Cafasso v. General Dynamics C4 Systems, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MARY ANGELA CAFASSO, United 

States ex rel.,

Plaintiff-counter-defendant-

Appellant, No. 09-16181

v.  D.C. No.

2:06-cv-01381-

GENERAL DYNAMICS C4 SYSTEMS, NVW

INC.,

Defendant-counter-claimant-

Appellee.



MARY ANGELA CAFASSO, United 

States ex rel.,

Plaintiff-Appellant, No. 09-16607

v.  D.C. No.

2:06-cv-01381-

GENERAL DYNAMICS C4 SYSTEMS, NVW

INC.,

Defendant-Appellee.



3963

3964 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

MARY ANGELA CAFASSO, United 

States, ex rel.,

Plaintiff-counter-defendant-

Appellant, No. 09-17710

v. D.C. No.

GENERAL DYNAMICS CORPORATION,  2:06-cv-01381-

Defendant-Appellee, NVW

GENERAL DYNAMICS C4 SYSTEMS, OPINION

INC.,

Defendant-counter-claimant-

Appellee.



Appeal from the United States District Court

for the District of Arizona

Neil V. Wake, District Judge, Presiding

Argued and Submitted

November 3, 2010—San Francisco, California

Filed March 24, 2011

Before: Ronald M. Gould and Consuelo M. Callahan,

Circuit Judges, and Morrison C. England, Jr.,

District Judge.*

Opinion by Judge Gould

*The Honorable Morrison C. England, Jr., District Judge for the U.S.

District Court for Eastern California, Sacramento, sitting by designation.

3968 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

COUNSEL

Mike Bothwell (argued), Julie Keeton Bracker, and Richard

J. Harris, Roswell, Georgia; Thomas Rogers, Phoenix, Ari-

zona; for plaintiff-appellant Mary Angela Cafasso.

Mark G. Kisicki (argued), Lawrence Allen Katz, Peter S.

Kozinets, and Thomas Michael Stanek, Phoenix, Arizona; J.

William Koegel, Washington, DC; for defendant-appellee

General Dynamics C4 Systems, Inc.

OPINION

GOULD, Circuit Judge:

In this False Claims Act (“FCA”) appeal, relator Mary

Cafasso challenges orders of the district court dismissing her

qui tam complaint, rejecting her proposed amended pleading,

granting summary judgment on remaining claims, and award-

ing attorneys’ fees.1 We have jurisdiction pursuant to 28

U.S.C. § 1291, and we affirm.

1

Congress amended the FCA in May 2009 by enacting the Fraud

Enforcement and Recovery Act, Pub. L. No. 111-21, § 4, 123 Stat. 1617,

1621 (2009). These amendments do not apply retroactively to this case.

See Hopper v. Solvay Pharms., Inc., 588 F.3d 1318, 1327 n.3 (11th Cir.

2009) (explaining non-retroactivity of FCA amendments).

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3969

I

Cafasso alleges that her former employer General Dynam-

ics C4 Systems (“GDC4S”), a technology company that ser-

vices the military, defrauded the government by withholding

disclosure of new inventions which, GDC4S had agreed by

contract, the government had rights to use and license.

Cafasso discovered the alleged fraud, according to her com-

plaint, and made repeated inquiries and requests for internal

audits. She claims that as a result of her activities in that

regard, GDC4S retaliated against her by eliminating her

department and position. GDC4S denies those allegations.

After learning that her job would be terminated but before

leaving GDC4S, Cafasso copied almost eleven gigabytes of

data from company computers in anticipation of bringing a

qui tam action. Within days of her departure, GDC4S realized

that she had taken thousands of its internal documents.

GDC4S filed suit in state court seeking to recover documents

that it believed Cafasso took in violation of a confidentiality

agreement that she executed when her employment began.

The state court issued a temporary restraining order (“TRO”)

that required Cafasso to return the electronic files that she

removed from GDC4S.

Two days later, Cafasso filed this qui tam action in federal

district court with a conclusory six-page complaint. The com-

plaint alleged FCA violations and retaliation. The district

judge, at Cafasso’s request, issued orders sealing the case and

permitting Cafasso to inform the state court of the pendency

of the qui tam action. With the orders and sealed complaint

in-hand, Cafasso presented the state court with an ex parte

request to lift the TRO, which the state court granted. The

state court also stayed the state action in its entirety, although

the Arizona Court of Appeals later reversed both orders.

When the district court learned that Cafasso had used its

orders to disrupt the state court suit, it vacated the orders that

it had issued. GDC4S was then served with the complaint and

3970 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

filed an answer and counterclaim. That counterclaim alleged,

among other things, that Cafasso’s appropriation of GDC4S’s

electronic files breached her confidentiality agreement with

the company.

Continuing prosecution of the qui tam action, Cafasso

lodged more specific allegations against GDC4S in an

amended complaint. In response to GDC4S’s objections about

privileged information contained in that amended pleading,

Cafasso filed a substitute amended complaint that struck the

objectionable language. Around the same time, the United

States announced that it would decline to intervene in the

FCA action. Cafasso continued to litigate the matter in her

own name.

The parties then began an acrimonious period of discovery.

