FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MARY ANGELA CAFASSO, United
States ex rel.,
Plaintiff-counter-defendant-
Appellant, No. 09-16181
v. D.C. No.
2:06-cv-01381-
GENERAL DYNAMICS C4 SYSTEMS, NVW
INC.,
Defendant-counter-claimant-
Appellee.
MARY ANGELA CAFASSO, United
States ex rel.,
Plaintiff-Appellant, No. 09-16607
v. D.C. No.
2:06-cv-01381-
GENERAL DYNAMICS C4 SYSTEMS, NVW
INC.,
Defendant-Appellee.
3963
3964 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
MARY ANGELA CAFASSO, United
States, ex rel.,
Plaintiff-counter-defendant-
Appellant, No. 09-17710
v. D.C. No.
GENERAL DYNAMICS CORPORATION, 2:06-cv-01381-
Defendant-Appellee, NVW
GENERAL DYNAMICS C4 SYSTEMS, OPINION
INC.,
Defendant-counter-claimant-
Appellee.
Appeal from the United States District Court
for the District of Arizona
Neil V. Wake, District Judge, Presiding
Argued and Submitted
November 3, 2010—San Francisco, California
Filed March 24, 2011
Before: Ronald M. Gould and Consuelo M. Callahan,
Circuit Judges, and Morrison C. England, Jr.,
District Judge.*
Opinion by Judge Gould
*The Honorable Morrison C. England, Jr., District Judge for the U.S.
District Court for Eastern California, Sacramento, sitting by designation.
3968 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
COUNSEL
Mike Bothwell (argued), Julie Keeton Bracker, and Richard
J. Harris, Roswell, Georgia; Thomas Rogers, Phoenix, Ari-
zona; for plaintiff-appellant Mary Angela Cafasso.
Mark G. Kisicki (argued), Lawrence Allen Katz, Peter S.
Kozinets, and Thomas Michael Stanek, Phoenix, Arizona; J.
William Koegel, Washington, DC; for defendant-appellee
General Dynamics C4 Systems, Inc.
OPINION
GOULD, Circuit Judge:
In this False Claims Act (“FCA”) appeal, relator Mary
Cafasso challenges orders of the district court dismissing her
qui tam complaint, rejecting her proposed amended pleading,
granting summary judgment on remaining claims, and award-
ing attorneys’ fees.1 We have jurisdiction pursuant to 28
U.S.C. § 1291, and we affirm.
1
Congress amended the FCA in May 2009 by enacting the Fraud
Enforcement and Recovery Act, Pub. L. No. 111-21, § 4, 123 Stat. 1617,
1621 (2009). These amendments do not apply retroactively to this case.
See Hopper v. Solvay Pharms., Inc., 588 F.3d 1318, 1327 n.3 (11th Cir.
2009) (explaining non-retroactivity of FCA amendments).
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3969
I
Cafasso alleges that her former employer General Dynam-
ics C4 Systems (“GDC4S”), a technology company that ser-
vices the military, defrauded the government by withholding
disclosure of new inventions which, GDC4S had agreed by
contract, the government had rights to use and license.
Cafasso discovered the alleged fraud, according to her com-
plaint, and made repeated inquiries and requests for internal
audits. She claims that as a result of her activities in that
regard, GDC4S retaliated against her by eliminating her
department and position. GDC4S denies those allegations.
After learning that her job would be terminated but before
leaving GDC4S, Cafasso copied almost eleven gigabytes of
data from company computers in anticipation of bringing a
qui tam action. Within days of her departure, GDC4S realized
that she had taken thousands of its internal documents.
GDC4S filed suit in state court seeking to recover documents
that it believed Cafasso took in violation of a confidentiality
agreement that she executed when her employment began.
The state court issued a temporary restraining order (“TRO”)
that required Cafasso to return the electronic files that she
removed from GDC4S.
Two days later, Cafasso filed this qui tam action in federal
district court with a conclusory six-page complaint. The com-
plaint alleged FCA violations and retaliation. The district
judge, at Cafasso’s request, issued orders sealing the case and
permitting Cafasso to inform the state court of the pendency
of the qui tam action. With the orders and sealed complaint
in-hand, Cafasso presented the state court with an ex parte
request to lift the TRO, which the state court granted. The
state court also stayed the state action in its entirety, although
the Arizona Court of Appeals later reversed both orders.
When the district court learned that Cafasso had used its
orders to disrupt the state court suit, it vacated the orders that
it had issued. GDC4S was then served with the complaint and
3970 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
filed an answer and counterclaim. That counterclaim alleged,
among other things, that Cafasso’s appropriation of GDC4S’s
electronic files breached her confidentiality agreement with
the company.
Continuing prosecution of the qui tam action, Cafasso
lodged more specific allegations against GDC4S in an
amended complaint. In response to GDC4S’s objections about
privileged information contained in that amended pleading,
Cafasso filed a substitute amended complaint that struck the
objectionable language. Around the same time, the United
States announced that it would decline to intervene in the
FCA action. Cafasso continued to litigate the matter in her
own name.
The parties then began an acrimonious period of discovery.
