United States of America and Eunice Mathews v. Bank of Farmington

408.342(2) (1998), risks which he intention- action, ally assumed his own course of

Accordingly, Michigan’s we find Ski Safety precludes any

Area recovery by Act injuries

the Plaintiff sustained while skiing premis-

snowboard on the Defendant’s properly granted

es that the lower court

judgment in Defendant’s favor as a matter of

law. judgment We thus affirm

district court.

UNITED STATES of America and Eunice

Mathews, Plaintiffs-Appellants, FARMINGTON, OF

BANK

Defendant-Appellee.

No. 98-2040. Appeals,

United States Court of

Seventh Circuit.

Argued Oct. 1998.

Decided Jan. with the proceed declined proceed with Mathews decided

action.2 government’s behalf. the action on the granted the Bank’s then The district court prejudice her lawsuit with motion to dismiss establishing the Act the section of under a claim “based jurisdictional bar where upon the ..., hearing ... ... civil transactions bringing the action is person unless the Peoria, IL, for O’Day (argued), Daniel G. the information.” original source of Mathews. Eunice 3730(e)(4)(A). that § The court held Attorney, Chambers, of U.S. Office K. Tate upon” qui claim was “based tam Mathews’ IL, Peoria, for O’Day (argued), G. Daniel “publicly disclosed” which was U.S. of “original source” an and that she was not Vonachen, (argued), ap- A. Kouri Stephen interpretation and The the information. Slevin, Peoria, IL, Lawless, 3730(e)(4) for Trager § & are of plication language of the Farmington. appeal. questions present Bank of in her main the affirm, rea- different but for somewhat We CUMMINGS, and KANNE Before by the court below. given sons than those WOOD, Judges. P. Circuit DIANE Background I. Factual CUMMINGS, Judge. Circuit guaranteed personally Eunice of Farm- Mathews the Bank Eunice Mathews sued $100,000 “Bank”) line of credit from (the of a a relator the extension ington [Illinois] in Farmington to her son Lester the Bank of False qui provision tam of the the under all of thereby guaranteeing Lester’s Act, in con- § 3729 et 31 U.S.C. seq., Claims Bank. existing and debts the the then future allegedly false claim nection Bank loaned Lester In 1987 and Farm- upon the former federal Bank made $290,000. were con- (“FmHA”).1 All the loans more than Un- Home Administration ers’ farming The business. False nected with Lester’s qui provisions of the tam der guaran- FmHA sought and obtained an Act, recover Bank private a citizen can Claims loans, but, in brought ty these violation of federal on for damages in a civil action treble application regulations, not disclose did government against party of the behalf of guaranty FmHA existence payment allegedly claim for made false has 3730(b). backing the guaranty as collateral § Mathews’ Id. against the United States. subsequently on lawsuit, defaulted alleging that new loans. Lester qui filed a Mathews two loss The Bank submitted informa- the loans. was the she neither reports to the FmHA March misrepresentation to tion the existence of Eunice FmHA, damages of more of which disclosed seeking and on paid The FmHA out guaranty. $100,000. requires, the Mathews’ As statute than nondisclosure gov- these claims. The stayed was and sealed while action alleged of guaranty violation of the information. was notified ernment may join lawsuit as a choose to were subsumed ment of the FmHA The functions 1. case, Agency although case the prosecute in 1994. To in that the Farm and under Service confusion, 3730(c). all the relevant party. § avoid and because If remains a Id. relator action, administrative facts occurred under structure, the old pursue declines agency as the we shall to the refer things being equal, go may, forward other relator throughout. FmHA herself; may inter- with it but the showing good Id. cause. later vene qui procedure private tam action 3730(c)(3). party remains § States United action is sealed this. The relator sues and the hence the title provision; under stayed States is notified while United Id. this case. 3730(a)(2). govern- the action. 31 U.S.C. Claims Act which she bases further information the False on its contents. Kowal 3729(1). provided her tam claim. See 31 U.S.C. an affidavit that confirms Rhea’s report. say, That is to the first time the In the Bank June sued Mathews FmHA guaranty the Mathews heard guaranty. court to enforce Illinois state her itself, although from the Bank this communi- the suit on the She lost instrument lost instigated by cation was subpoena. appeals, although the Bank settled for his, Kowal also stated affidavit that he $100,000, waiving attorney’s interest and believes that he “advised” the FmHA about proceedings, fees. those Mathews’ coun- guaranty during the Mathews one of the sel, reviewing produced by documents previous they conversations in regard had discovery, Bank in noticed that the existence loans, although Lester’s he said that he did guaranty of her had not been disclosed to the specific anyone not recall a conversation with applications FmHA on the Bank’s particular from the FmHA. agency. rules, Illinois court Under such dis- covery material is not filed in the court state, litigation followed, In the court provided opposing file but is counsel. Her the Bank’s failure to disclose and the other attorney attempted to use the Bank’s nondis- facts described above became matters guaranty closure as defense to the subject filed documentation and the failed, state trial. This effort since no mis- many hearings. court The Bank and the conduct, illegality or crimes of the Bank FmHA separate negotiations conducted against could Math- affect guaranty. about appears the Mathews It liability ews’ own to the Bank under the paid from the record that the Bank FmHA guaranty. some or all of the loss settlements that the Bank had received from FmHA in connection

