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United States of America, Ex Rel. Brady Folliard v. Government Acquisitions

July 27, 2012

UNITED STATES OF AMERICA, EX REL. BRADY FOLLIARD, PLAINTIFF,
v.
GOVERNMENT ACQUISITIONS, INC. DEFENDANT. UNITED STATES OF AMERICA, EX REL. BRADY FOLLIARD, PLAINTIFF,
v.
GOVPLACE, DEFENDANT.



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

MEMORANDUM OPINION

This action, which is brought under the False Claims Act ("FCA"), 31 U.S.C. § 3729-- 3733, is before this Court on defendant Government Acquisitions, Inc.'s ("GAI") Motion [126] for Summary Judgment and defendant Govplace's ("GP") Motion [129] for Summary Judgment. For the reasons set forth below, defendant GAI's Motion for Summary Judgment will be granted and defendant GP's Motion for Summary Judgment will be granted in part and denied in part.

I.Introduction

Relator Brady Folliard initiated this qui tam suit pursuant to the Federal False Claims Act, 31, U.S.C. §§ 3729--3733 ("FCA"). Folliard's complaint alleged that eight named defendants listed for sale and sold products under government contracts from non-designated countries, in violation of the Trade Agreements Act ("TAA"), 19 U.S.C. §§ 2501--2581. All eight defendants filed motions to dismiss, which the Court granted as to six of the defendants. See generally July 19, 2011 Mem. Op. [114]; July 19, 2011 Order [115]. Two defendants remain: GAI and GP. The Court granted their motion to sever, but retained joint case management. See Sept. 27, 2011 Order [123]. In its most recent ruling, the Court granted in part defendants' Motions [126; 129] for Summary Judgment. See Mem. Op. [156]. After dismissing Counts III and IV against both defendants,*fn1 the Court instructed plaintiff to submit an amended opposition to defendants' Motions for Summary Judgment. May 3, 2012 Order [155]. Plaintiff was specifically instructed to address only very limited issues regarding each defendant.*fn2 Id. at 2. Defendants then submitted amended replies [159; 161]. With a complete record, the Court can make a final determination on the remaining summary judgment issues.

II.Background

a.Basis for the Complaint

Defendants are information technology providers who each supply products to United States government agencies under separate General Services Administration ("GSA") Multiple Awards Schedule Contracts ("GSA Schedule"). See GAI's Mem. P&A Supp. Mot. Summ. J. [126] ("GAI P&A") at 1; GP's Mot. Summ. J. [129] at 1, 5--6. These contracts are covered by the TAA, which bars the federal government, inter alia, from purchasing end-products that originate in non-designated countries. Corrected Second Am. Compl. [37] ("Compl.") ¶ 40.

Federal Acquisition Regulation ("FAR") 52.225-5(a) lists designated countries for purposes of the TAA; the federal government is prohibited from purchasing products from any country not listed.

Plaintiff alleges that GAI knowingly sold six products that originated in non-designated countries. Compl. ¶¶ 101--01. He alleges that GP knowingly sold ten products that originated in non-designated countries. Id. ¶¶ 117--18. With the dismissal Counts III and IV, these sales now form the basis of what remains of Folliard's complaint. Id. ¶¶ 134--41.

The FCA, 31 U.S.C. § 3279 et seq., was amended by the Fraud Enforcement Recovery Act ("FERA") in 2009. See generally Pub. L. No. 111--12, 123 Stat. 1617 (2009). The FCA provisions relevant to this case involve (1) presenting fraudulent claims for payment and (2) knowingly making false statements or records to obtain payment. The presentment clause was renumbered from 31 U.S.C. § 3279(a)(1) to 31 U.S.C. § 3279(a)(1)(A) in FERA, which also removed language requiring that the claim be presented to an officer or employee of the government or armed forces. See Pub. L. 111--12 § 4(a). The false statement clause was renumbered from 31 U.S.C. § 3279(a)(2) to 31 U.S.C. § 3279(a)(1)(B) in FERA, which changed the language from "false record or statement to get a false or fraudulent claim paid or approved by the government" to "statement material to a false or fraudulent claim." See id. The false statement clause was also made retroactive to June 28, 2008, while the presentment clause was effective the date of enactment. See id. §4(f).

