Summary
In United Technologies, the government alleged that Pratt and Whitney (Pratt), a division of defendant United Technologies Corporation (UTC), fraudulently submitted a contract bid that "knowingly overstated" the prices to be charged by Pratt's subcontractors.
Summary of this case from Yuhasz v. Brush Wellman, Inc.Opinion
Case No. C-3-99-093.
March 20, 2000
The instant litigation stems from the formation and billing of a contract between Plaintiff United States of America ("United States") and Defendant United Technologies Corporation ("UTC"), pursuant to which UTC provided the United States Air Force ("Air Force") with high-performance jet engines. From the 1970's until 1982, the Pratt and Whitney division of UTC ("Pratt") was the Air Force's sole manufacturer and supplier of high-performance jet engines used in F-15 and F-16 fighter aircraft. In December, 1982, the Air Force sought to have the General Electric Company ("GE") become an alternative supplier, and it provided GE and Pratt a draft Request for Proposal ("RFP") F33657-83-R-0105 for a Source Selection procurement of more than 2,000 jet engines, to be delivered during fiscal years 1985-1990. On May 18, 1983, the Air Force issued RFP F33657-83-R-0105, after considering GE and Pratt's responses to the draft proposal. In August, 1983, Pratt and GE each submitted their confidential, certified initial proposals for the contract. The proposals were submitted on Forms 633 and were supported with pricing and cost data. Pratt's submission included ceiling price quotes ("not to exceed" prices) from sole-source vendors. The initial proposals were reviewed by government analysts and auditors. In October, 1983, government analysts and auditors met separately with GE and Pratt to resolve questions about the proposals; a document summarizing those discussions was sent to each in November, 1983. On November 19, 1983, the Air Force provided GE and Pratt with instructions regarding the submission of their "best and final offer" ("BAFO"). Pratt submitted its BAFO to the Air Force on December 5, 1983. Like its initial proposal, Pratt's BAFO was supported by cost and pricing data.
The following facts are taken from Plaintiff's Complaint.
In its Complaint, the United States alleges that Pratt knowingly understated the ceiling quote decrement factors for each major vendor set out in its BAFO Disclosure Item #8. It alleges that Pratt has a computer database from which it could have retrieved and provided to the Air Force its actual "past experience" with suppliers, sustaining PCAG-recommended price reductions in negotiations. Because Pratt did not use the information contained in the database, Pratt's BAFO contained false statements that its engine prices reflected Pratt's "best estimate and/or actual costs" and "necessary and reasonable costs that in [its] best judgement [would] properly be incurred in efficient contract performance." Rather, the government alleges, Pratt's costs were knowingly overstated, and its engine prices were therefore inflated. The United States further alleges that each bill, invoice, and price later presented by Pratt to the government reflected these inflations, as a result of that fraudulent conduct.
The United States has stated five causes of action against UTC, to wit: 1) violation of the False Claims Act ("FCA"), 31 U.S.C. § 3729(a)(1), for knowingly presenting or causing to be presented false or fraudulent claims to the United States; 2) violation of the FCA, 31 U.S.C. § 729(a)(2), for knowingly making, using, or causing to be made or used a false record or statement to get a false or fraudulent claim paid or approved by the government; 3) a common law claim for breach of contract; 4) a common law claim for payment by mistake; and 5) a common law claim for unjust enrichment.
Pending before the Court are UTC's Motions to Dismiss the government's common law claims for lack of subject matter jurisdiction or, in the alternative for failure to state a claim (Doc. #6), and its Motion to Dismiss the government's False Claims Act and mistake claims, pursuant to Fed.R.Civ.P. 9(b). For the reasons assigned, Defendant's Motions are OVERRULED.
