United States Court of Appeals,
Eleventh Circuit.
No. 95-8871.
Denise CHILDREE, Plaintiff-Appellant,
v.
UAP/GA AG CHEM, INC., et al., Defendants-Appellees.
Aug. 28, 1996.
Appeal from the United States District Court for the Northern
District of Georgia. (No. 1:94-CV-1312-FMH), Frank M. Hull, Judge.
Before CARNES, Circuit Judge, and FAY and GIBSON *, Senior Circuit
Judges.
CARNES, Circuit Judge:
After more than five years with one of the defendants, UAP/GA
AG CHEM., INC. ("UAP/GA"),1 the plaintiff, Denise Childree, was
terminated from her employment. Her termination occurred
approximately one week after she testified in an administrative
hearing before the Department of Agriculture (the "DOA"), about a
suspected fraudulent billing scheme allegedly used by a customer of
UAP/GA, Varner Bass Enterprises, Inc., to bilk money out of the
United States government. Although Varner Bass, and not UAP/GA,
was a party to the hearing, Childree's testimony was unfavorable to
UAP/GA, also. Her testimony allegedly exposed UAP/GA's assistance
to Varner Bass in its fraudulent scheme against the government.
The question on appeal is whether the district court correctly
granted summary judgment to the defendants, holding that Childree's
*
Honorable John R. Gibson, Senior U.S. Circuit Judge for the
Eighth Circuit, sitting by designation.
1
The other defendant is ConAgra, UAP's parent company.
UAP/GA is the Georgia branch of UAP.
termination did not violate the whistleblower protection provision
of the False Claims Act of 1986, 31 U.S.C. § 3730(h), or violate
the Ku Klux Klan Act of 1871, 42 U.S.C. § 1985(3). For the reasons
stated below, we reverse the district court's grant of summary
judgment to the defendants on the whistleblower protection claim,
and affirm the district court's grant of summary judgment to the
defendants on the Klan Act claim.
I. FACTS AND PROCEDURAL HISTORY
Because we are reviewing the district court's grant of
summary judgment in favor of the defendants, we view the evidence
in the light most favorable to the plaintiff. See, e.g., Flores v.
Carnival Cruise Lines, 47 F.3d 1120, 1122 (11th Cir.1995). Viewed
in that light, the facts are as follows.
While employed by UAP/GA, Childree's job responsibilities
included billing customers. UAP/GA sells fertilizer, seeds, and
other related products to farmers. In June 1989, a representative
for one of UAP/AG's primary customers, Varner Bass, requested that
Childree re-bill certain invoices. The invoices had been billed to
Varner Bass, and its representative requested that they be
re-billed to a number of other individuals, all of whom allegedly
leased land from Varner Bass, but whom Childree believed were
merely subsidiary fronts for Varner Bass. Childree refused to
comply, because she believed the re-billing request was part of an
attempt to defraud the United States government. Varner Bass, and
other farming businesses, receive reimbursement up to a maximum of
$50,000-per-claim from the DOA's Agricultural Stabilization and
Conservation Service ("ASCS") for monies expended in connection
with various farming activities. Childree believed that Varner
Bass's request for the re-billings was an attempt to use subsidiary
fronts to evade the $50,000-per-claim reimbursement ceiling and
thereby illegally obtain excessive payments from the government.
Childree raised her concerns about the re-billing request to
one of UAP/AG's credit managers. He replied, "Who is to say you
wouldn't do it if given the opportunity." Childree next raised her
suspicions to another UAP/AG credit manager, who informed her, in
essence, that the less she knew, the better. Childree then
reported her concerns to two of her supervisors. One of them
directed her to process the re-billings as they had been submitted,
and the other one, Darryl Mathis, apparently said nothing. Despite
her supervisor's directive, Childree refused to process the
re-billings; the re-billing forms sat on Childree's desk until
that supervisor processed them himself.
One month later, in July 1989, Eloise Taylor, a local ASCS
official, visited UAP/GA's office, and met with Childree and
Mathis. Taylor requested verification of the validity of the
re-billings that had been submitted to the ASCS on behalf of Varner
Bass. Mathis told Childree to tell the truth. Childree informed
Taylor that she could not verify the validity of those documents.
Taylor then asked Childree to tell her what was going on, and
Childree did so. Shortly after that meeting, Childree sent Taylor
a written statement, which repeated what Childree had told her in
person. After Taylor's visit, Childree made copies of the
completed re-billing forms, which were still on the counter waiting
to be filed, and took those copies home. Mathis was aware that
Childree was making copies of the documents, and he told her to do
whatever she had to do to protect herself. Childree says that she
had not planned on using the copies, but wanted to keep them
because they were represented as coming from her office.