The facts which constitute the basis of dispute Lester’s default. There is some qui emerged Mathews’ tam claim in the state much, precisely how but that is imma- proceedings During trial as follows. discov- terial here. ery discussed, proceedings, for those as misrepresentation Bank’s to the FmHA came 1997, qui Mathews filed her tam claim attorney the attention of Mathews’ when court, $111,440.68 seeking in federal in dam- he received the Bank’s FmHA claims dis- whether, ages. question on these 1993, covery. In December a loan officer at facts, jurisdiction a court has over this claim. Bank, Kimbrell, Mr. Rich told Mathews’ attorney guaranty that the Mathews had not II. Discussion application,

been disclosed on the FmHA but A. Introduction that it was in Lester’s file at the Bank and periodically by would have been reviewed The False Claims Act was a Civil War FmHA. statute, 1863, passed originally to enable attorney subpoenaed deter, then Mr. punish the federal and Rhea, employee Victor the FmHA principally profiteers. the fraudulent claims of war responsible agency guaranty provided penalties pre- of Les- criminal and civil loans, deposition. ter’s for a senting payment against Before the de- a false claim for position, Rhea Bank S.Rep. 99-345, called President Kent United States. See No. at 8 (1986), inquire 5266, Kowal to as to reprinted the reason for this in 1986 U.S.C.C.A.N. subpoena. first, very Kowal told Rhea that Bank 5273. From the the statute in- guaranty. had sued qui provision.. Mathews on her This cluded tam The term comes explanation alerted Rhea pro to the existence of expression, qui Latin tam dom- guaranty. the Mathews Rhea rege quam pro ipso parte stated ino se in hac affidavit,in (“Who qui tam sequitur brings case that this conver- the action for the himself’). King sation was the first that he had heard of her as for A well guaranty. brought by private Since he should party have been told lawsuit is or beginning, alleges upon govern- about it from the this have would “relator” who fraud interesting been an proven, conversation to have in ment. If the claim is the relator detail, percentage recovery rang- but the record this no case has receives ” Cooper lawsuits.’ parasitic statute, preventing from 10% to current

ing, under the Florida, 3730(d). Blue Shield Blue Cross and The relator v. See 31 30%. Cir.1994) (inter- 562, Inc., attorney general. private as a serves sort omitted). provision the the idea nal citations provision is based qui tam “ case, in this at issue meaning and most of which is expensive of the least ‘that one 3730(e)(4), “jurisdictional” frauds establishes preventing means of effective perpetrators of actions: Treasury against make the certain is to by private persons to actions them liable (e) barred— actions Certain per- strong stimulus acting ... under gain.’ hope of United ill or the will sonal (4)(A) jurisdiction shall have No court 537, Hess, 317 U.S. rel. Marcus ex States this section an action under over 383, L.Ed. 443 n. S.Ct. allegations upon omitted). (internal citations civil, criminal, or adminis- in a transactions twice, once has been amended The statute congressional, admin- hearing, in a trative recently in 1986. The more in 1943 and istrative, Accounting Office or Government bring anyone to Act allowed original 1863 audit, investigation, or report, hearing, receive 50% of amount qui tam action and media, action unless from the news 99-345, at 10. This S.Rep. No. recovered. Attorney or the brought General by the provision led abuse broad is an person bringing the action Marcus, Supreme following where the Court of the information. source that a relator could held (B) paragraph, purposes of For this con- entirely upon information action based individual who means an he had indictment to which tained in an knowledge independent has direct nothing, Congress amended the contributed which the the information on on evi- preclude actions “‘based statute provided voluntarily and has are based had dence or information fil- before to the Government brought.’ See United when the action was is this which ing an action under section Co., Ins. v. ex rel. Stinson Prudential States on information. Cir.1991) (3d 1149, (quoting 31 1153 944 F.2d 3730(b)(4) (1982) (superseded)). § not courts be Congress that intended being even in cases capitalize barred on by This led to claims who wish to persons troubled supplied the in- qui plaintiff tam discovery exposure of where of frauds to others’ filing the way before con- they formation to have in no which themselves rel. Wisconsin However, jurisdictional States ex claim. See is United tributed. Cir.1984). (7th 1100, Dean, narrowly 729 F.2d 1106 construed. excessively v. to be statutory interpretation is basic Our task 1986, Congress the Act amended Congress.” the intent of give to “to effect knowing encourage again “to individual Ass’ns, Trucking American States v. United bring informa fraud to that Government of 1059, 1063, 534, 542, 84 60 S.Ct. 310 U.S. 99-345, S.Rep. at 2 No. tion forward.” to be provision The therefore L.Ed. 1345. is 1986, pp. Cong. & Admin.News U.S.Code amend- 1986 in the context understood amendments effect of these 5266-5267. The ments, which, qui explained, broaden qui tam the whole is to broaden on increasing incentives provisions, tam pri Congress to reward provisions. wanted exposure of fraud. significant personal who take vate individuals claim troubling aspect of Mathews’ A wrongdoing light, to break to risks to attempt on her recover among employees turns conspiracies of silence Bank, alleged with an false whistleblowing in connection malfeasors, encourage guaranty, almost the to her claim id. at 14. The related of fraud. See and disclosure pay the Bank as a she had to precise amount history that the 1986 legislative shows guar her on also, however, court lawsuit “‘sought to re result of state amendments qui anty. not itself make encouraging This does between ... solve the tension intended to opportunistic in the sense information and lawsuit forward with people to come

