United States Ex Rel. Bias v. Tangipahoa Parish School Board ( 2016 )

Case: 15-30193 Document: 00513412856 Page: 1 Date Filed: 03/09/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-30193 United States Court of Appeals
Fifth Circuit
FILED
United States of America, ex rel, RONALD BIAS, March 9, 2016
Lyle W. Cayce
Plaintiff - Appellant Clerk
v.
TANGIPAHOA PARISH SCHOOL BOARD; MICHAEL STANT, in his official
capacity; CARL J. FOSTER, in his official capacity,
Defendants - Appellees
Appeal from the United States District Court
for the Eastern District of Louisiana
Before DAVIS, PRADO, and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
Ronald Bias, a high school JROTC instructor, brought suit against the
Tangipahoa Parish School Board and two school employees. The district court
dismissed Bias’s False Claims Act retaliation, Section 1983, and state law
claims pursuant to Federal Rule of Civil Procedure 12(b)(6). We AFFIRM in
part, and REVERSE and REMAND in part.
FACTS AND PROCEDURAL BACKGROUND
In August 2008, Ronald Bias, a retired lieutenant colonel in the United
States Marine Corps, began working for the Tangipahoa Parish School Board
as the Junior Reserve Officers’ Training Corps’ (“JROTC”) senior Marine Corps
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instructor at Amite High School. One year later, the Marine Corps recalled
Bias to active duty but allowed him to retain his position at Amite High. The
Marine Corps paid and employed Bias. Bias alleged, however, that he was “in
effect” a contractor or agent for the School Board because he was supervised
by Amite High Principal Michael Stant.
In September 2009, the Amite High cross-country team traveled to
Destin, Florida. Carl Foster, a teacher who also served as a JROTC master
sergeant under Bias, was the faculty adviser for the team and coordinated the
trip. The trip was not sponsored by or connected to the federal program, but
Bias “overheard a rumor” that Foster requested reimbursement for trip
expenses from JROTC funds. Bias, after confirming the reimbursement
request with the JROTC Regional Director, reported the alleged attempted
misappropriation to the school’s principal, Stant. Bias contended that, despite
Stant’s assurances that he would prevent any attempt to cover costs associated
with the trip with JROTC money, Foster submitted reimbursement paperwork
with Stant’s approval. The Marine Corps denied the request. Stant later
facilitated the use of JROTC “activity account” funds to pay the trip expenses,
which prompted the Marine Corps to investigate.
In April 2010, Bias reported a second alleged misappropriation to the
JROTC Regional Director, which the Regional Director discussed with the
School Board. Stant approved another reimbursement to Foster for
“concession-stand supplies for an athletic event unrelated to JROTC.” Later
in the same month, the Marine Corps issued orders transferring Bias to a New
Orleans school district more than an hour away from Amite High. Bias said
the transfer would be detrimental to his career and cause considerable strain
on his family, so he retired from the Marine Corps instead of taking the
assignment.
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Between the time of Bias’s first report of misappropriated funds and the
Marine Corps’s transfer order, Bias’s relationship with Stant and Foster
deteriorated. Bias alleged that Stant began criticizing Bias’s performance to
the Marine Corps and others, “shout[ed]” at and “badger[ed]” Bias during
meetings, implied to others that he caused Bias’s transfer, and spread rumors
about Bias to other school employees. Bias said Foster, assisted by Stant,
became so insubordinate that he hindered Bias from carrying out his JROTC
duties.
In September 2012, Bias filed this lawsuit against the School Board and
also against Stant and Foster in their official capacities (collectively, the
“defendants”). He asserted claims under the False Claims Act (“FCA”), 31
U.S.C. §§ 3729–3733, including a qui tam action and retaliation claim. Bias
later amended his complaint to add claims under 42 U.S.C. § 1983 and state
law against the same defendants. The defendants moved to dismiss for failure
to state a claim or, alternatively, for summary judgment. The district court,
relying on Rule 12(b)(6), dismissed Bias’s FCA retaliation claim because he had
not sufficiently alleged that the defendants caused his employer, the Marine
Corps, to transfer him. The district court also dismissed Bias’s Section 1983
and state law claims as time-barred. Bias’s motion for reconsideration was
denied.
