Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-13-07071/USCOURTS-caDC-13-07071-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 6, 2014 Decided December 2, 2014

No. 13-7071

UNITED STATES EX REL.JOHN DOE,

APPELLANT

v.

STAPLES, INC., ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:08-cv-00846)

Joseph A. Black argued the cause for appellant. With him 

on the briefs was Joyce E. Mayers. 

David W. Ogden argued the cause for appellees. With 

him on the brief were Daniel S. Volchok, D. Bradford Hardin 

Jr., Gideon M. Hart, James L. Volling, John F. Henault Jr., 

Robert P. Fletcher, and Leslie Paul Machado. John M. 

Peterson entered an appearance.

Before: TATEL and BROWN, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

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TATEL, Circuit Judge: This False Claims Act case is about 

pencils—Chinese pencils, to be precise. Anonymous relator 

John Doe alleges that defendants—including three major 

office-supply retailers—imported pencils that they knew were 

made in China, but to avoid paying substantial antidumping 

duties imposed on Chinese-made pencils, falsely declared to 

United States Customs officials that they were made elsewhere 

in Asia. The district court determined that the essential 

elements of the alleged fraud were already in the public 

domain, and so, as required by the False Claims Act, dismissed 

the case for lack of jurisdiction. For the reasons set forth in this 

opinion, we affirm.

I.

Enacted in 1863 to fight rampant fraud in Civil War 

procurement contracts, the False Claims Act (FCA) remains 

the government’s “primary litigative tool for combatting 

fraud.” S. Rep. No. 99-345, at 2, 4 (1986). The FCA penalizes

false claims for payment from the government, and, as alleged 

here, false statements to avoid payments owed to the 

government. See 31 U.S.C. § 3729(a)(1)(A) & (G). Since its 

enactment, the FCA has empowered not only the Attorney 

General, but also private citizens acting on the government’s 

behalf—known as qui tam relators—to sue persons who 

defraud the United States. Id. § 3730(a) & (b)(1). If a qui tam

relator initiates the suit, the government may elect to intervene 

and prosecute the action with the relator’s participation. Id. 

§ 3730(b)(2). If the government declines to intervene, the 

relator may proceed on his own, though the action remains “in 

the name of the Government.” Id. § 3730(b)(1). In either case, 

the relator shares in any recovery. Id. § 3730(d). Because FCA 

defendants are liable for treble damages and relators can 

receive nearly a third of the pie, that share can amount to tens 

of millions of dollars. Id. & id. § 3729(a). The FCA’s qui tam

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provisions thus encourage private citizens to expose false 

claims and so serve as a critical supplement to government 

enforcement. 

By the same token, however, the FCA can encourage 

opportunistic lawsuits based solely on information already 

known to the government. See, e.g., United States ex rel. 

Marcus v. Hess, 317 U.S. 537 (1943) (reviewing infamous qui 

tam action in which relator copied allegations of fraud from 

government’s criminal indictment). Accordingly, “in an effort 

to strike a balance between encouraging private persons to root 

out fraud and stifling parasitic lawsuits,” Congress established 

the FCA’s jurisdictional provision—the so-called “public 

disclosure bar.” Graham County Soil & Water Conservation 

District v. United States ex rel. Wilson, 559 U.S. 280, 295 

(2010). Although Congress has amended this provision several 

times, the version of the public disclosure bar that governs this 

case strips courts of jurisdiction over qui tam suits that are 

“based upon the public disclosure of allegations or 

transactions” through certain channels—including, as relevant 

here, administrative reports and news media—unless the 

relator “is an original source of the information.” 31 U.S.C. 

§ 3730(e)(4)(A) (1986). An original source is “an individual 

who has direct and independent knowledge of the information 

on which the allegations are based and has voluntarily 

provided the information to the Government before filing 

[suit].” Id. § 3730(e)(4)(B).

This qui tam case involves an alleged fraud on the United 

States government through false statements made to U.S. 

