we're back on track so we call the matter of united states of america extra paul dennis says that express scripts  sort of summary of what we believe the issue is here for the court and then i'd be happy to ask and answer any questions the court may have we believe that because of the mis application of this court's decision background in quotes because what we what we have before us is really only a fourth amended amended complaint direct quickly by way of of a motion to dismiss so let's let's talk about the original source exception first and i understand your attempts to distinguish your case from schumann what i'd like to ask then is putting aside the allegations that essentially educated guesses based upon conversations with others or review of documents in that case about a company that the relator did not work or two companies that the later did not work for was insufficient to constitute direct evidence and they pointed out that the specific language issue is knowledge of a scheme is not correct when it is gained by reviewing files and testing documents they're in with individuals who actually participated in the memorial events that's correct your honor that is some of the language and human but i would argue that it has to be read in the context of what the documents were that he was reviewing and who he was speaking to  name a dentist with two ends i believe and who had told him that medco said to supply auditors with the only documents related to rebates and purchase history on agreements and also that he ganis as a senior executive of one of only five people who knew about the essential elements of this fraud in his capacity as a member of the contracting department was advised that they intended to institute a senior executives specific complain that reg rebates were not generating right so he had he had nonpublic direct knowledge as an employee at medco was a member of this department that  looking to increase their profits due to their rebates that's direct knowledge that's that's direct knowledge as an employee of the company that's committing the fraud in shoe mind he was not an employee of knowledge that easy was aware of its best price obligations did not indicate it is intended to evade such obligations so and then i would add later on and that p g forty seven the court stated schuman is substituting experience based belief that misconduct was occurring for the requisite direct and independent knowledge that is plainly insufficient to qualify as no wiggle sources so again show me where you put that exclusivity he learned that from the people in his department that he worked with in his capacity as an employee of midtown he then learned after that meeting as in his capacity as an employee of the contracting department made to know when it was distributed to him the agreements that would be evidence of that fraud and he was asked to implement those by overseeing the person regina dennis who was going to ensure that purchase discounts were kept separate from we be and that those agreements were not going to be showed to customers so that's direct knowledge is is is our position because yes he was not in the room but in his capacity as a senior executive of the company committing the fraud he was asked to oversee the implementation of it and it was explained to him and as your honor told me to leave out mark but i think merck is critical because definition judge i believe that the majority of these allegations would be under the pre two thousand and i think when you are waive any argument that your allegations after the two thousand and ten amendment qualify you as an original i don't believe we waive that argument where does it appear in your opening breaks well the computer i think you said that it appears in your opening brief that page twenty four  which occurred before two thousand and ten you know the law before two thousand and ten applies i mean i don't know i have seen no case that says you know you can have an argument that somehow you go backwards i don't see no case  the change that was that resulted from the two thousand and ten amendment is that the disclosure materially added to what has been publicly disclosed right kruk all right so any of your post amendment allegations here materially add to the public disclosure regarding me to ski if so yes the s government because if it had had that exclusion they would have had to report those discounts and they could have concealed this he specifically says that even though the agreement say in them that there is going to be some segregation of discounts with respect to certain programs that never had a system by which it could have segregated those programs he specifically says he names the architect of the fraud the motive for the fraud  and the manner in which the fraud was implemented none of that was in the public domain at best there were only two things that were in public domain were that medco tries to steal  various ways and i was the counsel in the hunt litigation so i know about that but that does not mean that if they engage in a completely different scheme that that somehow publicly disclosed the other allegations are just general allegations about purchase discounts they do not go to the specific allegations of fraud in this case and i would argue under silver they are new public disclosures because you could not use those allegations t thank you i may please the court there's only one issue in this appeal and that is whether mr dennis met his burden to show that he was an original source of his publicly disclosed allegation we're talking about birds here are we stone is because due respect to him mistaken because mr stone did it list