I. Defendant's Motion to Dismiss Plaintiff's Unjust Enrichment, Payment by Mistake and Breach of Contract Claims (Counts Three, Four, and Five) (Doc. #6)
UTC asserts that the resolution of the government's common law claims is controlled by Contract Dispute Act ("CDA"), 41 U.S.C. § 605, because the parties have agreed to the procedures therein as part of the terms of their contract. It is undisputed that the parties adopted the CDA dispute resolution procedures in the their contract. The Air Force/Pratt Contract states, in pertinent part, that "[t]his contract is subject to the Contracts Dispute Act of 1978" and that, "[e]xcept as provided in the [CDA], all disputes arising under or relating to this contract shall be resolved in accordance with this clause." (emphasis added) Based on the unambiguous language of that contract, the parties have adopted not only the procedures of the CDA but also the exceptions to the coverage of the CDA as part of their contractual relationship. Thus, the government's common law claims are contractually subject to the CDA only if that statute provides that such claims must be resolved under its procedures.
In its Motion, Defendant contends that the Contract Dispute Act deprives this Court of subject matter jurisdiction over the government's common law claims for breach of contract (Count Three), payment by mistake of fact (Count Four), and unjust enrichment (Count Five). The United States responds that those claims fall within the anti-fraud exception to the CDA, because the common law claims are intertwined with its statutory claims under the False Claims Act ("FCA").
Section 605(a) of the CDA states, in pertinent part: "[A]ll claims by the government against a contractor relating to a contract shall be the subject of a decision by the contracting officer. The Act does not authorize any agency head to settle, compromise, pay or otherwise adjust any claim involving fraud."Id. Numerous courts have interpreted the phrase "claim involving fraud" to include common law claims that are merely alternative pleadings of a fraud claim. In United States ex rel O'Keefe v. McDonnell Douglas Corp., 918 F. Supp. 1338, 1343-44 (E.D. Mo. 1996), the court addressed whether it had subject matter jurisdiction over the federal government's claims for unjust enrichment and payment by mistake, which were brought along with a claim under the False Claims Act. In concluding that the common law claim fell within the anti-fraud exception to the CDA, it stated that fraud was "an integral part of" those claims, and that they were merely alternative theories of recovery. Id. A number of courts have reached similar conclusions. E.g., United States v. Unified Indus., Inc., 929 F. Supp. 947 (E.D. Va. 1996) (claims for unjust enrichment and breach of contract "involved fraud" within the meaning of § 605(a), because they were "intimately bound up with and part of the same case or controversy as" the False Claims Act claim); United States v. Rockwell Internat'l Corp., 795 F. Supp. 1131, 1135 (N.D. Ga. 1992); United States v. Baker Taylor, Case No. C-95-1825-VRW, 1998 WL 230979 at *13-14 (N.D. Cal. Mar. 20, 1998) (claims for unjust enrichment and payment by mistake fells within anti-fraud exception to CDA, because there was no question that those claims were bound up in the False Claims Act claims, and they served as alternative theories of recovery for the alleged fraudulent pricing scheme engaged in by defendants); United States v. United Technologies, Corp., Case No. 5:92-CV-375, 1996 WL 653620 (D. Conn. Oct. 11, 1996); United States v. Meredith Corp., Case No. 89-668-B, 1990 WL 375611 at *2 (S.D. Iowa June 15, 1990).
Defendant cites to two decisions which have ruled to the contrary, namely United States v. Hughes Aircraft Co. ("Hughes I"), Case No. CV 89-3312 RG (SX), 1991 WL 352416 (C.D. Cal. Apr. 29, 1991) (Gadbois, J.), and United States v. Hughes Aircraft Co. ("Hughes II"), Case No. CV 89-6842-WJR (SX), 1991 WL 133569 (C.D. Cal. Apr. 5, 1991). In Hughes I, the court provided no analysis to support its conclusion that the government's payment by mistake claims should be dismissed, pursuant to Rule 12(b)(1). Accordingly, that decision is not persuasive. The Hughes II court dismissed the government's mistake and unjust enrichment claims, for lack of subject matter jurisdiction, on the basis that the government had previously argued that the CDA should be given strict construction and that subjecting those claims to the CDA would be consistent with that court's prior holding. Because no such considerations apply herein and because the Hughes II court did not analyze the CDA in reaching its conclusion, that decision is likewise unpersuasive.
