*1 FILED United States Court of Appeals Tenth Circuit March 17, 2009 PUBLISH Elisabeth A. Shumaker Clerk of Court UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT In re: NATURAL GAS ROYALTIES
QUI TAM LITIGATION, Lead Case
Pursuant to Consolidation Order: ------------------------------ Case No. 06-8099 JACK J. GRYNBERG, ex rel. United
States,
Plaintiff - Appellant,
v.
PACIFIC GAS AND ELECTRIC
COMPANY; PACIFIC GAS Consolidated Appeals: TRANSMISSION COMPANY, n/k/a Case Nos.
Gas Transmission Northwest 06-8101, 06-8102, 06-8103, 06-8104, Corporation; KN ENERGY, INC.; 06-8105, 06-8106, 06-8107, 06-8108, ROCKY MOUNTAIN NATURAL 06-8110, 06-8111, 06-8112, 06-8120, GAS COMPANY; TCP GATHERING 06-8121, 06-8123, 06-8124, 06-8125, CO.; KN INTERSTATE GAS 06-8127, 06-8129, 06-8130, 06-8131, TRANSMISSION CO.; KN 06-8132, 06-8133, 06-8135, 06-8136, NATURAL GAS, INC.; NORTHERN 06-8141, 06-8145, 06-8147, 06-8149, GAS COMPANY; WESTAR 06-8151, 06-8157, 06-8159, 06-8160, TRANSMISSION COMPANY; 06-8161, 06-8164, 06-8166, 06-8168, WILDHORSE ENERGY PARTNERS, 06-8170, 06-8171, 06-8172, 06-8173, L.L.C.; QUESTAR PIPELINE 06-8174, 06-8176, 06-8177, 06-8178 COMPANY; WEXPRO COMPANY;
QUESTAR GAS MANAGEMENT
CO.; QUESTAR CORP.; QUESTAR
GAS CO.; UNIVERSAL
RESOURCES CORPORATION;
COASTAL STATES GAS
TRANSMISSION COMPANY;
COLORADO INTERSTATE GAS
COMPANY; COASTAL *2 CORPORATION; COASTAL OIL & GAS CORP.; COASTAL GAS
SERVICES COMPANY; COASTAL
GAS MARKETING COMPANY;
COASTAL FIELD SERVICES
COMPANY; GREAT DIVIDE GAS
SERVICES, LLC; DAUGHIN
ISLAND GATHERING PARTNERS;
COASTAL CHEM, INC.; GREELEY
GAS COMPANY; ENRON
CORPORATION; BLACK MARLIN
PIPELINE CO.; ENRON OIL & GAS
COMPANY; LOUISIANA
RESOURCES COMPANY;
NORTHERN BORDER PIPELINE
CO.; NORTHERN NATURAL GAS
COMPANY; NORTHERN NATURAL
GAS PRODUCTION COMPANY;
TRANSWESTERN PIPELINE
COMPANY; ENRON GAS
MARKETING, INC.; EL PASO
NATURAL GAS COMPANY;
TENNESSEE GAS PIPELINE
COMPANY; EAST TENNESSEE
NATURAL GAS COMPANY; EL
PASO ENERGY MARKETING
COMPANY; EL PASO FIELD
SERVICES COMPANY;
CORNERSTONE NATURAL GAS,
INC.; EL PASO GAS MARKETING
COMPANY; EL PASO TENNESSEE
PIPELINE CO.; PREMIER GAS
COMPANY; TRANSCOLORADO
GAS TRANSMISSION COMPANY;
PANENERGY CORP.; DAUGHIN
ISLAND GATHERING COMPANY
LP; PAN GAS STORAGE CO.;
PANHANDLE EASTERN PIPE LINE
COMPANY; TEXAS EASTERN
TRANSMISSION LP; TRUNKLINE
GAS COMPANY; UTILICORP UNITED, INC.; AQUILA ENERGY
CORPORATION; AQUILA GAS
PIPELINE CORPORATION;
UTILICORP PIPELINE SYSTEMS,
INC.; UTILICORP ENERGY
SOLUTIONS, INC.; TRISTAR GAS
INVESTMENTS CORP.; PUBLIC
SERVICE COMPANY OF
COLORADO; MGTC, INC.; MIGC,
INC.; KERN RIVER GAS
TRANSMISSION COMPANY;
NORTHWEST PIPELINE
CORPORATION; WILLIAMS
COMPANIES, INC.; WILLIAMS
INTERSTATE NATURAL GAS
SYSTEMS; TEXAS GAS
