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Layman v. MET Laboratories, Inc.

United States District Court, Fourth Circuit

May 20, 2013



Richard D. Bennett United States District Judge

Plaintiff Philip Layman (“Layman” or “Plaintiff”) has brought this action against his former employer Defendant MET Laboratories, Inc. (“MET Labs” or “Defendant”) for retaliation in violation of the False Claims Act (“FCA”), 31 U.S.C. § 3730(h). This is the second such action filed by Plaintiff. He originally filed a two-count complaint in Civil Action No. RDB-11-03139 alleging retaliation under the FCA and wrongful discharge in violation of Maryland law against MET Labs on November 3, 2011. In ruling upon MET Labs’ motion to dismiss for failure to state a claim in the first action, this Court dismissed Layman’s retaliation claim without prejudice and his wrongful discharge claim with prejudice.[1]Layman has now filed this second complaint alleging one count of retaliation under the False Claims Act for constructive discharge. Specifically, he claims that MET Labs took actions to induce his resignation after he refused to approve a report containing product testing results for an Air/Hydraulic Pumping Unit which he believed to be fraudulent. According to Layman, the private company for which this report was created, Windward Inc., was a subcontractor for the United States government and the Pumping Unit was being tested for an eventual sale to the United States military.

Pending before this Court is Defendant’s Motion to Dismiss for Failure to State a Claim (ECF No. 8) pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Also pending is Plaintiff’s Motion to File Instanter Surreply in Opposition to Motion to Dismiss (ECF No. 12). Defendant MET Labs has also filed two Notices of Supplemental Authorities (ECF Nos. 14 & 16) to which Plaintiff has objected (ECF Nos. 15 & 17). This Court has reviewed and considered all of the parties’ submissions, objections and supplemental pleadings and no hearing is necessary. See Local Rule 105.6 (D. Md. 2011). Thus, Plaintiff Philip Layman’s Motion for Leave to File Instanter Surreply (ECF No. 12) is GRANTED.[2] For the reasons that follow, Defendant MET Laboratories, Inc.’s Motion to Dismiss (ECF No. 8) is DENIED.


For the purposes of this motion, this Court accepts as true the facts alleged in the plaintiff’s’ complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). Plaintiff Philip Layman (“Layman” or “Plaintiff”) was employed by Defendant MET Laboratories, Inc. (“MET Labs” or “Defendant”) from October 1, 1991 to July 14, 2011. Pl.’s Compl. ¶ 9, ECF No. 1. “MET [Labs] is an independent electrical testing and certification lab, specializing in testing various technological products during pre-market development.” Id. ¶ 7. From 1991 to 2006, Layman worked as a test engineer for MET Labs’ Environmental Simulation Lab (“ESL”). Id. ¶¶ 10-11. He was then promoted to the ESL Manager position in 2006. Id. ¶ 16. As ESL manager Layman “scheduled and assigned test engineers to perform product testing . . . assisted clients in developing, organizing and tailoring tests to be performed on a particular product . . . identified potential problems with products” and made recommendations. Id. ¶¶ 18-19. Additionally, he “researched and designed new testing capabilities for the environmental chambers . . . to make product testing more efficient.” Id. ¶ 20. He also performed regular test engineer duties, such as “perform[ing], measur[ing] and record[ing] product testing” and he was responsible for “price quoting all ESL tests.” Id. ¶¶ 22-23. Finally, “Layman supervised audits performed on the ESL equipment [to ensure] that MET continued to maintain its American Association for Laboratory Accreditation (“A2LA”) certification”-an essential requirement imposed by several MET Labs clients. Id. ¶¶ 24-26. During that time, Layman’s salary was approximately $100, 000 per year. Id. ¶ 27.

In 2008, MET Labs built a dust chamber which “was [allegedly] riddled with problems” and constantly required repairs. Id. ¶¶ 28-36. “A dust chamber is designed to simulate a desert environment” and is used for product testing through the manipulation of the temperature, humidity and dust concentration levels. Id. ¶ 29. Although Layman initially recommended one company as the best company to build the dust chamber, Troy Franklin (“Franklin”), MET’s Director and Layman’s direct supervisor, ignored that recommendation and chose another company. Id. ¶¶ 31-33. This later company’s production cost estimate was approximately $30, 000 less than the company recommended by Layman. Id. ¶ 34

In or around May 2011, Layman alleges that Windward Inc. (“Winward”) hired MET Labs as a subcontractor to test a Pumping Unit (“Pumping Unit”) in the dust chamber. Id. ¶¶ 37-39. According to Layman, the United States government had entered into a contract with Winward which required it “to furnish pneumatic powered hydraulic pumping units . . . for use by the United States military.” Id. ¶ 37. In turn, Layman alleges that “MET [Labs] was subcontracted by Winward to subject the Pumping Unit to the MIL-STD-810E[3]Blowing Dust Test” in the dust chamber. Id. ¶ 39. However, Layman alleges that he did not “know the specific use or the military client associated with the Pumping Unit.” Id. ¶ 40. Additionally, Layman claims that once MET Labs became the subcontractor, it received a “Letter of Delegation” from the United States government listing the testing requirements and assigning a Defense Contract Administration Services Quality Assurance Representative (“DCAS QAR”), Elliot Jenkins (“Jenkins”), “to serve as the military witness to approve the final testing report.” Id. ¶¶ 42, 44. According to Layman, DCAS QARs are generally assigned to projects involving “critical and significant military equipment contracted for sale to the United States” government. Id. ¶ 43.

