United States District Court, M.D. Florida, Tampa Division
OMNIPOL, a. S. and ELMEX PRAHA, a. S., Plaintiffs,
CHRISTOPHER WORRELL, JAMES BRECH, BRYAN SIEDEL, AMY STROTHER, and KIRK BRISTOL, Defendants.
VIRGINIA M. HERNANDEZ COVTNGTON UNITED STATES DISTRICT JUDGE
cause comes before the Court pursuant to the Motions to
Dismiss the Amended Complaint filed by Defendants Christopher
Worrell, James Brech, and the United States on behalf of
Defendants Bryan Siedel, Amy Strother, and Kirk Bristol,
filed on August 9, 2019, August 23, 2019, and August 30,
2019, respectively. (Doc. ## 76, 86, 91). Plaintiffs Omnipol,
a.S. and Elmex Praha, a.S. filed responses in opposition to
all of the Motions, and the United States filed a reply.
(Doc. ## 87, 95, 98, 102). For the reasons explained below,
all of the Motions are granted and Plaintiffs' Amended
Complaint is dismissed without leave to amend.
April 3, 2019, Plaintiffs filed their original Complaint
against these Defendants and four others: Multinational
Defense Services, LCC, Angelo Saitta, Lisa Saitta, and Robert
Para, alleging a fraudulent scheme between the officers and
employees of Purple Shovel, LLC, and civilian contracting
employees at the U.S. Special Operations Command (SOCOM).
(Doc. # 1). In their original Complaint, Plaintiffs brought
claims for fraud, civil theft, unjust enrichment, state and
federal racketeering violations, and attorneys' fees.
(Id.). Worrell, Multinational Defense, Angelo
Saitta, and Lisa Saitta moved to dismiss the original
Complaint. (Doc. ## 9, 12, 36).
12, 2019, the Court held a hearing on the pending motions to
dismiss. (Doc. # 62). The Court denied the motions to the
extent they argued that the original Complaint was a shotgun
pleading or failed to name an indispensable party, but it
granted the motions on the basis that the original Complaint
failed to comply with Federal Rule of Civil Procedure 9(b)
and failed to state a claim under Federal Rule of Civil
Procedure 12(b)(6). (Doc. # 59).
hearing, the Court explained that the allegations in the
original Complaint failed to state a claim for fraud against
the moving Defendants because the original Complaint failed
to meet Rule 9(b)'s heightened pleading standard. (Doc. #
79 at 19). The Court further found the Plaintiffs' civil
theft allegations to be “speculative” and
conclusory.” (Id. at 21, 33). As to the unjust
enrichment claim against Worrell, the Court explained that
the claim “lacks sufficient detail” because it
failed to describe certain key dates. (Id. at
46-47). The state and federal racketeering claims were not
sufficiently pled because “the Complaint is not
specific enough regarding Worrell's involvement in the
scheme. [The racketeering counts] lump Christopher Worrell
with Benjamin Worrell, Para, and Brech. It's too
difficult to determine what Mr. Worrell actually did based on
the facts alleged, and not enough specificity is provided
regarding the time, place, and manner of the allegedly
fraudulent scheme.” (Id. at 47-48). As to the
racketeering conspiracy claim, the Court found that
“there is nothing in the Complaint that establishes a
single conversation between the Worrells, Para, Brech,
Multinational Defense, and the Saittas.” (Id.
at 30-31). Finally, the Court dismissed the claim for
attorneys' fees because attorneys' fees are typically
a remedy and not a stand-alone claim. (Id. at
31-32). The Court did, however, grant Plaintiffs leave to
amend. (Doc. # 59).
26, 2019, Plaintiffs filed an Amended Complaint. (Doc. # 70).
As in the original Complaint, the Amended Complaint alleges
the existence of two interrelated fraudulent schemes. First,
Plaintiffs allege a multi-year “fraudulent scheme that
targeted and fleeced” SOCOM. (Id. at 2).
According to Plaintiffs, Purple Shovel is a company formed by
non-party Benjamin Worrell, Christopher Worrell, and Brech
that was licensed to engage in international arms
transactions and was the “vehicle” for the fraud.