The district court’s November 4, 2009, order recites numerous
discovery abuses by Cafasso. Specifically, Cafasso refused to
identify which documents, of the thousands she had appropri-
ated, actually supported her claim or were privileged. Further,
Cafasso sought discovery into 110 inventions that were not
mentioned in her complaint, which the court prohibited.
GDC4S asked by interrogatory that Cafasso “[i]dentify each
specific provision of 31 U.S.C. § 3729(a)(1)-(7) of the False
Claims Act (‘FCA’) that you allege in paragraph 173 of the
Substitute Amended Complaint that Defendant ‘knowingly
violated’ . . . .” In response, Cafasso stated that she “has not
made a claim as described in this Interrogatory, nor does the
law require that she claim such to have been the case.”
Because Cafasso’s answer to this interrogatory appeared to
abandon her qui tam allegations, GDC4S promptly filed a
motion for judgment on the pleadings pursuant to Federal
Rule of Civil Procedure 12(c). Thereafter, Cafasso sought to
file a 733-page second amended complaint, which the district
court rejected for failing to state a “short and plain statement
of the claim,” as required by Federal Rule of Civil Procedure
8(a)(2). The district court granted GDC4S’s motion for judg-
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3971
ment on the pleadings. It then denied Cafasso’s subsequent
motion to amend her pleading.
Both parties moved for summary judgment on the remain-
ing claims (Cafasso’s retaliation claim against GDC4S, and
GDC4S’s counterclaims against Cafasso). GDC4S prevailed
on both motions, and the district court entered judgment and
a permanent injunction against Cafasso. GDC4S then moved
for an award of attorneys’ fees, which the district court
granted in part.
This appeal followed.
II
We first address the district court’s dismissal of Cafasso’s
qui tam claim pursuant to Federal Rule of Civil Procedure
12(c). Our review is de novo. Fleming v. Pickard, 581 F.3d
922, 925 (9th Cir. 2009). When considering a Rule 12(c) dis-
missal, we must accept the facts as pled by the nonmovant,
here, Cafasso. Id.; see also Jenkins v. McKeithen, 395 U.S.
411, 421 (1969) (“For the purposes of a motion to dismiss, the
material allegations of the complaint are taken as admitted.”).
We caution that the facts set forth below have not been deter-
mined judicially, but are rather what we think to be a fair
summary of the complaint’s2 allegations.
A
Cafasso worked as the chief scientist/technologist at
GDC4S, a technology company that services the military, and
was so employed at the predecessor-company that was
acquired by General Dynamics in 2001. As a participant in
the Advanced Telecommunications & Information Distribu-
tion Research Program (“ATIRP”), GDC4S’s predecessor-
2
We review the dismissal of Cafasso’s Substitute Amended Complaint.
For simplicity, we refer to this pleading as the “complaint.”
3972 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
company had contracted with the Army to assign to the
United States certain rights to “subject inventions” developed
in performance of military contracts. Specifically, ATIRP
gives the government “license to practice or have practiced
for or on behalf of the United States the subject invention
throughout the world,” and the right to require GDC4S to
license the invention to anyone “upon terms that are reason-
able under the circumstances.” In other words, ATIRP grants
the government the royalty-free right to use or have used on
its behalf subject inventions, as well as the right to require
GDC4S to license the inventions to another party (such as a
competing contractor) on reasonable terms.
ATIRP also requires timely disclosure of applicable new
inventions to the government. Once it discloses a new inven-
tion, GDC4S may opt to retain title to the invention, subject
to the government’s right to use or have used on its behalf,
and to require licensing of, the invention. If GDC4S chooses
not to retain title to the invention, the government may
assume title. Cafasso worked in the office that identified, doc-
umented, and protected GDC4S’s intellectual property. Her
responsibilities included ensuring that GDC4S complied with
ATIRP’s requirements by, among other things, disclosing
new inventions to the Army.
In early 2004, Cafasso became aware of what she believed
was a scheme to deprive the United States of its ATIRP rights
to a new invention. GDC4S had applied for a patent for an
invention known as GE04582, but the United States Patent
and Trademark Office had preliminarily rejected that applica-
tion subject to a response from GDC4S. Rather than respond-
ing to the Patent Office—and telling the government so that
it could protect its rights in the invention by preparing its own
response—GDC4S instead opted to abandon the patent appli-
cation and, according to Cafasso, delayed before notifying the
government in order to deprive it of the opportunity to prepare
a response.
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3973
Cafasso alleges that by refusing to prosecute its patent
application, GDC4S had “claim[ed] ownership of . . . [the
new] technology as [its] own trade secret,” and had denied the
United States an opportunity to protect its interest in the
invention. Further, because GDC4S had not disclosed its
newly invented technology to the government, competing
contractors would not know to ask the government for per-
mission to use the technology when bidding on later contracts.
According to Cafasso, the government might therefore pay
GDC4S or another contractor to invent technologies like
GE04582 that either already had been invented or with
respect to which the government already had the right to
authorize its contractors to use free of charge. In other words,
Cafasso alleges that the United States could potentially pay
twice for the same technologies.
