Opinion
108471/2009
06-30-2021
STATE of New York and City of New York ex rel. Brian Aryai, Plaintiffs/Relator, v. SKANSKA, Turner Construction Company, Tishman Construction Corporation, Plaza Construction Corporation, Bovis Lend Lease, LMB, Inc., Hunt-Bovis, Tishman/Washington Group, Tishman/Harris, Phoenix Constructors, Fluor Enterprises, Inc., Slattery Skanska, Inc., Granite Halmar Construction Company, Inc., Bovis Lend Lease, LMB, Inc., Slattery Skanska/Edwards & Kelsey Design-Build, S3 Tunnel Constructors, Skanska USA Civil Northeast, Schiavone Construction, J. Shea, Tishman Speyer, Hunter Roberts Construction Group, Granite Northeast, International Union of Operating Engineers Local 14, Local 79 Mason Tenders’ District Council of Greater New York, and New York City District Council of Carpenters Local 1536, Defendants.
Robert W. Sadowski PLLC, New York, NY (Robert W. Sadowski of counsel); Coughlin Duffy LLP, Morristown, NJ (Joshua L. Weiner of counsel); and Joseph G. Sconzo, Esq., Palm Beach Gardens, FL, for relator. Peckar & Abramson, P.C., New York, NY (Patrick J. Greene, Jr., Frank A. Hess, and Michael J. P. Schewe, of counsel), for defendants Skanska, Turner Construction Company, Slattery Skanska, Inc., Slattery Skanska/Edwards & Kelsey Design-Build, S3 Tunnel Constructors, Skanska USA Civil Northeast, Schiavone Construction, and J.F. Shea. Brady, McGuire & Steinberg, P.C., Tarrytown, NY (Joseph H. Green and James M. Steinberg of counsel), for defendant International Union of Operating Engineers, Local 14-14B, AFL-CIO. Cohen, Weiss & Simon LLP, New York, NY (Joseph J. Vitale of counsel), and Tamir W. Rosenblum, Esq., New York, NY, for defendant Construction & General Building Laborers’ Local 79. McLaughlin & Stern, LLP, New York, NY (Daniel J. Horwitz and Tracy A. Burnett of counsel), for defendant Tishman Speyer. Paul Hastings LLP, New York, NY (Kenneth M. Breen and Zachary S. Zwillinger of counsel), for defendant Plaza Construction Corporation. Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY (Hallie B. Levin of counsel), for defendants Tishman Construction Corporation, Tishman/Harris, and Tishman/Washington Group. Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY (Lea Haber Kuck and Amanda Raymond Kalantirsky of counsel), for defendant Hunter Roberts Construction Group, LLC. Arnold & Porter Kaye Scholar LLP, New York, NY (Manvin S. Mayell of counsel), and Washington, DC (Craig D. Margolis and Christian D. Sheehan of counsel), for defendant Fluor Enterprises, Inc. Cohen & Gresser LLP, New York, NY (Jason Brown and Nathaniel P.T. Read of counsel), and Washington, DC (Erica C. Lai of counsel), for defendant Grainte Construction Northeast, Inc. Spivak Lipton LLP, New York, NY (Gillian Costello and James M. Murphy of counsel), for defendant New York City District Council of Carpenters Local 1536.
Robert W. Sadowski PLLC, New York, NY (Robert W. Sadowski of counsel); Coughlin Duffy LLP, Morristown, NJ (Joshua L. Weiner of counsel); and Joseph G. Sconzo, Esq., Palm Beach Gardens, FL, for relator.
Peckar & Abramson, P.C., New York, NY (Patrick J. Greene, Jr., Frank A. Hess, and Michael J. P. Schewe, of counsel), for defendants Skanska, Turner Construction Company, Slattery Skanska, Inc., Slattery Skanska/Edwards & Kelsey Design-Build, S3 Tunnel Constructors, Skanska USA Civil Northeast, Schiavone Construction, and J.F. Shea.
Brady, McGuire & Steinberg, P.C., Tarrytown, NY (Joseph H. Green and James M. Steinberg of counsel), for defendant International Union of Operating Engineers, Local 14-14B, AFL-CIO.
Cohen, Weiss & Simon LLP, New York, NY (Joseph J. Vitale of counsel), and Tamir W. Rosenblum, Esq., New York, NY, for defendant Construction & General Building Laborers’ Local 79.
McLaughlin & Stern, LLP, New York, NY (Daniel J. Horwitz and Tracy A. Burnett of counsel), for defendant Tishman Speyer.
Paul Hastings LLP, New York, NY (Kenneth M. Breen and Zachary S. Zwillinger of counsel), for defendant Plaza Construction Corporation.
Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY (Hallie B. Levin of counsel), for defendants Tishman Construction Corporation, Tishman/Harris, and Tishman/Washington Group.
Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY (Lea Haber Kuck and Amanda Raymond Kalantirsky of counsel), for defendant Hunter Roberts Construction Group, LLC.
Arnold & Porter Kaye Scholar LLP, New York, NY (Manvin S. Mayell of counsel), and Washington, DC (Craig D. Margolis and Christian D. Sheehan of counsel), for defendant Fluor Enterprises, Inc.
Cohen & Gresser LLP, New York, NY (Jason Brown and Nathaniel P.T. Read of counsel), and Washington, DC (Erica C. Lai of counsel), for defendant Grainte Construction Northeast, Inc.
Spivak Lipton LLP, New York, NY (Gillian Costello and James M. Murphy of counsel), for defendant New York City District Council of Carpenters Local 1536.
Gerald Lebovits, J.
This is a qui tam action arising out of alleged payroll padding on major construction projects in the New York City metropolitan area. Relator Brian Aryai has sued under the New York State and New York City False Claims Acts. Relator's complaint, as amended, seeks damages and penalties on behalf of the State and City of New York against a number of large construction companies and labor unions that he alleges to have been complicit in this payroll-padding. In motion sequences 005 through 012, the various defendants separately move to dismiss the complaint as against them. The motions to dismiss are granted.
Due to a miscommunication between court and counsel, this court initially failed to adjourn the return date of motion sequence 005 as provided for in a stipulation among the parties, and therefore erroneously granted without opposition the motion to dismiss on motion sequence 005. In motion sequence 014, plaintiff brought this issue to the court's attention and sought reargument on motion sequence 005. (See NYSCEF No. 244.) This court issued an interim order granting reargument to the extent of vacating the dismissal of the complaint as to the defendants who had moved in motion sequence 005, and providing that the merits of the arguments originally made on motion sequence 005 would be considered at the same time as the other motions to dismiss. (See NYSCEF No. 249.) For convenience, the body of this decision treats those arguments as having been made on motion sequence 005, though as a formal matter they are being considered in connection with motion sequence 014.
BACKGROUND
The following account is drawn from the complaint's allegations, which are taken to be true solely for the purposes of this motion. Relator is a certified public accountant and forensic fraud examiner. Between April 2008 and January 2009, he was the senior vice president of finance of Bovis Lend Lease LMB, Inc. Bovis is a major construction company that acts as the general contractor or construction manager on many government-funded construction projects in New York.
While working at Bovis, relator learned that there was a longstanding, industry-wide agreement among major construction companies and labor unions with respect to a fraudulent payroll practice known as "gratis pay." Under this practice, union foremen working on government-funded construction projects routinely put in for two hours per day of overtime that they did not work. The construction-company defendants knowingly accepted these fraudulently padded time records from the labor-union defendants, and they passed their own inflated payroll records and costs on to federal, state and municipal governmental agencies funding the projects. After becoming aware of these no-show overtime payments, relator independently investigated the payroll records that Bovis was submitting for fraudulent payment. As part of this investigation, relator went to various Bovis job sites to verify personally the presence (or absence) of union employees or foremen who had put in for overtime hours. He succeeded in confirming the absence of union workers on the job sites during hours that the employees had claimed they were working and for which Bovis had paid overtime.
In addition to the gratis pay the foremen received for unworked hours, the labor-union defendants received fringe benefits in the amounts of 40% to 50% of the sum paid to every foreman. The receipt of these unearned benefits also was known to the construction-company defendants. Those defendants then recouped the amount of the unearned benefits from federal, state and municipal governmental entities.
Relator apprised various Bovis executives of the fraudulent practices relating to gratis pay. He also spoke to executives of several defendants here, including Plaza Construction Corporation, Tishman Construction Corporation, and Skanska. Relator alleges that these executives verbally confirmed to Relator their respective companies’ participation in the fraud, and warned Relator to avoid asking further questions about such practice. Shortly afterward, in January 22, 2009, Bovis fired relator.
In February 2009, relator provided a report detailing the findings of his investigation to Loretta Lynch, who at the time was working in private practice after having served as United States Attorney for the Eastern District of New York.
After being again appointed as U.S. Attorney for the Eastern District of New York in 2010, Lynch oversaw federal criminal prosecutions based on information originally provided by relator.
In June 2009, relator brought two qui tam actions: the current action (brought under state law) and one in the U.S. District Court for the Southern District of New York (brought under federal law). Both actions were originally filed under seal. Relator's initial complaint in this action was based on the results of his investigation. (See generally NYSCEF No. 96 [initial complaint].) The complaint asserted claims against Bovis and also some of, but not all, the current defendants.
The initial complaint in this action was unsealed by court order in July 2018. (See NYSCEF No. 96 at 1 [header]; see also NYSCEF No. 1 at 1 [County Clerk minutes].)