TRANSMISSION CORP.;
TRANSCONTINENTAL GAS
PIPELINE CORP.;
TRANSCONTINENTAL GAS
SUPPLY; TRANSCONTINENTAL
OIL CORPORATION; WILLIAMS
FIELD SERVICES COMPANY;
WILLIAMS GAS MARKETING;
WILLIAMS GAS SUPPLY;
WILLIAMS PRODUCTION;
SOUTHERN NATURAL GAS
COMPANY; SEA ROBIN PIPELINE
COMPANY; FLORIDA GAS
TRANSMISSION COMPANY;
SONAT, INC.; SONAT
EXPLORATION COMPANY; SONAT
ENERGY SERVICES; SONAT
MARKETING COMPANY, L.P.;
CITRUS CORP.; BEAR CREEK
STORAGE COMPANY; CORAL
ENERGY, L.P.; EVANGELINE GAS
PIPELINE COMPANY LP;
EVANGELINE GAS
CORPORATION; TEJAS GAS, LLC; TEJAS GAS OPERATING, LLC;
ACADIAN GAS LLC; TEJAS
NATURAL GAS, LLC; TRANSOK,
LLC; GULF COAST NATURAL GAS
COMPANY; TEJAS-MAGNOLIA
ENERGY, LLC; GULF ENERGY
PIPELINE, LLC; CONSOLIDATED
NATURAL GAS COMPANY; CNG
TRANSMISSION CORPORATION;
CNG PRODUCING COMPANY;
EAST OHIO GAS COMPANY; CNG
ENERGY SERVICES
CORPORATION; COLUMBIA GULF
TRANSMISSION COMPANY;
COLUMBIA GAS SYSTEM, INC.;
COLUMBIA GAS SYSTEM
SERVICE CORPORATION;
COLUMBIA LNG CORPORATION;
COLUMBIA GAS TRANSMISSION
CORPORATION; COLUMBIA
NATURAL RESOURCES, INC.;
COLUMBIA ENERGY SERVICES
CORPORATION; COLUMBIA GAS
OF KENTUCKY, INC.; COLUMBIA
GAS OF OHIO, INC.; COLUMBIA
GAS OF MARYLAND, INC.;
COLUMBIA GAS OF
PENNSYLVANIA, INC.;
COMMONWEALTH GAS
SERVICES, INC.; AVIARA ENERGY
CORPORATION; LOUISIANA
INTRASTATE GAS COMPANY,
LLC; EQUITABLE RESOURCES,
INC.; EQUITRANS, LP; JEFFERSON
ISLAND STORAGE & HUB LLC;
DYNEGY, INC.; VENICE ENERGY
SERVICES COMPANY, L.L.C.;
CONTINENTAL NATURAL GAS,
INC.; CONTINENTAL GAS
GATHERING, LLC; CONTINENTAL GAS PROCESSING, L.L.C.; LG & E
NATURAL MKTG; LG&E
NATURAL GATHERING AND
PROCESSING CO.; LG&E
NATURAL PIPELINE CO.;
TRANSOK, INC., predecessor to
Transok LLC, k/n/a Enogex Inc.;
ENOGEX, INC.; ENOGEX
SERVICES CORPORATION, k/n/a
OGE Energy Resources, Inc.;
OKLAHOMA GAS & ELECTRIC
COMPANY; CADDO GAS
GATHERING COMPANY;
WOODWARD PIPELINE, INC.;
NORAM USA, INC.; NORAM
ENERGY CORPORATION;
NORMAN GAS TRANSMISSION
COMPANY,; NORAM ENERGY
SERVICES, INC.; NORAM FIELD
SERVICES CORP.; MISSISSIPPI
RIVER TRANSMISSION
CORPORATION; ARKANSAS
LOUISIANA GAS COMPANY;
ARKLA, INC.; ARKLA ENERGY
RESOURCES; MINNEGASCO AND
LOUISIANA INTRASTATE GAS
CORPORATION; DELHI GAS
PIPELINE CORPORATION;
MARATHON OIL COMPANY;
MARATHON PIPE LINE
COMPANY; BLUE DOLPHIN PIPE
LINE COMPANY; MONTANA
POWER COMPANY; FMC
CORPORATION; FMC WYOMING
CORPORATION; BURLINGTON
RESOURCES OIL & GAS
COMPANY; BURLINGTON
RESOURCES, INC.; BURLINGTON
RESOURCES TRADING, INC.;
LOUISIANA LAND AND EXPLORATION COMPANY;
INEXCO OIL COMPANY; INEXCO
GAS TRANSMISSION COMPANY;
SNYDER OIL CORPORATION;
SNYDER GAS MARKETING, INC.;
SOCO OFFSHORE, INC.; CONOCO,
INC.; LOUISIANA GAS SYSTEMS,
INC., BARGATH, INC.; WILLIAMS
PRODUCTION RMT COMPANY;
TRANSMONTAIGNE OIL
