good morning i'm david go and i represent the relator anthony oliver in this appeal when this case before the court the first time this court specifically articulated the test to be applied for determining whether there was public disclosure of mr all of these allegations using this traditional springfield terminal x plus what it will see test the court said the ex was public disclosure of price disparities between the prices charged the government and court said in order for there to be public disclosure there had to be proof of both of those points one the price disparity to force certifications of compliance with the and the court with further and explained that the one in the wide component was comprised of two prongs the first prong was the existence of the embassies themselves which  fact that there was a certification issue and the second prong of the white of the white component was that there were forced certifications and the court dealt with that with those two problems on the its decision in the first paragraph of it's the situation where the court said quote neither the contract term obligating philip morris to provide the government with most favor customer pricing nor philip morris is fraudulent certifications that it complied it was publicly disclosed accordingly we've vacate the district court's decision so your position evidence of that don't have any public disclosure of was that there was a fourth certification and that is what the definition of the wire was in this course first opinion evidence of a formal certification of compliance h or with reckless disregard but there has to be something before the court to establish for city and what this could a said in its first decision this could we make this was the argument in the first decision before the and the essence of your complaint said the district court is this all the cause the end friends that arises from the continuation the mere fact that the exchanges inquired or even complained about pricing does not amount to a public disclosure of facts supporting the elements of a claim of fraud contrary to philip morris assertions the iceland memo did not publicly is alleged to have done is to price the cigarettes to private private distributors without including amounts to cover the mystic surcharges price the same cigarettes identical cigarettes in the same or gets to the is that philip morris used its affiliates to do fraudulent transactions with it in it to violate the a missy's they had an obligation to give the government the best price what they did was they sold from philip morris the parent company directly to the girl from minute one price they then used their affiliates they sold it at a low price to their so it's the affiliates then turned around and resold at a low price to a similarly situated  private to be free customer and made the allegation here is that that was and knowing an intentional way of circumventing the us see the difference between what's in the complaint and what's in says we there's this reason for a business reason having to do with the surgeon general requirements we explain that and it says at the bottom issue resolved what the complaint says is that's not the reason that's not the reason for the and you could bring in this to be a likelihood it's not a possible suspicion here won't you have another agreement in the in the iceland memo is yes this approach disparity is perfectly legitimate the issue is resolved where is there anything in the iceland memo that supports a finding of any wrongdoing that would allow you to say any wrongdoing it's not entered it's legal principle  justified the price to the government by saying it was to cover the amounts of those charges it doesn't make any difference why they justified it they knew it was they knew this is what the complaint alleges they knew that they were charging different prices they knew it a government took more to provide a basis for prosecution or would have alluded to a likelihood of wrongdoing that's what they have to establish and that is exactly what this court said the first time around didn't happen so the government that's right looking only at that memo but some do know that philip morris is charging two different prices and that the government's paying for some investigation those inquiries would have resulted in some somebody saying this doesn't make any sense and the issue here is not that of course we pick the position that there is a that there is a fraudulent scheme here the issue making about the over the inclusion of amounts for purported covering surcharges and and there's no dispute that he did that there's no dispute that he called the o t hotline we we   even if there were public disclosure he has an original source he's entitled thing can proceed with his action if he has direct and independent evidence of even one vital ingredient one element of the case the district court denied him original source than just because it said he got it all from third parties making reference to the paragraph where he said he went and verified but he knew who he knew from pay was when he talked with maloney in two thousand and seven the next  him original source status not not because it didn't believe what he was saying but because he went and verified it and she said oh well everything he knew came from third parties where he told maloney this is an overcharge even talk to any third parties he he was a conversation with maloney based upon his personal experience in the as a as someone of the market participant and so there are the originals the original source status is something that is an independent ground to allow him to go forward with the most fact doing something else which revealed that the state into the government was falls namely the theory is that one can imply from the most favored customer provisions a certification that philip morris was giving the military the best price for the products and then there was a price disparity that showed that or you could infer that might