69 F. Supp. 3d 416
D. Del.2014Background
- Moore & Company filed a sealed FCA complaint against Majestic Blue, Pacific Breeze, Dongwon, Jayne Kim, Joyce Kim, and Jaewoong Kim on Nov 26, 2012; government declined to intervene May 21, 2013 and case was unsealed May 24, 2013.
- Appearing defendants moved to dismiss for lack of subject matter jurisdiction (12(b)(1)) and for failure to state a claim (12(b)(6)); Moore filed an amended complaint on Jan 10, 2014.
- Court has jurisdiction under 28 U.S.C. § 1331 and 31 U.S.C. §§ 3729, 3730(b); issues concern FCA public disclosure bar and original source requirements.
- Allegations involve: (i) control of U.S.-flag vessels by foreign Dongwon; (ii) misrepresentation of ownership/control to obtain USCG/NMFS documentation; (iii) alleged improper dumping of waste under APPS; (iv) improper creation and use of U.S.-flagged vessels via Delaware LLCs.
- Plaintiff argues the amended complaint remains valid under both pre-PPACA and PPACA FCA; defendants contend public disclosures bar FCA claims.
- Court ultimately dismisses on public disclosure grounds and rejects original source status, granting the 12(b)(1) and 12(b)(6) motions and closing the case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether public disclosures bar the FCA action. | Moore argues disclosures do not bar; claims rely on ongoing conduct. | Appearing defendants contend disclosures (news, FOIA, litigation) publicize the fraud, triggering bar. | Yes; public disclosures bar applies under both pre- and post-PPACA FCA. |
| Whether Moore is an original source under pre-PPACA FCA. | Moore claims direct, independent knowledge from investigations. | Knowledge largely derives from public disclosures; not original source. | No; Moore not original source under pre-PPACA. |
| Whether Moore is an original source under amended (PPACA) FCA. | Moore’s independent knowledge adds to public disclosures. | Independent knowledge not sufficiently demonstrated; reliance on public records pervasive. | No; amended FCA original source status not satisfied. |
| Whether the court should dismiss for lack of subject matter jurisdiction and as a matter of law given the above. | Amendments and arguments retain jurisdiction and claims. | Public disclosures and lack of original source warrant dismissal. | Dismissed; case closed. |
Key Cases Cited
- Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280 (U.S. 2010) (Public disclosure bar framework and purpose of FCA discussed)
- Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939 (U.S. 1997) (Retroactivity rule guiding amendment application)
- Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506 (3d Cir. 2007) (Original source inquiry and independent knowledge framework)
- Zizic v. Q2Administrators, LLC, 728 F.3d 228 (3d Cir. 2013) (Public disclosures analysis defining 'based on' disclosures)
- Dunleavy v. Cnty. of Del., 123 F.3d 734 (3d Cir. 1997) (Fraud elements and public disclosure context guidance)
- Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884 (3d Cir. 1977) (Jurisdictional standard and evidentiary considerations in ruling on moot/jurisdiction issues)
- Schindler Elevator Corp. v. U.S. ex rel. Kirk, 563 U.S. 401 (U.S. 2011) (Public disclosure scope through news media and FOIA-like disclosures)