The district court’s November 4, 2009, order recites numerous

discovery abuses by Cafasso. Specifically, Cafasso refused to

identify which documents, of the thousands she had appropri-

ated, actually supported her claim or were privileged. Further,

Cafasso sought discovery into 110 inventions that were not

mentioned in her complaint, which the court prohibited.

GDC4S asked by interrogatory that Cafasso “[i]dentify each

specific provision of 31 U.S.C. § 3729(a)(1)-(7) of the False

Claims Act (‘FCA’) that you allege in paragraph 173 of the

Substitute Amended Complaint that Defendant ‘knowingly

violated’ . . . .” In response, Cafasso stated that she “has not

made a claim as described in this Interrogatory, nor does the

law require that she claim such to have been the case.”

Because Cafasso’s answer to this interrogatory appeared to

abandon her qui tam allegations, GDC4S promptly filed a

motion for judgment on the pleadings pursuant to Federal

Rule of Civil Procedure 12(c). Thereafter, Cafasso sought to

file a 733-page second amended complaint, which the district

court rejected for failing to state a “short and plain statement

of the claim,” as required by Federal Rule of Civil Procedure

8(a)(2). The district court granted GDC4S’s motion for judg-

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3971

ment on the pleadings. It then denied Cafasso’s subsequent

motion to amend her pleading.

Both parties moved for summary judgment on the remain-

ing claims (Cafasso’s retaliation claim against GDC4S, and

GDC4S’s counterclaims against Cafasso). GDC4S prevailed

on both motions, and the district court entered judgment and

a permanent injunction against Cafasso. GDC4S then moved

for an award of attorneys’ fees, which the district court

granted in part.

This appeal followed.

II

We first address the district court’s dismissal of Cafasso’s

qui tam claim pursuant to Federal Rule of Civil Procedure

12(c). Our review is de novo. Fleming v. Pickard, 581 F.3d

922, 925 (9th Cir. 2009). When considering a Rule 12(c) dis-

missal, we must accept the facts as pled by the nonmovant,

here, Cafasso. Id.; see also Jenkins v. McKeithen, 395 U.S.

411, 421 (1969) (“For the purposes of a motion to dismiss, the

material allegations of the complaint are taken as admitted.”).

We caution that the facts set forth below have not been deter-

mined judicially, but are rather what we think to be a fair

summary of the complaint’s2 allegations.

A

Cafasso worked as the chief scientist/technologist at

GDC4S, a technology company that services the military, and

was so employed at the predecessor-company that was

acquired by General Dynamics in 2001. As a participant in

the Advanced Telecommunications & Information Distribu-

tion Research Program (“ATIRP”), GDC4S’s predecessor-

2

We review the dismissal of Cafasso’s Substitute Amended Complaint.

For simplicity, we refer to this pleading as the “complaint.”

3972 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

company had contracted with the Army to assign to the

United States certain rights to “subject inventions” developed

in performance of military contracts. Specifically, ATIRP

gives the government “license to practice or have practiced

for or on behalf of the United States the subject invention

throughout the world,” and the right to require GDC4S to

license the invention to anyone “upon terms that are reason-

able under the circumstances.” In other words, ATIRP grants

the government the royalty-free right to use or have used on

its behalf subject inventions, as well as the right to require

GDC4S to license the inventions to another party (such as a

competing contractor) on reasonable terms.

ATIRP also requires timely disclosure of applicable new

inventions to the government. Once it discloses a new inven-

tion, GDC4S may opt to retain title to the invention, subject

to the government’s right to use or have used on its behalf,

and to require licensing of, the invention. If GDC4S chooses

not to retain title to the invention, the government may

assume title. Cafasso worked in the office that identified, doc-

umented, and protected GDC4S’s intellectual property. Her

responsibilities included ensuring that GDC4S complied with

ATIRP’s requirements by, among other things, disclosing

new inventions to the Army.

In early 2004, Cafasso became aware of what she believed

was a scheme to deprive the United States of its ATIRP rights

to a new invention. GDC4S had applied for a patent for an

invention known as GE04582, but the United States Patent

and Trademark Office had preliminarily rejected that applica-

tion subject to a response from GDC4S. Rather than respond-

ing to the Patent Office—and telling the government so that

it could protect its rights in the invention by preparing its own

response—GDC4S instead opted to abandon the patent appli-

cation and, according to Cafasso, delayed before notifying the

government in order to deprive it of the opportunity to prepare

a response.

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3973

Cafasso alleges that by refusing to prosecute its patent

application, GDC4S had “claim[ed] ownership of . . . [the

new] technology as [its] own trade secret,” and had denied the

United States an opportunity to protect its interest in the

invention. Further, because GDC4S had not disclosed its

newly invented technology to the government, competing

contractors would not know to ask the government for per-

mission to use the technology when bidding on later contracts.

According to Cafasso, the government might therefore pay

GDC4S or another contractor to invent technologies like

GE04582 that either already had been invented or with

respect to which the government already had the right to

authorize its contractors to use free of charge. In other words,

Cafasso alleges that the United States could potentially pay

twice for the same technologies.

Cafasso reported her discovery about GE04582 to her

supervisor and others in her office, but no corrective action

was taken. Cafasso asked for an audit or internal review. No

audit occurred. GDC4S thereafter eliminated the office in

which Cafasso worked and terminated her employment, as

well as that of her supervisor.3 GDC4S maintains that this

occurred as part of a routine corporate reorganization. Cafasso

disputes this account, alleging that her termination was retal-

iatory.