be false because two corporate affiliates were getting a better price that's the theory and we believe the district court correctly in this ro applied disclosure bar because this court case is say that the bar applies where the fraud that they were later alleges the essential elements of the fraud he alleges were in the public domain prior to the suit and so when you look at it the joint appendix pages twenty one twenty two those are the pages of his complaint where he describes this he says the fraud is there is a most favored customer certification to the government iceland memo standing alone was enough to trigger the bar because the court concluded that the other piece was not sufficiently disclosed on the record of evidence at that time we supplemented that so now we have the two pieces before the court  that with the holding but there is this discussion by the board describing what it thought was needed in order to reach the c conclusion and everybody the most favored customer relation does not obligate philip morris to give exactly the same price to the government as it might be in someone else there are other factors that were in to what is legitimately most favored customer price but that price difference from what philip morris made the charg disclosures this could one investigator refer a fraud i think the answer is you're certifying this most report customer you've got a price over here that may or may not violate that you could investigate it that's a peer review these disclosures but the more important and in fact critical point here that under this court's cases the bar measures what's in the world leaders complaint against what's in the public domain and his complaint again this is twenty five to twenty nine appendix twenty one and twenty two he alleges no more than the two pieces that we've just described and that were in the public domain and that is why the district court correctly on this round firmed that the fraud were later alleges to use this court's formulation staples was in the public domain now that we have a record establishing the two pieces so but but one thing that i guess understanding about your argument is sit in any government contract there could be you know evidence that someone comes across that the contractor may not be in compliance with the contract that doesn't necessarily put you on those fraud and it seems that that's what you're arguing here but if you can you understand what we're arguing that the test for barr simply what is the relator alleging is the fraud in his complaint and are the essential elements of what he describes as a fraud publicly disclose and that te say there's a most creative preferred customer certification that the court can infer is false because he appears that we appear to be charging someone else a better price that's you know terrorist twenty five to twenty nine of his complaint and that's exactly was what was in the public domain he's not adding anything to those publicly disclosed elements and if we take a step back from what this bar is supposed to do it's supposed to judge or test whether a key take them action that the government has declined to join after an investigation should nonetheless go forward because the relator is adding something about the potential for all that might otherwise have gone undetected or might reveal something new that's known to the public domain that simply is not the case here is there any legal significance to the fact that the government drawing down we never held that that has any significance in how we view this matter i don't know if the court has held that i think statistically and when we had a side in this in our brief statistically it's like ninety some percent of non intervened ten cases are not permitted to proceed and that's in part because the relator purports to be standing in the government shoes and prosecuting a claim of potential fraud in the government's name now certainly there are some cases where a key take action can proceed or the degree of government declines to intervene and even when some of the elements in the in the of the fraud in the public domain and that's where you satisfy the original source requirement but that is a very specific trappings and requirements that we would submit are not met here for the reasons in our papers and i think the district court carefully considered below and she agreed concluding after considering the new informal robust there are three your honor and is there a matter of timing and quality not just quantity on the declaration of the first is the operative complaint does not plead to original source which the supreme court said rocco's a problem but even if we go on to consider the declaration merits let's do that starting at appendix four fifty three he starts out with what this court's opinion of findlay described as some conclusions he says i believe there was a fraud i have a suspicion we've seen many relator do that have been jurisdiction we've barred and then he goes on to say this is really important it's a paragraph thirteen of his declaration at pages four fifty four and fifty five of the appendix he concedes that the only specific example of the disparate pricing that he says shows the certification to be false this some overseas guam disparity is one he discovered after he filed this lawsuit in two thousand and eight so the original source cases are clear that even if there is direct knowledge and  specific example it has to be uncovered and brought to the government's attention before the lawsuits filed so that's not the case here and then further in critically this court's precedent saying that the relator knowledge of the substan here i think that's the most reasonable reading if not the only but the other thing i'd say and i appreciate your on a reasoned time was going to go directly to the point i was about to make about the cases which is that the information in this declaration including paragraph ten has to be direct and independent of third party sources