COMPANY; SOUTHWESTERN
ENERGY COMPANY;
SOUTHWESTERN ENERGY
PRODUCTION COMPANY;
SOUTHWESTERN ENERGY
SERVICES COMPANY;
SOUTHWESTERN ENERGY
PIPELINE COMPANY; ARKANSAS
WESTERN GAS COMPANY;
ASSOCIATED NATURAL GAS
COMPANY; ARKANSAS WESTERN
PIPELINE COMPANY; SEECO,
INC.; DOW CHEMICAL COMPANY;
DOW CHEMICAL USA; ANR
PIPELINE COMPANY; ANR
PRODUCTION COMPANY; ANR
STORAGE COMPANY; HIGH
ISLAND OFFSHORE SYSTEM; U-T
OFFSHORE SYSTEM; BLUE LAKE
GAS STORAGE COMPANY;
CONSUMERS ENERGY;
CONSUMERS POWER; MICHIGAN
GAS STORAGE COMPANY; CMS
ENTERPRISES COMPANY; CMS
GAS TRANSMISSION AND
STORAGE COMPANY; CMS GAS
CO.; CMS GAS MARKETING; CMS
NOMECO OIL & GAS CO.; TERRA
ENERGY LTD.; AGAVE ENERGY
CO.; PHILLIPS PIPE LINE COMPANY; APACHE
CORPORATION; MOBIL NATURAL
GAS, INC.; SUPERIOR OIL
COMPANY; MOBIL EXPLORATION
& PRODUCING U.S., INC.; EXXON
COMPANY, USA; SHELL OIL
COMPANY; SHELL OFFSHORE,
INC.; SHELL PIPELINE
CORPORATION; ATLANTIC
RICHFIELD COMPANY; VASTAR
RESOURCES, INC.; ARCO OIL AND
GAS COMPANY; VASTAR GAS
MARKETING, INC.; ARCO PIPE
LINE COMPANY; ARCO PERMIAN,
DBA Atlantic Richfield Company;
NATURAL GAS PIPELINE
COMPANY OF AMERICA;
STINGRAY PIPELINE COMPANY;
OCCIDENTAL OIL AND GAS
CORPORATION; MIDCON CORP.;
MIDCON GAS SERVICES CORP.;
OCCIDENTAL ENERGY
VENTURES CORP.; MIDCON
TEXAS PIPELINE OPERATOR,
INC.; PLACID OIL COMPANY; OXY
USA INC.; MIDCON MARKETING
CORP.; CROSS TIMBERS OIL
COMPANY, k/n/a XTO Energy Inc.;
CROSS TIMBERS OPERATING
COMPANY; CROSS TIMBERS
ENERGY SERVICES, INC.;
RINGWOOD GATHERING
COMPANY; TIMBERLAND
GATHERING & PROCESSING
COMPANY; COVE POINT LNG
LIMITED PARTNERSHIP; ENTEX,
INC.; CMS NATURAL GAS
GATHERING, LLC; SHELL LAND &
ENERGY COMPANY; SHELL
WESTERN E&P INC.; SOUTHERN STAR CENTRAL GAS PIPELINE,
INC., f/k/a Williams Natural Gas
Company; HUNT PETROLEUM
CORPORATION; ATMOS ENERGY
CORPORATION, DBA Greeley Gas
Company; DCP MIDSTREAM, LP;
DUKE ENERGY SERVICES, INC.;
BARRETT RESOURCES
CORPORATION; PLAINS
PETROLEUM COMPANY; CITRUS
INTERSTATE PIPELINE
COMPANY, n/k/a Citrus Energy
Services, Inc.; EQUITABLE
STORAGE COMPANY, n/k/a
Jefferson Island Storage & Hub LLC;
PONTCHARTRAIN NATURAL GAS
SYSTEM, assignee of Louisiana
Industrial Gas Supply Systems,
Defendants - Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF WYOMING (D.C. Nos. 99-MD-1602, 1603, 1604, 1605, 1607, 1608, 1609, 1610, 1611, 1612, 1613, 1614, 1625, 1626, 1627, 1628, 1630, 1631, 1638, 1639, 1640, 1641, 1642,
1644, 1645, 1650, 1654, 1655,1656, 1657, 1659, 1666, 1667, 1669, 1670, 00-MD-1632-WFD, 1633, 1635, 02-MD-1682-WFD, 04-MD-1684-WFD, 99-MD-1618-WFD, 1621, 1629, 1665, 1668, 1672) Jeffrey A. Chase (Elizabeth L. Harris with him on the briefs), Jacobs Chase Frick Kleinkopf & Kelley, LLC, Denver, Colorado, for Relator-Appellant.
