Carl SCHROEDER, United States of America, ex. rel., Plaintiff-Appellant, v. UNITED STATES of America, Intervenor Plaintiff-Appellee, v. CH2M Hill; Washington River Protection Solution LLC, Defendants.
No. 13-35479
United States Court of Appeals, Ninth Circuit
July 16, 2015
Argued and Submitted April 10, 2015.
Michael C. Ormsby, United States Attorney, Stuart F. Delery, Assistant Attorney General, Michael S. Rabb and Robert D. Kamenshine (argued), Attorneys, Appellate Staff, Civil Division, Department of Justice, Washington, D.C., for Intervenor Plaintiff-Appellee.
OPINION
HAWKINS, Circuit Judge:
Carl Schroeder (“Schroeder“) appeals his dismissal from a qui tam suit concerning the billing practices of government contractor CH2M Hill. The appeal turns on an issue of first impression: Does
FACTUAL AND PROCEDURAL BACKGROUND
Schroeder worked for CH2M Hill, a contractor for the U.S. Department of Energy (“DOE“) as a Radiological Control Technician from January 2002 to February 2003 and then again from May 2004 to October 2008. During this time, CH2M Hill engaged in widespread fraudulent billing of hourly work.
Schroeder, like many of his colleagues, submitted false time cards, and, as a result, received at least $50,000 for falsely claimed overtime hours. In April 2008, the DOE Office of Inspector General (“OIG“) learned of the time card fraud from an anonymous source and began investigating. OIG investigators interviewed Schroeder‘s colleagues in November 2008. Several of them were escorted off-site, and supervisors informed employees that the employees were under investigation. Schroeder admitted to over-billing during his December 2008 interview with OIG.
Schroeder contends that he voluntarily approached OIG and did not know he was being investigated at the time. These allegations are not supported by the record, particularly the declaration of the investigation‘s case agent, and were rejected by the district court, which found that “[t]he record indicates Mr. Schroeder did not approach investigators on his own initiative.”
As a result of the investigation, the government filed an information against Schroeder in September 2011, and he pled guilty to one felony count of conspiracy to
In June 2009, after the initial interviews but prior to the filing of charges, Schroeder filed a complaint against CH2M Hill. Schroeder‘s qui tam suit proceeded contemporaneously with the government‘s investigation.1 The United States intervened in August 2012, and shortly thereafter moved to dismiss Schroeder as a relator based on his felony conviction.
The district court concluded that the statute is unambiguous and “requires dismissal from the action of a person who has been convicted of criminal conduct arising from his role” in the fraud that is the basis of his qui tam action. Schroeder timely appealed.
JURISDICTION AND STANDARD OF REVIEW
Because the district court‘s dismissal was a final decision disposing of all claims, we have jurisdiction under
ANALYSIS
Whether or not the Government proceeds with the action, if the court finds that the action was brought by a person who planned and initiated the violation of section 3729 upon which the action was brought, then the court may, to the extent the court considers appropriate, reduce the share of the proceeds of the action which the person would otherwise receive under paragraph (1) or (2) of this subsection, taking into account the role of that person in advancing the case to litigation and any relevant circumstances pertaining to the violation. If the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3729, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action. Such dismissal shall not prejudice the right of the United States to continue the action, represented by the Department of Justice.
The only dispute is whether the second sentence in this subsection requires the dismissal of all relators convicted of criminal conduct arising from the fraudulent conduct at issue in the qui tam suit, particularly minor participants who neither planned nor initiated the fraudulent scheme. The parties do not dispute the ordinary meaning of these words, and several courts have concluded that the provision is mandatory. See Roberts v. Accenture, LLP, 707 F.3d 1011, 1016 (8th Cir. 2013); U.S. ex rel. Taxpayers Against Fraud v. Gen. Elec. Co., 41 F.3d 1032, 1035 (6th Cir.1994); U.S. ex rel. Green v. Serv. Contract Educ. & Training Trust Fund, 843 F.Supp.2d 20, 28 n. 6 (D.D.C.2012).
