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Hamilton v. Yavapai Community College District

United States District Court, D. Arizona

September 28, 2016

Daniel Hamilton, Plaintiff,
v.
Yavapai Community College District; Guidance Academy LLC; John L. Stonecipher; Amanda Alsobrook; John Morgan; April Morgan, Defendants. Guidance Academy LLC; Amanda Alsobrook; John L. Stonecipher, Counterclaimants,
v.
Daniel Hamilton, Counterdefendant.

          ORDER

          HONORABLE G. MURRAY SNOW UNITED STATES DISTRICT JUDGE.

         Pending before the Court is the Motion for Partial Summary Judgment by Defendants Amanda Alsobrook, Guidance Academy LLC (“Guidance”), and John L. Stonecipher[1] (Doc. 189), the Motion for Summary Judgment and/or Judgment on the Pleadings by April Morgan and John Morgan (Doc. 244), the Motion to Supplement and Amend/Correct by Hamilton (Doc. 255), the Motion for Leave to File Supplemental Authority by Alsobrook, Guidance, and Stonecipher (Doc. 336), and the Motion for Leave to File Surreply by Hamilton (Doc. 346). For the following reasons, the Court denies all of the foregoing motions with the exception that the Morgans' Motion for Summary Judgment/Judgment on the Pleadings is granted as to the tortious interference claim involving Yavapai College, and denied as to the tortious interference claim involving NorthAire.

         BACKGROUND

         In fall 2009, Yavapai Community College District (“Yavapai”) entered an agreement with Guidance Academy, LLC (“Guidance”) to jointly develop and offer an Associate of Applied Science (“AAS”) degree for Professional Pilot-Helicopter (“PPH”). (Doc. 82 at 7.) Yavapai administered the PPH degree program and supervised Guidance, which provided the flight course component of the program. (Id. at 7.)

         To receive education benefit funding from the VA, Yavapai and Guidance had to comply with Regulation 4201, or the “85/15 Rule.” 38 C.F.R. § 21.4201(f)(2)(i). Regulation 4201 requires that no more than 85% of students enrolled in a specific course of study be supported by the VA or by the institution. 38 C.F.R. § 21.4201(a). The institution is responsible for reporting these numbers accurately to the VA. 38 C.F.R. § 21.4201(f).

         Initially the helicopter program was the only flight degree program offered by Yavapai, but in spring 2012, it also began to offer a degree program in Airplane Operations (“PPA”). This degree, offered through an agreement between Yavapai and NorthAire Aviation, LLC (“NorthAire”), (Doc. 82 at 8), provided the flight training component of the PPA degree at NorthAire's facility (separate from the campuses of both Yavapai and Guidance). (Id.)

         Beginning in Summer 2013, Yavapai began to phase out the PPH and PPA programs and instead began offering only one degree, the AAS in Aviation Technology (“AVT”), which had concentrations with different curricula: Helicopter Operations (“AVT (Helicopter)”), Airplane Operations (“AVT (Airplane)”), Aviation Operations and Management (“AVT (AOM)”), and Unmanned Aircraft Systems Operator (“AVT (UAS)”). (Id.) Once it made this change, Yavapai combined all members of these programs into a single calculation to determine the 85/15 ratio for Regulation 4201. (Doc. 221 at 8.) The VA suspended the enrollment of new veterans in this program in March of 2015, and noted that Yavapai must submit separate ratios for every concentration program within the AAS degree. (Doc. 221-1 at 25.)

         In the fall of 2013, Yavapai also entered into a new joint technical education district program (JTED) with a local school district. These students attended the aviation program through funding provided by the local school district. Veterans were not permitted to join this program, and students in the JTED program received a reduced tuition rate. (Doc. 221 at 8.) Yavapai allegedly included these students as “nonsupported” students for the purposes of Regulation 4201 despite awareness of a “statute stating that we can't count the JTED students as civilians.” (Doc. 221-3 at 6.)

         Defendant Yavapai hired Hamilton in September of 2011. (Doc. 245 at 1.) Hamilton was tasked with overseeing the helicopter and the fixed wing program, and his duties included ensuring compliance with Regulation 4201. (Doc. 245-1 at 6.) Defendant John Morgan is the Dean of Career and Technical Education Campus for Yavapai, and he was Hamilton's direct supervisor. (Doc. 245 at 2.) Yavapai terminated Mr. Hamilton's employment in June of 2012. (Id.)

         After his termination, Hamilton was approached by a NorthAire recruiter. (Doc. 308-1 at 2.) Hamilton was under the impression that NorthAire was interested in hiring him. (Id.) However, NorthAire hired another candidate for one of the positions in which Hamilton was interested. (Id.) A month later, another NorthAire recruiter told Hamilton that hiring him would “cause a friction” between NorthAire and Yavapai. (Doc. 308-1 at 3.) Hamilton alleges that Mr. Morgan approached a NorthAire employee to warn him against hiring Hamilton. (Id.) This series of events led Hamilton to file state-law tortious interference claims against Mr. Morgan.

         Hamilton's first complaint was filed in 2012, and it was amended in 2013 to include his state law claims against Mr. Morgan. Exhaustive discovery followed, and many claims were added as others were dismissed. The only outstanding Regulation 4201 claims remaining against the Defendants are the claims relating to 1) the combined AVT program and 2) the JTED. The only state-law claims remaining against the Morgans are the claims asserting tortious interference with Mr. Hamilton's employment at Yavapai and NorthAire. At issue here is whether the Defendants are entitled to summary judgment on these claims.

         DISCUSSION

         I. Legal Standard

         Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, demonstrates “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party opposing summary judgment “may not rest upon the mere allegations or denials of [the party's] pleadings, but...must set forth specific facts showing that there is a genuine issue for trial.” Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995). Substantive law determines which facts are material, and “[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A fact issue is genuine ‘if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.' ” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002) (quoting Anderson, 477 U.S. at 248).

         ANALYSIS

         I. The False Claims Act Claims

         Hamilton asserts two False Claims Act claims against the Defendants. First, he alleges that the Defendants' combined method of determining the 85/15 ratio for the AAS in Aviation Technology (“AVT”) violated Regulation 4201. He also alleges that considering the JTED students as “nonsupported” students in their calculations violated Regulation 4201. Hamilton alleges that the Defendants were aware that they were violating Regulation 4201in both instances, and yet presented a claim for payment to the VA despite this knowledge.

         The False Claims Act (FCA) imposes liability on any individual that “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” 31 U.S.C. § 3729. The FCA empowers individuals to “file suit on behalf of the United States seeking damages from persons who file false claims for government funds.” Hooper v. Lockheed Martin Corp., 688 F.3d 1037, 1041 (9th Cir. 2012). To establish a prima facie case, the plaintiff must show that “(1) the defendant made a claim against the United States; (2) the claim was false or fraudulent; and (3) that the defendant knew the claim was false or fraudulent.” United States ex rel. Oliver v. Parsons Co., 195 F.3d 457, 461 (9th Cir. 1999).

         The FCA does not provide a definition for the term “false.” Rather, “courts decide whether a claim is false or fraudulent by determining whether a defendant's representations are accurate in light of applicable law.” United States v. Bourseau, 531 F.3d 1159, 1164 (9th Cir. 2008). However, the FCA does provide that the terms “knowing” and “knowingly”:

(A) [mean] that a person, with respect to information-
(i) has actual knowledge of the information;
(ii) acts in deliberate ignorance of the truth or falsity of the ...

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