L. Poe Leggette, Fulbright & Jaworski, LLP, Washington, D.C. (Donald I. Shultz, Holland & Hart LLP, Cheyenne, Wyoming, and Nancy L. Pell and Laura S.
Morton, Fulbright & Jaworski, LLP, Washington, D.C., with him on the brief), and Michael L. Beatty (Rebecca H. Noecker with him on the brief), Beatty & *9 Wozniak, PC, Denver, Colorado, for Coordinated Defendants-Appellees.
Submitted on the briefs:
Michael L. Beatty and Rebecca H. Noecker, Beatty & Wozniak, PC, Denver, Colorado, for Defendants-Appellees KN Energy, et al.
Elizabeth A. Phelan, Holland & Hart, LLP, Boulder, Colorado, and Donald I.
Shultz, Holland & Hart, LLP, Cheyenne, Wyoming, for Defendants-Appellees Questar Corporation, et al.
Charles D. Tetrault, Vinson & Elkins, LLP, Washington, D.C., for Defendant- Appellee Transwestern Pipeline Company, LLC.
Michael L. Beatty and Rebecca H. Noecker, Beatty & Wozniak, PC, Denver, Colorado, for Defendant-Appellee TransColorado Gas Transmission Company. Kevin D. Evans, Steese & Evans, PC, Denver, Colorado, for Defendant-Appellee Public Service Company of Colorado.
Robin F. Fields and Charles B. Williams, Connor & Winters LLP, Oklahoma City, Oklahoma, for Defendants-Appellees Enogex, OG&E, and Cross Timbers.
Lawrence G. McBride, Foley & Lardner, LLP, Washington, D.C., for Defendant- Appellee Blue Dolphin Pipe Line Company.
Michael L. Beatty and Rebecca H. Noecker, Beatty & Wozniak, PC, Denver, Colorado, for Defendant-Appellee Apache Corporation.
Robert Salcido, Akin Gump Strauss Hauer & Feld LLP, Washington, D.C., and Daniel M. McClure and Laura S. Morton, Fulbright & Jaworski LLP, Houston, TX, for Defendants-Appellees Shell, Mobil, and Exxon.
Before MURPHY, McKAY , and McCONNELL , Circuit Judges.
McKAY , Circuit Judge.
In these consolidated appeals, Relator-Appellant Jack Grynberg appeals the *10 district court’s dismissal of a large number of coordinated cases Relator had brought against numerous natural gas pipelines and other companies involved in measuring natural gas produced from federal or Indian lands. [1] The district court dismissed the cases for lack of subject matter jurisdiction under 31 U.S.C. § 3730(e)(4), holding that Relator’s complaints were based upon publicly disclosed allegations and that Relator was not an original source of the information upon which the allegations in his complaints were based. We affirm.
B ACKGROUND Beginning in June of 1997, Relator filed a series of seventy-three lawsuits under the qui tam provisions of the False Claims Act against a large number of natural gas pipeline companies and their various parents, subsidiaries, and affiliates, accusing them of underpaying royalties to the government in violation of 31 U.S.C. § 3729(a)(7). Each complaint accused the Defendants named therein of utilizing several identified mismeasurement techniques to knowingly underreport or cause others to underreport the heating content and volume of gas, with a resultant underpayment of federal royalties. Most of the alleged *11 mismeasurement techniques were common to all seventy-three cases.
The cases were transferred as multidistrict litigation to the District of
Wyoming, where Defendants filed motions to dismiss for lack of subject matter
jurisdiction. Under the direction of a special master, the parties conducted
limited discovery on this issue. Because the special master and district court
considered evidentiary materials and because the jurisdictional question was
intertwined with the merits, the special master and district court properly treated
Defendants’ motions to dismiss as motions for summary judgment under Rule
56(c) of the Federal Rules of Civil Procedure.
See United States ex rel. Hafter v.
Spectrum Emergency Care, Inc.
,
In his report and recommendations, the special master concluded that forty of the seventy-three cases should be dismissed under § 3730(e)(4) because the allegations in these cases had been publicly disclosed and Relator was not an original source of the information upon which the allegations were based. The special master concluded that the remaining thirty-three cases were not jurisdictionally barred because none of the Defendants in these cases were identified in any public disclosure alleging mismeasurement of natural gas. The district court adopted in part and modified in part the special master’s report, holding that all of the cases were barred under § 3730(e)(4) because the publicly disclosed allegations of widespread mismeasurement were sufficient to set the government on the trail of the fraud as to all Defendants and Relator did not fit *12 within the original source exception to the public disclosure bar. The court therefore entered judgment in favor of Defendants in each of the seventy three cases. [2]
On appeal, Relator challenges the district court’s conclusions that the
public disclosure bar was triggered as to all Defendants and that Relator was not
an original source of the information upon which the allegations were based. We
review these issues of subject matter jurisdiction de novo, employing the same
legal standard as the district court.