It is well established that the “starting point in discerning congressional
Despite this plain language, our inquiry here does not cease because Schroeder argues that requiring the dismissal of convicted relators who played a minor role in a fraud would make the statutory scheme logically inconsistent and produce an absurd result. We disagree with both components of the argument. Applying the statute to minor participants in a fraud does not produce an absurd or unreasonable result. The provision states that “[i]f the person bringing the action is convicted of criminal conduct arising from his or her role in the violation of section 3729, that person shall be dismissed from the civil action and shall not receive any share of the proceeds of the action.”
Schroeder contends that when this provision is read in conjunction with the preceding clause, the statute produces the absurd and logically inconsistent result of allowing the most culpable fraud participants (planners and initiators) to collect a reduced share of an award but bars less culpable fraud participants (minor participants convicted of the offense) from recovery altogether. While the two clauses might not perfectly harmonize relator eligibility and awards with culpability, no authority suggests that the provision should be construed according to that criteria. As such, the argument urges us to untenably assume the role of a “‘superlegislature’ second-guessing the policy choices of the other branches of government.” Christian Sci. Reading Room Jointly Maintained v. City & Cnty. of S.F., 807 F.2d 1466, 1467 (9th Cir.1986) (Norris, J., dissenting).
Furthermore, the relator award hierarchy chosen by Congress may satisfy other values, such as the deterrent effect of preventing criminally culpable individuals from gaining from their conduct, and the investigatory benefits of actions brought by planners and initiators who often have greater knowledge about co-conspirators and the scope of a fraudulent scheme. Lastly, the dichotomy drawn by Schroeder is a false one, as the statute also requires courts to dismiss planners and initiators convicted of fraud.
Schroeder‘s next argument, that applying
The text of the statute leaves little doubt that the sole purpose of the 1988 amendment that codified
While the purpose of the Act, as amended in 1986, was to strengthen the federal government‘s ability to “recover losses sustained as a result of fraud” in large part by encouraging qui tam suits, S.Rep. No. 99-345, at 1-2 (1986), 1986 U.S.C.C.A.N. 5266, 5266, a broad congressional purpose is of limited value when the meaning is plain and the general purpose is inconsistent with the purpose of the particular provision.2 Further, enacting a modest amendment restricting relator eligibility merely two years after embracing qui tam suits is consistent with Congress‘s attempt to find a balance between “deterring parasitic claims [and] fostering productive suits.” See Christopher M. Alexion, Open the Door, Not the Floodgates: Controlling Qui Tam Litigation Under the False Claims Act, 69 Wash. & Lee L.Rev. 365, 378, 403 (2012); see also U.S. ex rel. Findley v. FPC-Boron Emps.’ Club, 105 F.3d 675, 680 (D.C.Cir.1997), abrogated on other grounds by Rockwell Int‘l Corp. v. United States, 549 U.S. 457, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007) (Act ricocheted between “extreme permissiveness” and “extreme restrictiveness“).
The last argument for an alternative interpretation of the statute is one that Schroeder did not present, yet could constitute the most persuasive evidence in support of a second interpretation of the statute. See Chickasaw Nation v. United States, 534 U.S. 84, 90, 122 S.Ct. 528, 151 L.Ed.2d 474 (2001). Close scrutiny of the provision‘s grammar and structure might indicate that the “criminal conduct” clause is modified by, or operates in concert with, the “plan/initiate” clause, such that a court may reduce a planner‘s award and shall dismiss a planner convicted of criminal conduct. This interpretation would not result in surplusage and would give effect to each part of the statute. Two related points suggest that Congress might have intended the first clause to modify the second.
