are not based on public disclosures which the lower court found and the second one has to do with the mill for admission of the second amended complaint so your honor first of all that the first amended complaint in this action was f under seal in june two thousand and seven that was the first time that the current defendants were named in this action and at that time the applicable statute regarding public disclosures was thirty seven thirty e it basically said that no no court should have jurisdiction at this action based on the public disclosures of the allegations or transactions in a so criminal civil or administrative hearing in a congressional the administrators government account accounting office report hearing audit or from news media here will be focusing on news media unless the action is brought by the attorney general or the person bringing the action is an original source just last month this court applied are you conceding that it's the two thousand and six version that you thought it was because your brief seem to at this remember this matter and for these purposes your honor it doesn't really matter in the two thousand and six as far as the public disclosure allegations  for if we're talking about later when defining knowingly the two thousand and nine version is applicable i would argue that the two thousand and nine apple version is applicable here my point is under no scenario was there a public disclosures as to the box manufacturers and if there's no public disclosure it's the same standard whether it be two thousand and six or two thousand and nine so for example as regards the box manufacturers that the  the point of had three allegations one of them was that the defendants in this case were invoicing for rashid's when they were actually complete providing complete or nearly complete boxes other than this action to date there has never been a public disclosure about that so there can't be a public this they can't get it can't be a failure to have subject matter jurisdiction for public for public disclosure where there's no public disclosure no that was that was sort of the backup there were three allegations the backup was so first let's let's talk about the panic plea of defendants there are five defendants for box manufacturers one is regarding ni so for the three box manufacturer for the four box manufacturers there were three allegations two of them have never been publicly disclosed one of them it's on the fence there's an argument that it was there's an argument that it wasn't and i'll get into that in a second for knish there were public disclosures and that's where we're arguing that the point of the earlier was the original source now the defendants here had their argument with nish because there were numerous stories about an so that sort of tipped the balance of the argument one way versus the other but the reality is that it when taken into account and you look at all the allegations against all of the defendants the original source as far as him being the source of the of the stories is only one portion of it and he was the stuart the source and he was there for the original source but i'd like to sort of lay out the groundwork for the whole scheme so that everybody's on the same page where they are notifying the government about the next step is he told the united states post office again another agency which he understood to be the government and finally when all that failed he then spoke to the f b i so on three occasions he actually spoke to the government and no one will deny that the f b i abuses the government and that was prior to filing the complaint so and by the way parts are these public disclosures that are alleged so the third by the way scheme that the box that there was some public disclosure is all one story all of one story cited in it's in the joint appeal record as tool five to zero seven are the stories focus is actually the story focuses on and cd and about how it forms our businesses it mentions only three of the four defendants it only mentions possibly one scheme which is them stamping the boxes within c d s box manufacturing certificate but it doesn't draw original source for cannot be the basis for this missing all three allegations and subject matter jurisdiction against all defendants for all three allegations so as regards that one story by the way  was the oregonian was the first newspaper to arrive in el paso they were actually drafting a they were investigating a story about executive excessive executive compensation and not for profit various not for profits across the country not specifically n c d not specifically so in fact this story cites has of compensation for not for profits in so what happens is he went by the time the oregonian arrived in el paso in two thousand and five it had been already one year about one year they arrived in october two thousand and five and my client was terminated from his employment in july two thousand and four it already been one year since he discovered the fraud and cd he told the box manufacturers in particular green bay and smurfit stone hey there's a fraud going on there don't do business with them it had been one year since he complained to nish it had been one year since he complained to the us post office saying hey these guys are committing a fraud so the oregonian arrives now the oregonian is talking about excessive executive pay in not for profit institutions when they arrive they meet up with with the relator who says ok listen i can put you in caught with folks that will talk about that moreover but i think the real story is that they're not even complying with the program you should check that out the fact is and by the way you should check it out because i think nish is in on it so subsequent to that point parting from that point is when the the oregonian begins to publish a series of stories now it no longer focused on the five or six executives throughout the country that works that were receiving excessive executive pay now all of a sudden because they were they received the information from this guy they're now focusing on and see the while that's happening the relator corps up his friend which is the local reporter and says hey listen you oregonian was here a couple of weeks starts publishing stories