See United States ex rel. Grynberg v. Praxair,
Inc.
,
D ISCUSSION
The False Claims Act imposes liability on any person who “knowingly
makes, uses, or causes to be made or used, a false record or statement to conceal,
avoid, or decrease an obligation to pay or transmit money or property to the
Government.” 31 U.S.C. § 3729(a)(7). The FCA’s provisions allow a
private individual, known as a relator, to bring a civil action on behalf of the
government against such persons and to share in any resulting government
recovery.
See Kennard v. Comstock Res., Inc.
,
1994)). Accordingly, a relator’s action will be jurisdictionally barred if it is
based on allegations or transactions already in the public domain unless the
relator can show that he is an “original source” of the information on which the
allegations are based. 31 U.S.C. § 3730(e)(4)(A). “If jurisdiction is challenged,
the burden is on the party claiming jurisdiction to show it by a preponderance of
the evidence.”
Hafter
,
To determine whether the FCA’s public disclosure bar has been triggered,
we consider “(1) whether the alleged ‘public disclosure’ contains allegations or
transactions from one of the listed sources; (2) whether the alleged disclosure has
been made ‘public’ within the meaning of the FCA; [and] (3) whether the
relator’s complaint is ‘based upon’ this ‘public disclosure.’”
United States ex rel.
Holmes v. Consumer Ins. Group
,
Public Disclosure
The district court concluded that the public disclosure bar had been triggered as to all Defendants based upon two main sets of documents: (1) several documents related to an investigation conducted in the 1980s by the United States Senate Select Committee on Indian Affairs and (2) court documents from and newspaper reports describing a action Relator had filed in 1995 against forty-four natural gas pipeline companies in the District of Columbia, which the court dismissed in March 1997 for failure to plead fraud with specificity and improper joinder of parties. The Senate Committee documents disclosed the mismeasurement of oil and gas on a large scale but did not identify any specific companies that engaged gas mismeasurement, while the defendants named in the 1995 qui tam action overlapped with Defendants or affiliates of Defendants in approximately half of the seventy-three 1997 complaints. Rejecting the special master’s conclusion that the public disclosure bar was only triggered by public disclosures that specifically named Defendants or affiliates of Defendants, the district court concluded that the Senate Committee documents and the 1995 action had triggered the public disclosure bar as to all Defendants because these *15 documents alerted the government to the industry-wide nature of the fraud and enabled the government to readily identify wrongdoers through an investigation of the companies measuring gas produced from federal or Indian lands.
On appeal, Relator does not dispute that the 1995 action and Senate
Committee documents were publicly disclosed and were from sources listed in §
3730(e)(4)(A).
[3]
Rather, he disputes the applicability of the third prong of the
public disclosure test to his complaints. This prong of the analysis asks whether
the
qui tam
complaint was “based upon,” meaning “supported by,” the publicly
disclosed allegations or transactions.
See United States ex rel. Fine v. MK-
Ferguson Co.
,
As an initial matter, we address Relator’s argument that each alleged
mismeasurement technique was a separate and unique claim of fraud that should
not be barred unless specifically alleged in a public disclosure. Relator correctly
*16
points out that we use a claim-by-claim analysis to determine whether the
allegations in a complaint were publicly disclosed.
See, e.g.
,
id.
at 1547;
see also
United States ex rel. Boothe v. Sun Healthcare Group, Inc.
,
The next question we must address is whether the public disclosures of *17 natural gas mismeasurement by other industry members and in the industry as a whole were sufficient to trigger the public disclosure bar as to Defendants not named in these disclosures. A handful of relevant cases provide us with guidance on this issue.
The first circuit to squarely address this issue was the Eleventh Circuit in
Cooper v. Blue Cross & Blue Shield of Florida, Inc.
,
1994). In Cooper , a relator sued Blue Cross Blue Shield of Florida for incorrectly instructing him that Medicare and not BCBSF should pay on his claims first, thus causing Medicare to make payments that should have been covered by BCBSF as his primary insurer. The Eleventh Circuit rejected the district court’s conclusion that the relator’s allegations had been publicly disclosed in several sources, including a General Accounting Office report describing widespread Medicare secondary payer fraud throughout the insurance industry, newspaper accounts publicizing similar wrongful practices committed by other insurance companies, and a prior qui tam action against Blue Cross Blue Shield of Georgia alleging the same type of conduct. Stating that it was “crucial whether [the defendant] was mentioned by name or otherwise specifically identified in public disclosures,” the Eleventh Circuit held that “[r]equiring that allegations specific to a particular defendant be publically disclosed before finding the action potentially barred” implemented the goals of the statute by “encourag[ing] private citizen involvement and increas[ing] the chances that every instance of specific fraud *18 will be revealed.” Id. at 566.
