Karen Fuerst v. The Housing Authority of the City of Atlanta, Georgia

USCA11 Case: 21-10285 Date Filed: 06/22/2022 Page: 1 of 32

[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 21-10285

____________________

KAREN FUERST,

Plaintiff-Appellant,

versus

THE HOUSING AUTHORITY OF THE CITY OF ATLANTA,

GEORGIA,

Defendant-Appellee.

____________________

Appeal from the United States District Court

for the Northern District of Georgia

D.C. Docket No. 1:20-cv-02027-MHC

____________________

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2 Opinion of the Court 21-10285

Before NEWSOM, BRANCH, and BRASHER, Circuit Judges.

BRANCH, Circuit Judge:

By its plain text, the National Defense Authorization Act

(“NDAA”), 41 U.S.C. § 4701 et seq., protects employees of federal

“contractor[s], subcontractor[s], grantee[s], [and] subgrantee[s] or

personal services contractor[s]” from their employers’ retaliation

for disclosing information that the employee reasonably believes

to be evidence of gross mismanagement of a federal contract or

grant, an abuse of authority related to a federal contract or grant,

or a violation of a law, rule, or regulation pertaining to a federal

contract or grant. 41 U.S.C. § 4712(a)(1).

The NDAA notwithstanding, in 2017, Karen Fuerst—then

an attorney employed by the Atlanta Housing Authority (“AHA”),

which is a recipient of federal grant funds—was fired after

challenging the negotiation tactics of AHA’s new CEO, Catherine

Buell. Fuerst’s complaints filed with the Department of Housing

and Urban Development (“HUD”) inspector general and the

United States District Court for the Northern District of Georgia

were both dismissed for failure to state a claim under the NDAA.

On appeal, Fuerst argues that the district court erroneously

concluded that § 4712 did not apply to her as an employee of a

federal “grantee,” and erroneously found that she merely alleged

a difference of opinion, not a specific violation of a contract or

grant.

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We agree with Fuerst that she falls within the class of

disclosing persons protected by § 4712; the district court erred in

concluding otherwise. Regardless, we affirm the district court

because Fuerst failed to show that her belief that Buell’s actions

evinced gross mismanagement was reasonable. Nor did she show

that she had a reasonable belief that Buell’s actions constituted an

abuse of authority or a violation of a law, rule, or regulation.

Accordingly, after careful review and with the benefit of oral

argument, we affirm.

I. BACKGROUND

A. Factual Background1

i. The Atlanta Housing Authority

AHA is a corporation organized under Georgia’s Housing

Authorities Law, O.C.G.A. § 8-3-1, et seq. Its bylaws describe the

organization’s mission to “provide quality, affordable housing in

amenity rich, mixed-income communities for the betterment of

the community.” According to Fuerst’s complaint, AHA is the

state’s largest housing authority, providing and facilitating

affordable housing for nearly 22,000 low-income households.

Pursuant to Georgia’s Housing Authorities Law, Atlanta’s mayor

appoints members to AHA’s Board of Commissioners. See

O.C.G.A. § 8-3-50(a)(1). However, according to Fuerst, HUD

1Because this case comes to us on appeal from a grant of a motion to dismiss,

we adopt the factual allegations in Fuerst’s complaint. See Timson v.

Sampson, 518 F.3d 870, 872 (11th Cir. 2008) (per curiam).

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4 Opinion of the Court 21-10285

provides the majority of AHA’s funding and regulates the

Authority’s activity through conditional grant terms.

Historically, municipalities concentrated affordable housing

units in discrete locations, or “housing projects.” However, HUD

now requires its grant recipients, including AHA, to develop new

affordable housing units in “deconcentrated” communities.

Hence, AHA currently finances “mixed-income” communities in

Atlanta, in which a portion of units contain subsidized rent-reduced

apartments for low-and-middle income residents.

But before AHA can provide affordable housing, developers

must first agree to build it. Therefore, to incentivize builders, AHA

enters into revitalization agreements with them, under which the

parties agree to develop the sites of former public housing projects

into mixed-use, mixed-income communities. Using money it

receives from HUD grants, AHA provides the developers with

subordinated loans, covering a portion of the construction costs for

low-income units. To obtain additional financing, the developer

and AHA both then apply for low-income housing tax credits

(“LIHTCs”) from the State, which they resell to high-income

investors looking to mitigate tax burdens. LIHTCs are governed

by the Internal Revenue Code and issued by the Georgia

Department of Community Affairs (“GDCA”), which awards

LIHTCs through a competitive application process. See 26 U.S.C.

§ 42.

LIHTCs are necessary to incentivize builders to engage in

mixed-income housing development. After a builder constructs

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the affordable housing units at the site of a former housing project,

it may then engage in further market rate unit development;

however, constructing additional affordable housing may risk

exceeding HUD’s cap on the percentage of affordable housing units

at any given property. To qualify for LIHTCs, builders must own

a qualifying “low-income building” by the end of the first year in

which they claim the credits. 26 U.S.C. § 42(g)(3)(a). A taxpayer

may elect to use one of three tests to qualify a building for LIHTCs;

federal law makes that election “irrevocable.” 2 Id. § 42(g)(1).

