Source: http://openjurist.org/363/f3d/1039
Timestamp: 2015-03-26 23:56:04
Document Index: 475826877

Matched Legal Cases: ['§ 3729', '§ 3729', '§ 3729', '§ 3730', '§ 3729', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730', '§ 3730']

363 F3d 1039 Kennard v. Comstock Resources Inc | OpenJurist
363 F. 3d 1039 - Kennard v. Comstock Resources Inc	Home363 f3d 1039 kennard v. comstock resources inc
363 F3d 1039 Kennard v. Comstock Resources Inc 363 F.3d 1039
Don C. KENNARD and Harrold E. Wright, Plaintiffs-Appellants,v.COMSTOCK RESOURCES, INC.; Comstock Oil & Gas, Inc.; Black Stone Oil Co.; WT Carter & Bro; and Willow Creek Resources, Inc., Defendants-Appellees.United States of America and Burlington Resources Oil & Gas Company LP, Amici Curiae.
J. Robert Beatty (W. Scott Hastings with him on the brief) of Locke, Liddell & Sapp LLP, Dallas, TX, for Defendants-Appellees.
John T. Boese, Justin J. Brookman, and Michael J. Anstett of Fried, Frank, Harris, Shriver & Jacobson, Washington, D.C.; Donald I. Schultz, P.C., of Holland & Hart, LLP, Cheyenne, WY; Craig L. Stahl and Jeffrey T. Kuehnle of Andrews & Kurth LLP, The Woodlands, TX; and Laura B. Rowe of Hicks, Thomas & Lilienstern, LLP, Houston, TX, filed a brief for Amicus Curiae Burlington Resources Oil & Gas Co. LP.
Appellant Relators Mr. Kennard and Mr. Wright brought this qui tam action on behalf of the United States Government against Appellees Comstock Resources, Inc., et al., ("Comstock") pursuant to the False Claims Act, 31 U.S.C. §§ 3729-3730 ("FCA"). The allegations center around oil and gas leases between Comstock and an Indian Tribe. The Indian leases are subject to regulation by the Secretary of the Interior who acts as a fiduciary for the Tribe. Comstock pays royalties owed to the Tribe to the Mineral Management Service ("MMS"), an agency under the Secretary. The MMS is responsible for (1) collecting royalties, (2) ensuring the accuracy of those payments with audits, and (3) remitting the royalty payments to the Tribe.
The FCA imposes liability on any person who "knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government." 31 U.S.C. § 3729(a)(7). Violators are "liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person." 31 U.S.C. § 3729(a). Pursuant to 31 U.S.C. § 3730, a private individual, known as a relator, "may bring a civil action for a violation of [31 U.S.C. § 3729] for the person and for the United States Government... in the name of the Government." 31 U.S.C. § 3730(b)(1). The relator then receives a share of any Government recovery. 31 U.S.C. § 3730(d). The relator's qui tam complaint is filed under seal and served on the Government with "a written disclosure of substantially all material evidence and information" in the relator's possession. 31 U.S.C. § 3730(b)(2). The Government may then either choose to intervene and take over litigation or decline to intervene, "in which case the person bringing the action shall have the right to conduct the action." 31 U.S.C. § 3730(b)(2), (4).
On appeal, we are asked to decide whether the district court erred in dismissing Relators' complaint for lack of subject matter jurisdiction on grounds that (1) the current action was barred because of a prior public disclosure and (2) Relators did not qualify as an original source. We review de novo the district court's dismissal of Relators' FCA qui tam action for lack of subject matter jurisdiction. United States ex rel. Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1518 (10th Cir.1996) ("review of the district court's dismissal under the FCA jurisdictional bar is plenary" because "the jurisdictional question is necessarily intertwined with the merits.").
United States ex rel. Hafter v. Spectrum Emergency Care, 190 F.3d 1156, 1161 (10th Cir.1999) (quoting United States ex rel. Fine v. MK-Ferguson Co., 99 F.3d 1538, 1544 (10th Cir.1996)). "A court should address the first three public disclosure issues first. Consideration of the fourth, `original source' issue is necessary only if the court answers the first three questions in the affirmative." Id. Therefore, we must first address whether the Sydow Complaint operated as a public disclosure which would operate to bar the current action unless Relators are an original source.
Relators argue strenuously that because Mr. Sydow allegedly unethically used their information in drafting his complaint for the Tribe that this court should not validate that fraud. However, we are constrained by the law as it is written. The jurisdictional bar in 31 U.S.C. § 3730(e)(4) does not contemplate an exception to public disclosure unless the person is an original source. The remedy for the alleged conversion of information in this case lies elsewhere. Section 3730(e)(4) operates to satisfy the dual goals of "avoidance of parasitism and encouragement of legitimate citizen enforcement actions." United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 651 (D.C.Cir.1994). "Consistent with these purposes, we believe the threshold `based upon' analysis is intended to be a quick trigger for the more exacting original source analysis." United States ex rel. Precision Co. v. Koch Indus., Inc., 971 F.2d 548, 552 (10th Cir.1992). Once a public disclosure is made, even if by somewhat nefarious means, "no person other than the Government may intervene or bring a related action based on the facts underlying the pending action." 31 U.S.C. § 3730(b)(5).