*1 HAGOOD, Plaintiff-Appellant, M. James
v. AGENCY, COUNTY WATER
SONOMA
Defendant-Appellee.
No. 95-16092. Appeals, Court of
United States Circuit.
Ninth
Argued and Feb. Submitted April
Decided *2 alleges
“reverse false claim”: he
not that the
fraudulently
overbilled the
States,
fraudulently
United
but that
in-
duced the United States to underbill it. Ha-
good
appeal
on
*3
contends
the district
by
finding
court erred
lacked
subject
jurisdiction
matter
over his claim
schedule;
concerning
the fixed
(2) granting summary judgment
and
in favor
of the
on his
Water-
cost allocation
claim. The
submits that the
Water
subject
jurisdic-
district court lacked
matter
Cabot,
Firm of Cabot
Lauren
The Law
tion over both claims.
Farrell, Denver, CO,
plaintiff-appel-
and
for
lant.
Hagood’s
trip
This is
second
to this court.
trip,
complaint
hisOn
first
we held that his
Zvoleff,
Conour,
I.
Kenneth P.
Vernon
Act,
stated a claim under the False Claims
Francisco,
Shanaghev,
&
San
Preuss Walker
12(b)(6)
and reversed the district court’s
dis
California,
defendant-appellee.
for
missal. United States ex rel.
v. So
County
Agency,
noma
and Circuit jurisdiction The district court had under 31 3729-3733, §§ claims were U.S.C. unless the SNEED; by Judge Opinion Concurrence 3730(e)(4), § barred under 31 U.S.C. a dis- by Judge KLEINFELD. puted jurisdiction appeal. issue on We have pursuant § to 28 U.S.C. 1291. We now af- SNEED, Judge: Circuit grant summary judgment. firm the by qui plaintiff tam appeal This is an district court’s James M. from the I. summary judgment in of the grant of favor BACKGROUND OF HAGOOD’S CLAIMS County Agency in his action Sonoma Water Act, began Congress It all authorized under the False Claims 31 U.S.C. when by Hagood’s Springs Dam §§ 3729-3733.1 action has construction Warm Engineers Army Corps of in the construction of the Warm the United States source (“the Creek, Dry tributary Corps”) in the Flood Control Act of Springs Dam on a California, 87-874, Pub.L. 76 Stat. 1180. The the Russian River northern project’s purposes flood con- which the Sono- authorized were a 1982 amended (“the trol, recreation, Agen- supply. To the County Water and water ma 132,000 purpose storage capacity cy”) agreed repay the United States for latter component of the cost of was allocated. Under the Water supply the water acre-feet2 390b, Thus, § building action is a Act of 43 U.S.C. the dam. recovery S.Rep. Cong., provides No. 99th Act defense contracts.” 1. The False Claims for (1986), knowingly pres- penalties reprinted U.S.C.C.A.N. of civil from those who 2d Sess. 8 in 1986 substantially to the federal ent a false or fraudulent claim amended and It was knowingly payment, rising govern- for use strengthened in 1986 because obligation fraud, record to avoid or an especially false decrease in the areas of defense ment government. pay 2-4, U.S.C. federal contracting health care benefits. Id. at 3729(a)(1),(7). provisions qui § The Act’s tam 1986 U.S.C.C.A.N.at 5267-69. bring a civil action on allow individual volume of water that covers 2. An acre-foot is the government, and himself as well as the behalf of foot, depth one about an area of one acre to a any penalty recovered. Id. to share 43,560 Heritage 3730(b),(d). American Dictio- cubic feet. The Act was first enacted in 1863 (3d 1992). rampant nary Civil War ed. “in order to combat fraud in (“GDM”) envisioned an from the water Memorandum which who benefit local interests projects, expanded Springs Dam with a of federal such Warm supply component 212,000 portion storage capacity supply are to shoulder the water Springs, Warm 80,000 purpose.3 acre-feet, allocated to that an increase of acre-feet. construction costs purposes GDM, like flood to federal reevaluated the break- Costs allocated adjusted are to be borne and recreation the cost allocation control down costs and sponsor for government. storage The local federal downward to water Springs project allocation, was the high- Sonoma Despite Warm lower 27.76%. County & Conservation Flood Control Water price tag assigned million was er of $20 District, County later renamed the Sonoma supply storage project’s because Agency. rising expansion and construction costs.4 *4 Corps Agency’s The asked for the Water Accordingly, in 1964 the Water pay that it needed and would for assurances signed Corps with the to use and a contract storage, the additional and the Water repay supply storage creat- the cost of water 1969, agreed. Corps approved In the the by Springs Dam and its reser- ed the Warm project “optimization” reported and voir, Lake Sonoma. The defined Congress. 