In AHA’s mixed-income properties, developers rent 40% of

the available units at market rates. The remaining 60% of units are

split 20-40 into two affordable housing subsets, moderate income

and “public housing-assisted” (“PHA”) units. Developers receive

AHA funding to build both types of affordable units, and, in

addition, may apply for LIHTCs, issued by Georgia in accordance

with federal tax law. See 26 U.S.C. § 42. Although LIHTCs

sufficiently offset the decreased rent paid by moderate income

2 The taxpayer may qualify using: (A) the “20-50 test,” under which “20 percent

or more of the residential units in [a] project are both rent-restricted and

occupied by individuals whose income is 50 percent or less of area median

gross income;” (B) the “40-60 test,” which requires that “40 percent or more

of the residential units in [a] project are both rent-restricted and occupied by

individuals whose income is 60 percent or less of area median gross income;”

or (C) the “[a]verage income test,” which subject to certain restrictions,

requires “40 percent or more . . . of the residential units in such project are

both rent-restricted and occupied by individuals whose income” does not

exceed an aggregate average of 60% of the area median gross income. See 26

U.S.C. § 42(g)(1).

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renters to building owners, they alone do not incentivize owners

to accept the even lower rate paid by PHA occupants. Thus, using

its HUD grant funds, AHA supplements PHA renters’ payments.

Consequently, a building owner receives the same rate for PHA

and moderate-income units.

Sometime in the late 1990s or early 2000s, AHA entered into

a series of revitalization agreements with Integral, a local property

developer, which gave Integral the right to develop former housing

project sites in phases. Under the agreements, Integral would first

build new affordable housing with AHA’s assistance, and,

afterwards, using private financing, it would complete the project

by building market rate units. Ostensibly, AHA gained little by

allowing Integral to engage in purely private development. On the

other hand, the ability to build market rate units sweetened the pot

for Integral, likely increasing its overall enthusiasm for the

affordable housing components of the project. Notably, although

the initial agreements between AHA and Integral reserved

negotiation on the scope of Integral’s private projects, they

imposed a deadline on the exercise of those development rights to

prevent Integral from sitting on the affordable housing projects in

perpetuity.

ii. Fuerst joins AHA

In 2010, Karen Fuerst was hired into AHA’s general

counsel’s office, where she spent the next seven years receiving

consistently positive feedback and was eventually promoted to

Senior Vice President and Deputy General Counsel for Real Estate.

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By 2016, Fuerst served on AHA’s Investment Committee (“IC”), a

management body that makes major decisions about the

organization’s policies and expenditures. According to Fuerst, she

also served as “AHA’s lead real estate counsel and its lead legal

liaison with HUD.” Under then-CEO Joy Fitzgerald, Fuerst claims

that she was a trusted advisor and routinely consulted on most real-

estate and policy matters.

Thus, when AHA agreed to allow Integral to develop the

University Homes housing project—including certain “further

leverage,” or privately financed market rate units—in 2011, Fuerst

was the lead attorney involved in the negotiations. By that point,

the HUD-mandated, and AHA-subsidized, housing phases of the

AHA-Integral revitalization plan for the University Homes site had

been developed, the HUD revitalization grant had been fully

expended, and the affordable housing portion of the project’s units

were completed and occupied by low- and middle-income

residents. As a result, Integral could develop the remaining market

rate units through private financing without constructing any

more affordable units.

In January 2016, AHA hired Catherine Buell as its COO and,

that September, it announced that she would serve as its next

president and CEO starting in 2017. In late 2016, AHA’s IC met

several times to discuss various closings on Integral developments,

which were partially funded with LIHTCs. Fuerst contends that,

at these meetings, Buell: (1) “disavowed” the terms of existing

agreements between AHA and Integral; (2) disavowed the terms of

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recent AHA board approvals that Integral had included in its

LIHTC applications to the GDCA; and (3) “arbitrarily sought to

force Integral to instead agree to more onerous terms by

continually delaying requests for the Board approvals,” preventing

AHA and Integral from closing prior to the date necessary to

receive their LIHTCs. 3 Although Fuerst’s complaint fails to specify

these risks clearly, as best we can tell, she believed that Buell’s plan

jeopardized Integral’s LIHTCs because Integral needed to proceed

with market rate housing to avoid exceeding the concentration cap

which was a part of AHA’s and Integral’s LIHTC election

application. And Fuerst ostensibly feared that if Integral refused to

reopen negotiations with AHA, the consequent failure to close on

the private development portion of the project would then prevent

AHA from receiving, and therefore selling, future LIHTCs, thereby

threatening its ability to complete its mission to construct more

affordable housing.

According to Fuerst, she “admonish[ed]” the IC regarding

the risks that Buell’s “proposed actions” posed to AHA’s HUD

grant and LIHTC funding sources, and, in response, Buell began to

freeze her out of real estate negotiations at AHA. At first, Fuerst

noticed that she was invited to fewer and fewer senior leadership

meetings. Then, she discovered that AHA’s website was altered to

omit her as a senior leadership team member. In subsequent IC

3 Although Fuerst references multiple agreements in her complaint, as best we

can tell, the present dispute focuses on the University Homes agreement, in

particular, as the relevant project for AHA’s HUD grant. See infra n.5.

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meetings, Fuerst, who had previously been consulted on all

matters related to real estate, learned for the first time about

various projects, despite being responsible for all relevant real

estate legal issues. According to Fuerst, her exclusion meant that

the IC was advancing deals without consulting internal counsel,

and, to her knowledge, without input from outside counsel either.

Next, Fuerst claims that Buell and the then-General

Counsel, Paul Vranicar, began to shunt real estate work to other

AHA attorneys without Fuerst’s supervision or input, and that

Buell then walled her off from any discussion of Integral’s projects.