about and cd and about their violation so so so to put it back in context one prior to him filing the complaint there was only one public disclosure at  best against the box manufacturers secondly to the extent that there was a public disclosure he was the one who informed the oregonian and the el paso times about it  so the same goes the the timeline begins from there it's the same finish he put the he uncovered the fraud for all of these folks now  fraud is that they're actively certifying to the united states government that they comply with a program that allows them to receive no bid contracts if they comply with things right to it yes that's part of the  so that's not a false claim that's a certification to participate in a program well false claim would have to be the bill that goes to the governor so both so so i want to focus on that ok and then this goes back to your discussion i went to the ality with you guys discussed in the in the previous case so there's two things so one for every bill that and see these summits and for every box and they ever saw any bill he did see bills and see a false statement almost bill yeah i mean that's how he knows that they were billing for rush sheets when in fact they were getting full boxes but it was only there for six months and a lot of  months this gentleman had been in the box manufacturing industry for twenty years so it wasn't like you know he did not know what that box manufacturing industry was when he came on to and see the n c t he came in as vice president in charge of the car gaited division there's only two divisions at n c d when he arrives so there's garments and there's car data division as part of that he was part of the little handful the management team that oversaw all of the of the services that n c d provided while he was there by the way we're hauser was supplying boxes to and see the international paper san antonio was supplying boxes and cd because the plant manager at el paso refused to provide  fraudulent services that bob jones desired and see the mission was always certifying n c d smurfit stone and green bay were invited to the plant while he was there because he was trying to increase production and he wanted their input on how he could do that best so after he left and by the way when he came over and cd he brought his team from smurfit stone so it wasn't like you know he didn't have friends there that he was talking to and so the fact is that after he left he continued to talk to these people so when green bay by the way he approached green bay subsequent to leaving and says hey listen they're committing a fraud there i want to start a legitimate business what happens is green bay reports back to and cd and see these starts making boxes with green bay and when he finds out he's already got all the pieces of the puzzle  been there he had been there he knows there's a fraud he tells green bay about the fraud all that needs to happen is that one of his friends says hey by the way mike greenberg is now making boxes he calls up green bay at wisconsin by the way the price president of green bay wisconsin doesn't just take a call from the janitor of of of and cd so he is this person in the industry he calls a green bay in wisconsin and says hey your guys are committing a fraud by making these boxes that was ignored smurfit stone again he finds out he worked at smurfit stone for twenty years he was part of this president's called he knew everybody it's murph it's known when he finds out smurfit stone is making these boxes he goes to the guys at the plant says you know manny manual where you're making boxes oh listen bob jones has contacts in washington don't worry about it we got this taken care of so they too chose to ignore it so i think you know that the allegation that these things court i'm robert weaver i am counsel for smurfit stone container and i've been asked to speak on behalf of all the defendants to the issue of whether or not the plaintiff in this case has adequately established his credentials as a original source of the that which was publicly disclosed and that is found in his complaint and mr fitzgerald will speak to the following me to the question of whether or not the requirements rule test although his brief a paragraph at page eleven says there is no evidence that he relied on any public information in bringing the action the truth is he quotes from the newspaper in his complaint he quotes extensively from the two thousand  lopez trial the court below found that there was a striking similarity between parts of his complaint and actual quotes from the newspaper articles that appeared in the fall of zero five and zero in the spring of zero six before initial complaint so we are at the point i believe of of him having to establish by a preponderance of evidence that he was the original source of that which is in his complaint i would like to invite the court's attention quickly to three points which i believe either one of which are sufficient to affirm as the district court noted that there are several claims in the complaint that appear to come directly out of the newspaper accounts and he has repeatedly failed to report that he's been given opportunity after opportunity after opportunity the first affidavit that we saw was in reply to our opposition to his motion to file the second amended complaint it is very generic very plain very  unspecific he does not address any of those things that came out of the newspaper in any way that would establish that he had independent knowledge and how he came to it that's number one number two in several of paragraphs in both the affidavit the complaint he admits that his information is coming from third sources which by law prevents him from having direct and independent knowledge and thirdly there is nothing to establish that he told the government anything at all fraudulent about any of these defendants i understand in his oral argument this morning that he is conceding the point that he does not enjoy the  retroactivity that that the men went to the false claims act to which he's trying to claim the title meant to that they or this court has helped they're not retroactive and i understand that he's abandoning that but it does he's repeatedly says that and it strikes us as that he is he has