Opinion ID: 805628
Heading Depth: 2
Heading Rank: 2

Heading: Who May Bring a False Claims Act Qui Tam Action?

Text: The district court granted summary judgment, which is proper if there are no genuine disputes of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Our review is de novo, with the evidence being viewed in the light most favorable to the non-movants. United States ex rel. Jamison v. McKesson Corp., 649 F.3d 322, 326 (5th Cir. 2011). The position advocated by Shell and the United States is expressly contrary to the holdings of the Eleventh Circuit and the en banc Tenth Circuit. United States ex rel. Williams v. NEC Corp., 931 F.2d 1493, 1501-02 (11th Cir. 1991); United States ex rel. Holmes v. Consumer Ins. Grp., 318 F.3d 1199, 120812 (10th Cir. 2003). Adopting that position would also create tension with the en banc Ninth Circuit and the Sixth Circuit. United States ex rel. Fine v. Chevron U.S.A., Inc., 72 F.3d 740, 743-44 & n.5 (9th Cir. 1995); United States ex rel. Burns v. A.D. Roe Co., 186 F.3d 717, 722 & n.5 (6th Cir. 1999). The First Circuit, though, has taken the position that at least some federal employees may not be qui tam claimants. United States ex rel. LeBlanc v. Raytheon Co., 913 F.2d 17, 19-20 (1st Cir. 1990).3 Though we apply our own judgment to every case, we customarily are “chary to create a circuit split.” Alfaro v. Comm’r, 349 F.3d 225, 229 (5th Cir. 2003). There is something of a split already, though.
The place to start in deciding whether these parties can bring this claim is the text of the False Claims Act. Med. Ctr. Pharmacy v. Mukasey, 536 F.3d 383, 394 (5th Cir. 2008). The key provision states this: (b) Actions by private persons.—(1) A person may bring a civil action for a violation of section 3729 for the person and for the United States Government. The action shall be brought in the name of the Government. The action may be dismissed only if the court and the 3 No one in this appeal has advocated for the First Circuit’s approach. 5 Case: 11-20320 Document: 00511940318 Page: 6 Date Filed: 07/31/2012 No. 11-20320 Attorney General give written consent to the dismissal and their reasons for consenting. 31 U.S.C. § 3730(b)(1) (2006). When a provision is unambiguous and “the statutory scheme is coherent and consistent,” there is no need for further inquiry as to meaning. Schindler Elevator Corp. v. United States ex rel. Kirk, 131 S. Ct. 1885, 1893 (2011) (quotation marks and citation omitted). “A person” may bring suit, suggesting that any person may do so. See Stevens, 529 U.S. at 783 n.12. According to the Dictionary Act in 1 U.S.C. § 1, as well as ordinary usage, a human being is a person. See Mohamad v. Palestinian Authority, 132 S. Ct. 1702, 1707 (2012). A normal rule of statutory interpretation is that when Congress uses the same word in different parts of a statute, it intended each to carry the same meaning. Dep’t of Revenue v. ACF Indus., Inc., 510 U.S. 332, 341-42 (1994). In determining that municipalities can be False Claims Act defendants, the Supreme Court embraced a “presumption that the statutory term person extends . . . to persons politic and incorporate, as to natural persons whatsoever.” Cook Cnty., Ill. v. United States ex rel. Chandler, 538 U.S. 119, 125 (2003) (quotation marks and citation omitted).4 We also look at the context of the whole statute to make certain contrary indications are not found. Bosamia v. C.I.R., 661 F.3d 250, 254 (5th Cir. 2011). Section 3730 contains four other major parts. Subsection (a) grants the Attorney General power to enforce the False Claims Act directly, (c) lays out the rights of qui tam plaintiffs, and (d) describes their share of any recovery. Subsection (e), entitled “Certain actions barred,” enumerates four statutory limits on jurisdiction. Among these are a bar by subject, by identity of defendant, and a 4 The Court’s earlier holding that “person” excluded States is not to the contrary. See generally Stevens, 529 U.S. at 780 (2000). That interpretation was counseled by (i) the False Claims Act’s structure (below, we conclude the opposite as to government employee relators), id. at 783-84, and (ii) by the “longstanding interpretive presumption that ‘person’ does not include the sovereign,” id. at 780. Also, in Stevens it was accepted as clear that the False Claims Act was directed “at natural persons.” Id. at 782. 6 Case: 11-20320 Document: 00511940318 Page: 7 Date Filed: 07/31/2012 No. 11-20320 special military exclusion. Suits duplicative of civil suits or administrative actions with the government as a party are barred. § 3730(e)(3). No suits may be lodged against members of Congress, the judiciary, or senior executive branch officials. § 3730(e)(2)(A). Former or current armed services personnel cannot sue another member of the armed forces for matters “arising out of such person’s service in the armed forces.” § 3730(e)(1). The (e)(4) exception for public disclosures is analyzed in detail later. The existence of these limiting provisions is instructive. When Congress provides express “exceptions in a statute, it does not follow that courts have authority to create others.” United States v. Johnson, 529 U.S. 53, 58 (2000). Instead, we typically infer that Congress wished to limit the statute only as stated. Id. Shell and the government argue they are not seeking a judiciallyimposed limit. Instead, they claim subsection (b)(1)’s heading of “Actions by private persons” narrows the universe of relators just to non-governmental persons. “Private” can mean “belonging to an individual, as opposed to the public or the government.” Black’s