United States District Court, D. South Carolina, Charleston Division
United States of America, ex rel. Willie Cooley and Frank Rawlinson, Plaintiffs,
Carolina Wrecking, Inc., Charles Dowey, individually, and Fencon, Inc., Defendants.
ORDER AND OPINION
Richard Mark Gergel United States District Court Judge
the Court is Defendant Fencon, Inc.'s motion to dismiss
the third and fourth causes of action alleged in the Second
Amended Complaint. (Dkt. No. 64.) For the reasons set forth
below, Fencon, Inc.'s motion to dismiss is granted in
part and denied in part.
Cooley and Frank Rawlinson ("Plaintiff-Relators")
are former employees-a tractor-trailer driver and equipment
operator, respectively-of Defendant Carolina Wrecking, Inc.
("Carolina Wrecking"), a demolition contractor.
Plaintiff-Relators bring this qui tarn action
pursuant to the False Claims Act ("FCA"), 31 U.S.C.
§ 3729 et seq., alleging that contractor
Fencon, Inc. ("Fencon"), subcontractor Carolina
Wrecking, and Carolina Wrecking's majority owner, Charles
Dowey, defrauded the United States government (the
"Government") by failing to pay employees the
"prevailing wages" mandated by the
McNamara-O'Hara Service Contract Act, 41 U.S.C.
§§ 351-358 ("SCA") and/or the Davis-Bacon
Act, 40 U.S.C. § 3141 et seq., but nonetheless
submitting statements that sought payment and certified
statutory compliance. (Dkt. No. 62 ¶¶ 5-7.)
Plaintiff-Relators worked pursuant to an approximately
five-year contract issued on or about August 18, 2010 by the
Government to Fencon for demolition and construction work at
the Joint Base Charleston. (Id. ¶¶ 19-20.)
In September 2011, the agreement was modified with an
amendment to "Incorporate the new Wage Determination
2005-2473, Rev. (06/13/2011)" (the
"Contract"). (Id. ¶ 28.) Wage
Determination 2005-2473, Rev. (06/13/2011) is issued by the
Department of Labor to set the minimum allowable hourly rate
per employee classification pursuant to the SCA.
(Id. ¶ 29.)
previously moved to dismiss all four causes of action in the
First Amended Complaint (Dkt. No. 43), which
Plaintiff-Relators moved to amend (Dkt. No. 47). The Court
granted in part and denied in part Fencon's motion to
dismiss. (Dkt. No. 61.) As to the first cause of action for
presentation of false claims and the second cause of action
for material false statements, the Court denied Fencon's
motion to dismiss. As to the third cause of action for
conspiracy to defraud the United States and fourth and
alternative cause of action for "QuantumMeruit/Unjust
Enrichment," the Court granted Fencon's motion to
dismiss and Plaintiff-Relators' motion to
amend. Plaintiff-Relators filed the Second
Amended Complaint, and Fencon now moves to dismiss the third
and fourth causes of action alleged therein.
12(b)(6) of the Federal Rules of Civil Procedure permits the
dismissal of an action if the complaint fails "to state
a claim upon which relief can be granted." A motion to
dismiss tests the legal sufficiency of the complaint and
"does not resolve contests surrounding the facts, the
merits of the claim, or the applicability of defenses. . . .
Our inquiry then is limited to whether the allegations
constitute a short and plain statement of the claim showing
that the pleader is entitled to relief." Republican
Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.
1992) (internal quotation marks and citation omitted). On a
Rule 12(b)(6) motion, the Court is obligated to "assume
the truth of all facts alleged in the complaint and the
existence of any fact that can be proved, consistent with the
complaint's allegations." E. Shore Mkts., Inc.
v. J.D. Assocs. Ltd. P 'ship, 213 F.3d 175, 180 (4th
Cir. 2000). Although the Court must accept the facts in a
light most favorable to the Plaintiff-Relators, the Court
"need not accept as true unwarranted inferences,
unreasonable conclusions, or arguments." Id.
Generally, to survive a motion to dismiss, the complaint must
provide enough facts to '"state a claim to relief
that is plausible on its face.'" Ashcroft v.
Iqbal, 556 U.S. 662, 679 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see
also Fed. R. Civ. Pro. 8(a)(2).
brought "under the FCA must also meet the more stringent
particularity requirement of Federal Rule of Civil Procedure
9(b)." McLain v. KBR, Inc., 612 Fed.Appx. 187,
187-88 (Mem) (4th Cir. 2015). Rule 9(b) particularity
requires that "[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake. Malice, intent, knowledge, and other
conditions of a person's mind may be alleged
generally." Fed.R.Civ.P. 9(b). The FCA "attaches
liability, not to the underlying fraudulent activity or to
the government's wrongful payment, but to the 'claim
for payment.'" Harrison v. Westinghouse Savannah
River Co., 176 F.3d 776, 785 (4th Cir. 1999). Meaning,
"to trigger liability under the Act, a claim actually
must have been submitted to the federal government for
reimbursement, resulting in a call upon the government
fisc." United States ex rel. Nathan v. Takeda
Pharms. N. A., Inc., 101 F.3d 451, 454 (4th Cir. 2013)
(internal quotation marks omitted); see also Harrison,
116 F.3d at 785 ("A false statement is actionable
under the Act only if it constitutes a false or fraudulent
claim."). Accordingly, a "court should hesitate to
dismiss a complaint under Rule 9(b) if the court is satisfied
(1) that the defendant has been made aware of the particular
circumstances for which she will have to prepare a defense at
trial, and (2) that plaintiff has substantial pre-discovery
evidence of those facts." Harrison, 176 F.3d at
Third Cause of Action for Conspiracy to Defraud the United
state a cause of action under 31 U.S.C. § 3729(a)(1)(C),
Plaintiff-Relators must plead that Fencon "conspire[d]
to commit a violation of [§§ 3729(a)(1)(A) or
(B)]" with Defendants. 31 U.S.C. § 3729(a)(1)(C).
Plaintiff-Relators "must allege with particularity facts
(1) to support the formation of an unlawful agreement between
the conspirators to get a false claim paid, and (2) at least
one overt act in furtherance of the conspiracy."
United States ex rel. Ahumada v. Nat'l Ctr. for
Emp't of the Disabled, No. 1:06-cv-713, 2013 WL
2322836, at *4 (E.D. Va. May 22, 2013), affdsub nom.
United States ex rel. Ahumada v. NISH, 756 F.3d 268 (4th
Second Amended Complaint alleges, in relevant part:
The Defendants had an agreement to violate the FCA: on or
after the August 18, 2010 Contract, both Defendants agreed to
present false claims to the government as described above,
via their contractor-subcontractor relationship.
Alternatively, the Contract itself was the agreement to
violate the FCA, as it caused Defendants to carry out its
scheme alleged above in submitting false claims.
Defends conspired to commit a violation of 31 U.S.C.
§§ 3729(a)(1)(A) and (B); Defendants, by or through
its agents, officers, or employees, knowingly agreed, with
the specific intent, to join into a conspiracy to defraud the
United States ...