Cafasso reported her discovery about GE04582 to her
supervisor and others in her office, but no corrective action
was taken. Cafasso asked for an audit or internal review. No
audit occurred. GDC4S thereafter eliminated the office in
which Cafasso worked and terminated her employment, as
well as that of her supervisor.3 GDC4S maintains that this
occurred as part of a routine corporate reorganization. Cafasso
disputes this account, alleging that her termination was retal-
iatory.
After Cafasso was told that her position had been elimi-
nated but before leaving GDC4S, she was tasked with per-
forming due diligence in closing out the ATIRP contract. In
performing this function, she contends, she discovered a num-
ber of other instances where new inventions had either not
been properly disclosed to the United States, or where
GDC4S had abandoned prosecution of its patent applications
to the detriment of the government’s rights to the invention.
3
We address the timing of these events more specifically in the part of
our opinion evaluating Cafasso’s appeal of the summary judgment on her
retaliation claim. See infra part IV.
3974 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
Cafasso claims that GDC4S continues to deprive the United
States of its rights to new inventions. She alleges that “[t]he
scheme [is] implemented in two ways. For some inventions,
the disclosure to the Government is made, but it is sketchy
and insufficient. In other cases, [GDC4S] apparently has
stopped submitting notification to the Government altogeth-
er.”
B
[1] In reviewing the dismissal of a complaint, we inquire
whether the complaint’s factual allegations, together with all
reasonable inferences, state a plausible claim for relief. Ash-
croft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009).4 The height-
ened pleading standard of Rule 9(b) governs FCA claims. Bly-
Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001).
Rule 9(b) provides that “[i]n alleging fraud or mistake, a party
must state with particularity the circumstances constituting
fraud or mistake.” Fed. R. Civ. P. 9(b). To satisfy Rule 9(b),
a pleading must identify “the who, what, when, where, and
how of the misconduct charged,” as well as “what is false or
misleading about [the purportedly fraudulent] statement, and
why it is false.” Ebeid ex rel. United States v. Lungwitz, 616
F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and
citations omitted).
[2] Until now, we have not had occasion explicitly to con-
firm that Iqbal’s plausibility requirement applies to claims
subject to Rule 9(b). We have, however, said that “complaints
alleging fraud must comply with both [Federal Rules of Civil
4
Although Iqbal establishes the standard for deciding a Rule 12(b)(6)
motion, we have said that Rule 12(c) is “functionally identical” to Rule
12(b)(6) and that “the same standard of review” applies to motions
brought under either rule. Dworkin v. Hustler Magazine Inc., 867 F.2d
1188, 1192 (9th Cir. 1989); see also Gentilello v. Rege, 627 F.3d 540, 544
(5th Cir. 2010) (applying Iqbal to a Rule 12(c) motion); Albrecht v. Treon,
617 F.3d 890, 893 (6th Cir. 2010) (same); Johnson v. Rowley, 569 F.3d
40, 43-44 (2d Cir. 2009) (same).
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3975
Procedure] 8(a) and 9(b).” Wagh v. Metris Direct, Inc., 363
F.3d 821, 828 (9th Cir. 2003), overruled on other grounds by
Odom v. Microsoft Corp., 486 F.3d 541, 551 (9th Cir. 2007)
(en banc). Because Rule 8(a) requires the pleading of a plausi-
ble claim, Iqbal, 129 S. Ct. at 1949-50, we hold that claims
of fraud or mistake—including FCA claims—must, in addi-
tion to pleading with particularity, also plead plausible allega-
tions.5 That is, the pleading must state “enough fact[s] to raise
a reasonable expectation that discovery will reveal evidence
of [the misconduct alleged].” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 556 (2007).6
C
[3] We next consider whether the qui tam claim stated in
Cafasso’s complaint is sufficiently particularized and plausi-
ble to avert dismissal. “It seems to be a fairly obvious notion
that a False Claims Act suit ought to require a false claim.”
United States ex rel. Aflatooni v. Kitsap Physicians Serv., 314
F.3d 995, 997 (9th Cir. 2002). “[T]he [FCA] attaches liability,
not to the underlying fraudulent activity or to the govern-
ment’s wrongful payment, but to the ‘claim for payment.’ ”
United States v. Rivera, 55 F.3d 703, 709 (1st Cir. 1995). As
5
This holding is consistent with the law of other circuits. E.g., United
States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163, 1167
(10th Cir. 2010); Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283,
1288-89 (11th Cir. 2010); Reger Dev., LLC v. Nat’l City Bank, 592 F.3d
759, 764 (7th Cir. 2010); United States ex rel. Grubbs v. Kanneganti, 565
F.3d 180, 185 (5th Cir. 2009).
6
Iqbal and its “plausibility” standard have been the subject of serious
and thoughtful criticism. E.g., Arthur R. Miller, From Conley to Twombly
to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke
L.J. 1 (2010). Also, at least one state court has disagreed with the wisdom
of Iqbal and declined to adopt its plausibility standard for state court
pleadings. McCurry v. Chevy Chase Bank, FSB, 233 P.3d 861, 863-64
(Wash. 2010). Nonetheless, pleading requirements for the federal courts
have departed from the traditional Rule 8 standard under Conley v. Gib-
son, 355 U.S. 41, 47-48 (1957); under Iqbal, the pleading standard has
changed and plausibility is required.
