary standards of workmanship and productivity." Letter from B. Beauchamp 1--2, Dec. 15, 2005, ECF No. 103-15. The letter further lists as grounds for dismissal Schweizer's unfounded allegations "that fraud and crimes had been committed by Mr. Frost." Id.

A few months later, in April 2006, Schweizer filed a qui tam suit against Oc©. Count I alleges that Oc© misrepresented its pricing practices, thereby not complying with its GSA contracts' price reductions clauses and overcharging the GSA in violation of the False Claims Act, 31 U.S.C. § 3729(a)(1) and (2). Count II alleges that Oc© violated § 3729(a)(1) and (2) by misrepresenting where Oc© manufactured its products and thereby not complying with the contracts' Trade Agreements Act clauses. Count III alleges that Oc© fired Schweizer in retaliation for her fraud investigation, violating § 3730(h), the FCA's whistleblower protection provision. Pl.'s Compl., Apr. 7, 2006, ECF No. 1. In December 2006, Schweizer's co-worker Nancy Vee joined Schweizer in filing an amended complaint, adding Vee as a plaintiff. In September 2009, the United States intervened in Counts I and II to request dismissal following execution of a settlement agreement between the United States, Oc©, and plaintiff Vee. In January 2010, this Court granted the United States' Motion to Dismiss Counts I and II with prejudice, over Schweizer's opposition, leaving only Schweizer's Count III retaliation claim. This Court now rules on Oc©'s Motion for Summary Judgment on Count III and request for attorneys' fees and costs.

II.LEGAL STANDARD

The Court will grant a motion for summary judgment where a party shows "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c)(2). There is a genuine issue as to a material fact if "reasonable minds could differ" as to that fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986), cited in Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The burden is on the moving party to demonstrate that there is an "absence of a genuine issue of material fact" in dispute. Celotex, 477 U.S. at 323. The Court will believe the evidence of the non-moving party and will draw all reasonable inferences from the record in the non-moving party's favor. Anderson, 477 U.S at 255. In addition, "the court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion." D.D.C. LCvR 7(h)(1). To avoid summary judgment, the non-moving party cannot merely raise "some alleged factual dispute": the fact at issue must be "material." Id. at ...


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