We distinguished Cooper in United States ex rel. Fine v. Sandia Corp. , 70 F.3d 568 (10th Cir. 1995). In Sandia , the relator sued Sandia Corporation under the FCA for misappropriating nuclear waste funds. A prior General Accounting Office report and a congressional hearing had disclosed that contractors operating at two of the Department of Energy’s nine multi-program laboratories were engaging in this practice. Although Sandia was not named in these public disclosures, we held that the public disclosure bar had been triggered as to Sandia because the report and hearing “set the government squarely on the trail of the alleged fraud without [the relator’s] assistance.” Id. at 571. Because these disclosures “detailed the mechanics of the practice, revealed that at least two of Sandia’s eight sister laboratories were engaged in it, and indicated the DOE’s acquiescence,” we concluded that “they sufficiently alerted the government to the likelihood” that Sandia would also engage in the practice. Id. at 571. We held that Cooper was distinguishable because, “[w]hen attempting to identify individual actors, little similarity exists between combing through the private insurance industry in search of fraud and examining the operating procedures of nine, easily identifiable, DOE-controlled, and government-owned laboratories.” Id. at 572. In light of “Congress’ twin goals of rejecting suits which the government is capable of pursuing itself, while promoting those which the government is not equipped to bring on its own,” we concluded that it would be *19 contrary to the purposes of the FCA to exercise jurisdiction over the relator’s claim in this case. Id. at 571 (internal quotation marks omitted).
Other circuits have followed the
Sandia
reasoning and similarly
distinguished
Cooper
where the public disclosures at issue are sufficient to set the
government squarely upon the trail of the alleged fraud. For instance, in
United
States v. Alcan Electrical and Engineering, Inc.
,
Likewise, in
United States ex rel. Findley v. FPC-Boron Employees’ Club
,
Noting that the public disclosures at issue disclosed that the practice occurred throughout the federal government, identified the nature of the fraud, and identified the types of actors engaged in the allegedly fraudulent activity, the court concluded that the relator’s allegations “substantially repeat what the public already knows and add only the identity of particular employees’ clubs engaged in the questionable and previously documented generic practice.” Id. at 687. The court rejected the relator’s argument that the public disclosures at issue were similar to a generic disclosure of fraud by defense contractors, stating that “[l]ittle similarity exists between combing through the myriad of transactions performed by the various defense contractors in search of fraud and finding easily identifiable federal employee organizations that provide vending services on federal property.” Id.
Applying the reasoning from these cases to the facts before us, we hold that the Senate Committee documents and 1995 action publicly disclosed the allegations against all Defendants named in Relator’s 1997 complaints. We note that, as in Sandia , the public disclosures at issue named a significant percentage of industry participants as wrongdoers and indicated that others in the industry were very likely engaged in the same practices. [4] The 1995 action alleged *21 mismeasurement by natural gas pipeline companies in general and did not suggest that the alleged practices were limited to the named defendants. Indeed, the complaint indicated that further investigation might lead to knowledge of more mismeasurement techniques and participation in this type of activity by other companies. Newspaper reports regarding this action also disclosed the industrywide nature of this action’s broad allegations.
As in Findley , Alcan , and Sandia , the public disclosures provided specific details about the fraudulent scheme and the types of actors involved in it, removing this from a situation where the government would need to comb through myriad transactions performed by various types of entities in search of potential fraud. A general allegation of Medicare fraud—or even more a specific allegation of Medicare fraud through the practice of incorrectly informing patients or health- care providers that claims should be submitted first to Medicare and not the primary insurer—does not help the government know where to focus in an investigation of the countless individual Medicare claims submitted to the government by vast numbers of health care providers and individuals. By contrast, the specific allegation that measurers of natural gas on federal and tribal lands engage in identified techniques to mismeasure gas obtained from federal or tribal properties allows the government to target its investigation toward specific actors and a specific type of fraudulent activity.