44,000 storage of three acre-foot blocks water space, repayment of which was to use and Question The Cost Allocation 1979, 1985, 1991, begin respectively. in early In while the dam was still contract, In the the allocated to water construction, under the Ac- U.S. General supply storage 30% of the total construction counting inquiry into Office conducted the cost, $12,433,500. or project Springs Warm and concluded that Springs Project Expanded Warm delays completion ques- project in called into validity tion In significant construction had the the cost allocation.5 before prepared Design response, Corps acknowledged begun, the a General the that de- Act, 390b(b). supply compo- § before it was amended 43 U.S.C. The water 3.The Water 99-662, DC, 932(a), by Tit. Springs entirely in 1986 Pub.L. nent of Warm future for part: Stat. stated in relevant supply. carrying policy In section, out the set forth in this hereby provided storage may it is that figure grow 4. This continued to as costs total surveyed, any project be included in planned, reservoir grew, finally so that the cost estimated for water planned, constructed or to be sur- $96,- supply in the 1982 amended contract was Corps Engi- veyed by constructed the and/or 624,900. neers or the Bureau of Reclamation to im- pound present anticipated water for or future Clavelli, regional manager, 5. The GAO's A.M. municipal need for or industrial demand or Corps’ engineer wrote to the district in San Fran- Provided, any water ...: That the cost of con- cisco, Col. James L. Lammie: authorized under the struction or modification provisions this section shall be determined Early project during in the formulation purposes on the that all authorized basis 1960’s, municipal it was assumed the and indus- by project equitably served shall share in supply would trial water benefits not be derived construction, multiple purpose the benefits of years expected project until about 10 after the Secretary Army determined Therefore, completion in about 1970. the bene- Interior, may Secretary as the case assigned supply fits were water discounted at further, be: Provided That before construction (3)4 project percent) interest rate for a 10- any including project or modification of year period. percentage This in turn reduced the supply provisions present is initi- demand project and amount of costs allocated to water ated, agree pay State or local interests shall supply: only project puipose. reimbursable provisions for the cost of such in accordance delays experienced, appears With the it now provisions provid- with the section: And specified the initial use of water for in the con- further, per ed That not to exceed 30 centum of project completion tract will coincide any project the total estimated cost of be year opinion, anticipated about In our allocated to future demands where changed questionable give State or local interests reasonable assur- situation makes the contin- ances, evidence, premise upon that and there is reasonable ued use of the which cost alloca- storage such demands for the use of such will tion was based. period be made within a permit paying of time which will you We believe should consider reallocation of to water out the costs allocated upon costs based the current situation. projectj.j the life within responded in the draft. storage space had included Beach lays and the increased by showing Pape allocation them the project made a new cost letter: expanded necessary, explained that this would but time, pulled At that Mr. Beach out a letter figures firm cost became performed when Pape_ explained from Mr. Mr. Beach available, years four from now.” “about figures, percentage figure that the in a letter to the Water contract, using in proposed he was his Corps’ Engi- the chief of the later contract, figure Henry was the same Francisco, neering H.E. Division San Pape predecessor, had sent to Mr. Beach’s Jr., percentage Pape, “[t]he wrote Mr. Miller. supply feature is cost allocated to the water approved as established the' Gener- 27.76% Mosely Hagood, who had been unaware percentage Design Memorandum. This al letter, they of this told Beach would “look unchanged regardless any remain will into this.” changes project’s made in the first con- [i.e. the two to San Francisco When returned struction] cost.” meeting, Hagood engi- after the asked the cost allocation re- The confusion over the neering about the cost allocation. He branch later, years when the surfaced several engineering was told an assistant chief of *5 negotiating Corps began and the an in the Francisco San district that cost project’s contract to reflect the ex- amended enlarged allocation would not be done for the pansion. primary negotiators were Rob- Greatly concerned, project. Hagood wrote Beach, Manager F. ert General Water 1981, two file memos in November and a 1980, Mosely Capt. of since Scott Engineer, to letter the District Colonel Paul April Corps’ Francisco district. In the San Bazilwich, 25, Jr., 1981, opining on March. 1981, Mosely sought guidance Capt. from Supply required that the Water “a new Act proceed in Corps headquarters on how to allocation on accurate and based current project’s expansion. response, view of the In participate costs.”6 refused Blalcey, Planning L.H. Chief of the Division drafting According Hagood, the contract. Corps headquarters, “[a] at noted that new if a current and accurate cost allocation required,” “[t]he cost allocation is but that performed, Agency’s] [the was re- guidance above cannot taken as official obligation payment would increase at least Office, Engineers views.” Chief million allocation on over its cost based $60 Mosely Apparently, and Beach then Thus [the inaccurate GDM. Wa- agreed that Beach would submit a draft of Agency’s] cost be over ter share $145 contract, proposed which Beach amended approximately million than the rather $86 1, on 1981. The draft included did October repayment million based on the 27% total fig- the 27.76% allocation and a handwritten obligation. $122,018,700 ure of for the cost allocated to letter, supply. point- Lingenfelter, In a cover Beach District Steve who