The opinion of the court was delivered by: Patel, Chief Judge.
Plaintiff/relator W. Lee McVey instituted this qui tam action against
defendants Board of Regents of the University of California ("Board") dba
Lawrence Livermore National Laboratory ("Livermore") and David K. Johnson
("Johnson") (collectively "defendants"), alleging violations of the False
Claims Act, 31 U.S.C. § 3729 et seq. ("FCA"), and 42 U.S.C. § 1983
("Section 1983"). On September 5, 2000, the Court dismissed with
prejudice McVey's FCA claim against the Board pursuant to Vermont Agency
of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120
S.Ct. 1858, 146 L.Ed.2d 836 (2000).*fn1 Remaining in the case are
McVey's FCA claims against Johnson, and retaliation claims under the FCA
and Section 1983 against both the Board and Johnson. McVey has stipulated
that he seeks only prospective relief for the retaliation claims.
Defendants bring this motion to dismiss the remaining claims. Having
considered the parties' arguments and submissions, and for the reasons
set forth below, the court enters the following memorandum and order.
Livermore is a federally-funded research and development facility under
the auspices of the United States Department of Energy ("DOE"). Livermore
is operated by the Board pursuant to a cost-reimbursement contract with
DOE. Under the contract, the Board bills DOE for the costs incurred for
the benefit of DOE research, plus an additional fee. Under federal
regulations governing the contract, Livermore may only bill DOE for costs
that are "reasonable," "allowable" and in conformance with contract
In 1988, Livermore suffered a three-day power outage. Concerned with
the impact of such a massive power failure on a critical research
facility, Congress appropriated funds to upgrade the reliability and
safety of Livermore's power system. Johnson, in his position as Division
Leader at Livermore's Plant Engineering in the Electric Utilities
Division, headed the upgrade project, known as the Electric Power System
Replacements and Upgrade Line Item Project ("EPSRU"). In 1990, Livermore
hired McVey to serve as Electric Utility System Manager for its
Electrical Utilities Division. In that position, McVey was responsible
for the operation and maintenance of Livermore's electrical utilities
system. McVey worked on EPSRU under Johnson's direct supervision.
McVey alleges that between 1991 and the present, Livermore, through
Johnson, incurred and billed to DOE costs that Johnson knew or should
have known were unjustified and unnecessary. Among the costs were those
for installation, of a differential fast-transfer relay system,
modifications to prevent the accidental tripping of circuit breakers,
modifications and design of a 115kV ring-bus substation, modifications of
a battery failure protection system, purchase of a new software system
and travel costs.
In December 1998, McVey instituted this action under seal. On April
20, 1999, the United States Government decided not to intervene. On April
21, 1999, the court ordered the complaint unsealed and served on
McVey alleges that: (1) Johnson violated the FCA through falsely
charging the federal government for unnecessary and wasteful engineering
modifications; and (2) Johnson and the Board violated the FCA's
whistleblower provision, 31 U.S.C. § 3730 (h), and Section 1983 by
taking employment actions aimed at chilling McVey's First Amendment right
to free speech and punishing him for raising spending concerns. McVey
seeks monetary and punitive damages, back pay and injunctive relief
reinstating him to his former position with appropriate promotions and
Defendants seek to dismiss the complaint for lack of subject matter
jurisdiction pursuant to Federal Rule of Civil Procedure ("F.R.C.P.") 12
(b)(1) and failure to state a claim pursuant to F.R.C.P. 12(b)(6).
Defendants contend that McVey cannot bring retaliation causes of action
against the Board or Johnson as the Board is a state agency and Johnson a
state official and therefore both are immune from this type of action
under the Eleventh Amendment. Johnson also individually argues that the
FCA claim should be dismissed because no fraud took place; rather, he and
McVey merely disagree regarding engineering decisions. Johnson also seeks
dismissal of the FCA claim based on failure to plead fraud allegations
with sufficient particularity in violation of F.R.C.P. 9(b).
A. Federal Rule of Civil Procedure 12(b)(1)
F.R.C.P. 12(b)(1) allows a party to challenge a federal court's
jurisdiction over the subject matter of the complaint. A complaint will
be dismissed if, looking at the complaint as a whole, it appears to lack
federal jurisdiction either facially or factually. See Thornhill Publ'g
Co., Inc. v. General Tel. & Elec. Corp., 594 F.2d 730, 733 (9th Cir.
1979). In considering a motion to dismiss for lack of subject matter
jurisdiction, the court must ...