In April 2012, based upon information provided by relator, the federal government brought fraud charges in the Eastern District of New York against Bovis and its former principal, James Abadie. Abadie later pleaded guilty to conspiracy to commit mail and wire fraud. Bovis admitted to participating in the gratis pay scheme and entered into a deferred prosecution agreement. The federal government, based upon information provided by relator, also entered into deferred prosecution agreements with defendants Tishman, Plaza, and Hunter Roberts Construction Group.
In 2013, the federal government intervened in relator's federal qui tam action. The federal claims against Bovis were later settled.
In September 2018, relator filed an amended complaint in this action, asserting claims under the New York State and New York City False Claims Act (State FCA and City FCA, respectively). (See NYSCEF No. 3.) The amended complaint added several new defendants, including additional construction companies and also labor-union locals. And it added new allegations both about relator's initial investigation at Bovis and about (mis)conduct revealed in the various federal deferred-prosecution agreements.
In October 2019, relator settled his claims against Bovis and other defendants that had engaged in joint ventures with Bovis. (See NYSCEF No. 93.) The remaining defendants have filed a series of motions to dismiss, motion sequences 005, 006, 007, 008, 009, 010, 011, and 012. These motions (along with motion sequence 014) are consolidated here for disposition. As discussed further below, each motion to dismiss is granted, and the action as a whole is dismissed.
DISCUSSION
The numerous motions to dismiss in this action raise a variety of jurisdictional, procedural, and merits arguments for dismissal. Although some of those arguments overlap among the different motions, others do not. This decision therefore addresses each of the motions separately, cross-referencing as appropriate analysis that applies to multiple motions. The motions of the construction-contractor defendants are considered first, followed by the motions of the union defendants.
I. The Skanska Defendants’ Motion to Dismiss (Motion Sequence 005)
The motion to dismiss in motion sequence 005 is brought by several defendants that are related to or affiliated with the Swedish corporation commonly known as Skanska. The Skanska Defendants seek dismissal both of relator's City FCA and State FCA claims against them. The motion to dismiss these claims is granted.
Defendants Skanska; Turner Construction Company; Slattery Skanska, Inc.; Slattery Skanska/Edwards & Kelsey Design-Build; S3 Tunnel Constructors; Skanska USA Civil Northeast; Schiavone Construction; and J.F. Shea.
A. The Branch of the Skanska Defendants’ Motion Seeking Dismissal of the City FCA Claim
The City FCA bars private individuals from bringing qui tam actions unless they are authorized by the City Corporation Counsel to do so. (See NY Admin. Code § 7-804 [b] [2]-[3], [e].) The Skanska Defendants argue that relator has not been authorized to bring his City FCA claim against them, and therefore that the claim must be dismissed. This court agrees.
Neither relator's initial nor amended complaint alleges that he has been authorized by the corporation counsel under § 7-804 (b) to bring a City FCA claim against the Skanska Defendants, or indeed against the other defendants here. Relator's opposition to the motions to dismiss does not contend (or provide documentary evidence) that he has, in fact, been so authorized. And relator does not argue that some other provision of the City FCA permits him to bring this claim absent corporation-counsel authorization.
Instead, relator contends only that "any claim by the City is covered by the New York State False Claims Act, which allows actions on behalf of a local government." (NYSCEF No. 224 at 2 n 1, citing State Finance Law § 190 [1].) But § 190 (1)-(2) of the State FCA, by its express terms, addresses only claims brought under the State FCA on behalf of New York City, not claims brought directly under the City FCA.
The branch of the Skanska Defendants’ motion seeking dismissal of relator's City FCA claim against them is granted.
Given the court's dismissal of the City FCA claim on this ground, the court does not reach the Skanska Defendants’ additional, alternative arguments for dismissal of that claim.
B. The Branch of the Skanska Defendants’ Motion Seeking Dismissal of the State FCA Claim
The Skanska Defendants argue that relator's claim under the State FCA should be dismissed as jurisdictionally barred by the statute's "public-disclosure" provision. Relator argues in opposition that his State FCA claim is not subject to the public-disclosure provision at all, much less barred by it. This court concludes as a matter of first impression that in the particular circumstances of this case, the public-disclosure bar applies to most, but not all, of relator's claims against the Skanska Defendants. Those allegations that are outside the scope of the public-disclosure bar fail to state a cause of action. The allegations within the scope of the public-disclosure bar are jurisdictionally barred, because relator has not established that he is an "original source" within the meaning of the statute. 1. The public-disclosure bar ground for dismissal
The State FCA provides that a court must dismiss qui tam claims if "substantially the same allegations or transactions as alleged in the action were publicly disclosed" in a federal "report, hearing, audit, or investigation that is made on the public record or disseminated broadly to the general public." ( State Finance Law § 190 [9] [b] [ii].) This "public-disclosure" bar is jurisdictional. (See State of New York ex rel. Rasmusen v. Citigroup, Inc. , 162 A.D.3d 607, 608, 75 N.Y.S.3d 903 [1st Dept. 2018], citing State of NY ex rel. Jamaica Hosp. Med. Ctr., Inc. v. UnitedHealth Group, Inc. , 84 A.D.3d 442, 442, 922 N.Y.S.2d 342 [1st Dept. 2011].) The sole exception to the bar is if "the qui tam plaintiff is an original source of the information" underlying the plaintiff's allegations. ( State Finance Law § 190 [9] [b].)
