United States District Court, W.D. Washington, Seattle
MARIA UCHYTIL, on behalf of the United States of America, Plaintiff,
AVANDE, INC., a Washington corporation, AVANDE FEDERAL SERVICES, a Delaware corporation, and ACCENTURE FEDERAL SERVICES LLC, a Delaware limited liability corporation, Defendants.
C. COUGHENOUR UNITED STATES DISTRICT JUDGE.
matter comes before the Court on Defendants' motion for
leave to file an amended answer and to add counterclaims
(Dkt. No. 123). Having thoroughly considered the parties'
briefing and the relevant record, the Court finds oral
argument unnecessary and hereby GRANTS the motion (Dkt. No.
123) for the reasons explained herein.
qui tam action under the False Claims Act
(“FCA”) 31 U.S.C. section 3724 has been
thoroughly described in other orders. (See Dkt. Nos.
102, 135.) Defendant now moves for leave to file an amended
answer to include counterclaims against Relator Maria Uchytil
(“Relator”). (Dkt. No. 123.) Defendants assert
that on January 18, 2018, Relator disclosed that she used a
hard drive to back up the contents of her company laptop,
retained this hard drive and the documents on it when her
employment was terminated on January 31, 2012, and provided
at least part of its contents to her attorneys. (Dkt. No. 123
at 1-2, 4.) Relator's Confidential Information Agreement
and Business Protection Agreement prohibited her from
“us[ing], disclos[ing], publish[ing], or
distribut[ing]” confidential company information and
required her to “deliver as soon as reasonably possible
to the Company . . . all Company Property, including copies
thereof, then in [her] possession or control.” (Dkt.
No. 123 at 3.) Defendants assert Relator violated these
agreements and concealed her actions during the course of
these legal proceedings. (Dkt. No. 128 at 7.) They
accordingly seek to amend their answer to add counterclaims
for breach of contract and conversion. (Id. at 2.)
February 27, 2018, Defendants moved for leave to file a
supplemental declaration (Dkt. No. 136). The Court did not
find it necessary to rely on this declaration in ruling on
the present motion. Thus, the Court STRIKES the motion and
declaration (Dkt. Nos. 136, 137).
to amend shall be freely given when justice so requires.
Fed.R.Civ.P. 15(a)(2). This rule should be “applied
with extreme liberality.” Owens v. Kaiser Found.
Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001).
Courts consider five factors in granting leave to amend: (1)
bad faith, (2) undue delay, (3) prejudice to the opposing
party, (4) futility of amendment, and (5) whether the
pleading has previously been amended. United States v.
Corinthian Colleges, 655 F.3d 984, 995 (9th Cir. 2011).
Here, Defendants have not previously amended their answer,
and Relator does not assert bad faith on the part of
Defendant. Thus, the Court will consider whether undue delay,
futility, and prejudice merit denial of leave to amend.
first asserts undue delay, arguing that Defendants knew of
the relevant facts underlying their potential causes of
action for breach of contract and conversion in 2014, when
they first received notice of this action, in 2016, when they
acknowledged Relator “retained some number of the
company's privileged documents, ” and certainly in
2017, when they filed an answer to the Second Amended
Complaint. (Dkt. No. 128 at 2, 4, 5.) On this basis,
Relator argues Defendants waived these compulsory
counterclaims. (Dkt. No. 128 at 9). According to Relator, her
recent revelation that she retained a physical hard drive
containing these and other documents does not provide a basis
to revive Defendants' claims. (Dkt. No. 123 at 1.)
Court disagrees. It is true that Defendants likely had
sufficient information to assert breach of contract or
conversion claims before filing their answer. But, there was
also a strong likelihood that-based on the information
available to Defendants at the time-the claims would fail on
public policy grounds. The Ninth Circuit has considered an
exception to confidentiality agreements to protect relators
where “removal of the documents was reasonably
necessary to pursue an FCA claim.” Cafasso, U.S. ex
rel. v. General Dynamics C4 Systems, Inc., 637 F.3d
1047, 1064 (9th Cir. 2011). While the Circuit Court found it
unnecessary to adopt a public policy exception at the time,
it noted that a potential exception would not cover
“vast and indiscriminate appropriation” of
confidential files. Id. at 1062. Relator's
January 2018 indication that she took not just a limited
number of documents relevant to her claims, but copied and
retained a backup of some or all of the contents of her work
laptop, provided Defendants a new basis for counterclaims
potentially less susceptible to a public policy
exception. (Dkt. No. 130 at 3-4.) Thus, the Court
finds Defendants neither waived proposed counterclaims, nor
unduly delayed in asserting them.
Futility of Amendment
motion for leave to amend is futile if it can be defeated on
[a motion for summary judgment].” Gabrielson v.
Montgomery Ward & Co., 785 F.2d 762, 766 (9th Cir.
1986). Relator argues amendment would be futile based on
public policy protecting whistleblowers. (See Dkt.
No. 128 at 10.) The Court disagrees. As discussed above, the
Ninth Circuit has made it clear that any such protection in
the context of an FCA claim would be limited and would
require justification based on necessity. Cafasso,
637 F.3d at 1062. Relator makes no showing that the extent
and manner of documents copied and retained was ...