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Mary Angela Cafasso v. General

March 24, 2011

MARY ANGELA CAFASSO, UNITED STATES EX REL., PLAINTIFF-COUNTER-DEFENDANT
v.
GENERAL DYNAMICS C4 SYSTEMS, NVW INC., DEFENDANT-COUNTER-CLAIMANT- APPELLEE. MARY ANGELA CAFASSO,UNITED STATES EX REL., APPELLANT,
v.
GENERAL DYNAMICS C4 SYSTEMS, NVW INC., DEFENDANT-APPELLEE. 3963 PLAINTIFF-APPELLANT, MARY ANGELA CAFASSO, UNITED STATES, EX REL., PLAINTIFF-COUNTER-DEFENDANT- APPELLANT,
v.
GENERAL DYNAMICS C4 CORPORATION, NVW DEFENDANT-APPELLEE, GENERAL DYNAMICS C4 SYSTEMS, INC., DEFENDANT-COUNTER-CLAIMANT-APPELLEE.



D.C. No.2:06-cv-01381; D.C. No. 2:06-cv-01381; D.C. No.2:06-cv-01381. Appeal from the United States District Court for the District of Arizona Neil V. Wake, District Judge, Presiding

The opinion of the court was delivered by: Judge Gould

FOR PUBLICATION

OPINION

Argued and Submitted November 3, 2010-San Francisco, California

Before: Ronald M. Gould and Consuelo M. Callahan, Circuit Judges, and Morrison C. England, Jr., District Judge.*fn1

COUNSEL

OPINION

GOULD, Circuit Judge

In this False Claims Act ("FCA") appeal, relator Mary Cafasso challenges orders of the district court dismissing her qui tam complaint, rejecting her proposed amended pleading, granting summary judgment on remaining claims, and awarding attorneys' fees.*fn2 We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I

Cafasso alleges that her former employer General Dynamics C4 Systems ("GDC4S"), a technology company that services the military, defrauded the government by withholding disclosure of new inventions which, GDC4S had agreed by contract, the government had rights to use and license. Cafasso discovered the alleged fraud, according to her complaint, and made repeated inquiries and requests for internal audits. She claims that as a result of her activities in that regard, GDC4S retaliated against her by eliminating her department and position. GDC4S denies those allegations.

After learning that her job would be terminated but before leaving GDC4S, Cafasso copied almost eleven gigabytes of data from company computers in anticipation of bringing a qui tam action. Within days of her departure, GDC4S realized that she had taken thousands of its internal documents. GDC4S filed suit in state court seeking to recover documents that it believed Cafasso took in violation of a confidentiality agreement that she executed when her employment began. The state court issued a temporary restraining order ("TRO") that required Cafasso to return the electronic files that she removed from GDC4S.

Two days later, Cafasso filed this qui tam action in federal district court with a conclusory six-page complaint. The complaint alleged FCA violations and retaliation. The district judge, at Cafasso's request, issued orders sealing the case and permitting Cafasso to inform the state court of the pendency of the qui tam action. With the orders and sealed complaint in-hand, Cafasso presented the state court with an ex parte request to lift the TRO, which the state court granted. The state court also stayed the state action in its entirety, although the Arizona Court of Appeals later reversed both orders. When the district court learned that Cafasso had used its orders to disrupt the state court suit, it vacated the orders that it had issued. GDC4S was then served with the complaint and filed an answer and counterclaim. That counterclaim alleged, among other things, that Cafasso's appropriation of GDC4S's electronic files breached her confidentiality agreement with the company.

Continuing prosecution of the qui tam action, Cafasso lodged more specific allegations against GDC4S in an amended complaint. In response to GDC4S's objections about privileged information contained in that amended pleading, Cafasso filed a substitute amended complaint that struck the objectionable language. Around the same time, the United States announced that it would decline to intervene in the FCA action. Cafasso continued to litigate the matter in her own name.

The parties then began an acrimonious period of discovery. The district court's November 4, 2009, order recites numerous discovery abuses by Cafasso. Specifically, Cafasso refused to identify which documents, of the thousands she had appropriated, actually supported her claim or were privileged. Further, Cafasso sought discovery into 110 inventions that were not mentioned in her complaint, which the court prohibited. GDC4S asked by interrogatory that Cafasso "[i]dentify each specific provision of 31 U.S.C. § 3729(a)(1)-(7) of the False Claims Act ('FCA') that you allege in paragraph 173 of the Substitute Amended Complaint that Defendant 'knowingly violated' . . . ." In response, Cafasso stated that she "has not made a claim as described in this Interrogatory, nor does the law require that she claim such to have been the case." Because Cafasso's answer to this interrogatory appeared to abandon her qui tam allegations, GDC4S promptly filed a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). Thereafter, Cafasso sought to file a 733-page second amended complaint, which the district court rejected for failing to state a "short and plain statement of the claim," as required by Federal Rule of Civil Procedure 8(a)(2). The district court granted GDC4S's motion for judg- ment on the pleadings. It then denied Cafasso's subsequent motion to amend her pleading.

Both parties moved for summary judgment on the remaining claims (Cafasso's retaliation claim against GDC4S, and GDC4S's counterclaims against Cafasso). GDC4S prevailed on both motions, and the district court entered judgment and a permanent injunction against Cafasso. GDC4S then moved for an award of attorneys' fees, which the district court granted in part.

This appeal followed.

II

We first address the district court's dismissal of Cafasso's qui tam claim pursuant to Federal Rule of Civil Procedure 12(c). Our review is de novo. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). When considering a Rule 12(c) dismissal, we must accept the facts as pled by the non-movant, here, Cafasso. Id.; see also Jenkins v. McKeithen, 395 U.S. 411, 421 (1969) ("For the purposes of a motion to dismiss, the material allegations of the complaint are taken as admitted."). We caution that the facts set ...


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