Customs and Border Control (Customs) to avoid antidumping 

duties—protective tariffs imposed on goods priced below fair 

market value—applicable to Chinese-made pencils. See 68 

Fed. Reg. 43082 (July 21, 2003) (“Certain Cased Pencils from 

the People’s Republic of China”). Relator, a self-styled 

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pencil-industry insider, filed suit in the U.S. District Court for 

the District of Columbia, alleging that defendants Staples, 

OfficeMax, Target, and Industries for the Blind knowingly 

purchased Chinese-made pencils from suppliers in Indonesia, 

Hong Kong, and Vietnam, but when the pencils arrived in the 

United States, falsely declared to Customs that the pencils’ 

country of origin was other than China. 

According to the complaint, Relator learned of 

defendants’ false representations by examining manifest data 

that all shippers must submit to Customs. By Relator’s 

account, a company called PIERS Global Intelligence 

Solutions compiles this data in an online database, which 

includes shipments’ designated country of origin and importer 

of record. With respect to the pencils’ true country of origin, 

Relator alleged that “Chinese pencils can be readily identified 

by their overall appearance and quality that is a result of the 

unique manufacturing processes used in China.” Compl. 8. 

Based on certain telltale characteristics, he asserted, 

defendants’ pencil buyers would surely have known that their 

pencils were made in China “without the need for direct 

contact with the factories actually producing the pencils.” Id.

Relator also alleged that he confirmed the pencils’ Chinese 

origin through his own investigation of defendants’ foreign 

suppliers. With the help of pencil-industry informants, the 

investigation apparently revealed that defendants’ suppliers

either make no pencils themselves or do not make the pencils 

they sell to U.S. buyers. Relator ultimately grounded his 

allegations on the pencils’ appearance, however, asserting with 

respect to each defendant’s product that, “[b]ased on their 

physical characteristics, these pencils were produced in 

China.” Id. at 13, 22-24. 

After the government declined to intervene, defendants 

moved to dismiss the complaint for lack of jurisdiction and for 

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failure to state a viable FCA claim. In support of their

jurisdictional argument, defendants invoked the FCA’s public 

disclosure bar, contending that the material facts of the alleged 

scheme were already in the public domain. They also argued 

that Relator failed to demonstrate that he qualifies for the 

original-source exception to the bar. 

The district court agreed, concluding that the essential 

elements underlying Relator’s allegation of fraud—i.e., 

defendants’ misrepresentations to Customs and the pencils’ 

actual country of origin—were “both based on publicly 

disclosed information.” United States ex rel. Doe v. Staples, 

Inc., 932 F. Supp. 2d 34, 40 (D.D.C. 2013). The court noted 

that Relator based his allegations regarding defendants’ 

misrepresentations on the PIERS database, a form of “news 

media” within the meaning of the FCA that is “readily 

accessible to the public,” and which itself derives from 

publicly available shipping information in the Customs 

manifest system. Id. As to the pencils’ true country of origin, 

the district court observed that Relator based his allegations on 

the pencils’ physical appearance, id. at 38, 40, explaining that

the “giveaway characteristics” of Chinese pencils had already 

been described in publicly accessible reports produced by the 

United States International Trade Commission, which 

constitute “administrative reports” within the meaning of the 

FCA. Id. at 40-41. Finally, concluding that Relator failed to 

show that he qualifies as an original source of the information, 

the district court dismissed the case for lack of subject matter 

jurisdiction. Id. at 41-42.

Relator now challenges the district court’s conclusions 

that his FCA claim is based on publicly disclosed information 

and that he failed to demonstrate original-source status. “We 

review de novo the district court’s dismissal for lack of subject 

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matter jurisdiction.” United States ex rel. Oliver v. Philip 

Morris USA Inc., 763 F.3d 36, 40 (D.C. Cir. 2014).

II.