relied on that aspect substantially in brief in this case on my first point which is public disclosure just an example paragraph one sixty two of the complaint the complaint is the joint appendix to twenty seven recites three compliance reviews that knish did this is where nish goes in and does not an audit but some kind of a compliance review that was reported in the the j a one eighty six the it's the march six oregonian article in the p b s documentary that followed it said that the oregonian got that through a freedom of information act requests he has failed to tell us if he has independent knowledge of that what it is and where it came from and we would suggest the reason is he can't he was gone he was never there when the two burst to audits i'm sorry compliance reviews occurred and he was gone when the third one occurred as head of the corrugated box division it is hard to imagine that he would have ever been involved in anything to do with ni another example paragraph one hundred four nish signs off on some of these four or four forms which are disability certifications they don't appear in his first complaint they appear for the first time in the proposed second amended complaint intervening event was the lopez trial where these were a big deal and there at j a five one four and five point nine lastly on this subject there was an oregonian article on march fifth  j one forty five where he cites that knishes revenue by the end of zero four had climbed eighty six percent of report years to fifty eight million annually that appears exactly in his proposed second amended complaint he never tells us if he didn't get it from the oregonian where he got it his attempts to establish direct independent knowledge are speculative at best i want to jump to the f the record does it appear that this was that you've told the government about this so my short answer to you judge diaz is nowhere and he and i think that kills his claim right there i would acknowledge that this this warehouser complaint is the first time he comes close to something that he learned on the job that's arguably independent indirect but he misses third base going around the home when he doesn't establish the fact that he told this to the f b i the f paragraphs twenty twenty three in the affidavit twenty four a are very general he says nothing about knysh he says a lot of n c d because that's who he thought was in gage in the fraud that's who he thought was engaged in the fraud  and he does not the other thing i would say about weyerhaeuser is under your rule you have got to connect the allegation of misconduct at some point to a specific false claim or present which he does not do and so those are my answers to that question  also i think rockwell the supreme court cases informative on this because it says joining all claims in one lawsuit even if that one claim could stand alone does not save a complaint that otherwise is fishing under the under the claims are i do want to speak to in that why i want to be sure that i speak to the issue that seems to be raised for the first time in the reply brief which is whether or not  whether or not fraud was really disclosed about these defendants in the public disclosures that preceded his complaint prince and the marion county case both speak to this and what they say is the public disclosure must contain allegations or disclosures sufficient to give an inference of fraud and i think it's the plaintiff's view that anything that was said about the box manufacturers was playing vanilla i would just invite the court's attention to one newspaper article j eight two zero six the november twenty seventh el paso times article it relies on jesse cruz who was still in c e d who said he received boxes from ip smurfit in green bay i paused to point out if it's just the cruise that was the original source of that article it's not the plaintiff as he claims to be he wants to be the first domino for the public disclosures but he certainly was not on this the article cites anonymous complaint to the committee for purchase that n c d c certifies that it's disabled work or spruces the product but farms out the entire work to smaller firms each of which alters its paperwork cruz was courting is saying it's not an isolated instance they've been doing for years a smurfette spokesman agreed that yes we've been doing it because it's customary and cruise provided copies of the bills from international paper just that story alone reveals all of the elements of fraud that are in his complaint the n c e d was cheating the government supplying the labor requirements that they were able to do this by farming out the box manufacturing to the box manufacturing firms and and the box manufacturing firms must have been in on it it he says so each firm allers its paperwork accordingly so the right there is a sufficient allegation of fraud in the public record that he has failed to explain why he was why he has independent knowledge of of any  remark to her and then nothing happened it is an inference and under every case that we've read from the four circuit that kind of speculation and inference is inadequate for him to meet its burden the findings below were not clearly erroneous series knowledge of the f b i of a conduct an investigation after the fact after all the newspaper articles came out they did do an investigation your honor and there were indictments depictions and imprisonment by the people what's unusual about this case and why i think it's very similar to where you rule is in in the normal he tam case at the time you file your complaint you file a disclosure of all that you're in the independent information at the same time so you can we can see what it was you had the moment you had the complaint but we don't have that here he has just general statements that i met with the f b i and i told them about j one fraud or i told him about schemes i remember is he told them about all of the defendants everything he knew about all of the defendants and unlike any where at two thousand  have five seventy eight i knew i wrote it down i can't find it now he i would suggest if that's what i'm trying to find the exact the exact notes but i can't that i made to myself about that i do believe that that is an adequate because what this court has to