Four years later, in June 1993, the DOA subpoenaed Childree to
appear at a hearing before its National Appeals Division (the
"NAD") concerning the alleged fraudulent schemes of Varner Bass and
other farming businesses in conjunction with the ASCS program. The
subpoena required that Childree bring to the hearing all documents,
personal notes, and written statements relating to the 1989 farming
operations of Varner Bass. Childree was reluctant to testify at
the hearing, because she feared she would lose her job if she did.
Nevertheless, on June 24, 1993, under subpoena, she did testify at
the hearing about the Varner Bass re-billings, and about her
attempts to report to her superiors what she believed to be
fraudulent activities in connection with those re-billings. She
also turned over her copies of the Varner Bass re-billing forms.
Gary Callahan, an officer of UAP,2 attended the DOA hearing.
According to Childree's deposition testimony, during a break in the
hearing, Callahan went into the room where some of the other
witnesses were sequestered and threw a yellow pad on the table.
According to Childree, he said that "these were the issues, that
[Childree] had just blown the whole thing, and [that she] didn't
know how to handle business."
In August 1994, the NAD issued its findings, in which it
concluded that Varner Bass, along with several other farming
2
See supra n. 1.
operations, had engaged in a scheme designed to evade ASCS payment
limitations. Although UAP/GA was not a party to the NAD hearing,
the NAD stated in its findings that UAP/GA had assisted in and
participated in the scheme.
On July 1, 1993, UAP/GA suspended Childree from her employment
without pay, and on July 9, 1993, terminated her employment.
UAP/GA stated that Childree was being terminated for removing
confidential customer files from the company's premises without
authorization, i.e., the copies of the re-billing forms that she
had taken home in 1989 and produced at the 1993 hearing.
Childree concedes that before her termination, she never
considered bringing a False Claims Act action with regard to the
Varner Bass re-billings, and that in fact, she had never heard of
that Act. She also concedes that the statute of limitations for
bringing such a qui tam action has now run. See 31 U.S.C.A. §
3730(b) (West Supp.1996). In addition, the government has never
brought, threatened to bring, or even considered bringing a False
Claims Act action against UAP/GA or its parent company, ConAgra,
for their role in Varner Bass's fraudulent scheme.
In May 1994, Childree filed this suit against UAP/GA and
ConAgra claiming that: (1) the defendants had violated the
whistleblower protection provision of the False Claims Act of 1986,
31 U.S.C. § 3730(h), by terminating her employment in retaliation
for her actions with regard to the Varner Bass re-billings; (2)
the defendants had violated the Ku Klux Klan Act of 1871, 42 U.S.C.
§ 1985(3), by conspiring to deprive Childree of her right to
testify; and (3) the defendants had intentionally inflicted
emotional distress on Childree in violation of Georgia state law.
In March 1995, the district court granted summary judgment in
favor of the defendants on the whistleblower protection claim and
the Klan Act claim.3 Having dismissed all of the federal claims,
4
the court also dismissed without prejudice the state law claim.
Childree appeals.
II. DISCUSSION
A. THE WHISTLEBLOWER PROTECTION CLAIM, § 3730(h)
The district court granted summary judgment to the defendants
on the whistleblower protection claim, because it concluded that
Childree's conduct was not covered by the whistleblower protection
provision of the False Claims Act of 1986. That provision states,
in pertinent part:
Any employee who is discharged, demoted, suspended,
3
The court also denied as moot ConAgra's earlier motion for
summary judgment, in which ConAgra argued that even if UAP/GA was
liable, ConAgra was not liable because it did not employ
Childree. Our disposition of this case requires that we vacate
that denial.
4
We also vacate the district court's dismissal without
prejudice of Childree's state law claim. That dismissal was
based upon the court's grant of summary judgment in favor of the
defendants on both federal claims. Because we reverse the
district court's grant of summary judgment on the whistleblower
protection claim, the district court on remand should revisit the
matter involving Childree's state law claim. See 28 U.S.C.A. §
1367(a) (West 1993).
In addition, we vacate the district court's denial of
Childree's revised motion for leave to file an amended
complaint. In that motion, Childree had sought to add
additional state law claims and additional defendants. The
court's denial of that motion was based upon its grant of
summary judgment on the federal claims in favor of the
defendants. Because we reverse that judgment insofar as it
concerned the whistleblower protection claim, the district
court will have the opportunity on remand to reconsider
Childree's motion for leave to file an amended complaint.