Testing of the Pumping Unit in the dust chamber allegedly began on May 24, 2011. Id. ¶ 46. DCAS QAR Jenkins and Winward’s President were allegedly present during these tests. Id. According to Layman, as the test engineers sought to perform the tests, the dust chamber was unable to “maintain the proper dust concentration levels” required. Id. ¶¶ 47. Attempts at repairing the dust chamber that day were unsuccessful and Layman claims that it continued to fail to “generate the correct dust concentration level” required to test the Pumping Unit. Id. ¶ 49. As a result, Layman alleges that DCAS QAR Jenkins directed the engineers to stop the tests. Id.

Throughout the following days, the test engineers allegedly continued their repair efforts but these were unsuccessful. Id. ¶ 51. Despite these failed attempts, Layman alleges that Franklin, his supervisor, ordered the test engineers to resume testing on May 27, 2011. Id. ¶¶ 51-52. Neither DCAS QAR Jenkins nor Winward’s President were present. Id. ¶ 52. On that day, Layman claims that one of the test engineers discovered that the dust chamber’s pressure sensor was clogged which had the effect of preventing accurate testing. Id. ¶¶ 53, 54. The test engineer then allegedly ordered a new sensor and continued to work on the dust chamber while he waited for the new sensor to arrive. Id. ¶ 55-56.

On May 31, 2011, the test engineers again resumed testing on the Pumping Unit. Id. ¶ 57. While the dust chamber was now allegedly able to maintain the appropriate dust concentration levels for low temperature tests, Layman claims that it failed again to maintain the necessary dust concentration for high temperature tests. Id. ¶¶ 57-58. As a result, that same day, Layman informed Franklin of the continued dust chamber issues and that he would not approve further test results until the dust chamber was successfully repaired. Id. ¶¶ 60-62. Despite this warning, however, Franklin allegedly instructed the test engineers to continue testing the Pumping Unit in the faulty dust chamber. Id. ¶ 64.

After Franklin decided to continue the tests over Layman’s objections, Layman alleges that he “began investigating the matter of the Pumping Unit.” Id. ¶ 65. Specifically, he claims having asked Franklin why he continued the tests when he knew that the Pumping Unit could not be tested accurately in the dust chamber at the moment. Id. Layman also claims that at that time he reiterated that he would not sign the Pumping Unit report if “Franklin intended to claim that the Pumping Unit complied with testing standards and applicable military regulations.” Id. ¶ 66. Franklin allegedly replied that Layman “would not have [his] signature on anything before long.” Id. ¶ 67.

On June 2, 2011, Layman alleges that he noticed test engineers as they were in the process of altering the Pumping Unit’s test results. Id. ¶ 70. Specifically, Layman alleges that they were engaged in the process of manipulating “test data to inaccurately convey that the Pumping Unit” was accurately tested. Id. ¶ 71. Moreover, Layman alleges that the method they were using was in explicit conflict with the method provided for by the MIL-STD-810E. Id. ¶ 73-74. However, when Layman informed them that they were “faking data, ” these engineers allegedly responded that they were following Franklin’s orders. Id. ¶¶ 72, 76. Layman then alleges that he immediately confronted Franklin about the “fraudulent calculations” and that submitting a report claiming that the “Pumping Unit met all testing standards” would amount to committing fraud. Id. ¶ 78. Nevertheless, Layman alleges that Franklin submitted the report containing the fraudulent data to Winward a couple of days later. Id. ¶ 79. According to Layman, the final report included a representation that the MIL-STD-810E dust concentration requirement was satisfied. Id. ¶ 80. Additionally, Layman alleges that although he had not witnessed all the tests, DCAS QAR Jenkins approved and signed the report. Id. ¶ 81. Layman further alleges that he did not approve the report because he believed that it would have “effectively induced the United States military to purchase equipment that did not meet testing standards.” Id. ¶ 82.

About two weeks after the issuance of the final report, Layman alleges that he was informed that Franklin had solicited complaints about his work performance. Id. ¶¶ 85-88. A month later, on July 14, 2011, Layman claims that he was demoted to the position of Chief Technical Engineer which “entailed an approximate 15-20% pay cut, [and] no supervisory authority.” Id. ¶¶ 89-94. Moreover, Layman claims that in said position he would have had to report to one of his former assistants and that it “allowed no opportunity for advancement.” Id. ¶ 93. Additionally, he claims that he never reviewed the complaints filed against him and that in twenty years with MET Labs he had never received “ a negative performance evaluation.” Id. ¶¶ 92, 95. Finally, he claims that he resigned the same day and that his demotion amounted to a constructive discharge. Id. ¶ 95.

As a result, Layman filed his initial complaint before this Court alleging retaliation in violation of the False Claims Act (“FCA”), 31 U.S.C. § 3730(h) and wrongful discharge under Maryland law. See Layman v. MET Labs., Inc., RDB-11-03139, 2012 WL 4018033 (D. Md. Sept. 12, 2012). This Court dismissed Layman’s FCA claim without prejudice and his wrongful discharge claim with prejudice. Id. Although Layman sought an appeal of this Court’s dismissal of his wrongful discharge claim in the United States Court of Appeals for the Fourth Circuit, that appeal was dismissed on December 17, 2012 noting that this Court’s earlier dismissal of his FCA claim without prejudice was neither a final order or an appealable interlocutory ...

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