859 (7th jurisdictional 535, Cir.1995); precluded by the bar. Joyce be Joyce, (7th Cir.1992). target provision .oppor- is that the sort of Mathews dis Marcus, involved in where a relator putes statutory tunism that the properly bar is con reporting “jurisdictional.” for that had been recovered fraud strued as is not clear exposed entirely by purpose But others. she theological what thinks is at stake this provision encourage dispute, is to since may she concedes that she exposure against of fraud maintaining reward the barred from the action on the government, persons not to allow grounds who have Congress jurisdic labeled as tional, by sustained financial liabilities backed valid they juris whether or not are in fact judgments waiver, or settlement orders to make dictional. She no raises issue of good expense those losses at the of those to question where the of whether the bar is they jurisdictional whom are liable. Thus the court below might be relevant. See Intern right that Mathews’ disclosure is not the Operating Engineers at'l Union Local whistleblowing Rabine, kind which the statute was 150 v. 161 F.3d 429-432 Nonetheless, Cir.1998) designed encourage. (discussing had the difference between jurisdictional require- Mathews satisfied the subject jurisdiction lack of matter and failure 3730(e)(4), claim). ments of 31 U.S.C. this trou- plain state But it is fact 3730(e)(4) bling aspect of her lawsuit would not have “satisfaction of an issue of enough subject create a jurisdiction.” been bar. matter United States merely No such bar exists Indust., lawsuits that ex rel. Precision v.Co. Koch up Cir.1992) are intended to make for losses incurred (collecting cases). in other lawsuits. We have ourselves so held. See Houck on Folding United States v. Behalf of inquiry into whether a court Committee, Carton Admin. may hear a tam relator’s claim has three (7th Cir.1989). & n. 9 Mathews cites no (1) parts: Have the made contrary. question caselaw pre (2) so, plaintiff “publicly been disclosed”? If sented, then, is whether dismissal for lack of upon” is the lawsuit “based subject jurisdiction matter was correct. (3) so, plain disclosed information? If is the tiff an the information? B. Analysis Cooper, 19 F.3d at 564 n. 4. The threshold inquiry is whether there has been a Hearing 1. Public Disclosure in a origi disclosure. Whether the is an Investigation nal source is immaterial there has unless The court below concluded that Wang been such disclosure. v. See guar Bank’s failure to disclose the Mathews (9th 1412, Corp., FMC 975 F.2d 1416 Cir. anty “publicly to the FmHA was disclosed” 1992). arises.only if showing when the Bank released documents the information which the tam claim response in Mathews this failure to a discov publicly is based has been and the disclosed ery request. agree We that information this was not the source of the disclosed, publicly was but for not this rea information. For an action to be barred below, noting correctly son. The court that 3730(e)(4), every compo under “each and spoken discovery we have not to whether present.” nent of this section Hin [must be] material, filed clerk of the court or University da v. Health Chi Sciences/The not, publicly meaning is disclosed within the School, 608, cago Medical 65 F.3d 613 3730(e)(4)(A),3 §of chose to follow the rea Cir.1995). Stinson, soning of 944 F.2d at 1153. The

This Court reviews de novo a dis Third held there that Circuit “disclosure of subject jurisdiction. discovery party missal lack of matter material to a not who is Skinner, imposed See Health Cost Controls v. under court limitation as to its mistakenly says litigation, prior 3. Mathews that de- this Circuit when it was revealed in see id. at 504, Houck, question cided this 881 F.2d 494. but we not whether it been did address had only publicly There we did not. We said that the infor- disclosed because it was revealed in the publicly discovery process. mation in that case had been disclosed 860 concealed,” English Dictio- 12 not [False under public disclosure is a