3976 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
we have said, “[A]n actual false claim is ‘the sine qua non of
a[n FCA] violation.’ ” Aflatooni, 314 F.3d at 1002 (quoting
United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d
1301, 1311 (11th Cir. 2002)).7
[4] False claims contemplated by the FCA take many
forms. Of seven types of actionable conduct listed in the FCA,
only three require that the misconduct involve an actual
demand for payment. 31 U.S.C. §§ 3729(a)(1)-(3). In the
remaining categories, the “false claim” lies in the fraudulent
use of a receipt, §§ 3729(a)(4)-(5), unauthorized purchase of
government property, § 3729(a)(6), or use of a “false record
or statement” to avoid payment to the government,
§ 3729(a)(7). We recently held that a request for reimburse-
ment that falsely implied compliance with federal rules could
constitute a false claim. Ebeid, 616 F.3d at 996. But to com-
mit conduct actionable under the FCA, one must, in some
way, falsely assert entitlement to obtain or retain government
money or property.8
Section 3729(a)(7) of the FCA—the “reverse false claims”
7
See also United States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d
1166, 1173 (9th Cir. 2006) (“[F]or a false statement or course of action to
be actionable . . . , it is necessary that it involve an actual claim . . . .”);
United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1265 (9th Cir. 1996)
(“The FCA . . . requires a false claim.” (quoting the district court)).
8
Cafasso confuses the FCA’s requirement of a false claim with the con-
cept of “presentment.” In United States v. Bourseau, we held that relators
bringing an action pursuant to § 3729(a)(7) need not allege that a claim
was actually presented to the government, because it is sufficient to allege
“that a defendant ma[d]e or use[d] a false record or statement in order to
conceal, avoid or decrease an obligation to pay the government.” 531 F.3d
1159, 1169 (9th Cir. 2008). Although it is not required that relators allege
that a particular claim was actually submitted to the United States, this
does not obviate the requirement that a fraudulent claim of some kind,
presented or not, form the basis of FCA liability. See Hagood v. Sonoma
Cnty. Water Agency, 81 F.3d 1465, 1479 (9th Cir. 1996) (rejecting a
§ 3729(a)(7) claim in part because the plaintiff had not established a false
claim).
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3977
provision—does not say otherwise. It makes actionable the
knowing use of a “false record or statement to conceal, avoid,
or decrease an obligation . . . to transmit money or property
to the Government.” § 3729(a)(7). This provision “attempts to
provide that fraudulently reducing the amount owed to the
government constitutes a false claim.” 1 John T. Boese, Civil
False Claims & Qui Tam Actions, § 2.01[K] at 2-56 (3d ed.
2010). In United States v. Pemco Aeroplex, Inc., for example,
the defendant, under an obligation to account for government
property in its possession, purposely misidentified airplane
parts worth more than two million dollars as scrap metal
worth only $1,875. 195 F.3d 1234, 1235-36 (11th Cir. 1999)
(en banc). In reliance upon the misrepresentation, the United
States allowed the defendant to purchase the parts for that
deflated sum. Id. The “false claim” in Pemco was the inven-
tory document fraudulently accounting for the value of gov-
ernment property. The “reverse false claims” provision does
not eliminate or supplant the FCA’s false claim requirement;
it rather expands the meaning of a false claim to include state-
ments to avoid paying a debt or returning property to the
United States.
Cafasso’s complaint alleges no false claim. While her
pleading alleges that GDC4S’s non-disclosure of new inven-
tions deprived the United States of lower-cost services by
third-party entities, it does not allege that GDC4S falsely
asserted an entitlement to obtain or retain government money
or property. It does not allege that GDC4S made a demand for
payment, fraudulently used a receipt, participated in an unau-
thorized purchase of government property, or used a false
record or statement.
[5] We consider whether, in the absence of pleading false
claims, the complaint warrants an inference that false claims
were part of the scheme alleged. Ebeid, 616 F.3d at 998-99.
In assessing the plausibility of an inference, we “draw on
[our] judicial experience and common sense,” Iqbal, 129 S.
Ct. at 1950, and consider “ ‘obvious alternative explana-
3978 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
tion[s],’ ” id. at 1952 (quoting Twombly, 550 U.S. at 567).
According to her complaint, Cafasso had worked in the office
tasked with ensuring ATIRP compliance since the
predecessor-company’s acquisition in 2001. Even after she
began to suspect fraud, she was responsible for reviewing
ATIRP-related documents to conclude GDC4S’s participation
in the contract. Despite access to GDC4S records, as detailed
in her complaint, she does not identify a single “false or
fraudulent claim for payment,” § 3729(a)(1), “false record or
statement,” § 3729(a)(2), (7), “document certifying receipt of
property,” § 3729(a)(5), or any other qualifying false claim.
Assuming the truth of Cafasso’s factual averments, an “obvi-
ous alternative explanation” of GDC4S’s conduct is that it
withheld disclosure of new inventions so it could continue to
use them as trade secrets, which might be a breach of contract
but not a fraudulent claim.9 In light of Cafasso’s failure to
identify any particular false claims or their attendant circum-
stances, as well as the “obvious alternative explanation” that
no false claims occurred, we will not draw the unwarranted
and implausible inference that discovery will reveal evidence
of such false claims.