Law Dictionary 1315 (9th ed. 2009). The argument drawn from the title is that Congress used “private persons” to exclude government employees. Equally plausible is that this title simply distinguishes subsection (b)’s provisions pertaining to qui tam suits from the provisions of subsection (a) entitled “Responsibilities of the Attorney General.” See Erickson ex rel. United States v. Am. Inst. of Biological Scis., 716 F. Supp. 908, 915 n.12 (E.D. Va. 1989). In that understanding, the title “private persons” means those filers of suits who are not the Attorney General. Regardless of what the language in this title means, a title is a form of abbreviation that frequently “fails to refer to all matters which the framers of that section wrote into the text.” United States v. Johnson, 632 F.3d 912, 924 (5th Cir.) (quotation marks and citation omitted), cert. denied, 132 S. Ct. 135 (2011). 7 Case: 11-20320 Document: 00511940318 Page: 8 Date Filed: 07/31/2012 No. 11-20320 The relators present another reason why the “private persons” title to subsection (b) is not a limitation on who can be a relator. They argue that subsection (e)(1), which prohibits members of the armed services from being relators in suits against other members on claims “arising out of” military service, would be unnecessary if the title of “private persons” already barred all suits by federal employees. The argument draws on the “cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.” TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (quotation marks and citations omitted). We are reluctant to put much analytical weight on this section dealing with the military. The treatment of members of the armed services under the False Claims Act has been the subject of recurring reevaluations and recalibrations almost since the Act was adopted in 1863. Dan L. Hargrove, Soldiers of Qui Tam Fortune: Do Military Service Members Have Standing to File Qui Tam Actions Under the False Claims Act, 34 Pub. Cont. L.J. 45, 83-85 (2004). Were we to agree with the relators as to the significance of subsection (e)(1), it would only confirm a conclusion we have reached for other reasons. We need not explore this particular argument further. In earlier suits, the government has argued that no federal employee may be a relator.5 In this appeal, the government and Shell ask us to interpret “private” as excluding only some sub-class of federal employees. Perhaps it would be those who learn of the fraud during their official duties or those employed to audit or otherwise investigate fraud.6 Fine-tuning such exceptions 5 It unsuccessfully argued to the Eleventh Circuit that the False Claims Act “contained a general exclusion against all government employees as qui tam plaintiffs.” Williams, 931 F.2d at 1502. 6 Shell claims that those “who are paid to investigate and report fraud and who then seek to file qui tam suits based on information they developed for the government” may not be False Claims Act relators. The United States’s proposed construction sweeps a bit more 8 Case: 11-20320 Document: 00511940318 Page: 9 Date Filed: 07/31/2012 No. 11-20320 would be based on little more than our perception of reasonable policy limits. The exceptions would not arise from the text of the Act. Not only would these new definitions take us beyond the “ordinary or natural meaning” appropriate for undefined terms, they would commit us to a process of exposition in future cases. F.D.I.C. v. Meyer, 510 U.S. 471, 476 (1994); e.g., United States ex rel. Holmes v. Consumer Ins. Grp., 318 F.3d 1199, 1217 n.2 (10th Cir. 2003) (en banc) (Tacha, J., dissenting). Because “the federal lawmaking power is vested in the legislative, not the judicial, branch of government,” we will not undertake creating exceptions to this statutory language. Nw. Airlines, Inc. v. Transp. Workers Union of Am., AFL-CIO, 451 U.S. 77, 95 (1981). Shell directs us to one other phrase in the False Claims Act. It claims there is an exception embedded in the statutory statement that because the suit is brought “for the person and for the United States,” government employees are not contemplated. § 3730(b)(1) (emphasis added). The argument is that because the government can only act through individuals, a government employee cannot act “for the United States”; that person is the United States. We are unconvinced. A person can have two legal identities, one official and one individual. E.g., Hafer v. Melo, 502 U.S. 21, 27 (1991) (explaining that a “government official in the role of a personal-capacity defendant . . . fits comfortably within the statutory term ‘person’”). Second, we take our cue from the Supreme Court’s early encounter with the False Claims Act. United States ex rel. Marcus v. Hess, 317 U.S. 537 (1943). The Court determined that the statute had “no words of exception or qualification” at a time when the virtually identical clause “as well as for himself as for the United States” was part of the False Claims Act. An Act to Prevent and Punish Frauds upon the Government of the United States, ch. 67, 12 Stat. 696 (1863). In granting the statute’s broadly. It would prohibit suits by any “government employee who obtains information about fraud in the course of his official duties.” 9 Case: 11-20320 Document: 00511940318 Page: 10 Date Filed: 07/31/2012 No. 11-20320 language full effect, the Court embraced the notion that “even a district attorney, who would presumably gain all knowledge of a fraud from his official position, might sue as the informer.” Hess, 317 U.S. at 546. The text of the False Claims Act supports the relators’ standing.