determine is whether or not under the what is what is valuable about to to the government what is valuable to congress about this claims bar issue is did he advance the ball did he have first of all did he have independent and direct knowledge other than you know that the words not from third sources and not from the public sources and did what he say advanced the government's interest to advance the ball and the only way you can assess that is did you say did you say you were cheating the government we had an c and and and i have had conversations with the xbox manufacturers in which i said and here's how we're doing it we're taking your boxes we're passing them office ours we're taking your invoices converting them to ours and the government doesn't know any better and were he to have said that and shared that with the f b i that would have advanced the ball our what we would urge the court to find on those very few provisions in his affidavit and in the complaint please the court matt fitzgerald to address the additional grounds for affirming the judgment of the district court so there are a handful of these grounds appearing in the briefs but there are two that i'd like to address here first failure to plead with particularity under rule nine b and second a failure of the of materiality under the false claims act and before i address these just briefly to correct same and made earlier there is no allegation in the second amended complaint anything about any event c d s bills to the government now with regard to rule nine b the allegations in this case cover seven years they cover quote hundreds or thousands of alleged false claims to the government different products created by different manufacturers at different times and in fact there are five defendants in this case not one of whom is itself ever alleged submitted a false claim for payment to the government well even as even as to n c he just lets a generalized statement that he doesn't allege any agreement among parties that manufacturing defendants which is the handle for referring to the four independent manufacturing companies the term manufacturing defendants is used in the second amended complaint no fewer than forty six times and again that's the second amended complaint so his third effort to plead fraud with particularity under rule nine b and that lumping together of the manufacturing defendants is essentially it seems to create a hole that looks bigger than the sum of its parts because if you look at the allegations in these specific allegations or the allegations defendant by defendant there are big holes in each one so for instance although the allegations that the manufacturing defendants gave rebates the manufacturing defendants were told of the fraud and c e d the manufacturing defendants got tours for instance there's no allegation that international paper ever gave a rebate at all there's no allegation that he told any identified person at international paper anything about the fraud there's no it allegation that any specific person had international paper even received a tour of the facility and so similarly he's identified weyerhaeuser the reply brief identifies weyerhaeuser as quote the biggest perpetrator of wrongdoing in the second amended complaint but there is no allegation anywhere in the second minute complaint that amada told weyerhaeuser anything about the fraud and cd he's just got this i told the manufacturing defendants generally so the second point is there's a failure to plausibly plead the element of materiality under the false claims act and the rule that applies here is that in certification cases that is where the bills to the government or the annual certification forms are certifying regulatory compliance the key is that the condition must be a condition of payment by the government not just a condition of compliance with a program like j the obviously the nub of the fraud is that n c d did not have seventy five percent severely disabled labor that is a condition of participation in the j one program not specifically a condition of payment by the government i mean the government here ordered boxes it received the boxes that it ordered this is nothing like the more common false claims act claim where for instance the government ordered one hundred boxes and it got fifty boxes but the bill said one hundred or it got deficient boxes or as frequently happens in the medicare context it ordered one hundred boxes and there were no boxes here the government ordered the boxes it got the boxes and what the regulations actually say is it's forty one c f r fifty one dash four point five an address is what happens when one of these nonprofits falls below seventy five percent it details  investigation a chance to defend itself and at the end the risk is expulsion from the program so there isn't the idea that the government would not pay for boxes that are adequate is not supported by the regulations under the jail and program so finally there was some discussion earlier of what i have modified told the green bay specifically and so generally under nine b just to bring that back together so there to respond to his allegation about what he told green bay first if you look at the allegations about what green bay is actually alleged to have done there are no specifics whatsoever about any sort of improper billing by green bay or by smurfit stone for that matter so literally what green bay and smurfit stone did to allegedly contribute to this fraud was make postal sleeves and sell them to n c so by trying to show that they knew and knowingly participated in the fraud by based on what he told them it's related his burden to show and the minimum standard of knowing is reckless disregard which is generally been described as an aggravated form of gross negligence so the relator needs to show that based on what he told green bay and smurfit stone it was an aggravated form of gross negligence for them to simply do business with  out of compliance with the j watt program and that's because the requirements of the jaywalk program are for a total direct labor seventy five percent severely disabled total direct labor on an annual basis so as a matter of law any one given day any one tour of the facility by any one person could not create an inference of knowledge