was then District, ed out that he had “included a cost estimate for the Francisco wrote Counsel San you may modify.” which wish to disputing Hagood’s file inter- a memo to the argu- pretation Act and Mosely and Beach then met to discuss ing: meet- draft in November 1981. Also that all staff com- Colonel Bazilwich considered ing appellant Hagood, an Assis- was who was regarding cost ments allocation issue. Corps’ Fran- tant District Counsel San decision, ultimately It his a thor- after assigned task cisco district and had been aspects ough of all review and evaluation drafting According contract. the new issue, new preparation of a Hagood, Mosely he and went into the meet- mandatory. figures cost allocation was not ing questions about the Beach repayment challenged on fails to tie commencement also the draft contract contract project, Agency's grounds pursue first use of the other that he does not in this to Water action, correspondence. that the not raised in his 1981 and action. His second claim in preliminary Corps “policy requires a cost Hagood left the San Francisco April Alaska; prepared before he allocation schedule to be retired District for legal signed. is This is not a contract Corps. necessity. It 3-6 months to de- will take controversy continued allocation The cost velop Decision made a new schedule. however. On percolate within Engineer] of Chief staff to [Office OCE 13, 1982, Oppenheim, P. September James policy. waive Works, Pacific, Assistant Director Civil signed On October Gianelli the contract. of the Pacific Divi- to the Commander wrote sion Question Repayment The Fixed Schedule paragraph 2-5b of ER In accordance with enlargement of dam raised cost While Corps regulation], [an 1105-2-40 internal issues, conjunc- possibility allocation January prelimi- updated dated 8 tively operating Lake Sonoma and another study nary required. allocation cost upstream dam and reservoir of Warm approved This cost allocation must be be- Springs timing raised issues.7 accompanying storage con- fore an watér Coyote Dam and Lake Mendocino are locat- Secretary tract can be submitted ed on the east fork of the Russian River Army approval.... Corps policy Dry above the confluence of Creek with the adjust ... on this item is to costs part river. Because the two facilities are only reflect actual construction costs system, operating the same river them con- change and not to reflect in cost alloca- would, junctively according to Water tions. issue, correspondence help on the “to main- 27,1982, Lee, Jr., September M. On Edward minimum tain flows the Russian River and replaced who had Colonel Bazilwich as Dis- Dry optimize Creek and to beneficial uses of *6 Engineer, trict wrote to the Commander of fish, for supply, water water wildlife and that the South Pacific Division “the cost allo- conjunctive manage- purposes.” other Such cation set forth in II of Exhibit ‘A’to Table making ment would involve some releases updated the executed contract is the current ordinarily from Lake that would Sonoma project upon project cost allocation the based Mendocino, made from Lake in order to project purposes.” and the authorized higher maintain in water levels the latter. 30, 1982, Finally, September the on con- 1978, negotiations In before on the amend- Corps approval tract was forwarded for final began, Agency ed the Water and the Secretary Army to Assistant William Department California of Fish & Game Gianelli, accompanied Briga- a memo from (“Fish Game”) began exploring possi- & III, Gay, dier General Forrest T. who noted: bility. releasing Concerned water from Regulations require updated prelimi- pre- Lake Sonoma under this scheme would nary for this cost- cost allocation as basis maturely trigger repayment on its Warm sharing expedited contract. The schedule Miller, Springs obligations, Dam Gordon W. approval for review and of this contract predecessor Agency, Beach’s at the Water by your directed office did not allow time Corps opinion. response, In asked the for its for this new cost allocation to be devel- Adsit, Engineer John M. then District in San oped. Francisco, acknowledged Agency’s the Water observation, concern, Gay prob- Despite this recommended and offered to circumvent the sign “routing by performing monthly “routing” Gianelli the contract. On a and lem system. slip” to the contract and the river The idea behind the rout- transmittal attached memo, ing methodology repayment on the handwritten note stated: years project timing repayments Agen- 7. The on the Water after the is first used for the cy’s obligation significant provi- because of a storage supply purposes, of water for water Supply sion of the Water Act that stated: except payment no need be made with costs, entire amount of the construction respect storage supply PJhe for future water until construction, including during interest allocat- supply used.... such is first supply repaid ed to water shall be within the added). 