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United States v. Wadsworth Brothers Construction Company, Inc.

United States District Court, D. Utah

June 5, 2019

UNITED STATES OF AMERICA, ex rel., KELLY E. SORENSON, Plaintiffs,
v.
WADSWORTH BROTHERS CONSTRUCTION COMPANY, INC., Defendant.

          MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS

          CLARK WADDOUPS UNITED STATES DISTRICT JUDGE.

         Before the court is the motion to dismiss by defendant, Wadsworth Brothers Construction Company, Inc., (ECF No. 19) which seeks to dismiss the Complaint plaintiff, Kelly E. Sorenson, acting as Relator and on behalf of and in the name of the United States, has filed against it. The motion has been fully briefed, and Defendant has submitted a request for a decision on the same. (ECF No. 23.) Having reviewed the pleadings and materials submitted, the court now enters this order GRANTING IN PART and DENYING IN PART Defendant's motion to dismiss.

         BACKGROUND

         Plaintiff was employed as a truck driver by Defendant from September 1, 2014 until November 14, 2014. (Compl. at ¶ 23, ECF No. 1.) Part of Plaintiff's employment was spent working on the construction of a deicing pad (the “Deicing Project”) at the Salt Lake International Airport (the “Airport”). Id. at ¶¶ 12, 13, 24. The Deicing Project was funded through a grant that the Airport received from the FAA. Id. at ¶¶ 12-13. As a condition of Defendant's contract with the Airport for the Deicing Project, Defendant was required to comply with the Davis-Bacon Act. Id. at ¶¶ 12-20. Plaintiff also performed work on the I-15 Core Project, which was also federally funded and governed by the Davis-Bacon Act. Id. at ¶ 28. Plaintiff worked exclusively on the Deicing Project and the I-15 Core Project. Id. at ¶ 29. Plaintiff asserts that Defendant failed to pay him the additional $10.53 per hour he was owed under the Davis-Bacon Act but falsely certified to the United States Government that it was complying with that Act. Id. at ¶¶ 24-20, 53-56. Plaintiff further alleges that Defendant retaliated against him for complaining about his deficient pay. Id. at ¶¶ 40-51.

         Plaintiff previously brought a complaint before the Utah Labor Commission alleging that Defendant did not properly pay him, and on June 24, 2015, an administrative law judge ordered Defendant to pay Plaintiff $2, 581.62 in non-paid Davis-Bacon wages. (ECF No. 19-1, at ¶ 1.) Defendant petitioned for the Third Judicial District Court of Salt Lake County, Utah, to review this award, and on May 25, 2017, that court held a trial on Plaintiff's claims, at which it heard testimony from Plaintiff and at least two of Defendant's employees. Id. at ¶¶ 3-36. On June 7, 2017, that court issued a Memorandum Decision that denied Plaintiff's claims and found that Defendant's “timecards and timecard coding” and “calculation and paying of Bacon wages” were correct and that Defendant had paid Plaintiff “in full.” Id. at ¶ 38-41.

         Plaintiff brings this action on behalf of, and in the name of, the United States pursuant to 31 USC § 3730(b). (Compl. at ¶ 1, ECF No. 1.) Plaintiff's qui tam action alleges that Defendant violated the False Claims Act (the “FCA”) and asserts five causes of action against it: 1) fraudulent claim; 2) false record; 3) conspiracy to defraud; 4) false receipt; and 5) retaliation. Defendant asks the court to dismiss all of Plaintiff's claims against it pursuant to the doctrine of collateral estoppel and under Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure. The United States declined to intervene in this action but remains the real party in interest in this matter. (ECF Nos. 13 & 21.)

         DISCUSSION

         Defendant argues Plaintiff's should be dismissed because: 1) the issues it raises were already adjudicated by the Third Judicial District Court of Salt Lake County, Utah, and are now barred under the doctrine of collateral estoppel; 2) it fails to state a valid claim for relief under Rule 12(b)(6) of the Federal Rules of Civil Procedure; and 3) it does not satisfy the level of particularity and detailed required by Rule 9(b) of the Federal Rules of Civil Procedure.[1]

         A. Plaintiff is not estopped from raising the issues contained in his complaint.

         Defendant argues that because the “salient issues” alleged in Plaintiff's complaint- Defendant's alleged underpayment of Davis-Bacon wages-were already “fully and conclusively litigated in state court, ” Plaintiff is barred from relitigating them here under the doctrine of collateral estoppel. “Under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case.” Allen v. McCurry, 449 U.S. 90, 94 (1980) (citing Montana v. United States, 440 U.S. 147, 153 (1979). The Supreme Court has recognized that “a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 81 (1984); see also U.S. ex rel. Laird v. Lockheed Martin Eng'g & Sci. Servs. Co., 336 F.3d 346, 357 (5th Cir. 2003) (“When a federal court is asked to give claim preclusive effect to a state court judgment, the federal court must determine the preclusiveness of that state court judgment according to the principles of claim preclusion of the state from which the judgment was rendered.” (citing Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508-09 (2001))). Under Utah law, the four elements of collateral estoppel are:

(i) the party against whom issue preclusion is asserted must have been a party to or in privity with a party to the prior adjudication; (ii) the issue decided in the prior adjudication must be identical to the one presented in the instant action; (iii) the issue in the first action must have been completely, fully, and fairly litigated; and (iv) the first suit must have resulted in a final judgment on the merits.

Collins v. Sandy City Bd. of Adjustment, 2002 UT 77, ¶ 12, 52 P.3d 1267, 1270 (citation omitted).

         While the state court action involved both Mr. Sorenson and Defendant and decided that Defendant had paid Mr. Sorenson in full, Defendant's argument that the decision bars Plaintiff's current action ignores one key fact-Plaintiff brings its action not just in his own right, but also “for the United States Government.” 31 U.S.C. § 3730(b)(1). And although the United States declined to intervene in this action and is not therefore a “party” here, it nonetheless remains as a “real party in interest” and has “a substantive right” in this suit. See U.S. ex rel. Eisenstein v. City of New York, New York, 556 U.S. 928, 935-36 (2009). It cannot therefore be ignored for purposes of collateral estoppel.

         Under the FCA, the United States has a financial interest in this action. It is entitled to at least 70% of any civil damages or penalty awarded to Plaintiff. 31 U.S.C. § 3730(d)(2). It also still has the right to intervene in this action. Id. at § 3730(c)(3). These rights and interests were not shared by Plaintiff in the state court action. See United States v. Mendoza, 464 U.S. 154, 159 (1984) (recognizing that “the Government is not in a position identical to that of a private litigant” (citing INS v. Hibi,414 U.S. 5, 8 (1973))). Because the United States' interests and rights were not represented in Mr. Sorenson's ...


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