Simonian v. Univ. & Cmty. Coll. Sys.

128 P.3d 1057

Lane SIMONIAN, Appellant, v. The UNIVERSITY AND COMMUNITY COLLEGE SYSTEM OF NEVADA, Respondent.

No. 39292.

Supreme Court of Nevada.

February 23, 2006.

Lane Simonian, Reno, in Proper Person.

Mary Phelps Dugan, Associate General Counsel, Reno, for Respondent.

Before ROSE, C.J., DOUGLAS and PARRAGUIRRE, JJ.

OPINION

PER CURIAM.

In this proper person appeal, we determine whether the district court properly granted summary judgment to the University and Community College System of Nevada (UCCSN) because, as a state entity, UCCSN is not subject to liability under Nevada's False Claims Act (FCA).¹ We also consider whether sanctions may be imposed on a complainant for having filed an FCA action based on allegations that, in the context of an administrative retaliation proceeding, were previously found meritless.

We agree with the district court that UCCSN is a state entity and therefore not subject to FCA liability. Accordingly, we affirm the district court's summary judgment. We further conclude, however, that the district court's award of attorney fees as a sanction for having asserted a meritless claim is unsupportable under the circumstances. Thus, we reverse the portion of the order awarding UCCSN attorney fees.

FACTS

Appellant Lane Simonian was a part-time instructor for Truckee Meadows Community College for several years. As a result of concerns that surfaced during his employment, Simonian instituted proceedings against respondent UCCSN on four notable occasions.

First, in 1999, Simonian filed a district court petition for extraordinary relief, challenging UCCSN's alleged refusal to pay part-time instructors the entire salary amounts for which legislative appropriations had been made. Within a few months of petitioning the court and before any response had been filed, however, Simonian voluntarily dismissed the petition.

Second, that same year, Simonian requested a hearing with the Nevada Department of Personnel under NRS 281.641, which governs reprisals and retaliatory actions taken against state officer or employee whistleblowers.² In his request, Simonian asserted that he had sent letters to certain individuals and agencies, alleging that UCCSN had misappropriated state funds by submitting incorrect part-time instructor salaries in budget requests to the Legislature. Consequently, Simonian claimed, the community college retaliated against him by refusing to renew his teaching contract. After reviewing the matter, a hearing officer found that Simonian had not proven his retaliation claim, in part because Simonian had not demonstrated success on the merits of his underlying misappropriation allegations, and without so doing, he could not succeed on a claim for retaliation.

Third, the following year, Simonian filed a second NRS 281.641 request, this time alleging that he had been retaliated against when he was dismissed as a part-time lecturer earlier that year. Simonian claimed that the dismissal resulted from his public complaints about "the false reporting of average new full-time instructors' salaries." The request was dismissed as untimely.

Finally, in 2001, Simonian instituted a false claims action against UCCSN. As a basis for relief, Simonian asserted that between 1987 and 2001, UCCSN had "presented to the Nevada State Legislature claims for $16 million in unpaid salaries for part-time instructors." He requested that UCCSN be assessed treble damages, a civil penalty payable to the State, and $5,000 for his expenses, plus costs. The Attorney General, although statutorily permitted to intervene in the action, declined to do so.

The district court granted UCCSN's ensuing motion to dismiss, treating it as a motion for summary judgment, and UCCSN's request for attorney fees as sanctions under NRCP 11 and NRS 357.180(2). Specifically, the district court determined that Simonian had failed to state an FCA claim because a legislative budget request does not fall within the FCA's definition of "claim" and because UCCSN is not a "person" for purposes of FCA liability. In addition, the district court summarily determined that Simonian's claim was barred by the doctrine of collateral estoppel. Finally, the district court noted that Simonian had previously brought actions against UCCSN on the issue of part-time UCCSN instructor salaries and awarded UCCSN $2,452.50 in attorney fees, as sanctions against Simonian for presenting "a claim . . . not well-grounded in fact or in existing law." Simonian appeals from the district court's order.

