United States District Court, N.D. Alabama, Northeastern Division
DANA HICKMAN and ROBBIN N. HINES, Plaintiffs,
SPIRIT OF ATHENS ALABAMA, INC., Defendant.
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE
Spirit of Athens, Alabama, Inc. is a 501(c)(3) non-profit
corporation that provides economic development services to
the city of Athens, Alabama. Plaintiff Dana Hickman served as
the executive director for Spirit of Athens, and plaintiff
Robbin Hines served as Ms. Hickman's assistant until
Spirit of Athens terminated both of the plaintiffs. The
plaintiffs allege that Spirit of Athens terminated them
because they voiced concerns about the organization's
misuse of funds. Ms. Hickman and Ms. Hines bring this action
against Spirit of Athens under the False Claims Act's
anti-retaliation provision. 31 U.S.C. § 3730(h).
under the False Claims Act arises from the submission of a
fraudulent claim to the government” of the United
States. Corsello v. Lincare, Inc., 428 F.3d
1008, 1012 (11th Cir. 2005). “Indeed, the
‘central question' regarding whether a
relator's allegations state a claim  is, did the
defendant present (or caused to be presented) to the
government a false or fraudulent claim for payment?”
Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1052
(11th Cir. 2015) (quoting Hopper v. Solvay Pharm.,
Inc., 586 F.3d 1318, 1326 (11th Cir. 2009)). In a motion
to dismiss that it filed shortly after the plaintiffs filed
their complaint, Spirit of Athens argued that it could not be
sued under the False Claims Act because the corporation does
not receive federal funds. (Doc. 6, p. 1). The Court denied
Spirit of Athens's motion but ordered the parties to
engage in limited discovery concerning the extent to which
Spirit of Athens receives federal funds. (Doc. 16).
on the information that the parties gathered during
discovery, Spirit of Athens has renewed its argument. Spirit
of Athens asks the Court to enter judgment in its favor
pursuant to Rule 56 of the Federal Rules of Civil Procedure,
arguing again that it is not subject to suit under the FCA.
(Doc. 28). For the reasons discussed below, the Court finds
that the plaintiffs cannot maintain their retaliation claim
against Spirit of Athens because the plaintiffs have not
engaged in activity that is protected under the FCA.
SUMMARY JUDGMENT STANDARD
court shall grant summary judgment if the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). To demonstrate that there is a genuine
dispute as to a material fact that precludes summary
judgment, a party opposing a motion for summary judgment must
cite “to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations, stipulations
(including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials.”
Fed.R.Civ.P. 56(c)(1)(A). When considering a summary judgment
motion, a district court must view the evidence in the record
and draw reasonable inferences in the light most favorable to
the non-moving party. Asalde v. First Class Parking Sys.
LLC, 898 F.3d 1136, 1138 (11th Cir. 2018). “The
court need consider only the cited materials, but it may
consider other materials in the record.” Fed.R.Civ.P.
of Athens is a non-profit corporation tasked with
revitalizing downtown Athens, Alabama. (Doc. 25-1, p. 13;
Doc. 25-2, p. 7, tp. 23; Doc. 27-9, p. 7, tp. 23). Spirit of
Athens receives funding from the City of Athens; Limestone
County, Alabama; TVA “in-lieu-of-taxes” funds;
and membership dues. (Doc. 27- 9, p. 7, tpp. 22-23; Doc.
27-1, p. 8, tp. 26; Doc. 26-6, pp. 7, 15 (2014 tax return);
Doc. 26-7, pp. 9, 32 (2015 tax return)).
“in-lieu-of-taxes” funds are funds that the
Tennessee Valley Authority or TVA provides to states in which
the TVA operates. The TVA is a federal corporation. 16 U.S.C.
§ 831. It is “the nation's largest
government-owned power provider, ” supplying
“electricity to local power companies and to large,
energy-intensive industrial customers and federal
facilities.” “Energy, ” Tennessee
Valley Authority, available at
https://www.tva.gov/About-TVA/TVA-at-a-Glance (last accessed
Feb. 22, 2019). According to the TVA's website, the
corporation is self-funded:
Initially, federal appropriations funded all TVA operations.
Federal funding for the TVA power program ended in 1959, and
appropriations for TVA's environmental stewardship and
economic development activities were phased out by 1999. In
2014, TVA made its final scheduled repayment on Congress'
original $1 billion investment in the TVA power system, but
TVA continues to make annual payments on the government's
remaining equity investment in TVA.
TVA is now fully self-financing, funding virtually all
operations through electricity sales and power system bond
financing. TVA sets rates as low as feasible and reinvests
net income from power sales into power system improvements
and economic development initiatives. TVA makes no profit and
receives no tax money.