Allegedly, Buell also cut her out of communications with HUD

regarding AHA’s compliance with the terms of the federal HUD

grant from which it benefited, despite Fuerst having previously

been the lead legal liaison with HUD. Fuerst maintains that some

of these communications included warnings from the GDCA about

the potential loss of LIHTC funding due to AHA’s failure to

effectuate timely closings.

The situation between Fuerst and Buell continued to

escalate. In December 2016, Fuerst informed Buell and Vranicar

that Fuerst was aware of AHA’s engagement of a recruiting firm to

find a new management-level real estate attorney and that AHA

was engaging in real estate projects without consulting her. Fuerst

offered to resign, but Buell convinced her to stay, claiming that the

new hire simply reflected an increase in expected workloads.

Fuerst claims to have told Buell and Vranicar that she did not think

that they “fully appreciate[d]” the context of the 2011 agreement

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with Integral, and that it was possible that the previous CEO may

even have “lied” to Buell about it. Fuerst offered to prepare a

briefing on the agreement, and Buell accepted.

On February 16, 2017, Fuerst’s dispute with Buell reached

its zenith in an IC meeting over the latter’s plan not to approve an

upcoming financial closing with Integral unless Integral agreed to

what Fuerst describes as “substantially new, less favorable terms”

that “Buell was seeking to cram down onto Integral.” Apparently,

Fuerst asked Mike Wilson, AHA’s business lead on the relevant

deal, whether Buell’s “proposed” terms violated the 2011

agreement between AHA and Integral, and Wilson said that they

did. Fuerst explained to the IC that following Buell’s strategy

would “risk” both parties missing the LIHTC deadlines, thereby

preventing them from financing construction, and, consequently,

AHA’s defaulting under the HUD grant agreement. 4 As the

exchange between the two grew heated—Buell allegedly screamed

at Fuerst over whether forcing Integral to accept new terms would

violate a duty of good faith and fair dealing—Fuerst emphasized to

the IC that it had approved AHA’s LIHTC application the year

before, which relied on the same terms that Buell now sought to

renegotiate. Consequently, she explained, failure to close by the

4

According to Fuerst, HUD’s grant agreement with AHA mandated that

financing for the first development project funded by the grant needed to be

closed by March 28, 2017, and that HUD threatened to withdraw the grant

funds as AHA’s hardball tactics brought AHA and Integral closer to the

deadline.

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deadline would prevent AHA from applying for future LIHTCs,

cause AHA to lose money, prevent AHA from accomplishing its

mission, and put AHA at risk of losing the HUD grant, to say

nothing of the damage to AHA’s deal with Integral.

On or around February 20, 2017, twenty of AHA’s senior

leadership, including Fuerst and Buell, attended yet another

meeting in which Buell took exception with the 2011 agreement

with Integral. At the meeting, Buell also announced that the

Atlanta Journal-Constitution would be running an article about the

deal.

Much to Fuerst’s surprise, on February 24, 2017, COO Mark

Kemp and AHA’s HR director told Fuerst that Fuerst was being

investigated in conjunction with AHA’s inquiry into the 2011

agreement, and that they were placing her on a two-to-four-week

administrative leave, effective immediately. She then told AHA’s

HR director that she was notifying him that she was acting as a

whistleblower under the NDAA. AHA terminated Fuerst on

March 10, 2017, citing “a loss of confidence in [her] ability to

provide legal counsel” on real estate matters.

B. Procedural History

On November 8, 2017, Fuerst filed a retaliation complaint

against Buell and AHA with HUD’s Office of the Inspector General

(“OIG”). On May 16, 2018, the OIG informed Fuerst that it had

determined that she did not qualify as a whistleblower because she

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was not a covered employee under the statute, and that it was

issuing her a right-to-sue letter.

Fuerst filed suit against AHA in the United States District

Court for the Northern District of Georgia on May 11, 2020,

alleging that she was terminated in retaliation for whistleblowing,

in violation of the NDAA. Specifically, Fuerst alleged that voicing

opposition to Buell’s negotiation tactics—which she viewed as

evidence of either gross mismanagement; an abuse of authority; or

a violation of a law, rule, or regulation—constituted protected

activity under § 4712.

AHA moved to dismiss Fuerst’s complaint for failure to state

a claim under Federal Rule of Civil Procedure 12(b)(6). It argued

that Fuerst’s disclosure to the IC was not protected under the

NDAA because it amounted to a “mere difference[] of opinion”

regarding Buell’s tactics, as evidenced by the fact that Fuerst had

not identified any other employees who shared her perspective. 5

Additionally, AHA emphasized that Buell failed to identify a

particular contractual or statutory provision that Buell violated or

risked violating. Finally, AHA argued that the NDAA applies only

5 We note that AHA also contended that, even if Buell’s disclosure was

protected, Fuerst failed to disclose information to a “required person” under

the statute, only to the “alleged wrongdoers.” Fuerst, in response, noted that

the statutory text did not exclude alleged wrongdoers from persons to whom

a disclosure could be made. However, because we affirm the district court’s

grant of AHA’s motion to dismiss Buell’s complaint on other grounds, we

need not address this argument.

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to federal contracts, and that AHA’s contracts with Integral were

not federal contracts under the statute.

In response, Fuerst argued that she pleaded sufficient facts

to establish a reasonable belief that she made a protected disclosure

by reporting evidence of gross mismanagement; an abuse of

authority; or a violation of a law, rule, or regulation, and that the

statute did not require her to show that other employees agreed

with her position at the time. She also asserted that she had, in fact,

identified the HUD grant agreement that she believed AHA

violated. Finally, again pointing to the statutory text, Fuerst

explained that the NDAA covered disclosures relating to “a Federal

contract or grant,” and her disclosures implicated AHA’s grant

agreement with HUD.