390b(b) (emphasis 43 U.S.C. fifty life of the but in no event to exceed cost, interest, $96,624,900 including triggered age obligation would be Springs .of Warm “routing” 2042, that had the only repaid by year years the showed the when was to be in- been made from Lake Sonoma releases anticipated “plant-in-service” from the date Mendocino, the available from Lake stead of 1992. in Lake Mendocino would have supply adoption repayment the of fixed Whether parties agreed on the been exhausted.8 complied start dates with the terms of the conjunctive management, but the for need disputed Supply Water Act was soon both routing methodology was soon abandoned 1980, within the and In without. while Yet, n complex. its introduction influenced too negotiations proceeding, the contract were repay- negotiations over the the course of Agency had become in a involved in the new ment terms contract. (“Ukiah”) dispute City with Ukiah over and the When Water competing applications their to the Federal August contract in began negotiating the new (“FERC”) Energy Regulatory Commission contract added a fourth block the draft preliminary investigate permit for a 80,000 to the three blocks acre-feet development hydropower facilities at Fixing dates on which original contract. Springs granted Warm Dam. The FERC begin was a repayment for each block would permit the basis on Water major sticking con- point. This was because of its contract which allowed junctive operation of Lakes Sonoma it Springs to control the Warm releases made it difficult to determine Mendocino petition Dam. Ukiah then submitted a for when, conjunctive operation, actual absent rehearing alleged repay which that the fixed in Lake of each block of water first use proposed ment schedule amended con occur. The solution settled would Sonoma Supply Act tract violated the Water because adopt repayment fixed start upon was decoupled repayment it commencement were, turn, block dates for each which from actual first use of the water. This “triggering prepared on studies” based petition was denied and Ukiah then filed a predict hypothetical petition for in the review D.C. Circuit Court Thus, dates of first use.9 F.E.R.C., Appeals. City Ukiah v. schedule, margin,10 called for set forth (D.C.Cir.1984), 729. F.2d the D.C. to commence in payments for the four blocks 390b(b)(1) that “section [of Circuit held 1995, 2000, respectively, re- require does not Sonoma Act] use of block gardless of when first each begin paying storage space actually began. The total water stor- when *7 right pertinent part: The Government further reserves the ... letter stated in 8. Adsit’s prohibit any of water from the to lake, withdrawals existing supplies the [in see if of water To any through releases the outlet works or adequate, Corps the will River] Russian are repayment provisions of that would cause the monthly supply routing perform of the water any provi- this contract be inconsistent assuming system, So- River that Lake Russian sion of the Water Act of 1958. existence, every at the end of was not in noma year. routing When the indicates calendar heen drawn that Lake Mendocino would have repay- supply of the Date Block of wa- Amount down below the bottom water month,. any repay- ment pool the end of Water ter [the supply Agency] full re- stor- will be directed to commence ment first, begins age payment with the of costs associated subsequent blocks of from Lake Sonoma $16,831,889 contracts). (as (principal) existing Block 1 (44,000 AF) set forth in 1992 3,222,336 (interest) $ Corps' proposed repay- lawyers that One $16,831,889 (principal) begin given than 1995 Block 2 block could earlier ment on 3,222,336 (interest) (44,000 AF) $ date if an earlier actual first use were the fixed Agency protested Water later determined. The $16,831,889 (principal) determining given complexity 2000 3 when Block the 3,222,336 (interest) (44,000 AF) occurred, might $ "first use” this solution too inad- obligations. vertently trigger repayment As an $31,603,434 alternative, (principal) Agency proposed Block 4 Water to in- 2005 5,858,791 (interest) (80,000 AF) clause, Corps’ $ savings attor- clude a to which the neys agreed. That clause in the final contract $96,624,900 212,000 AF Totals reads: 1472 1988, originally naming nonconsumptive purposes, as defendants two water for
releases generation.” Agency. The court de- including power Corps officials well as the Water question reach the whether clined to After the district court dismissed the individ consumptive purposes, defendants, same was true for ual and filed Ms third supply. Id. at 797 n. 12. including water complaint, amended the district court dis however, noted, had The court UMah case for a claim. missed the failure state argues that argued both: “UMah also remanded, holding TMs court reversed and Sup- illegal under the Water 1982 contract complaint that the stated a claim under separates ply Act the contract Sono- because Act. ex rel. Ha False Claims United States obligation from ma’s its use County Agency, good v. Sonoma 929 purposes.” for water Id. water even (9th Cir.1991) I”). (“Hagood 1416 Af F.2d period discovery, ter a from that time Internal memoranda summary judgment. moved for The district precisely confusion over what indicate motion, timely granted court Supply Act The Fran- required. San appealed. argued repay- the fixed cisco district legal.11 legal office ment schedule Corps headquarters apparently had III. questions legality up to ábout the schedule’s the end. the addition of the sav- THE JURISDICTION UNDER
ings
September
appeared
clause around
FALSE
ACT
CLAIMS
1,
satisfy those concerns.12 On October Gia-
signed
nelli
the contract.
de
court’s
We review
novo
lower
The Role Political Pressure
jurisdictional
City
determination. Hoeck v.
