Jeffrey Simoneaux v. E I DuPont de Nemours & Co. , 843 F.3d 1033 ( 2016 )

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 16-30141 December 13, 2016
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA, ex rel. JEFFREY M. SIMONEAUX,
Relator–Appellee,
versus
E.I. DUPONT DE NEMOURS & COMPANY,
Defendant–Appellant.
Appeal from the United States District Court
for the Middle District of Louisiana
Before STEWART, Chief Judge, and SMITH and DENNIS, Circuit Judges.
JERRY E. SMITH, Circuit Judge:
Jeffrey Simoneaux brought a qui tam action against his former em-
ployer, E.I. duPont de Nemours & Company (“duPont”), under the False
Claims Act (“FCA”). He contended that duPont had violated the reverse-false-
claims provision, 31 U.S.C. § 3729(a)(1)(G), by concealing an obligation to pay
the United States a penalty arising from alleged violations of the Toxic Sub-
stances Control Act (“TSCA”). He also averred that duPont had retaliated
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against him in violation of the FCA, 31 U.S.C. § 3730(h). DuPont unsuccess-
fully moved for summary judgment on both claims, and we permitted this
interlocutory appeal. Because duPont had no “obligation” to pay the United
States, we reverse and remand the denial of summary judgment on the reverse
false claim. With respect to the retaliation claim, we dismiss the appeal for
want of appellate jurisdiction.
I.
In his qui tam suit, 1 Simoneaux alleged that duPont violated the FCA’s
reverse-false-claims provision by failing to report leaks of sulfur dioxide and
sulfur trioxide to the Environmental Protection Agency (“EPA”) as required by
Section 8(e) of the TSCA. The reverse-false-claims provision imposes liability
on, inter alia, any person who “knowingly conceals or knowingly and improp-
erly avoids or decreases an obligation to pay or transmit money or property to
the Government.” 31 U.S.C. § 3729(a)(1)(G). Simoneaux claimed that by fail-
ing to report under Section 8(e), duPont owed the United States a penalty and
had avoided that obligation by failing to report the leaks. Simoneaux addi-
tionally proffered that duPont had wrongfully retaliated against him in viola-
tion of Section 3730(h). 2
DuPont moved for summary judgment, asserting that even if it had
violated Section 8(e), it had no “obligation” to pay the United States because
1 The FCA may be enforced by either (1) a suit brought directly by the United States
or (2) a qui tam action brought by a private person (called a “relator”) in the name of the
United States. 31 U.S.C. § 3730(a)–(b); see also Rockwell Int’l Corp. v. United States, 549 U.S.
457, 463 n.2 (2007) (“Qui tam is short for ‘qui tam pro domino rege quam pro se ipso in hac
parte sequitur,’ which means ‘who pursues this action on our Lord the King’s behalf as well
as his own.’”).
2 The complaint was filed under seal to give the United States an opportunity to
decide whether to intervene as allowed by 31 U.S.C. § 3730(b). It declined to do so but parti-
cipates on appeal as amicus curiae in support of duPont’s position.
2
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the EPA had not assessed a penalty. 3 DuPont principally relied on United
States ex rel. Bain v. Georgia Gulf Corp., 386 F.3d 648 (5th Cir. 2004), and
United States ex rel. Marcy v. Rowan Cos., 520 F.3d 384 (5th Cir. 2008), which
held that “the reverse false claims act does not extend to the potential or con-
tingent obligations to pay the government fines or penalties which have not
been levied or assessed (and as to which no formal proceedings to do so have
been instituted) . . . .” Marcy, 520 F.3d at 391 (quoting Bain, 386 F.3d at 657).
With respect to the retaliation claim, duPont contended that Simoneaux had
failed to establish that he had engaged in any protected activity.
The district court denied summary judgment, concluding that the Fraud
Enforcement and Recovery Act of 2009 (“FERA”), which amended the FCA, had
abrogated the relevant holdings of Bain and Marcy. The court held that under
the FCA, as amended, a person can be liable for a reverse false claim based on
a violation of a statute that imposes monetary penalties. The district court
denied duPont’s request that it certify the order for interlocutory appeal.
