United States ex rel. Plumbers and Steamfitters Local Union No. 38 v. C.W. Roen Construction Company

C.W. Roen Construction Company (Roen) (defendant) entered into a federally funded construction contract with the City of Santa Rosa in Northern California. The contract was subject to Davis-Bacon Act prevailing wage regulations, including a mandate that Roen submit weekly wage-rate certifications. The applicable prevailing wage-rate for each worker was determined by a worker’s job classification. Part of Roen’s contract involved hiring workers to perform a specific type of piping work. Roen classified those workers as laborers and paid them the laborers’ prevailing rate. Roen submitted all required weekly wage-rate certifications. Pursuant to a 1992 collective-bargaining agreement between the plumbers’ unions and the laborers’ unions, workers performing that specific type of piping work in Northern California should be classified as plumbers, not laborers. In January 1994, the Department of Labor issued a letter stating that relevant wage and job classifications under the Davis-Bacon Act would be set in accordance with the 1992 collective-bargaining agreement. In June 1994, the laborers’ union attempted to rescind the collective-bargaining agreement; however, the plumbers’ union refused to accept the termination, and the laborers’ union failed to pursue it further. Plumbers and Steamfitters Local No. 38 (Local 38) (plaintiff), a local plumbers’ union branch, filed a qui tam action against Roen, arguing that Roen’s knowing misclassification of the piping workers as laborers rather than plumbers violated the False Claims Act. The district court granted Roen summary judgment, holding that Roen lacked the requisite scienter for a False Claims Act violation because (1) the 1992 agreement was in dispute; (2) Local 38 failed to establish Roen had fraudulent intent; and (3) there was no area-practice survey establishing the local wage-rate.