involving public disclosure the public disclosure bar the threshold question that has to be answered before all else is whether the public disclosures revealed the allegations in transactions that are substantially similar to the false claims alleged by the relator in this case none of the public reports cited by ratio or the news articles disclosing any of the runs the government was quite concerned there were many many reports from congress and from the g a o talking about all of the unspecified technical problems the management problems  mr protest ski however was a he was a principal production planner material control specialist for raytheon in two thousand and five any advance to a senior technical support engineer in two thousand and six he had direct first handed independent knowledge of the false claims he was alleging none of those false claims as i said are even remotely similar to any of these government what was said in these government reports now the government had no prior knowledge of what mr mccaskie w alleging and we know that because when this to retest he filed his complaints with the government under seal the government within i believe a month held a high level conference in which mr macaskill was debriefed and when i talk about the government i'm talking about all of the relevant government agencies that were involved in the sos vere's satellite system that was  commerce department the sense that they all came department of justice they all came and to brief mr tessy extensively in two thousand in july of two thousand they had follow up meetings in two thousand and seven to follow up meeting in which you just sensibly to breathe and even pass that they had that's what we look at that is it don't look at what the public disclosures were and what his complaint was this other stuff that happened after is not really part of what actually much as we look at it that well you have to what has to be done is that this court must determine whether the public disclosure are substantially similar or substantially similar to the allegations in of his false claims and is it your argument that we can look at them and see that they're not yes i say that is your that is our argument it is as a matter of examination of the false claims characterized the four claims as oh these false claims involve management decisions that isn't technical challenges and then  mckenzie complaining of false claims as the same thing that we went to and it went to a level of generality that was so general that yes you could say oh here's the same they're identical and  and that's what the court did that was a wrong standard to apply in fandom case from our court that says it's the wrong standard to apply i had trouble finding cases really addressing this issue of level of generality at least in our although the seventh circuit has talked about it yes i was going to say the seventh circuit has specifically dealt with this issue i think it's implicit in this court's standard  court said this said we look for substantial similarity between the force claims allegations and the public disclosure and we define that in  they said for that one has to be revealed in a public disclosure is the state of or of events and those events that show that is state of events is being misrepresented in some way and that's exactly what mccaskey did you my charitably say that these public reports show the state of events that the veres program was being subject to all sorts of in the complaint before them in a complaint which is the relevant complaint here he alleges very specifically voice of racy on who were his supervisors who told him change this alter that there's no question that these that the reports were focusing on the mismanagement of the project and the growth of cost overruns no question about that what brought to the table was that there was fraud going on here that the government was aware of that in fact i there is not a single one of these  reports government reports that cite anything that raytheon was deliberately not complying with the contract specifications and requirements there was there's no report the point of showing that it was committing in effect fraud it was falsified books and records to cover up the fact that it wasn't performing what it was required to do under the contract specifications mandates and that was good and it was certainly of great interest to the government as i said because the government in its actions the british spent a great deal of time debriefing mcafee every day they were surprised that i could always describe it as being surprised of his allegations so that it's criminal there was a point there was a point where they were considering that could be when the government was they brought in people pointed out the seventh circuit in with its did say that you when you go to the level with generalizations to a quake the false claims with  contractors that were fought and he would try to get it via public disclosure bar on that basis what the what this ford said quite properly is that the public disclosure allegations and the allegations of the boss claims were basically identical and all that was provided to the government was just peripheral information which the government itself had in its own files so there was nothing important or critical that was provided to the government so that's how that case is distinguished and in fact a recent case of the united states  chattanooga hamilton county hospital authority which is the sixth circuit seventy two f thirty two sixty criticize this idea that if a government decides to open an good morning your honor please the court can believe done on behalf of raytheon corporation i want to address both the issue of what based on means as well as the direct and independent knowledge based upon does not mean reveal specifics it does not mean derived from that certainly doesn't mean identical to stanch really similar and i think the district court looks to way which is still good logs cept for that third prong of on the ground engineer was he added specifics in his complaint to that and the court said adding the to the bones is not going to make a difference here it doesn't mean there wasn't a public disclosure and i think we have exactly that situation here despite the hundred and thirty four page amended complaint it really was quite generic and after trying to get through is also a bit impenetrable but once you get through that and you bucket the issues that were there they fall within the issues that were discussed in the sixty plus public disclosures we had over fifty million ok can we just back up for a second so you're going right to substantially similar but where where was