use Oxford OED]; (2d 1989) [hereinafter, ed. Stinson, nary, 780 F.2d at 1158. 944 Act].” Claims view, “opening up to is that of “disclosure” “information is that for this rationale OED, at revelation, discovery, exposure.” 4 accessible discovery potentially is disclosed something publicly dis- say is that 738. To public.” Id. to the Whether open general in fact “significant.” Id. The even if it is not not closed therefore is filed view, up actually opened approach without adopted this observation Circuit Second so, and that it is not only potentially ex rel. Krein is United States but explanation Technologies only if a court has forbid- v. United disclosed publicly & Kreindler dler Cir.1992). (2d 1148, disclosure, ordinary 1157 F.2d is to distort Corp., 985 den cases, court below con into fact read Relying meaning on these of the words Congress information was not that since Mathews’ that did provisions cluded the statute discovery, unfiled discov albeit obtained enact. been disclosed. it had therefore ery, Circuit, Accordingly, the D.C. we follow however, think, reasoning of that We “discovery material which held interpre- Third is unsound. Circuit only court and filed with the has not been adopted there “public disclosure” tation public’s re- theoretically available meaning of the contrary plain runs “publicly disclosed” within quest” is not clearly expressed legisla- “Absent words. 3730(e)(4)(A). meaning United States language contrary, th[e] tive intention to the Ry. v. Co. Springfield rel. Terminal ex ordinarily be re- itself] the statute must [of (D.C.Cir.1994). 645, Quinn, As Product conclusive.” Consumer garded as remarked, discovery mate- “[u]ntil that court Inc., 447 Sylvania, v. GTE Safety Comm’n court, we doubt rials are filed with 2051, 2056, 102, 108, 100 S.Ct. U.S. two discovery process conducted between are to be in a statute L.Ed.2d 766. Words pub- litigants itself constitute a private could ordinary meaning. See given plain and their disclosure_[Unfiled discovery materi- lic 597, 604, James, v. 478 U.S. States United eye.” only potentially are als] “The 92 L.Ed.2d 483. 106 S.Ct. 10th ob- at 652-653.4 As the Circuit Id. is the most reli- plain language of a statute context, merely “conjec- in a served different Time congressional intent.” indicator of able ‘accessibility’to the speculative infor- tural or Doyle, v. Cable Warner plaintiffs bar[ ] [does not] mation Cir.1995). Ramseyer ex rel. States tarn action.” United Century Corp. 90 F.3d Healthcare language the statute itself is Here (10th Cir.1996).5 previously have We disclosure,” “potentially not accessi- “public or other ordinary held that a letter “communication plain and public.” A ble private parties [themselves] two “open general ob- between meaning “public” is manifest, under this section.” servation, sight, cognition, having discovery to materials in FmHA files access reach mate- 4. We do not here whether accept argu- with a court has has indeed filed at Bank. To this which been to Lester’s files the rial disclosed, publicly the case since been purpose therefore before of the 1986 would the ment undo present question. this How- us does not jurisdictional return the It would amendments. ever, every Appeals which has consid- Court of version, which barred lawsuits bar to the old it in the affirmative. See it has answered ered pos- government's the in based on information 652; Kreindler, Quinn, at at 985 F.2d 14 F.3d Stinson, the F.2d at 1153. As See 944 session. 1157; 1158; Stinson, States 944 at United F.2d remarked, Congress "when Circuit amend- D.C. Co.,& 21 F.3d v. Becton rel. Siller Dickinson ex 1986, jurisdic- focus of the the Act in the ed Cir.1994); 1339, (4th Recovery Federal Ser- 1350 [changed] in- from evidence of fraud tional bar E.M.S., City Crescent vices v. United States and Inc., government’s overcrowded file cabinets the side (5th Cir.1995); 447, United 72 450 F.3d public already exposed in the domain.” to fraud Telecom., v. BellSouth ex rel. States McKenzie Findley v. FPC-Boron Em- States ex Cir.1997). United rel. Inc., 939 123 F.3d (D.C.Cir.1997). Club, ployees’ 684 105 reject suggestion the of the this we 5. For reason of the statute therefore amended version public some sort of below that there was court possession any theo- precludes constructive such "con- the was in because disclosure ry. here, information, possession” of the structive

861 Hindo, Quinn, (citing F.3d at claim is based public constitutes disclosure 652-653). 3730(a)(4). at is no reason to treat There within meaning the of discovery differently. unfiled materials To Disclosure to officials with less policy treat them the same the of best serves responsibility direct might public still be dis Act, barring the False Claims since actions closure public if the disclosure is in the com merely po- based on information which was meaning monsense of the “open” term as or tentially actually opened up but not view to “manifest” to all. See United States ex rel. discourage only not parasitism. does de- Chevron, Inc., Fine v. 72 F.3d diligence in uncovering ters fraud. Cir.1995) (information Inspector contained Nonetheless, the information about semi-annual report Congress General’s misrepresentations upon disclosed). publicly open The more a disclo bases her tarn action was in is, sure public the less official need be deed disclosed because the Bank had specifically informed. If it is sufficiently official, competent public disclosed it to a open, official specifically no need be in here Victor Rhea of FmHA. the Disclosure of formed. likely The more competent the offi competent public information to official cial apprised is to be of the relevant facts by an alleged against gov about claim false the disclosure, “public,” the less in the sense of public ernment we hold to be disclosure with open all, or manifest to If it need be.6 3730(e)(4)(A) meaning of when made, here, disclosure is precisely disclosure managerial is made to one who has public responsible claim, official for the it very responsibility being claims made. need anyone not be disclosed to else to be This construction accords with a standard public disclosure meaning within the meaning “public,” which can also de be Act. for, by, acting fined as “authorized repre or disclosure, if actually not made senting OED, community.” at 779. public to the large, at public must be to a Disclosure to an official authorized to act official. persons Private represent do not represent community on behalf of public. distinguishable Mathews’ case is government can public be understood as dis where one of an results internal closure. corporate investigation not disclosed within point public disclosure of a false corporation nor pub disseminated to the against claim is to it to lic, trigger public not “d[id] authorities, the attention of the merely bar .... United States rel. ex Aflatooni enlighten public educate and large at Kitsap Services, Physicians dangers misappropriation (9th Cir.1998). money. tax their public to the at Disclosure step is a large lowering the Clearly, however, not all disclosure precisely likely because it is public to alert the to a public official is disclosure. As alleged authorities about suming public fraud. After promulgation no other investigation, they proper steps information, can take the public official to whom the prosecution, to deal with in- settlements information is disclosed must be one whose it— volving funds, repayment may question whatever duties extend claim particular called for in the case. way. Since some significant It would not have capacity official in his official is autho- been disclosure here had the Bank act represent rized to for and divulged the commu- the information in this case to a nity, and since disclosure to the postal official or to carrier Governor Guam responsible for the pur- claim effectuates the and to Accordingly reject no one else. we pose public of disclosure to large, the at adopted by Circuit, the construction the 10th public disclosure to a official with re- according direct to which there is disclosure sponsibility question for the claim in of alle- if [are “the disclosed] [sin to gations or transactions which a tarn gle] member of the not previously degree open The to general question disclosure is thus official in is factual likely give to responsible all or is to notice to a district court.