It is not immediately clear why the language of § 190 (9), which provides that "[t]he court shall dismiss a qui tam action under this article" if certain conditions apply, should be read as going to a court's subject-matter jurisdiction, rather than directing a particular merits deposition. But the First Department has consistently held that § 190 (9) imposes a jurisdictional bar.
As the language of § 190 (9) reflects, the public-disclosure bar applies when the relator commences an action after a public disclosure of facts that are substantially similar to the allegations of the complaint. (See Jamaica Hosp. Med. Ctr. , 84 A.D.3d at 442-443, 922 N.Y.S.2d 342.) Conversely, then, the bar does not apply to an action brought before the public disclosure.
Here, as the relator argues in opposing the motions to dismiss, he first brought claims against the Skanska Defendants in the initial complaint filed in 2009—three years before the first public disclosure of allegations or transactions related to the allegations made in relator's complaint. (See NYSCEF No. 224 at 24-25.) On the other hand, it is also true that the relator substantially amended his complaint, including as against the Skanska Defendants in 2018, years after various public disclosures. The Skanska Defendants argue that because an amended complaint wholly supersedes the initial complaint, questions relating to jurisdiction should be considered in light of the amended complaint. Therefore, they contend, because the amended complaint was filed following public disclosures, it is subject in its entirety to the public-disclosure bar.
The parties, though citing a number of federal cases that address this particular scenario, have not provided the court with New York authority construing the State FCA's public-disclosure bar. Nor has this court's own research uncovered any prior decision on point from any New York court. Considering the issue as a matter of complete first impression, this court concludes that the public-disclosure bar applies when a post-disclosure amendment to a complaint (i) adds claims against new defendants; (ii) adds new claims against existing defendants; or (iii) adds new allegations to support existing claims. It does not , however, apply to allegations that are made in an initial, pre-disclosure complaint and then retained in an amended, post-disclosure complaint.
In reaching this conclusion, this court has taken into account federal precedent addressing the scenario now before the court. (See State of New York ex rel. Seiden v. Utica First Ins. Co. , 96 A.D.3d 67, 71, 943 N.Y.S.2d 36 [1st Dept. 2012] [explaining that because the "NYFCA follows the federal False Claims Act ... it is appropriate to look toward federal law when interpreting the New York act"].) In particular, this court has given weight to the decision of the U.S. Supreme Court in Rockwell International Corp. v. United States, 549 U.S. 457, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007), which addressed a similar question.
In Rockwell , as here, the initial version of the qui tam relator's complaint was filed before any public disclosure; but the complaint was later amended after related facts had been publicly disclosed. The Court rejected the position of the relator in that case, who—like relator here—argued that the relevant date for public-disclosure purposes was the date only of the initial complaint. (See 549 U.S. at 476, 127 S.Ct. 1397 [holding that the statute "does not permit jurisdiction in gross just because a relator is an original source with respect to some claim"].) But the Court also declined to accept a version of the Skanska Defendants’ position that all of the relator's claims were subject to the public-disclosure bar because relator had amended his complaint after a public disclosure. The Court, quoting approvingly from a decision of then-Judge Alito, held that joinder in one action of claims that were made pre-disclosure and post-disclosure "should not result in the dismissal of claims that would have otherwise survived" had they been asserted separately. ( Id. , quoting United States ex rel. Merena v. SmithKline Beecham Corp. , 205 F.3d 97, 102 [3d Cir. 2000].) In other words, the barred post-disclosure claims do not drag the pre-disclosure claims down with them.
Lower federal courts have similarly looked closely at which claims in an amended complaint—or even which individual allegations—were raised before the public disclosure in the case, and which after. Only the post-disclosure material in an amended complaint is subject to the public-disclosure bar. (See e.g. United States ex rel. Bledsoe v. Community Health Sys., Inc. , 342 F.3d 634, 645-646 & n. 8 [6th Cir. 2003] [holding that "no subject matter jurisdiction lies for paragraphs 17-24 of Relator's amended complaint" because those paragraphs were based on a prior public disclosure]; United States ex rel. Boise v. Cephalon, Inc. , 2014 WL 5089717, at *6-7 [E.D. Pa. Oct. 9, 2014] [undertaking "a claim-by-claim analysis of the application of the public disclosure bar"], citing Merena , 205 F.3d at 102.)