After the district court entered a scheduling order related to Bias’s sole
remaining claim, an FCA qui tam action, Bias moved for leave to file a second
amended complaint. The magistrate judge denied his motion, and the district
court affirmed. The parties settled the remaining FCA claim, and the district
court entered final judgment on the previously-dismissed claims in the
defendants’ favor in January 2015. Bias timely appealed.
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DISCUSSION
A district court’s dismissal under Rule 12(b)(6) for failure to state a claim
is reviewed de novo. Wilson v. Birnberg, 667 F.3d 591, 595 (5th Cir. 2012). A
complaint survives a motion to dismiss if its facts, accepted as true, “state a
claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). Facial plausibility requires that the plaintiff “plead[]
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). The court’s inquiry should focus on the complaint as a whole,
“regardless of how much of it is discussed in the motion to dismiss.” Wilson,
667 F.3d at 595. “Dismissal is improper if the allegations support relief on any
possible theory.” Id. (quotation marks omitted) (quoting Cinel v. Connick, 15
F.3d 1338, 1341 (5th Cir. 1994)).
“We review the district court’s denial of a motion to amend for abuse of
discretion.” Ackerson v. Bean Dredging LLC, 589 F.3d 196, 208 (5th Cir. 2009).
I. Section 1983 and State Law Claims
The defendants contend that Bias’s Section 1983 and state law claims
are time-barred. Bias argues the defendants waived this affirmative defense
by failing to assert it in their answer. He therefore contends that the district
court erred in “permitting [the defendants] to resurrect” the defense in their
motion to dismiss. We examine how the defense was raised.
On February 15, 2013, Bias moved for leave to file an amended complaint
and submitted a proposed amendment that asserted new claims under Section
1983 and state law. On February 26, the defendants filed an answer styled
“Answer to Complaint, As Amended” responding to the allegations in Bias’s
proposed, but not yet authorized, amended complaint. The statute of
limitations defense was not pled. On March 6, the magistrate judge granted
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Bias’s motion for leave to amend; the amended complaint was docketed the
same day. On July 3, 2013, the defendants filed a motion to dismiss 1 that,
among other arguments, asserted for the first time that Bias’s new claims in
the amended complaint were time-barred.
Bias does not address the argument and implicitly concedes that his
claims were time-barred. He does contend, though, that the statute of
limitations defense has its own timing defect, namely, that the defense was not
pled in the defendants’ first response to his amended complaint. See FED. R.
CIV. P. 8(c)(1). He argues that the February 26 answer, filed before leave to
file the amended complaint was granted, fatally omitted pleading the defense.
The district court in its initial ruling of March 26, 2014, agreed that the
affirmative defense was not timely pled. Yet, the court still held that the
claims were time-barred. On reconsideration on May 15, the court
acknowledged the need for elaboration of its reasoning. The court noted that
a defense may be raised in a motion to dismiss if the motion is filed prior to the
answer. See Hilbun v. Goldberg, 823 F.2d 881, 884 (5th Cir. 1987). The court
concluded that the motion to dismiss was the first responsive pleading filed
after leave to file the amended complaint was granted and the new complaint
was actually filed. Thus, the district court held that the defendants preserved
their defense and it dismissed the new claims as untimely.
It is certainly true that if a plaintiff amends his complaint, a defendant
may file a new responsive pleading because the amended complaint typically
causes the original pleading to be “of no legal effect.” King v. Dogan, 31 F.3d
344, 346 (5th Cir. 1994). The district court concluded that the pleading entitled
1 The defendants’ motion to dismiss may have been untimely. See FED. R. CIV. P.
15(a)(3) (a response is required “within the time remaining to respond to the original pleading
or within 14 days after service of the amended pleading”). Bias, however, never advanced
that argument before the district court and does not make that argument on appeal.
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“Answer to Complaint, As Amended,” was not a responsive pleading to the
amended complaint because the answer was prematurely filed. If we were to
disagree with the court, the defendants’ waiting until a second responsive
pleading, i.e., the motion to dismiss, to raise the time bar would be a technical
failure to comply with Rule 8(c). We may excuse such errors provided a
defendant raises the defense “at a pragmatically sufficient time” and there is
no prejudice to the plaintiff’s ability to respond. Arismendez v. Nightingale
Home Health Care, Inc., 493 F.3d 602, 610–11 (5th Cir. 2007) (quotation marks
omitted) (quoting Lucas v. United States, 807 F.2d 414, 418 (5th Cir. 1986)).
