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United States ex rel. Dahlstrom v. Sauk-Suiattle Indian Tribe of Washington

United States District Court, W.D. Washington, Seattle

August 29, 2019



          JAMES L. ROBART United States District Judge.


         Before the court are: (1) Defendants Christine Marie Jody Morlock, Robert Larry Morlock, and Ronda Kay Metcalf's (collectively, “Individual Defendants”) motion for summary judgment (MSJ (Dkt. # 64)), and (2) Individual Defendants' motions in limine (MIL (Dkt. # 77)). The court has reviewed the summary judgment motion, the parties' submissions in support of and in opposition to the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court GRANTS Individual Defendants' summary judgment motion and DISMISSES this action WITH PREJUDICE. In light of this ruling, the court DENIES Individual Defendants' motions in limine as MOOT.


         A. Mr. Dahlstrom's Employment with the Tribe

         Mr. Dahlstrom was initially hired as a social worker for Defendant Sauk-Suiattle Indian Tribe of Washington's (“the Tribe”) Indian Child Welfare Department in 2010. (6/6/19 Nedderman Decl. (Dkt. # 67) ¶ 2, Ex. 1.) Mr. Dahlstrom became the Director of the Department in 2011. (Id. ¶ 3, Ex. 2.) On April 30, 2015, the Tribe appointed Mr. Dahlstrom interim Health and Social Services (“HSS”) Director. (Id. ¶ 4, Ex. 3.) In July 2015, the Tribe appointed him HSS Director. (Id. ¶ 5, Ex. 4.) As an at-will employee, Mr. Dahlstrom acknowledged that the Tribe “may terminate [his] employment at any time, with or without cause.” (Id. ¶ 6, Ex. 5.) The Tribe placed Mr. Dahlstrom on administrative leave with pay in October 2015. (Id. ¶ 7, Ex. 6.) The Tribal Counsel terminated his employment without cause on December 4, 2015. (Id. ¶ 8, Ex. 7; see also Metcalf Decl. (Dkt. # 66) ¶ 2.) Mr. Dahlstrom received a letter confirming his termination on December 8, 2015. (6/6/19 Nedderman Decl. ¶ 9, Ex. 8.)

         B. This Lawsuit

         Plaintiffs United States of America, ex rel. Raju A.T. Dahlstrom and State of Washington, ex rel. Raju A.T. Dahlstrom (collectively, “Mr. Dahlstrom”) filed this qui tam lawsuit on January 12, 2016, approximately one month after he was terminated. (See Compl. (Dkt. # 1).) Mr. Dahlstrom asserts claims under the federal False Claims Act (“FCA”), 31 U.S.C. § 3729, et seq., and the Washington Medicaid Fraud False Claims Act (“the Washington Medicaid Fraud FCA”), RCW ch. 74.66. (See Compl. ¶¶ 71-82.) He also brings claims for FCA retaliation and Washington Medicaid Fraud FCA retaliation.[2] (See id. ¶¶ 92-95.) On September 26, 2016, both the United States and the State of Washington opted not to intervene in this suit. (Not. Declining Intervention (Dkt. # 8).) On September 28, 2016, the court unsealed the pleadings. (9/28/16 Order (Dkt. # 9).) The court later dismissed Mr. Dahlstrom's claims against the Tribe on grounds of sovereign immunity but permitted Mr. Dahlstrom's claims against Individual Defendants to proceed. (See generally 3/21/17 Order.)

         C. Alleged False Claims

         Although Mr. Dahlstrom's complaint and other filings are often confusing and difficult to follow, the parties implicitly agree that he raises seven alleged false claims in this lawsuit. (See MSJ at 4 (“[D]efendants believe that there are only seven alleged false claims in this lawsuit.”); Resp. at 10-16 (responding to the seven alleged false claims in Defendants' motion for summary judgment and failing to identify any additional alleged false claims).)[3] The court recounts the relevant facts with respect to each such claim in the analysis section below. The court now considers Individual Defendants' motion for summary judgment on all of Mr. Dahlstrom's claims.

         III. ANALYSIS

         A. Summary Judgment Standard

         Summary judgment is proper when the pleadings, discovery, and other materials on file, including any affidavits or declarations, show that “there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Miranda v. City of Cornelius, 429 F.3d 858, 860 n.1 (9th Cir. 2005). To satisfy its burden at summary judgment, a moving party with the burden of persuasion “must establish beyond controversy every essential element of its . . . claim.” S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 888 (9th Cir. 2003) (internal quotation marks and citation omitted). By contrast, a moving party without the burden of persuasion “must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102 (9th Cir. 2000) (citing High Tech Gays v. Def. Indus. Sec. Clearance Office, 895 F.2d 563, 574 (9th Cir. 1990)). “If the party moving for summary judgment meets its initial burden of identifying for the court the portions of the materials on file that it believes demonstrate the absence of any genuine issue of material fact, the nonmoving party may not rely on the mere allegations in the pleadings in order to preclude summary judgment[, but instead] must set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (internal citations and quotation marks omitted) (citing, among other cases, Celotex Corp. v. Catrett, 477 U.S. 317, 106 (1986)).

