Source: https://law.justia.com/cases/federal/appellate-courts/F2/557/456/272798/
Timestamp: 2019-10-19 09:57:21
Document Index: 190120175

Matched Legal Cases: ['§ 3108', '§ 231', '§ 3108', '§ 232', '§ 232', '§ 232', '§ 232', '§ 455', '§ 455', '§ 455', '§ 2766', 'art, 234']

United States of America Ex Rel. David P. Weinberger, Anddavid P. Weinberger, Esq., Individually,plaintiffs-appellants, v. Equifax, Inc. (formerly Retail Credit Company), Defendant-appellee, 557 F.2d 456 (5th Cir. 1977) :: Justia
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United States of America Ex Rel. David P. Weinberger, Anddavid P. Weinberger, Esq., Individually,plaintiffs-appellants, v. Equifax, Inc. (formerly Retail Credit Company), Defendant-appellee, 557 F.2d 456 (5th Cir. 1977)
U.S. Court of Appeals for the Fifth Circuit - 557 F.2d 456 (5th Cir. 1977) Aug. 12, 1977
In this appeal we review the district court's dismissal of plaintiff Weinberger's action, pursuant to Federal Rule 12(b) (6), for lack of standing and failure to state a claim. By his suit, Weinberger sought a declaratory judgment that government employment of Equifax, Inc. (formerly Retail Credit Co.) to provide information on prospective government employees violated the Anti-Pinkerton Act, 5 U.S.C. § 3108 (1970).1 Weinberger also alleged that Equifax's billing of the United States for services performed violated the False Claims Act, 31 U.S.C. §§ 231-32 (1970),2 asserting that Equifax's billing of the United States for services performed in violation of the Anti-Pinkerton Act was a false claim. The district court dismissed the action, ruling that Weinberger had failed to allege essential facts under both actions and that, in any case, Weinberger lacked standing to bring either. Weinberger appeals these determinations and further asserts that the district judge should have stood recused.
In his action seeking a judgment declaratory of 5 U.S.C. § 3108, Weinberger asserts that because Equifax employs detective-like investigative techniques, it is an organization "similar" to the Pinkerton Detective Agency and thus barred from government employment by the Anti-Pinkerton Act. Weinberger lacks standing to assert this claim. To have standing, Weinberger must assert a personal stake in the outcome "warranting his invocation of federal court jurisdiction and to justify exercise of the court's remedial powers on his behalf." Warth v. Seldin, 422 U.S. 490, 498-99, 95 S. Ct. 2197, 2205, 45 L. Ed. 2d 343 (1975). Under Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970), standing turns on "whether the plaintiff alleges that the challenged action has caused him injury in fact, economic or otherwise . . ., "id. at 152, 90 S. Ct. at 829, and whether "the interest sought to be protected by the complainant is arguably within the zone of interest to be protected or regulated by the statute or constitutional guarantee in question." Weinberger fails to satisfy the first requirement because he has alleged no injury in fact.3
In 31 U.S.C. § 232 (1970), Congress specifically provides for informer's suits. It grants informers standing to sue and an award for successful action under the statute. See 31 U.S.C. § 232(B) and (E) (2) (1970). To maintain the action the informer is required only to notify the United States of the suit. The United States may then choose whether to join the action. If it elects not to enter an appearance, the informer's suit may continue. See 31 U.S.C. § 232(C) (1970). A jurisdictional requirement of the informer's suit is that it must rest on information not in the possession of the United States prior to filing the action. See 31 U.S.C. § 232(C) (1970). None of these procedural requirements doom Weinberger's action.
Nevertheless, Weinberger still fails to state a claim under the False Claims Act. That Act prohibits false or fraudulent claims to government payment. The penal nature of the statute requires careful scrutiny to see if the alleged misconduct violates the statute. See United States ex rel. Marcus v. Hess, 317 U.S. 537, 542, 63 S. Ct. 379, 87 L. Ed. 443 (1943). The False Claims Act "was not designed to reach every kind of fraud practiced on the Government." United States v. McNinch, 356 U.S. 595, 599, 78 S. Ct. 950, 2 L. Ed. 2d 1001 (1958). The statute is primarily directed against government contractors' billing for nonexistent or worthless goods or charging exorbitant prices for delivered goods. Id. Equifax plainly did not submit a false claim under this reading of the statute: no one has suggested that Equifax's reporting activities for the government were not properly carried out. Weinberger has alleged no false claim in this sense.