862 guaranty and of the Mathews thereof,” Fine FmHA learned ex rel. United States informed Sciences, Inc., misrepresentation because of the Bank’s Advanced not, Cir.1996), postal carrier discovery proceedings, even to a but to step the (as in Ad- hearing, of Guam —or to the Governor “in” a statutory language or the use Sciences), the representative of to a hearings. vanced discovery are proceedings if even Persons. of Retired (at American Association facts inkling of these FmHA’s first purpose the fails to serve interpretation That latest) during phone conversation was the amendments, the 1986 Act under FmHA told President Kowal which Bank pun- exposure and namely encourage the to guaranty suit official Rhea of fraud. ishment of if “in” is as flexible against Mathews. Even be- “hearing,” an informal conversation as that disclosure It should be obvious agent party’s potential witness and tween a by to part deposition subpoena is not itself complaint is on which the information hearing.” not “in a 3730(a)(2), any proceeding, and so based, § is not mandated in as 3730(e)(4)(A), § “public under disclosure” any qui prohibit statutory language would by who was someone

tam action whatsoever in this brings “public disclosure” raised source, clearly not which is not an scope conversation within Congress. intent of 3730(e)(4)(A) operates § is that the bar congressional “a against public case, however, was the information In this investigation,” ... id. administrative [or] Rhea, FmHA official disclosed to Victor Kowal Rhea and The conversation between had, very responsible for the loans investiga pursuant to an administrative him, was guaranteed. It to hitherto unbeknownst agency An official of an administrative the Bank’s intent tion. may not have been (the subpoena) in a misrepresentation, anomaly its own faced with an confess or correct just inquiry action was to purview the effect made but matter within his the attention of misrepresentation industry regulated for which an official of a have been person who should precisely the does not agency responsible. with, begin apprised of the information “in language to understand such stretch the effectuating purpose disclo- thus Although there “investigation.” quiry” as an sure. discussing what is no caselaw seems be necessary something an administra to be jurisdictional bar and meaning of investigation tive within in- operate only when the exception 3730, investigations § as formal need qui tam claim is upon which a formation investigation” in United the “multifaceted “criminal, as in a is disclosed Corp., Doe v. John Doe States ex rel. John civil, hearing, congres- in a or administrative (2d Cir.1992). may They administrative, sional, Ac- 960 F.2d or Government audit, long hearing, inquiries in- so counting report, be informal or casual Office by they media.” 31 authorized officials vestigation, or from news are undertaken below, 3730(e)(4)(A). See, e.g., The court O’Connor v. purposes. with official place having taken treating the disclosure as Chicago Authority, Transit discovery Cir.1992) (informal discovery, whether addressed administrative statutory term “hear- encompassed by characterized as an inquiry whistleblower See, so held. ing.” Circuits have officer, Several hearing a investigation). police A (“For Quinn, purposes of e.g., 14 F.3d at 652 shop, investigates in a dark peculiar noise 3730(e)(4)(A), synony- ‘hearing’ roughly flashlight and ask gingerly shining a inside Kreindler, ”); ‘proceeding.’ accord mous with essentially what ing, up?” This is “What’s Stinson, 1158; F.2d at 1155- at allega phone call. The Mr. Rhea did his Siller, 1157; 21 F.3d at 1350-1351. constitute the or transactions which tions then Eunice claim were here, basis of question how- not reach the We need in an “administrative “publicly disclosed” ever, “hearing” not the clause is because investigation.” present case. The applicable provision Publicly Upon” provision parasitic “Based meant to bar lawsuits. Id. at 1348. Disclosed Information interpretation The Fourth Circuit’s jurisdictional applies only bar upon” grounds “based is the better on the qui upon”