The jury returned a verdict in favor of duPont on the reverse false claim
and retaliation claim. Simoneaux moved for a new trial, based on allegations
that duPont had failed to provide certain leak-calculation documents in discov-
ery. The court ordered a new trial under Federal Rule of Civil Procedure
60(b)(3). DuPont again asked the court to certify its denial of summary judg-
ment for interlocutory appeal, noting that since the court’s refusal to certify, a
different district court in Louisiana had relied on Marcy, and we had affirmed. 4
The district court certified an interlocutory appeal under 28 U.S.C. § 1292(b),
3 It is undisputed that the EPA has not assessed a penalty on duPont or initiated any
proceeding to do so.
4 See United States ex rel. Guth v. Roedel Parsons Koch Blache Balhoff & McCollister,
No. 13-6000, 2014 WL 7274913, at *7 (E.D. La. Dec. 18, 2014), aff’d, 626 F. App’x 528 (5th
Cir. 2015) (per curiam).
3
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and we granted duPont leave to appeal.
II.
This court reviews certified orders de novo. Castellanos-Contreras v.
Decatur Hotels, LLC, 622 F.3d 393, 397 (5th Cir. 2010) (en banc). Under Sec-
tion § 1292(b), “a grant or denial of summary judgment is reviewed de novo,
applying the same standard as the district court but review only extends to
controlling questions of law.” Id. (citation omitted). Our inquiry “is limited to
the summary judgment record before the trial court.” Id. (quoting Martco Ltd.
P’ship v. Wellons, Inc., 588 F.3d 864, 871 (5th Cir. 2009)).
III.
The reverse-false-claim issue involves the interplay between the FCA
and the TSCA. On the one hand, a person is liable under the reverse-FCA
provision if he knowingly and improperly avoids an obligation to pay the
United States. 31 U.S.C. § 3729(a)(1)(G). On the other hand, Section 8(e) of
the TSCA requires chemical manufacturers to notify the EPA when they have
“information which reasonably supports the conclusion that [a] substance or
mixture presents a substantial risk of injury to health or the environment.”
15 U.S.C. § 2607(e). The EPA can assess civil penalties for violations of Sec-
tion 8(e). Id. §§ 2614–15. Simoneaux’s theory is that a violation gives rise to
reverse-FCA liability because the unpaid civil penalty is an “obligation” to pay
the United States.
In Bain and Marcy, we held that potential or contingent penalties are
not obligations under the FCA. Bain, 386 F.3d at 657; Marcy, 520 F.3d at 391.
Simoneaux offers two arguments for why Bain and Marcy do not control. First,
he asserts that FERA’s definition of “obligation” covers contingent penalties
and thus abrogates Bain and Marcy’s holding. Second, he theorizes that
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Section 8(e) imposes liability “at the statutory level” such that assessment of a
penalty is mandatory.
Both of these notions fail. Although FERA’s new definition resolved un-
certainty regarding whether the amount of an obligation needs to be fixed, it
did not upset the widely accepted holding that contingent penalties are not
obligations. And a plain reading of the TSCA shows that penalties are not
mandatory. Thus, we reverse the denial of summary judgment on the reverse-
FCA claim because, even if duPont violated Section 8(e), it had no obligation
under the reverse-FCA provision.
A.
It was in Bain that we first addressed the interaction between the FCA
and regulatory penalties. The qui tam relator urged that a potential penalty
under the Clean Air Act constituted an “obligation” under the reverse-FCA
provision. At the time, the FCA did not define “obligation.” We held that
the reverse false claims act does not extend to the potential or contin-
gent obligations to pay the government fines or penalties which have
not been levied or assessed (and as to which no formal proceedings to
do so have been instituted) and which do not arise out of an economic
relationship between the government and the defendant (such as a
lease or a contract or the like) under which the government provides
some benefit to the defendant wholly or partially in exchange for an
agreed or expected payment or transfer of property by (or on behalf of)
the defendant to (or for the economic benefit of) the government.
