Opinion ID: 805628
Heading Depth: 3
Heading Rank: 2

Heading: Conflict of Interest Principles

Text: 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.