In Arismendez, we held there was no prejudice when a defendant raised a
defense late in the case because it did not involve an issue of disputed fact. Id.
at 611.
Here, Bias was not prejudiced. His lawsuit was still in its infancy when
the defendants raised the time-bar defense. He had notice and an opportunity
to respond to the motion to dismiss. Finally, he does not challenge the
conclusion that his Section 1983 and state law claims are time-barred. The
district court did not err in dismissing the new claims. See id.
II. False Claims Act Retaliation Claim
Bias filed an FCA retaliation claim against the School Board and Stant
and Foster in their official capacities. 2 The district court dismissed the official
capacity claims as redundant of Bias’s claim against the School Board. See
Turner v. Houma Mun. Fire & Police Civil Serv. Bd., 229 F.3d 478, 485 (5th
2 District courts disagree about whether 31 U.S.C. § 3730(h)(1), as amended in 2009,
created individual liability for supervisors. See United States ex rel. Wuestenhoefer v.
Jefferson, No. 4:10-CV-00012-DMB-DAS, 2014 WL 7409760, at *7 (N.D. Miss. Dec. 31, 2014)
(collecting cases). This court has not previously addressed the issue, and we do not reach it
now as Bias filed his FCA retaliation claim against Stant and Foster only in their official
capacities.
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Cir. 2000) (“[O]fficial-capacity claims and . . . claims against the governmental
entity essentially merge.”). It also dismissed the claim against the School
Board, finding that the Marine Corps was “responsible for the terms and
conditions of [Bias’s] employment.” Therefore, only the Marine Corps or its
agents or employees, not the School Board, could have retaliated against Bias.
In response to Bias’s motion to reconsider, the district court further clarified
that the problem with his complaint relates to causation:
Even if Mr. Stant and Mr. Foster had asked that Mr. Bias be
transferred, that could not have been the cause . . . of the [Marine
Corps’ discretionary] transfer. This is true whether or not the
Marine Corps relied on their alleged request: if it did, then the
Marine Corps’ potentially inappropriate reliance severs the causal
chain; if it did not, then there was no causal chain to begin with.
On appeal, Bias focuses only on the School Board’s liability as a result of
the actions of Stant and Foster. Thus, we confine our analysis to the sufficiency
of Bias’s claim against the School Board. We begin by examining the statutory
language and the elements of a proper claim.
Under the FCA “whistleblower” statute:
Any employee, contractor, or agent shall be entitled to all relief
necessary to make that [individual] . . . whole . . . if that
[individual] . . . 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 [individual] . . . in furtherance of . . . efforts to stop [one] or
more violations of this subchapter.
31 U.S.C. § 3730(h)(1). To survive a motion to dismiss, a plaintiff alleging
injury under Section 3730(h)(1) must show (1) he engaged in protected activity,
(2) his employer, or the entity with which he has contracted or serves as an
agent, knew about the protected activity, and (3) he was retaliated against
because of his protected activity. See id.; Robertson v. Bell Helicopter Textron,
Inc., 32 F.3d 948, 951 (5th Cir. 1994).
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Here, the parties appear to agree that Bias alleged he engaged in
protected activity by reporting suspected misappropriation of government
funds. As to knowledge of the protected activity, Bias contended he discussed
the suspected misappropriations with Stant, Foster, and the JROTC Regional
Director, and that the Regional Director alerted the School Board. Whether
the other elements of a retaliation claim are sufficiently pled is where we now
turn.
Bias’s primary theory of liability against the School Board is that Stant
and Foster were the Board’s agents, that they opposed his protected activities,
and they used pretext to convince the Marine Corps to remove Bias from the
school. 3 Bias also argues, however, that Stant and Foster retaliated against
him directly for engaging in protected activity, and that the School Board is
liable for their conduct. Because we conclude that Bias pled enough facts to
state a claim under this latter theory, we decline to address the former.
