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United States ex rel. Fields v. BI-State Development Agency of Missouri-Illinois Metropolitan District

United States District Court, E.D. Missouri, Eastern Division

July 23, 2019

UNITED STATES OF AMERICA ex rel. Eric Fields, Plaintiff,
v.
THE BI-STATE DEVELOPMENT AGENCY OF THE MISSOURI-ILLINOIS METROPOLITAN DISTRICT, et al., Defendants.

          MEMORANDUM & ORDER

          RODNEY W. SIPPEL UNITED STATES DISTRICT JUDGE

         Plaintiff-Relator Eric Fields moves for an altered or amended judgment of my order granting summary judgment to Defendant Bi-State in this False Claims Act Cas. [No. 230]. Fields does not identify a manifest error of law or fact that would have created a dispute of material fact. As a result, I will deny Field's motion for an amended judgment.

         BACKGROUND

         Fields is a former employee of Defendant Bi-State Development Agency (“Bi-State”) who claims that former CEO of Bi-State, Bob Bear, directed employees to participate in partisan campaigns and instituted a “pay to play” scheme in violation of the Hatch Act. Fields also claims that Defendant Bi-State violated the Uniform Relocation Act by purchasing interest in the Meridian Parking Garage without appraising the property first. Based on these two underlying violations, Fields alleges that Bi-State submitted a false claim for payment to the federal government, in violation of the False Claims Act.

         Bi-State filed three successive motions for summary judgment in this case. I denied these motions, and Bi-State appealed both denials. U.S. ex rel. Fields v. Bi-State Dev. Agency of the Missouri-Illinois Metro. Dist., No. 4:14 CV 1321 RWS, 2015 WL 5158398, at *15 (E.D. Mo. Sept. 2, 2015); 2016 WL 4944097, at *3 (E.D. Mo. Sept. 16, 2016). The Eighth Circuit dismissed the first appeal for lack of jurisdiction, 829 F.3d 598, and affirmed my second ruling. 872 F.3d 872 (8th Cir. 2017), cert. denied sub nom., 138 S.Ct. 677, (2018).

         I granted Bi-State's third motion for summary judgment, [No. 207], because Fields did not provide evidence to demonstrate a dispute of material fact concerning the existing and timing of Hatch Act or Uniform Relocation Act violations. [No. 226]. In his response in opposition to summary judgment, [No. 221], and first amended complaint, [No. 27], Fields did not cite any evidence other than a self-serving affidavit, and he did not provide dates for the alleged Hatch Act violations. The first amended complaint alleges that the Uniform Relocation Act violations occurred between May and December 2010. [No. 27 at ¶¶ 50-55]. Bi-State allegedly made false certifications to obtain federal funds between 2006 and 2009. (No. 221 at 10-11).

         Fields now moves pursuant to Rule 59(e) for an altered or amended judgment. He argues that I ignored Eighth Circuit precedent in Baycol Prods Litig. V. Bayer Healthcare, 732 F.3d 869 (8th Cir 2013), and that the evidence presented in his affidavit created a dispute of material fact. This motion is fully briefed.

         LEGAL STANDARD

         “Rule 59(e) motions serve the limited function of correcting ‘manifest errors of law or fact or to present newly discovered evidence.' ” United States v. Metro. St. Louis Sewer Dist., 440 F.3d 930, 933 (8th Cir. 2006) (quoting Innovative Home Health Care v. P. T.-O. T. Assoc. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir.1998)). A litigant cannot use Rule 59(e) motions “to introduce new evidence, tender new legal theories, or raise arguments which could have been offered or raised prior to entry of judgment.” Id. (quoting Innovative Home Health Care, 141 F.3d 1284, 1286). As I stated in my challenged order, summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Lynn v. Deaconess Med. Ctr., 160 F.3d 484, 486 (8th Cir. 1998) (citing Fed.R.Civ.P. 56(c)). The party seeking summary judgment bears the initial responsibility of identifying the basis of its motion and those portions of the affidavits, pleadings, depositions, answers to interrogatories, and admissions on file which it believes demonstrates the absence of a genuine issue of material fact. Celotext Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party makes and supports such a motion, the nonmoving party may not rest on his pleadings. Id. at 324. Instead, the nonmoving party must produce enough evidence to support the essential elements on which he bears the burden of proof. Id. at 324.

         ANALYSIS

         Fields presents two primary theories in support of his motion including (1) that I made manifest errors of law by failing to apply “fraud-in-the-inducement” liability explained in Baycol Prods Litig. V. Bayer Healthcare, 732 F.3d 869, and (2) that I erred in finding that Fields presented no evidence that Bi-State violated the Hatch Act or Relocation Act before making false certifications to the federal government.

         I. Fraud-in-the-Inducement

         The general elements of a False Claims Act case are “that (1) the defendant made a claim against the United States; (2) the claim was false or fraudulent; and (3) the defendant knew the claim was false or fraudulent.” U.S. ex rel. Raynor v. Nat'l Rural Utilities Co-op. Fin., Corp., 690 F.3d 951, 955 (8th Cir. 2012). The knowledge requirement can be met if a defendant acts with “actual knowledge, ” “deliberate indifference, ” or “reckless disregard” of the truth. 31 U.S.C. § 3729(b)(1)(A)(i)-(iii). The false or fraudulent requirement can be met when a defendant “certifie[d] compliance with a statute or regulation as a condition to government payment, ” yet had knowingly failed to comply with such statute or regulation. U.S. ex rel. Conner v. Salina Reg'l Health Ctr., Inc., 543 F.3d 1211, 1217-18 (10th Cir. 2008) (citing Shaw v. AAA Eng'g & Drafting, Inc., 213 F.3d 519, 531 (10th Cir. 2000). This certification of compliance can be express or implied. Id; Universal Health Servs., Inc. v. United States, 136 S.Ct. 1989, 1999 (2016). Specifically, implied false certification liability can arise if omissions of “statutory, regulatory, or contractual requirements . . . render the defendant's representations misleading with respect to the goods or services provided.” Universal Health Servs., Inc. v. United States, 136 S.Ct. 1989, 1999.

         Liability under both express and implied false certification depends on relative timing. A False Claims Act Defendant cannot omit a violation that has not happened, or about which they do not know. And Fields presents no cases in which False Claims Act ...


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