This court concludes that this analytical approach—interpreting similar statutory language—best balances the statutory goals of (i) encouraging private relators to uncover frauds that victimize the public fisc, while still (ii) discouraging opportunistic qui tam actions based on publicly available information rather than the relator's own investigations.
It would serve little purpose to require dismissal of claims and allegations asserted before a public disclosure merely because the complaint was later amended following a disclosure to raise other, distinct claims (or to make additional allegations in support of existing claims). A claim based on the relator's own knowledge or investigation (rather than on a public disclosure) does not suddenly derive from a different source because other claims based on different information have been added. Conversely, though, permitting an amended complaint to survive in its entirety as long as the initial complaint was filed before a public disclosure "would leave the relator free to plead a trivial theory of fraud for which he had some direct and independent knowledge and later amend the complaint to include theories copied from the public domain or from materials in the Government's possession." ( Rockwell , 549 U.S. at 473, 127 S.Ct. 1397.)
Here, relator's initial 2009 complaint named many of the Skanska Defendants. But as the Skanska Defendants point out, relator's initial complaint in this matter does not make any allegations of wrongdoing against them, in particular. Thus, all Skanska-specific allegations in the amended complaint are within the scope of the public-disclosure bar. The non-Skanska-specific allegations, though not subject to a jurisdictional bar under CPLR 3211 (a) (2), are subject to dismissal under CPLR 3211 (a) (7) for failure to state a cause of action. At most, those allegations describe in general terms alleged wrongdoing by undifferentiated construction contractors and labor unions, or by "defendants" collectively, without identifying particular defendants or particular projects. Such allegations, without more, are insufficient to state a claim under the State FCA against the Skanska Defendants (or, as discussed below, the other defendants). (See Total Asset Recovery Servs. LLC v. Metlife, Inc. , 189 A.D.3d 519, 523, 139 N.Y.S.3d 3 [1st Dept. 2020].)
The initial complaint's only specific allegations of wrongdoing pertain to Bovis, relator's former employer, with which relator has already settled.
2. The original-source exception to the public-disclosure bar
That the amended complaint's specific allegations against the Skanska Defendants are potentially subject to the public-disclosure bar does not end the matter, however. As noted above, the court retains jurisdiction to hear post-disclosure qui tam claims when "the qui tam plaintiff is an original source of the information" underlying those claims. ( State Finance Law § 190 [9] [b].) A qui tam plaintiff may qualify as an original source in two ways. First, if he "voluntarily disclosed to the state or a local government the information on which allegations or transactions in a cause of action are based," prior to the public disclosure. (Id. § 188 [7].) Second , if he "has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and ... has voluntarily provided the information to the state or a local government before or simultaneous with filing an action under this article." (Id. )
Here, relator claims to have been an original source because, prior to any public disclosure, he provided information to Loretta Lynch (at a time when she was in private practice rather than federal-government service), to prosecutors in the U.S. Attorney's Office for the Eastern District of New York, to agents of the FBI, and to representatives of the Port Authority of New York & New Jersey and the U.S. Department of Labor. (See NYSCEF No. 3 at ¶ 82; NYSCEF No. 223; see also NYSCEF No. 218 at 30.) The U.S. Attorney's Office, the FBI, and the U.S. Department of Labor are not state- or local-government entities. Nor is the Port Authority: as the Skanska Defendants point out on reply, it is instead a "bi-state compact that is neither state nor federal." (NYSCEF No. 232 at 9 n 4, citing Hess v. Port Auth. Trans-Hudson Corp. , 513 U.S. 30, 115 S.Ct. 394, 130 L.Ed.2d 245 [1994].)
Although relator's initial complaint does allege that he "voluntarily provided information to the ... state[ ] and/or local government prior to the filing of this action," it does not specify what information he provided. (NYSCEF No. 96 at ¶ 4.) And the amended complaint alleges only that relator "voluntarily provided the accumulated information and results of his investigation to the appropriate federal and state law enforcement and prosecuting agencies ... before the initial Complaint was filed"—again without describing that information. (NYSCEF No. 3 at ¶ 8.) Nor, for that matter, does this allegation state that relator provided his information to New York law-enforcement agencies (and, if so, which agencies). Relator thus has pleaded no facts in his initial complaint, his amended complaint, or his opposition to the motions to dismiss that could establish he was the original source for the allegations that he seeks to assert against Skanska in the amended complaint. That pleading deficiency renders jurisdictionally defective relator's claims against Skanska. It may be that a relator should not be required to plead granular specifics about what information the relator gave to New York State (or New York City) government before its public disclosure. But the relator must give at least some details, so that a court may properly assess which allegations in a post-disclosure complaint should survive the public-disclosure bar to subject-matter jurisdiction. Merely referring in general and conclusory fashion to "information," as relator does here, is not sufficient.