On December 28, 2020, the district court granted AHA’s

motion to dismiss. The district court rested its decision on two

grounds: first, that the NDAA applies only to employees of federal

contractors, not federal grant recipients; and, second, that even if

Fuerst qualified for protection under the NDAA, her disclosures

were not protected because they did not rise above the level of a

“mere difference of opinion” and because she did not point to any

action which violated a federal contract or grant. Fuerst timely

appealed.

II. ANALYSIS

A. Standard of Review

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“We review de novo the district court’s grant of a motion to

dismiss for failure to state a claim under [Federal Rule of Civil

Procedure 12(b)(6)], accepting the allegations in the complaint as

true and construing them in the light most favorable to the

plaintiff.” Timson v. Sampson, 518 F.3d 870, 872 (11th Cir. 2008)

(per curiam). To survive a motion to dismiss, a “complaint need

only present sufficient facts, accepted as true, to ‘state a claim to

relief that is plausible on its face.’” Renfroe v. Nationstar Mortg.,

LLC, 822 F.3d 1241, 1243–44 (11th Cir. 2016) (quoting Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 556, 570 (2007)). Likewise, we

review de novo a district court’s interpretation of statutory text.

See Pinares v. United Tech., 973 F.3d 1254, 1259 (11th Cir. 2020).

B. Scope of the NDAA

As an initial matter, Fuerst must demonstrate that she, as an

employee of a federal grant recipient, is an employee protected by

the NDAA. Based on the plain and unambiguous statutory text,

we conclude that the NDAA protects whistleblower employees of

all federal “grantee[s],” including, in this case, AHA.

Statutory interpretation starts, and ideally ends, with the

text. See Lamie v. U.S. Tr., 540 U.S. 526, 534 (2004). And “when

the statute’s language is plain, the sole function of the courts . . . is

to enforce it according to its terms.” Id. (quotation omitted).

Granted, statutory language does not exist in a vacuum, and “[w]e

must interpret statutes ‘harmoniously,’ reconciling separate

sections so that they are compatible and not contradictory.” In re

Shek, 947 F.3d 770, 777 (11th Cir. 2020) (quoting Antonin Scalia &

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Bryan Garner, Reading Law: The Interpretation of Legal Texts 180

(2012)). Further, the “surplusage canon obliges us, whenever

possible, to disfavor an interpretation when that interpretation

would render a ‘clause, sentence, or word . . . superfluous, void, or

insignificant.’” Id. (quoting TRW Inc. v. Andrews, 534 U.S. 19, 31

(2001)). See also Whole Woman’s Health v. Jackson, 142 S. Ct. 522,

536 n.4 (2021).

With that in mind, we turn to the provision of the NDAA at

issue in this case, § 4712(a), which, in relevant part, prohibits

certain entities receiving federal funds from retaliating against their

employees for reporting evidence of misconduct in certain

circumstances. Section 4712(a)(1) provides that:

(1) In general.—An employee of a contractor,

subcontractor, grantee, or subgrantee or personal

services contractor may not be discharged, demoted,

or otherwise discriminated against as a reprisal for

disclosing to a person or body described in paragraph

(2) 6 information that the employee reasonably

6 Paragraph (2) of § 4712(a) lists the persons and bodies to whom a covered

employee may make a protected disclosure. Covered persons and bodies

include:

(A) A Member of Congress or a representative of a committee of

Congress.

(B) An Inspector General.

(C) The Government Accountability Office.

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believes is evidence of gross mismanagement of a

Federal contract or grant, a gross waste of Federal

funds, an abuse of authority relating to a Federal

contract or grant, a substantial and specific danger to

public health or safety, or a violation of law, rule, or

regulation related to a Federal contract (including the

competition for or negotiation of a contract) or grant.

41 U.S.C. § 4712(a)(1).

Without question, the district court was correct that § 4712

protects “employee[s]” of “contractor[s]” and “subcontractor[s]”

from being “discharged, demoted, or otherwise discriminated

against as a reprisal” for whistleblowing. Id. But the district court

failed to appreciate that Congress did not stop there. Instead, the

enacted text of § 4712 also extends that protection to “employee[s]”

of “grantee[s],” “subgrantee[s],” and “personal services

contractor[s].” Accordingly, as the statute clearly covers federal

(D) A Federal employee responsible for contract or grant oversight or

management at the relevant agency.

(E) An authorized official of the Department of Justice or other law

enforcement agency.

(F) A court or grand jury.

(G) A management official or other employee of the

contractor, subcontractor, grantee, or subgrantee who has

the responsibility to investigate, discover, or address

misconduct.

41 U.S.C. § 4712(a)(2).

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grantees and because AHA is a federal grant recipient, employees

of AHA—including Fuerst—are covered by the provision.

Yet, the district court reached a different conclusion.

Looking to a different provision of the statute—41 U.S.C. § 4705

(“Protection of contractor employees from reprisal for disclosure

of certain information”)—which extends whistleblower

protections to employees of federal contractors only, the district

court relied on the similarity between the statutory titles to read

§ 4712 (“Enhancement of contractor protection from reprisal for

disclosure of certain information”) as a restatement of, rather than

an addition to, § 4705’s protections. In its analysis, because § 4705

defined a “[c]ontract” as “a contract awarded by the head of an

executive agency,” and a contractor as “a person awarded a

contract with an executive agency,” § 4712 must therefore apply

only to conduct between the federal government and its

contractors, not its grant recipients. Fuerst v. Housing Authority

of City of Atlanta, Ga., 2020 WL 8299763, *4–6 (N.D. Ga. Dec. 28,

2020) (citing 41 U.S.C. §§ 4705, 4712). In so doing, however, the

district court ignored the plain language of § 4712, which clearly

includes employees of federal grant recipients like Fuerst. Further,

to embrace the district court’s holding and construe the text to

limit whistleblower protections to private contractors would

necessarily render the statute’s “grantee,” “subgrantee,” and

“personal services contractor” language mere surplusage. See In re

Shek, 947 F.3d at 777. Pursuant to the surplusage canon, we strive

to avoid such interpretations.

