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United States ex rel. Conteh v. IKON Office Solutions, Inc.

United States District Court, D. Columbia.

May 8, 2015

UNITED STATES OF AMERICA, ex rel. ISSA CONTEH, Plaintiff/Relator,
v.
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.

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(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),[1] 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,[2] 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.

I. BACKGROUND

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]." [3] 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. ΒΆ 30 (second alteration in original). And, IKON " submitted invoices under the contract on or ...


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