         “A non-movant's bald assertions or a mere scintilla of evidence in his favor are both insufficient to withstand summary judgment.” FTC v. Stefanchik, 559 F.3d 924, 929 (9th Cir. 2009). In addition, the evidence presented by the parties must be admissible. See Fed. R. Civ. P. 56(e); see also Pelletier v. Fed. Home Loan Bank of S.F., 968 F.2d 865, 872 (9th Cir. 1992) (to survive summary judgment, the non-moving party “ordinarily must furnish affidavits containing admissible evidence tending to show the existence of a genuine dispute of material fact”). Conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. See Thornhill Publ'g Co., Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir. 1979). With that said, courts do not make credibility determinations or weigh conflicting evidence at the summary judgment stage and must view all evidence and draw all inferences in the light most favorable to the non-moving party. See T.W. Elec., 809 F.2d at 630-31 (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)); see also Motley v. Parks, 432 F.3d 1072, 1075, n.1 (9th Cir. 2005) (en banc).

         B. Preliminary Matters

         Although presently represented by counsel, Mr. Dahlstrom's 43-page qui tam complaint was initially filed pro se.[4] (See Compl.) His complaint contains a maze of disjointed factual allegations, numerous related and unrelated legal and factual tangents, and many pages of legal citations and explanations.[5] (See generally id.) Once he obtained representation, Mr. Dahlstrom's filings did not significantly improve. (See generally Dkt.) For example, his responsive memorandum is nearly as difficult to follow as his complaint. (Compare Resp. with Compl.) Further, his responsive memorandum violates the court's rules concerning formatting, and accordingly, it also violates the court's rules governing the length of briefs. See infra n.12, n.16; see also Local Rules W.D. Wash. LCR 7(e), 10(a). More significantly, Mr. Dahlstrom's citations to the record are often in error or simply refer the court to conclusory allegations made in his own declaration or to other irrelevant or inadmissible evidence. See infra § III.C.4-5; n.12; (see generally Resp.) Indeed, Mr. Dahlstrom filed over 1, 700 pages of declarations and accompanying exhibits in opposition to Individual Defendants' motion. (See Waszak Decl.; Pope Decl.; Dahlstrom Decl.) Yet, he cites to only a small portion of any of these documents in his responsive memorandum, and as noted above, many of these citations are in error. (See generally Resp.); see also infra § III.C.4-5; n.12.

         “[I]t is not . . . [the] task . . . of the district court . . . to scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir.1995)); see also Greenwood, 28 F.3d at 977 (citing United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991)) (“Judges are not like pigs, hunting for truffles buried in briefs.”). The court “rel[ies] on the nonmoving party to identify with reasonable particularity the evidence that precludes summary judgment.” Keenan, 91 F.3d at 1279; see also Californians for Renewable Energy v. Cal. Pub. Utilities Comm'n, 922 F.3d 929, 936 (9th Cir. 2019). Factual citations in a party's brief should identify the evidence that will create a triable issue. Instead, as noted above, many of Mr. Dahlstrom's citations direct the court to a portion or page of the record that provides little or no support for the cited proposition in his memorandum. In this respect, his responsive memorandum “obfuscate[s] rather than promote[s] an understanding of the facts” and undermines rather than supports the proposition that there are genuine, triable, material factual disputes. Keenan, 91 F.3d at 251. To the extent that Mr. Dahlstrom's responsive memorandum fails to cite evidence in his voluminous and meandering factual filings that demonstrates a material factual dispute for trial, the court will not search for such a dispute here.

         C. FCA Claims

         The FCA makes liable anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval, ” or “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.” 31 U.S.C. § 3729(a)(1)(A), (B). A “claim” includes a direct request for government payment as well as a reimbursement request made to the recipients of federal funds under a federal benefits program. 31 U.S.C. § 3729(b)(2)(A); Universal Health Servs., Inc. v. United States (Escobar), ___U.S.___, 136 S.Ct. 1989, 1996 (2016). “A claim under the [FCA] requires a showing of ‘(1) a false statement or fraudulent course of conduct, (2) made with the scienter, (3) that was material, causing (4) the government to pay out money or forfeit moneys due.'” United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d 890, 899 (9th Cir. 2017) (quoting United States ex rel. Hendow v. Univ. of Phx., 461 F.3d 1166, 1174 (9th Cir. 2006)).

         Significantly, it is not enough to allege regulatory violations, id. (citing United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1266 (9th Cir. 1996)); nor “a private scheme, ” without evidence of a claim requesting illegal payments, United States v. Kitsap Physicians Serv., 314 F.3d 995, 1002 (9th Cir. 2002). Rather, the plaintiff “must establish that a false claim was submitted to the government.” Id. Indeed, “the false claim or statement must be the ‘sine qua non of receipt of state funding.'” Campie, 862 F.3d at 898-99 (quoting Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010)).

         As to the knowledge element, a defendant acts knowingly if it has actual knowledge, deliberate ignorance of the statement, or reckless disregard as to the truth of the statement. 31 U.S.C. § 3729(b)(1). “Innocent mistakes, mere negligent misrepresentations and differences in interpretations” do not constitute knowingly false statements. United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1267 (9th Cir. 1996).