Seeking to prevent suits “by those other than an ‘original 

source’ when the government already has enough information 

to investigate the case” or where “the information ‘could at 

least have alerted law-enforcement authorities to the likelihood 

of wrongdoing,’” United States ex rel. Davis v. District of 

Columbia, 679 F.3d 832, 836 (D.C. Cir. 2012) (citation 

omitted), the FCA’s public disclosure bar blocks qui tam suits 

that are “based upon the public disclosure of allegations or 

transactions,” 31 U.S.C. § 3730(e)(4)(A) (1986). In this 

circuit’s seminal opinion on the public disclosure bar, United 

States ex rel. Springfield Terminal Railway v. Quinn, 14 F.3d 

645 (D.C. Cir. 1994), we explained that the government has 

“enough information to investigate the case” either when the 

allegation of fraud itself has been publicly disclosed, or when 

both of its underlying factual elements—the misrepresentation 

and the truth of the matter—are already in the public domain. 

In Springfield Terminal, the relator alleged that an 

arbitrator working for the National Mediation Board had 

fraudulently billed the government for arbitration services 

never actually rendered. Id. at 647. After concluding that the 

allegations were “based upon” certain pay vouchers that had 

been publicly disclosed in a related civil action, the district 

court dismissed the case for lack of jurisdiction. Id. at 648. 

Reversing, we recognized that the relator had relied in part on 

public information, but explained that Congress sought to 

prohibit qui tam suits only when both essential elements of 

fraud—the false statement and the true facts—had been 

publicly disclosed. Id. at 655. We illustrated this principle with 

a simple algebraic formula: “[I]f X + Y = Z, Z represents the 

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allegation of fraud and X and Y represent its essential 

elements. In order to disclose the fraudulent transaction

publicly, the combination of X and Y must be revealed, from 

which readers or listeners may infer Z, i.e., the conclusion that 

fraud has been committed.” Id. at 654. Because the publicly 

disclosed pay vouchers reflected only the false statement (the 

arbitrator’s claim for payment) and not the true facts (the 

services actually rendered), we held that the public disclosure 

bar did not apply. Id. at 655-56. That said, we stressed that a 

qui tam action cannot be sustained where both elements of the 

fraudulent transaction—X and Y—are already public, even if 

the relator “comes forward with additional evidence 

incriminating the defendant.” Id. at 655.

In this case, the parties agree that X, the alleged 

misrepresentation, is defendants’ declarations to Customs that 

their imported pencils were made somewhere other than China. 

Relator, moreover, concedes that this information was publicly 

disclosed in the PIERS database. The only question, then, is 

whether Y, the alleged fact that defendants’ pencils actually 

were made in China, was likewise in the public domain. 

Echoing the district court’s conclusion, defendants argue that 

this fact was disclosed in two public reports produced by the 

United States International Trade Commission (ITC) before 

Relator brought this suit. Those reports, defendants maintain, 

constitute “administrative reports” within the meaning of the 

FCA and describe the physical characteristics of Chinese 

pencils, including many of the telltale characteristics that form 

the basis of Relator’s charge that the pencils were made in 

China. According to defendants, then, both essential elements 

of the alleged fraud—X and Y—were already in the public 

domain. For his part, Relator agrees, as he must, that the ITC 

reports qualify as administrative reports within the meaning of 

the FCA. See Schindler Elevator Corp. v. United States ex rel. 

Kirk, 131 S. Ct. 1885, 1891 (2011) (explaining that “report” 

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maintains its “broad ordinary meaning” in the FCA). He

insists, however, that the reports disclose insufficient 

information to demonstrate that defendants’ pencils were made 

in China. 