UTC argues that the above-cited decisions are contrary to the express language in the CDA. In particular, Defendant asserts that the phrase "involving fraud" unambiguously means that the statute exempts only those claims which actually allege fraud. It further asserts that this interpretation is consistent with the legislative history, which states, in pertinent part:
Consistent with the limitations expressed in section [605(a),] excluding issues of fraud against the United States from the authority of contracting agencies to consider or resolve, actions to enforce the Government's rights under section [605(b)] would be solely the responsibility of the Department of Justice and would be instituted by the United States in a court of competent jurisdiction. The procedures now utilized by procurement agencies for reporting suspected fraudulent activity to the Department of Justice would be equally applicable to section [605(b)] matters.
If such cases do arise and are thus handled in the courts, other parts of the claim not associated with possible fraud or misrepresentation of fact will continue on in the agency board or the Court of Claims where the claim originated.
S. Rpt. No. 95-1118, at 20 (1978), reprinted in 1978 U.S.C.C.A.N. 5235 at 5254. UTC contends that "[t]his explicit statement of Congressional intent shows decisively that the Section 605(a) 'limitations' meant only to exclude 'issues of fraud' from the otherwise 'comprehensive' CDA jurisdiction, not to exclude contract-related issues that might also arise from the alleged facts." (Doc. #6, p. 13).
Defendant's argument was addressed by the courts in United Technologies (Sikorsky), supra, and Unified Indus., supra. In concluding that the phrase "involving fraud" was broad enough to encompass other common law claims, the Unified Indus. court reasoned:
The more plausible plain reading of the phrase "involving fraud" is that it contemplates a wider range of claims than those that actually allege a cause of action for fraud. Had Congress intended to limit the CDA's exception to causes of action for fraud, the statute presumably would have so provided explicitly, by referring specifically to claims "of fraud" or "for fraud." Instead, Congress chose to use the more general phrase, "any claim involving fraud." The use of this broader language reflects a congressional intent to except from CDA exclusivity not only causes of action for fraud in particular, but also actions the factual bases of which are intertwined with allegations of fraud. And again, reference to § 605(a)'s legislative history supports this conclusion. See S. Rep. No. 95-118, at 20, reprinted in 1978 U.S.C.C.A.N. 5235 at 5245 (excluding from federal court jurisdiction "parts of the claim not associated with possible fraud or misrepresentation").929 F. Supp. at 950-51; see United Technologies, 1996 WL 653620 at *3 (quoting Unified Indus., 292 F. Supp. at 950-51). The United Technologies court also rejected the argument that Senate Report 118 compelled it to interpret § 605(a) to mean that only claims of actual fraud were exempted, stating:
This argument would require the court to find that the government's contract claims are not associated with possible fraud. In other words, the court would have to close its eyes to the fact that the contract claims arise out of the very same actions that led to the fraud claims and are, in fact, nothing more than alternative pleadings. The court prefers to look at the case as a whole, and it sees a clear association among the counts.
1996 WL 653620 at *3. This Court finds the above-referenced authority to be well-reasoned. Accordingly, the Court rejects Defendant's narrow reading of "involving fraud" and interprets that phrase as exempting from the CDA common law claims which arise from the same actions that lead to the fraud claim and merely constitute alternative pleadings. In the present case, the government's claims for breach of contract, unjust enrichment, and payment by mistake are premised on the same conduct as its False Claims Act claims (Counts One and Two). They are merely alternative pleadings. Accordingly, Plaintiff's claims for unjust enrichment, breach of contract, and payment by mistake fall within the anti-fraud exception to the CDA, and the United States is not contractually obligated to resolve these claims according to the procedures set forth in the CDA. Because Plaintiff's common law claims are not covered by the CDA, this Court has subject matter jurisdiction over them. Defendant's Motion to Dismiss Counts Three, Four, and Five of Plaintiff's Complaint, pursuant to Rule 12(b)(1) (Doc. #6), is OVERRULED.