After Cafasso was told that her position had been elimi-

nated but before leaving GDC4S, she was tasked with per-

forming due diligence in closing out the ATIRP contract. In

performing this function, she contends, she discovered a num-

ber of other instances where new inventions had either not

been properly disclosed to the United States, or where

GDC4S had abandoned prosecution of its patent applications

to the detriment of the government’s rights to the invention.

3

We address the timing of these events more specifically in the part of

our opinion evaluating Cafasso’s appeal of the summary judgment on her

retaliation claim. See infra part IV.

3974 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

Cafasso claims that GDC4S continues to deprive the United

States of its rights to new inventions. She alleges that “[t]he

scheme [is] implemented in two ways. For some inventions,

the disclosure to the Government is made, but it is sketchy

and insufficient. In other cases, [GDC4S] apparently has

stopped submitting notification to the Government altogeth-

er.”

B

[1] In reviewing the dismissal of a complaint, we inquire

whether the complaint’s factual allegations, together with all

reasonable inferences, state a plausible claim for relief. Ash-

croft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009).4 The height-

ened pleading standard of Rule 9(b) governs FCA claims. Bly-

Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001).

Rule 9(b) provides that “[i]n alleging fraud or mistake, a party

must state with particularity the circumstances constituting

fraud or mistake.” Fed. R. Civ. P. 9(b). To satisfy Rule 9(b),

a pleading must identify “the who, what, when, where, and

how of the misconduct charged,” as well as “what is false or

misleading about [the purportedly fraudulent] statement, and

why it is false.” Ebeid ex rel. United States v. Lungwitz, 616

F.3d 993, 998 (9th Cir. 2010) (internal quotation marks and

citations omitted).

[2] Until now, we have not had occasion explicitly to con-

firm that Iqbal’s plausibility requirement applies to claims

subject to Rule 9(b). We have, however, said that “complaints

alleging fraud must comply with both [Federal Rules of Civil

4

Although Iqbal establishes the standard for deciding a Rule 12(b)(6)

motion, we have said that Rule 12(c) is “functionally identical” to Rule

12(b)(6) and that “the same standard of review” applies to motions

brought under either rule. Dworkin v. Hustler Magazine Inc., 867 F.2d

1188, 1192 (9th Cir. 1989); see also Gentilello v. Rege, 627 F.3d 540, 544

(5th Cir. 2010) (applying Iqbal to a Rule 12(c) motion); Albrecht v. Treon,

617 F.3d 890, 893 (6th Cir. 2010) (same); Johnson v. Rowley, 569 F.3d

40, 43-44 (2d Cir. 2009) (same).

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3975

Procedure] 8(a) and 9(b).” Wagh v. Metris Direct, Inc., 363

F.3d 821, 828 (9th Cir. 2003), overruled on other grounds by

Odom v. Microsoft Corp., 486 F.3d 541, 551 (9th Cir. 2007)

(en banc). Because Rule 8(a) requires the pleading of a plausi-

ble claim, Iqbal, 129 S. Ct. at 1949-50, we hold that claims

of fraud or mistake—including FCA claims—must, in addi-

tion to pleading with particularity, also plead plausible allega-

tions.5 That is, the pleading must state “enough fact[s] to raise

a reasonable expectation that discovery will reveal evidence

of [the misconduct alleged].” Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 556 (2007).6

C

[3] We next consider whether the qui tam claim stated in

Cafasso’s complaint is sufficiently particularized and plausi-

ble to avert dismissal. “It seems to be a fairly obvious notion

that a False Claims Act suit ought to require a false claim.”

United States ex rel. Aflatooni v. Kitsap Physicians Serv., 314

F.3d 995, 997 (9th Cir. 2002). “[T]he [FCA] attaches liability,

not to the underlying fraudulent activity or to the govern-

ment’s wrongful payment, but to the ‘claim for payment.’ ”

United States v. Rivera, 55 F.3d 703, 709 (1st Cir. 1995). As

5

This holding is consistent with the law of other circuits. E.g., United

States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163, 1167

(10th Cir. 2010); Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283,

1288-89 (11th Cir. 2010); Reger Dev., LLC v. Nat’l City Bank, 592 F.3d

759, 764 (7th Cir. 2010); United States ex rel. Grubbs v. Kanneganti, 565

F.3d 180, 185 (5th Cir. 2009).

6

Iqbal and its “plausibility” standard have been the subject of serious

and thoughtful criticism. E.g., Arthur R. Miller, From Conley to Twombly

to Iqbal: A Double Play on the Federal Rules of Civil Procedure, 60 Duke

L.J. 1 (2010). Also, at least one state court has disagreed with the wisdom

of Iqbal and declined to adopt its plausibility standard for state court

pleadings. McCurry v. Chevy Chase Bank, FSB, 233 P.3d 861, 863-64

(Wash. 2010). Nonetheless, pleading requirements for the federal courts

have departed from the traditional Rule 8 standard under Conley v. Gib-

son, 355 U.S. 41, 47-48 (1957); under Iqbal, the pleading standard has

changed and plausibility is required.