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Despite AHA’s request that we follow the lead of the district

court in giving effect to the statutory title of § 4712, federal courts

are not responsible for policing Congress’s consistent use of

headings throughout a large and complex act. Rather, “where, as

here, the [statutory] text is complicated and prolific, headings and

titles can do no more than indicate the provisions in a most general

manner.” Lawson v. FMR LLC, 571 U.S. 429, 446–47 (2014)

(quotation omitted). 7 Thus, to determine whether § 4705

constrains § 4712, we must look to the enacted text of those

statutes. Section 4705 provides that:

An employee of a contractor may not be discharged,

demoted, or otherwise discriminated against as a

reprisal for disclosing to a Member of Congress or an

authorized official of an executive agency or the

Department of Justice information relating to a

substantial violation of law related to a contract

(including the competition for, or negotiation of, a

contract).

41 U.S.C. § 4705(b) (emphasis added). In other words, § 4705 does

exactly what its title says: it enacts whistleblower protections for

employees of federal contractors, and only federal contractors. In

contrast, § 4712 uses the terms “contractor, subcontractor, grantee,

or subgrantee or personal services contractor . . . .” 41 U.S.C.

7 We note that, in Lawson, the Supreme Court explicitly rejected a similar

argument about the role of statutory headings in determining the scope of

whistleblower protections in the Sarbanes-Oxley Act, 18 U.S.C. § 1514A. Id.

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§ 4712(a)(1) (emphasis added). Moreover, while § 4705 focuses on

violations relating to federal contracts, § 4712 protects disclosures

relating both to “Federal contract[s]” and “grant[s].” Id. Therefore,

§ 4712 clearly provides broader antiretaliation protections than its

title suggests. And as AHA is certainly a federal grantee, Fuerst falls

within the protection of the statute.

We also note that, by holding that § 4712 provides greater

whistleblower protections than § 4705, we reach a similar

conclusion to the Fifth Circuit, the only other Circuit Court to

consider the scope of § 4712. The panel in Tex. Educ. Agency v.

U.S. Dep’t of Educ., held that § 4712(a)(1) “by its terms, applies to

any federal contract or grant and is not limited to a particular

appropriation or class of grant.” 992 F.3d 350, 354 (5th Cir. 2021).

We agree.

In contrast, AHA urges us to follow the same Colorado

district court case upon which the district court in this case relied,

Armstrong v. Arcanum Group Inc., 2017 WL 4236315 (D. Col.,

Sept. 25, 2017). But, like the district court here, the Armstrong

court mistakenly used § 4705’s definitions of “contract” and

“contractor” to define the statutory text of § 4712 based on the

appearance of the term “contractor” in the latter’s title. Section

4705’s definitions could certainly bear on Congress’s use of the

same words in § 4712. But the mention of “contractor

protection[s]” in § 4712’s title cannot justify ignoring, or rendering

superfluous, the rest of a law properly enacted through

bicameralism and presentment. See Lawson, 571 U.S. at 446–47;

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In re Shek, 947 F.3d at 777. Tellingly, AHA does not even attempt

to rebut Fuerst’s surplusage argument.

Under our Constitution, Congress writes the laws, not the

federal judiciary. We hold that the district court erred in

determining that the NDAA does not apply to employees of

grantees of federal funds.

C. Gross Mismanagement

To prevail on appeal, however, Fuerst must establish more

than the fact that she was an “employee” of an entity listed in

§ 4712(a)(1).

Rather, pursuant to the statute, she must also demonstrate

that she:

disclose[d] . . . information that [she] reasonably

believe[d] [was] evidence of gross mismanagement of

a Federal contract or grant, a gross waste of Federal

funds, an abuse of authority relating to a Federal

contract or grant, a substantial and specific danger to

public health or safety, or a violation of law, rule, or

regulation related to a Federal contract (including the

competition for or negotiation of a contract) or grant.

41 U.S.C. § 4712(a)(1) (emphasis added).

The district court, relying on the Federal Circuit’s decision

in White v. Dep’t of the Air Force, 391 F.3d 1377, 1381 (Fed. Cir.

2004), found that Fuerst’s allegations failed to show a reasonable

belief of gross mismanagement because they were merely

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“differences of opinion” which failed to identify any actual

violations of the HUD grant’s terms.

In Fuerst’s view, the statutory language requires her to show

only that she reasonably believed that her disclosure provided

evidence of gross mismanagement, an abuse of authority, or a

violation of a law, rule, or regulation, not that an actual violation

occurred. 8 According to Fuerst, her good faith belief based on

decades of experience in housing development and finance, that

forcing Integral to renegotiate would necessarily result in AHA’s

failure to qualify for LIHTCs, and, as a result, prevent it from

complying with the HUD grant’s closing requirement, was a

“disclos[ure] [of] . . . information that [she] reasonably believe[d]

was evidence of gross mismanagement of a Federal . . . grant.” See

41 U.S.C. § 4712(a)(1).

While we agree with Fuerst that § 4712(a)(1) requires only a

disclosure that a covered person “reasonably believes” indicates

gross mismanagement, an abuse of authority, or a violation of a

law, rule, or regulation, we nevertheless conclude that Fuerst’s

belief was not objectively reasonable as a matter of law.