As an alternative argument, Defendant contends that Counts Three, Four, and Five must be dismissed, pursuant to Fed.R.Civ.P. 12(b)(6), on the ground that the Price Reduction Clause in the parties' contract provides a self-executing remedy for the alleged breaches and, therefore, the terms of the contract preclude these common law claims. Even though an express contract exists between the parties, the United States may plead, in the alternative, unjust enrichment, payment by mistake, and breach of contract, along with its claims under the False Claims Act, pursuant to Fed.R.Civ.P. 8(e). United States ex rel. Roby v. Boeing Co., 184 F.R.D. 107, 111 (S.D. Ohio 1998) (Spiegel, J.) (express contract between Boeing and the United States did not warrant dismissal, pursuant to Rule 12(b)(6), of the government's claims for unjust enrichment and payment by mistake, because United States could plead, in the alternative, those claims, breach of contract, and fraud, in addition to its claim under the False Claims Act). Defendant's Motion to Dismiss, pursuant to Rule 12(b)(6) (Doc. #6), is OVERRULED.
II. Defendant's Motion to Dismiss False Claims Act (Counts One and Two) and Mistake (Count Four) Claims (Doc. #13)
UTC seeks dismissal of Counts One, Two, and Four of Plaintiff's Complaint, arguing that the United States has failed to plead such claims with particularity, as required by Fed.R.Civ.P. 9(b). Rule 9(b) states: "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." Fed.R.Civ.P. 9(b). "[T]he purpose undergirding the particularity requirement of Rule 9(b) is to provide a defendant fair notice of a plaintiff's claim in order that the defendant may prepare a responsive pleading."Michaels Building Co. v. Ameritrust Co., N.A., 848 F.2d 674, 679 (6th Cir. 1988). However, Rule 9(b) must be read in harmony with Rule 8, which requires a "short and plain statement of the claim," using simple, concise, and direct allegations.Id. Sixth Circuit case law has therefore interpreted Rule 9(b) to provide that a plaintiff must allege with specificity the times, places, and contents of the alleged fraud; the fraudulent scheme; the fraudulent intent of the defendants; and the injury resulting from the fraud. Coffey v. Foamex L.P., 2 F.3d 157, 161-62 (6th Cir. 1993); Vild v. Visconsi, 956 F.2d 560 (6th Cir.), cert. denied, 506 U.S. 832 (1992); Hoover v. Langston Equipment Assocs., Inc., 958 F.2d 742, 745 (6th Cir. 1992); 5 Wright Miller, Federal Practice and Procedure, § 1297 at 590. Where a plaintiff asserts fraudulent concealment, the plaintiff must also allege, with particularity, its own due diligence to discover the fraud. Dayco Corp. v. Goodyear Tire Rubber Co., 523 F.2d 389, 394 (6th Cir. 1975) ("The [Supreme] Court [has] said that an injured party has a positive duty to use diligence in discovering his cause of action within the limitations period. Any fact that should excite his suspicion is the same as actual knowledge of his entire claim . . . If the plaintiff has delayed beyond the limitations period, he must fully plead the facts and circumstances surrounding his belated discovery 'and the delay which has occurred must be shown to be consistent with the requisite diligence.'") (quoting Wood v. Carpenter, 101 U.S. 135, 143 (1879)).
The requirements of Rule 9(b) are applicable to claims under the False Claims Act ("FCA"). Roby, 184 F.R.D. at 109. "The conduct to which liability attaches in a False Claims Act suit consists in part of false statements or claims for payment presented to the government. Because such statements or claims are among the circumstances constituting fraud in a False Claims Act suit, these must be pled with particularity under Rule 9(b)."United States ex rel. Russell v. Epic Healthcare Mgmt. Group., 193 F.3d 304, 308 (5th Cir. 1999) (citations omitted).