We agree with the district court and defendants. In his 

complaint, Relator detailed a series of physical characteristics 

that, he alleged, result from “unique manufacturing processes 

used in China” and so allow one to “readily identif[y]” Chinese 

pencils. Compl. 8. Those characteristics include apex-to-apex 

bonding (a distinctive method of joining a pencil’s halves), 

substandard wood, off-center leads, low-quality erasers, 

inferior paint, unmatchable price, and loose ferrules—a 

reference to the small metal band that fastens the eraser to the 

pencil shaft. The ITC reports also identify several of these 

features as characteristic of Chinese pencils. For example, the 

reports note that U.S. pencil producers had informed the ITC 

that “Chinese pencils use lower quality wood, did not sharpen 

or erase well, had loose ferrules and erasers, and had leads that 

would break easily.” Certain Cased Pencils from Thailand, 

USITC Pub. 2816, Inv. No. 731-TA-670, at II-49 (Oct. 1994) 

(Final). They also report that Chinese pencils have an inferior 

“finish, paint covering, centering of lead, and attachment of 

ferrule and eraser.” Id. at II-54.

To be sure, as Relator points out, the complaint catalogues

characteristics of Chinese pencils that are unmentioned in the 

ITC reports, including the pencils’ price and bonding method, 

and generally describes their features in greater detail. Yet our 

inquiry focuses not on the additional incriminating information 

a relator supplies, but instead on whether “the quantum of 

information already in the public sphere” was sufficient to “set 

government investigators on the trail of fraud.” Springfield 

Terminal, 14 F.3d at 654-55. In this case, answering that 

question is easy. Relator himself asserted not only that Chinese 

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pencils “can be readily identified by their overall appearance,” 

Compl. 8, but also that defendants’ pencils have “certain well 

known unique features common to pencils manufactured in 

China, and distinct from pencils manufactured elsewhere,” 

Pl.’s Opp’n to Staples’s Mot. to Dismiss 14 (emphases added). 

He stated, moreover, that these features “include any one of the 

following: apex-to-apex bonding[,] leads that are off center[,] 

and general inferior finishing.” Id. (emphasis added). As noted 

above, two of these three “unique” characteristics—off-center

leads and inferior finishing—were disclosed in the ITC reports. 

See USITC Pub. 2816, at II-54. 

Relator tells us that he included allegations about the 

pencils’ appearance only to prove that defendants had notice of 

their products’ Chinese origin, not to show that the pencils 

actually were made in China. Appellant’s Br. 11-12; see also 

31 U.S.C. § 3729(a)(1)(G) (penalizing “any person who 

knowingly makes . . . a false record or statement” to avoid 

payments owed to the Government) (emphasis added). But his 

subjective intent is beside the point. As the district court 

explained, if the pencils’ distinctive features “put defendants 

on notice of their Chinese origin ‘without the need for direct 

contact with the factories actually producing the pencils,’” as 

Relator alleged in his complaint, “these characteristics were 

also sufficient to ‘enable the government adequately to 

investigate the case and to make a decision whether to 

prosecute.’” Staples, 932 F. Supp. 2d at 41 (quoting Springfield 

Terminal, 14 F.3d at 654).

Of course, we recognize that lopsided leads may not in fact

distinguish Chinese pencils from those made everywhere else 

in the world. But Relator alleged that this feature, in addition to 

others disclosed in the ITC reports, is unique to Chinese 

pencils, and “the party invoking federal jurisdiction bears the 

burden of establishing its existence.” Steel Co. v. Citizens for a 

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Better Environment, 523 U.S. 83, 104 (1998). Instead of 

pleading facts that establish federal jurisdiction, Relator has 

thus pled himself out of court. See Sparrow v. United Air Lines, 

Inc., 216 F.3d 1111, 1116 (D.C. Cir. 2000) (“[I]t is possible for 

a plaintiff to plead too much: that is, to plead himself out of 

court by alleging facts that render success on the merits 

impossible.”).

In any event, the ITC reports disclose more than just the 

physical features of Chinese pencils. They also explain that 

U.S. pencil makers identified three of the four 

defendants—Staples, Target, and OfficeMax—as “possible” 

importers of Chinese pencils. Cased Pencils from China, 

USITC Pub. 3820, Inv. No. 731-TA-669, at I-7, I-11 (Nov. 