that and cd was out of compliance with j wod additionally i note that there is no detail at all about what was shown in particular on the tours or what the narration or description was of the tours and it doesn't seem a fair inference that the tours were narrated in a way that pointed out the fraud to these businessmen from other companies who whose own companies were not subject to just watch and i had no particular reason to know anything about the details of that program so in some of the false claims act requires materiality to payment not just to a condition of participation in the program and under rule nine be on the third try there were later cannot long for independent companies together forty six times and still get scheme which was sending rashid's and building for i mean building for rashid's when making complete nearly complete boxes there is no legitimate reason for doing that except a defraud secondly there is also no legitimate reason for billing n c d at overpriced rates and then forwarding rebates to bob jones and the jones family trust there's no legitimate reason i think can hide and say a whole bunch of things but there's no legitimate reason for that as regards international paper excuse me international paper has a point in el paso what was all my name again the united states government so the false so by stamping the boxes with n c d stamp which says that these boxes have been made many manufactured by severely handicapped individuals which is a requirement proper to subpoena in the program and i'll read you those requirements in a second i  stand so so that my trouble is on this question my habit is the same issue that we had in on the care which is there is a program that the government's interested in they're interested in this jaywalk program and they require service why didn't you get some special relationship with the government but while in that program they build boxes and sell boxes to the government and in connection i could find no place where in connection with submitting a claim for payment they had to certify that the box complied with jaywalk as a condition of payment and there's no allegation that the bill says that is not a nation that it's required and i'm not aware of is there may not know all corners of the of the regulation there but i'm not aware of any regulation that requires that and i'm a cure we said in that circumstance the government was not there was not a false claim made against the government now there may be but in that case it was practices that they couldn't conduct their business that they could manufacture in that way it's matter of fact they were adult d they found they were adulterated so they're selling adulterated goods to the government we still didn't find a false claim because the government pays always pays for adulterated goods what they do is there's other sanctions now here right there's a program of a congressional program that we choir certification to be in the program but the question is when you are submitting the claim for the boxes was there ever a false claim made in connection with that submission so in theory every claim submitted where it's stamped that it was made by severely disabled individuals was a false claim and the reason being like well i mean that's like saying on a package of aspirin that the you sell the aspirin and they pay for the aspirin and the government pays for so there's a reason why n c e d was the only one that could provide postal trays to the government and not warehouse or who clearly had the capabilities for making them there's a reason why n c e d could provide the the the the boxes the g s a boxes where international paper smurfit stone or green bay could not vote and that reason is because the minute rightly to the complaint a portion of a complaint where you see where you allege that a claim was made to the government in connection with the sale of these box the stamping of the boxes saying you know that they were made by handicapped people when they were not so that's what the second is that a condition of payment that is a condition of payment is going to this and participating in the program it's not like on it's not like i was not follow unless there's a regulation or rick a contractual refund like but unlike contract unlike your honor unlike your i'm a care situation here the fact that it's a requirement is belied by what the government actually did to inforce this regulation so first of all it prosecuted criminally the people who defrauded the government and it contained then pay for boxes afterwards even after discovering the fraud they continued to pay for boxes and the reason is because this is a program specifically made for providing employment for our severely handicapped people so that would be like saying i mean imagine the pink slip the are severely handicapped individuals we are closing your plant and firing you because there's a handful of hand up non handicapped people who committed fraud in your name that would defeat the purpose of your statute your missing mark question altogether the stock jaywalk statute was violated and they misrepresented and they covered it up and they lied about it and that kickbacks that everything those guys were prosecuted but the false claim is under a specific act that has specific parts that say you have to make a false statement in connection with a claim for payment from the government and i'm looking for that and my point is you're just saying there's fraud because they sent bad boxes but that doesn't satisfy the false claim that's get away from the bad boxes ok there was a contractual obligation to provide the cost for the boxes the accurate course for the boxes to the governments were that's in the in the contracting documents for under j white so it's a cost plus program so the box the the and c the the contractor provides a government with a list of courses these are my costs and therefore my margin of gain is x and therefore we're  government with accurate information as to what the underlying cost of the boxes were i e by saying hey bill me higher so i can build the government i understood that that was the part that was the rebate scheme otherwise there's no reason for a rebate scheme to be led you and i am done time was that i mean if you have questions