Rille v. PricewaterhouseCoopers LLP
2015 U.S. App. LEXIS 17438
8th Cir.2015Background
- Relators Rille and Roberts filed a qui tam False Claims Act (FCA) suit alleging kickbacks and defective pricing by systems integrators and vendors; Cisco and Comstor were later added as defendants.
- Relators provided extensive documents; the GSA Inspector General audited a Comstor contract and found defective disclosures and price-reduction failures.
- The government intervened in part, later intervened against Cisco, then negotiated settlements: Cisco paid $44.16M and Comstor $3.84M; the settlement described broad "Covered Conduct."
- The settlement dismissed the relators’ claims against Cisco but left open the relators’ entitlement to a share of recovery under 31 U.S.C. § 3730(d)(1).
- The district court awarded relators 17% of Cisco’s and 15% of Comstor’s payments; the government appealed, arguing the settled conduct did not overlap with the relators’ pleaded claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a relator is entitled to a share of government settlement proceeds from claims that were not the relator’s original claim | Relators: once government proceeds in a relator-initiated action, relator gets a share of proceeds the government recovers in that action, regardless of later-added factual theories | Government: relator’s share is limited to proceeds of the claim the relator actually brought; no recovery from non-overlapping claims | Court: Relator’s share for settlements is limited to proceeds of “the claim” brought by relator; recovery requires factual overlap between relator’s allegations and settlement conduct; remand for findings |
| Proper construction of “proceeds of the action” vs “proceeds of the settlement of the claim” in § 3730(d)(1) | Relators: “proceeds of the action” includes settlement proceeds of the action after government intervention | Government (and majority): statute distinguishes action vs settlement of the claim; settlement recovery must be tied to the claim the relator brought | Court: text/structure indicate settlement recovery is tied to “the claim” the relator brought; cannot be read to cover entirely new, non-overlapping claims |
| Whether a relator may recover from government settlements that resulted from later-added or alternate claims pursued by the government | Relators: causation/catalyst theory — relator brought case that led to settlement; should share in proceeds | Government: allowing recovery where relator didn’t allege settled conduct would be inconsistent and permit windfalls | Court: adopted an overlap test (following Bledsoe) — relator recovers only to extent settled conduct overlaps relator’s pleaded allegations |
| Whether the district court made adequate findings to permit appellate review of overlap | Relators: district court’s findings (e.g., relators were the catalyst; allegations “fit” Covered Conduct) suffice | Government: district court failed to make factual findings comparing pleaded claims to settled conduct | Court: district court’s findings were insufficient under Fed. R. Civ. P. 52(a); vacated and remanded for specific factual findings about overlap |
Key Cases Cited
- Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, 135 S. Ct. 1970 (2015) (noting interpretive challenges under the FCA)
- Roberts v. Accenture, LLP, 707 F.3d 1011 (8th Cir. 2013) (discussing relator recovery when government intervenes)
- United States ex rel. Bledsoe v. Community Health Sys., Inc., 342 F.3d 634 (6th Cir. 2003) (relator entitled to share only where settlement conduct overlaps relator’s allegations)
- United States ex rel. Barajas v. United States, 258 F.3d 1004 (9th Cir. 2001) (relator’s rights in alternate remedies mirror those in an FCA action; overlap analysis in alternate-remedy context)
- Allied Van Lines, Inc. v. Small Bus. Admin., 667 F.2d 751 (8th Cir. 1982) (appellate review requires clear statement of trial court’s basis)
- King v. United States, 553 F.3d 1156 (8th Cir. 2009) (Fed. R. Civ. P. 52(a) findings requirement)
- Darst-Webbe Tenant Ass’n Bd. v. St. Louis Hous. Auth., 339 F.3d 702 (8th Cir. 2003) (need for adequate factual findings for appellate review)