                                                                                        United States Court of Appeals
                                                                                                 Fifth Circuit
                                                                                               F I L E D
                        IN THE UNITED STATES COURT OF APPEALS
                                                                                              November 29, 2005
                                 FOR THE FIFTH CIRCUIT
                                                                                           Charles R. Fulbruge III
                                                                                                   Clerk

                                               No. 04-41585



SEALED APPELLANT I,
                                                                                         Plaintiff-Appellant,

                                                   versus

SEALED APPELLEE I,
                                                                                       Defendant-Appellee.



                              Appeal from the United States District Court
                                   for the Eastern District of Texas
                                          (No. 1:02-CV-155)




Before BENAVIDES, STEWART, and OWEN Circuit Judges.

CARL E. STEWART, Circuit Judge:*

        This appeal arises from a qui tam action alleging violations of and retaliatory discharge under

the False Claims Act, 31 U.S.C. § 3729. The principal issues on appeal are whether the relator

satisfied the pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure and whether

the relator stated a claim for retaliatory discharge. The district court dismissed the claims for failure

to plead with particularity pursuant to Rule 9(b) and failure to state a claim pursuant to Rule 12(b)(6).

For the following reasons, we affirm.


   *
    Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not
precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.
                      I. FACTUAL AND PROCEDURAL BACKGROUND

       Sealed Appellee I (“Appellee”) is an ambulance service company. Sealed Appellant I

(“Appellant”) was originally hired by Appellee’s parent company as Compliance Manager to oversee

regulatory compliance in the eastern Unit ed States. Federal regulations require that an ambulance

company obtain the patient’s signature before the company can bill the government for its services.

In his capacity as Compliance Manager, Appellant became aware of complaints about the lack of

patient signatures from one of Appellee’s billing supervisors and several billing clerks. In response,

Appellant wrote a compliance intake form to his supervisor informing him of the billing clerks’

complaints. He was later promoted to Director of Compliance for Appellee. In that capacity,

Appellant conducted a company wide audit to evaluate the extent of the patient signature problem.

This audit revealed that in several regions in the United States, a number of offices were

noncompliant. Specifically, the audit revealed that in Kennesaw, Georgia, the best regional billing

office, noncompliance in the patient signature area was thirty-four percent while the worst regional

billing office, Portland, Oregon, was ninety-four percent noncompliant. After the auditor removed

those files that had a “lifetime signature” from the noncompliant category, the noncompliance rate

improved to between thirty-five and forty percent company wide. Appellant then used the data from

the audit to extrapolate how much Appellee had billed the government and concluded that Appellee

had falsely billed the government approximately $200 million annually.

       In July 2001, Appellant repo rted the results of the audit in a memorandum addressed to

Appellee’s Chief Compliance Officer and distributed it to several of Appellee’s executive officers.

Appellant also gave a presentation about the problem at a compliance retreat in August 2001. On or

about August 31, 2001, Appellee’s supervisor called Appellant away from his office in Aurora,


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Colorado, to a staff meeting in Arlington, Texas, but fired Appellant before the meeting began.

Appellant was unable to retrieve from his office his personal effects or documentation that supported

his allegations. Appellant contends that this was done to bar his access to the documents necessary

to be more specific in his allegations.

         Appellant subsequently filed a qui tam suit alleging violations of the FCA and retaliatory

discharge. The government declined to intervene. Appellee filed a mo tion to dismiss for failure to

state a claim. The district court granted Appellee’s motion to dismiss as to Appellant’s claims of

violation of the FCA as well as his claim of retaliatory discharge. Appellant timely filed notice of

appeal.1

                                          II. DISCUSSION

A.       Violation of the FCA

         Claims brought under the FCA must be pleaded with particularity pursuant to Federal Rule

of Civil Procedure 9(b). United States ex rel. Doe v. Dow Chemical Co., 343 F.3d 325, 328 (5th Cir.