Bain, 386 F.3d at 657. Because the EPA had not assessed a penalty, and the
defendant had only a “purely regulatory” relationship with the government,
the relator failed to state a reverse-FCA claim. Id. at 657–58.
In Marcy, a relator advanced a similar theory based on alleged violations
of the Clean Water Act (“CWA”). We declared that “Bain contro[lled] [the]
result.” Marcy, 520 F.3d at 391. We acknowledged that under the CWA, a
5
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polluter is required immediately to report certain polluting discharges. Id.“However,” we explained, “even when a statute requires immediate action from
a violator, the government still must choose whether to impose a penalty.” Id.Although the defendant had a contractual relationship with the government,
“the relevant payment obligations did not arise out of the [contract],” so the
relator had failed to state a reverse FCA claim. Id. at 391–92.
B.
FERA amended the FCA to define “obligation” as “an established duty,
whether or not fixed, arising from an express or implied contractual, grantor-
grantee, or licensor-licensee relationship, from a fee-based or similar relation-
ship, from statute or regulation, or from the retention of any overpayment.” 5
Simoneaux maintains that the definition is unambiguous and that unassessed
regulatory penalties are included within its plain meaning. The district court
agreed, emphasizing the phrase “whether or not fixed.” On the other hand,
duPont asserts that “established” is the key word.
The United States, as amicus curiae, agrees with duPont. It also notes
that Congress did not change the overarching requirement that an obligation
must be one “to pay or transmit money or property to the Government.”
31 U.S.C. § 3729(a)(1)(G). “A statute enforceable through an unassessed mon-
etary penalty,” the United States explains, “creates an obligation to obey the
law, not an obligation to pay money.”
We agree with duPont and the United States. The most reasonable inter-
pretation is that “established” refers to whether there is any duty to pay, while
“fixed” refers to the amount of the duty.
5 Fraud Enforcement and Recovery Act of 2009, Pub. L. 111-21 § 4(a)(2), 123 Stat.
1617, 1623 (2009) (codified at 31 U.S.C. § 3729(b)(3)).
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Section 3729(b)(3) identifies three characteristics of “obligation[s]”:
(1) they must be “established dut[ies]”; (2) they need not be “fixed”; and (3) they
can arise from a list of sources, including statutes and regulations. Both sides
and the United States concur that Congress, by providing a definition of “obli-
gation,” was responding to the judge-made definitions that various courts had
devised. We agree. The section of FERA that provides the new definition is
titled “Clarifications to the False Claims Act to Reflect the Original Intent of
the Law.” 6 Moreover, a Senate Judiciary Committee Report, which both par-
ties cite extensively, states that “this legislation addresses current confusion
among courts that have developed conflicting definitions of the term ‘obliga-
tion.’” 7 Thus, given the ambiguity of the terms, it is useful to look to the state
of the law before enactment of FERA.
The key difference between the competing definitions of “obligation” was
whether a duty to pay had to be fixed. The Eighth Circuit, in United States v.
Q Int’l Courier, Inc., 131 F.3d 770, 773 (8th Cir. 1997), provided the first inter-
pretation of “obligation” and held that “[t]he duty . . . must [be] an obligation
in the nature of those that gave rise to actions of debt at common law for money
or things owed.” Therefore, an obligation “must be for a fixed sum that is
immediately due.” Id. at 774. The Sixth Circuit adopted the same definition.
Am. Textile Mfrs. Inst., Inc. v. Ltd., Inc., 190 F.3d 729, 736 (6th Cir. 1999).
Other circuits, however, held that an obligation need not be for a fixed
sum. 8 As the Tenth Circuit explained, “we think that it is significant that [the
reverse-FCA provision] refers to ‘an obligation’ and not ‘a fixed obligation.’ We
6 Id. § 4, 123 Stat. at 1617.
7 S. REP. NO. 111-10, at 14 (2009), as reprinted in 2009 U.S.C.C.A.N. 430, 441.
8 United States v. Bourseau, 531 F.3d 1159, 1169–70 (9th Cir. 2008); United States
ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1201–02 (10th Cir. 2006); United States v.
