Hoyte v. American National Red Cross

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 5, 2007 Decided March 4, 2008

No. 06-5230

MICHELLE HOYTE, BRINGING THIS ACTION ON BEHALF OF
THE UNITED STATES OF AMERICA,
APPELLANT

UNITED STATES OF AMERICA,
APPELLEE

v.

AMERICAN NATIONAL RED CROSS,
APPELLEE

Appeal from the United States District Court
for the District of Columbia
(No. 04cv01054)

H. Vincent McKnight, Jr. argued the cause for the appellant.
Tracy L. Hilmer, Attorney, United States Department of
Justice, argued the cause for appellee United States of America.
Peter D. Keisler, Assistant Attorney General, Jeffrey A. Taylor,
United States Attorney, Douglas N. Letter, Appellate Litigation
Counsel, and Michael D. Granston and Daniel R. Anderson,
Attorneys, United States Department of Justice, were on brief.
R. Craig Lawrence, Assistant United States Attorney, entered an
appearance.
 2

John R. Fleder argued the cause for appellee American
National Red Cross.
Before: HENDERSON and TATEL, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the court filed by Circuit Judge HENDERSON.
Opinion concurring in part and dissenting in part filed by
Circuit Judge TATEL.
KAREN LECRAFT HENDERSON, Circuit Judge: Michelle
Hoyte filed this action under the False Claims Act (FCA), 31
U.S.C. §§ 3729 et seq. The complaint alleges that Hoyte’s
former employer, the American National Red Cross (ARC), (1)
violated FCA section 3729(a)(7) by failing to report to the
Federal Drug Administration (FDA) that ARC had mishandled
blood supplies, for which conduct the FDA was authorized to
assess financial penalties pursuant to a district court consent
decree, (Count I) and (2) violated FCA section 3730(h), the
“whistleblower” provision, by discharging Hoyte in retaliation
for her investigating, and complaining to supervisors about, the
mishandled blood (Count II). The district court dismissed Count
I (the reverse false claim1) on the ground that it was obliged to
defer to the Government’s decision to dismiss the claim under
FCA section 3730(c)(2)(A), which provides that “[t]he
Government may dismiss [an FCA qui tam] action

1
Ordinarily under the FCA, “the government, or a party suing on
its behalf, may recover for false claims made by the defendant to
secure a payment by the government.” United States ex rel. Bain v.
Ga. Gulf Corp., 386 F.3d 648, 652 (5th Cir. 2004); see 31 U.S.C. §
3729(a)(1)-(6). In a reverse false claim action under FCA section
3729(a)(7), “the defendant’s action does not result in improper
payment by the government to the defendant, but instead results in no
payment to the government when a payment is obligated.” Ga. Gulf
Corp., 386 F.3d at 653.
 3

notwithstanding the objections of the person initiating the
action.” The court dismissed Count II (the retaliation claim) on
the ground that Hoyte did not allege that ARC was under an
“obligation to pay or transmit money or property to the
Government,” as section FCA 3729(a)(7) requires for a reverse
false claim, and therefore Hoyte’s investigation into the blood
mishandling, for which investigation she alleged she was
discharged, was not “in furtherance of” a viable qui tam action
so as to be protected activity under the whistleblower provision.
United States ex rel. Hoyte v. Am. Nat’l Red Cross, 439 F. Supp.
2d (D.D.C. 2006). For the reasons set out below, we affirm the
district court’s dismissal of both counts.
I.
On April 15, 2003, the district court issued a consent decree
incorporating an agreement between ARC and the United States
in which ARC agreed to adopt and follow specified blood
handling and reporting requirements. See United States v. Am.
Nat’l Red Cross, C.A. No. 93-0949 (Apr. 15, 2003) (Consent
Decree), reprinted in Joint App. (JA) at 27. The Consent Decree
provides that the FDA “may assess” financial penalties for
various violations of its provisions “up to” specified maximums.
See, e.g., id. at 35-36, 42, 52, 56-57, 61-64.
Hoyte was an ARC employee from 1997 until June 17, 2004.
She alleges that in February 2004, when she was Director of
Quality Audits, she discovered ARC had mishandled 607 units
of blood at its “Penn-Jersey” facility in Philadelphia. She
further alleges that ARC’s officials and staff were aware of the
mishandled blood but did nothing about it even after she and her
staff urged her superiors to report the matter to the FDA as
required under the Consent Decree. Finally, she alleges that she
scheduled a meeting with ARC’s Senior Vice President for
Quality Assurance and Regulatory Affairs for June 18, 2004 but
was fired by her supervisor over the telephone the day before the
meeting.
 4

On June 25, 2004, Hoyte filed this qui tam action under FCA
section 3730(b)(1), which provides that “[a] person may bring
a civil action for a violation of section 3729 for the person and
for the United States Government.”2 As noted, the complaint
includes a reverse false claim count under section 3729(a)(7) for
which Hoyte is authorized to bring a qui tam action under
section 3730(b) and a retaliation claim under the FCA’s
whistleblower provision, section 3730(h). The United States
filed a notice of election to decline intervention in the suit on
November 7, 2005, pursuant to section 3730(b)(2).3 On January
24, 2006, ARC moved to dismiss both Count I and Count II for

