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United States v. Wadsworth Brothers Construction Co.

No. 21-4005. 9/9/2022. D.Utah. Judge Murphy. Qui Tam Action—False Claims Act—Davis-Bacon Act—Motion to Dismiss—Motion for Summary Judgment.

September 9, 2022

Plaintiff was briefly employed by defendant as a truck driver. Defendant had obtained a contract with the Salt Lake City Airport, which had received a $9 million federal grant for improvements. According to the complaint, plaintiff noticed discrepancies in his pay and mentioned the discrepancies to two supervisors. Other employees told plaintiff that it was standard practice for defendant to shave time off of federal projects to undercut other bidders.

After being laid off, plaintiff, acting as a qui tam relator, brought suit on behalf of the United States against his former employer under the provisions of the False Claims Act (FCA). Plaintiff alleged that defendant, as a contractor working on a federally funded transportation project, falsely certified its compliance with the prevailing wage requirements of the Davis-Bacon Act.

The district court granted defendant’s FRCP 12(b)(6) motion as to claims 1 (presenting a false claim to the government), 2 (using or making a false record to obtain payment on a false claim), and 3 (conspiracy to defraud). The district court concluded that plaintiff’s complaint failed to satisfy the demanding materiality standard announced by the Supreme Court in Universal Health Services, Inc. v. United States, 579 U.S. 176 (2016). The district court later granted summary judgment to defendant on claim 5—whistleblower retaliation. Plaintiff appealed.

The FCA imposes liability for “fraudulent attempts to cause the government to pay out sums of money.” USC § 3729(a)(1) creates liability for “false certifications,” but it has a rigorous materiality requirement. A private person (the relator) may bring a qui tam suit on behalf of the government and individually, alleging that a third party made fraudulent claims for payment to the government. Relators can keep a portion of any recovery they obtain. A misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the government’s payment decision to be actionable under the FCA.

The Davis-Bacon Act governs federally funded construction contracts. It is a “minimum wage law designed for the benefit of construction workers.” Payment of Davis-Bacon wages is jobsite and task specific, not project related.

The Tenth Circuit first held that plaintiff’s complaint was bereft of critical facts regarding the alleged Davis-Bacon violation and failed to state a material misrepresentation under the FCA. For instance, the complaint was unclear about where plaintiff worked, what tasks plaintiff performed, and whether the amounts involved were minor or significant. The complaint therefore fell short of the FCA’s rigorous materiality requirement, and the district court did not err in dismissing claims 1 through 3.

The Tenth Circuit next determined that the district court properly granted summary judgment as to claim 5. No reasonable jury could find plaintiff connected his Davis-Bacon complaints to the FCA, and thus a jury could not find that defendant was put on notice of the protected activity. Non-compliance with the wage requirements of the Davis-Bacon Act does not, standing alone, relate to potential violations of the FCA.

The orders dismissing claims 1 through 3 and granting summary judgment to defendant on claim 5 were affirmed.

Official US Court of Appeals for the Tenth Circuit proceedings can be found at the US Court of Appeals for the Tenth Circuit website.

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