A. Required Statutory Relationship
Initially, we examine whether Bias has alleged the kind of relationship
with the School Board required by statute. In 2009, Congress amended the
FCA retaliation statute by omitting the word “employer” as the only potentially
culpable party, and adding “contractor” or “agent” to “employee” as identifiers
of a possible aggrieved party. 4 Fraud Enforcement and Recovery Act of 2009,
3 This argument is somewhat similar to the cat’s-paw theory of causation utilized for
retaliation claims under Title VII of the Civil Rights Act. See Zamora v. City of Houston, 798
F.3d 326, 331 (5th Cir. 2015), petition for cert. filed (Jan. 8, 2016) (No. 15-868) (“Under this
theory, . . . a plaintiff must show that the person with retaliatory animus used the
decisionmaker to bring about the intended retaliatory action.”). We have “expressed
uncertainty about the continued viability of cat’s paw analysis” in certain employment claims
now subject to a heightened but-for standard of causation, and we have never applied such a
theory in an FCA retaliation context. See id.
4 The previous version of the statute read: “Any employee who is discharged, [etc.]
. . . , or in any other manner discriminated against in the terms and conditions of employment
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Pub. L. No. 111-21, § 4, 123 Stat. 1617, 1624. There is little available case law
discussing the amendment. Most district courts, including some in this circuit,
reason that the amendment expanded the range of plaintiffs in FCA retaliation
actions while still requiring that a defendant have “some employer-type
relationship with the plaintiff.” See, e.g., United States ex rel. Wuestenhoefer
v. Jefferson, No. 4:10-CV-00012-DMB-DAS, 2014 WL 7409760, at *7 (N.D.
Miss. Dec. 31, 2014). 5 We factor into our analysis that Section 3730(h)(1) is
designed to protect individuals who expose unlawful use or handling of the
property of the federal government. 31 U.S.C. § 3730(h). Because the FCA is
“remedial,” its provisions are to be construed “broadly to effectuate its
purpose.” See United States ex rel. Rigsby v. State Farm Fire & Cas. Co., 794
F.3d 457, 468 (5th Cir. 2015), petition for cert. filed (Oct. 21, 2015) (No. 15-513).
District courts, however, have cautioned that Congress did not intend “to
grant a federal right of action against anyone and everyone” in amending the
statute, so requiring some employment relationship acts as a continuing
limiting principle. See generally, e.g., Howell v. Town of Ball, No. 12-951, 2012
WL 6680364, at *2 (W.D. La. Dec. 21, 2012). We agree, and conclude that the
2009 amendment requires that courts must expand the class of defendants
beyond just employers but not interpret that expansion as a license to sue
anyone. To discern the outer boundary of liability, we look “to the plain
language of the statute, reading it as a whole and mindful of the linguistic
choices made by Congress.” See In re Universal Seismic Assocs., Inc., 288 F.3d
by his or her employer . . . shall be entitled to all relief necessary to make the employee
whole.” 31 U.S.C. § 3730(h) (2006), amended by 31 U.S.C. § 3730(h)(1).
5 Some courts have reached this conclusion because of a Senate Report explaining that
the amendment was necessary to correct courts’ narrow interpretation of the term
“employee,” which left individuals “who are not technically employees . . . but nonetheless
have a contractual or agent relationship with an employer” unprotected. S. REP. No. 110-
507, at 2, 26–27 (2008). We rely on the plain language of the statute, though, particularly
the omission of the word “employer” to identify the defendant, and not the Senate Report.
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205, 207 (5th Cir. 2002). One of the district courts recognized there still must
be an “employer-type relationship,” see Wuestenhoefer, 2014 WL 7409760, at *7
(emphasis added), an articulation we can accept if the meaning is confined to
the three types of relationships listed in the statute. Defendants, then, must
be those by whom plaintiffs are employed, with whom they contract, or for
whom they are agents. In addition, the retaliatory action must be related to
“terms and conditions of employment,” or the contract or agency relationship.
See 31 U.S.C. § 3730(h)(1) (emphasis added).
Traditionally, JROTC instructors are employed by the school district and
are “responsible to school authorities,” though the Regional Director and
military maintain oversight over the program. Marine Corps Order 1533.6E,
at 3–3 (Marine Corps’ JROTC regulations); see also 10 U.S.C. § 2031(d)(2).
Bias alleged that he left that traditional relationship before he was retirement
eligible. The military then did its best to rectify that error by recalling him to
active duty. Bias contended, though, that his recall placed him in a bifurcated
status: he was an active-duty Marine paid by the Marine Corps, which ordered
his transfer, but he continued to answer to Stant, a principal employed by the
School Board. Though Section 3730(h)(1) expanded the range of plaintiffs who
can bring FCA retaliation claims, the statute did not define “employee,”
“contractor,” or “agent.” We thus look outside its text to determine whether
Bias’s relationship with Stant and the School Board could fall within those
anticipated by the statute.