the allegation or transaction in the public disclosures we need to either have an allegation of fraud or the pieces of fraud that we can put together right to have an allegation or a transaction in the previous public disclosures can you point us where in the record there is something that is fraud suggested by the previous public disclosures rather than just incompetence i don't think that is a risk standard i don't think fraud needs to be alleged i think the component parts of what would put the government on notice that there may be a reason to investigate broad though it has to be investigated fraud the fact i have the office of inspector general of commerce of nasa of these various government agencies all were looking at this contract but it could have been that they just said why did we hire this incompetent company it could be why did we have engineers who don't know what they're doing that's not fraud that's not a key tam action so it has to be a public disclosure of at least the pieces of a reason to investigate something it might be fraud so can you point me to why they might have thought this was fraud when you look at all the reports that talk about the problems the deficiencies the severe illness it was systematic there were massive cost overruns there were failures but can we have cost overruns and equipment that doesn't work without fraud absolutely and in fact we think that was the case or we don't think that the relator brings any evidence of fraud to the table and we can talk about well in it but the point about the public disclosures is that these are all factual issues that should put somebody on notice a notice of what i notice that there's a reason to investigate and maybe there is fraud maybe there's not fraud but  suggestion of fraud i think the way in case is an example there's no suggestion that the media reports talked about fraud it talked about transmission problems and what the court said was that could have put the governor could have put you don't have to be a notice right just when there's enough information in the public domain that could put the government on notice here you had a number of agencies involved over a decade lots of problems they were they were looking at this there were investigations it was public record and so here you have a number of public displays of issues exactly and the related simply because really as with this record you noted the very specific example recordkeeping that's false intentional and use of the wrong materials and he's he's adding a layer of there is intentional fraud here that i haven't yet heard you say was in the previous public disclosures do you disagree with that we have to take a step away from  just his generic allegation of the word fraud ok he does use the word fraud he does use the word intentional but this was a factual challenge we introduced evidence that put him t to the birds say he had direct and independent knowledge of fraud of k and he didn't satisfy that burden because all he could do is say no i was ten when they were supposed to use something else that they thought failing failed to report the location of seventy five degrees generating locations that they had problems with electrostatic discharge and they didn't maintain the right records i mean it goes on and on and on a very specific things that he two important facts he he alleges that there were problems with waivers but he misunderstands what that really means the waiver process is a process whereby the government can say we're going to agree process he has no evidence he has well so maybe usually weigh in on the merits i mean maybe the case should go forward and maybe you'll win improbable you will win but why does that i mean he has alleged fraud and we can say later that it will prove not to be true but if we take the allegations of the complaint as true he's alleging all kinds of lies and i don't see them in the public disclosures so i'm not sure how we can say that this was previously disclosed fraud of the type that he's alleging doesn't require the suit for si what is in the public record and that is the case here a number of times what wouldst what does that mean if if if if if it's in the public record that that there are huge cost overrun if it's in the public record that the government has paid amounts with the government shouldn't  paid what else is there that would you say put notices that that probably is enough to put the government on notice that there may be fraud when you speak in terms of failures defects all things that if you are to look at the examples at the relator good is they fall within those to say we have an enormous project and you're building a rocket and it is more expensive than planned and the rocket isn't quite working now that's publicly disclosed is there any type of fraud that could go on in the building of the rocket that would still be worth a key tam action and under your argument would we say that if someone comes forward and says every one of these bills is double billing they're saying people  drilling twice as many hours as they're actually billing and they're sending it to the government but we already know in previous disclosures that this project is too expensive are you saying that can't be a key term action because there's already reason to investigate this project absent the ok so what's the difference to who ha directed independent knowledge who could add ok well that but that goes to a different issue right that's whether he has an original source but i'm talking about are there is there substantial similarity that's not about original source so let's just talk about substantial similarity what is the difference in what you're saying in this case about the public disclosures and this complaint compared to the hypothetical i gave you because if you put aside with or i think appropriately characterized as minutia very isolated issues of you know the wrong part being used which may have by the way  used because the government said it was ok to use if you take that away from the complaint all he is doing is using buzz words he's talking of there's fraud oh there's bad intent ok and when we brought the most the subject matter jurisdiction motion because we do believe there are disclosures he couldn't support that all he would have had to be do is bring to the court's attention the direct an independent knowledge or fraud that he has but that's not that's a different part of the test we first have to see whether there's substantial similarity then we might ask if he's an original source but if there's no substantial similarity we never got to our original source i think when you have as many public reports and articles that are talking