(Id. at 2, 8, ¶¶ 5-6, ¶ 21). Purple
Shovel has since filed for bankruptcy and is not a party to
this action. (Doc. # 7).
allege that Siedel, Strother, and Bristol, as civilian
contracting officers at SOCOM, issued contracts to Purple
Shovel to deliver arms and ammunition to SOCOM. (Doc. # 70 at
2, ¶¶ 12-14, ¶¶ 28-30). The supplies
provided by Purple Shovel were allegedly
“defective” and had “little to no value,
” but Siedel, Strother, and Bristol nonetheless helped
them pass SOCOM inspection in exchange for alleged kickbacks.
(Id. at 2, ¶¶ 31-38).
Plaintiffs allege that Purple Shovel became ineligible to
receive further SOCOM contracts. (Id. at 2-3,
¶¶ 39-46). So Defendants began bringing unwitting
subcontractors, such as Omnipol and Elmex, into the scheme
because these subcontractors were capable of delivering
supplies that met SOCOM's quality standards.
(Id. at 3, ¶¶ 47-50). As part of this
scheme, Plaintiffs allege that, on June 7, 2016, Siedel,
Strother, and Bristol issued a “partial SOCOM
contract” to Purple Shovel for 7, 500 AK-47 assault
rifles. (Id. at ¶¶ 51-53). Pursuant to
that contract (the “SOCOM Contract”), SOCOM would
pay Purple Shovel $2, 984, 250. (Id.).
3, 2017, “Benjamin Worrell, as CEO of Purple Shovel,
notified [Elmex] by email that they were hired as the
subcontractor” on the SOCOM Contract, and Elmex then
selected Omnipol as the supplier on the contract.
(Id. at ¶¶ 54-55). Both Elmex and Omnipol
are companies registered in the Czech Republic. (Id.
at ¶¶ 10-11).
26, 2017, Benjamin Worrell sent Plaintiffs a Cooperation
Agreement between Plaintiffs and Purple Shovel
“memorializing their agreement under the awarded
subcontract.” (Id. at ¶ 56). The
Cooperation Agreement provided that Purple Shovel would pay
Elmex via wire transfer within 10 days of Purple Shovel
receiving payment from SOCOM. (Id. at ¶ 61).
According to Plaintiffs, Benjamin Worrell signed the
Cooperation Agreement on behalf of Purple Shovel.
20, 2017, SOCOM accepted delivery of the weapons.
(Id. at ¶ 57). On July 27, 2017, Elmex invoiced
Purple Shovel for the total amount due under the Cooperation
Agreement, $2, 984, 250. (Id. at ¶ 58).
Plaintiffs allege that Benjamin Worrell, as CEO of Purple
Shovel, “agreed by mail, email, and telephone to pay
Plaintiffs the $2, 984, 250 provided to Purple Shovel from
SOCOM, ” and that Benjamin Worrell also provided to
Plaintiffs an “End Use Certificate from SOCOM,
verifying that this subcontract was pursuant to a SOCOM
contract and that payment would be made by SOCOM.”
(Id. at ¶¶ 59-60). According to
Plaintiffs, “[o]nce SOCOM paid Purple Shovel for the
weapons, Defendants diverted the subcontract proceeds to an
unnamed co-conspirator, ” who then disbursed the funds
among all Defendants. (Id. at ¶¶ 62, 72,
on these allegations, Plaintiffs bring claims for fraud
(Count I), civil theft (Count II), unjust enrichment (Count
III), state racketeering violations (Count IV), violations of
the federal Racketeer Influenced and Corrupt Organizations
Act (RICO) (Count V), RICO conspiracy (Count VI), and
attorneys' fees (Count VII). (Id. at 17-29).
August 30, 2019, the United States filed three Notices of
Substitution, stating that the United States was to be
substituted for Defendants Siedel, Strother, and Bristol
pursuant to the Westfall Act, 28 U.S.C. § 2679, on
Counts I through IV and VII. (Doc. ## 88-90). The United
States attached to each Notice a certification from the
United States Attorney for the Middle District of Florida
stating that Siedel, Strother, and Bristol were acting within
the course and scope of their federal employment at the time
of the alleged incidents giving rise to the Amended
Complaint. (Doc. ## 88-1, 89-1, 90-1).