[6] Cafasso tries to save her complaint by arguing that
GDC4S may have charged the government directly for use of
intellectual property that the government already had the right
to use free of charge. But Cafasso’s pleading contains none of
9
As previously discussed, ATIRP grants the government the royalty-
free right to use or have used on its behalf subject inventions, as well as
the right to require the contractor to license the invention to another party
on reasonable terms. To the extent that Cafasso’s complaint may be con-
strued to allege that GDC4S charged third-party contractors for their use
of inventions that should have been, but were not, disclosed pursuant to
ATIRP, the complaint contains no particular circumstances of any such
charges, as required by Rule 9(b). Further, even if this allegation had been
pled with sufficient specificity, it is not clear that the scheme would have
involved any false claims, or that the scheme would have been genuinely
fraudulent given ATIRP’s contemplation that third-party contractors
would pay to license GDC4S inventions on reasonable terms.
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3979
the “circumstances” attendant to this alleged fraudulent con-
duct. Fed. R. Civ. P. 9(b). As the district court correctly
observed, “The pleading does not allege . . . when GDC4S
‘charged’ the government for previously-purchased technol-
ogy, which contracts the charges related to, whether the reuse
of technology actually inflated the charge, or if the govern-
ment even paid the charges.”10 Indeed, the pleading does not
point to a single invention for the use of which GDC4S
charged the United States.
[7] This type of allegation, which identifies a general sort
of fraudulent conduct but specifies no particular circum-
stances of any discrete fraudulent statement, is precisely what
Rule 9(b) aims to preclude. See Bly-Magee, 236 F.3d at 1018
(“Rule 9(b) serves not only to give notice to defendants of the
specific fraudulent conduct against which they must defend,
but also to deter the filing of complaints as a pretext for the
discovery of unknown wrongs, to protect defendants from the
harm that comes from being subject to fraud charges, and to
prohibit plaintiffs from unilaterally imposing upon the court,
the parties and society enormous social and economic costs
absent some factual basis.” (internal quotation and alterations
omitted)).
[8] None of the remaining qui tam allegations levied in
Cafasso’s complaint are cognizable under the FCA. Cafasso’s
allegations that GDC4S did not comply with ATIRP’s disclo-
sure requirements, and that GDC4S received payment from
the United States pursuant to ATIRP, in essence fault GDC4S
for allegedly breaching its contractual obligations. But
“breach of contract claims are not the same as fraudulent con-
duct claims, and the normal run of contractual disputes are not
cognizable under the [FCA].” United States ex rel. Wilson v.
Kellogg Brown & Root, Inc., 525 F.3d 370, 383 (4th Cir.
10
We do not suggest that pleading any one of these circumstances is
necessary to state an FCA claim. It is significant that Cafasso pleads none
of them.
3980 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
2008). To be sure, Cafasso’s complaint alleges unsavory con-
duct. But unsavory conduct is not, without more, actionable
under the FCA. See Aflatooni, 314 F.3d at 1002 (“It is not
enough . . . ‘to describe a [fraudulent] scheme in detail but
then to allege simply and without any stated reason . . . that
claims requesting illegal payments must have been submit-
ted.’ ” (quoting Clausen, 290 F.3d at 1311)); Hopper, 91 F.3d
at 1265 (“It is not the case that any breach of contract, or vio-
lation of regulations or law, or receipt of money from the gov-
ernment where one is not entitled to receive the money,
automatically gives rise to a claim under the FCA.” (quoting
the district court)).11 Given Cafasso’s failure to plead a false
claim, we affirm the district court’s dismissal of Cafasso’s
complaint.
III
We next consider the district court’s denial of Cafasso’s
motion for leave to amend her complaint. Our review is for
abuse of discretion. United States ex rel. Lee v. SmithKline
Beecham, Inc., 245 F.3d 1048, 1051 (9th Cir. 2001).
GDC4S brought its Rule 12(c) motion after nearly two
years of discovery. Given that late stage of litigation, the dis-
trict court suggested that Cafasso, rather than opposing the
motion, instead seek to amend her pleading to cure the defi-
ciencies identified in the motion. Acting on this suggestion,
Cafasso moved to amend and tendered a 733-page proposed
amended complaint. The district court denied Cafasso’s
motion for failure to comply with Rule 8(a), among other
deficiencies.
11
The United States Court of Appeals for the Fifth Circuit has wryly
observed: “A hand in the cookie jar does not itself amount to fraud sepa-
rate from the fib that the treat has been earned when in fact the chores
remain undone.” United States ex rel. Grubbs v. Kanneganti, 565 F.3d
180, 190 (5th Cir. 2009).
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3981
[9] Normally, when a viable case may be pled, a district
court should freely grant leave to amend. Lipton v. Pathogen-
esis Corp., 284 F.3d 1027, 1039 (9th Cir. 2002). However,
“liberality in granting leave to amend is subject to several lim-
itations.” Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149,
1160 (9th Cir. 1989) (citing DCD Programs, Ltd. v. Leighton,
833 F.2d 183, 186 (9th Cir. 1987)). Those limitations include
undue prejudice to the opposing party, bad faith by the
movant, futility, and undue delay. Id. Further, “[t]he district
court’s discretion to deny leave to amend is particularly broad
where plaintiff has previously amended the complaint.” Id.