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.A. § 3730(h) (West Supp.1996).
The district court stated that Childree, "at a minimum, must
show some nexus between her conduct and the furtherance of a
potential False Claims Act action." The court stated that Childree
had failed to demonstrate that nexus because there was no
"potential False Claims Act action" in any way related to her
conduct. Neither Childree nor the government had filed, or had
ever intended to file, such an action. To the contrary, the
district court found that the government had chosen to pursue the
administrative route in lieu of filing a False Claims Act action.
The court noted that the DOA administrative hearing was not an
"action" contemplated by § 3730(h), and therefore did not put
Childree's conduct within the provision's protection. It held that
"action" means a False Claims Act action under either 31 U.S.C. §
3730(a) or (b).5
The district court also said that Childree had "never
performed any affirmative act to expose any alleged fraud."
Instead, it found that she simply had responded to questions asked
of her by the ASCS investigator and by the DOA during the NAD
hearing. By Childree's own admission, she had only reluctantly
5
Subsection (a) deals with actions brought by the government
for false claims, and subsection (b) deals with qui tam actions
brought by private litigants.
participated in that hearing.
Childree, and the United States as amicus curiae, contend that
the district court erred in granting summary judgment to the
defendants on the whistleblower protection claim. Although they
concede that the administrative hearing was not an "action" as
contemplated by § 3730(h), they still contend that Childree was
protected because she "assist[ed] in an action ... to be filed
under [§ 3730(h) ]." See 31 U.S.C.A. § 3730(h) (West Supp.1996)
(emphasis added). They argue that the district court lost sight of
the central question in a § 3730(h) claim, which they contend is
whether the employer intended to retaliate against the employee
because of the false claims information that the employee provided
to the government. According to them, the "to be filed" language
of § 3730(h) does not mean, as the district court held, that such
an action ever has to be actually filed, or even contemplated.
Such a "retrospective" interpretation, they contend, does not
comport with the plain language of that provision, and would lead
to nonsensical results. For example, they point out that under
that interpretation, an employee who provided information to the
government about her employer's fraud would not be protected if the
government settled with the employer before filing a false claims
action.
Childree and the government argue that "to be filed" means
whether an action "could" have been filed. They contend that that
broad interpretation of the provision fits with the provision's
language and purpose. They argue that § 3730(h) was intended to
encourage employees to bring information to the government about
false claims against it, without fear of retaliation. See Neal v.
Honeywell, Inc., 33 F.3d 860, 861 (7th Cir.1994) ("Section 3730(h),
added to the False Claims Act in 1986, is designed to protect
persons who assist the discovery and prosecution of fraud and thus
to improve the federal government's prospects of deterring and
redressing crime."). Because an employee who brings such
information to the attention of the government may not know whether
a false claims action can or will be filed, it is doubtful that
under the "retrospective" construction of "to be filed" the
employee would feel sufficiently protected from retaliation to turn
the information over to the government. Or so the argument goes.
Childree and the government urge us to follow the Seventh
Circuit's decision in Neal v. Honeywell, Inc., which held that §
3730(h) applied to an employee who indirectly had provided false
claims information to the government, 33 F.3d at 864, even though
in that case a false claims action was never filed, id. at 861.
After concluding that co-workers were defrauding the government by
falsifying company data reports, the plaintiff in Neal informed her
employer's legal counsel of the fraud, and the counsel immediately
notified the government. Id. at 861. The government commenced an
investigation, the results of which convinced the employer that the
plaintiff's accusations were correct. Id. The employer and the
government settled for $2.5 million, and no false claims action was
ever filed. Id.
The Neal plaintiff's immediate supervisors allegedly were
displeased with her honesty and began to harass as well as
physically threaten her. She quit, and several years later, filed
a suit under § 3730(h). Id. The employer argued that because the
government settled rather than sued, § 3730(h) was inapplicable.
The Seventh Circuit disagreed, and held that the plain language of
§ 3730(h) supported the plaintiff's claim, id. at 863-64, reasoning
that "[i]t makes both linguistic and practical sense to understand
the actual "filed or to be filed' formulation as linking protection
to events as they were understood at the time of the investigation
or report," id. at 864. The court went on to conclude that because
litigation was a distinct possibility when the plaintiff reported
what she had learned, she was entitled to protection under §
3730(h).