Because some of the construction projects at issue were undertaken by the Port Authority, wrongdoing on these projects conceivably could have implicated New Jersey law as well as New York law.
Given this court's conclusion that relator's claims against the Skanska Defendants are jurisdictionally barred, the court does not reach their challenges to the sufficiency of the complaint. But it is unclear that relator could state a cause of action against these defendants even if jurisdiction did exist. Given the particularity requirement of CPLR 3016 (b), a relator may not merely "assert[ ], in general terms, that all defendants engaged in all of the alleged conduct." (Total Asset Recovery , 189 A.D.3d at 523, 139 N.Y.S.3d 3.) And the only specific allegations against any of the Skanska Defendants are that (i) a Bovis executive told relator in December 2008 that all foremen at a construction project in which a Skanska entity was one of the contractors were (at some point) receiving gratis pay (see NYSCEF No. 3 at ¶ 71); and (ii) a Skanska executive "verbally confirmed [Skanska's] past, current, and future involvement and participation in the gratis pay scheme" to relator (id. at ¶ 81). This court is somewhat skeptical that these allegations, without more, "provide a reasonable indication that one or more violations" of the State FCA "are likely to have occurred" and "provide adequate notice of the specific nature of the alleged misconduct to permit ... defendants to defend." (State ex rel. Edelweiss Fund LLC v. JP Morgan Chase & Co. , 189 A.D.3d 723, 723, 140 N.Y.S.3d 1 [1st Dept. 2020], quoting State Finance Law § 192 [1-a].)
II. Tishman Speyer's Motion to Dismiss (Motion Sequence 008)
Defendant Tishman Speyer moves in motion sequence 008 to dismiss relator's City FCA and State FCA claims against it. The motion is granted.
In addition to the other grounds for dismissal discussed below, this motion contends that the claims must be dismissed for lack of a proper defendant because "Tishman Speyer" is merely a trade name, rather than a legal entity. (See NYSCEF No. 103 at 5-6.) Relator's combined opposition to the motions to dismiss does not respond to this argument. This court declines to reach this issue, though, given its disposition of the motion.
The City FCA claim against Tishman Speyer fails for the same lack-of-authorization reason discussed above with respect to the Skanska Defendants’ motion to dismiss. (See Section I.A, supra. ) And, as above, this court does not reach Tishman Speyer's other arguments for dismissal of the City FCA Claim.
With respect to the State FCA claim, relator did not name Tishman Speyer as a defendant in the initial complaint in this action. Any State FCA claim against Tishman Speyer therefore is subject to the statute's public-disclosure bar for the reasons discussed above with respect to the Skanska Defendants. (See Paragraph I.B.1, supra. ) Relator has not established that he qualifies as an original source for the allegations against Tishman Speyer in the amended complaint, either. Relator's State FCA claim against Tishman Speyer therefore is jurisdictionally barred. The motion to dismiss the City FCA and State FCA claims is granted.
Indeed, relator's only allegation against Tishman Speyer is that it was part of a joint venture with Bovis at a construction site at which, according to a Bovis project manager, "the overtime gratis pay scheme was in operation." (NYSCEF No. 3 at ¶ 21.)
III. The Tishman-Plaza Defendants’ Motion to Dismiss (Motion Sequence 009)
Defendants Tishman Construction Corporation, Tishman/Washington Group, Tishman/Harris, and Plaza Construction Corporation (the Tishman-Plaza defendants) move in motion sequence 009 to dismiss relator's City FCA and State FCA Claims against them. The motion is granted. The City FCA claim against the Tishman-Plaza Defendants fails for the same lack-of-authorization reason discussed above with respect to the Skanska Defendants’ motion to dismiss. (See Section I.A, supra. ) And, as above, this court does not reach the Tishman-Plaza Defendants’ other arguments for dismissal of the City FCA Claim.
With respect to the State FCA claims against the Tishman-Plaza Defendants, although these defendants were all named in the initial complaint, there are no specific allegations against them in that complaint. The allegations and claims against them asserted in relator's amended complaint are thus subject to the public-disclosure bar for the reasons discussed above with respect to the Skanska Defendants. (See Paragraph I.B.1, supra. )
Relator therefore must establish that he is an original source for the allegations in the amended complaint against the Tishman-Plaza Defendants. Relator has not done so. Relator does not provide any basis for this court to conclude that he "voluntarily disclosed to the state or a local government the information on which [these] allegations" are based. ( State Finance Law § 188 [7].) Nor does relator allege in his amended complaint, or for that matter argue in opposition to the motions to dismiss, that he "has knowledge that ... materially adds to the publicly disclosed allegations" against the Tishman-Plaza defendants and that he "voluntarily provided the information to the state or a local government before or simultaneous with filing an action under this article." (Id. ) Instead, respondent emphasizes that he has an independent basis of knowledge for many of the publicly disclosed allegations against Tishman Construction and Plaza. (See NYSCEF No. 224 at 25-35.) But that, standing alone, is not enough.