3976 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

we have said, “[A]n actual false claim is ‘the sine qua non of

a[n FCA] violation.’ ” Aflatooni, 314 F.3d at 1002 (quoting

United States ex rel. Clausen v. Lab. Corp. of Am., 290 F.3d

1301, 1311 (11th Cir. 2002)).7

[4] False claims contemplated by the FCA take many

forms. Of seven types of actionable conduct listed in the FCA,

only three require that the misconduct involve an actual

demand for payment. 31 U.S.C. §§ 3729(a)(1)-(3). In the

remaining categories, the “false claim” lies in the fraudulent

use of a receipt, §§ 3729(a)(4)-(5), unauthorized purchase of

government property, § 3729(a)(6), or use of a “false record

or statement” to avoid payment to the government,

§ 3729(a)(7). We recently held that a request for reimburse-

ment that falsely implied compliance with federal rules could

constitute a false claim. Ebeid, 616 F.3d at 996. But to com-

mit conduct actionable under the FCA, one must, in some

way, falsely assert entitlement to obtain or retain government

money or property.8

Section 3729(a)(7) of the FCA—the “reverse false claims”

7

See also United States ex rel. Hendow v. Univ. of Phoenix, 461 F.3d

1166, 1173 (9th Cir. 2006) (“[F]or a false statement or course of action to

be actionable . . . , it is necessary that it involve an actual claim . . . .”);

United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1265 (9th Cir. 1996)

(“The FCA . . . requires a false claim.” (quoting the district court)).

8

Cafasso confuses the FCA’s requirement of a false claim with the con-

cept of “presentment.” In United States v. Bourseau, we held that relators

bringing an action pursuant to § 3729(a)(7) need not allege that a claim

was actually presented to the government, because it is sufficient to allege

“that a defendant ma[d]e or use[d] a false record or statement in order to

conceal, avoid or decrease an obligation to pay the government.” 531 F.3d

1159, 1169 (9th Cir. 2008). Although it is not required that relators allege

that a particular claim was actually submitted to the United States, this

does not obviate the requirement that a fraudulent claim of some kind,

presented or not, form the basis of FCA liability. See Hagood v. Sonoma

Cnty. Water Agency, 81 F.3d 1465, 1479 (9th Cir. 1996) (rejecting a

§ 3729(a)(7) claim in part because the plaintiff had not established a false

claim).

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3977

provision—does not say otherwise. It makes actionable the

knowing use of a “false record or statement to conceal, avoid,

or decrease an obligation . . . to transmit money or property

to the Government.” § 3729(a)(7). This provision “attempts to

provide that fraudulently reducing the amount owed to the

government constitutes a false claim.” 1 John T. Boese, Civil

False Claims & Qui Tam Actions, § 2.01[K] at 2-56 (3d ed.

2010). In United States v. Pemco Aeroplex, Inc., for example,

the defendant, under an obligation to account for government

property in its possession, purposely misidentified airplane

parts worth more than two million dollars as scrap metal

worth only $1,875. 195 F.3d 1234, 1235-36 (11th Cir. 1999)

(en banc). In reliance upon the misrepresentation, the United

States allowed the defendant to purchase the parts for that

deflated sum. Id. The “false claim” in Pemco was the inven-

tory document fraudulently accounting for the value of gov-

ernment property. The “reverse false claims” provision does

not eliminate or supplant the FCA’s false claim requirement;

it rather expands the meaning of a false claim to include state-

ments to avoid paying a debt or returning property to the

United States.

Cafasso’s complaint alleges no false claim. While her

pleading alleges that GDC4S’s non-disclosure of new inven-

tions deprived the United States of lower-cost services by

third-party entities, it does not allege that GDC4S falsely

asserted an entitlement to obtain or retain government money

or property. It does not allege that GDC4S made a demand for

payment, fraudulently used a receipt, participated in an unau-

thorized purchase of government property, or used a false

record or statement.

[5] We consider whether, in the absence of pleading false

claims, the complaint warrants an inference that false claims

were part of the scheme alleged. Ebeid, 616 F.3d at 998-99.

In assessing the plausibility of an inference, we “draw on

[our] judicial experience and common sense,” Iqbal, 129 S.

Ct. at 1950, and consider “ ‘obvious alternative explana-

3978 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

tion[s],’ ” id. at 1952 (quoting Twombly, 550 U.S. at 567).

According to her complaint, Cafasso had worked in the office

tasked with ensuring ATIRP compliance since the

predecessor-company’s acquisition in 2001. Even after she

began to suspect fraud, she was responsible for reviewing

ATIRP-related documents to conclude GDC4S’s participation

in the contract. Despite access to GDC4S records, as detailed

in her complaint, she does not identify a single “false or

fraudulent claim for payment,” § 3729(a)(1), “false record or

statement,” § 3729(a)(2), (7), “document certifying receipt of

property,” § 3729(a)(5), or any other qualifying false claim.

Assuming the truth of Cafasso’s factual averments, an “obvi-

ous alternative explanation” of GDC4S’s conduct is that it

withheld disclosure of new inventions so it could continue to

use them as trade secrets, which might be a breach of contract

but not a fraudulent claim.9 In light of Cafasso’s failure to

identify any particular false claims or their attendant circum-

stances, as well as the “obvious alternative explanation” that

no false claims occurred, we will not draw the unwarranted

and implausible inference that discovery will reveal evidence

of such false claims.