In the alternative, the government and Shell rely on a statute and regulations that concern ethical obligations of federal employees. One is the criminal conflict-of-interest statute. 18 U.S.C. § 208. The other is a set of federal ethics regulations. See 5 C.F.R. pt. 2635 (“Standards of Ethical Conduct for Employees of the Executive Branch”); 5 U.S.C. § 7301. Allowing federal employees to be relators is said to conflict with both these provisions. We accept, without exploring in detail, that there are potential if not clear difficulties under those provisions for federal employees to be relators.7 The argument that flows from the possibility that obligations extraneous to the False Claims Act affect these relators is that we must harmonize different laws if possible, which is a corollary of the rule that an individual statute should be construed as a whole. 2B Norman J. Singer, Sutherland on Statutory Construction § 51.1, at 200 (7th ed. 2008). Nonetheless, “other statutes may not be resorted to if the statute is clear and unambigious.” Id. at 197. That latter 7 The crime statute on its face pertains only to interested-official acts. It bars employees from participating “through decision, approval, disapproval, recommendation, the rendering of advice, investigation” when the “judicial or other proceeding, application, [or] request for a ruling” is one in which they have a financial interest. 18 U.S.C. § 208. Section 2635.101(b)(3) prohibits the “improper use” of nonpublic information to further private interest, and various provisos bar employees from “participating personally and substantially in an official capacity” in matters in which they have a financial interest. 5 C.F.R. § 2635.402(a). The regulation on misuse of government property does not facially encompass facts learned at work, except in the case of intellectual property that has been purchased. See § 2635.704(b)(1) (“Government property includes any form of real or personal property in which the Government has an ownership, leasehold, or other property interest as well as any right or other intangible interest that is purchased with Government funds . . . .”). 10 Case: 11-20320 Document: 00511940318 Page: 11 Date Filed: 07/31/2012 No. 11-20320 maxim applies to the unambiguous statement that begins subsection (b): “A person” may bring suit. Even were we inclined to venture outside the False Claims Act in search of meaning, however, it would be inappropriate to draw from the conflict-ofinterest rules. The justification for the in pari materia canon is that Congress should be assumed to have legislated with reference to the other provision. Singer, Sutherland on Statutory Construction § 51.1, at 203. Thus, a conventional limit on the canon is that courts should harmonize only those “statutes addressing the same subject matter.” Wachovia Bank v. Schmidt, 546 U.S. 303, 316 (2006).8 In Schmidt, the Court concluded that the provisions on subject matter jurisdiction and venue were not sufficiently similar to be harmonized. Id. The False Claims Act rules and the ethics guidelines for federal employees are not the same subject. The government and Shell also argue that failing to give effect to the conflict-of-interest and ethics requirements would require us to acknowledge that those provisions were impliedly repealed, and such repeals are disfavored. See Jackson v. Stinnett, 102 F.3d 132, 135-36 (5th Cir. 1996). We do not accept the premise for this argument, namely, that the relevant provisions are somehow inoperative. How they operate on these relators is an issue for another time and place. At no stage in this litigation has the government taken the position that Little and Arnold committed a crime, or violated a specific regulation. We have no evidence that their federal agency disciplined them. Nothing in the record indicates that the lawsuit was filed while at work, or 8 It has been noted that even when legislation expressly references other law, an interpreting court should not assume that because “the reference makes discovery of the prior act possible,” such a discovery necessarily has occurred. Singer, Sutherland on Statutory Construction § 51.1, at 203. In the False Claims Act, there is not even that type of crossreference. 11 Case: 11-20320 Document: 00511940318 Page: 12 Date Filed: 07/31/2012 No. 11-20320 otherwise in dereliction of their duties. Were such claims made at some point, they would be processed in a forum separate from this suit. Further, using the conflict rules to override the False Claims Act’s terms would interfere with the other two coordinate branches of our government. We would thwart a cause of action Congress permitted. See Med. Ctr. Pharmacy, 536 F.3d at 394. As to the ethics prohibitions, which are susceptible to multiple reasonable interpretations, we would tie the hands of the President who is vested with discretion to enforce those regulations. See 5 U.S.C. § 7301. There is evidence the Executive Branch in the past has permitted employee-relator suits. In 1996, the Department of Justice (DOJ) created a manual entitled “Relator’s Share Guidelines” to assist government attorneys in making recommendations for the award, within the statutory range, in qui tam suits.9 A factor “for consideration for a possible decrease in the percentage” proposed by the DOJ was that “[t]he relator learned of the fraud in the course of his Government employment.” Also at oral argument, the question was put to the government why its authority to intervene could not be a vehicle for redressing ethical or administrative concerns. It admitted that its existing authority was up to the task, but that it was unwilling to incur the political costs associated with dismissing potentially meritorious suits. This candid admission and the DOJ’s guideline, which counsels reduced but not zero recovery, illustrate why it is sound for us to follow the statutory text.

