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United States ex rel. Johnson v. Raytheon Co.

United States District Court, N.D. Texas, Dallas Division

July 3, 2019

UNITED STATES, ex rel. DANA JOHNSON, Plaintiff-Relator,
v.
RAYTHEON COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          SIDNEY A. FITZWATER SENIOR JUDGE

         Plaintiff United States of America (“United States”) and defendant Raytheon Company (“Raytheon”) move to dismiss this action by plaintiff-relator Dana Johnson (“Johnson”) under the False Claims Act, 31 U.S.C. §§ 3729-3733. Johnson brings a qui tam action of behalf of the United States and a retaliation claim on his own behalf related to Raytheon's defense contract with the United States Navy (“Navy”). For the following reasons, the court grants the United States's motion to dismiss, grants in part and denies in part as moot Raytheon's motion to dismiss, and grants Johnson leave to file a second amended complaint that repleads his retaliation claim. The court also denies without prejudice as moot a pending motion for protective order.

         I

         Johnson worked for Raytheon for 30 years.[1] Under Raytheon's contract with the Navy, Raytheon agreed to provide special radars and upgraded equipment, and Johnson was assigned to work as a systems engineer aircraft test conductor. Johnson alleges that Raytheon did not perform its work according to the contractual terms-instead hiding problems from the Navy and misrepresenting the work it provided. Johnson asserts that Raytheon made false claims for payment related to four items: two software problems, test equipment, and incorrect configuration instructions.

         Johnson also alleges that he “expressed concerns to supervisors about some aspects of the project, ” and that he “expressed concern to his supervisors about Raytheon's misrepresentation to the Navy.” Am. Compl. ¶¶ 99, 102. Johnson avers that, after he expressed these concerns, Raytheon suspended him from the Navy project but allowed him to continue to work on other projects. He asserts that, at some point, both Raytheon and the Navy questioned and investigated him about a potential security violation, and his employment was terminated, even though he did not violate any security policies or do anything improper.

         In April 2017 Johnson filed this action against Raytheon, alleging in his complaint qui tam claims on behalf of the United States and a retaliation claim on his own behalf. As required by law, the complaint was filed under seal to enable the United States to decide whether to intervene. After the United States declined to intervene, the court in July 2018 ordered that the complaint be unsealed and served upon Raytheon. After Raytheon was served, it moved to dismiss the complaint. Johnson then filed a first amended complaint within the time allotted by Fed.R.Civ.P. 15(a)(1)(B). Raytheon now moves to dismiss Johnson's first amended complaint.

         The court denied without prejudice as moot Raytheon's motion to dismiss Johnson's original complaint, but explained that the motion to dismiss Johnson's first amended complaint remained pending. The United States then requested, and the court granted, leave to file a statement or other pleading regarding its interests. Shortly thereafter, the United States filed the instant motion for partial dismissal, seeking to dismiss the claims that Johnson asserts on behalf of the United States.[2] Johnson opposes the United States's motion.

         Raytheon has also filed a motion for protective order, which the court has referred to the magistrate judge. Raytheon seeks to preclude Johnson from obtaining discovery until after the court decides the motions to dismiss.

         II

         The court considers first the United States's motion to dismiss Johnson's qui tam claims under 31 U.S.C. § 3730(c)(2)(A).[3]

         A

         Pursuant to 31 U.S.C. § 3730(c)(2)(A) “[t]he Government may dismiss the [qui tam] action notwithstanding the objections of the person initiating the action if the person has been notified by the Government of the filing of the motion and the court has provided the person with an opportunity for a hearing on the motion.” The United States retains the unilateral authority to seek dismissal in qui tam actions “notwithstanding the objections of the person.” Riley v. St. Luke's Episcopal Hosp., 252 F.3d 749, 753 (5th Cir. 2001) (en banc) (citation omitted). The Fifth Circuit has not, however, expressly established a standard that courts should apply when evaluating a motion to dismiss under § 3730(c)(2)(A). Other circuits have adopted standards, but they are not identical. For example, the D.C. Circuit has adopted a deferential standard, finding that the government's decision not to pursue a qui tam action is “unreviewable” and “generally committed to [the government's] absolute discretion.” Swift v. United States, 318 F.3d 250, 251-52 (D.C. Cir. 2003) (holding that § 3730(c)(2)(A) provides the government a virtually “unfettered right to dismiss [the] action.”). The Ninth Circuit, on the other hand, has employed a less deferential standard, holding that a qui tam action may be dismissed under § 3730(c)(2)(A) if “the government offers reasons for dismissal that are rationally related to a legitimate government interest.” United States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139, 1147 (9th Cir. 1998); accord Ridenour v. Kaiser-Hill Co., 397 F.3d 925, 936 (10th Cir. 2005) (adopting the Sequoia “rational relation” standard).

         B Regardless which standard the court employs in this case, the outcome is the same: dismissal under § 3730(c)(2)(A) is warranted. Applying Swift, the court would conclude that the United States should not be compelled to permit a relator to sue on its behalf and that the statutory language does not require-or even permit-judicial review of this discretionary decision. See Swift, 318 F.3d at 251-52.

         Further, the United States explains in its motion that (1) a substantial portion of the information necessary to prosecute and defend Johnson's claims would be classified; (2) contrary to Johnson's assertion, there is no clear way to allow discovery without the attendant risk that classified information may be disclosed; and (3) it wants to avoid spending further resources on what, in its view, is a meritless action. Thus even if the court were to apply the “rational relation” standard, it would hold that the United States has satisfied its burden. The United States has identified valid governmental interests-avoiding the disclosure of classified information and avoiding the expenditure of government resources-that are rationally related to dismissing the action. See Ridenour, 397 F.3d at 936-37. And Johnson has not shown that dismissal is “fraudulent, arbitrary and capricious, or illegal.” Id.

         Johnson maintains that he is entitled to a hearing before the court dismisses his qui tam claims. Section 3730(c)(2)(A) does provide that a relator is entitled to “an opportunity for a hearing on the motion [to dismiss].” Although Johnson posits that “an opportunity for a hearing” should be a live hearing before the court, he presents no case law to support his position. Instead, Johnson concedes-and the United States concurs-that courts have concluded that § 3730(c)(2)(A)'s hearing requirement is satisfied when the relator has a formal opportunity to respond (i.e., via a written response). See, e.g., Swift, 318 F.3d at 253 (“[T]he function of a hearing when the relator requests one is simply to give the relator a formal opportunity to convince the government not to end the case.”); United States ex rel. May v. City of Dallas, 2014 WL 5454819, at *3-4 (N.D. Tex. Oct. 27, 2014) (Godbey, J.) (adopting findings and recommendation of the United States Magistrate Judge). This court thus follows the conclusion that § 3730(c)(2)(A)'s hearing requirement is satisfied by affording Johnson an opportunity to respond to the United States's motion to dismiss before entering a decision on the motion.

         In Johnson's response, he acknowledges that, following dicta in Riley and the holding in Swift, the United States has unilateral authority to seek dismissal of a qui tam action. Johnson argues that the motion should be denied, however, because the United States does not specifically contest Johnson's allegations and because he disagrees with the United States's determination that classified information would necessarily be disclosed. But there is no requirement that the government specifically deny a relator's allegations in order to seek dismissal under § 3730(c)(2)(A). Indeed, such a requirement would be contrary to cases such as Swift, in which the government conceded the truth of the relator's allegations when it sought to dismiss (and the court granted dismissal). Swift, 318 F.3d at 254. Furthermore, Johnson's disagreement with-and attempt to plead around-the United States's determination regarding classified information is of no consequence. Again, the United States's goal of minimizing ...


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