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United States ex rel. Schweizer v. OCE North America, Inc.

United States District Court, District of Columbia

July 19, 2013

UNITED STATES ex rel. Stephanie Schweizer et al., Plaintiffs,
OCÉ NORTH AMERICA, INC. et al., Defendants

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For STEPHANIE SCHWEIZER, United States of America ex. rel, Plaintiff: James Charles Bailey, Jason H. Ehrenberg, Michael A. Tilghman, LEAD ATTORNEYS, BAILEY & EHRENBERG PLLC, Washington, DC.

For NANCY VEE, Plaintiff: David W. Sanford, LEAD ATTORNEY, SANFORD HEISLER, LLP, Washington, DC; H. Vincent McKnight, Jr., LEAD ATTORNEY, Altomease Rucker Kennedy, MCKNIGHT & KENNEDY, LLC, Silver Spring, MD.

For OCE N.V., Defendant: Andrew C. Bernasconi, Kathleen H. McGuan, Tyree P. Jones, Jr., LEAD ATTORNEYS, REED SMITH LLP, Washington, DC.

For OCE NORTH AMERICA, OCE IMAGISTICS, OCE-USA HOLDING, INC., Defendants: Andrew C. Bernasconi, Tyree P. Jones, Jr., LEAD ATTORNEYS, REED SMITH LLP, Washington, DC.

For UNITED STATES OF AMERICA, Movant: Laurie J. Weinstein, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC; Meredith Lynn Burrell, U.S. DEPARTMENT OF JUSTICE, Commercial Litigation Branch, Washington, DC.


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Royce C. Lamberth, Chief United States District Judge.

Plaintiff Stephanie Schweizer was terminated after notifying supervisors about her company's violation of government contracts. She subsequently brought these allegations to the government, which ultimately reached a proposed settlement with the company--a settlement of which Ms. Schweizer would stand to receive a certain percentage. In this lawsuit, she challenges the settlement, and alleges that she was terminated in retaliation for her whistle-blowing. The case is before the Court on remand to determine whether the settlement is " fair, adequate, and reasonable" after a hearing pursuant to 31 U.S.C. § 3730(c)(2)(B), and to rule on " the ultimate question [of] 'whether a reasonable jury could infer . . . retaliation from all the evidence.'" U.S. ex rel. Schweizer v. Océ N.V., 677 F.3d 1228, 1237, 1241, 400 U.S. App. D.C. 284 (D.C. Cir. 2012), rev'g 681 F.Supp.2d 64 (D.D.C. 2010), and rev'g 772 F.Supp.2d 174 (D.D.C. 2011). Because the Court finds the proposed settlement is " fair, adequate, and reasonable," the government's motion to dismiss Ms. Schweizer's qui tam claims, ECF No. 63, is GRANTED. Because a reasonable jury could infer that Ms. Schweizer's termination was retaliatory, defendants' supplemental motion for summary judgment, ECF No. 124, as to Ms. Schweizer's retaliation claim is DENIED.


A. Factual Background

In late 2004, plaintiff Stephanie Schweizer went to work for defendant Océ North America, a private company, supervising its fulfillment of certain government contracts. U.S. ex rel. Schweizer, 677 F.3d at 1229-30. Contracts between Océ and the General Services Administration contained " price reduction" clauses, requiring Océ to provide government customers with the same discount offered to certain private sector purchasers. Id. at 1229 (citing 48 C.F.R. § 552.238-75). These contracts also contained " country-of-origin" clauses, requiring Océ to sell to the government only goods made in the United States or other countries designated under the Trade Agreements Act, 19 U.S.C. § 2501 et seq. Schweizer, 677 F.3d at 1229.

1. Ms. Schweizer's Prima Facie Case of Retaliation

The Court of Appeals, reviewing the same record in the light most favorable to

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Ms. Schweizer (the non-movant), found that Ms. Schweizer had successfully set forth a prima facie case of retaliatory termination:

In early 2005 Schweizer began to suspect that Océ was violating the price reduction clauses. Through discussions with several co-workers, she learned that Océ representatives had been offering private sector customers significant ad hoc discounts. Her further investigation revealed that Océ was not passing these discounts on to the government, as the price reduction clauses required. If accurate, these findings meant that Océ regularly overcharged government agencies.
Schweizer sought to correct the violations, consistent with her duties as GSA contracts manager. She provided [her immediate supervisor, Ronald] Frost with records documenting the private sector discounts, which she said were causing Océ " not to be in compliance with the [contracts]." Frost allegedly responded by forbidding Schweizer from investigating the matter and stating that management would " destroy" her if she disobeyed.
A second set of concerns arose in November 2005 as Océ was planning to merge with Imagistics, a rival print and document management company. In preparation for the merger, Océ officials asked Schweizer to determine whether Imagistics' products complied with the contracts' country-of-origin clauses. Schweizer replied that they did not. She explained in an e-mail to Bryan Beauchamp, Océ 's vice president of business development, that most Imagistics products were manufactured in China, a country not certified under the Trade Agreements Act. Beauchamp agreed with Schweizer's assessment. Despite this understanding, Frost directed Schweizer to add Imagistics' products to Océ 's government contract listings just a few days later. When Schweizer refused, Frost allegedly told her not to pursue the issue any further and again threatened to " destroy" her if she did not comply.
Schweizer did not heed Frost's warning. Instead, she contacted Beauchamp, Frost's superior, in early December 2005. Schweizer informed Beauchamp of Frost's actions, her pricing investigation, and her belief that Océ was violating the False Claims Act. She also alleged that many of Océ 's own products were made in China, rather than in the Netherlands as stated in the contracts. Beauchamp referred Schweizer to Océ 's human resources director, Gerald Whelan, who then directed her to meet with in-house counsel, Dan Harper. That meeting resulted in a further referral to Kenneth Weckstein, Océ 's outside counsel for government contracting issues. In each of these conversations Schweizer reiterated her claim that Océ was violating the False Claims Act.
On December 6, 2005, Schweizer made a final, emotional plea to Beauchamp. She complained that the meetings with Whelan, Harper, and Weckstein were not productive, and that Beauchamp was " her last hope in terms of . . . saving the company" from " legal trouble." Beauchamp suspended Schweizer two days later, and terminated her employment on December 15. In a letter memorializing these actions, Beauchamp wrote that Schweizer had engaged in " inappropriate communications with [her] colleagues and supervisors" ; " refused to follow orders" ; ignored " the chain of command" ; and " failed to maintain necessary standards of workmanship and productivity." The letter added that Océ would " continue to investigate" Schweizer's " numerous complaints . . .

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about illegal conduct," including " fraud and crimes" committed in conjunction with the company's " Federal Supply Schedule contract." It closed by stating
While Océ 's initial response to your allegations is that they are without basis, you may want to bring your concerns to the attention of the Inspector General at the U.S. General Services Administration (" GSA" ). Separately, Océ intends to report your allegations to the GSA Inspector General.

Schweizer, 677 F.3d at 1230-31.

2. Océ 's Alternative, Non-Discriminatory Basis For ...

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