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218 Response William H. Narwold (pro hac vice) [email protected] Mathew P. Jasinski (pro hac vice) [email protected] Michael J. Pendell (pro hac vice) [email protected] Laura W. Ray (pro hac vice) Sarah M. Frazier (pro hac vice) [email protected] [email protected] MOTLEY RICE LLC BERG & ANDROPHY 20 Church St., 17th Floor 3704 Travis St. Hartford, CT 06103 Houston, TX 77002 Tel.: (860) 882-1681 Tel: (713) 529-5622 Fax: (860) 882-1682 Fax: (713) 529-3785 John P. Cashion (Alaska Bar No. 9806025) Charles H. Rabon, Jr. (pro hac vice) [email protected] [email protected] CASHION GILMORE LLC RABON LAW FIRM, PLLC 1007 W. 3rd Ave., Suite 301 225 E. Worthington Ave., Ste. 100 Anchorage, AK 99501 Charlotte, NC 28203 Tel.: (907) 222-7936 Tel.: (704) 247-3247 Fax: (907) 222-7038 Fax: (704) 208-4645 [email protected] Attorneys for Relator Ben Ferris IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ALASKA UNITED STATES OF AMERICA, § Case No. 3:15-cv-00150-HRH ex. rel. BEN FERRIS, § § Plaintiff, § RELATOR’S OPPOSITION § TO DEFENDANTS’ MOTION v. § TO DISMISS THE SECOND § AMENDED COMPLAINT AFOGNAK NATIVE CORPORATION and § PURSUANT TO RULES 12(b)(6) ALUTIIQ, LLC, § AND 9(b) [212] § Defendants. § United States ex rel. Ben Ferris v. Afognak Native Corp, et al.; 3:15-cv-00150-HRH Case 3:15-cv-00150-HRH Document 218 Filed 01/03/17 Page 1 of 37 TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 1 II. BACKGROUND ................................................................................................................ 2 A. The Small Business Act’s 8(a) program is reserved exclusively for small business concerns, irrespective of their ownership. .............................................................. 2 B. Relator alleges that Afognak has misrepresented its subsidiaries’ small business status. ...................................................................................................................... 6 C. The only issue before the Court is whether Relator sufficiently has alleged that the misrepresentations were material. ........................................................................... 8 III. LEGAL STANDARD ....................................................................................................... 10 IV. ARGUMENT .................................................................................................................... 11 A. Afognak’s misrepresentations are material because they have “a natural tendency to influence” the payment or receipt of money or property. ................................. 12 1. A reasonable person would attach importance to Afognak’s misrepresentations..................................................................................... 15 2. Even if a reasonable person would not attach importance to Afognak’s misrepresentations, Afognak knew or had reason to know that the government did. ........................................................................................ 17 B. Relator sufficiently has alleged Afognak’s material misrepresentations. ............. 19 1. Relator has alleged a material misrepresentation regarding whether Afognak’s 8(a) subsidiaries are separate and distinct small business concerns. ................................................................................................... 20 2. Relator has alleged a material misrepresentation regarding whether Afognak’s 8(a) subsidiaries do their own work as separate and distinct small business concerns. ........................................................................... 22 3. Relator has alleged a material misrepresentation regarding whether Afognak’s 8(a) subsidiaries are managed as separate and distinct small business concerns. ..................................................................................... 23 4. Relator has alleged a material misrepresentation regarding whether Afognak’s 8(a) subsidiaries pursue growth and development as separate and distinct small business concerns......................................................... 24 C. There is no evidence that the government has actual knowledge of Afognak’s violations. ............................................................................................ 25 V. CONCLUSION ................................................................................................................. 28 United States ex rel. Ben Ferris v. Afognak - i - Native Corp, et al.; 3:15-cv-00150-HRH Case 3:15-cv-00150-HRH Document 218 Filed 01/03/17 Page 2 of 37 TABLE OF AUTHORITIES Cases Ab-Tech Constr. v. United States, 31 Fed. Cl. 429 (Fed. Cl. 1994) ................................................................................................ 