[6] Cafasso tries to save her complaint by arguing that

GDC4S may have charged the government directly for use of

intellectual property that the government already had the right

to use free of charge. But Cafasso’s pleading contains none of

9

As previously discussed, ATIRP grants the government the royalty-

free right to use or have used on its behalf subject inventions, as well as

the right to require the contractor to license the invention to another party

on reasonable terms. To the extent that Cafasso’s complaint may be con-

strued to allege that GDC4S charged third-party contractors for their use

of inventions that should have been, but were not, disclosed pursuant to

ATIRP, the complaint contains no particular circumstances of any such

charges, as required by Rule 9(b). Further, even if this allegation had been

pled with sufficient specificity, it is not clear that the scheme would have

involved any false claims, or that the scheme would have been genuinely

fraudulent given ATIRP’s contemplation that third-party contractors

would pay to license GDC4S inventions on reasonable terms.

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3979

the “circumstances” attendant to this alleged fraudulent con-

duct. Fed. R. Civ. P. 9(b). As the district court correctly

observed, “The pleading does not allege . . . when GDC4S

‘charged’ the government for previously-purchased technol-

ogy, which contracts the charges related to, whether the reuse

of technology actually inflated the charge, or if the govern-

ment even paid the charges.”10 Indeed, the pleading does not

point to a single invention for the use of which GDC4S

charged the United States.

[7] This type of allegation, which identifies a general sort

of fraudulent conduct but specifies no particular circum-

stances of any discrete fraudulent statement, is precisely what

Rule 9(b) aims to preclude. See Bly-Magee, 236 F.3d at 1018

(“Rule 9(b) serves not only to give notice to defendants of the

specific fraudulent conduct against which they must defend,

but also to deter the filing of complaints as a pretext for the

discovery of unknown wrongs, to protect defendants from the

harm that comes from being subject to fraud charges, and to

prohibit plaintiffs from unilaterally imposing upon the court,

the parties and society enormous social and economic costs

absent some factual basis.” (internal quotation and alterations

omitted)).

[8] None of the remaining qui tam allegations levied in

Cafasso’s complaint are cognizable under the FCA. Cafasso’s

allegations that GDC4S did not comply with ATIRP’s disclo-

sure requirements, and that GDC4S received payment from

the United States pursuant to ATIRP, in essence fault GDC4S

for allegedly breaching its contractual obligations. But

“breach of contract claims are not the same as fraudulent con-

duct claims, and the normal run of contractual disputes are not

cognizable under the [FCA].” United States ex rel. Wilson v.

Kellogg Brown & Root, Inc., 525 F.3d 370, 383 (4th Cir.

10

We do not suggest that pleading any one of these circumstances is

necessary to state an FCA claim. It is significant that Cafasso pleads none

of them.

3980 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

2008). To be sure, Cafasso’s complaint alleges unsavory con-

duct. But unsavory conduct is not, without more, actionable

under the FCA. See Aflatooni, 314 F.3d at 1002 (“It is not

enough . . . ‘to describe a [fraudulent] scheme in detail but

then to allege simply and without any stated reason . . . that

claims requesting illegal payments must have been submit-

ted.’ ” (quoting Clausen, 290 F.3d at 1311)); Hopper, 91 F.3d

at 1265 (“It is not the case that any breach of contract, or vio-

lation of regulations or law, or receipt of money from the gov-

ernment where one is not entitled to receive the money,

automatically gives rise to a claim under the FCA.” (quoting

the district court)).11 Given Cafasso’s failure to plead a false

claim, we affirm the district court’s dismissal of Cafasso’s

complaint.

III

We next consider the district court’s denial of Cafasso’s

motion for leave to amend her complaint. Our review is for

abuse of discretion. United States ex rel. Lee v. SmithKline

Beecham, Inc., 245 F.3d 1048, 1051 (9th Cir. 2001).

GDC4S brought its Rule 12(c) motion after nearly two

years of discovery. Given that late stage of litigation, the dis-

trict court suggested that Cafasso, rather than opposing the

motion, instead seek to amend her pleading to cure the defi-

ciencies identified in the motion. Acting on this suggestion,

Cafasso moved to amend and tendered a 733-page proposed

amended complaint. The district court denied Cafasso’s

motion for failure to comply with Rule 8(a), among other

deficiencies.

11

The United States Court of Appeals for the Fifth Circuit has wryly

observed: “A hand in the cookie jar does not itself amount to fraud sepa-

rate from the fib that the treat has been earned when in fact the chores

remain undone.” United States ex rel. Grubbs v. Kanneganti, 565 F.3d

180, 190 (5th Cir. 2009).

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3981

[9] Normally, when a viable case may be pled, a district

court should freely grant leave to amend. Lipton v. Pathogen-

esis Corp., 284 F.3d 1027, 1039 (9th Cir. 2002). However,

“liberality in granting leave to amend is subject to several lim-

itations.” Ascon Props., Inc. v. Mobil Oil Co., 866 F.2d 1149,

1160 (9th Cir. 1989) (citing DCD Programs, Ltd. v. Leighton,

833 F.2d 183, 186 (9th Cir. 1987)). Those limitations include

undue prejudice to the opposing party, bad faith by the

movant, futility, and undue delay. Id. Further, “[t]he district

court’s discretion to deny leave to amend is particularly broad

where plaintiff has previously amended the complaint.” Id.