meaning it has to be first hand and the district court correctly applied those cases to say what he's really describing here is his learning research and i take research other than god it's indeed your honor we agree completely and we don't quarrel with the fact that or were later who has what you need in the first place which is some direct independent knowledge factual knowledge of your own you are then free to go investigate and augment it but you have to have the first step which is the relator personally has to have direct and independent knowledge of the fraud that he's asserting here and what we see in the declaration is and th that was able to be authenticated between philip morris executives that basically said we're going to cheat the government and here's how we're doing it senator and he came in the position of that document he could because he'd still only have second hand knowledge it depends what the basis of his knowledge was in the first instance i mean to give you a concrete example right there was like that the relator in the in the quinn case who was the client and the defend was an arbitrator who said the arbitrator does case only on a given day and build the government and the clearance at all i have first hand knowledge that my arbitration did not happen that day so he's misstating something to the government so we have the foundation now is that related going on and confirmed  are the arbitrator was at a resort to bermuda and investigated that through third party sources that would be fine you know the same thing in davis which was a kid to the situation your son or sort of suppose we have what would what he says that he knew  coupon his further investigation he comes into a position of a document like that your position would be that that document could be considered because it's in the facts secondhand knowledge it m insider might that philip morris knew that these were comparable customers and that it was actually misrepresenting best price of the government and the failure to plea i mean he's offered to plead to remain and it's  honor and the futility of repeating and i want to stress this it it's clear from our papers and this is that appendix one twenty two one forty four we walk through in the few several rounds he's on his third complaint since two thousand and eight he has not he never worked for philip morris he hasn't been able he says it and paragraph thirty was complaining needs discovery to do what you're supposed to do with the pleading stage which is played some actual facts that we knew that this wasn't comparable and the reason w you tell your owner is that when you look on page twenty nine of our brief and the accompanying citations to the record what he's admitting is that this is apples to oranges the price disparity or the price comparison here is between philip morris usa charging the military one price and then philip morris usa charging its corporate affiliates duty free and international a different price and those are not similarly situated customers we put f c c fines in the record that are noticeable this is an appendix one twenty two and one forty four that say those are contract manufacturer agents different than the government they're not similarly situated it explains a lot about really why there's no n f c violation here never mind a fraud so we somehow that philip morris was charging somebody an affiliate or a duty free operator about a different price in the government that was out there for decades so what is he adding i mean the disclosure pouring raised do you get to go forward with take despite the fact that the essential elements of your pace are in the public domain and this course cases say yes if you have something substantial material new to add finley says that taking your expertise  applying a legal conclusion or supplying additional detail about an already disclosed practice is not enough so what he doesn't have is exactly what you're on to describe plus the building block of it original source claim which is some personal factual knowledge that he disclosed to the government before he filed the lawsuit some obama's the only thing he's come up with it doesn't work for a myriad of reasons and it was far too late let's just suppose that zumo on time when you know  your view on the facts put here no because he doesn't say that he had any direct or personal knowledge of that if he were the person buying into that arrangement for zerbe or he were somehow revealing you know something new or material about this practice but the practice itself namely his complaint and samoa guam rely on the same thing that was has been in the public domain for decades namely there's a world wide most favored customer policy and then there's evidence multiple places in the world that the military gets one price philip morris corporate affiliates get another the iceland memo says it in this is paragraph three of the memo we receive we frequently receive inquiries about why this is the case it's observable on the shelf so even with someone they have no personal direct knowledge of it and begins not adding anything to what's in the public domain it's just another example of an already disclosed practice and that's exactly what this this court case is saying is not enough to proceed is an original source after the government because intervention so the custodian works of philip morris and they just happen to be observant and they you know find some documents on the desk that show government fraud and they take those to the government the government isn't interested in and they bring a suit they're not in the original source because all t they bring this lawsuit your position as their original source no your honor i don't think that we have to embrace a position as broad is that to affirm the district court here the later in your example might be in original source he's got something very different in the relator here right he's got direct first hand knowledge of facts documents internal that might first