2
Section 3730(b)(1) further provides: “The action shall be
brought in the name of the Government. The action may be dismissed
only if the court and the Attorney General give written consent to the
dismissal and their reasons for consenting.” Thus, a motion to dismiss
by the relator requires the consent of both the Government and the
court “[e]ven where the Government has declined to intervene.”
Ridenour v. Kaiser-Hill Co., 397 F.3d 925, 931 & n.8 (10th Cir. 2005)
(citing Searcy v. Philips Elecs. N. Am. Corp., 117 F.3d 154, 155 (5th
Cir. 1997); United States v. Health Possibilities, P.S.C., 207 F.3d 335,
339 (6th Cir. 2000)). By contrast, as we explain infra, Part II.A, the
FCA does not require the court’s consent if the Government moves to
dismiss.
3
The FCA provides the United States with two options in a qui
tam action:
Before the expiration of the 60-day period or any extensions
obtained under paragraph (3), the Government shall–
(A) proceed with the action, in which case the action
shall be conducted by the Government; or
(B) notify the court that it declines to take over the
action, in which case the person bringing the action
shall have the right to conduct the action.
31 U.S.C. § 3730(b)(4).
 5

failure to state a claim under Fed. R. Civ. P. 12(b)(6) and to
dismiss Count II for lack of jurisdiction under Fed. R. Civ. P.
12(b)(1) as well. The United States then moved on February 16,
2006 to dismiss Count I, asserting that under section
3730(c)(2)(A) “the United States’ decision to dismiss th[e] case
is not subject to judicial review.” U.S. Mot. to Dismiss 1.
On April 27, 2006 the district court held a hearing on the
motions to dismiss at the conclusion of which it granted the
Government’s motion to dismiss Count I and deferred ruling on
ARC’s motion. 4/27/06 Hr’g Tr. 43-44. On July 14, 2006 the
court issued an opinion and order in which it granted ARC’s
motion to dismiss Count II. United States ex rel. Hoyte v. Am.
Nat’l Red Cross, 439 F. Supp. 2d 38 (D.D.C. 2006).
Hoyte filed a notice of appeal on August 3, 2006.
II.
Hoyte contends the district court erred in dismissing Count
I and Count II. We consider each count in turn.
A. Count I: Reverse False Claim Charge
Section 3730(c)(2)(A), which sets out the “[r]ights of the
parties to qui tam actions” brought on behalf of the United
States, provides: “The Government may dismiss the action
notwithstanding the objections of the person initiating the action
if the person has been notified by the Government of the filing
of the motion and the court has provided the person with an
opportunity for a hearing on the motion.” In granting the
Government’s motion to dismiss Count I, the district court
concluded that under this provision, as construed in Swift v.
United States, 318 F.3d 250 (D.C. Cir. 2003), the court did not
“have a role to play” in the Government’s decision whether to
dismiss Count I given “the general presumption of the
Government’s right to end a prosecution” and the absence of
special circumstances that “warrant an exception such as fraud
 6

on the court.” 4/27/06 Hr’g Tr. 41. The district court correctly
dismissed Count I.
In Swift, a Department of Justice (DOJ) lawyer filed a qui
tam action alleging that three employees of the DOJ Office of
Legal Counsel had conspired to defraud the Government of
$6,169.20 using falsified time sheets and leave slips. The
Government moved to dismiss the action and the district court
granted the motion. On appeal, we upheld the dismissal,
concluding that the Government has what amounts to “an
unfettered right to dismiss” a qui tam action, citing four bases
for our conclusion: (1) the separation of powers doctrine, (2) the
Government’s broad discretion in initiating or continuing a
criminal prosecution, (3) Federal Rule of Civil Procedure
41(a)(1)(i), which permits a plaintiff to dismiss a civil action
“without order of the court,” and (4) the language of section
§ 3730(c)(2)(A) itself, which grants to “[t]he Government” (not
the court) unilateral authority to “dismiss the action
notwithstanding the objections of the person initiating the
action.” Swift, 318 F.3d at 252. As we there explained:
“Nothing in § 3730(c)(2)(A) purports to deprive the Executive
Branch of its historical prerogative to decide which cases should
go forward in the name of the United States. The provision
neither sets ‘substantive priorities’ nor circumscribes the
government’s ‘power to discriminate among issues or cases it
will pursue.’ ” Id. at 253 (quoting Heckler v. Chaney, 470 U.S.
821, 833 (1985)). In addition, we noted that, although “the
government conceded at oral argument that there may be an
exception for ‘fraud on the court,’ no evidence of that sort was
presented” and therefore we “d[id] not pass on whether this type
of exception, or any other, might be consistent with our reading
of § 3730(c)(2)(A).” Id.
We conclude that under Swift the district court correctly
deferred to the Government’s virtually “unfettered” discretion
to dismiss the qui tam claim. As in Swift, there is no evidence
 7