“Contractor” requires the existence of some form of contract between
parties. Although Bias alleged in his complaint that he was effectively a
contractor for the School Board, he did not plead that he entered into a contract
with the defendants. Also, counsel conceded in oral argument that no such
contract exists.
As for “employee,” courts should look to the “conventional master-
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servant relationship as understood by common-law agency doctrine” where a
statute leaves the word undefined. Community for Creative Non-Violence v.
Reid, 490 U.S. 730, 739–40 (1989). To determine whether an employment
relationship exists in other contexts, this circuit applies a “hybrid economic
realities/common law control test.” See Muhammad v. Dallas Cnty. Cmty.
Supervision & Corr. Dep’t, 479 F.3d 377, 380 (5th Cir. 2007) (applying Title VII
of the Civil Rights Act). “The most important component of this test is [t]he
right to control [the] employee’s conduct.” Id. (alterations in original)
(quotation marks omitted) (quoting Deal v. State Farm Cnty. Mut. Ins. Co. of
Texas, 5 F.3d 117, 119 (5th Cir. 1993)). This includes examining whether the
alleged employer has the power to “hire, fire, supervise, and set the work
schedule of the employee.” Id. The economic realities portion focuses on who
pays, withholds taxes from, provides benefits to, and sets other terms and
conditions of employment for, the employee. Id.
Similarly, the common law definition of “agency” anticipates “a
consensual relationship in which one person . . . acts as a representative . . . of
another . . . with power to affect the legal rights and duties of the other person.”
RESTATEMENT (THIRD) OF AGENCY § 1.01, cmt. c. The person represented, as
in a master-servant situation, “has a right to control the . . . agent.” Id.
Bias admitted in his complaint 6 that he was on active military duty and
was paid by the Marine Corps. He claimed, though, that by being assigned to
the high school’s JROTC program, he “in effect, was a contractor or agent to
the Tangipahoa Parish School Board.” Bias also alleged that Stant, a principal
employed by the School Board, supervised him and evaluated his performance.
Additionally, Bias said the unusual situation resulting from his premature
6 Bias’s first amended complaint did not add any facts fleshing out the relationship
between him and the School Board, so our review is confined to the sufficiency of the factual
content in his original pleading.
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retirement from the Marine Corps left him “assigned to the same school in
virtually the same position as” when he was actually employed by the School
Board. Other allegations were that he performed teacher-like functions, such
as supervising lunchtime detention, and participated in meetings with school
officials, including someone from the Human Resources department, to discuss
the conflict between Stant, Foster, and Bias.
In summary, exactly what the relationship was between Bias and the
School Board is unclear. It is plausible, though, that he was, as claimed, an
agent (his counsel acknowledged Bias was not a contractor). Bias did not
expressly contend that he was an employee. There is enough pled in the
complaint to make it plausible, as required by Twombly, that Bias had the kind
of relationship required by statute with the School Board. 550 U.S. at 570.
B. Retaliatory Acts
As for the alleged retaliatory acts, this court has not examined in any
depth what constitutes retaliation under the FCA. The statute itself provides
a list of non-exhaustive examples. 31 U.S.C. § 3730(h)(1) (retaliation includes
“discharge[], demot[ion], suspen[sion], threat[s, and] harass[ment]”). Other
circuits, have expanded on that list, holding that “behavior . . . constitute[s]
retaliation [if] . . . it would be sufficient to constitute an adverse employment
action under Title VII.” Moore v. Cal. Inst. of Tech. Jet Propulsion Lab., 275
F.3d 838, 847–48 (9th Cir. 2002).
Analyzing other whistleblower statutes with language comparable to
Section 3730(h)(1), this court has said that, as under Title VII, a retaliatory act
must be “materially adverse, which . . . means it well might have dissuaded a
reasonable worker from” engaging in protected activity. Halliburton, Inc. v.