Because of the dates of the alleged infractions and the enactment of FERA, Folliard makes two claims against GAI and GP: (1) allegations under the pre-FERA presentment clause for acts prior to May 20, 2009 (Count I, Compl. ¶¶ 134--37), and (2) allegations under the post-FERA presentment clause for acts after May 20, 2009 (Count II, Compl. ¶¶ 138--41).

b.Procedural History

Folliard filed this qui tam action under seal in April 2007, alleging violations of the FCA. See generally Apr. 20, 2007 Compl. [1]. Pursuant to 31 U.S.C. § 3730, the government was required to decide whether to intervene in this case, and in May 2010, finally determined that it would not. See Notice of Election to Decline Intervention [13]. The case was unsealed in June 2010. See June 17, 2010 Order [32]. Folliard filed his Corrected Second Amended Complaint in October 2010.

GAI and Govplace ("GP") filed Motions to Dismiss in December 2010. See generally GAI's Mot. Dismiss Relator's Corrected Second Am. Compl. [81]; GP's Mot. Dismiss Relator's Corrected Second Am. Compl. [75]. In July 2011, the Court denied both defendants' motions. See July 19, 2011 Mem. Op. [114]; July 19, 2011 Order [115]. The defendants jointly filed a motion to sever, which the Court granted, except that case management was to remained joined. See Sept. 27, 2011 Order [123].

GAI filed for summary judgment in November 2011, and GP filed for summary judgment in December 2011. See GAI's Mot. Summ J. [126]; GP's Mot. Summ. J. [129]. These motions were granted in part, with the Court dismissing Counts III and IV. See May 3, 2012 Mem. Op.; May 3, 2012 Order. Plaintiff filed his Supplemental Memorandum in Opposition [157] to GAI's Motion for Summary Judgment and Supplemental Memorandum in Opposition [158] to GP's Motion for Summary Judgment on May 17, 2012. Both defendants submitted replies [159; 161]. The issue of summary judgment is now ripe for the Court's determination.

III.Legal Standard

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The standard requires more than the existence of some factual dispute; "the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247--48 (emphasis in original). A fact is material if, under the applicable law, it could affect the outcome of the case. Id. A dispute is genuine for summary judgment purposes if the "evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. Also, because "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge," the "evidence of the non-movant is to be believed, and all justifiable are to be drawn in his favor." Id. at 255. A nonmoving party, however, must establish more than "the existence of a scintilla of evidence" in support of its position. Id. at 252. In addition, he may not rely solely on allegations or conclusory statements. See Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999). The nonmoving party must present specific facts that would enable a reasonable jury to find in its favor. Id. If the evidence presented is "merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249--50.

A proper FCA claim is composed of three elements: (1) the defendant presented a claim for payment or approval to the government, (2) the claim was "false or fraudulent," and (3) the defendant acted knowing that the claim was false. United States ex rel. Schwedt v. Planning Research Corp., 59 F.3d 196, 198 (D.C. Cir. 1995). The defendant must provide at least some evidence about each element to survive summary judgment. See United States ex rel. Hockett v. Columbia/HCA Healthcare Corp., 498 F. Supp. 2d 25, 71 (D.D.C. 2007) (holding when a relator cannot "point to a single, specific false claim" or sufficiently describe one, he has "failed to create a triable issue of fact.").

Federal Rule of Civil Procedure 56(d)*fn3 allows a court to deny a motion for summary judgment or defer deciding the motion if the nonmoving party shows that it cannot present facts essential to justify its opposition. McWay v. LaHood, 269 F.R.D. 35, 38 (D.D.C. 2010). Rule 56(d) is provided to ensure that the non-moving party isn't "railroaded" by a premature motion for summary judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 326 (1986). However, the burden is on the party making a Rule 56(d) request to "state concretely" why additional discovery is needed. Messina v. Krakower, 439 F.3d 755, 762 (D.C. Cir. 2006) (citations and internal edits omitted). The party seeking relief under Rule 56(d) must do more than offer "'conclusory allegation[s] without any supporting facts' to justify the proposition ...


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