8

Fuerst further maintains that, despite not being required to identify any

actual violation, in her complaint she identified several actions taken by Buell

that violated HUD grant conditions. Specifically, she points to her comments

to Buell, AHA’s general counsel, and AHA’s HR director that Buell’s actions

could cause AHA to default on timely delivery of new affordable housing,

which, in turn, could allow HUD to revoke a $30 million grant to AHA.

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22 Opinion of the Court 21-10285

Starting, as always, with the plain text of the statute, § 4712

protects disclosures of “information that the employee reasonably

believes is evidence of gross mismanagement of a Federal contract

or grant.” 41 U.S.C. § 4712(a)(1). Although, as noted by the district

court, reporting an actual rule violation could establish a

reasonable belief under § 4712(a)(1), the statutory language clearly

does not require Fuerst, or any plaintiff, to prove that one

occurred. Instead, Fuerst only needs to show that she had (1) a

reasonable belief that the information she disclosed (2) was

evidence of gross mismanagement.

Hence, to ascertain whether Fuerst was entitled to § 4712’s

protection, we must first determine the meaning of “reasonable

belief,” “gross mismanagement,” and a “reasonable belief of gross

mismanagement”—terms not defined by the statute. To that end,

we note that § 4712(a)(1) mirrors the text of another federal

whistleblower law’s anti-retaliation provision—5 U.S.C.

§ 2302(b)(8) of the Whistleblower Protection Act of 1989 (“WPA”),

5 U.S.C. § 1201, et seq., Pub. L. 101-12, and caselaw interpreting the

WPA provides analytical guidance.

Section 2302(b)(8) of the WPA prohibits federal agencies

from retaliating against employees for disclosing wrongdoing.

According to its text, a federal employer may not:

take or fail to take, or threaten to take or fail to take,

a personnel action with respect to any employee or

applicant for employment because of . . . any

disclosure of information . . . which the employee

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21-10285 Opinion of the Court 23

reasonably believes evidences – any violation of any

law, rule, or regulation or . . . gross mismanagement,

a gross waste of funds, an abuse of authority, or a

substantial and specific danger to public health or

safety . . . .

5 U.S.C. § 2302(b)(8) (emphasis added). 9

The Federal Circuit defined a “reasonable belief,” and later

a “reasonable belief” of “gross mismanagement,” as used in

§ 2302(b)(8) of the WPA in two cases, Lachance v. White and

9 Meanwhile, Congress extended substantially similar whistleblower

protections to certain non-federal employees through the NDAA, § 4712.

Again, that statute, in relevant part, provides that any covered employee:

[M]ay not be discharged, demoted, or otherwise discriminated

against as a reprisal for disclosing . . . information that the

employee reasonably believes is evidence of gross

mismanagement . . . a gross waste of Federal funds, an abuse

of authority . . . a substantial and specific danger to public

health or safety, or a violation of a law, rule, or regulation . . .

.

41 U.S.C. § 4712(a)(1) (emphasis added).

Accordingly, because § 4712(a)(1) of the NDAA and § 2302(b)(8) of the

WPA both deal with whistleblower protections relating to the misuse of

federal funds, we interpret them together. See United States v. Tigua, 963 F.3d

1138, 1143 (11th Cir. 2020) (quoting Scalia & Garner, Reading Law § 39, at 252)

(“Statutes in pari materia are to be interpreted together, as though they were

one law”); Gallardo by and through Vassallo v. Dudek, 963 F.3d 1167, 1178

n.15 (11th Cir. 2020).

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24 Opinion of the Court 21-10285

White v. Dep’t of Air Force. 10 First, in Lachance v. White,

canvassing the meaning of a “reasonable belief” in other legal

contexts, the Federal Circuit concluded that:

[T]he proper test is . . . [whether] a disinterested

observer with knowledge of the essential facts known

to and readily ascertainable by the employee

reasonably conclude that the actions of the

government evidence gross mismanagement? A

purely subjective perspective of an employee is not

sufficient even if shared by other employees.

174 F.3d 1378, 1381 (Fed. Cir. 1999) (“White I”). And, as the

Federal Circuit later clarified, again in the § 2302(b)(8) context,

“debatable differences of opinion concerning policy matters are not

protected disclosures.” White v. Dep’t of Air Force, 391 F.3d 1377,

1382 (Fed. Cir. 2004) (“White II”). “Rather, . . . to constitute ‘gross

mismanagement,’ an employee must disclose such serious errors

. . . that a conclusion . . . [of] err[or] is not debatable among

reasonable people.” Id.

10It is possible that we have never interpreted this statutory language because,

in 1982, seven years before Congress first enacted the WPA, it vested exclusive

appellate jurisdiction over most whistleblower complaints in the Federal

Circuit, where it remained until 2012. See 5 U.S.C. § 7703(b) (1982), Pub. L.

97-164; 5 U.S.C. § 7703(b) (2012), Pub. L. 112-199. See also Kelliher v.

Veneman, 313 F.3d 1270, 1274 (11th Cir. 2002) (explaining that, during that

time period, the Eleventh Circuit had jurisdiction only over petitions of

“mixed” cases involving whistleblower and discrimination claims).