Admin. Review Bd., 771 F.3d 254, 259–60 (5th Cir. 2014) (determining the
meaning of retaliation under the Sarbanes-Oxley Act’s (“SOX”) retaliation
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provision) (citing Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 67–
68 (2006)). Based on the similarity of the whistleblower protections afforded
under the FCA and SOX, we find the SOX definition of retaliation as
articulated in Halliburton also applies to Section 3730(h)(1). Compare 31
U.S.C. § 3730(h)(1) (FCA), with 18 U.S.C. § 1514A(a) (SOX). 7
Here, Bias alleged that the Marine Corps ordered the ultimate
retaliatory act against him, which was his transfer. That was an effective
demotion that would have put considerable strain on his family. Instead, he
retired early. Bias also pled that Stant (the individual charged with
supervising and evaluating his performance) caused the transfer order to be
issued by reporting to the School Board, Marine Corps, and other employees
that Bias had been “derelict in his duties” and was unlikely to receive an
appointment for the next year. Bias, moreover, contended that Stant, assisted
by Foster, “harass[ed]” him for a number of months after Bias reported the
misappropriation of funds. See 31 U.S.C. § 3730(h)(1) (prohibiting the threat
or harassment of an employee because he has engaged in protected activity).
Specific examples of harassment in the complaint include Stant’s “shout[ing]”
at and “badgering” Bias, spreading rumors about Bias, and facilitating Foster’s
insubordination, which made it difficult for Bias to do his job.
The defendants counter that the School Board is not liable for the
“retaliatory acts, even if proven, of its mid and low level employees without
having any knowledge” of their conduct. We borrow from common law agency
principles “[w]hen grappling with the standard for imposing vicarious liability
in civil liability provisions.” See United States ex rel. Vavra v. Kellogg Brown
7 SOX’s whistleblower statute provides that “[n]o company [subject to SOX’s
mandates] . . . may discharge, demote, suspend, threaten, harass, or in any other manner
discriminate against an employee in the terms and conditions of employment because of any
lawful act done by the employee.” 18 U.S.C. § 1514A(a).
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& Root, Inc., 727 F.3d 343, 349 (5th Cir. 2013). Common law dictates that a
“master is subject to liability for the torts of his servants committed while
acting in the scope of their employment,” or acts committed “outside the scope
of employment, if the servant purported to act or to speak on behalf of the
principal and there was reliance upon apparent authority.” 8 Id. (footnote and
quotation marks omitted) (quoting RESTATEMENT (SECOND) OF AGENCY § 219
(1958)); see also Faragher v. City of Boca Raton, 524 U.S. 775, 802–03 (1998)
(using agency law to determine vicarious liability for a supervisor’s unlawful
harassment under Title VII).
In the present case, Bias alleged that Stant and Foster convinced the
Marine Corps to transfer him after he reported supposed misappropriation of
government funds. He also alleged, however, that Stant and Foster harassed
him during the school day and undermined his ability to adequately perform
his job. See Arguello v. Conoco, Inc., 207 F.3d 803, 810 (5th Cir. 2000) (factors
used to consider whether an act is within the scope of employment include the
time and purpose of the act, and its similarity to acts which the servant is
authorized to perform). Although Foster was a teacher subordinate to Bias in
JROTC, Stant was Amite High’s principal, or the top official who ran day-to-
8 Bias cites United States v. Ridglea State Bank, 357 F.2d 495, 498 (5th Cir. 1966), in
arguing that, under the FCA, a corporation is liable for its employees’ acts if the employees
were “acting within the scope of their authority and for the purpose of benefitting the
corporation.” (emphasis added). That case, however, analyzed a corporation’s FCA liability
for an employee’s alleged misappropriation of government funds, not an FCA retaliation
claim. Id. at 496–97. At that time, the FCA authorized double damages and a forfeiture of
$2,000 for each knowing violation of the law. Id. at 497–98. Thus, we sought guidance from
more-rigorous criminal vicarious liability principles. Id. at 498–500. We have not applied
the Ridglea standard in examining vicarious liability in any other civil statute, including
Section 3730(h)(1), and we have since questioned the applicability of Ridglea generally. See
United States ex rel. Vavra v. Kellogg Brown & Root, Inc., 727 F.3d 343, 350–51 (5th Cir.
2013) (citing American Soc’y of Mech. Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 573–74
(1982) (noting, in applying agency law in a Sherman Antitrust Act vicarious liability claim,
that requiring an employee act to benefit the employer before imputing liability would hinder
the law’s purpose)).
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day operations at the school on behalf of the School Board and allegedly
supervised Bias.
