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Steele v. Great Basin Scientific, Inc.

United States District Court, D. Utah

November 21, 2016



          Jill N. Parrish United States District Court Judge.

         Before the court is a motion brought by defendant Great Basin Scientific, Inc. to dismiss the single cause of action asserted against it by plaintiff Christina Steele. (Docket 6). The court GRANTS the motion and dismisses the complaint with prejudice.


         Great Basin manufactures diagnostic testing kits used to detect the presence of blood pathogens. Strict anti-contamination protocols are required to manufacture accurate testing kits. If a kit is contaminated during the manufacturing process, it will produce a false-positive test result. Great Basin sells the testing kits to hospitals nationwide. Hospitals then bill patients for the kits when they are used. For at least some of the kits, hospitals request payment from the Federal Government through Medicare and Medicaid.

         Ms. Steele worked for Great Basin as its director of recruitment and company culture. On multiple occasions, Ms. Steele raised concerns about the potential for testing kit contamination caused by employees moving from “dirty” areas of the facility to “clean” areas where the kits are produced. Some of the concerns she voiced to her superiors included inadequate signage on the entry to the clean portion of the facility; inadequate door locks and security card panels; the absence of color coded employee identification badges to differentiate employees in the clean facility from employees in the dirty facility; inadequate ventilation, which caused employees to leave doors between clean areas and dirty areas open; the absence of security cameras to enforce anti-contamination protocols; and the lack of comprehensive anti-contamination training.

         Ms. Steele periodically made suggestions for improvement in these areas over the course of approximately eight months. Great Basin fired her soon after she made one of her proposals for improvement.

         Ms. Steele sued Great Basin, alleging in her sole cause of action that she had been wrongfully terminated in retaliation for her efforts to stop her employer from violating the False Claims Act (the “FCA” or the “Act”) and because Great Basin believed that she was preparing to file a lawsuit under the Act. Great Basin moved for the dismissal of her suit, arguing that Ms. Steele has not alleged any facts showing that it had notice that she had engaged in any activities protected by the Act.[1]


         Under rule 12(b)(6) of the Federal Rules of Civil Procedure, a court may dismiss a complaint if it fails “to state a claim upon which relief can be granted.” When considering a motion to dismiss for failure to state a claim, a court “accept[s] as true all well-pleaded factual allegations in the complaint and view[s] them in the light most favorable to the plaintiff.” Burnett v. Mortg. Elec. Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013).

         “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted)). However, a court will not accept as true “legal conclusions” or “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Id. Thus, a claim must be dismissed where the complaint does not contain sufficient facts to make the claim “plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.


         Enacted during the Civil War to curb fraud against the government, see Universal Health Servs., Inc. v. United States, 136 S.Ct. 1989, 1996 (2016), the False Claims Act imposes penalties against “any person who . . . knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval [or] knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim, ” 31 U.S.C. § 3729(a)(1). The Act permits individuals to sue on behalf of the government to enforce the statute. Id. § 3730(b).

         The Act also contains an anti-retaliation provision that states:

Any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance ...

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