Worrell and Brech (the Purple Shovel Defendants) each filed a
Motion to Dismiss the Amended Complaint or, In the
Alternative, For More Definite Statement, to which Plaintiffs
responded. (Doc. ## 76, 86, 87, 95). The United States, on
behalf of Siedel, Strother, and Bristol (the Federal
Defendants) filed one consolidated Motion to Dismiss the
Amended Complaint. (Doc. # 91). Plaintiffs responded, and the
United States replied. (Doc. ## 98, 102). The Motions are now
ripe for review.
allegations of fraud, a plaintiff must “state with
particularity the circumstances constituting fraud[.]”
Fed.R.Civ.P. 9(b). “The particularity rule serves an
important purpose in fraud actions by alerting defendants to
the precise misconduct with which they are charged and
protecting defendants against spurious charges of immoral and
fraudulent behavior.” United States ex rel. Atkins
v. McInteer, 470 F.3d 1350, 1359 (11th Cir. 2006)
(internal quotation marks omitted).
Rule 9(b), plaintiffs must allege (1) precisely what
statements were made in what documents or what oral
misrepresentations were made; (2) the time, place, and person
responsible for the statement; (3) the content of such
statements and the manner in which these statements misled
the plaintiff; and (4) what the defendants gained by the
alleged fraud. Brooks v. Blue Cross & Blue Shield of
Fla., Inc., 116 F.3d 1364, 1371, 1380-81 (11th Cir.
1997). In other words, to satisfy Rule 9(b), a plaintiff must
establish the who, what, when, where, and how of the fraud.
Mizarro v. Home Depot, Inc., 544 F.3d 1230,
1237 (11th Cir. 2008). In cases involving multiple
defendants, a complaint alleging fraud must “reasonably
notify the defendants of their purported role in the
scheme” and “inform each defendant of the nature
of his alleged participation in the fraud.”
Brooks, 116 F.3d at 1381.
motion to dismiss pursuant to Rule 12(b)(6), the Court
accepts as true all the allegations in the complaint and
construes them in the light most favorable to the plaintiff.
Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1262
(11th Cir. 2004). Further, the Court favors the plaintiff
with all reasonable inferences from the allegations in the
complaint. Stephens v. Dep't of Health & Human
Servs., 901 F.2d 1571, 1573 (11th Cir. 1990). But,
[w]hile a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a
plaintiff's obligation to provide the grounds of his
entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do. Factual allegations must be
enough to raise a right to relief above the speculative
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)
(citations omitted). Courts are not “bound to accept as
true a legal conclusion couched as a factual
allegation.” Papasan v. Allain, 478
U.S. 265, 286 (1986). Furthermore, “[t]he scope of
review must be limited to the four corners of the
complaint.” St. George v. Pinellas Cty., 285
F.3d 1334, 1337 (11th Cir. 2002).
Defendants seek dismissal of the Amended Complaint for
failure to meet the pleading standards enunciated in Rules 8,
9(b), and 12(b)(6). See (Doc. ## 76, 86, 91).
However, before turning to this issue, the Court must address
the Government's argument that Counts I through IV and
VII should be dismissed as against the Federal Defendants for
lack of subject-matter jurisdiction under Federal Rule of
Civil Procedure 12(b)(1). (Doc. # 91 at 1-2, 7, 10).
United States argues that, once it filed the Notices of
Substitution, it was, by operation of law, substituted for
Strother, Siedel, and Bristol as Defendant for Counts I
through IV and VII, pursuant to the Westfall Act, 28 U.S.C.
§ 2679(d). (Doc. # 91 at 1 n.1). What's more, the
Government argues that, under the Federal Tort Claims Act
(FTCA), the Plaintiffs' exclusive remedy is against the
United States on their state-law claims. (Id. at 9).
And because the FTCA does not waive sovereign immunity for
claims based on fraud, the Government submits that the Court
should dismiss Counts I through IV and VII against the
Federal Defendants for lack of subject-matter jurisdiction.
(Id. at 9-10). The Government also argues that
dismissal for lack of subject-matter jurisdiction is
appropriate here because Plaintiffs have failed to exhaust
their administrative remedies. (Id. at 11-12). The
Government concedes that the FTCA does not govern Counts V
and VI, Plaintiffs' claims for alleged violations of the
federal RICO statutes. (Id. at 10 n.8).
their response, Plaintiffs vehemently object to the
Government's certification that the Federal Defendants
were acting within the scope of their employment. (Doc. # 98
at 4). According to the Plaintiffs, “[b]ased on this
objection, the Government is not a proper party to this
action and [the] FTCA does not apply.” (Id.).