Herein, Defendant asserts that the government's Complaint is lacking sufficient details regarding Pratt's fraudulent conduct in that it fails to specify: 1) which of Pratt's CY 1988 and post-1988 bill and invoices were "false claims" and in what manner each such claim was false; 2) who at Pratt knew that CY 1988 and post-1988 bill and invoices were false; 3) who in the government acted on an "erroneous belief" with regard to the CY 1988 and post-1988 bills and invoices, and what that person's belief was; 4) which FY 1987-1990 prices were inflated; 5) when and in what manner each of the FY 1987-1990 price was set; 6) in what respect and for what amount each FY 1987-1990 price was inflated; 7) what information Pratt allegedly concealed or failed to disclose at the time of the December, 1993, exchange; 8) what information Pratt allegedly continued to conceal; 9) in what manner Pratt's December, 1993, statements and disclosures were allegedly false; 10) which individuals at Pratt knew that Pratt's December, 1983, statements were false; 11) who within the government relied on the alleged false December, 1983, statements, when those statements were relied upon, and what form the reliance took; 12) how Pratt's December, 1993, statements, disclosures, and alleged non-disclosures were connected with its prices for FY 1987-1990 and with its CY 1988 and Post-1988 bills and invoices, and how they caused the government injury; and 13) what information the government "did not and could not discover" until the Summer of 1997, so as to cause a tolling of the statute of limitations. As a means of analysis, the Court will group a number of these arguments together and will address them in reverse order.
With respect to Pratt's arguments regarding the 1993 exchange and the government's subsequent reliance (numbers 7-9, 11-13 above), the government's Complaint contains sufficient particulars of the alleged fraudulent conduct. The United States alleges that Pratt concealed and failed to disclose information regarding its actual past experience with suppliers, as stored on a company database, both at the time of the December, 1993, exchange and for years subsequent to that date (Compl. ¶¶ 32, 34, 43, 48). In particular, Plaintiff alleges that the database "produced reports titled 'Procurement Cost Analysis; Jobs Negotiated; Year to Date' . . . that described, by vendor, product line, and PCAG employee, the ceiling price analyzed, the PCAG-recommended price, the price negotiated, negotiated savings, and 'savings percent.'" (Compl. ¶ 32) The government alleges that, because Pratt failed to use or disclose the actual past experience, the statements in Pratt's BAFO regarding the PCAG-recommended ceiling price reductions for individual suppliers and its overall price reduction were underestimated. Moreover, it alleges that Pratt's statements that its decrement factor was developed based upon past experience with the individual vendors was false, because Defendant did not use that data. The United States also alleges that, as a result of Pratt's misrepresentations and concealment of its data regarding it actual past experience, the government accepted Pratt's statement of its material costs and engine prices, which were inflated, and that it paid hundreds of claims which were based on those inflated costs and prices (Compl. ¶¶ 36, 37). Finally, the United States has alleged that in its attempts to audit Pratt's contract, Pratt continued to withhold its actual past experience data and made affirmative misrepresentations (which are specified in the Complaint) that prevented the government (including auditors and other Air Force personnel) from discovering the alleged fraud (Compl. ¶¶ 32, 38-48). Based on these allegations, the United States has pled, with particularity, the circumstances of Pratt's fraud, as a result of the December, 1983, exchange, and the circumstances surrounding its failure to discover the alleged fraud until the Summer of 1997. Defendant's Motion to Dismiss, which is based on its argument that the United States failed to plead with particularity the circumstances of the fraud in the December 5, 1983, exchange, the government's reliance, and its failure to discover the fraud until the Summer of 1997 is OVERRULED.