18 Am. Elec. Co. v. United States, 270 F. Supp. 689 (D. Haw. 1967) ............................................................................................... 4 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .................................................................................................................. 10 Autodesk, Inc. v. Dassault Systemes Solidworks Corp., No. C 08-04397 WHA, 2008 U.S. Dist. LEXIS 109800 (N.D. Cal. Dec. 18, 2008) ...................................................... 10 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................................................................. 10 Berg v. Honeywell Int’l, Inc., 580 Fed. App’x 559 (9th Cir. 2014) ......................................................................................... 27 Bly-Magee v. California, 236 F.3d 1014 (9th Cir. 2001) .................................................................................................. 11 Ebeid ex rel. United States v. Lungwitz, 616 F.3d 993 (9th Cir. 2010) .............................................................................................. 10, 11 Hooper v. Lockheed Martin Corp., 688 F.3d 1037 (9th Cir. 2012) .................................................................................................. 27 In re Reality Technologies, Inc., SBA No. BDPT-488, 2013 WL 215002 (May 3, 2013) .............................................................................................. 23 In re Sparccom & Assocs., SBA No. BDPT-501, 2013 WL 4502314 (Aug. 19, 2013) .......................................................................................... 25 Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940 (9th Cir. 2005) .................................................................................................... 10 Rose v. Stephens Inst., No. 09-cv-05966-PJH, 2016 U.S. Dist. LEXIS 128269 (N.D. Cal. Sept. 20, 2016) ..................................................... 25 Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) .................................................................................................. 10 United States ex rel. Ben Ferris v. Afognak - ii - Native Corp, et al.; 3:15-cv-00150-HRH Case 3:15-cv-00150-HRH Document 218 Filed 01/03/17 Page 3 of 37 United States ex rel. Am. Sys. Consulting v. ManTech Advanced Sys. Int’l, 600 Fed. Appx. 969 (6th Cir. 2015) .......................................................................................... 27 United States ex rel. Handal v. Cent. Empl. Training, No. 2:13-cv-01697-KJM-KJN, 2016 U.S. Dist. LEXIS 105158 (E.D. Cal. Aug. 8, 2016) .................................................. 11, 16 United States ex rel. Harrison v. Westinghouse Savannah River Co., 352 F.3d 908 (4th Cir. 2003) .................................................................................................... 27 United States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166 (9th Cir. 2006) ............................................................................................ 11, 16 United States ex rel. Jordan v. Northrop Grumman Corp., No. CV 95-2985 ABC, 2002 U.S. Dist. LEXIS 26674 (C.D. Cal. Aug. 5, 2002) .......................................................... 28 United States v. Palin, No. 1:14-cr-00023, 2016 U.S. Dist. LEXIS 111225 (W.D. Va. Aug. 22, 2016) ..................................................... 12 United States v. United Healthcare Ins. Co., 832 F.3d 1084 (9th Cir. 2016) ............................................................................................ 10, 11 United States, ex rel. Escobar v. Universal Health Servs., 842 F.3d 103, 2016 U.S. App. LEXIS 21072 (1st Cir. Nov. 22, 2016)............................ passim United States, ex rel. Longhi v. Lithium Power Techs., Inc., 575 F.3d 458 (5th Cir. 2009) .................................................................................................... 12 United States, ex rel. Miller, 840 F.3d 494, 2016 U.S. App. LEXIS 18758 (8th Cir. Oct. 19, 2016) .............................. 14, 16 Universal Health Services, Inc. v. United States, ex rel. Escobar, 136 S. Ct. 1989 (Jun. 16, 2016) ......................................................................................... passim Statutes 15 U.S.C. § 631 ............................................................................................................................... 3 15 U.S.C. § 631(f)(1)(E) ............................................................................................................... 17 15 U.S.C. § 631(f)(2)(C) ............................................................................................................... 17
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