Plaintiffs point out that, under applicable law, the
Government's certification is not dispositive.
(Id. at 7). Plaintiffs argue that Siedel, Strother,
and Bristol are the proper parties to this action because
none of them were acting within the scope of their employment
when carrying out the fraudulent schemes because the Federal
Defendants' actions were not meant to serve their
employer, the Government, but were meant purely to enrich
themselves. (Id. at 5, 8, 9, 10). Plaintiffs request
leave to conduct jurisdictional discovery and an evidentiary
hearing on this issue. (Id. at 11, 12).
reply, the Government argues that substitution of the United
States was proper under the Westfall Act and that Plaintiffs
have not met their burden to challenge the United States
Attorney's certification. (Doc. # 102 at 1, 3-4). The
Government argues that, to overcome the certification,
Plaintiffs must come forward with evidence proving, by a
preponderance of the evidence, that the employees were acting
outside the scope of their employment. (Id. at 4).
Because Plaintiffs have offered no specific evidence, or even
a forecast of specific evidence, to contradict the
certification, no discovery or hearing is needed.
(Id. at 5).
The Westfall Act and Whether Substitution of the United
States is Proper
federal employee is sued, the Westfall Act allows the United
States Attorney General to certify that such federal employee
defendant was acting within the scope of his or her office or
employment at the time of the incident out of which the claim
arose. 28 U.S.C. § 2679(d)(1). Upon the Attorney
General's certification, any civil action commenced upon
such a claim against a federal employee in a federal district
court “shall be deemed an action against the United
States, ” and the United States “shall be
substituted as the party defendant.” Id. The
authority to make such certification has been delegated to
the United States Attorney for the district where the civil
action is brought. 28 C.F.R. § 15.4. When such
certification is made, the civil action “shall proceed
in the same manner as any action against the United States
filed pursuant to [28 U.S.C. § 1346(b)] and shall be
subject to the exceptions and limitations applicable to those
actions.” 28 U.S.C. § 2679(d)(4).
the certification of the Attorney General, the federal
employee is dismissed from the action, and the United States
is substituted as defendant in the employee's place.
Osborn v. Haley, 549 U.S. 225, 230 (2007). Indeed,
“[i]f the action is commenced in a federal court, and
the Attorney General certifies that the employee ‘was
acting within the scope of his office or employment at the
relevant time,' the United States must
be substituted as the defendant.” Id. at 241
(quoting 28 U.S.C. § 2679(d)(1)) (internal alterations
omitted) (emphasis added). Thereafter, the litigation is
governed by the FTCA. Id. at 230.
both the Eleventh Circuit and the U.S. Supreme Court have
held that the Attorney General's certification decision
is subject to judicial review. Gutierrez de Martinez v.
Lamagno, 515 U.S. 417, 431, 434 (1995) (determining that
the Attorney General's certification “does not
conclusively establish as correct the substitution of the
United States as defendant in place of the employee”);
see also Id. at 432 (“[T]he Attorney
General's scarcely disinterested certification on that
matter is by statute made the first, but not the final
word.”); S.J. & W. Ranch, Inc. v.
Lehtinen, 913 F.2d 1538, 1542, 1544 (11th Cir. 1990),
amended by 924 F.2d 1555 (11th Cir. 1991) (concluding that a
plaintiff “is entitled to litigate the question of
whether the employee was acting within the scope of his
employment when the challenged conduct occurred”).
plaintiff challenges the scope-of-employment certification,
the district court must review the certification de
novo. Lehtinen, 913 F.2d at 1543 (explaining
that the district court should not defer to the Attorney
General's certification but should instead review the
question de novo). Whether an employee's actions
are within the scope of his employment for purposes of the
Westfall Act involves a question of law as well as a question
of fact, and is an issue governed by the law of the state
where the incident occurred. Id. at 1542.
course of the district court's de novo review,
the Attorney General's certification serves as prima
facie evidence that the employee conduct at issue
occurred within the scope of employment. Id. at
1543. “The burden of altering the status quo by proving
that the employee acted outside the scope of employment is,
therefore, on the plaintiff.” Id.
conducting this de novo review, the question of
whether a given act falls within the scope of employment is
highly fact-specific, and turns on the unique circumstances
of the case at bar.” Hendrix v. Snow, 170
Fed.Appx. 68, 82 (11th Cir. 2006) (internal alterations
omitted). Significantly, the Supreme Court has explained that
the United States “must remain the federal defendant in
the action unless and until the District Court determines
that the employee, in fact, and not simply
as alleged by the plaintiff, engaged in conduct beyond the
scope of his employment.” Osborn, 549 U.S. at
231 (emphasis in original).