Indeed, the only allegation in the amended complaint against the Tishman-Plaza defendants is that shortly before relator was fired, he spoke with executives from Tishman Construction and Plaza who "verbally confirmed their respective companies’ past, current, and future involvement and participation in the gratis pay scheme," and "warned Relator to avoid asking questions about the practice." (NYSCEF No. 3 at ¶ 81.)
The Tishman-Plaza Defendants’ motion to dismiss the City FCA and State FCA claims against them is granted.
IV. Hunter Roberts's Motion to Dismiss (Motion Sequence 010)
Defendant Hunter Roberts Construction Group moves in motion sequence 010 to dismiss relator's claims against it. The motion is granted. The City FCA claim against Hunter Roberts fails for lack of authorization. As for the State FCA claim, relator did not name Hunter Roberts as a defendant in the initial complaint. The amended complaint, in adding Hunter Roberts as a defendant, is subject to the public-disclosure bar. And relator does not establish that he is an original source for State FCA purposes with respect to his allegations against Hunter Roberts. Indeed, the amended complaint does not include any allegations against Hunter Roberts in particular.
V. The Fluor-Granite Defendants’ Motion to Dismiss (Motion Sequence 011)
Defendants Fluor Enterprises, Inc., and Granite Construction Northeast, Inc. (the Fluor-Granite Defendants) move in motion sequence 011 to dismiss relator's claims against them. The motion is granted.
The City FCA claim against the Fluor-Granite Defendants fails for lack of authorization. With respect to the State FCA claim, relator did not name these defendants in the initial complaint. The claims asserted against them in the amended complaint, therefore, are subject to the public disclosure bar. As with the other defendants discussed above, neither relator's amended complaint nor his opposition to the motion to dismiss establish that he qualifies as an original source within the meaning of State Finance Law § 188 (7) for his allegations against the Fluor-Granite Defendants. Relator's State FCA claim against these defendants is dismissed as well.
As with the Skanska Defendants, the only specific allegation against either of the Fluor-Granite Defendants is that a Bovis executive told relator in December 2008 that all foremen at a construction project in which these defendants served as contractors were (at some point) receiving gratis pay. (See NYSCEF No. 3 at ¶ 71.)
VI. Local 14's Motion to Dismiss (Motion Sequence 006)
Defendant International Union of Operating Engineers, Local 14-14B, AFL-CIO (Local 14) moves in motion sequence 006 to dismiss relator's claims against it. The motion is granted.
Relator's City FCA claim against Local 14, like his City FCA claims against the various construction-contractor defendants, is subject to dismissal for lack of authorization to sue on behalf of the City. Relator's State FCA claim against Local 14 is subject to dismissal due to the public-disclosure bar. The initial complaint does not name Local 14 as a defendant. Relator's claims against Local 14 in the amended complaint are therefore necessarily post-disclosure. But neither the amended complaint, nor relator's opposition to the motions to dismiss, alleges facts that might establish that relator was an original source of the information underlying the amended complaint's allegations against Local 14. VII. Local 79's Motion to Dismiss (Motion Sequence 007)
Local 14 has not raised this particular ground for dismissal. But because the public-disclosure bar goes to this court's subject-matter jurisdiction (see Rasmusen, 162 A.D.3d at 608, 75 N.Y.S.3d 903 ), it may properly be addressed by this court sua sponte. (See Matter of Prospect v. Cohalan , 65 N.Y.2d 867, 870 n. *, 493 N.Y.S.2d 293, 482 N.E.2d 1209 [1985] ; see also Concourse Nursing Home v. Chasin , 259 A.D.2d 302, 302, 684 N.Y.S.2d 784 [1st Dept. 1999] [affirming trial-court's sua sponte dismissal of action for lack of subject-matter jurisdiction].)
Further, even if this court were to have subject-matter jurisdiction, the amended complaint contains no allegations about any particular wrongdoing committed by Local 14, in particular, as opposed to conduct of other union locals or of "unions," generally. Such allegations would not satisfy the heightened pleading standards governing State FCA cases. (See Total Asset Recovery , 189 A.D.3d at 523, 139 N.Y.S.3d 3.) Additionally, Local 14 correctly notes that there is significant reason to think the claims against it accrued more than 10 years before the filing of the amended complaint, which would render those claims untimely. (See State Finance Law § 192 [1] [limitations period]; NYSCEF No. 95 at ¶ 13, citing NYSCEF No. 3 at ¶ 43. This court is skeptical that relator could satisfy the conditions necessary for his claim against Local 14 to relate back to the initial complaint. (See Buran v. Coupal , 87 N.Y.2d 173, 178, 638 N.Y.S.2d 405, 661 N.E.2d 978 [1995] ; Ramirez v. Elias-Tejada , 168 A.D.3d 401, 402-403, 92 N.Y.S.3d 188 [1st Dept. 2019].)