The government’s ability to investigate the potential fraud in this case is *22 also furthered by the information in its records and its control over the locations at which the fraud is allegedly occurring. The government knows and has contracts with the royalty payors who either measure or rely on purchasers’ measurements of gas produced from federal land. Although the royalty payors may not always measure the gas themselves, the government should be able to discover from these royalty payors the source of the measurements upon which they are basing their royalty payments. Moreover, the measuring facilities at which the alleged fraud is occurring are located at government-controlled facilities on federally or tribally owned lands and are subject to physical inspection by the government. [5] Thus, an investigation into the publicly disclosed allegations at issue here is not analogous to poring over millions of individual Medicare claims looking for specific instances of fraud by insurers, health-care providers, and other potential wrongdoers.
We therefore conclude that the allegations of industrywide gas mismeasurement disclosed in the 1995 complaint and the Senate Committee documents were sufficient to set the government on the trail of the fraud as to all Defendants and thus that the allegations in Relator’s 1997 complaints were *23 publicly disclosed. [6] Because the public disclosure bar has been triggered, all the instant cases will be barred for lack of subject matter jurisdiction unless Relator can demonstrate original source status. Accordingly, we turn to the question of whether Relator fits within the original source exception to the public disclosure bar.
Original Source
The FCA defines an “original source” as “an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.” 31 U.S.C. § 3730(e)(4)(B). We first consider how the second part of this definition, the pre- filing disclosure requirement, affects our analysis of the first part, then consider whether Relator has demonstrated that he had direct and independent knowledge of the information underlying his allegations.
In
United States ex rel. King v. Hillcrest Health Center, Inc.
, 264 F.3d
1271, 1280 (10th Cir. 2001), we discussed the pre-filing disclosure requirement of
the original source definition. We noted that “courts have not settled on what it
means to have ‘voluntarily provided the information to the Government before
*24
filing an action.’”
Id.
(quoting § 3730(e)(4)(B). We also noted that this pre-filing
disclosure requirement is distinct from the written disclosure requirement of §
3730(b)(2) and requires the relator to “voluntarily provide the Government with
the essential elements or information on which the allegations are based”
before filing the
qui tam
action.
Id.
We stated: “The pre-filing voluntary
disclosure requirement encourages private individuals to come forward with their
information of fraud ‘at the earliest possible time and . . . discourage[s] persons
with relevant information from remaining silent.’”
Id.
at 1280-81 (alterations in
original) (quoting
United States v. Bank of Farmington
,
Based mainly on Hillcrest , the district court held that the “direct and independent knowledge” element of the original source test must be satisfied with information the relator voluntarily disclosed to the government before filing and *25 that no other information can be considered in the original source assessment. Although we agree with Relator that this result was not directly compelled by Hillcrest , we conclude that the district court’s holding was a sensible interpretation of the statute in light of the purposes of the FCA.
As noted above, the FCA’s
qui tam
provisions are intended to achieve “‘the
golden mean between adequate incentives for whistle-blowing insiders with
genuinely valuable information and discouragement of opportunistic plaintiffs
who have no significant information to contribute of their own.’”
Sandia
, 70 F.3d
at 571 (quoting
Springfield
,
As we held in
Hillcrest
, it is appropriate to apply the statute’s jurisdictional
*26
requirements in a manner that “encourages private individuals to come forward
quickly with their information, to not dawdle when there has been a public
disclosure, and to discourage persons from withholding or remaining silent about
their relevant information.”
Accordingly, we now consider whether the information Relator provided to
the government shows that he had “direct and independent knowledge” of the
information underlying the allegations in any of his 1997 complaints.
[7]
*27
Knowledge is “direct and independent” if it is “marked by [the] absence of an
intervening agency” and “unmediated by anything but [the relator’s] own efforts.”
MK-Ferguson
,
Relator bears the burden of alleging the facts essential to show jurisdiction
and supporting those facts with competent proof.
United States ex rel. Precision
Co. v. Koch Indus., Inc.
,
Relator provided the government with no information regarding any named Defendant in several of the 1997 cases. He contends that his experience in the industry, his hypotheses regarding the accuracy of certain measurement techniques, and his interviews with third parties such as manufacturers of measuring devices and government representatives are sufficient to show direct and independent knowledge that all members of the industry were engaging in the alleged fraudulent practices. We disagree and hold that, in those cases where Relator did not even provide the names of any Defendants to the government, he *29 cannot qualify as an original source as to the allegations in those complaints.
In several other cases, Relator provided the government only with pages of handwritten notes briefly mentioning telephonic or attempted telephonic interviews with employees of various Defendants. For certain Defendants, the notes indicated that Relator or his staff confirmed through these interviews that Defendants used one or two specific measurement practices that were the subject of the complaints, such as measuring gas downstream of the orifice plate. We conclude that this secondhand knowledge from employees of various Defendants does not constitute “direct and independent” knowledge, and thus that Relator is not an original source as to these Defendants.