here of fraud on the court or any similar exceptional
circumstance to warrant departure from the usual deference we
owe the Government’s determination whether an action should
proceed in the Government’s name. Hoyte asks us to recognize
a new exception for a dismissal “clearly contrary to manifest
public interest,” Appellant’s Br. at 14, contending that in Swift
we left the door open for future recognition of other types of
exceptions in addition to “fraud on the court.” In Swift,
however, we flatly rejected the relator’s suggestion that we
routinely review the Government’s decision to dismiss a qui tam
action, instead holding the door only barely ajar for review in an
exceptional circumstance—in particular, where there is “fraud
on the court.” See id. at 253. It is clear from Swift that any
exception to section 3730(c)(2)(A)—if there are any—must be
like “fraud on the court” and Hoyte’s proposed “manifest public
interest” exception is not.4 Hoyte was afforded the hearing the
FCA mandates to give her “a formal opportunity to convince the
government not to end the case.” Id. The Government was not
persuaded to proceed, however, and its decision to dismiss the
case, based on its own assessment, is not reviewable in the
district court or this court. Accordingly, we affirm the district
court’s dismissal of Count I.

4
In Swift, we declined to adopt the judicial review standard for a
qui tam action endorsed by the Ninth Circuit, under which the
Government must initially show that dismissal is “rationally related to
a valid purpose,” after which the relator bears the burden to show the
decision to dismiss is “fraudulent, illegal, or arbitrary and capricious.”
See Swift, 318 F.3d at 252 (quoting United States ex rel. Sequoia
Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139, 1145 (9th
Cir. 1998), cert. denied, 525 U.S. 1067 (1999)). We explained that we
“c[ould ]not see how § 3730(c)(2)(A) gives the judiciary general
oversight of the Executive’s judgment” in deciding “that an action
brought in its name should be dismissed.” Id.
 8

B. Count II: Retaliation Claim
FCA section 3730(h) provides in relevant part:
Any employee who is discharged, demoted, suspended,
threatened, harassed, or in any other manner
discriminated against in the terms and conditions of
employment by his or her employer because of lawful
acts done by the employee on behalf of the employee or
others in furtherance of an action under this section,
including investigation for, initiation of, testimony for,
or assistance in an action filed or to be filed under this
section, shall be entitled to all relief necessary to make
the employee whole.
31 U.S.C. § 3730(h) (emphasis added). Count II alleges that
ARC violated this provision by discharging Hoyte in retaliation
for her “protected activity,” namely, “repeatedly advising her
supervisors that she believed that the American Red Cross had
violated the law, [standard operating procedures], and the
Consent Decree by not appropriately addressing the problems
associated with the collection of the 607 unsuitable units of
blood in Penn-Jersey.” Compl. ¶ 71. The district court
dismissed Count II on the ground that Hoyte’s investigation and
complaints about the blood handling and reporting were not “in
furtherance of” an FCA action as required by section 3730(h)
because Count I—asserting the reverse false claim under
section 3729(a)(7)—did not allege that ARC had any “obligation
to pay or transmit money or property to the Government” as
section 3729(a)(7) requires. We agree.
This court has established that
to prevail on a whistleblower claim, an employee must
demonstrate that:
(1) he engaged in protected activity, that is, “acts done
. . . in furtherance of an action under this section”; and
 9

(2) he was discriminated against “because of” that
activity. To establish the second element, the
employee must in turn make two further showings.
The employee must show that: (a) “the employer had
knowledge the employee was engaged in protected
activity”; and (b) “the retaliation was motivated, at
least in part, by the employee’s engaging in [that]
protected activity.”
United States ex rel. Williams v. Martin-Baker Aircraft Co., 389
F.3d 1251, 1260 (D.C. Cir. 2004) (quoting United States ex rel.
Yesudian v. Howard Univ., 153 F.3d 731, 736 (D.C. Cir. 1998)
(quoting S. Rep. No. 99-345, at 35 (1986) (alterations in
Yesudian))).5 For the first requirement—engaging in protected
activity—“ ‘it is sufficient that a plaintiff be investigating
matters that ‘reasonably could lead’ to a viable False Claims Act
case.’ ” Id. (quoting Yesudian, 153 F.3d at 740). The matters
Hoyte was investigating, however, could not have reasonably
led to a viable FCA case. Section 3729(a)(7), on which Hoyte
relies, imposes civil liability on a person who “knowingly
makes, uses, or causes to be made or used, a false record or
statement to conceal, avoid, or decrease an obligation to pay or
transmit money or property to the Government.” Yet Hoyte has
not alleged that ARC had any “obligation to pay or transmit
money or property to the Government” which it “could conceal,
avoid, or decrease” through a false statement or record so as to