         “A failure to raise a triable issue of fact as to any of these . . . elements justifies the summary judgment dismissal of [the relator's] claims.” Kitsap Physicians Serv., 314 F.3d at 1000 (citing Hagood v. Sonoma Cty. Water Agency, 81 F.3d 1465, 1477-79 (9th Cir. 1996)). Although his claims and arguments are at times confusing and difficult to follow, the court endeavors to understand and then address each of Mr. Dahlstrom's asserted FCA claims.

         1. False Claim 1-Alleged Transfer of Properties

         Mr. Dahlstrom alleges that the Tribe “purchased properties, in excess of $500, 000[.00], ” and “transferred real properties to various persons or agents of the . . . Tribe in contravention of the IRA-process[6] approved for bringing fee-land into trust-land.” (Compl. ¶ 16(a) (footnote added); see also Id. ¶¶ 75-82.) In his deposition, Mr. Dahlstrom testified that this claim applies to Ms. Metcalf but not to Dr. Morlock or Mr. Morlock. (6/6/19 Nedderman Decl. (Dkt. # 67) ¶ 14, Ex. 13 (“Dahlstrom Dep.”)[7] at 133:25-134:2, 479:20-480:4.) When asked to describe Ms. Metcalf's involvement, Mr. Dahlstrom stated that it was his understanding that she was “the spokesperson and the signer on behalf of the council [for] . . . these transactions.” (Id. at 480:8-10.) When pressed for specific evidence of wrongdoing by Ms. Metcalf, Mr. Dahlstrom stated in his deposition that she “served as both general manager . . . [and] was also a voting member on the council” so that she could “either halt the fraud or . . . perpetuate it.” (Id. at 480:18-22.) Mr. Dahlstrom offers no other material evidence.

         The gravamen of Mr. Dahlstrom's claim is that the tribe “was involved in purchasing properties under false reasons - specifically, to use federal dollars to leverage purchases of the properties without intending to use those purchased properties for advertised or expressed use.” (6/6/19 Nedderman Decl. ¶ 17, Ex. 15 at 41.) Mr. Dahlstrom states that the Tribe advertised using the properties for children's therapeutic programs and other services, and that he was “invited . . . to assist in the development of effective strategies for securing these properties, ” but “was completed [sic] shut out of this process and left in the dark as to the real intentions for the foregoing properties.” (Id. at 42.)

         However, during his deposition, Mr. Dahlstrom admitted that-as far has he knows-the Tribe never went forward with its application to the State of Washington concerning these properties. Specifically, he testified:

Yeah, there were two different properties. I was told that it was for the use of children - for children and for therapy and for all sorts of programs. . . . [A]nd that was initially what I was told was going to happen. Now, whether or not its full implementation ever occurred, I don't know because I'm no longer there, so I don't know. All I know is that there was some pretense that this is what it was about, but as far as I know, the program, at least while I was still there, was never allowed to get off the ground. There were representations made to the State of Washington, through my office, that I had been directed by the council to produce a program. We provided application for consideration and everything. And then . . . The - only then for all of that to come crumbling to the ground because Ms. Metcalf told me we weren't going forward with it.

(Dahlstrom Dep. at 122:9-123:3.) Indeed, Mr. Dahlstrom acknowledged that he knows very little about the transaction at all:

Q: . . . Do you have any personal knowledge what specific funds were used . . . for the purchase of these properties?
A: The only thing I know is what [a Council member] described to me. He said the tribe gave him cash and he was supposed to go and approach the purchasing of all this. So how that - how that happened in terms of whether he was a front person for providing the cash to buy property on moneys that belonged to the tribe, whether it was through federal contracts or moneys from the State or from a private enterprise or from tribal resources, a casino, receipts, I don't know, all I know is that [the council member] said the monies were pulled out of the bank and handed to him, and in the form of a payment that he was supposed to handle privately.
Q: But do you know who purchased [the properties], whether it was a tribe or a private individual, do you know?
A: I never saw the documents.
Q: Okay. But you don't know if, specifically, whether any federal funds were used to purchase this property; is that correct?
A: I know that [a Council member] told me that they removed money from the bank where our contracts and grants were kept.
Q: [M]y question to you is: Do you have any evidence that a single federal dollar was used to purchase that property?
A: The only evidence that I have is that [a Council member] indicated to me that the moneys were coming from the Coastal Bank where the federal dollars and grant moneys are, and that's the only reference point I have.
Q: . . . [O]ther than what [the Council member] told you, that he purchased those properties from some source, you have no evidence that any federal funds were used to purchase those properties; is that correct? It's a yes or no question.
A: Well, it's not that simple because I don't have discovery, but based on - based on what I know at the time, his representations were that he was given money to purchase property and it came out of Coastal Bank where the tribal grants and contract money is stored.
Q: That's the only information you have?
A: That - for right now, yes.

(Id. at 126:24-127:13, 127:21-23, 129:11-16, ...

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