The statute also interdicts material misrepresentations made to qualify for government privileges or services. See, e. g., Alperstein v. United States, 291 F.2d 455, 456 (5th Cir. 1961) (per curiam) (veteran violated False Claims Act when, to qualify for federal benefits, he falsely swore that he was financially unable to bear medical expenses); United States v. Johnson, 138 F. Supp. 525, 527-28 (W.D. Okla. 1956) (physician misrepresented competency and general qualifications to gain employment with Air Force). The principal thrust of Weinberger's allegations fall into this category: that Equifax misrepresented its qualification for government employment and thus made a false claim. But to establish that Equifax committed fraud in this manner, Weinberger first must demonstrate that the government was misled by Equifax's application for the reporting business. Unless the government made it clear that it would not employ detective agencies when it contracted for the work, Equifax's application did not make a material misrepresentation, did not mislead the government, and did not defraud the government within the meaning of the False Claims Act. Weinberger does not allege that the government required applicants to represent that they were not detective agencies; no misrepresentation is alleged. In this case the False Claims Act is not an enforcement device for the Anti-Pinkerton Act. Weinberger has failed to allege a claim under the False Claims Act.
The current statute providing for disqualification of a judge for bias suggests that he "shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned," 28 U.S.C. § 455(a), and that he must disqualify himself if he or his spouse or a "person within the third degree of relationship" is acting as a lawyer in the proceeding, 28 U.S.C. § 455(b) (5) (ii), or has a financial interest in the outcome of the proceeding, 28 U.S.C. § 455(b) (5) (iii). None of the provisions requiring recusal apply here. It is undisputed that the district judge's son did not actively participate in Equifax's defense. That the son's law firm participated in the proceeding does not mean that he was "acting as a lawyer in the proceeding." See SCA Services, Inc. v. Morgan, 557 F.2d 110 (7th Cir., 1977). That provision requires actual participation. The fears of judicial bias that might result from an offspring's active participation in a proceeding do not merit automatic disqualification of the law firm to which the relative belongs. The "financial interest" provision might apply if the district judge's son were a partner in the firm. But his status as an associate removes that fear. See id. His salary interest as an associate is too remote to fall under this "financial interest" prohibition.
Although none of these matters require disqualification, they are considerations that might move the district judge to examine "whether his impartiality might reasonably be questioned." He should determine whether a reasonable man would conclude that the district judge should recuse himself. See Parrish v. Board of Commissioners, 524 F.2d 98, 103 (5th Cir. 1975); Davis v. Board of School Commissioners, 517 F.2d 1044, 1052 (5th Cir. 1975), cert. denied, 425 U.S. 944, 96 S. Ct. 1685, 48 L. Ed. 2d 188 (1976). The district judge examined Weinberger's assertions that recusal was appropriate but perceived no justification for removing himself. On appeal, we review the district judge's determination for abuse of discretion. See Davis, supra at 1052. We find no abuse here of the district judge's conclusion that his impartiality could not reasonably be questioned.
Weinberger's complaint does state that at one time he applied to the United States Civil Service Commission for employment, that the Civil Service requested permission to conduct a background investigation on him in connection with the position of Assistant Appeals Officer, and that he gave his assent to that background investigation. It does not allege that Equifax was employed to conduct a background investigation on him or that he was injured in any way by the background investigation. Thus, Weinberger's only interest is one shared with other citizens that the government follow its laws, but this "generalized grievance" shared with other citizens does not confer standing or support the invocation of federal jurisdiction. See Warth v. Seldin, supra, 422 U.S. at 499, 95 S. Ct. 2197. The personal interest he alleges is too tenuous and undifferentiated from the interests of others to afford him standing. Of course, the fact that Weinberger seeks a declaratory judgment action provides no jurisdictional help if he lacks standing to seek any sort of relief. See Red Lobster Inns of America, Inc. v. New England Oyster House, Inc., 524 F.2d 968, 969 (5th Cir. 1975) (per curiam); 10 C. Wright & A. Miller, Federal Practice & Procedure: Civil §§ 2766, 2767 (1973)
Weinberger invokes a long line of Comptroller General decisions holding that the Anti-Pinkerton Act bars the employment of any detective agency in any capacity. See, e. g., 71 M.S.Comp.Dec. 488 (1914); 38 Comp.Gen. 881 (1959). These decisions resulted from the Comptroller's determination, in his executive capacity, that certain payments by disbursing officers would be passed or disallowed. These decisions do not have the force of administrative interpretations by agencies empowered by Congress to interpret statutes, and we are not bound by them. See United States ex rel. Brookfield Construction Co. v. Stewart, 234 F. Supp. 94, 99-100 (D.D.C.), aff'd per curiam, 119 U.S.App.D.C. 254, 339 F.2d 753 (1964). Although we respect the Comptroller's efforts, our reading of the statute and its legislative history leads us to a different conclusion