United States ex rel. Berglund v. Boeing Co.

835 F.Supp.2d 1020

UNITED STATES of America ex rel. Cliff BERGLUND, Plaintiff,

v.The BOEING COMPANY, Defendant.

No. 03:02–cv–193–AC.

United States District Court, D. Oregon.

Dec. 13, 2011.

David J. Hollander, Hollander Lebenbaum & Gannicott, Portland, OR, Frederick M. Morgan, Jr., Morgan Verkamp LLC, Cincinnati, OH, for Plaintiff.

Calvin L. Keith, Perkins Coie, LLP, Portland, OR, Steve Y. Koh, Perkins Coie, LLP, Seattle, WA, for Defendant.

Opinion and Order

ACOSTA, United States Magistrate Judge:

Relator, Cliff Berglund, filed a Third Amended Complaint (“TAC”) alleging defendant, The Boeing Company (“Boeing”), committed fraud on the United States government pursuant to the qui tam provisions of the False Claims Act (“FCA”), 31 U.S.C. §§ 3729–3733, and violated the Act's retaliation provision. In Count One of the TAC, Berglund alleges, among other things, that Boeing submitted false claims to the United States by delivering contractually nonconforming aircraft parts to agencies of the United States. Specifically, Berglund alleges mistakes were made by shop floor personnel at Boeing's Portland facility in complying with internal Boeing specifications for the production of commercial aviation parts. Berglund maintains the errors were documented in Boeing's quality system. The United States declined to intervene in this action on July 1, 2005. On May 4, 2010, the parties stipulated that Count One of the TAC be dismissed with prejudice to Berglund and without costs to any party.

In Count Two of the TAC, Berglund alleges Boeing engaged in retaliatory conduct because he sought to rectify Boeing's violations of its aircraft contract requirements and because he reported Boeing's malfeasance to the federal government. Additionally, Berglund alleges Boeing discriminated against him in the terms and conditions of his employment because of the lawful acts he pursued in furtherance of actions brought under the False Claims Act. (Third Am. Compl. ¶¶ 140–141.)

Pursuant to Fed. R. Civ. P 56(a), Boeing moves the court to enter judgment against Count Two of Berglund's TAC on the ground that most of Berglund's retaliation claims are barred by the statute of limitations and the remaining allegations are “indisputably false.” (Def's Mot. Summ. J. 1–2.) In addition, Boeing moves for sanctions against Berglund for an alleged “campaign” to alter, conceal and destroy evidence and give false testimony under oath. (Def.'s Mot. Sanctions 2.) Oral argument was heard on Boeing's Motion for Summary Judgment and Motions for Sanctions and, for the reasons that follow, Boeing's request for summary judgment is denied and its request for sanctions is granted.

Factual Background

Berglund is a manufacturing planner at Boeing and he began working there in 1979. (Doug Hanna Decl. Ex. B, Nov. 15, 2010.) At the start of 2001, Berglund held the position of DGKJT Manufacturing/Engineer Planner Level 4. (Hanna Decl. Ex. B at 3.)

In his declaration, Berglund states that in late 2000, he learned one or more Boeing subcontractors were omitting a critical cleaning process in the manufacture of certain titanium alloys. (Cliff Berglund Decl. ¶ 4, Jan. 31, 2011.) Boeing denies this allegation.

In February 2001, Berglund, along with Jeffrey Biron, filed an initial lawsuit against Boeing and other defendants pursuant to the FCA. See United State ex rel. Jeffrey Biron and Cliff Berglund v. QPM Aerospace, Inc., The Boeing Company, et al., CV No. 01–163–KI (“ Biron and Berglund ”). This original action included a claim by Biron for retaliation, but not a retaliation claim by Berglund. Although Biron and Berglund presented the Complaint to this court as a sealed document, the Clerk of the court mistakenly posted the Complaint on the court's website where it remained for a few days, available for public viewing. (David Hollander Decl. ¶ 3, Feb. 1, 2011.) Boeing learned of the lawsuit while it was posted on the Court's website and available for public view. (Berglund Decl. ¶¶ 7–8; Larry Payette Decl. ¶¶ 2–4, Jan. 30, 2011.) Berglund alleges one of his managers, Lorenzo Ontiveros, had a copy of the Biron and Berglund Complaint on or about February 2001. (Berglund Decl. ¶¶ 7–8; Payette Decl. ¶¶ 2–4.)

Fifteen months later, on June 4, 2002, a Second Amended Complaint was filed in Biron and Berglund, alleging Boeing retaliated against Berglund for his FCA activities.¹ (Calvin Keith Decl. Ex. A at ¶¶ 103–05, Nov. 15, 2010.) Subsequently, in May 2004, Biron and Berglund voluntarily dismissed this initial case.