5
Although both Williams and Yesudian involved the more usual
type of FCA action to recover for false claims made to secure a
payment by the Government, the retaliation requirements set forth
therein apply equally to a reverse false claim retaliation action. See
Hutchins v. Wilentz, Goldman & Spitzer, 253 F.3d 176, 186 (3d Cir.
2001) (plaintiff asserting reverse false claim retaliation “must show (1)
he engaged in ‘protected conduct,’ (i.e., acts done in furtherance of an
action under § 3730) and (2) that he was discriminated against because
of his ‘protected conduct.’ ” (citing Yesudian, 153 F.3d at 736)).
 10

violate section 3729(a)(7). The Consent Decree imposed no
obligation on ARC to tender money or property to the
Government but only to follow the prescribed blood handling
and reporting requirements. In this respect, ARC is in the same
position as any regulated entity subject to possible sanctions for
violating an administrative requirement and we made clear in
Yesudian that an unassessed potential penalty for regulatory
noncompliance does not constitute an obligation that gives rise
to a viable FCA claim or, consequently, a related whistleblower
claim.
Like Hoyte, the plaintiff in Yesudian filed a qui tam action
asserting both (1) a false claim count—alleging that his superior
in the Purchasing Department at Howard University (Howard)
falsified time and attendance records, accepted bribes from
vendors, permitted payments to vendors who provided no
services to Howard and took university property home for
personal use—and (2) a whistleblower claim—alleging he was
discharged because he reported the misconduct to various
Howard officials. A jury returned a verdict against the relator
on the false claim count and in his favor on the whistleblower
count but the district court subsequently granted the defendants’
motion for judgment as a matter of law on the whistleblower
count.
On appeal, we reversed the judgment on the whistleblower
claim. Noting that in a whistleblower claim, “it is sufficient that
a plaintiff be investigating matters that ‘reasonably could lead’
to a viable False Claims Act case,” 153 F.3d at 740, we
concluded that neither the relator’s uncertainty whether a FCA
suit would follow nor the jury’s adverse verdict on the false
claim count precluded success on the whistleblower count. See
id. at 741 (“Nor was it necessary for Yesudian to ‘know’ that the
investigation he was pursuing could lead to a False Claims Act
suit.”), 739 (“[T]he protected conduct element of such a claim
does not require the plaintiff to have developed a winning qui
 11

tam action before he is retaliated against.”). Nonetheless, we
unequivocally stated that “an employee’s investigation of
nothing more than his employer’s non-compliance with federal
or state regulations” is not enough to support a whistleblower
claim. Id. at 740 (citing Hopper v. Anton, 91 F.3d 1261, 1269
(9th Cir. 1996); United States ex rel. Ramseyer v. Century
Healthcare Corp., 90 F.3d 1514, 1523 (10th Cir. 1996)). In
Yesudian, we found that “the nature of [the relator’s] charges
could not have been mistaken for a complaint about mere
regulatory compliance” because his was a “classic false claim”
which charged his supervisor with attempting to defraud the
Government of money. Id. at 744. Not so with Hoyte’s claim,
which cannot be deemed a “classic” reverse false claim—in
which the defendant’s alleged deception “results in no payment
to the government when a payment is obligated,” United States
ex rel. Bain v. Ga. Gulf Corp., 386 F.3d 648, 653 (5th Cir. 2004)
(emphasis added)—but, in contrast to Yesudian, involves “mere
regulatory compliance,” namely, ARC’s failure to follow the
blood handling and reporting procedures spelled out in the
Consent Decree.
Relying heavily on Yesudian, Hoyte contends the district
court erred in dismissing her whistleblower count because
“winning the underlying claim is not a necessary predicate to
maintaining a Section (h) action.” Appellant’s Br. 27. It is true
that under Yesudian a relator need not ultimately prevail on a
FCA charge in order to recover for retaliation under section
3730(h). See 153 F.3d 739. Indeed, in Yesudian, we concluded
that the evidence supported the jury verdict in the relator’s favor
on the whistleblower claim notwithstanding the jury found
against the relator on the underlying false claim count and we
therefore reversed the district court’s post-trial judgment setting
aside the whistleblower verdict. Nonetheless, we made clear
that the relator must have been “investigating matters that
‘reasonably could lead’ to a viable False Claims Act case,” id.
at 740, and here that is simply not the case. Under no
 12

reasonable interpretation of the statutory language can ARC be
deemed to have had an “obligation to pay or transmit money . . .
to the Government,” as section 3729(a)(7) requires, at the time
of Hoyte’s investigation and complaints. Hoyte’s investigation
was into mere regulatory noncompliance and did not “concern
‘false or fraudulent claims’ ” as it must to support a retaliation
claim under section 3729(a). Yesudian, 153 F.3d at 740 (citing
31 U.S.C. § 3729(a)). Because the conduct Hoyte was
investigating—ARC’s failure to report its noncompliance with
the Consent Decree—could not have reasonably led to a viable
claim under section 3729 of the FCA, her investigation of it was
not protected activity “in furtherance of an action under [section
3730],” 31 U.S.C. § 3730(h)—that is, an action “for a violation
of section 3729,” id. § 3730(b)(1)—so as to support a retaliation
claim. Cf. Hamm v. Weyauwega Milk Prods., 332 F.3d 1058,
1066 (7th Cir. 2003) (district court properly dismissed Title VII
retaliation claim because complaints to employer and state
agency amounted to claims of sexual orientation discrimination,
not sex discrimination, and therefore “did not concern an
employment practice that violated Title VII”).
Relying again on language in Yesudian, Hoyte contends the
court should focus on “whether Hoyte had a good faith chance
of success at the time that she suffered the retaliation.”
Appellant’s Br. 27. In Yesudian the defendants argued that no
actionable false claim charge existed at the time of the relator’s
investigation because there was no evidence that Howard ever
re-submitted the allegedly false claims to the Government so as
to transform the defendants’ fraud on Howard into fraud on the
United States as well. Without expressly deciding whether re-
submission was necessary, the court concluded that Yesudian’s
personal knowledge that “80% of Howard’s money came from
the United States Government” afforded “a good faith basis for
going forward at the time of the retaliation” because, “[g]iven
the information he had about Howard’s finances, it would have
been reasonable to conclude there was a ‘distinct possibility’ he
 13

