United States District Court, D. Columbia.
UNITED STATES OF AMERICA, ex rel. ISSA CONTEH, Plaintiff/Relator,
IKON OFFICE SOLUTIONS, INC., Defendant
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, Civil Division, Washington, DC.
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(a)(1)--(a)(3) (2006). See Amended Complaint (" Am. Compl." ) ¶ ¶ 36-53. 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 with fringe benefits as mandated by the Service Contract Act (the " SCA" ), 41 U.S.C. § § 351-58 (2006), even after being advised that it was violating the SCA by not providing these benefits, see id. ¶ ¶ 1, 11-35. Currently before the Court is [IKON's] Motion to Dismiss and Request for Hearing (" Mot." ) under Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, and Rule 9(b) for failure to plead fraud with sufficient particularity. Upon careful review of the parties' submissions, the Court concludes for the reasons below that it must grant IKON's motion to dismiss the plaintiff/relator's False Claims Act claim and deny its motion for a hearing, as a hearing is unnecessary.
The following facts are alleged by the plaintiff/relator in his amended complaint, to a large degree, based merely " on information and belief." Am. Compl. ¶ ¶ 11, 26, 29, 32, 34-35, 52-53.
From September 2007 to November 2010, the plaintiff/relator " was employed by IKON as a General Clerk II in furtherance of IKON's contract with the FDIC." Id. ¶ 8. On or about 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 [SCA]."  Id. ¶ 1. IKON " failed to provide such wages and fringe benefits, and, after being advised of its violation of the SCA and its contract with the FDIC, [it] submitted invoices to the FDIC indicating compliance with the SCA and its contract with [the] FDIC." Id. ¶ 1. IKON " knowingly, . . . and in reckless disregard and/or deliberate ignorance of the truth or falsity of the information, submitted to the government, bills, invoices[,] and statements to [the] FDIC and potentially other government agencies, without regard to whether or not the billings were in compliance with the SCA . . . ." Id. ¶ 19. Furthermore, IKON " received payment from the government in response to those billings." Id. Thus, IKON " misrepresented to the United States that it was in compliance with the SCA, when it was not[; ]. . . . [s]pecifically, . . . [IKON] failed to provide [the plaintiff/relator] and other employees any fringe benefits in violation of the SCA." Id. ¶ 20.
A. Facts Alleged in Paragraphs Twenty-Two Through Thirty-Five of the Amended Complaint
" From 2007 through 2010[, the plaintiff/relator] was employed by IKON on its FDIC Contract as a General Clerk II at IKON's Arlington, Virginia facility." Id. ¶ 22. As a General Clerk II, he was entitled to " wages at $15.32 per hour, and . . . Health & Welfare [fringe benefits] [of] $3.35 per hour or $134.00 per week or $580.66 per month." Id. ¶ 23 (first alteration in original). Prior to his employment with IKON, the plaintiff/relator was employed " on the same FDIC contract requirement for four . . . other government contractors . . . and all previous employers paid the required SCA fringe benefits." Id. ¶ 27.
On several occasions during [the plaintiff/relator's] employment, [he] notified several IKON officials that IKON was not paying a benefit to which he and other employees were entitled under the SCA. He initially brought the failure to pay [the] SCA['s] fringe benefits to the attention of a representative in IKON's Human Resources office. When [the plaintiff/relator's] concerns were not addressed, he brought the matter to the attention of two . . . other IKON officials/managers: Ted Tuck, the contract Project Manager, and Lyndon Johnson, [the plaintiff/relator's] immediate supervisor. These individuals were agents and employees of IKON. On each occasion that [the plaintiff/relator] spoke to the supervisors, [he] advised them that the SCA required [IKON] to provide fringe benefits, and that all prior contractors for whom he had worked, provided fringe benefits for its employees. Accordingly, [IKON] had actual notice of the SCA requirement to provide fringe benefits, or, had a duty to research the issue. On information and belief, [IKON] ignored [the plaintiff/relator's] inquiries and notices.
Id. ¶ 29. At some unknown time, the plaintiff/relator " discussed IKON's failure/refusal to pay fringe benefits with several other [unidentified] employees at the Arlington facility. . . . [and they] stated that IKON was not paying them [the] required SCA fringe benefits [either]." Id. ¶ 33;
see also id. ¶ 28. " Based on these discussions, [the plaintiff/relator] concluded that IKON was not paying any of the other twenty-one . . . employees the required SCA fringe benefits." Id. ¶ 33.
Additionally, at some unknown time, " Mr. Johnson told [the plaintiff/relator] that he [Johnson] was responsible for collecting the time information from employees for pay purposes, and that he was also responsible for preparing and submitting IKON['s] invoices to the government." Id. ¶ 30 (second alteration in original). And, IKON " submitted invoices under the contract on or ...