First, the two clauses rest within a single subparagraph of text, indicating that Congress might have meant for them to function together. See generally Grogan v. Garner, 498 U.S. 279, 287-88, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991). Second, more importantly, the two clauses describe relators using different articles. In Gale v. First Franklin Loan Services, 701 F.3d 1240, 1246 (9th Cir.2012), we determined that the use of a definite article preceded by an indefinite article can be persuasive
Similarly, the first clause of
The structure and grammar of the text, in light of our decision in Gale, narrowly permits a second plausible interpretation, see Robinson, 519 U.S. at 341, 117 S.Ct. 843 (“The plainness or ambiguity of statutory language is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.“), which complements Schroeder‘s arguments that Congress did not intend for courts to dismiss all minor fraud participants as relators. Yet, the more persuasive reading of the statute, given its plain language, logical harmony, and consistency with the purpose of the 1988 amendment, is that “Congress said what it meant and meant when it said.” United States v. Steele, 147 F.3d 1316, 1318 (11th Cir.1998) (citing Conn. Nat‘l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). Thus, we need not reach the legislative history of
When a statute is susceptible to two or more meanings, we may consider legislative history. See, e.g., N. Cal. River Watch v. Wilcox, 633 F.3d 766, 773 (9th Cir. 2011) (“If the proper interpretation is not clear from this textual analysis, the legislative history offers valuable guidance and insight into Congressional intent.“) (citation and internal quotation marks omitted). But, “the plainer the language, the more convincing contrary legislative history must be.” Church of Scientology of Cal. v. U.S. Dep‘t of Justice, 612 F.2d 417, 422 (9th Cir.1979). In this case, the legislative history of
The legislative history provides some support for Schroeder‘s position. The two Senators that discussed the provision indicated that it only applies in narrow circumstances and does not cover minor participants.3 See 134 Cong. Rec. S16697-01 (Sen. DeConcini) (“I am confident that the
Yet, the legislative history does not constitute convincing evidence that Congress meant to exclude convicted minor fraud participants because both Senators suggested that the two clauses operate independently. Neither expressed that minor fraud participants are not covered by the criminal conduct provision or that the first clause modifies the second. In addition, contrary to the strongest textual support for an interpretation deviating from the plain meaning, both Senators describe the “criminal conduct” clause with an indefinite article and as applying in “any case.” Senator DeConcini stated:
The amendment offered today provides that in an extreme case where the private plaintiff was a principal architect of a scheme to defraud the Government, that plaintiff would not be entitled to any minimum guaranteed share of the proceeds of the action. Also, in any case where a private plaintiff is convicted of criminal misconduct for his or her role in the false claims practice, the private plaintiff will be dismissed from the action and not entitled to any recovery.
Id. Similarly, Senator Grassley stated:
My amendment simply clarifies that in an extreme case where the qui tam plaintiff was a principal architect of a scheme to defraud the Government, that plaintiff would not be entitled to any minimum guaranteed share of the proceeds of the action. And in any case where a qui tam plaintiff is convicted of criminal misconduct for his or her role in the false claims practice, the qui tam plaintiff must be dismissed from the action and is entitled to zero recovery.
Id.
Thus, while the legislative history provides some support for the notion that the sponsors did not intend for the provision to require the dismissal of minor fraud participants, it is not convincing enough to warrant departing from the plain meaning. The legislative history‘s inconsistency limits its value. It provides that “in any case where a qui tam plaintiff is convicted ... [he] must be dismissed,” but that the amendment is not intended to apply to “those qui tam plaintiffs who may have had some more minor role in the false claims conduct.” 134 Cong. Rec. S16697-01. This evidence does not warrant a departure from the plain meaning. See Chamber of Commerce of U.S. v. Whiting, 563 U.S. 582, 131 S.Ct. 1968, 1980, 179 L.Ed.2d 1031 (2011) (Roberts, C.J.) (“Congress‘s ‘authoritative statement is the statutory text, not the legislative history.‘” (quoting Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 568, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005))).
CONCLUSION
We affirm the district court‘s dismissal of Schroeder as a qui tam relator. The grammar and structure of the provision narrowly supports a second plausible interpretation. However, the text does not include an exception for minor fraud participants, and our interpretation is consistent with the particular purpose of the 1988 amendment. The legislative history is too inconclusive to warrant departing from the plain meaning.
AFFIRMED.