Pemco Aeroplex, Inc., 195 F.3d 1234, 1237–38 (11th Cir. 1999) (en banc).
7
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agree that there are instances in which a party is required to pay money to the
government, but, at the time the obligation arises, the sum has not been pre-
cisely determined.” Bahrani, 465 F.3d at 1201. This is the issue—whether an
obligation must be for a fixed sum—that caused the “confusion among courts”
to which the Senate Report refers. 9
In contrast, the overwhelming weight of authority, before FERA, held
that contingent penalties are not obligations under the FCA. 10 Given that we
presume that Congress is “aware of judicial interpretations of the law, and . . .
act[s] with awareness of judicial interpretations of prior law,” 11 it necessarily
follows that “whether or not fixed” resolved the active dispute over whether an
obligation could be for an uncertain sum, while “established” confirmed the
accepted holding that contingent penalties are not obligations under the FCA.
This view comports with the legislative history of FERA. 12 An early ver-
sion of the bill defined “obligation” as “a fixed duty, or a contingent duty arising
from an express or implied contractual, quasi-contractual, grantor-grantee,
9 S. REP. NO. 111-10, at 14.
10 E.g., Bourseau, 531 F.3d at 1169–70; Bahrani, 465 F.3d at 1195; Hoyte v. Am. Nat’l
Red Cross, 518 F.3d 61, 67 (D.C. Cir. 2008); Bain, 386 F.3d at 657; Am. Textile Mfrs., 190 F.3d
at 738; Q Int’l Courier, 131 F.3d at 773; United States ex rel. Conner v. Salina Reg’l Health
Ctr., Inc., 459 F. Supp. 2d 1081, 1091 (D. Kan. 2006); Zelenka v. NFI Indus., 436 F. Supp. 2d
701, 705–06 (D.N.J. 2006); United States ex rel. Huangyan Imp. & Exp. Corp. v. Nature’s
Farm Prods., Inc., 370 F. Supp. 2d 993, 1000 (N.D. Cal. 2005). But see Pickens v. Kanawha
River Towing, 916 F. Supp. 702, 708–09 (S.D. Ohio 1996); United States ex rel. Sequoia
Orange Co. v. Oxnard Lemon Co., No. CV-F-91-194, 1992 WL 795477, at *9 (E.D. Cal. May 4,
1992). We note that American Textile disapproves of Pickens, a decision from a district court
within the Sixth Circuit. See Am. Textile Mfrs., 190 F.3d at 735.
Howell v. Town of Ball, 827 F.3d 515, 530 (5th Cir. 2016) (quoting Dresser Indus. v.
11
United States, 238 F.3d 603, 614 n.9 (5th Cir. 2001)).
12 This court repeatedly cautions against use of legislative history unless the text of a
statute is ambiguous, which this text is not. E.g., Carrieri v. Jobs.com Inc., 393 F.3d 508,
518–19 (5th Cir. 2004). Nonetheless, we may cite the legislative history to give additional
confirmation to the conclusion we have already reached by consulting the plain text.
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licensor-licensee, statutory, fee-based, or similar relationship, and the reten-
tion of any overpayment.” 13 By a vote of ninety-four to one, the Senate adopted
Senator Kyl’s amendment to change the language to the current, enacted ver-
sion. 14 The fact that Congress deleted the word “contingent,” added the
“whether or not” modifier to “fixed,” and inserted the word “established” sug-
gests that it did not intend to cover contingent penalties.
Although the statements of individual legislators are not controlling, 15
our interpretation is consistent with Senator Kyl’s explanation of the amend-
ment. As he stated, the original language was problematic because it spoke of
“contingent” obligations and “[s]uch contingent or potential duties could
include duties to pay penalties or fines, which could arise—and at least become
‘contingent’ obligations—as soon as the conduct that is the basis for the fine
has occurred.” 16 “Obviously,” he continued, “we don’t want the Government or
anyone else suing under the False Claims Act to treble and enforce a fine before
the duty to pay that fine has been formally established.” Id.Caselaw since FERA supports this interpretation. Simoneaux correctly
notes that few courts have seriously engaged with FERA’s definition of
“obligation.” 17 But those that have considered the issue concluded that
Fraud Enforcement and Recovery Act of 2009, S. 386, 155th Cong. § 4(a) (as reported
13
by S. Comm. on the Judiciary, Apr. 22, 2009).
