U.S. District Court for the Western District of Louisiana Rules that False Claims Act as Amended by Fraud Enforcement and Recovery Act of 2009 Does Not Prohibit Retaliation by Non-Employers

 

The U.S. District Court for the Western District of Louisiana in Howell v. Town of Ball, et al., Civil Action No. 12-951, 2012 U.S. Dist. LEXIS 181217 (W.D. La. Dec. 21, 2012) (Howell II), denied a plaintiff’s motion to reconsider its previous ruling that the False Claims Act (FCA), 31 U.S.C. §§ 3729 et seq., does not prohibit retaliation by non-employers.  See also Howell v. Town of Ball, et al., Civil Action No. 12-951, 2012 U.S. Dist. LEXIS 128433 (W.D. La. Sept. 4, 2012) (Howell I).

Allegations and Procedural History: The plaintiff police officer acted as a confidential informant in an FBI investigation that led to criminal convictions of town officials and employees for defrauding the Federal Emergency Management Agency of disaster recovery funds.  After the plaintiff’s role in the investigation became known, the town police chief allegedly told the plaintiff that he did not trust him and eventually fired him for insubordination and disrespect.  The town aldermen approved the police chief and the mayor’s recommendation that the plaintiff’s employment be terminated.  The plaintiff filed, among other, claims for retaliation in violation of the FCA against the town, police chief, mayor, and aldermen.  Judge James T. Trimble, Jr. ruled that the FCA does not prohibit retaliation by non-employers and dismissed the FCA retaliation claims against the defendants other than the town.

Ruling on Whether FCA Prohibits Retaliation by Non-Employers: Section § 3730(h) previously only prohibited retaliation against employees, not against contractors or agents, and expressly prohibited retaliation “by his or her employer.”  Section § 3730(h) as amended by the Fraud Enforcement and Recovery Act of 2009 (FERA) omits the “by his or her employer” language and prohibits retaliation against employees, contractors, and agents.   In dismissing the FCA retaliation claims against defendants other than the town, the court noted the absence of any jurisprudence supporting the plaintiff’s interpretation of the FCA and agreed with the defendants’ observation that: “alteration in the terms or conditions of employment, whether by demotion, termination or otherwise, may only be carried out by plaintiff’s employer.”  Howell I, 2012 U.S. Dist. LEXIS 128433, at *10.   The court found that FERA’s legislative history showed that removal of the “by his or her employer” language was not meant to expand the class of defendants whom could be sued for retaliation.  Howell II, 2012 U.S. Dist. LEXIS 181217, at *5-*6 (citing 155 Cong. Rec. E 1295, 1300 (daily ed. June 3, 2009) (statement of Congressman Berman)).