United States District Court, D. Idaho
THE UNITED STATES OF AMERICA, ex rel. DOUGLAS V. TOOMER, Plaintiff,
TERRAPOWER, LLC and BATTELLE ENERGY ALLIANCE, LLC, Defendants.
MEMORANDUM DECISION AND ORDER
C. NYE, U.S. DISTRICT COURT JUDGE.
a False Claims Act (“FCA”) case. As is typical in
FCA cases, an individual, Douglas Toomer
(“Toomer”), has asserted FCA claims against
Defendants TerraPower, LLC (“TerraPower”) and
Battelle Energy Alliance, LLC (“BEA”) on behalf
of the United States government. As required by the FCA,
Toomer has only served the Complaint on the government. The
FCA does not permit Toomer to serve the Complaint on the
Defendants until the government decides what course of action
to take. Usually, the government chooses to either intervene
or permit the whistleblower to proceed on his own. In this
case, the government has moved for dismissal. That motion is
currently pending before the Court (Dkt. 14), as is
Toomer's Motion for an Evidentiary Hearing and to Unseal
the Case. Dkt. 23.
Court heard oral argument on these Motions on September 13,
2018. For the reasons outlined below, the Court GRANTS the
Motion to Dismiss and DISMISSES all claims except
Toomer's retaliation claim. The Court also DENIES in PART
and GRANTS in PART Toomer's Motion for an Evidentiary
Hearing and to Unseal the Case. While the Court will not hold
an evidentiary hearing, it will unseal the case.
United States Department of Energy (“DOE”) owns
Idaho National Laboratory (“INL”), which is
located in Idaho Falls, Idaho. INL is a Federally Funded
Research and Development Center operated under Federal
Acquisition Regulation Part 35. See 48 C.F.R. §
35.000 et seq. INL conducts nuclear energy research
the management and operating contractor of INL, as laid out
in government contract number DE-AC07-05ID14517 (“the
Management Contract”). DOE acquisition regulations
require that management and operating contractors be legal
entities created for the purpose of “performing a
specific management and operating contract.” 48 C.F.R.
§ 970.0970-1. BEA was formed for the purpose of
performing the Management Contract.
is the “relator” in this FCA case. Toomer worked
for BEA during the relevant timeframe as a Relationship
Manager. One of his major responsibilities was to work with
is a private company that focuses on nuclear energy and
science innovation. In September 2011, and then again in July
2012, TerraPower entered into Cooperative Research and
Development Agreements (“CRADA”) with BEA for work
at the INL.
CRADAs contain a multitude of contractual obligations for
both BEA and TerraPower. Significant to this litigation are
the obligations surrounding “Subject Invention[s],
” which the CRADAs define as “any invention of
[BEA] or [TerraPower] conceived or first actually reduced to
practice in the performance of work under th[e] CRADA.”
Dkt. 1-3, at 2. The parties are required to disclose to the
government any and all Subject Inventions. Id. at 8,
10. However, BEA or TerraPower may still “elect to
retain title” to any Subject Inventions made by its
employees and the “Inventing Party” has the
“first opportunity to file U.S. and foreign Patent
applications” on any Subject Inventions. Id.
at 10, 11. Nevertheless, the United States “retains a
nonexclusive, nontransferable, irrevocable, paid-up license
to practice or to have practiced for or on behalf of the
United States every Subject Invention . . . throughout the
world.” Id. at 10. DOE may obtain title to or
seek to patent a Subject Invention only if the Inventing
Party declines to do so. Id.
CRADAs also contain obligations regarding “Generated
Information, ” defined as “information produced
in the performance of [a] CRADA.” Id. at 2.
The CRADAs state that the parties “have no obligations
of nondisclosure or limitations on their use of, and the
Government shall have unlimited rights in, all Generated
Information produced and information provided by the Parties,
” with certain exceptions including information that
has been properly marked as “Protected CRADA
Information.” Id. at 7.
CRADA contains a “Statement of Work” describing
the purpose and objectives of the CRADA. The 2011 CRADA
involved “the development and testing of metallic fuel
irradiation behavior, fabrication and fast reactor structural
materials, all related to nuclear energy.” Dkt. 10, at
7. The 2012 CRADA “allow[ed] for the further
development and irradiation testing of variants of
‘barrier coatings' in nuclear fuel rods.”
Id. at 8. The 2012 CRADA committed DOE to over $17
million in in-kind contributions. Id. In August
2014, BEA entered into a modification of the 2012 CRADA that
committed DOE to an additional $5.6 million. Id.
alleges that TerraPower developed a “duplex
liner” (also called a “barrier coating”)
under the 2012 CRADA (thus making it a “Subject
Invention”) and failed to disclose it to the government
as required by the 2012 CRADA. Toomer further alleges that
TerraPower applied for a patent for the duplex liner and, in
the application, failed to provide a sworn statement
discussing the relation of the invention to a CRADA as
required under 42 U.S.C. § 2182.
filed a provisional patent application for the duplex liner
in December 2012. It then filed a nonprovisional application
in March 2013. The U.S. Patent and Trademark Office
(“USPTO”) rejected TerraPower's patent
application in December 2015. TerraPower filed a Request for
Continued Examination with the USPTO, but the USPTO issued a
final rejection of the patent application in August 2017.
TerraPower has filed a notice of appeal.
also alleges that TerraPower improperly claimed some key
Generated Information associated with the CRADA and the
Subject Inventions was proprietary information. Finally,
Toomer maintains that TerraPower concealed the duplex liner
so that it could manufacture and market the invention outside
of the United States, in direct violation of the 2012 CRADA.
status of the duplex liner first became an issue in early
2014, when TerraPower disclosed the duplex liner as
“background intellectual property, ” not a
Subject Invention, in the process of negotiating a new CRADA.
BEA investigated the development of the duplex liner and
TerraPower provided information on its development that
supported its position that the duplex liner was not a
Subject Invention. BEA forwarded this material to DOE.
to Toomer, BEA determined that the duplex liner was a Subject
Invention and TerraPower's claimed proprietary
information was in fact Generated Information that was not
proprietary. BEA informed TerraPower of these findings;
TerraPower, in turn, maintained its position that the duplex
liner was not a Subject Invention and the at-issue
information was proprietary. BEA prepared a white paper on
the dispute, but did not recommend that any specific action
to the government, DOE was aware of this dispute all along
and decided to defer its Subject Invention inquiry until
after the conclusion of the patent prosecution of the duplex
liner because the outcome of those proceedings would affect
was involved in BEA's investigation of the duplex liner
and took steps to notify BEA and TerraPower of
TerraPower's alleged violations of the CRADA and to take
corrective measures. Dkt. 10, at 14. According to Toomer,
“Terrapower became increasingly upset with Toomer's
efforts” and “applied pressure to Toomer's
senior management at BEA to back off and change its position
on the matter, and also have Toomer removed from any
involvement with TerraPower and the CRADAs.”
Id. TerraPower was successful in these endeavors.
Id. Still, Toomer “insisted that BEA formally
request that DOE become involved in the matter.”
Id. at 15. BEA's legal counsel and management
allegedly became hostile towards Toomer. They “stripped
[him] of all of his responsibilities and effectively told
[him] to ‘find work elsewhere' at BEA.”
Id. Toomer claims that he became ...