The text under consideration here is the product of a 1986 congressional overhaul of the False Claims Act. False Claims Amendments Act, Pub. L. No. 9 See United States ex rel. Alderson v. Quorum Health Grp. Inc., 171 F. Supp. 2d 1323, 1333-34 & n.33 (M.D. Fla. 2001); United States ex rel. Johnson-Pochardt v. Rapid City Reg’l Hosp., 252 F. Supp. 2d 892, 899 n.2 (D.S.D. 2003). 12 Case: 11-20320 Document: 00511940318 Page: 13 Date Filed: 07/31/2012 No. 11-20320 99-562, 100 Stat. 3153 (1986). Each party argues that if we study Congress’s 1986 drafting history, a clear purpose supportive of their position will emerge that should guide our statutory interpretation. We have already determined that this part of the Act needs no further elaboration. The divergent messages that can be obtained from legislative history render the history prone to selective use. See Nalle v. C.I.R., 997 F.2d 1134, 1137 (5th Cir. 1993). Because the 1986 False Claims Act bill was so repeatedly revised en route to final passage, this is particularly true as to it. See Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 130 S. Ct. 1396, 1407 n.15 (2010). That winding path through Congress “provides ample opportunity to search the legislative history and find some support somewhere for almost any construction” of its terms. Id. (quotation marks and citation omitted). Shell and the relators have done just that. Relators point to a U.S. Merit Systems Board survey cited in the Senate Report recounting that almost 70 percent of federal employees with knowledge of illegality failed to take appropriate internal action. By contrast, Shell focuses on the passage in the same report that says the purpose of the amendments was to “allow and encourage assistance from the private citizenry.” S. Rep. No. 99-345 at 8 (1986). Given the general and specific pitfalls associated with legislative history of this Act, we do not search for further enlightenment in it.
If the result we reach is absurd, we might need to proceed beyond the plain meaning. United States v. Rabanal, 508 F.3d 741, 743-44 (5th Cir. 2007). We briefly address why our interpretation is not an absurdity. The government and Shell claim that today’s holding will work “an unseemly and counter-productive result.” We are aware of the dilemmas identified. Chief among them is how to ensure employee fidelity to agency enforcement priorities in the face of personal monetary incentives. Our holding, 13 Case: 11-20320 Document: 00511940318 Page: 14 Date Filed: 07/31/2012 No. 11-20320 though, does not prevent the government from promulgating new personnel guidelines (or enforcing old ones) to manage these concerns. Also, as discussed earlier, the government can intervene and dismiss actions. Absurdity requires more than questionable policy. Miss. Poultry Ass’n, Inc. v. Madigan, 992 F.2d 1359, 1365 (5th Cir. 1993). There are plausible reasons for Congress to have authorized governmental relator suits, which forecloses recourse to the absurdity canon. Id.; see also Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461-62 (2002). The government has monetary and personnel constraints that do not enable it to pursue every lead or prosecute every wrongdoer. By nature, bureaucracies can be slow to act, and on occasion can fall victim to corruption or restrictive partisan agendas. There is potential for governmental relators to prompt more agency responsiveness even when suits are not filed. Additionally, the prospect of monetary awards might provide public servants with additional incentives to ferret out fraud.10 Our task is still unfinished. Having decided that Little and Arnold’s employment as government auditors does not deprive them of standing under the False Claims Act, we now consider whether their particular factual allegations bring them within the terms of the public disclosure bar. 31 U.S.C. § 3730(e)(4).