2003). A dismissal for failure to meet the requirements of Rule 9(b) is a dismissal for failure to state

a claim, thus review is de novo. Id. We also review a dismissal for failure to state a claim under Rule

12(b)(6) de novo. Id.

         To satisfy Rule 9(b) the complaint must allege the “who, what, when, where, and how of the

alleged fraud.” United States ex rel. Thompson v. Columbia/HCA Healthcare Corp.,125 F.3d 899,

903 (5th Cir. 1997) (internal quotations omitted) (quoting Williams v. WMX Tech., Inc., 112 F.3d


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    Appellee also filed a motion to extend the automatic sixty-day seal placed on the record, and the
district court entered an order temporarily extending the seal. Because we conclude that the district
court properly dismissed Appellant’s claims, we need not reach Appellant’s contention that the
district court erred in granting Appellee’s motion to continue the seal beyond the automatic sixty-day
period.

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175, 179 (5th Cir.1997)). Appellant alleged that Appellee violated the FCA by sending bills for

ambulance runs representing that the patients’ signatures were on file, when Appellee knew that the

signatures were not on file. He further alleged that these violations occurred nationwide and cost the

government approximately $200 million annually spanning a period of five years, “[f]rom 1999 to the

present.”

        Appellant has failed to plead any particular facts showing that Appellee was aware of the

actions of its emplo yees and intentionally filed false claims with the government. The complaint

alleges that when Appellant conducted training sessions with the billing clerks, they complained that

they were required to check the box indicating the patient’s signature was on file when they knew

there was no signature on file. Appellant asserts that he did not name the individual billing clerks

because he contends that seventy-five individual corporations perpetrated the fraud. The complaint

alleges that Appellant told his supervisor about the billing clerks’ complaints and that Appellee’s vice

president criticized Appellant for instructing the clerks not to bill without a signature. Thereafter,

Appellant was promoted to Director of Compliance and, in that capacity, he conducted an audit and

submitted the results in a memo to, inter alia, Appellee’s corporate officers. These are the only

allegations that Appellee was aware of the actions of its employees. The complaint includes no more

than the conclusory assertions of Appellee’s knowledge and intent to file fraudulent claims. Cf.

United States ex rel. Williams v. Bell Helicopter Textron, Inc., 417 F.3d 450, 454 (5th Cir. 2005)

(“Williams’ complaint fails to plead any particular facts showing that Bell Helicopter was aware of

the actions of its employees, [and] that it had intentionally filed these false claims with the government

. . . .”). Further, the complaint alleges that on or about August 31, 2001, Appellant was fired, but

does not allege how Appellant knows that Appellee submitted false billing statements after that time.


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The audit only spanned one year, thus the allegations of fraud outside of that time frame are based

on Appellant’s extrapolations and good faith belief; this is simply not sufficient under Rule 9(b). See

Columbia/HCA Healthcare, 125 F.3d at 903 (rejecting relat or’s claim that there was reasonable

probability based on statistical studies performed by the government, that forty percent of the claims

submitted by the defendants violated the anti-kickback law or were not medically necessary).

        The complaint does not ident ify a single false claim that was actually submitted to the

government. Appellant contends that his complaint is “perfectly analogous” to the complaint held

sufficient in Benchmark Electronics, Inc. v. Huber Corp., 343 F.3d 719 (5th Cir. 2003). To the

contrary, the complaint in Benchmark referred to specific documents alleged to contai n false or

misleading statements, as well as the month and year in which the documents were sent, see id. at

724, whereas Appellant’s complaint alleges the billing statements were sent from 1999 to the present

and that they occurred nationwide and in the Port Arthur, Portland, and Kennesaw offices. He does

not contend that all of the billing statements submitted from 1999 to the present contained false

statements; instead he alleges that the audit revealed a noncompliance rate between thirty-five percent

and forty-five percent. Nevertheless, the complaint does not identify particular invoices containing

false statements by number, date, or otherwise. While we understand that Appellant’s contention that

he was prevented from reentering his office after Appellee terminated his employment, it defies

credulity that he is unable to identify any details of a single false claim submitted to the government.