would find evidence of resubmission of the claims.” 153 F.3d
at 739-40 (quoting Childree v. UAP/GA AG CHEM., Inc., 92
F.3d 1140, 1146 (11th Cir. 1996) (requiring “distinct
possibility” of suit), and Neal v. Honeywell Inc., 33 F.3d 860,
864 (7th Cir. 1994) (sufficient if litigation was “distinct
possibility” or “could be filed legitimately”)). As we explained
in Yesudian, determining whether the false claims were re-
submitted required “the kind of information a plaintiff normally
cannot acquire until he files a suit and obtains the benefits of
court-sanctioned discovery.” Id. at 740. We therefore
concluded Yesudian’s personal knowledge provided the
requisite “good faith basis” at the time of the investigation and
retaliation to believe the defendants were defrauding the federal
Government. Hoyte, in contrast, regardless of her subjective
beliefs, had no objectively reasonable basis to believe that she
was “ ‘investigating matters that reasonably could lead’ to a
viable False Claims Act case.’ ” Martin-Baker Aircraft Co., 389
F.3d at 1260 (quoting Yesudian, 153 F.3d at 740); see Lang v.
Nw. Univ., 472 F.3d 493, 495 (7th Cir. 2006) (“What [FCA
relator] actually believed is irrelevant, for people believe the
most fantastic things in perfect good faith; a kind heart but
empty head is not enough. The right question is whether her
belief had a reasonable objective basis . . . .”). There was not
even a “distinct possibility” that her claim against ARC might
become viable before or at trial because under any view of the
facts as alleged the claim lacked one of the legal requirements
for a reverse false claim charge: the defendant must have an
“obligation to pay or transmit money or property to the
Government,” 31 U.S.C. § 3729(a)(7). ARC had no such
obligation and no amount of discovery could cure this defect.
There being no viable action against ARC under section 3730
for violation of section 3729(a), Hoyte’s investigation and
reporting of ARC’s conduct did not constitute “protected
activity”—“that is, ‘acts done . . . in furtherance of an action
under [section 3730],’ ” Yesudian, 153 F.3d at 736 (quoting S.
 14

Rep. No. 99-345, at 35 (1986))—and her subsequent discharge
was therefore not unlawful retaliation under section 3730(h).6
The dissent argues that Hoyte can pursue a retaliation claim
even in the absence of a viable reverse FCA claim, relying in
part on language culled from the Supreme Court’s decision in
Graham County Soil & Water Conservation District v. United
States ex rel. Wilson, 545 U.S. 409 (2005). Dissent at 1, 2-3, 4,
8. In Graham County, the question before the Supreme Court
was whether the correct limitations period for an FCA retaliation
claim is the 6-year period prescribed in FCA for “[a] civil action
under section 3730,” 31 U.S.C. § 3731(b)(1), or the period
established under the “most closely analogous state statute of
limitations,” 545 U.S. at 422. The Court held the latter and in
the course of its analysis, observed that “proving a violation of
§ 3729 is not an element of a § 3730(h) cause of action” and
thus, section 3730(h) “protects an employee’s conduct even if
the target of an investigation or action to be filed was innocent,”
id. at 416 & n.1—both points that we made in Yesudian when
we upheld the jury’s verdict in Yesudian’s favor on the
whistleblower claim notwithstanding the jury held against him
on the underlying qui tam claim. While it is true, as the dissent
notes, that “ ‘a well-pleaded retaliation complaint need not
allege that the defendant submitted a false claim,’ ” Dissent at
8 (quoting Graham County, 545 U.S. at 416), the complaint
must allege that “the defendant retaliated against him for

6
The Government argues as amicus on Count II that the district
court erroneously “advanced the view that an actionable ‘obligation’
means ‘a present, existing debt or liability, owed at the time the
alleged false statement is made, and not some future or contingent
liability.’ ” United States Br. 24 (quoting 439 F. Supp. 2d at 43).
Because Hoyte’s allegations identify no obligation on ARC’s part to
tender money or property, we need not decide the extent, if any, to
which such an obligation must be fixed to support a reverse false
claim action under section 3729(a)(7).
 15