when a tam action is “based plain meaning public policy. both of and public allegations or disclosure of trans claim, however, Mathews’ upon” is “based majority actions. view is of the public disclosure preferred even under our Circuit, qui Second that a tam action is reading. “derived from” complaint Her and upon” public “based when the pleadings only in fact refer not to the exis- supporting allegations are “the same as those guaranty tence of the Mathews and its non- publicly that have been disclosed .... re disclosure on the Bank’s submissions to the gardless of where the relator obtained his FmHA, also, but essentially, and to Rhea’s Doe, 324; information.” 960 F.2d at accord statement that he had not learned of the Kreindler, 1158; Quinn, 985 F.2d at guaranty prior subpoena to Mathews’ and his (D.C.Cir.); McKenzie, at 652-655 123 F.3d at own conversation with the Bank. Whether or (9th Cir.); Wang, at 1417 discovery not the unfiled upon material Cir.); Koch, Cir.); at part in bases her lawsuit consti- (11th Cir.). Cooper, 19 F.3d at 566-567 disclosure, public tutes a Rhea’s conversation jurisdic rationale in these cases is that the Kowal, point the latest at which the operates upon if tional bar the information divulged Bank guaranty the existence of the “ already which the suit is ‘in based government, public to the constitutes dis- domain, public qui plaintiff and the tam closure the context of an administrative information,’ Doe, not a of that source 960 inquiry. qui actually Mathews’ tam claim is (internal omitted). F.2d at 324 citations Un substantially derived from this disclo- reading, Bank der this once the had informed claim, part sure. It is of her cited her surrounding FmHA the facts its mis complaint, necessary to show that representation, Mathews’ claim was “based Bank misrepresentation had not corrected its upon” that if disclosure even she knew about to the FmHA began discovery until Mathews entirely apart those facts from the Bank’s in the state court action. This is sufficient admission, e.g., through examination of the upon” claim to be “based the disclo- produced discovery. documents jurisdictional purposes sure for bar. Circuit, representing The Fourth the mi- If the disclosure from which view, nority objects statutory lan- actually the information is derived is essen guage upon” “based does not mean “similar claim, qui tial to a tam then the claim is (even identical) to” but “derived from.” See upon pur disclosure for the Siller, 21 F.3d at 1347-1348. On this con- jurisdictional poses of the bar. This Court struction, it purposes is irrelevant for 3730(e)(4)(A) need not reach whether bars jurisdictional bar that claim- states qui any part” tam actions based “in rather the same divulged information that the Bank “solely” upon publicly than disclosed informa got unless Mathews Houck, tion. we that “the Act ... said information on which her claim is based from bring does not allow a an divulgence. The rationale of this solely upon publicly action based disclosed reading is twofold. textual: One is “based Houck, transactions.” 881 F.2d at 504. This upon” synonymous is not with “identical to” however, say, does not that the to,” or “similar but can be substituted for only applies plaintiffs where informa “derived from” wherever it occurs. The oth- wholly upon public tion is based disclosures. policy: er rationale is a lawsuit based saying It is consistent with that a happens information which to be plaintiff may similar any not action based See, identical to disclosed part e.g., on such transactions. Krein transactions, dler, (“solely” but which part derives some 985 F.2d at disclosure, statute); Koch, other source than the is not accord 971 F.2d at 553 (“Based parasitic, upon” and should not barred means “based claim, that the below, her essential to information qualification the noted With part.”)- information to divulged this Bank had not question. the broader not decide need we discovery request in the prior her here, the FmHA holding will suffice limited more The lawsuit, de- entirely from or derives essentially state depends both that a claim which testimony, sup- later upon Rhea’s pends and is information publicly disclosed upon Kowal, FmHA learned by that the ported is information actually such derived from guaran- Mathews existence of the the purposes public disclosure for upon” “based previous misrepre- ty, thus 3730(e)(4)(A). there- claim is Mathews’ of sentations, investigation. But in Rhea’s public upon” a disclosure. fore “based knowledge on Rhea’s testi- depends her since investigation, Original findings in the mony Source to his as the independent of knowledge is not that her based Since Mathews indepen- not is investigation, therefore publicly disclosed upon information action public disclosure. of the dent (here) investigation, she an administrative of that informa “original an source” be original must an argues she is Mathews jurisdictional bar. escape the because, tion to from while some under Houck source According to the statute: by story her of fraudulent conduct pieces of public may dependent on an individual have been “[OJriginal source” means the Bank knowledge disclosures, was to independent her reveal contribution who has direct and All the facts fraud. pattern of the on which the entire of the information her together in voluntarily provided the various sources came are based and has office, says, fil- before she caused lawyer’s before she to the Government public domain. placed which is be ing this section to an action under facts revealed is what was pattern hidden she on the based information. Fair independent public disclosure. 3730(e)(4)(B). In one theory. exceptionally an enough section, —in construing this decisions earliest complicated allegation of fraud unusually Houck, the ex- we construed may publicly piece of the information each that, to to mean pression disclosed, may yet itself remain the fraud source, as such a qualify perspicacious plaintiff puts until some hidden plain- satisfy requirements. two had acknowledge that We perspective. it knowledge of the information tiffs case, original plaintiff might be an such a “direct,” had to be the claim based was which every knowledge of though her even source define but indicated term we did not of the fraud is based element isolated plaintiffs involvement the Houck satisfied Mathews, however, not public disclosures. assisting filings claimants plaintiff. such a he al- from a fund whose activities claims statutory concerns under leged raised affair, simple re- alleged fraud is a plain- Act. at 504-505. The False Claims Id. completely by one line on each vealed “indepen- knowledge had to be tiffs also applica- Bank’s pieces paper three —the dent,” independent of we defined stating that the tions the FmHA value disclosure, saying in that case: one guarantee was any personal $0.0—and Houck is no to indicate that “There evidence guaranty such other true statement funds of the claims to the have learned would existed, Rhea that Kowal made when like Id. disclosure.” absent subpoena. This him to ask about called It would not standard, profound scheme. take is was no Under the Houck it out. Kowal’s source, because, figure Holmes to or Sherlock whether not misrepre- direct, response would have revealed indepen- it not knowledge is her FmHA official. We explained, sentient As sentation disclosure. dent complex a fraud say in advance how substantially cannot actually and claim is revelation, be, deep clever its or how of must upon the Bank’s FmHA requirement satisfy original source investi- guaranty in context of Rhea’s information which claim is based on knowledge piece of when gation. misrep- filing disclosed. But the has been Government before an action .... revealed, Granted, say resentation Mathews and the diffi- Id. that a “source” is one culty unveiling, falls well involved short voluntarily provides government who Putting togeth- of the mark. “two and two filing qui with information before a tam ac er,” did, says will not do. as Mathews she tion ais nonstandard definition. But it is original qualify provi- To under the source any hard to make other sense solely by putting things together sion one has 3730(e)(4)(B), § expressly tells us that doing simple to be more than arithmetic. says that section what “original purposes means for the qui provi tam Although qualify Mathews does not sion of the False Claims Act. The subsection Houck, original as an source it under has a parallel defines two-word term with two years been over nine since we that decided requirements. requirement of “direct briefly case. We consider whether subse independent knowledge” obviously de quent suggests revisiting caselaw our earlier “original,” might fines since someone have accepts The Ninth our view. Circuit con knowledge such and not be a source. Thus junctive reading “original source” but adds “providing government the information to the requirement qui plaintiff a that the her filing before the action” must be construc public self “have had a hand “source,” tion of and we so read it. “In the allegations part that are of one’s suit.” definition, statutory give absence of we terms 1418; Wang, 975 F.2d at accord United ordinary meaning,” their v. Stolper, Bass Long Lighting States ex rel. Dick v. Island Neider, S.C., Koritzinsky, Brewster & 111 Cir.1990). Co., (2d 912 F.2d 16 This view (7th Cir.1997), 1325 but when rejected having is as no basis text definition, express statutory there is an even Stinson, legislative history by 944 F.2d at odd, nonstandard, if an or technical defini (3d Cir.); Siller, (4th 1160 21 F.3d at 1355 tion, we are bound to follow it. ‘“Courts Cir.); Sciences, Advanced 99 F.3d at 1006- presume legislature says must that a in a (10th Cir.), 1007 Cooper, 19 F.3d at 568 statute what it means and means a statute (11th Cir.). agree. n. 13 We so The statute says what it there.’ In the Matter of Lifs says jurisdictional operates bar Freight Corp., chultz Fast 63 F.3d 628 qui when a tam claim publicly is based Cir.1995) (quoting Connecticut Nat. allegations disclosed or transactions “unless Germain, 249, 253-254, Bank 503 U.S. 112 person bringing ... the action an 391). 1146, 1149, 117 S.Ct. L.Ed.2d original source of the information.” 3730(e)(4)(A) added). (emphasis U.S.C. It construing We feel confident in the term say original does not “is an source of the “source” in this manner several because oth- help disclosure.” But this does not language er circuits read the as we do. The problem Mathews. The is not that she was qualify said that an “[t]o D.C. Circuit has disclosure, although not the source of the she source,’ ‘original a relator also have must not, original but that she an was not ‘voluntarily provided gov- information information, source of the someone who filing qui ernment’ before tam suit which is allegation would have learned trans Findley, ‘based on the information.’” independently actions disclo McKenzie, 690; at accord 123 F.3d at sure. (“A ‘true whistleblower’ [must] source,” alleged To be an alert[ ] the to the fraud plaintiff must be a source as well as before such information is do- being main.”); original language an source. The United States ex rel. Barth v. 3730(e)(4)(B) Elec., Inc., (quoted supra), Ridgedale de Cir.1995). source,” fining “original require expressly say has two These courts do not “original” plaintiff “source,” To they interpreting ments. must are. the term independent knowledge doing have “direct and but we understand them to be so. the information on which the are case the functional effect of their con- escape plaintiff based.” To be “source” the must structions is the as. To same ours. “voluntarily bar, must, provided jurisdictional have the information to before jurisdiction. Mathews action, voluntarily- create Since have qui tam