as an issue on appeal the question of whether the district court correctly applied the post two thousand and ten statute to his occasions he did not then argue it in his brief we pointed that out in our brief that he had therefore waived the issue his reply brief is silent on the issue the question is wait well and even if his reply brief we're not court that applies to waiver we still might regard the issues waived i think you should indeed regard the issue as way but that the point is even clearer when he did not even respond to our notation that the point was when he has accepted the waiver i will point out just although it's certainly not the principal point i want to scuff say that the district court was entirely right about the post two thousand and ten allegations that mr dennis left medco in two i recall fleshed out anywhere in the in the complaint as to what monitoring activity consist no i agree i think i think what the complaint actually says is that he reviewed public filings and that's how public information about the company and that's how it monitored events after he left the company and so there is nothing after two thousand and eight and certainly nothing after march two thousand and ten that mr dennis could possibly have materially added and the only thing he even says specifically in his complaint as the district court found that occurred after two thousand  immediate without any you know being instrumentality so if we had a vacuum here he was in the room and he's told we're participating in a fraud wink and that it's not enough well if he's there when the fraud is actually occurring that's enough if somebody later tells him we've participated in a fraud that's not what he alleges by the way but if somebody had later told him that that's certainly evidence of a fraud but it is not direct information of a fraud and that's what the court he you have to be an eye witness to the fraud you have to be if it's if it's a pro that occurs in a in a room then yes you have to be as the recent quote says in the room where it happened there are better people for it then you have to be part of the events you have to actually have firsthand knowledge of the events but don't we have case law in this area that even suggests more than that i'm interested in hearing you with respect to our atkins this point i'm not sure if it actually holds this much but there are cases in other circuits that have held that when you conduct a investigation of a fraud and you root out a fraud through your own efforts you can then become an original source and you could do that even if you're not an insider at the company if you actually through the through the fruits of your own waivers you uncover a fraud then you can conceivably have firsthand information that way i'm not aware that that has occurred in this court and i think it's quite a rare circumstance but that's not what dennis is alleging he's alleging that in the course of his employment he came across information about a fraud and that he then concluded because he disclosed and that's another issue that mr stone seems to continue to be disputing but he specifically and affirmatively waived that issue in his appeal this is a publicly disclose fraud and we're talking by the way about an original source test that is a n exception to the rule that somebody is not allowed to sue on the publicly disclosed brought government can but if you're not the government if you're going to get a share of recovery and it's a fraud that's already been publicly disclosed before you soon you need to meet this narrow original source test and prior to two thousand and ten the this court and more describe that as a formidable hurdle and congress wanted to be a formidable hurdle that's how they wrote direct independent knowledge because you're suing for something that's eliminate the direct knowledge they did or didn't hear on or in the more case describes that as a radical change and so that's why it's so important that we're talking about the pre two thousand time because the standard is directness the standard does not so you really need it that it is a radical change and therefore congress decision to sell a bed this statute should not provided any curry divil a window into what he didn't have did with respect to the original hundred eighty six and in two thousand and ten there there is no significant legislative history about what congress was intended all we have all we have is the language but what this court found in the more case is that it was a radical change that the prior standard of direct knowledge was a formidable hurdle and that this that the test that the congress has always been grappling with is to try to draw a middle ground between avoiding parasitic lawsuits avoiding were lawyers coming in and suing on publicly disclosed information but also rewarding relator is who really have something of importance or really deserve to be rewarded and it prior to two thousand  the congress true that line of direct independent knowledge today they draw in a different place and it's a different standard it's not necessarily you know lesser or greater but it's but it's different what would your response to the relate to or argu court also considered that and i think the district court was quite correct in saying that yes perhaps he had direct independent knowledge of the merck negotiations but merck did not agree to do anything merck and medco did not agree to do anything fraudulent this is a false claims act case in this court has repeatedly said that it's a claim by claim analysis each claim is a separate potential offense and you have to look at what the actual claims are there be some being submitted