A Virginia federal judge recently dismissed a retaliation complaint under the False Claims Act because the plaintiff’s allegations of a false claim against the government were too speculative.
In Carlson v. DynCorp International, LLC, Scott Carlson alleged that DynCorp engaged in false billing practices when it bid for business with the U.S. Agency for International Development (USAID). Carlson claimed that DynCorp hid indirect costs associated with the bid in an unbillable code to put itself in a more competitive position.
The court held that, even assuming Carlson’s allegations to be true, the possibility of an FCA violation resulting from the billing practice was too remote to bring Carlson’s activities within those protected by the FCA’s anti-retaliation provisions. Although a plaintiff need not prove an FCA violation to establish protected activity, an employee’s investigation must still concern false or fraudulent claims for payment to the government to receive protection.
The court agreed with DynCorp that the allegedly improper billing practice amounted to an internal procedure that had not, and would not, lead to a false or fraudulent claim being made against the government. Without a false or fraudulent claim, Carlson’s efforts could not reasonably lead to a viable FCA action. The court therefore dismissed Carlson’s complaint with prejudice.
This case shows the willingness of certain federal courts closely to scrutinize the substance of relator’s allegations to determine whether the conduct alleged falls within the protections of the False Claims Act.