Defendant Construction and General Building Laborers Local 79 (Local 79) moves in motion sequence 007 to dismiss relator's claims against it. The motion is granted.
Relator's City FCA claim against Local 79, like his City FCA claims against the other defendants, fails for lack of authorization.
Although Local 79 does not raise this issue, relator's State FCA claim against it is subject to the public-disclosure bar because Local 79 was not named as a defendant in the initial complaint. And relator's amended complaint and opposition to the motions to dismiss does not establish that he was an original source with respect to the information underlying his allegations against Local 79.
As discussed above (see Paragraph I.B.2, supra ), to be an original source, relator must at a minimum have voluntarily disclosed that information "to the state or a local government" prior to a public disclosure or "before or simultaneous with filing an action under this article." ( State Finance Law § 188 [7].) Here, relator has not sufficiently alleged that he meets these requirements with respect to Local 79.
To show that relator was an original source, the initial and amended complaints state, in general and conclusory terms, that relator provided relevant information to state and local government officials before filing the initial complaint. (See NYSCEF No. 96 at ¶ 4 [initial complaint]; NYSCEF No. 3 at ¶ 8 [amended complaint].) But neither version of the complaint alleges that this pre-disclosure information included the only allegations in the amended complaint that relate to Local 79, in particular—i.e. that one Local 79 foreman was paid for overtime hours that he did not work on one jobsite in September 2008. (See NYSCEF No. 3 at ¶¶ 74-75.) Nor does the amended complaint attempt to provide any other basis under which relator qualifies as an original source with respect to this claim. The claim is thus jurisdictionally barred.
Although this court does not reach the issue, relator's opposition did not respond to Local 79's argument that the amended complaint fails to allege that the members of Local 79 authorized or ratified the alleged gratis-pay scheme, as would be required to bring an action against Local 79 under Martin v. Curran, 303 N.Y. 276, 101 N.E.2d 683 (1951). (See Duane Reade, Inc. v. Local 338 Retail, Wholesale, Dept. Store Union, UFCW, AFL-CIO , 17 A.D.3d 277, 278, 794 N.Y.S.2d 25 [1st Dept. 2005] [describing the Martin doctrine].)
VIII. Local 1536's Motion to Dismiss (Motion Sequence 012)
Defendant New York City District Council of Carpenters Local 1536 (Local 1536) moves in motion sequence 012 to dismiss relator's claims against it. The motion is granted.
Relator's City FCA claim against Local 1536 fails for lack of authorization. Relator's State FCA claim against Local 1536 is subject to the public-disclosure bar because relator's initial complaint did not name Local 1536 as a defendant. And relator fails to establish that he was an original source for the information underlying his claims against Local 1536. As was true of relator's claims against Local 79, neither the original nor amended version of the complaint alleges that the pre-disclosure information relator assertedly disclosed to state and local government officials encompassed the only allegation relating to Local 1536 in particular—that the timesheets for several Local 1536 members on one Bovis jobsite "show they worked 8 hours straight time and 2 hours of overtime." (NYSCEF No. 3 at ¶¶ 74, 76.) (See NYSCEF No. 3 at ¶¶ 74, 76.) The claim is thus jurisdictionally barred.
Those allegations also on their face pertain to work that was done, and timesheets that were completed, several months outside the State FCA's 10-year limitations period. And the allegations do not directly state that these Local 1536 members were paid for hours they did not work in any event. (See NYSCEF No. 3 at ¶¶ 74, 76.)
Given this court's jurisdictional holding, the court does not reach Local 1536's argument—to which relator's opposition papers did not respond—that Local 1536 is an improper defendant here because it was dissolved as a union local in 2011, years before relator filed his amended complaint. (See NYSCEF No. 168 at 6; NYSCEF No. 167 at ¶ 5.)
Accordingly, for the foregoing reasons, it is hereby
ORDERED that the motions to dismiss that have been filed on motion sequences 006, 007, 008, 009, 010, 011, and 012 are granted; and it is further
ORDERED that upon consideration of the merits of the arguments previously raised on motion sequence 005 by relator and by the Skanska Defendants, this court grants relator's motion for leave to reargue (motion sequence 014), and upon reargument adheres to its original decision dismissing relator's claims against the Skanska Defendants; and it is further
ORDERED that relator's complaint is dismissed in its entirety against all defendants, with separate costs and disbursements to each defendant or group of defendants filing a motion to dismiss, as taxed by the Clerk of the Court upon submission of appropriate bills of costs; and it is further
ORDERED that the Clerk shall enter judgment accordingly.