Portland,
(9th
Cir.1995),
final wrinMe in this
must
told
One
tale
—
denied,
U.S.-,
910, 133
cert.
116 S.Ct.
in order to understand
claims. In
(1996). However,
accept
L.Ed.2d 842
we
March
Beach contacted the office of his
findings underlying
factual
such determina
Claussen,
representative, Congressman
they
clearly
tion uMess
are
erroneous. Unit
request help
shepherding
the contract
Barajas Northrop Corp.,
ed States ex rel.
v.
through
Corps’
process.
approval
Beach
(9th
Cir.1993),
F.3d
409 n. 5
cert. de
put
Reisinger,
special
touch with Paul
-
nied,
-,
U.S.
114 S.Ct.
minority
counsel to the
for the Public Works
(1994). Hagood
L.Ed.2d 195
bur
bears the
Transportation
&
Subcommittee of
establishing jurisdiction,
den
and all other
Appropriations
House
Committee. Follow-
claim, by prepon
essential elements of his
ing
Reisinger,
contacts between Beach and
derance
evidence.
31 U.S.C.
staff,
Reisinger
and Gianelli’s
an internal
3731(c); Barajas,
On A. The Gianelli issued a Fixed Schedule Claim ordering expedit- memo that the contract be The district court declined to reach the 1, 1982, approval, ed for his and on October Hagood’s merits of claim that the fixed re- signed he the contract. payment in schedule the 1982 contract amounted to a claim. false The court held II. jurisdiction that its exercise of over his claim
PRIOR PROCEEDINGS public provision was barred the disclosure Hagood, following According Ms retirement from the of the False Claims Act. to that qM provision: filed tMs tarn action on March 12, 1982, Lee, July may necessarily correspond A11. memo from Edward M. which not Jr., Engineer, District states: actual dates demand. year requirement Provided the statute's 50 met, Lord, opinion Gary Deputy the is of the that the 12. Memo from R. Command- District 1958 er, Division, 13, 1982; preclude Sept. Act does not the establishment of South Pacific Memo repayment Brigadier Gay, Sept. definitive [sic] contractural dates from General
1473 allegations complaint, (A) jurisdiction the of the' the Water over shall have court No upon pressure the .‘used and influence’ to ex- based under this section an action allegations signing or transac- pedite [the contract’s] without accu- public disclosure civil, criminal, I, or administrative Hagood in a rate and current cost allocations.” tions administrative, Indeed, congressional, hearing, in a at 1418. 929 F.2d fixed Accounting report, Office repayment clearly or Government schedule claim was not audit, investigation, or from the hearing, complaint. in stated even his third amended media, person bring- unless ... the news began precise shape only That claim to take original action is an source ing remand, the opposition on in his to the Water information. Agency’s summary judgment motion before (B) “origi- paragraph, us now. purposes For has an individual who nal source” means addition, now, summary there is at the knowledge of the independent direct and judgment stage, significant new evidence allegations the are on which information jurisdiction bearing on issue that was not the in- voluntarily provided and has based 12(b)(6) previous panel on the before filing before to the Government formation evidence, motion to dismiss. The new dis is based this section which an action under below,- cussed warranted reconsideration of information. on the question by the district court on remand. 3730(e)(4). court The district
31 U.S.C.
149, 157
Corp.,
v.
F.2d
Eichman
Fotomat
juris-
deprived it of
provision
that this
held
Cir.1989).
(9th
repayment
Hagood’s fixed
over
diction
undisputed that
“it is
claim because
schedule
Allegations
Fraud.
fixed
sched-
allegation that a
juris-
This court has held that to raise the
pub-
Supply Act was
ule violated
bar,
public
dictional
disclosure must be
proceed-
in
licly
the administrative
disclosed
transactions,”
opposed
“allegations or
as.
brought by
ings
litigation
Ukiah.”
Wang
Corp.,
v.
mere information.
FMC
dis-
primarily contends that
Hagood
(9th Cir.1992).
Wang
F.2d
de-
public
disclosure
trict court erred
its
public
court
found there was
disclosure
(1)
actual-
did not
termination because
Ukiah
“supported by
qui
tam suit was
where
(2)
does;
no
there was
ly allege fraud as he
publicly
few factual assertions never before
until the
actual fraud on
disclosed;
‘fairly characterized’ the alle-
but
began using
storage space
already
gation repeats
public
what
repayments, which did not
initiating
without
1417;
knows.” Id. at
see also United States
litigation was-
until after the Ukiah
occur
Quinn,
Ry. v.
Springfield
ex rel.