(citing Leighton, 833 F.2d at 186; Mir v. Fosburg, 646 F.2d
342, 347 (9th Cir. 1980)).
[10] The district court was well within its discretion to
deny leave to amend for several reasons. First, amendment
would have been futile considering the proposed pleading’s
extraordinary prolixity. Rule 8(a) requires that a complaint
contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
Although normally “verbosity or length is not by itself a basis
for dismissing a complaint,” Hearns v. San Bernardino Police
Dep’t, 530 F.3d 1124, 1131 (9th Cir. 2008), we have never
held—and we know of no authority supporting the
proposition—that a pleading may be of unlimited length and
opacity. Our cases instruct otherwise. See, e.g., McHenry v.
Renne, 84 F.3d 1172, 1177-80 (9th Cir. 1996) (upholding a
Rule 8(a) dismissal of a complaint that was “argumentative,
prolix, replete with redundancy, and largely irrelevant”);
Hatch v. Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985)
(upholding a Rule 8(a) dismissal of a complaint that “ex-
ceeded 70 pages in length, [and was] confusing and conclu-
sory”); Nevijel v. North Coast Life Ins. Co., 651 F.2d 671, 674
(9th Cir. 1981) (holding that Rule 8(a) is violated when a
complaint is excessively “verbose, confusing and almost
entirely conclusory”); Schmidt v. Herrmann, 614 F.2d 1221,
1224 (9th Cir. 1980) (upholding a Rule 8(a) dismissal of
“confusing, distracting, ambiguous, and unintelligible plead-
3982 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
ings”). While “the proper length and level of clarity for a
pleading cannot be defined with any great precision,” Rule
8(a) has “been held to be violated by a pleading that was
needlessly long, or a complaint that was highly repetitious, or
confused, or consisted of incomprehensible rambling.” 5
Charles A. Wright & Arthur R. Miller, Federal Practice &
Procedure § 1217 (3d ed. 2010). Our district courts are busy
enough without having to penetrate a tome approaching the
magnitude of War and Peace to discern a plaintiff ’s claims
and allegations.
[11] Second, a 733-page pleading prejudices the opposing
party and may show bad faith of the movant, both valid
grounds to deny leave to amend. See Ascon Prop., 866 F.2d
at 1160. Rather than straightforwardly stating her claims and
allegations, Cafasso would burden her adversary with the
onerous task of combing through a 733-page pleading just to
prepare an answer that admits or denies such allegations, and
to determine what claims and allegations must be defended or
otherwise litigated. See McHenry, 84 F.3d at 1178 (“[T]he
very prolixity of the complaint ma[kes] it difficult to deter-
mine just what circumstances were supposed to have given
rise to the various causes of action.”); Mendez v. Draham, 182
F. Supp. 2d 430, 433 (D.N.J. 2002) (“Only through superhu-
man patience, effort, and insight, could any attorney review
the allegations of the Complaint and make paragraph-by-
paragraph responses.”). As we have said,
Prolix, confusing complaints . . . impose unfair bur-
dens on litigants and judges. . . . Defendants are . . .
put at risk that . . . plaintiffs will surprise them with
something new at trial which they reasonably did not
understand to be in the case at all, and that res judi-
cata effects of settlement or judgment will be differ-
ent from what they reasonably expected. . . . The
judge wastes half a day in chambers preparing the
“short and plain statement” which Rule 8 obligated
plaintiffs to submit. He then must manage the litiga-
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3983
tion without knowing what claims are made against
whom. This leads to discovery disputes and lengthy
trials, prejudicing litigants in other case who follow
the rules, as well as defendants in the case in which
the prolix pleading is filed.
McHenry, 84 F.3d at 1179-80. Further, Cafasso’s proposed
amendment sought to circumvent the district court’s discov-
ery order limiting her qui tam claim to allegations relating to
the 37 inventions identified in her complaint.
[12] Citing our prior holding in Hearns, 503 F.3d at 1131,
Cafasso argues that Rule 8(a) dismissals for excessive length
are disfavored. At issue in Hearns was an 81-page complaint
that, while “excessive [in] detail,” was written with sufficient
clarity and organization such that the defendants would “have
no difficulty in responding to the claims.” Id. at 1132. This
case, however, is distinguishable. Cafasso’s proposed com-
plaint was more than nine times longer than the one before us
in Hearns. Under these extraordinary circumstances, a district
court has ample discretion to deny amendment. We affirm the
district court’s denial of Cafasso’s motion to amend.
IV
The district court granted summary judgment in favor of
GDC4S on Cafasso’s claim that her employment was termi-
nated in retaliation for her investigation of fraud at the com-
pany. United States ex rel. Cafasso v. Gen. Dynamics C4 Sys.,
Inc., No. 06-1381, 2009 WL 1457036, at *11-13 (D. Ariz.
