United States ex rel. Newell v. City of St. Paul
2013 U.S. App. LEXIS 17940
| 8th Cir. | 2013Background
- Newell filed a False Claims Act suit against the City of St. Paul for HUD grant noncompliance (2003–2009).
- Alleged violations centered on Section 3 employment/training requirements and false certifications to obtain HUD funds.
- The government declined to intervene in the qui tam action.
- The district court dismissed for lack of subject matter jurisdiction under the public disclosure bar, § 3730(e)(4).
- HUD audit found Section 3 violations; a Voluntary Compliance Agreement resolved administrative claims.
- Public disclosures included a 2005 McDonald memorandum, Nails litigation filings, and FOIA-revealed documents; these disclosures underpin the bar.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Public disclosure bar applicability | Newell contends disclosures do not establish fraud basis for FCA suit | City/Newell argue disclosures reveal the fraud basis | Bar applies; disclosures show the true facts and misrepresentation before May 2009 |
| Original source requirement | Newell claims direct, independent knowledge of noncompliance | He lacks direct knowledge; information came from public sources | Newell not an original source; knowledge derived from others and public records |
| Rule 60(b) relief and alternate remedy | Settlement/alternate remedy should entitle relief share | Alternate remedy not applicable to FCA bar here | Abandoned; no entitlement to relief or share; district court not abused |
Key Cases Cited
- United States ex rel. Hays v. Hoffman, 325 F.3d 982 (8th Cir. 2003) (public disclosure bar permits suit only by original source)
- Rockwell Int’l Corp. v. United States, 549 U.S. 457 (S. Ct. 2007) (public disclosure bar strips jurisdiction if disclosures reveal fraud)
- Minnesota Ass’n of Nurse Anesthetists v. Allina Health Sys. Corp., 276 F.3d 1032 (8th Cir. 2002) (disclosures must reveal true facts and misrepresentation)
- Schindler Elevator Corp. v. United States ex rel. Kirk, 131 S. Ct. 1885 (2011) (agency FOIA responses are reports for public disclosure)
- Nurse Anesthetists v. United States, 276 F.3d 1069 (8th Cir. 2002) (distinguishes direct versus independent knowledge for original source)
- Merena v. SmithKline Beecham Corp., 205 F.3d 97 (3d Cir. 2000) (relator may be denied share when FCA claim barred)
- Vigil v. Nelnet, Inc., 639 F.3d 791 (8th Cir. 2011) (public disclosure bar governs jurisdiction and relief)