The court recognized that one could argue, as the employer
did, that the "to be filed" language is intended simply to ensure
that "the employer may not retaliate for reports made before the
litigation gets under way." Id. Even so, the court concluded that
such a construction of the provision was inferior to the court's,
because it would lead to the conclusion that by immediately
settling with the government—and thus ensuring that a suit was
never filed—the employer had "purchase[d] an option to retaliate
against [the plaintiff]." Id. The court found that scenario to be
unacceptable, and noted that there was nothing in the language or
background of § 3730(h) to support such an outcome. Id.6
6
Besides Neal, only one other court of appeals has addressed
§ 3730(h). That case, Robertson v. Bell Helicopter Textron,
Inc., 32 F.3d 948 (5th Cir.1994), cert. denied, --- U.S. ----,
115 S.Ct. 1110, 130 L.Ed.2d 1075 (1995), involved a situation
quite different from the present one, and for that reason, it is
not particularly useful for present purposes. Although the
Robertson plaintiff had voiced concerns to his superiors that his
employer might be overcharging the government, id. at 949-50, he
had never referred to the overcharging as illegal or unlawful,
We agree with the Neal court that the "to be filed" language
does not require that a False Claims Act action ever have been
filed. We are bound to follow the plain language of a statute,
see, e.g., Scarborough v. Office of Personnel Management, 723 F.2d
801, 813 (11th Cir.1984), and there is nothing about the plain
language of "to be filed" that suggests such a narrow
interpretation. Moreover, as the Seventh Circuit pointed out in
Neal, a retrospective test which furnished no protection unless an
action was eventually filed would preclude protection in every case
where the evidence of wrongdoing was so compelling that the
employer settled before an action was filed. 33 F.3d at 864. We
join the Seventh Circuit in disbelieving that Congress intended
such a result, and we join it in holding that § 3730(h) protection
is available not only where a false claims action is actually
filed, but also where the filing of such an action, by either the
employee or the government, was "a distinct possibility" at the
time the assistance was rendered.
We recognize that there will be cases, such as this one, in
which the employee was apparently unaware of the existence of the
False Claim Act in general, and § 3730(h) in particular, at the
id. at 951 & n. 2. He had never voiced an intention to file a
qui tam action under § 3730(b), nor had he ever spoken to
government officials about the alleged overcharging. Id. at 952.
However, when he was laid off as part of a general workforce
reduction, he brought suit against his employer under § 3730(h)
claiming unlawful retaliation.
The Fifth Circuit held that § 3730(h) did not protect
the plaintiff because there was insufficient evidence that
he had furthered or assisted in any "action," and also
because there was insufficient evidence that his employer
was aware that the plaintiff was investigating the
overcharging.
time the employee acted. There is some force to the argument that
a provision cannot encourage acts by offering to protect the actor
where the actor is unaware of the provision and the offered
protection. However, nothing in the language of § 3730 suggests
that its protections are limited to those who were motivated by it.
The provision contains no knowledge requirement, and we will not
read one into it.
We turn now to an application of the distinct possibility
test to the facts of this case viewed in the light most favorable
to Childree, the non-movant. Childree concedes that she never even
considered filing a § 3730(b) qui tam action, so it is obvious that
such an action was never a distinct possibility. The question,
then, is whether the government's filing a § 3730(a) action was a
distinct possibility at the time Childree rendered her assistance.
We think that summary judgment should not have been granted against
Childree on this issue. Viewing the facts in Childree's favor, in
July 1989, she provided extensive information about her employer's
fraudulent re-billings to Taylor, the ASCS official who visited
UAP/GA's office. Several years later, at the NAD hearing, Childree
again provided the information about her employer's fraudulent
re-billings to the DOA. Based upon Childree's testimony, the DOA
found that "Cook [a Varner Bass representative] and UAP/GA Ag.
Chem. created documentation to create an appearance that crop
inputs used on the farming operations ... were separately ordered,
delivered, used and paid for by the persons in whose names the
accounts were later established." Moreover, the DOA concluded that
"[o]ne of the most egregious examples of falsifying documents, in
addition to the false leases, involved Cook and UAP/GA Ag. Chem."
If those asserted facts, and Childree's deposition testimony
about the re-billings, are ultimately determined to be true, then
a § 3730(a) action was a distinct possibility at the time Childree
rendered her assistance. Therefore, summary judgment should not
have been granted in favor of the defendants. Accordingly, we
reverse that judgment and remand to the district court for further
proceedings consistent with this opinion.