May 21, 2009). We review a grant of summary judgment de
novo. Universal Health Servs., Inc. v. Thompson, 363 F.3d
1013, 1019 (9th Cir. 2004).
[13] The FCA protects employees from being “discharged,
demoted, . . . or in any other manner discriminated against in
the terms and conditions of employment . . . because of lawful
acts done by the employee . . . in furtherance of an [FCA]
3984 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
action . . . , including investigation for, initiation of, testimony
for, or assistance in an [FCA] action . . . .” § 3730(h). An
FCA retaliation claim requires proof of three elements: “1)
the employee must have been engaging in conduct protected
under the Act; 2) the employer must have known that the
employee was engaging in such conduct; and 3) the employer
must have discriminated against the employee because of her
protected conduct.” Hopper, 91 F.3d at 1269.
Cafasso’s complaint alleges that GDC4S dismantled the
office in which she worked, causing her termination, in retali-
ation for her inquiries regarding the ATIRP-related fraud that
she suspected. GDC4S, on the other hand, maintains that it
eliminated Cafasso’s department and position as part of a cor-
porate reorganization unrelated to Cafasso’s conduct, and that
the official who decided to eliminate Cafasso’s department
and position did not know about her ATIRP-related inquiries.
[14] Cafasso’s protected conduct giving rise to her claim
for retaliation is, according to her complaint, a series of inqui-
ries and requests for an audit or internal review occurring in
2004 and 2005.12 GDC4S’s allegedly discriminatory acts,
according to the complaint, took place in early 2006: The
decision to eliminate Cafasso’s department was announced in
early January, and Cafasso was informed that her employment
12
We assume without deciding that Cafasso’s conduct was “in further-
ance of” an FCA action. § 3730(h). GDC4S has argued that Cafasso’s
ATIRP-related conduct is not protected because the fraud she suspected is
not actionable under the FCA and her investigations could not reasonably
have led to a viable FCA action. See Hopper, 91 F.3d at 1269 (“[T]he
plaintiff must be investigating matters which are calculated, or reasonably
could lead, to a viable FCA action.” (citing Neal v. Honeywell Inc., 33
F.3d 860, 864 (7th Cir. 1994))). But see Moore v. Cal. Inst. of Tech. Jet
Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002) (“[A]n employee
engages in protected activity where (1) the employee in good faith
believes, and (2) a reasonable employee in the same or similar circum-
stances might believe, that the employer is possibly committing fraud
against the government.”). We need not decide this issue because we
affirm the district court on other grounds.
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3985
would be terminated the following month.13 But Cafasso has
adduced no evidence that these acts were causally related to
her ATIRP-related inquiries and requests. Christopher Marz-
illi, the GDC4S official who eliminated Cafasso’s department
and position, testified that he did not know of her inquiries
and requests at the time of his allegedly retaliatory decision.
And Cafasso admitted in deposition that she had no reason to
disbelieve Marzilli’s account.
[15] Cafasso defends her retaliation claim by speculating
that other GDC4S officials who did know of her protected
conduct may have poisoned Marzilli against her—the “cat’s
paw” theory of liability. See generally Poland v. Chertoff, 494
F.3d 1174, 1182-83 (2007). The only evidentiary support she
offers is first, the fact that some GDC4S officials who were
in a position to influence Marzilli knew of her ATIRP-related
inquiries and requests, and second, the cryptic statement of a
coworker that unspecified “people” had, for unknown rea-
sons, “poisoned the water,” “gotten to Chris Marzilli,” and
“placed a cloak of poison over [Cafasso’s] office with Chris
Marzilli.” This evidence, without more, is not enough to sus-
tain Cafasso’s burden at summary judgment. To prove this
theory at trial, Cafasso would have to establish that one of
Marzilli’s subordinates, in response to Cafasso’s protected
activity, “set[ ] in motion” Marzilli’s decision to eliminate
Cafasso’s department and job, and that the subordinate “influ-
enced or was involved in the decision or decisionmaking pro-
cess.” Poland, 494 F.3d at 1182. The evidence adduced by
Cafasso establishes only that this set of events could conceiv-
ably have occurred; it does not give rise to a reasonable infer-
ence that it did in fact occur. To find liability on this evidence
13
Cafasso’s brief alleges a further retaliatory act: that GDC4S interfered
with her efforts to find a new job within the company in the spring of
2006. This allegation does not appear in her complaint, so we will not
entertain it here. See Pickern v. Pier 1 Imps. (U.S.), Inc., 457 F.3d 963,
968-69 (9th Cir. 2006) (holding that new allegations must be raised by
amended pleading).
3986 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
would require undue speculation. To survive summary judg-
ment, a plaintiff must set forth non-speculative evidence of
specific facts, not sweeping conclusory allegations. Mackie v.
Rieser, 296 F.3d 909, 915-16 (9th Cir. 2002); Leer v. Murphy,
844 F.2d 628, 634 (9th Cir. 1988). We affirm the district
court’s grant of summary judgment to GDC4S on Cafasso’s
FCA retaliation claim.14
V
The district court also granted summary judgment to
GDC4S on its counterclaim that Cafasso’s appropriation of
electronic documents and files violated a confidentiality
agreement that Cafasso executed at the start of her GDC4S
employment. Cafasso, 2009 WL 1457036, at *13-15.