Berglund filed the present action on February 15, 2002, and the Complaint contained only one claim for relief for violations of the FCA; it did not allege a claim for retaliation. (Keith Decl. Ex. B at ¶¶ 5–32.) Over two years later, on May 17, 2004, Berglund filed a Second Amended Complaint (“SAC”), to add a count of retaliation under the whistleblower provision of the FCA, 31 U.S.C. § 3730(h). (Keith Decl. Ex. C at 32.) Subsequently, Berglund abandoned his allegations that Boeing committed fraud on the government. (Keith Decl. Ex. G.) As a result, the only remaining claim in this case is Berglund's retaliation claim.

In his SAC, Berglund alleges numerous instances of retaliation. (Keith Decl. Ex. C at ¶¶ 129–139.) According to Boeing, most of these events took place before May 17, 2003, one year prior to Berglund filing his SAC adding the retaliation claim. For example, Berglund claims that “[a]fter February 2001” he “applied for and was denied managerial advancement on dozens of occasions.” (Keith Decl. Ex. C at ¶ 134.) Also, “Relator Berglund was stripped of many of his job responsibilities as a lead/Focal Manufacturing Engineering Planner.” (Keith Decl. Ex. C at ¶ 134.) Finally, Berglund further alleges in March 2002, he was “demoted to a lesser job grade with lesser responsibilities.” (Keith Decl. Ex. C at ¶ 136.)

According to Boeing, Berglund claims only two instances of retaliation that allegedly took place after May 17, 2003, and two instances in the year between May 17, 2002, and May 17, 2003. First, Berglund claims that “[s]ince at least the 3rd QTR 2002 Relator's supervisors have been monitoring Relator's work assignments are [ ] being monitored, graphed and being [sic] over scrutinized.” (Keith Decl. Ex. E at 9.) Second, he was assigned a lower retention rating in November 2002 following a yearly review. (Hanna Decl. Ex. B at 3.) Third, in April 2003, his home and vehicle were vandalized. (Keith Decl. Ex. E at 9.) Lastly, he was laid off in September 2003. (Keith Decl. Ex. C at ¶ 138.)

Berglund is a member of he Society of Professional Engineering Employees in Aerospace (“SPEEA”), a union that represents engineers and other technical professionals in the aerospace industry, including those working at Boeing. (Deborah Sternberg Decl. ¶ 2, Nov. 15, 2000.) SPEEA and Boeing negotiated collective bargaining agreements governing the terms of employment for SPEEA members. (Sternberg Decl. ¶ 2.) Berglund asserts that as a SPEEA member he cannot be terminated, suspended, or otherwise disciplined except for good cause. The collective bargaining agreement, however, sets forth a procedure for deciding which employees will be let go when layoffs are necessary. (Sternberg Decl. ¶¶ 3–5.)

Under these procedures, roughly once a year managers evaluate all employees, who are then ranked against all those within the same organization, skill code, or job classification and level. (Sternberg Decl. ¶ 3; Hanna Decl. ¶ 2.) The parties agree Berglund is subject to periodic reviews that should take place once each year. However, Berglund contends that at times his yearly evaluations either did not occur or took place more frequently than once a year. Employees are assigned one of three ratings, R1–R3, with R1 as the highest and R3 as the lowest. (Sternberg Decl. ¶ 3; Hanna Decl. ¶ 3.) These rankings are assigned according to a forced distribution system, which requires about 40 percent of employees to be rated R1, 40 percent to be rated R2, and 20 percent to be rated R3. (Sternberg Decl. ¶ 3; Hanna Decl. ¶ 3.)

According to Boeing, it independently evaluates whether layoffs are necessary and, if so, the scope and size. If Boeing determines layoffs are necessary, it implements the order of layoff using the ratings system. (Sternberg Decl. ¶¶ 5, 7.) Generally, those rated R3 will be laid off before those rated R2, and those rated R2 before those rated R1. (Sternberg ¶ 7.) Berglund concedes layoffs are designed to occur in this manner, but insists his retention rating was manipulated by Boeing to ensure he would be laid off at the first available opportunity.

At the end of 2000, just weeks prior to the filing of the Biron and Berglund Complaint, Boeing reviewed Berglund for the calendar year 2000. In that performance review, Berglund's supervisor, Fred Reynolds, stated:

You worked on some significant initiatives this year with high success.

• Initiated testing process towards the implementation of “fatigue Technology ForceMate” method of bushing installation for our engine mounts. I know you are working on a demonstration for Jan. 2001. The benefits could be far reaching.

• 747 Carriages

• Lg—elimination of (4) holes/part that are not being used on the plane. Not only will this save time in not having to put in the holes and additional steps, it will eliminate R/Ts. There are (16) holes per S/S. Status—waiting on BMT memo # .

• Sm—You met with Everett Planning and Engineering on climinating (1) Part number/configuration (65B08026–) for the outboard. This will make it cheaper and simpler through all the shops. Effective LN1278.

• Standardization of PCUs—After much work you were able to stabilize the PCUs generated for our products. This will help us in forecasting requirements and costs, and can now be used to help other business team with their PCUs. Thank you for your support.

(Second Cliff Berglund Decl. Ex. 16–1, Jan. 31, 2011.)

Berglund insists that, prior to the ...