engaging in ‘lawful acts done . . . in furtherance of’ an FCA
‘action filed or to be filed,’ Graham County, 545 U.S. at 416
(quoting 31 U.S.C. § 3730(h) (ellipsis in Graham)), that is, for
engaging in protected conduct. Yesudian defines “protected
conduct” as conduct that “ ‘reasonably could lead’ to a viable
False Claims Act case,” 153 F.3d at 740, as the Court
acknowledged in Graham County, 545 U.S. at 416 n.1 (citing
Yesudian).7
As we have explained, supra pp. 11-14, under Yesudian
Hoyte’s investigation could not reasonably lead to a viable
reverse false claim action under section 3729(a)(7) (so as to
support a whistleblower claim under section 3730(h)) because
the activity she claims to have been investigating did not
constitute an attempt to “conceal, avoid, or decrease an
obligation to tender money or property to the Government.”
The plain language of the statute (whether read by a lawyer or
layman) requires that there be an obligation to make payment to
the Government and ARC had no such obligation, “contractual”
or otherwise. See Dissent at 7. It is true, as the dissent asserts,
Dissent at 4-5, that the statute does not require in so many words
that the investigation be in furtherance of a “viable” or “non-
frivolous” action. But section 3730(h) does expressly require
that the whistleblower’s conduct, to be protected, be “in
furtherance of an action under this section” (emphasis added),
that is, in furtherance of an action under section 3730, which in
turn requires that the action be “for a violation of section 3729”
(in this case a violation of section 3729(a)(7)). Thus, to recover
for retaliation under section 3730(h), it is not sufficient that the
whistleblower further an action under some other statutory
scheme or, as here, a non-existent action. In any event, it is the

7
The Court also noted that circuit courts had adopted varying
“formulations” of what constitutes protected activity, without
endorsing any particular one. 545 U.S. at 416 n.1.
 16

law of this Circuit that “the employee must be investigating
matters which are calculated, or reasonably could lead, to a
viable FCA action.” Shekoyan v. Sibley Int’l, 409 F.3d 414, 423
(D.C. Cir. 2005) (quotation omitted); see also Martin-Baker
Aircraft Co., 389 F.3d at 1260; Yesudian, 153 F.3d at 740. And
a frivolous action is by definition not a viable one. See Brandon
v. D.C. Bd. of Parole, 734 F.2d 56, 59 (D.C. Cir. 1984) (“[I]f the
complaint is viable—it cannot be deemed frivolous.”). Because
there was no viable FCA action here, the district court properly
dismissed Count II.

For the foregoing reasons, we affirm the district court’s
judgment dismissing Hoyte’s complaint.
So ordered.
 TATEL, Circuit Judge, concurring in part and dissenting
in part: Michelle Hoyte, Director of Quality Audits for the
American Red Cross, discovered that the organization had
mishandled hundreds of units of blood destined for human
transfusion and was hiding its mistake from the government.
Under a consent decree the Red Cross had signed with the
government, this deception authorized the government to
impose substantial fines on the organization. Hoyte urged her
supervisors to report what had occurred, ultimately scheduling
a meeting with a Senior Vice President to discuss her
concerns. But the day before the meeting, Hoyte’s supervisor
fired her because of her actions.

Acknowledging these sordid allegations, the court
nevertheless concludes that Hoyte failed to state a retaliation
claim under the False Claims Act (FCA), 31 U.S.C. § 3729 et
seq., because she never alleged that the Red Cross actually
filed a false claim. The Supreme Court has made clear,
however, that “a well-pleaded retaliation complaint need not
allege that the defendant submitted a false claim.” Graham
County Soil & Water Conservation Dist. v. United States ex
rel. Wilson, 545 U.S. 409, 416 (2005) (emphasis added).
Rather, as I demonstrate below, plaintiffs need only show
they reasonably believed their employer violated the FCA—a
standard Hoyte plainly satisfies. I therefore respectfully
dissent from Part II.B. of the court’s opinion.

Congress enacted the FCA to prevent fraud against the
government. Because “[d]etecting fraud is usually very
difficult without the cooperation of individuals who are either
close observers or otherwise involved in the fraudulent
activity,” S. REP. NO. 99-345, at 4 (1986), reprinted in 1986
U.S.C.C.A.N. 5266, 5269, Congress included several
provisions in the FCA to encourage whistleblowers, see, e.g.,
31 U.S.C. § 3730(d) (allowing whistleblowers to receive a
portion of any recovery by the government based on
information they provide). Relevant here, 31 U.S.C.
 2
§ 3730(h) protects whistleblowers from retaliation by their
employers:

Any employee who is discharged, demoted,
suspended, threatened, harassed, or in any
other manner discriminated against in the
terms and conditions of employment by his or
her employer because of lawful acts done by
the employee on behalf of the employee or
others in furtherance of an action under this
section, including investigation for, initiation
of, testimony for, or assistance in an action
filed or to be filed under this section, shall be
entitled to all relief necessary to make the
employee whole.

Id.

As we explained in United States ex rel. Yesudian v.
Howard University, 153 F.3d 731 (D.C. Cir. 1998), to prevail
on a whistleblower claim “an employee must demonstrate
that: (1) he engaged in protected activity, that is, ‘acts done
. . . in furtherance of an action under this section’; and (2) he
was discriminated against ‘because of’ that activity.” Id. at
736 (quoting 31 U.S.C. § 3730(h)) (omission in original). To
satisfy the first requirement—the one the court believes Hoyte
failed to meet—“it is sufficient that a plaintiff be investigating
matters that reasonably could lead to a viable False Claims
Act case.” Id. at 740 (citation and internal quotation marks
omitted). As the Supreme Court has made clear, this does not
mean that at the time the employee engaged in the
investigative conduct there had to be a reasonable possibility
that she would prevail on an FCA claim, for an employee can
prevail on a retaliation claim even if the facts ultimately make
it impossible for any underlying FCA claim to succeed. See
 3
Graham County, 545 U.S. at 416 (stating that section 3730(h)
“protects an employee’s conduct even if the target of an
investigation or action to be filed was innocent”); id. at 416
n.1 (“[P]roving a violation of § 3729 is not an element of a §
3730(h) cause of action.”).