(citing Leighton, 833 F.2d at 186; Mir v. Fosburg, 646 F.2d

342, 347 (9th Cir. 1980)).

[10] The district court was well within its discretion to

deny leave to amend for several reasons. First, amendment

would have been futile considering the proposed pleading’s

extraordinary prolixity. Rule 8(a) requires that a complaint

contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

Although normally “verbosity or length is not by itself a basis

for dismissing a complaint,” Hearns v. San Bernardino Police

Dep’t, 530 F.3d 1124, 1131 (9th Cir. 2008), we have never

held—and we know of no authority supporting the

proposition—that a pleading may be of unlimited length and

opacity. Our cases instruct otherwise. See, e.g., McHenry v.

Renne, 84 F.3d 1172, 1177-80 (9th Cir. 1996) (upholding a

Rule 8(a) dismissal of a complaint that was “argumentative,

prolix, replete with redundancy, and largely irrelevant”);

Hatch v. Reliance Ins. Co., 758 F.2d 409, 415 (9th Cir. 1985)

(upholding a Rule 8(a) dismissal of a complaint that “ex-

ceeded 70 pages in length, [and was] confusing and conclu-

sory”); Nevijel v. North Coast Life Ins. Co., 651 F.2d 671, 674

(9th Cir. 1981) (holding that Rule 8(a) is violated when a

complaint is excessively “verbose, confusing and almost

entirely conclusory”); Schmidt v. Herrmann, 614 F.2d 1221,

1224 (9th Cir. 1980) (upholding a Rule 8(a) dismissal of

“confusing, distracting, ambiguous, and unintelligible plead-

3982 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

ings”). While “the proper length and level of clarity for a

pleading cannot be defined with any great precision,” Rule

8(a) has “been held to be violated by a pleading that was

needlessly long, or a complaint that was highly repetitious, or

confused, or consisted of incomprehensible rambling.” 5

Charles A. Wright & Arthur R. Miller, Federal Practice &

Procedure § 1217 (3d ed. 2010). Our district courts are busy

enough without having to penetrate a tome approaching the

magnitude of War and Peace to discern a plaintiff ’s claims

and allegations.

[11] Second, a 733-page pleading prejudices the opposing

party and may show bad faith of the movant, both valid

grounds to deny leave to amend. See Ascon Prop., 866 F.2d

at 1160. Rather than straightforwardly stating her claims and

allegations, Cafasso would burden her adversary with the

onerous task of combing through a 733-page pleading just to

prepare an answer that admits or denies such allegations, and

to determine what claims and allegations must be defended or

otherwise litigated. See McHenry, 84 F.3d at 1178 (“[T]he

very prolixity of the complaint ma[kes] it difficult to deter-

mine just what circumstances were supposed to have given

rise to the various causes of action.”); Mendez v. Draham, 182

F. Supp. 2d 430, 433 (D.N.J. 2002) (“Only through superhu-

man patience, effort, and insight, could any attorney review

the allegations of the Complaint and make paragraph-by-

paragraph responses.”). As we have said,

Prolix, confusing complaints . . . impose unfair bur-

dens on litigants and judges. . . . Defendants are . . .

put at risk that . . . plaintiffs will surprise them with

something new at trial which they reasonably did not

understand to be in the case at all, and that res judi-

cata effects of settlement or judgment will be differ-

ent from what they reasonably expected. . . . The

judge wastes half a day in chambers preparing the

“short and plain statement” which Rule 8 obligated

plaintiffs to submit. He then must manage the litiga-

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3983

tion without knowing what claims are made against

whom. This leads to discovery disputes and lengthy

trials, prejudicing litigants in other case who follow

the rules, as well as defendants in the case in which

the prolix pleading is filed.

McHenry, 84 F.3d at 1179-80. Further, Cafasso’s proposed

amendment sought to circumvent the district court’s discov-

ery order limiting her qui tam claim to allegations relating to

the 37 inventions identified in her complaint.

[12] Citing our prior holding in Hearns, 503 F.3d at 1131,

Cafasso argues that Rule 8(a) dismissals for excessive length

are disfavored. At issue in Hearns was an 81-page complaint

that, while “excessive [in] detail,” was written with sufficient

clarity and organization such that the defendants would “have

no difficulty in responding to the claims.” Id. at 1132. This

case, however, is distinguishable. Cafasso’s proposed com-

plaint was more than nine times longer than the one before us

in Hearns. Under these extraordinary circumstances, a district

court has ample discretion to deny amendment. We affirm the

district court’s denial of Cafasso’s motion to amend.

IV

The district court granted summary judgment in favor of

GDC4S on Cafasso’s claim that her employment was termi-

nated in retaliation for her investigation of fraud at the com-

pany. United States ex rel. Cafasso v. Gen. Dynamics C4 Sys.,

Inc., No. 06-1381, 2009 WL 1457036, at *11-13 (D. Ariz.

May 21, 2009). We review a grant of summary judgment de

novo. Universal Health Servs., Inc. v. Thompson, 363 F.3d

1013, 1019 (9th Cir. 2004).