B. THE KU KLUX KLAN ACT CLAIM, § 1985(3)
The district court also granted summary judgment in favor of
the defendants on Childree's Ku Klux Klan Act of 1871 claim, 42
U.S.C. § 1985(3). The elements of a cause of action under §
1985(3) are: (1) a conspiracy, (2) for the purpose of depriving,
either directly or indirectly, any person or class of persons of
the equal protection of the laws, or of equal privileges and
immunities under the laws; and (3) an act in furtherance of the
conspiracy, (4) whereby a person is either injured in his person or
property or deprived of any right or privilege of a citizen of the
United States. Lucero v. Operation Rescue, 954 F.2d 624, 627 (11th
Cir.1992). The second element "requires a showing of some "racial,
or perhaps otherwise class-based, invidiously discriminatory animus
behind the conspirators' action.' " Id. at 628 (quoting United
Bhd. of Carpenters & Joiners of Am., Local 610 v. Scott, 463 U.S.
825, 829, 103 S.Ct. 3352, 3356, 77 L.Ed.2d 1049 (1983)); see also
Bray v. Alexandria Women's Health Clinic, 506 U.S. 263, 269, 113
S.Ct. 753, 759, 122 L.Ed.2d 34 (1993) (holding that whatever the
precise meaning of "class" may be, it "unquestionably connotes
something more than a group of individuals who share a desire to
engage in conduct that the § 1985(3) defendant disfavors.").
The district court held that Childree failed to establish the
second element of her Klan Act claim, explaining that:
Even assuming Section 1985(3) can be applied in some
non-racial contexts, this Court finds that Plaintiff, as an
alleged whistle-blower, is not a victim of some "otherwise
class-based invidiously discriminatory animus.' The Court
finds that "whistle-blowers' instead merely fall within Bray's
"group of individuals who share a desire to engage in conduct
the Section 1985(3) defendant disfavors.'
We agree. Although this Court has never addressed specifically
whether whistleblowers are a protected class under § 1985(3), we
repeatedly have declined to extend that section to apply in
non-racial contexts. See, e.g., Lucero, 954 F.2d at 628 (refusing
to apply § 1985(3) to protect women seeking abortions as a class);
McLellan v. Mississippi Power & Light Co., 545 F.2d 919, 933 (5th
Cir.1977) (en banc) (refusing to apply § 1985(3) to protect
bankrupts as a class); cf. Burrell v. Board of Trustees of Ga.
Military College, 970 F.2d 785, 794 (11th Cir.1992) (noting that §
1985(3)'s "narrow intent requirement erects a significant hurdle
for section 1985(3) plaintiffs."), cert. denied, 507 U.S. 1018, 113
S.Ct. 1814, 123 L.Ed.2d 445 (1993). To the best of our knowledge,
no circuit court has ever held that whistleblowers are a protected
class under § 1985(3), and some have expressly declined to do so.
See, e.g., Garrie v. James L. Gray, Inc., 912 F.2d 808, 813 (5th
Cir.1990) (declining to extend § 1985(3) protection to
whistleblowers), cert. denied, 499 U.S. 907, 111 S.Ct. 1108, 113
L.Ed.2d 218 (1991); Buschi v. Kirven, 775 F.2d 1240, 1258 (4th
Cir.1985) (same). Indeed only one district court of which we are
aware has interpreted § 1985(3) to extend to whistleblowers. See
Lapin v. Taylor, 475 F.Supp. 446 (D.Haw.1979).
We decline to apply § 1985(3) to protect whistleblowers as a
class. Two types of classes come within § 1985(3)'s protection:
(1) classes having common characteristics of an inherent
nature—i.e., those kinds of classes offered special protection
under the equal protection clause, and (2) classes that Congress
was trying to protect when it enacted the Ku Klux Klan Act. Kimble
v. D.J. McDuffy, Inc., 648 F.2d 340, 347 (5th Cir.) (en banc),
cert. denied, 454 U.S. 1110, 102 S.Ct. 687, 70 L.Ed.2d 651 (1981).
Whistleblowers simply do not fall under either type of class. See,
e.g., McLellan, 545 F.2d at 932-33. The broad construction of §
1985(3) that Childree requests is inconsistent with the history and
purpose of that provision, with our previous readings of it, and
with the better reasoned precedent on the issue. Accordingly, we
hold that the district court properly granted summary judgment to
the defendants on the § 1985(3) claim.
III. CONCLUSION
We AFFIRM the district court's grant of summary judgment on
the Ku Klux Klan Act claim in favor of the defendants. We REVERSE
the district court's grant of summary judgment in favor of the
defendants on the whistleblower protection claim. We VACATE: the
district court's denial of Childree's revised motion for leave to
file an amended complaint; the court's denial as moot of ConAgra's
motion seeking summary judgment on the grounds that it did not
employ Childree; and the court's dismissal without prejudice of
Childree's state law claim. We REMAND the case for further
proceedings consistent with this opinion.