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United States District Court for the District of Columbia
July 3, 2014, Decided; July 3, 2014, Filed
Civil Action No. 11-cv-0852 (KBJ)
[*109] MEMORANDUM OPINION
Relator Tien H. Tran ("Relator" or "Tran") brings this action under the False Claims Act ("FCA"), 31 U.S.C. §§ 3729-33 (2013), [**2] seeking to challenge the contracting practices of Defendant Computer Sciences Corporation ("CSC") with respect to a particular government contract. Under the contract at issue, CSC agreed to serve as a prime contractor with respect to certain information technology ("IT") work to be performed for the United States Citizenship and Immigration Service ("USCIS"), and CSC also promised to make a good faith effort to subcontract a certain percentage of the IT work to be performed under the contract to qualified small businesses. The complaint alleges that, rather than comply with its obligations under the contract, CSC set up a scheme in which it would subcontract work to qualified small businesses, such as Defendant Sagent Partners, LLC ("Sagent"), and as a condition of the subcontract, those small businesses would agree to further subcontract the work to large businesses that CSC trusted, such as Defendant Modis, Inc. ("Modis"), in exchange for a small fee. (First Amended Complaint ("Compl."), ECF No. 4, ¶¶ 3-4.) According to the complaint, this "pass-through" scheme violated several provisions of the FCA insofar as it permitted CSC to report to the government that the company had met [**3] its small business subcontracting goals when, in reality, large businesses were performing the substantive work under the contract. (Id. ¶¶ 4-6.)
Before this Court at present are three motions to dismiss, one filed by each of the three Defendants. Although each Defendant offers a different rationale for dismissing the particular charges that pertain to it, all argue that Relator has failed to state a claim upon which relief can be granted for the purpose of Federal Rule of Civil Procedure 12(b)(6) and that Relator has failed to plead fraud with the requisite particularity as Federal Rule of Civil Procedure 9(b) requires. Because this Court concludes that some of the claims that Relator has made against Defendants CSC and Modis are viable and properly pled when the complaint is liberally construed, but that none of Relator's claims against Defendant Sagent are sufficiently alleged, the Court will DENY IN PART and GRANT IN PART CSC and Modis's motions to dismiss, and will GRANT Sagent's motion to dismiss in full, as explained further below. What remains of this case are Relator's contentions that (1) CSC has presented false claims for payment to the government in connection with the government [**4] contract at issue and made material [*110] false statements in support of those claims; (2) CSC fraudulently induced the government into awarding it that contract; (3) Modis caused CSC to present the false claims and to make the material false statements; and (4) CSC and Modis conspired to commit these violations of the FCA. A separate order consistent with this opinion will follow.
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53 F. Supp. 3d 104 *; 2014 U.S. Dist. LEXIS 90757 **; 2014 WL 2989948
UNITED STATES OF AMERICA ex rel. TIEN H. TRAN, Plaintiff, v. COMPUTER SCIENCES CORPORATION, et al., Defendants.
Prior History: Modis, Inc. v. Infotran Sys., 674 F. Supp. 2d 160, 2009 U.S. Dist. LEXIS 117060 (D.D.C., 2009)
small business, subcontracting, pass-through, false claim, allegations, false statement, Presentment, counts, retaliation, contracts, subcontractor, fraudulent, large business, personnel, conspiracy, refuse to participate, motion to dismiss, fraudulent inducement, protected activity, fulfill, contractor, invoices, complaint alleges, regulations, compliance, obligations, knowingly, set-aside, conduit, spend
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Heightened Pleading Requirements, Fraud Claims, Governments, Federal Government, Claims By & Against, Public Contracts Law, Business Aids & Assistance, Small Businesses, Legislation, Interpretation, Contracts Law, Affirmative Defenses, Fraud & Misrepresentation, General Overview, Torts, Concerted Action, Civil Conspiracy, Elements, Labor & Employment Law, Retaliation, Statutory Application, False Claims Act, Business & Corporate Compliance, False Claims Act, Scope & Definitions, Protected Activities