2005) (Second Review). Combined with defendants’ 

declarations in the PIERS database that their pencils were 

made only in, say, Indonesia or Hong Kong, that information 

could likewise “have alerted law-enforcement authorities to 

the likelihood of wrongdoing.” Springfield Terminal, 14 F.3d 

at 654 (citation omitted). 

In short, Relator’s suit is “based upon” publicly disclosed 

“allegations or transactions,” thus triggering the public 

disclosure bar. 31 U.S.C. § 3730(e)(4)(A). Relator’s arguments 

to the contrary are unpersuasive.

First, Relator maintains that his private investigation of 

defendants’ foreign suppliers contributed critical independent 

information, without which no allegation of fraud was 

possible. Indeed, he asserts, even though defendants’ pencils 

display the “Chinese characteristics described in the ITC 

reports,” it is “still possible” that they were made elsewhere. 

Appellant’s Br. 20. As should be clear by now, this contention 

flatly contradicts what Relator pled in his complaint. By his 

own pleadings and concessions, the material elements of the 

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fraud, X and Y, were already public, so Relator’s private 

intelligence cannot defeat the FCA’s jurisdictional hurdle.

Relator next argues that even if the ITC reports disclose 

sufficient information to unequivocally identify Chinese 

pencils, they nowhere reveal that defendants’ pencils were 

made in China since that determination requires physical 

inspection of defendants’ product. But this theory not only 

ignores the ITC reports’ revelation that the principal 

defendants in this case might be importing Chinese pencils, it 

also overlooks key language in the public disclosure bar and 

defies its basic purpose. That provision divests courts of 

jurisdiction to hear qui tam suits that are “based upon the 

public disclosure of allegations or transactions.” 31 U.S.C. 

§ 3730(e)(4)(A) (emphasis added). And with respect to each 

defendant, the linchpin of Relator’s allegations was that 

“[b]ased on their physical characteristics”—characteristics 

described in public reports—“these pencils were produced in 

China.” Compl. 13, 22-24. Under Relator’s theory, however, 

anyone armed with the information in the ITC reports could 

troll the aisles of any office-supply store for pencils with loose 

ferrules or off-center leads. The would-be plaintiff could then 

determine whether the retailer had paid the required 

antidumping duties by reference to other public information, 

and if it had not, then voilà, the plaintiff would be entitled to 

millions of dollars in qui tam compensation. But these sorts of 

lawsuits, brought by “opportunistic plaintiffs who have no 

significant information to contribute of their own,” are 

precisely the kind the public disclosure bar seeks to prevent. 

Springfield Terminal, 14 F.3d at 649. 

Finally, Relator contends that even if his suit rests on 

public disclosures, the bar does not apply because he qualifies 

as an original source of the information. See 31 U.S.C. 

§ 3730(e)(4)(A). But because Relator declined to raise this 

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argument in the district court—apparently due to a “firm 

conviction” that his allegations did not reflect public

information, Appellant’s Br. 32—he has forfeited it. As we 

have explained, a relator may not wait until his case is on 

appeal before invoking the original-source exception to the 

public disclosure bar, but rather must set forth “sufficient 

jurisdictional facts in a timely fashion.” United States ex rel. 

Settlemire v. District of Columbia, 198 F.3d 913, 920 (D.C. 

Cir. 1999). Thus, although a relator is free to “assert below that 

the jurisdictional bar [does] not apply because, in his view, the 

public disclosures [do] not fall under 31 U.S.C. 

§ 3730(e)(4)(A),” he “does not have a right to recast his claim 

on appeal so as to avoid the consequences of that decision.” Id. 

III.

Because Relator’s claim is jurisdictionally barred, we 

have no reason to determine whether the complaint failed to 

state a viable FCA claim. We therefore affirm the district 

court’s dismissal for lack of subject matter jurisdiction.

So ordered.

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