Opinion ID: 162057
Heading Depth: 2
Heading Rank: 2

Heading: The Ongoing Investigation

Text: 11 The district court reasoned that the government's ongoing investigation demonstrated that the government was capable of pursuing the allegations without the assistance of the relator. The court therefore held that allowing a qui tam suit would not serve the purposes of the FCA and dismissed Holmes from the suit. Our examination of the FCA, its 1986 amendments, and Tenth Circuit case law leads us to conclude that an ongoing government investigation is not a per se bar to a qui tam suit. 12 Prior to 1986, the FCA required a court to dismiss an action that was based on information the government possessed when the action was brought, unless the government elected to proceed with the action. 31 U.S.C. § 3730(b)(4) (superceded). The Act further provided that, if the government elected to proceed with an action, the person initiating the action may receive an amount the court decides is reasonable for disclosing evidence or information the Government did not have when the action was brought. Id. § 3730(c)(1) (superceded). A qui tam relator, in other words, could only recover a portion of the proceeds due to the government if the relator had provided new information. 13 In 1986, Congress amended the qui tam provisions. The current version of the statute does not require that the relator provide information that the government does not already possess. Instead, Congress has provided that there is no jurisdiction over a relator's suit that is based upon the public disclosure of allegations or transactions ... in a congressional, administrative, or Government Accounting Office report, hearing audit, or investigation ... unless the person bringing the action is an original source of the information. 31 U.S.C § 3730(e)(4)(A). This jurisdictional inquiry requires us to answer four questions: (1) Are the allegations or transactions contained in one of the listed sources? (2) Have the allegations or transactions been publicly disclosed? (3) Is the suit based upon the public disclosure? (4) If the answer to the first three questions is affirmative, can the relator qualify as an original source and therefore escape the jurisdictional bar? MK-Ferguson Co., 99 F.3d at 1544. A negative answer to any of the first three questions means that the qui tam action may proceed. The last question is only asked if the first three questions are all answered affirmatively. 14 The fact that a government investigation contains the allegations in Holmes's complaint means that the answer to the question in step (1) is yes. This does not, however, end the inquiry. To hold that an ongoing investigation alone is a per se jurisdictional bar would ignore the four-step approach created in MK-Ferguson and would eviscerate the public disclosure bar's remaining three steps, which are firmly grounded in the statutory language. Moreover, [n]ot requiring some positive act of disclosure would reinstate the pre 1986 jurisdictional bar based on mere `government knowledge' of information pertaining to fraud. United States ex rel. Fine v. MK-Ferguson Co., 861 F.Supp. 1544, 1551 (D.N.M.1994), aff'd, 99 F.3d 1538 (10th Cir.1996), quoted with approval in Ramseyer, 90 F.3d at 1520. 15 We also find unpersuasive the district court's reliance on our reference in a prior case to Congress' `twin goals of rejecting suits which the government is capable of pursuing itself, while promoting those which the government is not equipped to bring on its own.' United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir.1995) (quoting United States ex rel. Springfield Terminal Ry. v. Quinn, 14 F.3d 645, 651 (D.C.Cir.1994)). In that case, these goals of the FCA informed our interpretation of the public disclosure of allegations or transactions and when a qui tam action is based upon that disclosure. Id. at 571-72. We decline to extend Sandia 's rationale, which we used as an aid to understanding specific statutory phrases, to reach a result that contradicts the plain meaning of the public disclosure bar and the purposes it evidences. 16 We therefore conclude that the district court erred in concluding that an ongoing government investigation bars a qui tam action. We normally would proceed under MK-Ferguson to answer the remaining three questions and, because there has been no public disclosure, we would find jurisdiction. For the reasons below, however, we hold that the specific circumstances of this case — where a government employee pursues a qui tam action during an ongoing investigation — gives rise to a different inquiry. 17