to the government that are false no false claims arise from the merck relationship because there was no relationship with merck that's alleged to be he has no direct an independent knowledge mr davis doesn't of the mexico astra zeneca relationship that he claims did result in false claims and this court in the judd case i think it's a nonpresidential opinion that it came to a very similar conclusion in saying that the later in that case may have had direct and independent knowledge of a fraud as to  one party one participant but not as to the other health care providers that the that the relayer was alleging were also involved in fraud this is also alleged that he provided back up rebates he's saying that he did something similar prior to that regarding other parties and that this was a general process that medco followed and then it's the same thing after you mentioned the conversation with regina dennis he says he had that conversation in the two thousand and six timeframe and that conversation was about her allegedly doing the same thing later that later had done earlier and he divined from that that he that she was there for engaged in fraud involving astra zeneca because she told him that she was doing following the same process that he followed and by the way there's no allegation in the cape in the complaint that i see that relator was tasked with  implementing the fraud or overseeing the fraud in some way that's not alleged but even if it were his only information that he's alleging that he got was second hand from is dennis and and things that he surmised from the work that he did zeneca relationship before he changed jobs and to his senior executive position which by the way the exact same senior executive position that mr shuman had they had the same title vice president of pharmaceutical contracting affidavit to substantiate his original source allegations remember this is a jurisdictional inquiry so the court can consider any evidence in front of it and mr dennis presented a lengthy affidavit where he details all of the efforts he went into to extend the agreements to try to extend it to other health care providers that was not sufficient because all his information was secondhand he was not in the room when it happened you just heard about it afterwards he worked on trying to extend it and so let me turn to a couple of the specific allegations of in the thirty seconds or so i have left he he claims that he alleges in various ways that he knew things about the way that medco did business and i think that that took up a fair amount of my adversaries time this this morning that he supposedly supervised things he understood things within that co but that's exactly what szymon said as well it's categor sufficient under shuman you cannot claim original source status from an experience based deduction that fraud is happening you have to witness it firsthand and would surmise no matter how well informed the surmise is it has to be more than yes or mov you can be right the surmise could be correct but if it's not firsthand if it's not based on you're actually witnessing the events firsthand and it's not direct under the creek two thousand and ten statute thank you very much pract that company here is the fraud i just agreed to go out and implement that broad and that president could then or c e o could then see all the documents all the agreements work with all the people implementing the fraud and he would not have direct knowledge that is not what direct knowledge is he saw with his own eyes to wrecked knowledge is seem with your own eyes it doesn't mean you have to be in the room during the you know two minute conversation that the knew those purchased discounts were not being passed through he knew he spoke to that he supervised regina dennis she took over for him she was doing what he did before and he was her direct supervisor and she told him i am doing it the same way i am not i am not disclosing the purchase discounts to customers and not disclosing them to the government and i'm not even keeping track of them in the same way i'm keeping track of we it was actually introduced evidence of the fact which again is no reasons and the first one he says is they are unchanged from the previous complaint how how are the allegations in the fourth amendment complaint different that's that's just i'm correct you have contracting i just agreed to a fraud here are the specifics of the fraud i want to now extend that to lurk prepare a power point you know about the fraud you have direct knowledge of the  third reason is the allegation show that dennis received his knowledge second and through reviewing documents you're being told information why is that not the case here because he also received his knowledge from being an employee at  actually implementing and being involved in the mechanics of how the fraud was implemented and why make you intended to commit the froyo she did not do that because he did not work for astra zeneca he did not work for b m s and by the way nobody challenged you on as an original source to medco who you also sued and recovered money from under a case that i handle so nobody has ever said schuman was an illegal source as to medicare they said it wasn't original source as to and b m s and the court made very clear why that was that is not the case here mr dennis is the prototypical original source and if if you don't find him to be an illegal source there are hundreds of now to which the two thousand and ten statute applies with which involved senior executives who come forward with evidence of fraud and if this is the standard in the circuit those cases are going to be dismissed and they may be