Opinion ID: 759793
Heading Depth: 2
Heading Rank: 3

Heading: Post-1986 Conduct

Text: 22 The next issue we must address is whether a different standard applies to the analysis of Hughes' post-1986 conduct. The Supreme Court in Schumer specifically stated that the false claims alleged by Schumer were submitted to the government between 1982 and 1984, Schumer, 117 S.Ct. at 1875, and that Hughes' alleged false charges occurred before 1986. Id. at 1876 n. 4. By contrast, Lujan alleges that Hughes mischarged the government from 1982 through 1989. Because the district court in Lujan's case did not make specific findings as to the individual dates of the alleged presentation of false claims, we must assume that some of the alleged presentation of false claims occurred after 1986. Accordingly, we must determine whether Lujan's post-1986 allegations are jurisdictionally barred by the 1986 version of the FCA, which provides: 23 No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information. 24 31 U.S.C.A. § 3730(e)(4)(A) (West Supp.1998). 2 25 In subsection (B), the statute next defines original source as an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information. 31 U.S.C.A. § 3730(e)(4)(B) (West Supp.1998). Thus, as the Supreme court noted in Schumer, the 1986 amendments allow qui tam suits based on information in the Government's possession, except where the suit was based on information that had been publicly disclosed and was not brought by an original source of the information. Schumer, 117 S.Ct. at 1876. 26
27 The first issue we must resolve in analyzing the jurisdictional status of Lujan's post-1986 allegations is whether Schumer's earlier allegations constituted public disclosure of the misconduct underlying Lujan's complaint. In other words, if Lujan's allegations are substantially similar to Schumer's, then the wrongdoing was publicly disclosed and Lujan's qui tam claims must be dismissed unless Lujan is an original source of the information. As set forth above, we review the district court's factual findings for clear error. Adler, 107 F.3d at 729. However, even if we were to review the district court's comparison of Lujan's and Schumer's complaints de novo (the district court conducted no factual inquiry beyond an examination of the complaints and the record), we would affirm the district court's determination that the allegations are substantially similar. 28 The record supports this conclusion. The subject matter of Schumer's action was four defense contracts between Hughes and the United States-the F-14D Program contract (F14 contract), the F-15 Radar Multistage Improvement Program Contract (F15 contract), the F-18 Radar Upgrade Program Contract (F18 contract), and the B-2 Special Programs Contract (B-2 contract). The B2 contract involved the design of an advanced radar system for that airplane. Hughes managed each of these contracts under commonality agreements, which permit each program using a common component to share in some portion of its development and production costs. 29 Schumer alleged that Hughes used these commonality agreements to misbid, misallocate, and mischarge costs among the four contracts. For example, Schumer alleged that Hughes charged the development of a radar signal processor to the F15 contract but then also charged these developments costs to the F14, F18, and B2 contracts. 30 Lujan's allegations also concern the contract to develop the B2 radar system. Lujan alleges that, between 1982 and at least 1989, Hughes routinely mischarged costs associated with the design and development of various B2 radar system contracts. She also alleges that Hughes mischarged costs on contracts involving the F14, F15, and F18 by means of the commonality agreements governing cost allocations among the various radar system programs. 31 The Schumer and Lujan allegations both involve cost-sharing transactions among and within the radar system programs on four aircraft. The two claims involve the same commonality agreements and the same radar program contracts. In sum, we agree with the district court that Lujan's allegations are substantially similar to those disclosed in the earlier Schumer action, thereby constituting public disclosure of Lujan's qui tam claims within the meaning of the 1986 version of the False Claims Act. 32
33 However, even if Schumer's allegations are sufficiently similar to Lujan's to constitute public disclosure of Lujan's allegations, jurisdiction over Lujan's qui tam claims is not necessarily destroyed. As set forth above, public disclosure is fatal to jurisdiction only if Lujan is not an original source of the allegations. 31 U.S.C.A. § 3730(e)(4)(A) (West Supp.1998). 34 To qualify as an original source, a relator must show that he or she has 'direct and independent knowledge of the information on which the allegations are based,' 'voluntarily provided the information to the government before filing his or her qui tam action,' and 'had a hand in the public disclosure of allegations that are a part of ... [the] suit.'  United States ex rel. Devlin v. State of California, 84 F.3d 358, 360 n. 3 (9th Cir.1996) (quoting Wang v. FMC Corp., 975 F.2d 1412, 1418 (9th Cir.1992)). 35 We have already noted that Lujan voluntarily provided the information to the government before filing her suit: She met and discussed her allegations with Department of Defense personnel on June 6, 1998. As the district court noted, the parties do not dispute that Lujan has direct and independent knowledge of her allegations. Order Dismissing Relator's Qui Tam Counts, at 3 n. 2. These two factors alone, however, do not establish original source status. 36 In Wang, we held that, to bring a qui tam suit based on allegations already in the public domain ... a plaintiff [must] have played a part in disclosing those allegations. Wang, 975 F.2d at 1414. Wang had direct knowledge in May 1983 of possible fraud by his employer, FMC Corporation, involving a transmission problem on the Bradley rocket launcher. FMC fired Wang in December 1986, and Wang filed his False Claims Act case in December 1987. Id. at 1417-18. However, before he filed suit, various newspapers reported the Bradley's transmission problems. Id. at 1417. We then observed that Wang is now revealing what is already publicly known. Id. at 1418. Wang had known of the Bradley problems since 1983, yet he sat quietly in the shadows and breathed not a word about them until he was fired, id. at 1419-20, while some other conscientious or enterprising person bravely brought the transmission problems to the attention of the media and Army, id. at 1420. Because Wang had merely republished an allegation that had already been publicly disclosed, we concluded that Wang was not an original source. Id. at 1419. 