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United States ex rel Marlar v. BWXT Y-12

August 6, 2007


The opinion of the court was delivered by: Thomas A. Varlan United States District Judge



Realtor Claudia Marlar brought this qui tam action against defendant BWXT Y-12, L.L.C. ("BWXT") claiming that BWXT violated the False Claims Act ("FCA"), 31 U.S.C. § 3729, et seq., and wrongfully terminated her in retaliation for her allegations of wrong-doing. After the United States declined to intervene, BWXT moved to dismiss the case pursuant to Rules 9(b) and 12(b)(6), Federal Rules of Civil Procedure [Doc. 27]. For the reasons that follow, the motion will be GRANTED and this action DISMISSED.

I. Factual Background

The following factual background is taken from the plaintiffs' complaint and considered in the light most favorable to her.

BWXT's sole business is to manage and operate the plant known as Y-12 located in Oak Ridge, Tennessee, pursuant to a contract with DOE entered into on August 31, 2000.

The contract sets forth the estimated cost for each of the fiscal years 2001-2003. These costs include performance-based incentives for each fiscal year for various categories of performance, including Environment, Safety and Health. [Doc. 1, Complaint at ¶ 11].

The maximum available fees for the first three years of the contract were $22,000,000, $22,000,000, and $22,940,552. The actual available and earned fee for each year was based on objective and subjective criteria established in a Performance Evaluation Plan set out in the contract, as was the criteria for its measurement. The total fee available for the first fiscal year was $20,166,666. The Fee was $16,135,672, of which 7,530,985 was based on subjective evaluation and $8,604,587 was based on performance-based criteria. The available fee for the second fiscal year was $22,000,000. The Fee was $19,312,689 of which $5,554,568 was based on subjective evaluation and $13,758,121 was based on performance-based objective criteria. The available fee for the third fiscal year was $22,940,552. The Fee was $21,188,511. Commencing in fiscal 2003, the subjective fee was replaced by a new concept, the "comprehensive incentive fee." This fee was based on performance objectives which had both quantitative and qualitative elements. For satisfactory performance, as determined by DOE, of all performance objectives BWXT was entitled to receive as its Fee the entire available fee. If one or more objectives were not met, the fee was adjusted downward. [Id. at ¶ 12-14.]

During each fiscal year representatives of DOE and BWXT met on a monthly basis to review BWXT's performance. In connection with that meeting BWXT provided DOE with oral and/or written statements as to its performance under the various categories. At the end of the fiscal year BWXT provided DOE with a certified Completion Form for each category detailing its performance. It also provided DOE with a self-evaluation which included all Completion Forms and a general evaluation for its entire performance for the year. Based on these statements, BWXT was partially paid the available fee on a quarterly basis. The final Fee was paid after reconciliation with partial payments made to BWXT after the Completion Forms and the BWXT self-evaluation were submitted. [Id. at ¶ 15-16.]

Under the contract BWXT was reimbursed for allowable costs incurred in performing its obligations including personnel costs, such as salaries, wages and incentive compensation (bonuses) and associated overhead costs. These costs were paid monthly on invoices submitted by BWXT. BWXT also submitted an annual certification that all costs claimed were properly incurred under the contract. [Id. at ¶ 17-18.]

Plaintiff Claudia Mahlar is a certified nurse practitioner who worked in the Occupational Health Services Division ("OHS") during her tenure at BWXT. The complaint does not identify when she began working at that position. She reported to OHS Assistant Medical Director who reported to the OHS Medical Director. He, in turn, reported to the Division Manager of the Environmental Safety and Health ("ES&H") Division. The manager of Industrial Safety also reported to the ES&H Division Manager. Non-medical Industrial Safety personnel were in charge of reporting accidents and injuries to the Safety Manager. Two Safety Managers were assigned to work in the OHS Division. The complaint does not provide the names of any of these employees. [Id. at ¶ 19-21.]

The Performance Evaluation Plan set forth several elements upon which the Fee was based including Environment, Safety and Health. Plaintiff contends that "on information and belief" the Environment, Safety and Health element, related elements and the management thereof constituted a significant portion of the available fee. The measurements of performance for Safety and Health components were based in large part on the records and reports of occupational injuries and illnesses required to be made by BWXT by various contractual and regulatory requirements. [Id. at ¶ 22-23.]

Under the Plan, BWXT is required to keep a record of and report all occupational injuries and illnesses. It was required to record and report all new work-related injuries and illnesses that result in (1) death; (2) days away from work; (3) restrictions on work; (4) transfer to another job; (5) medical treatment beyond first aid; or (6) loss of consciousness. Any significant injury or illness diagnosed by a licensed health care professional had to be recorded and reported irrespective of whether it falls within any of the above. [Id. at ¶ 24.]

Medical treatment beyond first aid included the administration of any prescription drug (except those used for diagnostic purposes) or of non-prescription drugs at above normal dosages or strength. If a licensed health care professional recommended medical treatment, that had to be recorded and reported even if the employee did not follow the recommendation. BWXT was required to use standard OSHA Forms or the equivalent to record all injuries and illnesses within seven days of receiving the information. At the end of each calendar year, BWXT was required to create an annual summary of the injuries and illnesses recorded, certify the summary and post it in a conspicuous place. [Id. at ¶ 27-30.]

The complaint alleges that "on information and belief" the certifications made by BWXT in connection with its monthly reports, its annual Completions Forms and its annual self-assessment were based on the systematic and significant underreporting of work-related injuries and illnesses and time missed from work. [Id. at ¶ 31.] The complaint then describes several examples of this underreporting as follows:

1. Marlar treated employees who stated that they had been given prescription drugs as a result of work-related injuries or illnesses when there was no record of such prescriptions in their medical records;

2. A licensed medical provider routinely prescribed drugs that would not require a prescription at over-the-counter strength at strength levels that would require a prescription and the records inaccurately reflected that the drug had been provided at non-prescription strength;

3. In May 2003 an employee suffered a head injury and was treated with a prescription drug injection. Marlar later discovered that the medical record did ...

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