We're Funded, ” TennesseeValleyAuthority,
https://www.tva.gov/About-TVA/TVA-at-a-Glance (last accessed
Feb. 22, 2019).
than paying taxes on the income that it derives from sales of
electricity, “to render financial assistance to those
States and local governments in which the power operations of
the Corporation are carried on and in which the Corporation
has acquired properties previously subject to State and local
taxation, ” the TVA provides a “percentage of
the gross proceeds derived from the sale of power by the
Corporation for the preceding fiscal year . . ., together
with such additional amounts as may be payable pursuant to
the provisions” of 16 U.S.C. § 831l,
“said payments to constitute a charge against the power
operations of the Corporation.” 16 U.S.C. §
831l. The payments that the TVA makes under §
831l are “in lieu of taxation, and the
Corporation, its property, franchises and income, are
expressly exempted from taxation in any manner or form by any
State, county, municipality, or any subdivision or district
thereof.” 16 U.S.C. § 831l.
State of Alabama receives “in-lieu-of-taxes”
funds from the TVA. The state divides this money among the
Alabama counties in which the TVA operates. A . C . §
40-28-2 (1975). By act of the Alabama Legislature, Spirit of
receives $5, 000 in TVA “in-lieu-of-taxes” funds
annually. (Doc. 27-1, p. 11, tpp. 39-42; Doc. 27-1, p. 49 (in
pp. 45-51); Doc. 27-1, p. 56 (in pp. 52-62)). Spirit of
Athens's 2014 federal tax return indicates that Spirit of
Athens received “in-lieu-of-taxes” funds directly
from the TVA. (Doc. 26-6, p. 15). Other documents in the
record indicate that Limestone County received
“in-lieu-of-taxes” funds from the TVA, and then
the county dispersed TVA funds to Spirit of Athens.
(See Doc. 27-1, pp. 63, 66, 73, 79, 86, 93).
January of 2016, Spirit of Athens hired Dana Hickman as its
executive director. (Doc. 27-1, p. 5, tp. 13). A few months
later, Spirit of Athens hired Robbin Hines to assist Ms.
Hickman. (Doc. 27-3, p. 5, tpp. 13-14). When Ms. Hickman
arrived at Spirit of Athens, the organization was
experiencing financial difficulties. The IRS had questions
about Spirit of Athens's 2013 and 2014 tax returns and
had revoked Spirit of Athens's 501(c)(3) status. (Doc.
27-6, p. 13, tp. 47; see also Doc. 1, p. 6, ¶
As she began gathering documents for Spirit of Athens's
accountant to prepare the corporation's 2015 federal and
state tax returns, Ms. Hickman became concerned about
financial discrepancies and irregularities that she observed.
the plaintiffs worked for Spirit of Athens, Spirit of Athens
received one check from Limestone County for TVA
in-lieu-of-taxes funds. (Doc. 27-1, pp. 8-9, tpp. 28-29; Doc.
27-3, p. 6, tpp. 18-19). Ms. Hines testified that while she
and Ms. Hickman worked for Spirit of Athens, she heard that
the TVA funds were federal funds. (Doc. 27-3, p. 8, tpp.
27-28). According to Ms. Hines, Jason Black, a Limestone
County Commissioner, once stated that Spirit of Athens was to
receive “some federal money from the TVA, we should be
getting it soon, and not to feel bad that [the Commission]
didn't vote for us to get money from the County for [an
upcoming event] because we should be getting some federal
money soon from TVA, and we could use that for [the event]
because it is putting it back into the community.”
(Doc. 27-3, p. 9, tpp. 29-30). Later Ms. Hines
“[g]oogled TVA in lieu of tax, ” and found that
this “was federal money.” (Doc. 27-3, p. 9, tp.
30). Ms. Hines then “just assumed that it was [federal
money].” (Doc. 27-3, p. 9, tp. 34).
Hickman also believed the TVA funds were federal funds. (Doc.
27-1, p. 10, tp. 33). Ms. Hickman stated: “when we
receive a check that says in lieu of tax TVA, that spells to
me federal money.” (Doc. 27-1, p. 10, tp. 36). Ms.
Hickman explained: “[I] was associated with other
ladies who were directors in this community or in our town
… [and they] said that they received [TVA
in-lieu-of-taxes] moneys, too. … [T]hey told me that
it was federal money, so that's why I know that this is
federal money.” (Doc. 27-1, p. 27, tp. 101).
Hickman testified that Spirit of Athens could use the TVA
funds “for anything that was within our scope of what
we were going to do.” (Doc. 27-1, p. 9, tp. 30). To Ms.
Hickman's knowledge, the TVA did not restrict the use of
the in-lieu-of-taxes funds, and the TVA did not require an
accounting of the funds after the TVA disbursed the funds.
(Doc. 27-1, p. 9, tpp. 30-31). To Ms. Hickman's
knowledge, Spirit of Athens did not submit a written request
to the TVA for the in-lieu-of-taxes funds that the
corporation received. (Doc. 27-1, pp. 9-10, tpp. 32-33). Ms.
Hickman testified: “No. The way that all worked was
that it was the law and it was - TVA would distribute the
money to Spirit of Athens. So it wasn't something we had
- that I had any - to go back to fill out any paperwork to
say we are needing this money, we are asking for
appropriations for that.” ...