filing her source, source, much less upon which provided the information are satis- requirements for if the tam claim is based statute, no court By the terms of the fied. has been disclosed. jurisdiction her claim. over has Precisely mean to what it would might seems order. A final remark voluntarily provided the information have because of odd seem that loses filing un the lawsuit government before timing. Had not informed quirks of Kowal 3730(e)(4)(B) is not some der 31 U.S.C. guaranty when Rhea Rhea of the Mathews clearly speci in the caselaw or thing settled circumstances investigate the called to might plaintiff quiA in the statute. fied the infor- subpoena, then Mathews’ around by no satisfy requirement, example, this publicly dis- might not have been mation FBI, Attorney, the tifying the United States with initiated contact closed. Had Mathews of law enforcement office or other suitable misrepresentation be- Rhea about which is the basis information the Kowal, Mathews’ lawsuit fore called Rhea action, informing agency or official by the or disclosures, upon public might not be based ques particular responsible for the claim investigation, no would have since been there tion&emdash;in ease, the FmHA Victor Had Math- merely private a conversation. methods, it but not exclusive Rhea. These are misrepre- Rhea of Bank’s ews informed the requirement is not satisfied is clear the did, might she be before the Bank sentation time of by informing government at the the original source. the action, compliance with the filing even in pro private plaintiff a must requirement that jurisdiction depend Should filing, of government, at the vide the time really a rule which Do we want quirks? such complaint written copy “a and quickly? says: your qui tam claim Get substantially evi all disclosure of material yes, that is because The short answer person possesses and information the dence Congress adopted. the statute rule Where _"Id. 3730(b)(2). More be done must depend on events which jurisdiction makes original to file qualify times, source than as an a such as occur at determinable government must be volun pro voluntary the action. The information disclosure of Findley, 105 tarily filing notified beforehand. See a law before vision suit, F.3d at 690-691. encouraged not to dawdle. plaintiff is by right to sue one can lose Just as case, nothing in record In this limitations, running of so court of a statute anything to vol did indicates jurisdiction by an acci such can denied be her untarily provide information on which timing. policy But the rationale is dent of government be allegations are based to the Act ... is to en The “intent of clear: circumstances, filing her In the fore lawsuit. are of private individuals who aware courage source, then, much qualify fails to as she government to such against the fraud original an source. The less as “source” possible at earliest information forward information government’s persons discourage with relevant time fact the misrepresentations was in Bank’s Barth, remaining silent.” information Kowal was Bank President Bank itself. omitted) (internal citations at 704 Rhea voluntarily provided FmHA who official added); Wang, 975 (emphasis see also the existence with the information about goals 1419; Cooper, 19 F.3d 565. These at at guaranty in the course the Mathews requir by jurisdictional rule promoted are True, investigation. Mathews’ sub Rhea’s allegations ing early divulgence fraud. begin investiga poena this caused Rhea jurisdic by telephoning Kowal. But the tion AFFIRMED. requires that provision