about the problems on this program congressional hearings there was a lot of discussion i mean they had gone over the budget there was none mccurdy review this program got a lot of attention and you don't need to use the word fraud it had so much attention and so many problems the oh i g the office of inspector general was involved they're involved for a reason because they're wondering if there's fraud ok so let's say so as the years now saying ok there were allegations and transactions i'm not sure i agree with you but let's give you that will say the public disclosures were enough to suggest there might be fraud now how do we get substantial similarity how do we get from the general idea that there was a problem in this program to wrong materials wrong recordkeeping falsifying tests how do you link those and say they're substantially similar what case should i look to to say that those things count as the same and under our case i mean if you could look at weighing as i mentioned i think you can look at other public disclosure cases where they talk in very general terms about what was out there it was substantially similar in terms of the deficiencies testing failures but there is not i mean i you keep saying that but i mean they're talking about the specific materials the specific records the things that they were the debris that was falling on the equipment i mean maybe you're just saying the entire complaint is my new show but and if it is then maybe you win your case but i don't see anything like these details that the specific things you said went wrong in this project i don't see any of that in the public disclosures i mean i think they weren't as detailed as i think the court thinks they are and if you look at them they fall into certain buckets they fall into you know poor record keeping engineering problems because you're using drawings you shouldn't use you had poor design those were all the types of issues that were in the public  record with regard to the direct and independent i know you do have to find a public disclosure before you get to that issue i do think it is important that he could bring nothing to the table to connect the dots on fraud and there's a reason and is because he has very limited transparency into this program despite what i understand he wrote in the complaint but when he was put to the test of having to put something out there for the court show why he has directed and has knowledge of fraud he couldn't do it he and that's because he loses on original source anyway right because he didn't tell the court the government before he filed the complaint he does lose that but i think the direct inability to talk about actual evidence of fraud is what makes his allegations so similar to all that was in the public record because it really is no different when you get through you know what he's suggesting is detail because of one hundred forty four page complaint but when you pieces of our his allegations are no it's in the fourth amended contents he was directed to falsify required recordkeeping to cover up the fact that they weren't conforming to the contract will mandate the final matter on the calendar information so could we just pause for second please don't say the name of the agency in this argument you can just call it the agency and we'll know what you're talking about i do know i'm not saying i know you haven't i don't believe or can we reply to say that at the beginning it's just remind you to not use the for a year and a half two years we're not dealing with classified information in that program the government has changed it saying it's some larger project which the low power electronic device is a part that contains the threatened disclosure of his birth and inadvertent has floated of classified information and that's why we need to dismiss th case however the government also admits that mr mckenzie was not privy to any classified information about the larger project so we're left with the what kind of classified information i going to reveal if he has no knowledge of any classified information i think that the government's problem in this case is that the very agency that is in question here is the source of all of this public infor government has asked to be redacted on class or national security grounds is in the public domain by the very agency that put it in the public domain and so it be fine i think we in this case we were denied a hearing when our case was dismissed as being unnecessary well we take questions we take strong issue with that the false claims act statute mandates a hearing test at least some of the allegations that the government says is the basis for this dismissed but we weren't even able to now i know there's a secret declaration which we we have left out a one that will never see your honour's has probably basically in a century the same for claims that are in the previous case with the public disclosure isn't a key time action for the benefit of the government though and if the government thinks that it would be better off not spending resources watching this case  for security problems why shouldn't we defer to that why should your client get to continue on with a case that supposedly for the benefit of the government if the government doesn't want it well because because the cases that deal with this issue say that the government does not have absolute discretion in this regard the statute as it is craft that provides for a hearing provides for wait a minute this is not a proper reason to get rid of this but ok so if you dispute that a proper reason for the government to offer is that the government wants to save resources on watching for potential confidentiality breaches that can be but we have to look for a rational relationship between dismissing this particular case we can case and protecting that interest in this case the government itself suggested the procedures that could be followed after decline to intervene and suggest the procedures that this case could be prosecuted on a on a non trial on an open basis and in fact not revealing classified information yes the government has to it's going to expend some resources everything we can actually involve the expense of resources now but this case you know the cases that are cited the swift case they involve six thousand dollars worth of false billing to the government this case involves a practice many many many many millions of dollars and so it's not even like to pick up on something that was noted by the panel this case involves a claim brought by the relator in the government's name claiming injury to the government based on the government's substantive right to not be  defrauded and seeking damages