Thus, instead of requiring an actual possibility of success
on the underlying FCA claim, Yesudian holds only that the
employee must have reasonably believed her investigative
acts could lead to a viable FCA claim. Three of our sister
circuits have described the test this way: “[T]he relevant
inquiry to determine whether an employee’s actions are
protected under § 3730(h) is whether: ‘(1) the employee in
good faith believes, and (2) a reasonable employee in the
same or similar circumstances might believe, that the
employer is committing fraud against the government.’”
Fanslow v. Chicago Mfg. Ctr., Inc., 384 F.3d 469, 480 (7th
Cir. 2004) (quoting Moore v. Cal. Inst. of Tech. Jet
Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002)); accord
Wilkins v. St. Louis Housing Auth., 314 F.3d 927, 933 (8th
Cir. 2002). The FCA’s legislative history confirms that this
test mirrors what Congress intended. The Senate Report
accompanying the FCA’s retaliation provision explains that
for an employee to be protected by the Act, “the employer
would not have to be proven in violation of the False Claims
Act,” but “the actions of the employee must result from a
‘good faith’ belief that violations exist.” S. REP. NO. 99-345,
at 35, reprinted in 1986 U.S.C.C.A.N. at 5300; see also
Graham County, 545 U.S. at 416 (“[A] well-pleaded
retaliation complaint need not allege that the defendant
submitted a false claim.”).

Properly understood then, the question before us is this:
could Hoyte have reasonably believed that the Red Cross had
violated the FCA? The answer is plainly yes.
 4
The FCA makes it illegal to “knowingly make[], use[], or
cause[] to be made or used, a false record or statement to
conceal, avoid, or decrease an obligation to pay or transmit
money or property to the Government.” 31 U.S.C. §
3729(a)(7). The consent decree the Red Cross had entered
with the government required the organization to disclose
certain types of blood handling errors—such as the ones
alleged here—and failure to do so authorized the government
to impose substantial fines. Thus, Hoyte could reasonably
have believed that by hiding its blood handling errors the Red
Cross was attempting “to conceal, avoid, or decrease an
obligation to pay or transmit money or property to the
Government.” Id. To be clear, I take no position on whether
the Red Cross actually violated section 3729(a)(7); I maintain
only that Hoyte could reasonably have believed that the Red
Cross violated the statute by hiding this information.

Even were the reasonableness of Hoyte’s belief
debatable, I would give her the benefit of the doubt, for
several factors counsel a generous approach in deciding
whether an FCA retaliation plaintiff’s beliefs were reasonable.
The first is the statute’s plain text, which requires only that
the act the employee engaged in was somehow “in
furtherance of an action under this section,” 31 U.S.C. §
3730(h) (emphasis added), not “an action that is reasonably
likely to succeed,” or even “a non-frivolous action.” See
Graham County, 545 U.S. at 416 (“A retaliation plaintiff . . .
need prove only that the defendant retaliated against him for
engaging in ‘lawful acts done . . . in furtherance of’ an FCA
‘action filed or to be filed,’ language that protects an
employee’s conduct even if the target of an investigation or
action to be filed was innocent.” (quoting 31 U.S.C. §
3730(h)) (second omission in original)). Thus, the statute
itself imposes no requirement—indeed, it includes no
suggestion—that an employee’s underlying FCA claim must
 5
be even remotely viable to support a retaliation claim.
Although courts, including this one, have nonetheless
imposed this requirement to discourage frivolous claims, see
Yesudian, 153 F.3d at 740, we should avoid reading into the
statute any more than is absolutely necessary to achieve this
goal, and a minimal reasonableness requirement will suffice.
Requiring anything more would—without any basis in the
statute—often leave employees unprotected even when they
acted in good faith to prevent fraud against the government.
Such a result would directly contravene the FCA’s goal of
“encourag[ing] any individual knowing of Government fraud
to bring that information forward.” S. REP. NO. 99-345, at 2,
reprinted in 1986 U.S.C.C.A.N. at 5267.