The confidentiality agreement provides:
During the time of my employment by [GDC4S], I
will not disclose or use any Confidential Information
except to the extent I am required to disclose or use
such Confidential Information in the performance for
[sic] my assigned duties for [GDC4S]; and I will use
my best efforts to safeguard the Confidential Infor-
mation and protect it against disclosure, misuse,
espionage, loss and theft.
After the termination of my employment . . . , I will
not use any Confidential Information or disclose any
14
Our holding is supported by the Supreme Court’s recent decision in
Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011). There, the Court held
that plaintiff Vincent Staub had proven employment discrimination on the
“cat’s paw” theory by producing evidence that his supervisors’ actions
“were motivated by hostility toward [his] military obligations” and “were
causal factors underlying [the] decision to fire [him].” Id. at 1194. Further,
“there was evidence that both [supervisors] had the specific intent to cause
Staub to be terminated.” Id. Cafasso lacks the causal evidence that was
dispositive in Staub.
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3987
Confidential Information to any person or entity who
is not specifically authorized by [GDC4S] to receive
it. . . .
I will not remove any such materials from
[GDC4S’s] premises without the prior written con-
sent of a corporate officer of [GDC4S]. Upon the ter-
mination of my employment with [GDC4S], or at
any time requested, I shall promptly deliver to
[GDC4S] all such materials and copies thereof in my
possession an control.
Cafasso admits that the files she appropriated had information
covered by the agreement. While not disputing that taking
GDC4S files violated the agreement’s terms, Cafasso none-
theless urges us to adopt a public policy exception to enforce-
ment of such contracts that would allow relators to disclose
confidential information in furtherance of an FCA action.
Although we see some merit in the public policy exception
that Cafasso proposes, we need not decide whether to adopt
it here. Even were we to adopt such an exception, it would not
cover Cafasso’s conduct given her vast and indiscriminate
appropriation of GDC4S files. Cafasso copied nearly eleven
gigabytes of data—tens of thousands of pages. She decided
which GDC4S documents to copy by browsing through fold-
ers related to technology and technology development, and,
she testified, “if I saw something that I thought actually could
apply and should be investigated, I just grabbed the whole
folder” (emphasis added). Further, she scanned only file
names and “did not look at any individual documents at all.”
Swept up in this unselective taking of documents were
attorney-client privileged communications, trade secrets
belonging to GDC4S and other contractors, internal research
and development information, sensitive government informa-
tion, and at least one patent application that the Patent Office
had placed under a secrecy order.15 An exception broad
15
Cafasso seeks to excuse her conduct on the grounds that she was in
contact with, and providing information to, government investigators. This
neither explains nor excuses the overbreadth of her seizure of documents.
3988 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS
enough to protect the scope of Cafasso’s massive document
gather in this case would make all confidentiality agreements
unenforceable as long as the employee later files a qui tam
action. See JDS Uniphase Corp. v. Jennings, 473 F. Supp. 2d
697, 702 (E.D. Va. 2007) (“[E]mployees would feel free to
haul away proprietary documents, computers, or hard drives,
in contravention of their confidentiality agreements, knowing
they could later argue they needed the documents to pursue
suits against employers . . . .”).
[16] Were we to adopt a public policy exception to confi-
dentiality agreements to protect relators—a matter we reserve
for another day—those asserting its protection would need to
justify why removal of the documents was reasonably neces-
sary to pursue an FCA claim. Cafasso has made no such par-
ticularized showing. The need to facilitate valid claims does
not justify the wholesale stripping of a company’s confiden-
tial documents. Although courts perhaps should consider in
particular instances for particular documents whether confi-
dentiality policies must give way to the needs of FCA litiga-
tion for the public’s interest, Cafasso’s grabbing of tens of
thousands of documents here is overbroad and unreasonable,
and cannot be sustained by reference to a public policy excep-
tion. We affirm the district court’s grant of summary judg-
ment on GDC4S’s contract claim.
VI
Finally, we consider the district court’s award of attorneys’
fees to GDC4S for having prevailed on its contract claim.
United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc.,
No. 06-1381, 2009 WL 3723087 (D. Ariz. Nov. 4, 2009). We
review a fee award for abuse of discretion. Guy v. City of San
Diego, 608 F.3d 582, 586 (9th Cir. 2010).
[17] We take seriously Cafasso’s concern that awarding
fees against a qui tam claimant may chill prospective relators
from exposing frauds on the government. This consideration
CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3989
generally counsels against a fee award, and courts should not
reject such arguments out of hand. However, relators and their
attorneys are not free to engage in misconduct without conse-
quences merely because those consequences might chill oth-
ers. Further, the awarded fees cover GDC4S’s successful
contract claim, not Cafasso’s FCA claim. We are confident
that future litigants will appreciate the difference. The district
court applied the correct legal standard, it did not abuse its
discretion in applying that standard, and we affirm the fee
award for substantially the reasons stated in its thorough
November 4, 2009, order. See Cafasso, 2009 WL 3723087, at
*5-8.
AFFIRMED.