Terminal
over;
allege
he
the first
(D.C.Cir.1994)
(“Congress
of the false
improper
pressure
aid
political
only
sought
prohibit qui tam actions
when
claim.
the,
allegation of fraud or
critical
either the
contentions,
turning to
Before
these
transaction them-
of the fraudulent
elements
secondary
dispose Hagood’s
con
we must
domain.”). Thus,
public
were
selves
tention,
case.
on the law of the
which is based
jurisdictional
by public
raised
bar
pro
argues
law of the case
that the
explicit alle-
unaccompanied
disclosure
questioning
the district court
hibited
,
gation of fraud.
already
hád
ruled
jurisdiction, as this court
case,
public
disclo
In this
there
jurisdiction
I. This
in favor of
*9
allega
during
proceedings of
panel
sure
the Ukiah
previous
lacks merit.
contention
repayment
vio
claim,
that the fixed
schedule
only
nev
tions
the cost allocation
addressed
Supply Act.13 In the course
“According to
lated the Water
repayment
the fixed
claim:
er
("
appeal
‘every
to have addressed
agency
court of
with an
or court
13. That documents filed
‘any
dis-
litiga-
question’
held that
information
has
during
proceedings or civil
administrative
litigation
through
and on file with
firmly
civil
publicly
a
closed
are
disclosed is
tion
considered
public
a
dis-
should be considered
principle.
Nor-
clerk’s office
See United States v.
established
Cir.1995)
hearing
953,
(9th
allegations
[sic]
in a civil
closure of
throp Corp.,
966
59 F.3d
1474
—
-
(1996).'
1877,
proceedings, UMah learned of S.Ct.
L.Ed.2d
FERC
“
words,
amended contract between the
other
‘one must have had a
in
proposed
hand
Corps,
argued
allegations
and the
public
disclosure of
that are a
”
improperly allow the Water
it would
part
Barajas,
of one’s suit.’
Agency to withdraw
(quoting Wang,
Hagood
975 F.2d at
obligation under the
repayment
showing
knowledge
has made no
that UMah’s
Indeed, UMah all but accused
Supply Act.
repayment
allegations
schedule
Agency of fraud in its letters to
the Water
illegality
any way
stemmed in
from Ha-
it also filed with the
wMch
good’s
complaints
internal
about the contract.
FERC.14
Indeed, Hagood’s
complaints
internal
in 1981
repay-
and 1982 did not mention the fixed
pro
in
lost
the FERC
When UMah
Therefore,
ment schedule issue.
he
not
petition
a
for review in
ceedings, it submitted
original
an
source of this disclosure.
Although
Appeals.
the D.C. Circuit Court
controlling
Act
issue was whether the
repayment on
required initiation of
first use
2. Fraud Based on Actual Use.
hydropower generation, a
of the water for
Hagood,
attempt
in an
to narrow the
noneonsumptive purpose, rather than for wa
claim,
focus of Ms
contends that the district
supply,
consumptive purpose,
ter
UMah
jurisdictional ruling
apply
court’s
eannot
argument
City
based its
on both. See
of his claim that
Agency’s
the Water
fraud be
(“UMah
Ukiah,
F.2d at
n. 12
729
797
also
gan only
actually
when it
used water “be
argues
illegal
that the 1982 contract is
under
cause the relevant facts as to the actual
Supply Act
the Water
because the
usage
repayment
water
without
did not occur
separates
repayment obligation
Sonoma’s
placed
until after the
had
in
been
from its use of water even for water
operation.”15
purposes.”). An
issue need not be decided
prior litigation
public
for the
disclosure bar
Obviously
Agency’s
the Water
actual use
rather,
triggered;
to be
its mere disclosure
Lake Sonoma
1987 or 1988
Northrop Corp.,
suffices.
See
59 F.3d
966.
during
could not have been disclosed
proceedings
However,
UMah
docu-
Nor has
that he is
shown
proceedings
ments filed in those
acknowl-
“original
allegations.
source” of UMah’s
See
edged
that the Water
would be able
I,
(original
plan will allow the
as Lake Sonoma is
water as it needs as soon
4. Conclusion.
filled,
higher payment
triggering a
without
Hagood
respect
is not a
with
for under the old
whistleblower
that was called
schedule
repayment
Through
to his fixed
claim.
agreement.”
litigation
reports,
public
and media
Ukiah
Thus,
in 1982 that
public
was alerted
was made aware
1982 that
the Water
possibility
embraced the
the new contract
Agency
Corps
negotiated
had
and the
re-
begin using
Agency might
payment contract
that allowed
the.
Springs project before
water from the Warm
Agency
begin using
began
water before
commencing repayment. Hagood’s claim
Hagood
paying for it. Had
raised this issue
begin
Agency
now that the Water
did
fact
in his 1981
1982 memoranda before he
making payments
using
without
the water
have
in a
left the
he would
been
factual asser-
amounts to no more than a new
“
position
bring
this claim.
better
tion,
‘fairly
...
characterized’
which when
Wang:
stated in
he did not. As we
already
repeats
public
knows.”
what
1417.