        Appellant contends that he is entitled to a relaxed Rule 9(b) standard because the audit is the

only evidence of Appellee’s false statements and it is exclusively within Appellee’s control. This court

has stated that the Rule 9(b) standard may be relaxed when the facts relating to the alleged fraud are

peculiarly in the defendant’s control; however, a plaintiff is not entitled to the relaxed standard where


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the information is available from another source or where the defendant fails to allege a factual basis

for his beliefs. See United States ex rel. Russell v. Epic Healthcare Mgmt. Group, 193 F.3d 304, 308

(5th Cir. 1999); Columbia/HCA Healthcare Corp., 125 F.3d at 903. Appellant has not alleged a

sufficient factual basis for his beliefs, nor has he argued that he tried but failed to obtain the

information. We are not persuaded by his argument that he could not obtain the information from the

billing clerks. The rules of professional conduct prevent counsel from contacting persons represented

by counsel but do not “prohibit communication between a lawyer’s client and persons, organizations,

or entities of government represented by counsel, as long as the lawyer does not cause or encourage

the communication without the consent of the lawyer for the other party.” Tex. Gov’t Code Ann. art.

10, § 9, Rule 4.02 cmt. 2 (Vernon 2005). Thus, nothing prevented Appellant from contacting

Appellee’s employees on his own, whether before commencing the litigation or after. Accordingly,

the district court properly granted Appellee’s motion to dismiss Appellant’s claim for violation of the

FCA for failure to plead with particularity and failure to state a claim.

B.      Retaliatory Discharge

        The district court dismissed Appellant’s retaliatory discharge claim under Rule 12(b)(6)

because it concluded he could not show that Appellee was aware that he was engaged in protected

activity. Again, we review dismissal under Federal Rule of Civil Procedure 12(b)(6) de novo. Causey,

394 F.3d at 288; Doe, 343 F.3d at 328. A district court may not dismiss a complaint for failure to

state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts that would

entitle him to relief. Doe, 343 F.3d at 328 (quoting Columbia/HCA Healthcare Corp., 125 F.3d at

901).




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       “The ‘whistleblower’ provision of the False Claims Act prevents the harassment, retaliation,

or threatening of employees who assist in or bring qui tam actions.” Robertson v. Bell Helicopter

Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). Under the whistleblower provision of the FCA,

Appellant was required to show that he engaged in protected activity, that Appellee knew he was

engaged in protected activity, and that he was discharged because of it. See id.; 31 U.S.C. § 3730(h).

       In his complaint, Appellant alleges he conducted the audit in his capacity as Director of

Compliance. He also alleges that, in that capacity, he informed Appellee’s chief compliance officer,

as well as corporate managers, of the signature requirements and the results of his audit, and that he

gave a presentation about the problem at the compliance retreat; however, he does not allege that he

informed his supervisors that he was concerned about fraud. In Robertson, 32 F.3d at 952, this court

concluded that the plaintiff could not show retaliatory discharge where his investigations were part

of his job and he never characterized his concerns as involving illegal, unlawful, or false-claims

investigations. Appellant does not allege that he expressed concerns to his supervisors outside of

those that were part of his duties as Director of Compliance, nor does he allege that he engaged in

any conduct inconsistent with his responsibilities as Director of Compliance such that management

was on notice that he was engaged in protected activity. See Robertson, 32 F.3d at 952. Appellant

has not alleged a sufficient factual basis from which we can infer that Appellee had knowledge that

Appellant was engaged in protected activity or that he was fired because of such activity. Therefore,

we agree with the district court’s conclusion that Appellant failed to state a claim for retaliatory

discharge.




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                                       III. CONCLUSION

         For the foregoing reasons, we AFFIRM the district court’s dismissal of Appellant’s claims

for failure to state a claim.




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