Defendant further argues that the United States has failed to specify the individuals at Pratt who knew of the alleged fraudulent statements (number 10 above). Courts in this district have recognized that Rule 9(b) requires only that the Plaintiff identify the parties and not the individual employees involved in the misconduct. United States ex rel. Roby v. Boeing, 184 F.R.D. 107 (S.D. Ohio 1998) (Spiegel, J.); see also United States ex rel. Pogue v. American Healthcorp, Inc., 977 F. Supp. 1329, 1333 (M.D. Tenn. 1997) ("Although no specific dates or West Paces employees are identified, the complaint alleges that the hospital participated in a systematic, fraudulent scheme, spanning the course of twelve years; thus, reference to a time frame and to "West Paces" generally is sufficient."). Although the identification of individuals is not required, the government has identified specific individuals who made allegedly false statements, and it has attached a number of exhibits to its Complaint which identify additional individuals. See Fed.R.Civ.P. 10(c) ("A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.") Most notably, the United States attaches as Exhibit 2 its December 5, 1983, BAFO. Each page is signed by R.G. Ley, Pricing Manager of UTC. Attached as Exhibit 5 is the Certificate of Current Cost or Pricing Data, which certifies that the data submitted with the BAFO is accurate, complete, and current as of December 5, 1983. That statement, which the government alleges is fraudulent, was signed by Pratt's Director, Contract Management, R.J. Jones. In addition, the United States provides Pratt's Best and Final Decrement Factors, as provided by Mr. Don Nichols to the government on December 5, 1983 (Ex. 4, p. 2). In addition, in paragraph 45, the government alleges that Pratt's Vice President of Finance, Mr. D.P. Hamilton, and its Manager of Government Accounting and Compliance made misrepresentations to the United States (Compl. ¶ 45(b)-(e)). Thus, the United States has alleged in paragraph 45 and Exhibits 2, 4, and 5 a number of principals in Pratt's alleged fraudulent conduct. Defendant's Motion to Dismiss, on the ground that the United States has failed to plead the identity of individual employees who knew of the fraud, is OVERRULED.
The United States has attached as Exhibit 7 to its Complaint a Record of Acquisition Act, dated December 23, 1983. In that document, the Air Force specifies individuals who participated in the review of Pratt's price proposal. In addition, it is signed by a number of individuals, who thereby state that the contract prices are considered to be fair and reasonable. Based on this exhibit, the government has provided the names of a number of individuals who relied upon the prices stated in Pratt's BAFO.
Defendant also challenges the government's pleading with respect to Pratt's CY 1988 and post-1988 bills and invoices and its FY 1987-90 prices. In essence, Defendant argues that the United States has failed to provide any of the "who, what, where, when, and how" of the alleged fraud in its allegations. Plaintiff's allegations regarding these bills, invoices, and prices, are located in paragraphs 36 and 37, which state, in pertinent part:
36. As a result of Pratt's knowing acts and omissions described above, its BAFO material costs were inflated as were its engine prices. These inflated prices were accepted by the Air Force in the Contract, and formed the basis for inflated payments made by the United States to Pratt.
37. During its performance of the AFE Contract, Pratt routinely submitted progress bills (DD Forms 1443) and final invoices to the Air Force for payment. These claims totaled in the hundreds during Pratt's performance of the Contract. These progress payment requests and invoices were knowing false claims for payment since they reflected inflated engine prices that resulted from Pratt's overstatement of its BAFO material costs.
(Compl. ¶¶ 36-37) Based on these allegations, it appears that the United States is asserting that all of Pratt's invoices, bills, and prices were inflated due to the alleged misrepresentation of data regarding its actual past experience in the BAFO.
A number of courts have recognized that "if the alleged fraud occurred over an extended period of time and consisted of numerous acts, the specificity requirements [of Rule 9(b)] are applied less stringently. United States ex rel. Butler v. Magellan Healthcare Inc., 74 F. Supp. 2d 1201, 1215 (M.D. Fla. 1999); United States ex rel. Thompson v. Columbia/HCA Healthcare, 29 F. Supp. 2d 1017, 1039 (S.D. Tex. 1998);Fujisawa Pharmaceutical Co. v. Kapoor, 814 F. Supp. 720, 726 (N.D. Ill. 1993); Hurd v. Monsanto Co., 908 F. Supp. 604, 614 (S.D. Ind. 1995) (noting that courts generally are "more lenient in sustaining pleadings where the transactions involved are complex or cover a long period of time") (internal citation omitted), aff'd in part, 107 F.3d 873 (7th Cir. 1997).