Wang, 975 F.2d at
If, however,
republishes
someone
an alle-
negate
Hagood seeks to
the effect
gation
publicly
already
has been
dis-
,
Agency
by arguing
closed,
suit,
that the Water
bring
qui
he cannot
tarn
escape
obligation to
rely on it to
cannot
independent
if he had “direct and
even
it first uses the wa-
begin repayments when
knowledge”
is no “whis-
of the fraud. He
wrong.
ter.
In this he is
As
district
A “whistleblower” sounds the
tleblower.”
observed,
correctly
“unless the contract
court
alarm;
it.
he does not echo
claim,
itself constitutes a false
Defendant
(citing Rep.
Wang,
was an source complaint about the cost allocation
Hagood’s
1981,
early as November
while Uki
began as
IV.
in the
were not filed
FERC
ah’s letters
Moreover,
July
until
1982.
as
proceedings
OF THE FALSE CLAIMS ACT
SCOPE
great
attorney
had worked a
deal
he
grant
summary
review de novo the
of
We
project and
Springs Dam
on the Warm
judgment on
cost allocation claim. Jes
specifications
to know its
position
in a
Union,
inger v. Nevada Fed. Credit
24 F.3d
of information
he learned
costs. Because
Cir.1994).
1127,
(9th
approach
1130
We
this
independently of its
to the issue
relevant
principles governing
issue mindful of the
disclosure,
prong
origi
of
public
the first
summary judgment,
granting which are
test,
independent
nal
direct and
source
margin.20
set forth
Wang,
knowledge, is met. See
975 F.2d
gist
Hagood’s
The
cost allocation
claim is that
prong
also meets the second
He
test,
original
voluntarily pro-
he
source
as
Agency]
decided to seek the
[The
superiors in
an
his
ex-
vided
influence
others to avoid current cost
why
planation
thought
he
a new cost al-
place
allocation....
These events set into
legally required.19 Although
location was
Agency]
[the Water
resulted
violation
only Corps employee
Hagood was not the
to
3729(a)(6)
§
31
U.S.C.
needed,
argue that a new allocation was
3729(a)(7)....
case,
[the
this
“[a]nyone
helped
report
allega-
who
Agency]
inducing
had
role in
a critical
government
tion to either the
or the media
Army Corps
rely
on information which
‘indirectly’ helped
publicly
would have
Agency]
[the Water
had reason to know
Wang,
disclose it.”
not
or receives as a
claim.
we must ad-
debt,
obligation
public property
of an
dress the issue whether what
now
knowing
employee
reveals was
fraudulent behavior di-
from an officer or
of the Gov-
original
Corp.,
treated
source test is often
as the
States ex rel. Williams v. NEC
931 F.2d
jurisdictional
1493,
(11th Cir.1991)
inquiry,
(“nothing
focus of the
with courts
[section
1501
treating
upon public
step
3730(e)(4)(A)
the "based
disclosure”
operates
preclude everygovern-
]
" 'quick trigger
get
exacting
as a
to the more
employee
bringing
gui
ment
tam action
"
original
inquiry.' Cooper
source
v. Blue Cross
upon
acquired
based
information
in the
course
Inc.,
Florida,
562,
& Blue Shield
19 F.3d
568
government employment").
his
(11th Cir.1994) (quoting
n. 10
United States ex
971,
Indus.,
548,
rel.
Co. v. Koch
F.2d
Precision
if,
20.Summary
judgment
appropriate
viewing
denied,
(10th Cir.1992),
951,
U.S.
cert.
light
evidence in
most favorable to the
1364,
(1993)).
S.Ct.
122 L.Ed.2d
non-moving party,
genuine
there is no
issue of
material fact. Once
movant has made this
19. This case is not
our recent deci-
controlled
showing,
initial
the burden shifts to the other
Fine,
sion in
Tl F.3d at
in which we held
present
party to
sufficient evidence on which a
job
that an internal
whose
auditor
him,
jury
reasonable
could find for
on each ele-
expose
"voluntarily” pro-
was to
fraud did not
ment of the claim on which he will bear the
qualifying
purpose
vide information for the
as
Catrett,
proof
Corp.
burden of
at trial. Celotex
v.
original
Hagood’s job
source.