37 Paraphrasing Wang, the district court in Lujan's case concluded that Lujan had merely echoed Schumer's allegations and was, therefore, not an original source. We disagree with the district court's application of Wang to the facts of this case. Like Wang, Lujan has direct and independent knowledge of the information underlying her allegations. But, unlike Wang, she did not remain silent and wait until after she was fired to take that information to the government. Instead, she took her allegations to the government in June 1988, before Schumer filed his action in 1989 and well before Lujan filed her original complaint in 1992. 38 In Wang, we noted that Congress's intent in protecting original sources was to bring the wrongdoing to light at the earliest possible opportunity. Id. at 1419. Crucial to the instant opinion, however, we stated the following in Wang: 39 It is important to note that under the rule we adopt today, all those who directly or indirectly disclose an allegation might qualify as its original source. Anyone who helped to report the allegation to either the government or the media would have indirectly helped to publicly disclose it. 40 Id. at 1419 (quoting United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2d Cir.1990)). 41 Lujan disclosed her allegations to the government before similar allegations were publicly disclosed by Schumer's lawsuit. Under the reasoning of Wang, Lujan indirectly publicly disclosed her allegations of fraud. She also acted promptly to remedy the perceived wrongdoing. Because the district court has subject matter jurisdiction under the original source exception to the 1986 FCA, we reverse the district court's dismissal of Lujan's post-1986 qui tam claims. III The Retaliation Claim 42 Lujan's complaint also includes a retaliation claim under another provision of the False Claims Act. 3 She alleges Hughes ostracized, harassed, and intimidated her because she reported her perceived discrepancies in Hughes' contracting and accounting procedures. The district court dismissed these claims as time-barred by the applicable one-year state statute of limitations. On appeal, Lujan argues that the district court should have applied the False Claim Act's six-year statute of limitations to her retaliation claims. We review de novo the district court's determination of the applicable statute of limitations, Naas v. Stolman, 130 F.3d 892 (9th Cir.1997), and we affirm. 43 The relevant section of the False Claims Act provides: A civil action under section 3730 may not be brought ... more than 6 years after the date on which the violation of section 3729 is committed. ... 31 U.S.C.A. § 3731(b)(1) (West Supp.1998) (emphasis added). Lujan urges us to read the statute plainly and to apply a six-year statute of limitations to all actions under section 3730, including her retaliation claim even though retaliation does not constitute a violation of section 3729. The answer is not so simple. 4 44 The False Claims Amendment Act of 1986, Pub.L. 99-562, 100 Stat. 3153, added the retaliation claim provisions at section 3730(h) and the statute of limitations for false claims provision at section 3731(b). Before 1986, section 3731(b) simply said that [a] civil action under section 3730 of this title must be brought within 6 years from the date the violation is committed. 31 U.S.C.A. § 3731(b) (West 1983). By implication, all claims had a six-year window of opportunity under the old law. 45 If Congress had wanted to retain a six-year statute for all actions under section 3730, including retaliation claims, it would have left the pre-1986 language of section 3731(b) intact when it enacted the 1986 amendments to the FCA. Instead, Congress, while adding a provision for retaliation claims under 3730(h), narrowed the application of the six-year statute of limitations to violations of section 3729. Section 3729 specifically and strictly addresses false claims, not retaliation claims. 46 That Congress was specifically concerned with false claims in its 1986 amendments to the statute of limitations is further illustrated by its addition of section 3731(b)(2). This section provides an alternative to the six-year statute of limitations for false claims, namely a period of no more than three years after material facts should have been known by the relevant government official, but never longer than ten years after the violation was committed. 31 U.S.C.A. 3731(b) (West Supp.1998). The legislative history to this section indicates that this change was enacted to ensure the Government's rights are not lost through a wrongdoer's successful deception, because fraud is, by nature, deceptive.... S.Rep. No. 99-345, at 15 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5280. 47 The same rationale is inapposite to a private claim for retaliation. There is nothing covert or deceptive about retaliation-the victim feels its sting immediately. In the absence of some meaningful indication to the contrary, we must therefore presume that, in amending section 3731(b) so that the limitation runs only from the date of a violation of section 3729, Congress did not intend that the statute apply to section 3730(h). 48 Congress created the retaliation claim but provided no specific statute of limitations for such claims. The Supreme court has held that when Congress does not supply an express statute of limitations governing a federal cause of action, then Congress intended that the courts apply the most closely analogous statute of limitations under state law. Reed v. United Transport Union, 488 U.S. 319, 323, 109 S.Ct. 621, 102 L.Ed.2d 665, (1989). 49 We agree with the district court that the most analogous statute of limitations under California law is the one-year statute applicable to wrongful termination in violation of California public policy. See Cal.Civ.Proc.Code § 340(3) (West Supp.1998). Accordingly, we affirm the district court's dismissal of Lujan's retaliation claim as time-barred. 50 AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.