14 155 CONG. REC. S4531, S4543 (daily ed. Apr. 22, 2009).
15United States v. Ceballos-Torres, 218 F.3d 409, 414 n.6 (5th Cir. 2000), amended by
226 F.3d 651 (5th Cir. 2000).
16 155 CONG. REC. at S4539.
17 As Simoneaux observes, in several of the cases that duPont relies on, the courts
cited pre-FERA cases without discussing the new definition of “obligation.” For example, in
Guth—the Eastern District of Louisiana case that persuaded the district court here to certify
its order—the court cited to Marcy without addressing FERA. Guth, 2014 WL 7274913, at *7.
It does not appear that any of the parties raised the issue. On appeal, this court similarly
cited Marcy without discussing FERA. Guth, 626 F. App’x at 534. Simoneaux is right that
this weakens the persuasive value of those cases. But he does not offer cases that support
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potential, contingent penalties are not “obligations.” 18 As one district court
recently stated,
Plaintiff has failed to identify an “established duty” that would bring
this matter within the scope of the FCA. The addition of the phrase
“whether or not fixed” to the reverse false claims provision was not
meant to cover the type of contingent obligations Plaintiff
contemplates—i.e., unadjudicated and unassessed statutory fines.
“[The] phrase refers to ‘whether or not the amount owed was fixed at
the time of the violation’ rather than whether an obligation to pay was
fixed.”
Nissman, 2016 WL 1317495, at *14 (quoting Boise, 2015 WL 4461793, at *1
n.1) (citation omitted). Simoneaux’s only response to those cases is that they
are distinguishable because they do not involve “mandatory” penalties. But
that notion—addressed below—is distinct from his contention that FERA abro-
gated the key holding of Bain and Marcy. He does not explain how the cases
incorrectly interpreted the new definition of “obligation.”
Moreover, Simoneaux’s position yields an extraordinarily broad con-
struction of the FCA. If his reading of FERA were correct, reverse-FCA lia-
bility could attach from the violation of any federal statute or regulation that
imposes penalties. Functionally that means the FCA permits blanket trebling
of all federal penalties, so long as the violator knowingly conceals his violation
of the regulation. See 31 U.S.C. § 3729(a)(1)(G). It also means any such viola-
tion leads to a civil FCA penalty “of not less than $5,000 and not more than
his position.
18 United States ex rel. Nissman v. Southland Gaming of the Virgin Islands, Inc.,
No. 2011-0010, 2016 WL 1317495, at *14–15 (D.V.I. Mar. 31, 2016); United States ex rel.
Booker v. Pfizer, Inc., 9 F. Supp. 3d 34, 49–50 (D. Mass. 2014); United States ex rel. Moore &
Co., P.A. v. Majestic Blue Fisheries, LLC, No. 12-1562-SLR, 2016 WL 4051266, at *8 (D. Del.
July 26, 2016); United States ex rel. Scharber v. Golden Gate Nat’l Senior Care LLC, 135 F.
Supp. 3d 944, 966 (D. Minn. 2015); United States ex rel. Boise v. Cephalon, Inc., No. CIV. A.
08-287, 2015 WL 4461793, at *1 n.1 (E.D. Pa. July 21, 2015); United States ex rel. Kane v.
Healthfirst, Inc., 120 F. Supp. 3d 370, 388 (S.D.N.Y. 2015).
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$10,000, as adjusted [for inflation].” Id. That result would apply even to the
most minor infractions.