A few other Defendants were briefly mentioned in one or two documents besides the phone call notes, but the references to these Defendants were innocuous, irrelevant to the allegations in Relator’s complaints, or based upon speculation, publicly available documents, and secondhand information. We thus hold that Relator did not demonstrate “direct and independent” knowledge as to these Defendants.
The special master identified three cases in which Relator’s claim of original source status was strongest because, taken in the light most favorable to him, the information he provided to the government demonstrated that he had a limited amount of direct and independent knowledge about a handful (though far from a majority) of the mismeasurement techniques these defendants allegedly *30 employed. As the special master noted, these three cases thus raised the issue of just how much direct and independent information a relator must have in order for his allegations to be “based” upon this information in accordance with the statutory mandate. See § 3730(e)(4)(B). The special master considered four possible approaches to make this assessment and concluded that an “all or nothing approach” requiring direct and independent knowledge of every alleged fact in the complaint would be too restrictive, while a “bare minimum” approach would err in the opposite extreme. The third approach suggested by the special master, a “pick and choose” approach, would limit the relator to claims based on allegations for which he had direct and independent knowledge, while the rest would be dismissed. However, as the special master noted, this approach would require the district court to effectively redraft relators’ complaints. Moreover, this approach also suffers from the “all-or-nothing” approach’s draconian rejection of individual claims based even in small part on publicly disclosed information. Thus, the special master concluded that the best approach would be the fourth suggested approach, a “substantiality” standard. Under this standard, the district court would evaluate the relator’s independently discovered information against the entirety of the allegations on which he based his claim and sustain the relator’s invocation of subject matter jurisdiction only if his contribution in terms of direct and independent knowledge was substantial.
We agree with the special master that “substantiality” is the best approach
*31
to assess whether a relator’s direct and independent information is sufficient to
qualify him as an original source. This standard provides a balance between “the
dual goals of ‘avoidance of parasitism and encouragement of legitimate citizen
enforcement actions.’”
Kennard
,
We conclude that Relator did not provide the government with information demonstrating sufficient direct and independent knowledge to qualify as an original source as to any Defendants. Because we affirm the district court’s dismissal of the complaints on this ground, we do not address Defendants’ additional arguments regarding Relator’s status as an original source. We *32 likewise do not address Defendants’ alternate argument for dismissal based on the written disclosure requirement of 31 U.S.C. § 3730(b)(2).
C ONCLUSION For the foregoing reasons, we AFFIRM the district court’s dismissal of Relator’s complaints. We DENY Relator’s motion to remand based on supervening law.
Notes
[1] Of the seventy-three related appeals originally filed and consolidated by this court, appellant voluntarily dismissed twenty-nine of those appeals during the course of appellate proceedings. The dismissed appeals were: 06-8100, 06-8109, 06-8113, 06-8114, 06-8115, 06-8116, 06-8117, 06-8118, 06-8119, 06-8128, 06- 8134, 06-8137, 06-8138, 06-8139, 06-8140, 06-8142, 06-8143, 06-8144, 06-8146, 06-8150, 06-8152, 06-8153, 06-8154, 06-8155, 06-8162, 06-8163, 06-8167, 06- 8169, 06-8175.
[2] In seven cases, judgment was entered pursuant to Fed. R. Civ. P. 54(b) because the district court’s order did not dispose of all claims. The subsequent dismissal of these remaining claims was separately appealed and is not addressed in this opinion.
[3] Relator asserts in a footnote that a relator’s own prior action
should not trigger the public disclosure bar against him. Relator has not properly
raised this issue on appeal.
See United States v. Hardman
,
[4] In fact, the percentage of industry participants named in the public disclosures is, according to Relator’s own figures, exactly the same as the percentage named in Sandia .
[5] Although Relator argues that the district court impermissibly resolved disputed issues of material fact in Defendants’ favor, he cites to no evidence in the record calling these facts recited by the district court into dispute.
[6] Because we conclude that these documents publicly disclosed the allegations of all the instant complaints, we need not consider whether any other documents could also constitute public disclosures of the allegations.
[7] As stated above, we reject Relator’s argument that each individual (continued...)
[7] (...continued) mismeasurement technique constituted a separate allegation of fraud. Relator chose to plead the mismeasurement techniques as interrelated parts of his broad claim of fraud in Defendants’ measurement of gas. Therefore, like the district court, we consider for each case whether Relator demonstrated original source status as to the broad mismeasurement claim as a whole, not as to each fact alleged in support of this claim.
[8] We agree with the special master that, to the extent there is a dispute of fact regarding whether Relator provided these documents to the government before filing suit, it must be resolved in favor of Relator for purposes of summary judgment.