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21-10285 Opinion of the Court 25

We agree with the Federal Circuit’s analysis. And, given the

similarity between § 4712(a)(1)’s language and § 2302(b)(8), we

adopt the Federal Circuit’s interpretation of “reasonable belief” and

a “reasonable belief” of “gross mismanagement” for § 4712(a)(1)

purposes. See Tigua, 963 F.3d at 1143; Dudek, 963 F.3d at 1178

n.15.

Accordingly, § 4712(a) requires that an eligible person

“reasonably believe[]” that her disclosure evidences gross

mismanagement. See 41 U.S.C. § 4712(a)(1). Likewise, by

protecting disclosures pertaining to “gross mismanagement,”

rather than ordinary mismanagement, Congress limited

whistleblower protection to disclosures about particularly

egregious conduct, not run-of-the-mill policy disputes between

managers and employees. See “Gross,” “Mismanage[ment],”

Webster’s New World College Dictionary, 640, 935 (5th ed. 2014)

(defining “gross” as “glaring; flagrant; very bad,” and “mismanage”

as “to manage or administer badly or dishonestly”); White II, 391

F.3d at 1382 (“[D]ebatable differences of opinion concerning policy

matters are not protected disclosures.”). In sum, section 4712(a)

thus asks whether an employee has an objectively reasonable belief

that the disclosed information evidenced “such serious errors . . .

that a conclusion . . . [of] err[or] is not debatable among”

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26 Opinion of the Court 21-10285

objectively reasonable persons with knowledge of the essential

facts. 11 White II, 391 F.3d at 1382.

Applying this clear articulation of § 4712’s “gross

mismanagement” prong and “reasonable belief” standard to

Fuerst’s complaint, we hold that Fuerst failed to establish a

reasonable belief that her disclosure evidenced gross

mismanagement. Fuerst is correct that the district court did not

explicitly analyze whether her belief was reasonable. Instead, the

district court proceeded to apply the Federal Circuit’s “gross

mismanagement” test and found that Fuerst’s allegations failed to

satisfy it. [Doc. 48 at 17] Though this may seem like putting the

cart before the horse, it was not erroneous. After all, to

“reasonably believe[]” that her disclosure evidenced gross

mismanagement, Fuerst needed to interpret “gross

11

Fuerst argues that the district court improperly required her to show proof

that other employees contemporaneously agreed with her position. It did not.

Regardless, the subjective views of other employees would not matter.

Hence, we agree with the Federal Circuit that “[a] purely subjective

perspective of an employee is not sufficient even if shared by other

employees.” White I, 174 F.3d at 1381. By the same token, we clarify that

district courts should not treat evidence that other employees disagreed with

a whistleblower as establishing that an objectively reasonable person would

not reach the whistleblower’s conclusion. Especially in a retaliation context,

carrying with it the implied threat of reprisal, a colleague’s disagreement may

simply reflect a desire for self-preservation. We do not consider whether

agreement or disagreement by an employee owing legal duties to a

corporation, e.g., corporate counsel, rather than management, has probative

value in an NDAA retaliation suit.

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21-10285 Opinion of the Court 27

mismanagement” correctly. Clearly, Fuerst disagreed with Buell

about how to deploy federal grant funds. But to obtain protection

under § 4712, she needed to demonstrate that she reasonably

believed that she disclosed evidence of “gross mismanagement.”

This requirement means that Fuerst must show that a

“disinterested observer with knowledge of the essential facts

known to and readily ascertainable by [Fuerst] [would] reasonably

conclude that the actions of . . . [Buell] evidence” violations flagrant

enough to obviate disagreement. See White I, 174 F.3d at 1381.

Returning to Fuerst’s complaint, she generally alleged that

Buell’s plan to force Integral to renegotiate its agreement with

AHA by refusing to close would threaten AHA’s ability to qualify

for LIHTCs, which, in turn, would prevent it from closing on or

before March 28, 2017, the date specified in the HUD grant

agreement. But, at the time, Buell’s plan was just that—a plan.

Fuerst did not allege that Buell could unilaterally force AHA to take

action with respect to its agreements with Integral, or that the

other members of the IC were on board. Instead, Fuerst, allegedly

familiar with the IC’s role, challenged the course of action for

which Buell sought IC approval. Because the challenged action

was not final, and Fuerst knew that the decision was not final, in

turn, she necessarily knew that her disclosure was premature, too.

Moreover, at least at the time that Fuerst made her

disclosures, she simply could not know how Integral would

ultimately respond: Fuerst was not even fired until March 10, 2017,

weeks before the closing deadline mandated by the HUD grant

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28 Opinion of the Court 21-10285

agreement. Hence, she could not know whether AHA would

refuse to close on its agreements with Integral, let alone that, in

response to AHA’s sudden obstinance, Integral would ultimately

walk away rather than renegotiate. Indeed, even if Integral refused

to renegotiate at first, it had ample time to change its mind. Thus,

even if Buell and the IC followed through, those hardball tactics

could just as easily have led to AHA and Integral reaching an accord

prior to the LIHTC deadlines. In that event, timely closings for the

LIHTCs would completely ameliorate any perceived risk to the

HUD grant funds.

Meanwhile, Fuerst does not even attempt to show how the

mere act of renegotiating with Integral, without missing deadlines

and thereby jeopardizing LIHTCs or the HUD grant, would lead

to a “conclusion . . . [of] err[or] [that] is not debatable among”

objectively reasonable persons with knowledge of the essential

facts. White II, 391 F.3d at 1382. In fact, in her complaint, Fuerst

concedes that “there was no harm in seeking to renegotiate a deal.”