For example, 45 C.F.R. § 3.42(e) prohibits roller-skating at the National
Institutes of Health, and a person violating that regulation “shall be fined
under title 18, United States Code, imprisoned for not more than 30 days, or
both.” 40 U.S.C. § 1315(c)(@). Under Simoneaux’s reasoning, roller-skating at
the NIH results in a penalty “of not less than $5,000” and three times the fine
assessed under Title 18. 19 And any private person who saw the roller-skater
could bring a qui tam action against him. The statutory definition of “obliga-
tion” cannot bear the weight of that interpretation.
In sum, FERA did not upset Bain and Marcy’s holding that unassessed
regulatory penalties are not obligations under the FCA. For FCA liability to
attach, there must be an “established” duty “to pay or transmit money or prop-
erty to the Government.” 31 U.S.C. § 3729(a)(1)(G). Where, as in this case, a
regulatory penalty has not been assessed and the government has initiated no
proceeding to assess it, there is no established duty to pay.
To be clear, the fact that further governmental action is required to
collect a fine or penalty does not, standing alone, mean that a duty is not
established. For example, failure to pay customs duties on mismarked goods
can give rise to an FCA claim. United States ex rel. Customs Fraud Investiga-
tions, LLC. v. Victaulic Co., 839 F.3d 242, 254–55 (3d Cir. 2016). The distinc-
tion is that the customs law imposes a duty to pay. 20 In contrast, most regu-
latory statutes, such as the TSCA, impose only a duty to obey the law, and the
19The fact that the FCA penalty likely will vastly outweigh the Title 18 fine is further
evidence that Congress did not intend the FCA to operate as Simoneaux describes.
20 Title 19 U.S.C. § 1304(i), at issue in Customs Fraud, states,
If at the time of importation any article [is not properly marked] there shall be
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duty to pay regulatory penalties is not “established” until the penalties are
assessed.
C.
Under 15 U.S.C. § 2615(a)(1), any person who violates certain provisions
of the TSCA, including Section 8(e), “shall be liable to the United States for a
civil penalty in an amount not to exceed $37,500 for each such violation. Each
day such a violation continues shall, for purposes of this subsection, constitute
a separate violation . . . .” Simoneaux asserts that violation of Section 8(e)
leads to “mandatory” penalties because the duty to pay “is established at the
statutory level.” He emphasizes the phrase “shall be liable” in Sec-
tion 2615(a)(1). In contrast, duPont maintains that Section 2615(a) grants the
EPA discretion to determine whether a penalty should be assessed. Accord-
ingly, it urges, TSCA penalties are contingent and fall within the holding of
Bain and Marcy. We agree with duPont.
By its plain terms, the statute gives the EPA discretion to decide to
assess no penalty:
In determining the amount of a civil penalty, the Administrator shall
take into account the nature, circumstances, extent, and gravity of the
violation or violations and, with respect to the violator, ability to pay,
effect on ability to continue to do business, any history of prior such
violations, the degree of culpability, and such other matters as justice
may require.
15 U.S.C. § 2615(a)(2)(B). 21 Additionally, “[t]he Administrator may compro-
mise, modify, or remit, with or without conditions, any civil penalty which may
levied, collected, and paid upon such article a duty of 10 per centum ad valorem,
which shall be deemed to have accrued at the time of importation, shall not be con-
strued to be penal, and shall not be remitted wholly or in part nor shall payment
thereof be avoidable for any cause.
In a section on the intent of Congress, the statute also states, “It is the intent of
21
Congress that the Administrator shall carry out this chapter in a reasonable and prudent
12
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be imposed under this subsection.” Id. § 2615(a)(2)(C) (emphases added). 22
Finally, violation of the TSCA can also lead to criminal penalties, which may
be imposed “in addition to or in lieu of any civil penalty,” thus demonstrating
that civil penalties are not required. Id. § 2615(b)(1) (emphasis added). Only
one court has addressed whether penalties are mandatory, concluding that the
EPA has discretion in deciding whether to impose penalties. 23
Simoneaux’s reliance on In re Deepwater Horizon,753 F.3d 570 (5th Cir.