was not to
draft,
317, 322-23,
2548, 2552-53,
fraud,
477 U.S.
106 S.Ct.
expose
perform
but to
contracts and
(1986);
Liberty
This statement indicates that Beach knew evidence does not that lied; removing purpose suggests only an entire from the Water existing cost-sharing might Corps’ contract re- knew that the re- reallocation, quire sponsibility regard a cost support allocating costs clear, sophisti- reasonable Corps might inference that Beach was was not and that authority jump ways. cated. from there to the exercise its in a number most, Hagood conclusion that Beach At knew that the cost has shown that the Water dam, wasteful, legal eager too or advantage disputed to build the of a Agency took held, given too much the stat- This, is been discretion previously we have as issue. not, operations. governing He has utes enough. not
however, the False established violation of County Act the Sonoma. Improper Political Pressure. Claims C. Agency. political again refers court, judgment includ- district his allocation claim. pressure part cost ing Agency, its award of costs to Con Beach asked He offers evidence AFFIRMED. getting gressman help Claussen as that after Claussen’s approved; KLEINFELD, Judge, concurring; Circuit officials, those offi *14 met with
sistant approval; result, expedite majority’s to cials decided I in the in the concur and reason, was expedition, Hagood and there not that because that what revealed was a allocation.24 prepare no to new cost time fraud. supports reasonable of events a
This chain err, think, in deciding I that We politi used that the Water inference original voluntarily pro was an source who approv cal to obtain contract’s pressure lawyer vided the information. He was a so al. not establish that the contract It does duty charged drafting with the a contract Perhaps approved a false claim. Con was other documents for the transactions and gressman did the manner Claussen influence thought If was he the transaction issue. in their officials exercised which fraudulent, “required give an hon he was to event, Perhaps not. In either discretion. client, “may opinion” to his not know est meaning claim no false within the there was ingly assist a client criminal or fraudulent Act, §§ 31 3729- False Claims U.S.C. Model Rules Con conduct.” of Professional (1995). Rules duct Rule 1.2 cmt. 6 See also Bar of of Professional Conduct of the State branch in a dem- To vest executive officials (1995) (stating 3-210 that mem “[a] Cal.Rule with in the ocratic discretion any law not advise violation of ber shall rep- powers is their to invite exercise of good member faith ... unless the believes legislative of those in the branch resentatives invalid”). profes ... such law that These by present to be affected exercise obligations to his sional made disclosure such, vigorously constituents’ views to their voluntary. mandatory, agency of fraud not expect it be otherwise is officials. To Therefore, rel. Fine v. United States ex foolish; require it to would be otherwise U.S.A., (9th Chevron, Inc., tyranny. Cir.1995)(en banc), controls, prevents qui recovery. tam IV. Fine, govern- In we held that an internal
CONCLUSION job expose whose fraud ment auditor was persuasive “voluntarily” provide presented evidence did not information. Hagood has our majority The states that management in its Id. at 743—14. we project, may not controlled Fine because Springs Dam have been decision is Warm observed, expressed only tangi- any opposition to the I have never the district court As for the preparation of a new allocation indicating cost that the Water ble evidence Wa- [the 1982 water contract between objected preparation of a new have Agency] of Amer- and the United States ter by Corps a memo a offi- allocation was written any with I have never discussions ica. ... had stating support that locals would not cial Congressman anyone Claus- connected with share of the cost increased. The if their office, Dawson, Gianelli, Mr. Mr. Colonel sen’s Bauchspies, likely hearsay; court ruled district concerning Saling Neil the is- finding not an abuse discretion. See Larez told new cost I never sue of a allocation.... (9th Angeles, City v. Los F.2d Congressman anyone Claus- connected with Cir.1991) ruling (hearsay abuse of reviewed for office, anyone nor connected sen's Corps, discretion). part, Agency, sub- for its The deadline had a [Water] stating: mitted a declaration Beach of the final contract. for execution rejected argument Fine’s that since all feder- duty employees report
al labor a under treating against government,
fraud his involuntary all
disclosure as would “bar fed- employees potential from the-universe of
eral Fine,
original sources.” Id. at 744. we question federal em-
said that the “whether
ployees might as a class from be excluded
qualifying original sources” remained “for day.” Id. at 744 n. 5.
another from whether a issue here is distinct
government lawyer who discovers fraud
a matter unrelated to his own duties can qui
recover tarn action. Had carpool acquaintance
heard from a about agency, ques-
fraud in some other then the day in
tion we left for another Fine would be *15 lawyer working
before us. But a aon trans- duty agent
action has a as an to disclose to principal
his “information relevant to matters province
within his and of which he should principal
know the would want to know.” Seavey, Agency §
Warren A. Law (1964). Hagood provided Because the infor- agency pursuant legal
mation to his to his
duty, “voluntarily,” he did not do so as 31 3730(e)(4)(B) requires
U.S.C. for qui tarn
jurisdiction. Hagood voluntarily “no more
provided information to the than
we, judges, voluntarily argu- as federal hear Fine, dispositions.”
ments and draft
at 743-44. CROWDER; Stephanie Good,
Vernon
Plaintiffs-Appellants,
v. KITAGAWA, Chairman,
Yukio Board of
Agriculture, Hawaii; State of Calvin
Lum, al., Defendants-Appellees. et
No. 94-15403. Appeals,
United States Court of
Ninth Circuit.
Argued and Submitted Nov. April
Decided