Plaintiffs have challenged the Attorney General's
certification and argue that the Federal Defendants were
acting outside the scope of their employment in committing
the acts alleged in the Amended Complaint. Thus, this Court
must review de novo whether the Federal
Defendants' conduct was within the scope of their
employment. See Lehtinen, 913 F.2d at 1543. The
Court is entitled to treat the U.S. Attorney's
certification as prima facie evidence that the
Federal Defendants' conduct occurred within the scope of
their employment at SOCOM and, thus, Plaintiffs have the
burden of showing that the Federal Defendants' acted
outside the scope of their employment, such that substitution
would be improper. See Id.
parties disagree, however, on how Plaintiffs may make this
showing. Plaintiffs rely on the allegations in their Amended
Complaint and seek jurisdictional discovery and an
evidentiary hearing to adduce further evidence on this issue.
The Government maintains that, because Plaintiffs have not
come forward at this stage with any evidence or a forecast of
specific evidence, discovery should not be allowed and the
certification and substitution should stand.
the Eleventh Circuit in Lehtinen remanded for the
district court to permit the plaintiff “full discovery
on the scope question” and ordered the district court
to conduct a de novo hearing on the
scope-of-employment issue, 913 F.2d at 1544, “nothing
mandates that a district court allow discovery and hold an
evidentiary hearing before ruling on a section 2679
certification.” Glover v. Donahoe, 626
Fed.Appx. 926, 930 (11th Cir. 2015); see also Pritchett
v. Milstid, 891 F.Supp. 1541, 1544 (S.D. Ala. 1995)
(“The Eleventh Circuit has not suggested, however, that
an evidentiary hearing is required or that discovery must be
permitted every time the Attorney General's certification
is challenged.”). The question, then, is what serves to
unlock the limited discovery that Plaintiffs seek - is it
merely the allegations in the Amended Complaint, taken as
true, or is there an extra showing that Plaintiffs must first
make? The Court could not locate, nor do the parties point
to, any Eleventh Circuit case law on this issue. Other
Circuit Courts of Appeal have taken different approaches.
Court of Appeals for the District of Columbia Circuit has
written: “Because the plaintiff cannot discharge [his]
burden without some opportunity for discovery, the district
court may permit limited discovery and hold an evidentiary
hearing to resolve a material factual dispute regarding the
scope of the defendant's employment.” Stokes v.
Cross, 327 F.3d 1210, 1214 (D.C. Cir. 2003). To unlock
this limited discovery, the plaintiff need only plead facts
that, taken as true, would establish that the defendants'
actions exceeded the scope of their employment. Id.
the Third Circuit has determined that, where an Attorney
General's certification clashes with the allegations in
the complaint, “the plaintiff should be permitted
reasonable discovery and should then be called upon to come
forward, as if responding to a motion for summary judgment,
with competent evidence supporting the facts upon which he
would predicate liability, as well as any other facts
necessary to support a conclusion that the defendant acted
beyond the scope of his employment.” Melo v.
Hafer, 13 F.3d 736, 747 (3d Cir. 1994).
Fourth Circuit, however, has laid out a different process for
district courts to follow:
When the certification is challenged, it serves as prima
facie evidence and shifts the burden to the plaintiff to
prove, by a preponderance of the evidence, that the defendant
federal employee was acting outside the scope of his
employment. . . .
Moreover, the plaintiff's submission must be specific
evidence or the forecast of specific evidence that
contradicts the Attorney General's certification
decision, not mere conclusory allegations and speculation. If
the plaintiff's evidence is sufficient to carry the
burden of proof, the defendant federal employee or the
Government may come forward with evidence in support of the
certification. At this point, the district court may permit
(and limit) any needed discovery. Thereafter, the district
court must determine whether there are any genuine issues of
fact material to the scope-of-employment decision, and, if
so, it may conduct an evidentiary hearing to resolve these
factual issues. Once any factual issues are resolved, the
district court should weigh the evidence on each side to