2014), is misplaced. There, we described a penalty provision of the CWA as
“mandatory.” Id. at 571. That provision states that owners of facilities “from
which oil or a hazardous substance is discharged . . . shall be subject to a civil
penalty . . . .” 33 U.S.C. § 1321(b)(7)(A). Simoneaux contends that that lan-
guage is similar to the “shall be liable to the United States” language of TSCA
Section 8(e) and thus supports his mandatory-penalty theory. But his argu-
ment is flawed in two ways.
First, the statutes are not comparable. Though the TSCA expressly
allows for remittitur of any penalty, the relevant provision of the CWA makes
no such allowance. See 33 U.S.C. § 1321(b). Second, we did not hold (and have
manner, and that the Administrator shall consider the environmental, economic, and social
impact of any action the Administrator takes or proposes as provided under this chapter.”
15 U.S.C. § 2601(c).
22 Simoneaux asserts that the word “remit” implies that there is a “preexisting duty
to pay” because there must be something to forgive. That theory does not withstand scrutiny.
Under Simoneaux’s view, even if the EPA had decided to impose a penalty of zero, thereby
exercising its power to remit, duPont would still be liable under the FCA for the period in
between violation and remittitur. But liable for what? Simoneaux has to say that in that
interim period, duPont had some amorphous duty to pay a penalty somewhere between
$0 and $37,500 per day, notwithstanding the fact that the EPA ultimately adjudicated the
value at zero. The text of the TSCA does not support the existence of such a Schrödinger’s
Penalty.
23N’Jai v. U.S. EPA, No. 13-1212, 2014 WL 2508289, at *17 (W.D. Pa. June 4, 2014)
(“Despite the statute’s use of the word ‘shall,’ the foregoing provisions do not demonstrate a
Congressional intent to circumscribe the EPA Administrator’s enforcement discretion.”).
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never held) that regulatory penalties are “mandatory” in the sense that Sim-
oneaux is arguing. His theory is that a duty to pay arises at the moment Sec-
tion 8(e) is violated. But penalties under the CWA are mandatory only in the
sense that “once a violation has been established, some form of penalty is re-
quired.” 24
IV.
DuPont contends that because Simoneaux has failed to state a viable
claim under the FCA, his FCA retaliation claim fails as a matter of law. Sim-
oneaux asserts that the issue is outside this court’s appellate jurisdiction, since
duPont did not raise it in the district court. Because we agree with Simoneaux,
we dismiss the appeal of the retaliation claim for lack of jurisdiction.
“Under § 1292(b), it is the order, not the question, that is appealable.” 25
“The court of appeals may not reach beyond the certified order to address other
orders made in the case. But the appellate court may address any issue fairly
included within the certified order . . . .” 26 Moreover, even if we have power to
address an issue on interlocutory review, we can exercise our discretion to
decline that jurisdiction. 27
24 Atl. States Legal Found., Inc. v. Tyson Foods, Inc., 897 F.2d 1128, 1142 (11th Cir.
1990) (emphasis added); see also Nat. Res. Def. Council v. Sw. Marine, Inc., 236 F.3d 985,
1001 (9th Cir. 2000) (“If a district court finds a violation, then civil penalties . . . are manda-
tory.”) (emphasis added). These decisions, all outside of the FCA context, merely clarify that
a district court or agency cannot simultaneously find a person liable under 33 U.S.C.
§ 1319(d) and impose a penalty of zero. See Deepwater Horizon, 753 F.3d at 575 n.11. They
do not create an exception to Bain and Marcy’s rule that regulatory penalties are not “estab-
lished” in advance of assessment.
25 Castellanos-Contreras v. Decatur Hotels, LLC, 622 F.3d 393, 398 (5th Cir. 2010)
(en banc) (citing Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 205 (1996)).
Yamaha, 516 U.S. at 205 (citation omitted); Accord Koch Foods of Miss., L.L.C. v.
26
EEOC, 838 F.3d 540, 548 n.16 (5th Cir. 2016) (citing cases).
27Castellanos-Contreras, 622 F.3d at 399; see also Yamaha, 516 U.S. at 205 (“[T]he
appellate court may address any issue fairly included within the certified order . . . .”)