hand he he's not if he were to be called as a witness in court to testify about you know how these transactions happen you would object and say here say in that objection if i were sitting a district court still would be sustain a possibly one of the reason i'm hesitating is because i'm thinking of the relator in davis who was an accountant who prepared some documents for the defendant that defend that relate or may not have been able to testify about how the actual transactions occurred what he could do in the first instance personally that this relate or cannot say i have personal firsthand my eyes knowledge of internal documents that i've read i have the documents i can present to you they or belief some of the conversations occurred to late in this case and then again who's the best party to disclose it right when you think about what's the point of encouraging your original sources or whistleblowers to come forward in your example those documents that the custodian of taking to at the defendant might never have come to light might never have come to the government's attention quite different here mr oliver is a related was performing no such public service what he's doing is talking to other people who are frankly in a better position to speak to or report what he says is the pricing differential that shows the fraud is that he's bringing nothing new and he's certainly bringing nothing new that wasn't already public which is not clear that that was the case and your hypothetical i don't know if the facts in the council for thank you what you just heard or did was that everyone's known for decades and the that it's perfectly lawful for philip morris to charge one price through its affiliates to exactly why the iceland memo doesn't give any evidence to an investigator because all it does is confirm what you just heard philip morris say everyone knows it's perfectly legal  here's what all over contributed and this goes both to the public disclosure into the original source you have to look at what he says in his declaration which has been a little mysterious paraphrase by the  and at four fifty one i think it is of the pending but what he says is i met with i met with maloney i asked him if i could sell my company could sell overseas he said yes i talked about pricing alone he told me do what everyone include just knock off the federal excise tax even a system alone based upon his knowledge and experience as a market participant know i'm going to knock off the amounts to cover the other two surcharges he and then explain what they were these three these surcharges amount to approximately five six the m one dollar per carton and in my experience in the industry were generally passed on by cigarette manufacturers in the prices charged to the purchaser now then he says it was my understanding at the time that i was speaking with tom only that these surcharges were not applicable to overseas sales and would not be included in overseas product pricing determinations that's what he knows as a market participant as someone who is involved in pain surcharges in pricing products domestically in pricing products overseas and dealing with competitive pricing last few lines of pages of the a for a private previous page where he's saying these are the surcharges they're passed on to the purchaser for domestic it was my understanding the last three lines on page two of the declaration it was my understanding at the time and this is page four forty nine of the appendix it was my understanding at the time that i was speaking with mr maloney that these surcharges were not above the overseas sales and the overt the search of this if it's perfectly legal to do it it's just no one was doing it all over knew no one was including those amounts in the pressing that it was if they could do it they couldn't charge the private duty consumers  of what this one mr all over new bass the part of his more put experience as someone pricing with knowledge of market pricing practices and what he says is it's my understanding that these amounts are not included to cover the surcharges because these surcharges only apply the domestic sales you're saying that he knew what the industry practice was yes he knew that philip morris was complying with the industry practice as far as pricing while he knew the in the super practice was because he himself from more to participate in and what he was saying was philip morris why did the industry practice with the private duty free customers and was was fifteen dollars overseas including those same mails to cover the surcharges all over comes along and says whoa there's no amount to cover the surcharges because those are domestic and w philip morris prices the private sector overseas it knocks those numbers out so the private sector is paying ten dollars instead of fifteen dollars for the same cigarette molone there's nothing in the iceland manual that says this is a deliberate way to include six dollars and sixty cents for surcharges to cover purported surcharges that we don't charge in  private sector and that is why that's why they did the difference between the complaint in this action and the iceland memo and with all due respect to the characterization of the complaint here is what the complaint  paragraph thirty one not twenty five to twenty nine but per thirty one that philip morris falsely warranted compliance with the embassy provisions when it knew it was not complying the complaint alleges and various three to the philip morris made those false statements to get money it was not entitled to get the complaint alleges an earlier thirty nine the philip morris use going to sell directly to the military at one price willing we're going to use our affiliates to sell the private sector at a lower price and in the complaint alleg that they did that knowing that there was no just the complaint alleges it's the identical cigarettes the claim alleges that similar markets the complaint alleges this was a scheme this wasn't something perfectly