[13] The FCA protects employees from being “discharged,

demoted, . . . or in any other manner discriminated against in

the terms and conditions of employment . . . because of lawful

acts done by the employee . . . in furtherance of an [FCA]

3984 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

action . . . , including investigation for, initiation of, testimony

for, or assistance in an [FCA] action . . . .” § 3730(h). An

FCA retaliation claim requires proof of three elements: “1)

the employee must have been engaging in conduct protected

under the Act; 2) the employer must have known that the

employee was engaging in such conduct; and 3) the employer

must have discriminated against the employee because of her

protected conduct.” Hopper, 91 F.3d at 1269.

Cafasso’s complaint alleges that GDC4S dismantled the

office in which she worked, causing her termination, in retali-

ation for her inquiries regarding the ATIRP-related fraud that

she suspected. GDC4S, on the other hand, maintains that it

eliminated Cafasso’s department and position as part of a cor-

porate reorganization unrelated to Cafasso’s conduct, and that

the official who decided to eliminate Cafasso’s department

and position did not know about her ATIRP-related inquiries.

[14] Cafasso’s protected conduct giving rise to her claim

for retaliation is, according to her complaint, a series of inqui-

ries and requests for an audit or internal review occurring in

2004 and 2005.12 GDC4S’s allegedly discriminatory acts,

according to the complaint, took place in early 2006: The

decision to eliminate Cafasso’s department was announced in

early January, and Cafasso was informed that her employment

12

We assume without deciding that Cafasso’s conduct was “in further-

ance of” an FCA action. § 3730(h). GDC4S has argued that Cafasso’s

ATIRP-related conduct is not protected because the fraud she suspected is

not actionable under the FCA and her investigations could not reasonably

have led to a viable FCA action. See Hopper, 91 F.3d at 1269 (“[T]he

plaintiff must be investigating matters which are calculated, or reasonably

could lead, to a viable FCA action.” (citing Neal v. Honeywell Inc., 33

F.3d 860, 864 (7th Cir. 1994))). But see Moore v. Cal. Inst. of Tech. Jet

Propulsion Lab., 275 F.3d 838, 845 (9th Cir. 2002) (“[A]n employee

engages in protected activity where (1) the employee in good faith

believes, and (2) a reasonable employee in the same or similar circum-

stances might believe, that the employer is possibly committing fraud

against the government.”). We need not decide this issue because we

affirm the district court on other grounds.

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3985

would be terminated the following month.13 But Cafasso has

adduced no evidence that these acts were causally related to

her ATIRP-related inquiries and requests. Christopher Marz-

illi, the GDC4S official who eliminated Cafasso’s department

and position, testified that he did not know of her inquiries

and requests at the time of his allegedly retaliatory decision.

And Cafasso admitted in deposition that she had no reason to

disbelieve Marzilli’s account.

[15] Cafasso defends her retaliation claim by speculating

that other GDC4S officials who did know of her protected

conduct may have poisoned Marzilli against her—the “cat’s

paw” theory of liability. See generally Poland v. Chertoff, 494

F.3d 1174, 1182-83 (2007). The only evidentiary support she

offers is first, the fact that some GDC4S officials who were

in a position to influence Marzilli knew of her ATIRP-related

inquiries and requests, and second, the cryptic statement of a

coworker that unspecified “people” had, for unknown rea-

sons, “poisoned the water,” “gotten to Chris Marzilli,” and

“placed a cloak of poison over [Cafasso’s] office with Chris

Marzilli.” This evidence, without more, is not enough to sus-

tain Cafasso’s burden at summary judgment. To prove this

theory at trial, Cafasso would have to establish that one of

Marzilli’s subordinates, in response to Cafasso’s protected

activity, “set[ ] in motion” Marzilli’s decision to eliminate

Cafasso’s department and job, and that the subordinate “influ-

enced or was involved in the decision or decisionmaking pro-

cess.” Poland, 494 F.3d at 1182. The evidence adduced by

Cafasso establishes only that this set of events could conceiv-

ably have occurred; it does not give rise to a reasonable infer-

ence that it did in fact occur. To find liability on this evidence

13

Cafasso’s brief alleges a further retaliatory act: that GDC4S interfered

with her efforts to find a new job within the company in the spring of

2006. This allegation does not appear in her complaint, so we will not

entertain it here. See Pickern v. Pier 1 Imps. (U.S.), Inc., 457 F.3d 963,

968-69 (9th Cir. 2006) (holding that new allegations must be raised by

amended pleading).

3986 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

would require undue speculation. To survive summary judg-

ment, a plaintiff must set forth non-speculative evidence of

specific facts, not sweeping conclusory allegations. Mackie v.

Rieser, 296 F.3d 909, 915-16 (9th Cir. 2002); Leer v. Murphy,

844 F.2d 628, 634 (9th Cir. 1988). We affirm the district

court’s grant of summary judgment to GDC4S on Cafasso’s

FCA retaliation claim.14

V

The district court also granted summary judgment to

GDC4S on its counterclaim that Cafasso’s appropriation of

electronic documents and files violated a confidentiality

agreement that Cafasso executed at the start of her GDC4S

employment. Cafasso, 2009 WL 1457036, at *13-15.