We agree: at the point of Fuerst’s disclosure, Buell’s negotiation

tactic simply had not yet matured into anything resembling “gross

mismanagement.”

Section 4712 protects whistleblowers who reasonably

believe that they are reporting evidence of gross mismanagement.

But § 4712 does not permit an employee to blow the whistle before

the foul. Fuerst fell short of establishing a reasonable belief that

her disclosure evidenced gross mismanagement, or, really,

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21-10285 Opinion of the Court 29

anything more than a dispute with her boss about negotiation

tactics.

D. Abuse of Authority

In addition to asserting that Buell’s actions constituted

“gross mismanagement,” Fuerst also insisted that they amounted

to an abuse of authority pursuant to § 4712, defined as “an arbitrary

and capricious exercise of authority that is inconsistent with the

mission of the executive agency concerned or the successful

performance of a contract or grant of such agency.” 41 U.S.C.

4712(g). The district court, however, failed to consider whether

Fuerst’s complaint could survive a motion to dismiss under this

prong of the statute.

Federal Rule of Civil Procedure 8(a) provides the standards

for most civil complaints in federal court. Fed. R. Civ. P. 8. Rule

8(a)(2) requires that a plaintiff provide the court and opposing party

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

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

allegation must be simple, concise, and direct,” but “[n]o technical

form is required.” Fed. R. Civ. P. 8(d)(1). Rule 8 “does not require

‘detailed factual allegations,’ but it demands more than an

unadorned, the-defendant-unlawfully-harmed-me accusation.”

Chapparo v. Carnival Corp., 693 F.3d 1337, 1335 (11th Cir. 2012)

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Accordingly,

where a plaintiff has pleaded “facts sufficient to show that her claim

has substantive plausibility,” the federal rules “do not countenance

dismissal of a complaint for imperfect statement of the legal theory

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30 Opinion of the Court 21-10285

supporting the claim asserted.” Johnson v. City of Shelby, 574 U.S.

10, 11 (2014) (per curiam) (quotations omitted). See also Marsteller

for Use and Benefit of United States v. Tilton, 880 F.3d 1302, 1314

n.23 (11th Cir. 2018).

Fuerst’s complaint, which explicitly referred to Buell and

AHA’s actions as “an abuse of authority”—and even described

them as “arbitrary and capricious” and “inconsistent with AHA’s

successful performance under HUD grant agreements”—satisfied

Rule 8(a)(2). Hence, the district court’s omission of that claim in

its ruling on AHA’s motion to dismiss, without explanation, was

clearly erroneous.

But we may affirm the district court’s judgment on any

ground within the record. See Jackson v. Bank of Am., N.A., 898

F.3d 1348, 1356 (11th Cir. 2018). To that end, we hold that Fuerst

failed to establish that she had a reasonable belief that Buell’s

actions constituted an “abuse of authority” for the same reasons

that Fuerst cannot establish a reasonable belief that her disclosure

evidenced “gross mismanagement.” Remember, Fuerst’s

assumption that Integral would refuse to acquiesce to any of Buell’s

new terms is, itself, a key component of Fuerst’s claim that

renegotiation would prevent the parties from closing on their

LIHTCs in compliance with the HUD grant requirements. But, at

the time of her disclosure, Fuerst was an attorney, not a fortune

teller. Hence, because Fuerst cannot demonstrate how Buell’s

proposed renegotiation tactic, independent of Integral’s

prospective actions, would be “inconsistent” with AHA’s mission

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21-10285 Opinion of the Court 31

of providing affordable housing. In effect, by failing to plead more

than mere speculation that Buell’s actions could result in a parade

of horribles, Fuerst’s claim also fails. Accordingly, we affirm the

district court’s dismissal of Fuerst’s complaint.

E. Violation of Law, Rule, or Regulation

Although Fuerst admits that she never pleaded that her

disclosures constituted evidence of a “violation of law, rule, or

regulation” in proceedings below, she maintains that, due to the

lenient Rule 8 pleading standards, the district court should have

asked whether she “reasonably believe[d]” her disclosures were

“evidence of . . . a violation of [a] law, rule, or regulation related to

a Federal . . . grant,” nevertheless. 41 U.S.C. § 4712(a)(1). As noted

earlier, the district court concluded its analysis at “gross

mismanagement,” instead.

Without question, in her initial complaint, Fuerst asserted a

“violation of [a] law, rule, or regulation” claim: she warned the IC

members that without a timely closing, Integral and AHA would

lose their LIHTCs, and potentially be barred from applying for

them in the future, which, in turn, could threaten AHA’s HUD

grant. But Fuerst failed to establish a reasonable belief of a

“violation of a law, rule, or regulation” in relation to a federal grant

for the same reasons that doom her “gross mismanagement” and

“abuse of authority” claims: she neglected to proffer any evidence

establishing that, as a result of Buell’s actions or otherwise, AHA

violated any law, rule, or regulation. Consequently, we affirm the

district court’s dismissal of Fuerst’s complaint.

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32 Opinion of the Court 21-10285

III. CONCLUSION

When Congress and the President enacted § 4712 of the

NDAA, they extended its protections to employees of federal

grantees, not just federal contractors. Accordingly, we now vacate

the district court’s holding that employees like Fuerst could not

qualify for whistleblower protections.

However, we affirm the district court because Fuerst

nevertheless failed to establish a reasonable belief that her

disclosure evidenced “gross mismanagement,” an “abuse of

authority,” or a violation of a “law, rule, or regulation” pertaining

to a federal grant. Accordingly, Fuerst failed to state a claim upon

which relief can be granted.

AFFIRMED.