tional of the statute WOOD, Judge, P. DIANE Circuit who bases case concurring. allegations or transactions publicly disclosed conclu- Although agree I with the court’s source, original not an cause. an be allegations Mathews’ fraud were sion that chain is insufficient position Her causal upon publicly based disclosed information. upon publicly disclosed statute, meaning judgment I believe I in the therefore concur within a narrower resolved on case can be this court. court. adopted than that

ground accept Mathews’ view if were to

Even we publicly disclosed allegations were

that her prior law- to them she testified

when qualify “original an

suit, she still does Act. by the False Claims as defined Act, “an source” is

Under independent who has direct

individual the information on which knowledge of GRUNDSTAD, Oddmund pro- voluntarily has are based and Plaintiff-Appellant, to the Government be- the information vided 31 U.S.C. filing an action....” fore 3730(e)(4)(B). argues that her § Mathews RITT, Joseph Defendant-Appellee. was direct

knowledge of the Bank’s fraud unique because she was independent No. 98-1850. together, to put two and two so position to thereby reveal the otherwise hid- speak, and Appeals, United States Court by the Bank. As the pattern of fraud den Seventh Circuit. 864-65, acknowledges, majority ante at also whistleblower, possible that a would-be it is Argued Nov. 1998. here, put could acting much as Mathews has Decided Jan. only together to her with other facts known pattern of fraud information and reveal

sufficiently complex as to meet the direct and knowledge requirements.

independent however, best, only this means

At satisfy inde- could the “direct and knowledge”

pendent half of the She must still demon-

source definition. voluntarily provided in-

strate that she government filing her before

formation

action, and this she has not done. volun- requirement

tary disclosure 3730(e)(4)(B) require- from the is distinct 3730(b)(2) that a

ment in 31 U.S.C. provide government with a complaint that the

copy of her so proceed with the ac-

can decide whether to ex

tion on its own behalf. See United States Telecomm., Inc., v. BellSouth

rel. McKenzie (6th Cir.1997). As the out, points there is no evi- opinion

court’s in the record to indicate that Mathews

dence steps inform the

took complaint. In allegations prior filing view, enough require

my this is us court, and judgment of the district

affirm the questions of

I therefore not reach the would ways in which

the different

might what it means for a claim occur or

Case Details

Case Name: United States of America and Eunice Mathews v. Bank of Farmington

Court Name: Court of Appeals for the Seventh Circuit

Date Published: Jan 20, 1999

Citation: 166 F.3d 853

Docket Number: 98-2040

Court Abbreviation: 7th Cir.