Similar to UTC herein, the defendant in Pogue, supra, contended that the plaintiff had failed to plead with sufficient particularity, arguing that, given that the complaint's allegations span a twelve-year period, the plaintiff must give specific information regarding the fraudulent transaction to which it allegedly was a party. The defendant further argued that the plaintiff had failed to specify when, where and how it allegedly learned of the fraud and the identity of the persons who had such knowledge. 977 F. Supp. at 1332. The court rejected the defendant's argument, stating:
In the present case, the Fourth Amended Complaint alleges that, between 1984 and 1996, West Paces [the defendant] entered into a series of incentive-based contracts with DTCA [another defendant], whereby West Paces would pay DTCA a commission based on the number of diabetes patients admitted into the medical center. In addition, the complaint states that DTCA entered into contracts with the various Atlanta Physicians, ostensibly to serve as medical directors of the diabetes center located within West Paces's facility. The complaint alleges that in actuality the physicians' compensation under these contracts was based not upon the medical services provided, but upon the ability of the physicians to refer large numbers of diabetes patients to the center. The complaint avers that these contracts violated the federal law proscriptions against kickbacks and self-referrals, and that West Paces knew of this illegality. It alleges that West Paces nevertheless filed claims for Medicare and Medicaid reimbursement for the "services provided to patients whose admissions were illegally and fraudulently obtained," thereby violating the FCA.
After careful review of the Fourth Amended Complaint in light of the applicable law, the Court finds that it meets Rule 9(b)'s heightened pleading requirements. Keeping in mind that the primary purpose of the pleading standard is to ensure that Defendants receive notice of the charges against them, the Court finds that the complaint adequately describes Defendants' allegedly fraudulent scheme to defraud the United States of Medicare and Medicaid monies. Although no specific dates or West Paces employees are identified, the complaint alleges that the hospital participated in a systematic, fraudulent scheme, spanning the course of twelve years; thus, reference to a time frame and to "West Paces" generally is sufficient. As this Court noted in its denial of Atlanta Physicians' similarly-couched motion to dismiss the Second Amended Complaint, "[r]equiring Plaintiff to refer to the specific instances underlying each Medicare and Medicaid claim submission that he claims was fraudulent in his [complaint] would undermine Rule 8's admonishment to keep pleadings simplistic."Id. at 1332-33 (emphasis added); see Roby, 184 F.R.D. at 110 (complaint satisfied Rule 9(b), where defendant Boeing should have been able to identify the gears at issue, because the government alleged a defect inevery CH-47(D) helicopter delivered under Forms DD-250).
The United States herein has detailed, with specificity, the circumstances by which UTC provided false materials costs and engine prices, by failing to use in its BAFO the actual past experience data that it had accumulated and by certifying that the information submitted was accurate. The government further alleged that as a result of Pratt's misrepresentations and concealment of information, the contract between the parties provided for materials costs and engine prices that were higher than they would had been absent Pratt's wrongful conduct, i.e., the costs and prices were "inflated." It further alleged that throughout the performance of the contract (thirteen and a half years of which the government was unaware of the alleged fraud),all of the invoices, bills, and prices submitted by Pratt to the Air Force were based on that initial "inflation." Thus, UTC should be able to identify the invoices, bills, and prices at issue and the information that is alleged to be false. Although the United States has not stated the amount of the "inflation" and has not clearly specified all the individuals who knew these bills were "false," the allegations are sufficient to provide UTC notice of the claims against it. Moreover, to require Plaintiff to allege the particulars of each invoice, bill, and price would result in an unwieldy pleading, which would upset the balance struck by the Sixth Circuit between Rules 8(a) and 9(b). In light of the period of time and the number of alleged false claims involved in Plaintiff's Complaint, Plaintiff's allegations are sufficient to satisfy the pleading requirements of Rule 9(b). Defendant's Motion to Dismiss Plaintiff's False Claims Act and mistake claims, pursuant to Fed.R.Civ.P. 9(b) (Doc. #13), is OVERRULED.
For the foregoing reasons, Defendant's Motion to Dismiss Plaintiff's common law claims for lack of subject matter jurisdiction or, in the alternative, for failure to state a claim (Doc. #6) is OVERRULED. Its Motion to Dismiss Plaintiff's False Claims Act and mistake claims, pursuant to Fed.R.Civ.P. 9(b) (Doc. #13), is likewise OVERRULED.
Counsel listed below will take note that a telephone conference call will be had, beginning at 8:40 a.m., on Tuesday, April 11, 2000, for the purpose of determining the viability of the September 18, 2000, trial date, and other dates leading to the resolution of this litigation.