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The jurisdictional question turns on whether duPont’s retaliation argu-
ment is “fairly included” in the certified order. We have found an issue to be
fairly included when it was raised in the district court and the parties pre-
sented it in their appellate briefs. 28 On the other hand, an issue was not fairly
included when it was not raised in the district court. 29
On appeal, duPont advances a new argument with respect to Simon-
eaux’s retaliation claim. In the district court, it posited that Simoneaux had
failed to show that he engaged in protected activity because there was no evi-
dence that his complaints related to a concern that duPont was defrauding the
government. On appeal, however, duPont contends that Simoneaux could not
have engaged in protected activity because he has not established a viable FCA
claim. Those are distinct legal theories that rely on different authorities. 30
Indeed, duPont acknowledges, perhaps inadvertently, that they are distinct. 31
DuPont maintains, however, that its argument in the district court was
not limited to whether Simoneaux complained of fraud, but instead was that
Simoneaux could not prove the elements of retaliation. DuPont seems to sug-
gest that by advancing one theory of why Simoneaux did not engage in pro-
tected activity, it has “fairly included” all other such theories. Such a concept-
tion of “fairly included” is too broad, and this court has rejected a similar
(emphasis added); United States v. Caremark, Inc., 634 F.3d 808, 811 n.1 (5th Cir. 2011)
(“[W]here an issue is not fully developed in the district court, we may decline to reach it [on
interlocutory appeal].”).
28Melder v. Allstate Corp., 404 F.3d 328, 330–31 (5th Cir. 2005); see also Caremark,
634 F.3d at 815 n.8.
29 Dehoyos v. Allstate Corp., 345 F.3d 290, 297 n.5 (5th Cir. 2003).
30 In the district court, duPont did not even cite the case it now relies on for its non-
viability theory.
31DuPont states, “Further, the court in George does not actually discuss whether there
was a viable FCA claim, but rather whether the plaintiff’s internal complaints were focused
on fraud on the government.”
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contention. 32
Moreover, duPont’s position runs counter to our waiver jurisprudence,
which requires more than a cursory mention of an issue to deem it “raised.” 33
Thus, the issue of whether Simoneaux’s retaliation claim fails as a matter of
law because he cannot establish a viable FCA claim was not fairly included in
the district court’s order, and so we have no appellate jurisdiction over it.
The denial of summary judgment for duPont on the reverse-FCA claim
is REVERSED and REMANDED. With respect to the retaliation claim, the
appeal is DISMISSED for lack of appellate jurisdiction.
32See Dehoyos, 345 F.3d at 297 n.5 (citations and quotation marks omitted) There,
we stated,
Appellants also urge us to entertain two additional theories of preemption. The
first argument, dubbed the “filed rate” argument, is presented to us for the first time
in this interlocutory appeal. . . . [W]e consider issues raised for the first time on
appeal only in extraordinary instances . . . to avoid a miscarriage of justice. More-
over, although we have discretion to review on interlocutory appeal those issues
which are “fairly included” in the appeal, we do not deem this argument to be fairly
included, as it is, at best, ancillary to Appellants’ primary arguments in support of
preemption.
33 E.g., FDIC v. Mijalis, 15 F.3d 1314, 1327 (5th Cir. 1994) (“[I]f a litigant desires to
preserve an argument for appeal, the litigant must press and not merely intimate the argu-
ment during the proceedings before the district court. If an argument is not raised to such a
degree that the district court has an opportunity to rule on it, we will not address it on
appeal.”); McIntosh v. Partridge, 540 F.3d 315, 325 n.12 (5th Cir. 2008) (“In his brief,
McIntosh occasionally mentions an ‘equal protection’ claim in conjunction with his due pro-
cess claim, but this claim is inadequately briefed and is hence waived.”); Raj v. La. State
Univ., 714 F.3d 322, 330 (5th Cir. 2013); Frazin v. Haynes & Boone, L.L.P. (In re Frazin),
732 F.3d 313, 324 (5th Cir. 2013).
16