For purposes of deciding whether dismissal under Rule 12(b)(6) is
appropriate, Bias’s allegations about Stant “well might have dissuaded” Bias
from reporting misappropriation of government funds. See Burlington, 548
U.S. at 67–68. Additionally, Bias pled enough facts to make it plausible that
Stant was acting within the scope of his employment, or at the very least, with
the apparent authority of the School Board. See Vavra, 727 F.3d at 349. Bias
has sufficiently stated a claim against the School Board, based on Stant’s
alleged actions against him. See Twombly, 550 U.S. at 570. We reverse the
district court’s dismissal of his FCA retaliation claim as to that defendant.
III. Motion to Amend Complaint
Finally, Bias argues that the district court abused its discretion in
denying him a second opportunity to amend his complaint.
As an initial matter, the defendants argue that Bias impermissibly
attempted to expand the scope of his appeal by seeking review of “various other
district court rulings subsequent to its March 26, 2014 granting of [the
defendants’] motion to dismiss.” Federal Rule of Appellate Procedure 3(c)
requires an appellant to “designate the judgment, order, or part thereof being
appealed” in the notice of appeal. This requirement is jurisdictional, but we
“construe a notice of appeal liberally to avoid technical barriers to review.”
New York Life Ins. Co. v. Deshotel, 142 F.3d 873, 884 (5th Cir. 1998). Bias’s
Notice of Appeal references only the district court’s January 2015 final
judgment. Reviewing a final judgment, though, “clearly encompasses the prior
orders leading up to it.” See Xerox Corp. v. Genmoora Corp., 888 F.2d 345, 348–
49 (5th Cir. 1989). Whether the district court erred in denying Bias’s motion
to amend is therefore properly before this court.
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No. 15-30193
On March 26, 2014, the district court dismissed Bias’s FCA retaliation,
Section 1983, and state law claims. The court clarified parts of its order on
May 15 in denying Bias’s motion for reconsideration. On May 22, the court
entered a scheduling order related to the remaining FCA claim, setting the
deadline for amending pleadings with leave of court for June 23. On August
13, Bias filed a motion for leave to file his second amended complaint. The
magistrate judge denied the motion, and the district court affirmed.
While Federal Rule of Civil Procedure 15(a) provides that leave to amend
shall be “freely” given, Rule 16(b)(4) limits modifications to a scheduling order
to situations where good cause is shown. S&W Enters., L.L.C. v. SouthTrust
Bank of Ala., NA, 315 F.3d 533, 535–36 (5th Cir. 2003). Four factors are
considered in determining whether a motion under Rule 16(b)(4) should be
granted: “(1) the explanation for the failure to [timely move for leave to amend];
(2) the importance of the [amendment]; (3) potential prejudice in allowing the
[amendment]; and (4) the availability of a continuance to cure such
prejudice.” Id. at 536.
We have held that Bias’s complaint was sufficient to state an FCA
retaliation claim against the School Board. We therefore note that the need
for an amendment as to that claim and defendant was minimal. As for his
other claims, the magistrate judge properly found that the first S&W
Enterprises factor weighed in favor of denying Bias’s motion. Bias argues that
deciding whether to amend was “not an easy decision” because he had to “fully
digest” both the court’s dismissal order and denial of his motion for
reconsideration. The district court’s March 2013 order dismissing Bias’s
claims in part did contain confusing language. Bias still had several weeks
after the court clarified its reasoning, though, to request leave to amend.
Instead, he waited more than two months after a scheduling order was entered,
and one month after the deadline to amend pleadings passed, to file his motion.
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No. 15-30193
The magistrate judge also correctly concluded that the third factor
weighed against Bias. If his amendment had been authorized, the parties
would have been forced to “re-urge the same arguments” presented in previous
dispositive motions, which could have delayed set deadlines related to the sole
remaining claim in the case.
Finally, as to Bias’s Section 1983 and state law claims, the second factor
counseled against granting Bias’s motion. Bias concedes that any amendment
he could have offered would have been futile as he fails to challenge the district
court’s conclusion that the claims are time-barred. See LA. CIV. CODE art. 3492;
see also Moore v. McDonald, 30 F.3d 616, 620–21 (5th Cir. 1994).
In sum, on remand, Bias is free to file another motion requesting
permission to amend. The district court did not, however, abuse its discretion
in denying Bias’s second motion for leave to amend in August 2014.
We REVERSE the dismissal of Bias’s FCA retaliation claim against the
School Board, and REMAND. We otherwise AFFIRM.
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