for the government the government investigated the claims over a long period of time not only found no violation but further determined that continued litigation would harm the government's interests the re so that the government may dismiss an action that notwithstanding the objections of the person in this cheating the action if the person have been notified by the government of the filing of the motion and the court has provided the person with an opportunity for hearing both of those  so this is decided on the papers yes that's my understanding what the relator have asked for is an evidentiary hearing that goes beyond we think what the statute provides and that would be appropriate only have the relator ha made demonstrate a particular need for a hearing of the district or found the really had failed to do so and it was proper to decide the motion to dismiss on the papers let me ask you this there were government resources that would be involved if the case were permitted to go forward but i can and let me just say what i wanted to explore a little bit was i can understand the government's concern that there might be  litigation would necessarily result in risk of disclosure of confidential information because the government there are a lot of legitimate concerns about consumer can security what i have a little trouble with is the argument that you shouldn't be have to spend money to protect the security rendell the purpose of this act is in order to help protect the government recover when government has been in the government spend money all the time trying to protect its security and why should this why should he can be any different well a couple of things it's not certainly the government expense resources to protect national security all the time the determination was made that allowing this litigation to proceed would actually increase the cost the government would need to incur kind of beyond the baseline that i believe your honor is referring to and examples of that include all of the monitoring of discovery that would have to occur because of this but a geisha relates to a classified program and a classified contract when either side and we can expect that the defendant for example would seek substantial discovery from the government about its understanding what the contract was about and performance issues every time a discovery discovery request is made specially security personnel from the relevant agencies will have to review every single document involved to try and make money by buying reduction and i'm sure the court is aware discovery in these cases can be very significant we're not talking about you know five documents i mean there could be thousands and thousands if not more documents in this case that's a substantial expenditure of resources not only that the personnel who would be conducting this review  the same security personnel who would be protecting the other sorts of information that the agency have so we're actually creating a diversion of resources away from programatic in the towards this litigation the government determines that that is not in the best interest of the agency to have all of the security personnel working on this one case and one step further as explained in the declaration of the court have the agency determine that even with all of the stuff that would not be sufficient to protect the information at issue here the agency determined that line by line reductions would not be sufficient because of the volume of information that we're talking about and the nature of the information that things  they could slip through that art apparent kind of looking one document at a time but someone who could look at the body of information it may be able to piece together associations and programatic needs that are evident just by looking  at one one document at a time and that wouldn't even begin to address all the world that's there gets to be a little remote that the district courts have what the district court had before in terms of the understanding of the size of the project and their own what the nature of the just what have the same corporation that was submitted to to your honor's that declaration laid out the nature of the classified information at stake  or we believe that these i mean there's some relation between the go surely they both go to the fact of the involvement of classified information but just the need to protect the information we don't need to invoke the cost the agency that  pointed to the cost of continuing litigation as a reason to dismiss it and this court said that in that case there was no fuss about information involved it was marketing orders by the secretary of agriculture governing citrus industry this court said that the in what way i'm sorry i can't  here is a reason for the cost is because they're concerned about the cost about information that's you know that's the reason why the costs are can help but there still would be imo there were not and there was no classified information no one would have to be reviewing this it's at all derived from the idea that there's cost does a nation at say no i would like to of course back slightly on that in a case such as this where we later is challenging a government contract we can expect that there would be substantial discovery demands put on the resource devotion to just answering discovery process and what's the driving your real concern here that was the classified information and the fact that this agency will have to deal with that right that this is a motion to dismiss i mean it hasn't even then yes it is mostly new we haven't had any discovery yet exactly right and that's why the government moved into so that it could avoid those costs and just not get into any of that which is congress specifically gave it the power to do thirty seven thirty six if the court has no has been worried about this overclassification using classification to keep information that's embarrassing out of the public domain and we have this very odd case as i said where the very agency itself is the source of a lot of this public disclosure that the government is very concerned about i can't tell you what's in that affidavit obviously i can tell you the so called relationship that they can see but it seems in this case we have a i mean the way the government has changed its rationale for why we have to suppress all we couldn't deal with the issues of the four planes in the narrow focus that the government has permitted to be dealt with because the government never redacted any of these files not with what would you have said at a hearing that you haven't s let's take care of the matter is this morning and we'll recess until nine nine a