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Fourth Circuit Revives FCA Retaliation Claims Based on Triple Canopy Principles

May 28, 2015

Author: Stephanie D. Willis.

On Thursday, the Fourth Circuit issued an unpublished opinion in Young v. CHS Middle East that reversed and remanded the dismissal of two whistleblowers’ False Claims Act (FCA) retaliation claims against a U.S. Department of State civilian medical services subcontractor. The reversal was based in part on the Fourth Circuit’s recent adoption of the “implied certification” theory of FCA liability, highlighting the potential for that doctrine to create ripple effects across the FCA litigation landscape.

In Young, the husband-and-wife whistleblowers were employed as surgical nurses by the defendant in late 2011 at two medical facilities in Iraq.  They alleged that the defendant falsely certified to the staffing levels and the use of proper equipment and supplies at its medical facilities and, when they raised concerns about the validity of these certifications under the government contracts, suffered adverse employment action.

Of note, the court specifically referenced United States ex rel. Omar Badr v. Triple Canopy, Inc., 775 F. 3d 628 (4th Cir. 2015), stating: “Logically, if making false implied staffing certifications to the government can constitute a [FCA] violation, acts undertaken to, for example, investigate, stop, or bring an action regarding such false implied staffing certifications can constitute protected activity for purposes of a retaliation claim” under 31 U.S.C. § 3730(h).  Based on this rationale, the court concluded that the whistleblowers plausibly pled the protected activity element required under the retaliation provisions of the False Claims Act.

The court also distinguished the facts of the Young case from those that led the lower court to dismiss the whistleblower’s claims in Glynn v. EDO Corp., 710 F. 3d 209 (4th Cir. 2013) on two bases.  First, the pre-2009 version of the FCA applied to the whistleblower conduct at issue in Glynn; auspiciously for the plaintiffs in Young, the scope of protected conduct was broadened in 2009 amendments to the FCA to include “other efforts to stop 1 or more violations” of the FCA.  Second, in Glynn, the court was considering the dismissal of the whistleblower’s claims at the summary judgment stage, when plaintiffs must “proffer not just allegations but evidence.”

Although unpublished opinions are of limited precedential value, the implications of this case highlight the unavoidable effects of the Triple Canopy case in attempts to dismiss retaliation claims.  And given the potential breadth of the implied-certification theory, this is likely only the beginning of Triple Canopy’s impact on Fourth Circuit FCA jurisprudence.

Stephanie D. Willis
Counsel – Washington, D.C.
Phone: +1 202.624.2721