The confidentiality agreement provides:

During the time of my employment by [GDC4S], I

will not disclose or use any Confidential Information

except to the extent I am required to disclose or use

such Confidential Information in the performance for

[sic] my assigned duties for [GDC4S]; and I will use

my best efforts to safeguard the Confidential Infor-

mation and protect it against disclosure, misuse,

espionage, loss and theft.

After the termination of my employment . . . , I will

not use any Confidential Information or disclose any

14

Our holding is supported by the Supreme Court’s recent decision in

Staub v. Proctor Hospital, 131 S. Ct. 1186 (2011). There, the Court held

that plaintiff Vincent Staub had proven employment discrimination on the

“cat’s paw” theory by producing evidence that his supervisors’ actions

“were motivated by hostility toward [his] military obligations” and “were

causal factors underlying [the] decision to fire [him].” Id. at 1194. Further,

“there was evidence that both [supervisors] had the specific intent to cause

Staub to be terminated.” Id. Cafasso lacks the causal evidence that was

dispositive in Staub.

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3987

Confidential Information to any person or entity who

is not specifically authorized by [GDC4S] to receive

it. . . .

I will not remove any such materials from

[GDC4S’s] premises without the prior written con-

sent of a corporate officer of [GDC4S]. Upon the ter-

mination of my employment with [GDC4S], or at

any time requested, I shall promptly deliver to

[GDC4S] all such materials and copies thereof in my

possession an control.

Cafasso admits that the files she appropriated had information

covered by the agreement. While not disputing that taking

GDC4S files violated the agreement’s terms, Cafasso none-

theless urges us to adopt a public policy exception to enforce-

ment of such contracts that would allow relators to disclose

confidential information in furtherance of an FCA action.

Although we see some merit in the public policy exception

that Cafasso proposes, we need not decide whether to adopt

it here. Even were we to adopt such an exception, it would not

cover Cafasso’s conduct given her vast and indiscriminate

appropriation of GDC4S files. Cafasso copied nearly eleven

gigabytes of data—tens of thousands of pages. She decided

which GDC4S documents to copy by browsing through fold-

ers related to technology and technology development, and,

she testified, “if I saw something that I thought actually could

apply and should be investigated, I just grabbed the whole

folder” (emphasis added). Further, she scanned only file

names and “did not look at any individual documents at all.”

Swept up in this unselective taking of documents were

attorney-client privileged communications, trade secrets

belonging to GDC4S and other contractors, internal research

and development information, sensitive government informa-

tion, and at least one patent application that the Patent Office

had placed under a secrecy order.15 An exception broad

15

Cafasso seeks to excuse her conduct on the grounds that she was in

contact with, and providing information to, government investigators. This

neither explains nor excuses the overbreadth of her seizure of documents.

3988 CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS

enough to protect the scope of Cafasso’s massive document

gather in this case would make all confidentiality agreements

unenforceable as long as the employee later files a qui tam

action. See JDS Uniphase Corp. v. Jennings, 473 F. Supp. 2d

697, 702 (E.D. Va. 2007) (“[E]mployees would feel free to

haul away proprietary documents, computers, or hard drives,

in contravention of their confidentiality agreements, knowing

they could later argue they needed the documents to pursue

suits against employers . . . .”).

[16] Were we to adopt a public policy exception to confi-

dentiality agreements to protect relators—a matter we reserve

for another day—those asserting its protection would need to

justify why removal of the documents was reasonably neces-

sary to pursue an FCA claim. Cafasso has made no such par-

ticularized showing. The need to facilitate valid claims does

not justify the wholesale stripping of a company’s confiden-

tial documents. Although courts perhaps should consider in

particular instances for particular documents whether confi-

dentiality policies must give way to the needs of FCA litiga-

tion for the public’s interest, Cafasso’s grabbing of tens of

thousands of documents here is overbroad and unreasonable,

and cannot be sustained by reference to a public policy excep-

tion. We affirm the district court’s grant of summary judg-

ment on GDC4S’s contract claim.

VI

Finally, we consider the district court’s award of attorneys’

fees to GDC4S for having prevailed on its contract claim.

United States ex rel. Cafasso v. Gen. Dynamics C4 Sys., Inc.,

No. 06-1381, 2009 WL 3723087 (D. Ariz. Nov. 4, 2009). We

review a fee award for abuse of discretion. Guy v. City of San

Diego, 608 F.3d 582, 586 (9th Cir. 2010).

[17] We take seriously Cafasso’s concern that awarding

fees against a qui tam claimant may chill prospective relators

from exposing frauds on the government. This consideration

CAFASSO v. GENERAL DYNAMICS C4 SYSTEMS 3989

generally counsels against a fee award, and courts should not

reject such arguments out of hand. However, relators and their

attorneys are not free to engage in misconduct without conse-

quences merely because those consequences might chill oth-

ers. Further, the awarded fees cover GDC4S’s successful

contract claim, not Cafasso’s FCA claim. We are confident

that future litigants will appreciate the difference. The district

court applied the correct legal standard, it did not abuse its

discretion in applying that standard, and we affirm the fee

award for substantially the reasons stated in its thorough

November 4, 2009, order. See Cafasso, 2009 WL 3723087, at

*5-8.

AFFIRMED.