United States ex rel. Grant v. United Airlines, Inc.

Summary

The Fourth Circuit reviewed the dismissal of a qui tam action brought by a former United Airlines employee under the False Claims Act. The court affirmed dismissal of the substantive FCA claims because the complaint did not plead with particularity that false claims were presented to the government for payment, but reversed dismissal of the retaliation claim, holding that the complaint adequately alleged objectively reasonable efforts to stop FCA violations.

Holdings

1. A relator must plead with particularity that a false claim was presented to the government for payment, either by identifying specific false claims or by alleging a pattern of conduct that necessarily led to submission of false claims. Grant's complaint failed to do so because it did not explain how United's subcontracted work was billed to the government or whether the government paid for the allegedly fraudulent repairs.
2. The complaint failed to state a claim under § 3729(a)(1)(B) for the same essential reason: it did not adequately plead that a false claim was submitted to the government for payment.
3. The distinct-possibility standard does not govern the second category of protected activity covering 'other efforts to stop' FCA violations. The applicable standard is objective reasonableness: an employee engages in protected activity when motivated by an objectively reasonable belief that the employer is violating or soon will violate the FCA, takes action based on that belief, and designs the action to stop one or more FCA violations.
4. Grant adequately pleaded an FCA retaliation claim by alleging protected activity, United's knowledge of that activity, and adverse action caused by the activity.

Questions Presented

1. Whether Grant's second amended complaint pleaded with the particularity required by Federal Rule of Civil Procedure 9(b) that United presented or caused the presentation of false claims to the government under 31 U.S.C. § 3729(a)(1)(A).
2. Whether Grant's complaint adequately pleaded a claim under 31 U.S.C. § 3729(a)(1)(B) based on false records or statements material to false claims.
3. Whether Grant adequately pleaded protected activity, employer knowledge, and causation for an FCA retaliation claim under 31 U.S.C. § 3730(h)(1).

Disposition

reversed_and_remanded