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United States ex rel. Conteh v. Ikon office Solutions, Inc.

United States District Court, D. Columbia.

March 18, 2014

UNITED STATES OF AMERICA, ex rel. ISSA CONTEH, Plaintiff/Relator,
v.
IKON OFFICE SOLUTIONS, INC., Defendant

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[Copyrighted Material Omitted]

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For Issa Conteh, United States of America ex rel, Plaintiff: Richard Ethelbert Patrick, LEAD ATTORNEY, JORDAN, PATRICK & COOLEY, LLP, Fairfax, VA.

For Ikon Office Solutions, Inc, Defendant: Andy Liu, LEAD ATTORNEY, CROWELL & MORING, L.L.P., Washington, DC.

For United States of America, Interested Party: Beverly Maria Russell, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.

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MEMORANDUM OPINION

REGGIE B. WALTON, United States District Judge.

The plaintiff/relator, Issa Conteh, brings this qui tam action against the defendant, IKON Office Solutions, Inc. (" IKON" ), under the False Claims Act, 31 U.S.C. § 3729 (2006). See Complaint and Jury Demand (" Compl." ) ¶ ¶ 21-32. The plaintiff/relator alleges that IKON violated the False Claims Act by falsely reporting to the Federal Deposit Insurance Company (" FDIC" ) that IKON provides its employees the fringe benefits mandated by the Service Contract Act, 41 U.S.C. § § 351-358.[1] See id. ¶ ¶ 11-20. Currently before the Court is IKON's Motion to Dismiss under Federal Rules of Civil Procedure 12(b)(6) and 9(b) for failure to state a claim upon which relief can be granted and for failure to plead fraud with sufficient particularity. Upon careful review of the parties' submissions,[2] the Court concludes that because the plaintiff/relator does not have standing to assert any private causes of action under the Service Contract Act, his claims concerning his personal compensation for lost wages, benefits, or any other personal remuneration are dismissed with prejudice. The Court further concludes that the plaintiff/relator has failed to plead fraud with sufficient particularity as required by Rule 9(b). Therefore, IKON's motion to dismiss the plaintiff/relator's False Claims Act claim based on fraud will be dismissed without prejudice.[3]

I. BACKGROUND

The following facts are as alleged, primarily based on information and belief, by

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the plaintiff/relator in his complaint. From September 2007 to November 2010, the plaintiff/relator " was employed by IKON as a Mail Clerk 2 in furtherance of IKON's contract with the FDIC." Compl. ¶ 8; Pl.'s Opp'n at 6. On May 11, 2007, prior to employing the plaintiff/relator, IKON entered into a contract with the FDIC to provide " copying and other document services . . . that required payment of specific wages and benefits [to employees] under the Service Contract Act." Compl. ¶ 1; Pl.'s Opp'n at 5. The Service Contract Act requires that private contractors: " (1) pay a 'prevailing wage' to employees who work on federal contracts; (2) contribute a certain amount to pay fringe benefits for covered employees ('health and welfare'); (3) provide covered employees a minimum number of paid holidays and vacation days; and (4) notify employees of their rights under the statute." Compl. ¶ 12 (citing 41 U.S.C. § § 351(a)(1)-(4)). Prior to the plaintiff/relator's employment with IKON, he " essentially held the same position for the same contract requirements with the FDIC under four . . . previous contractors; all four . . . previous contractors provided [him] fringe benefits" in accordance with the Service Contract Act. Id. ¶ 15.

The plaintiff/relator contends that " during the life of its contract with [the] FDIC, [the d]efendant failed to provide [the p]laintiff any fringe benefits." Id. ¶ 14. Based on the plaintiff/relator's discussions " with several other employees from [the d]efendant's Arlington, Virginia facility," the plaintiff/relator ascertained that the " [d]efendant failed to pay fringe benefits to any of its approximately twenty-two . . . personnel." Id. ¶ 18. On multiple occasions the plaintiff/relator questioned his direct supervisor, Landon Johnson, and IKON's Project Manager, Ted Tuck, " regarding his non-receipt of any fringe benefits." Id. ¶ 16. During those conversations, the plaintiff/relator provided the defendant with " actual notice of the [Service Contract Act] requirement to provide fringe benefits, or, [that they] had a duty to research the issue." Id. Yet, based on " information and belief, [the d]efendant ignored [the p]laintiff's inquiries and notices," id., and from September 2007 to November 2010, IKON submitted invoices to the FDIC approximately every two weeks certifying its compliance with the terms of the contract,[4] id. ¶ ¶ 11, 23, 29.

Based on these factual allegations, the plaintiff/relator filed a complaint under seal on June 29, 2012, alleging that IKON: (1) " knowingly presented, or caused to be presented, false or fraudulent claims to the United States for payment[] in violation of 31 U.S.C. § 3729(a)(1) [sic]," [5] id. ¶ ¶ 25-26; (2) " knowingly made and used, or caused to be made or used, false statements to get false or fraudulent claims paid by the United States[] in violation of 31 U.S.C. § 3729(a)(2)," [6] id. ¶ 27; (3) conspired to

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" defraud[] the United States by submitting false or fraudulent claims" and by " getting falsely certified claims paid or approved[] in violation of 31 U.S.C. § 3729(a)(3)," id. ¶ ¶ 28, 30; and (4) " knowingly certified, implicitly and expressly, or caused to be certified invoices claiming payment[s] for satisfactory compliance with the [Service Contract Act] and the terms of the contract . . . in violation of 31 U.S.C. § 3729(a)(2)," id. ¶ 29. In addition to seeking civil penalties and treble damages under the False Claims Act, the plaintiff/relator also seeks " [c]ompensation for lost wages, benefits and other remuneration." Id. ¶ ¶ A-B (Prayer for Relief). On May 15, 2013, the United States declined to intervene in this case, ECF No. 7, and the Court ...


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