Moreover, we must keep in mind that nearly all
employees who investigate and bring fraud claims are
laypeople, not lawyers. Expecting laypeople to know with
any degree of certainty whether their employers’ actions
violate the FCA’s often vague provisions is simply
unrealistic, especially when courts themselves disagree over
what constitutes a viable FCA claim. Compare United States
ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1201 (10th
Cir. 2006) (holding that the term “obligation” in the FCA
includes “instances in which a party is required to pay money
to the government, but, at the time the obligation arises, the
sum has not been precisely determined”) with United States v.
Q Int’l Courier, Inc., 131 F.3d 770, 774 (8th Cir. 1997)
(“[A]n obligation under the meaning of the False Claims
Act[] must be for a fixed sum that is immediately due.”). As
we said in the analogous context of Title VII retaliation
claims, “a layperson should not be burdened with the
‘sometimes impossible task’ of correctly anticipating how a
given court will interpret a particular statute.” Parker v.
Baltimore & Ohio R.R., 652 F.2d 1012, 1020 (D.C. Cir. 1981)
(quoting Berg v. La Crosse Cooler Co., 612 F.2d 1041, 1045
 6
(7th Cir. 1980)). Thus, when deciding whether a plaintiff’s
beliefs were reasonable, we must put ourselves in the
layperson’s shoes, for “[t]here is no suggestion in the [FCA’s]
legislative history that Congress meant to extend protection
only to lawyers, or to others only after they have consulted
with lawyers.” Yesudian, 153 F.3d at 741.

Given these considerations, it becomes even clearer that
Hoyte’s belief was reasonable. The court holds to the
contrary, but its reasons for doing so are unpersuasive.

The court first states that no one could have thought the
Red Cross violated the FCA because “[t]he Consent Decree
imposed no obligation on [the Red Cross] to tender money or
property to the Government but only to follow the prescribed
blood handling and reporting requirements.” Maj. Op. at 10.
The consent decree, however, expressly authorized the
government to fine the Red Cross if it failed to disclose
information like the blood mishandling incident that allegedly
occurred here. Am. Consent Decree of Permanent Inj.,
United States v. Am. Nat’l Red Cross, Civ. No. 93-0949, at 52
(D.D.C. Apr. 15, 2003). Thus, at the time Hoyte began
pressuring her superiors to report the mistake, the government
already had the authority to fine the Red Cross—all it needed
was to know of the Red Cross’s error, precisely the
information the Red Cross hid. Again, I take no position on
whether this means the Red Cross actually violated section
3729(a)(7) by lying to avoid an obligation to the government,
but it certainly made it reasonable for Hoyte to believe as
much.

The court next says there was no obligation here because
the Red Cross “is in the same position as any regulated entity
subject to possible sanctions for violating an administrative
requirement and we made clear in Yesudian that an
 7
unassessed potential penalty for regulatory noncompliance
does not constitute an obligation that gives rise to a viable
FCA claim.” Maj. Op. at 10. I would agree if the Red Cross
had only violated federal statutes or regulations governing
blood handling. But the Red Cross violated a consent decree
it had entered with the government, and as we have repeatedly
held, “a consent decree . . . is essentially a contract.” Segar v.
Mukasey, 508 F.3d 16, 21 (D.C. Cir. 2007) (citation omitted).
Given that the Red Cross was violating a contract with the
government, Hoyte could reasonably have believed the
organization was violating the FCA, for courts have
universally held that “a contractual obligation falls within the
scope of § 3729(a)(7).” Bahrani, 465 F.3d at 1204; see also,
e.g., Am. Textile Mfrs. Inst., Inc. v. The Limited, Inc., 190 F.3d
729, 741 (6th Cir. 1999) (“§ 3729(a)’s definition of
‘obligation’ certainly includes those arising from . . . breaches
of government contracts . . . .”).

Third, the court states that “[u]nder no reasonable
interpretation of the statutory language can [the Red Cross] be
deemed to have had an ‘obligation to pay or transmit money
. . . to the Government,’ as section 3729(a)(7) requires.” Maj.
Op. at 11-12. But this ignores a key part of the statute. The
reverse false claims provision prohibits making a false
statement to “conceal, avoid, or decrease an obligation to pay
or transmit money or property to the Government.” 31 U.S.C.
§ 3729(a)(7) (emphasis added). Hoyte’s very allegation is
that the Red Cross was attempting to avoid paying a fine to
the government by hiding a blood handling error the consent
decree required it to report.

Finally, the court asserts that “under Yesudian Hoyte’s
investigation could not reasonably lead to a viable reverse
false claim action under section 3729(a) (so as to support a
whistleblower claim under section 3730(h)) because the
 8
activity she claims to have been investigating did not
constitute an attempt to ‘conceal, avoid, or decrease an
obligation to tender money or property’ to the Government.”
Maj. Op. at 15. But this is no different from Yesudian itself,
where we allowed the plaintiff’s whistleblower claim even
though he never proved that “the activity [he] claim[ed] to
have been investigating . . . constitute[d] an attempt to
‘conceal, avoid, or decrease an obligation to tender money or
property’ to the Government.” Id.; see also Yesudian, 153
F.3d at 740-41 (stating that Yesudian’s retaliation claim could
proceed even without “evidence . . . necessary to prove a
False Claims Act case”). And it again ignores the Supreme
Court’s directive in Graham County that “a well-pleaded
retaliation complaint need not allege that the defendant
submitted a false claim.” 545 U.S. at 416.

In sum, the Red Cross fired Hoyte for acting on her good
faith, reasonable belief that the organization had violated the
FCA by attempting to “avoid . . . an obligation to pay or
transmit money . . . to the Government.” 31 U.S.C.
§ 3729(a)(7). Because the FCA requires nothing more to state
a retaliation claim, I would reverse the district court’s
dismissal of Hoyte’s claim.