DISCUSSION

This court reviews orders granting summary judgment de novo.³ Summary judgment is appropriate when, after an examination of the record viewed in a light most favorable to the nonmoving party, no genuine issues of material fact remain and the moving party is entitled to judgment as a matter of law.⁴

As, legally, state entities are not subject to FCA liability and no material factual disputes exist as to UCCSN's state entity status, we conclude that the district court properly granted summary judgment on that basis. Consequently, we do not reach Simonian's arguments regarding the district court's alternative bases for summary judgment, that an entity's budget request does not constitute a "claim" for FCA purposes and that the action was barred under the collateral estoppel doctrine.

State entities are not "persons" subject to FCA liability

Nevada's FCA permits the Attorney General, or a private "qui tam" plaintiff acting on his own behalf and on that of the State, to maintain an action for treble damages against "a person" who, among other things, presents a false claim for payment or approval, uses a false record or statement to obtain payment or approval of a false claim, or is the beneficiary of and fails to disclose after discovery of, an inadvertent submission of a false claim.⁵ The FCA defines "claim" as "a request or demand for money, property or services made to . . . [a]n officer, employee or agent of this state . . . or . . . [a] contractor, grantee or other recipient of money from the State . . . if any part of the money . . . was provided by the State."⁶

Although the FCA does not likewise define the term "person," a long-standing principle of statutory construction instructs that "`person' does not include the sovereign."⁷ While we have previously only had occasion to apply this principle in the context of statutory civil rights law, it applies equally to any statute.⁸ Thus, unless a statute expressly indicates otherwise, we will presume that the statute does not confer "person" status on a state entity.⁹ Here, the FCA contains no express language specifying that the term "person" includes state entities, and therefore we presume that the Legislature did not intend to subject the State to FCA liability.

While we acknowledge that this presumption is "not a `hard and fast rule of exclusion,'"¹⁰ we conclude that the FCA's policy to recover state funds further supports the presumption's use here. It would simply make no sense to interpret the FCA to allow the Attorney General or a private plaintiff, acting on the State's behalf, to sue a state entity to recover state funds; a successful action would not actually "recover" funds for the State, but would rather merely require the State to reallocate resources between state entities while expending funds for litigation costs and amounts awarded to a private plaintiff under the FCA.¹¹

Moreover, this court has recognized that Nevada's FCA is modeled after the federal FCA,¹² which the United States Supreme Court has interpreted as excluding states and state entities, but not local governments, from the definition of "person."¹³ Although the Supreme Court's reasoning is not entirely relevant in the context of Nevada's FCA,¹⁴ it does define language in the act upon which Nevada's FCA is expressly modeled, and thus we may look to it for guidance.¹⁵

Part of the Supreme Court's reasoning observes that the original federal FCA contained no express provision to overcome the presumption that states are not "persons" for purposes of qui tam liability, even though a separate federal FCA provision granting the Attorney General permission to instigate civil investigations with "any person" specifically defined "person" in that context to include states.¹⁶ Because Congress had expressly defined "person" to include states in the investigative context, but not elsewhere in the FCA, the Supreme Court reasoned that the absence of a similar definition with respect to the liability provision revealed that the liability provision was not intended to include states.¹⁷ Further, that Court noted that, despite subsequently making various changes to the liability provision, Congress never expanded the meaning of "person" to include states.¹⁸

Correspondingly, because in drafting Nevada's FCA the Nevada Legislature looked to the federal FCA, the Legislature necessarily examined the federal act's definitions. Having thus considered the federal FCA's definition of "person" that expressly included state entities in the investigative context, the Legislature nevertheless chose not to similarly define "person" in the Nevada FCA's liability provision. Consequently, we see no reason to depart from the presumption that state entities are not "persons" under Nevada's FCA; therefore, state entities are not subject to FCA liability.¹⁹

UCCSN is a state entity

UCCSN is comprised of the system of universities, colleges, administrative services, research facilities, and departments within the public service division, and it is administered by the Board of Regents²⁰—the group of persons constitutionally authorized to control and manage the state university system.²¹ At least to the extent that other funds are inadequate, the Legislature must "provide for [the] support and maintenance" of the system.²² To obtain maintenance and support from the state, UCCSN must apply for "direct legislative appropriation from the general...