154 F.2d 344 | 10th Cir. | 1946
The suit at bar is a qui tam action brought under the False Claims Act, R.S. § 3491, 31 U.S.C.A. § 232. It was filed on January 5, 1942 by the relator, David Bayarsky, on his own behalf and on behalf of the United States. The complaint alleges that the defendants in 1935 and 1936 conspired to defraud the United States by submitting collusive bids, by preventing others from bidding or performing their contracts for the sale of sand and stone to the United States for use on WPA projects in New Jersey, and that the defendants presented claims against the United States knowing such claims to be fraudulent and knowingly employed as proof thereof false bills, receipts and vouchers.
In 1938 before the civil suit at bar had been commenced, the persons named as defendants had been indicted under Section 35 of the Criminal Code as amended, 18 U.S.C.A. § 80, for the acts specified in the complaint. In December, 1941, about ten days before the suit at bar was instituted, twenty-five of the forty defendants pleaded guilty to the indictment and were fined
The question presented is one of statutory interpretation. The learned District Judge concluded, basing his decision upon the language of clause (C) of the amending statute
The phrase “any such suit” appearing-first in clause (C) does not require the abatement of the suit at bar. It will be observed that where first used it is followed by the phrase “brought by any person under clause (B).” Since the United States has entered an appearance in the cause within the prescribed time the suit is not one within the purview of clause (B). The construction put upon the statute by the court below therefore is not a permissible one. Legislative history aids greatly in interpretation. The history of the False Claims Act demonstrates that it was intended to correct substantial abuses which Congress had clearly in mind. The original law was enacted March 2, 1863, 12 Stat. 696, the Civil War having given opportunity to the unscrupulous to defraud the United States. The Attorney General of the United States and his subordinates did not possess the facilities necessary to investigate adequately or to prosecute frauds against the United States.
But the statute as it existed prior to the amendments of 1943 resulted in races to the courthouses by informers anxious to secure shares of possible recoveries. The filing of numerous qui tarn actions threatened effective law enforcement and hampered the administration of justice. Congress met this situation by the 1943 amendments to the Act and, inter alia, created controls which applied to then pending qui tarn suits. These controls were placed in the United States. But Congress provided also that if the United States should fail or should decline to enter any suit or should neglect to carry on a suit with “due diligence” for a specified period, the control of the suit reverts to the relator. All of this seems clear from the words of the amending act.
The legislative history of the 1943 statute shows with equal clarity that it was the intention of Congress to make the United States the master of pending qui tarn suits. Following the decision of the Supreme Court in United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443, the change in the law was initiated in the House of Representatives in H.R. 1203. This bill was passed by the House on April 1, 1943 with little debate.
In its report the Senate Committee made clear its intention that informer suits should not be eliminated but rather that such suits should be put in charge of the United States when considered desirable by the Attorney General. Senator Van Nuys, who was in charge of the bill in the Senate, quoted from a letter by the Attorney General. That Officer stated
Conclusions similar to those expressed herein were arrived at by the Circuit Court of Appeals for the Fifth Circuit in United States v. Pittman, 151 F.2d 851. We think that the position taken by that court is correct. Cf. United States ex rel. Rodriguez v. Weekly Publications, Inc., 2 Cir., 144 F.2d 186, 187, quoted in the opinion of the court below.
The order of the court below abating the suit is reversed.
As follows: “The court shall have no jurisdiction to proceed with any such suit brought under clause (B) or pending suit brought under section 3491 of the Revised Statutes whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States, or any agency, officer or employee thereof, at the time such suit was brought: Provided, however, That no abatement shall be had as to a suit pending at the effective date of this Act if before such suit was filed such person had in his possession and voluntarily disclosed to the Attorney General substantial evidence and information which was not theretofore in the possession of the Department of Justice.”
See Cong.Globe, 37th Cong., 3rd Sess., (1863) p. 952.
See Gong.Globe, 37th Cong., 3rd Sess., (1863) p. 956.
See 89 Cong.Rec. 2800-2801 (1943).
See Senate Rep.No.291, 78 Cong. 1st Sess., 1943, as follows:
“Section 3491, Revised Statutes, w^s enacted during the Civil War time, to meet a situation then existing, which does not now exist. At that time the office of the Attorney General was not staffed sufficiently to handle the many matters which arose and was not possessed of investigative facilities now at the disposal of that office. Now adequate facilities in respect to handling such matters exist and through the Federal Bureau of Investigation and many other investigative agencies of the Government, adequate investigations of frauds against the United States are being made. The experience of the Department in the present war has established that many persons who have filed suits and may file suits under this section, have no information or facts of their own, but prepare and file complaints which obviously are based on information and alleged facts obtained bodily from indictments returned in United States courts, from newspaper stories, and congressional investigations. * * * The Department’s principal desire for the enactment of this bill is that the United States be protected against being compelled to disclose its facts involved in any criminal prosecution it may have undertaken or is about to undertake. Their experience has shown that upon filing of such civil suits, steps are soon taken to compel discovery, by taking deposition and otherwise, in the civil suits, to ascertain the facts upon which the Government is proceeding. All such matters tend to embarrass the Government in its conduct of criminal prosecutions in obtaining what they otherwise would not be entitled to obtain and could ■ not secure.”
See 89 Cong.Rec. 10,687 — 10,688, 10,-752, 10,844-10,845, 10,849 (1943).
Emphasis added in both titles.