Opinion ID: 162057
Heading Depth: 3
Heading Rank: 2

Heading: The Purposes of the FCA and the 1986 Amendments

Text: 32 The purposes of the FCA's qui tam provisions and its 1986 amendments further support our conclusion that jurisdiction is lacking. Congress instituted the qui tam provisions of the FCA to encourage private citizens to expose fraud that the government itself cannot easily uncover. United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 572 (10th Cir.1995). Moreover, the 1986 amendments' expansion of jurisdiction over qui tam actions reflects Congress's concern that the government was not pursuing known instances of fraud. Ramseyer, 90 F.3d at 1520 (quoting MK-Ferguson Co., 861 F.Supp. at 1551). The statute as amended aims (1) to encourage private citizens with first-hand knowledge to expose fraud; and (2) to avoid civil actions by opportunists attempting to capitalize on public information without seriously contributing to the disclosure of the fraud. Id. at 1519-20 (quoting Precision, 971 F.2d at 552). The public disclosure bar manifests and serves these purposes by requiring that, if information exists in one of the enumerated sources, and if that information has been publicly disclosed, only an original source of the information may sue. Consideration of the circumstances at issue here reveals several reasons that exercising jurisdiction would not serve the FCA's purposes of encouraging exposure of fraud or preventing parasitic suits. 33 First, where a government employee has a duty to report fraud, as Holmes does as postmaster, the information underlying that employee's suit does not constitute information that the government would not otherwise uncover. The duty to report itself assures that her information is the government's information. Thus, this is a case of fraud allegations that the government is capable of pursuing. 10 34 Second, an ongoing government investigation demonstrates that the government is in fact pursuing the allegations of fraud. This is true even if, until the government actually initiates an enforcement action, there may be uncertainty as to whether it will do so. Holmes participated in the government investigation pursuant to her duties as postmaster. With respect to that investigation, she is part of the governmental entity. Her qui tam action is not prodding the government to pursue fraud it would not otherwise pursue, because the undisputed facts show that the government is engaged in active pursuit. In fact, Holmes's own brief states plainly that this was not the purpose of her suit: After Relator was confident that the government was adequately investigating her information, she filed her lawsuit under the FCA to recover her lawful share of the proceeds. Therefore, permitting Holmes's qui tam suit would not serve this aspect of the FCA's purposes. 35 Third, these circumstances are not ones in which a private person needs to be encouraged to expose fraud. On the contrary, having acquired the information in the course of her duties as a postmaster, Holmes had a specific obligation as a postmaster to report it. Again we note that, in the performance of her duties as a postmaster, she is part of the governmental entity. As such, she acquired the information for the government. Moreover, a federal employee who reports a private company's fraud on the government does not have the same fear of reprisal that a company insider who acts as a whistleblower may have, further reducing the need for financial incentives to encourage them to disclose information about fraud. 11 36 Finally, allowing federal employees' qui tam suits in these circumstances would not serve, and would in fact contradict, Congress's goal of preventing parasitic suits. The purposes we have outlined create a contrast between public and private, between the federal government's information and private citizens' independent knowledge. In Ramseyer, we concluded that the public disclosure bar requires actual, not merely theoretical, disclosure. 90 F.3d at 1519. Underlying our reasoning was the assumption that potential qui tam relators do not have access to governmental information that has not been made public: 37 Information to which the public has potential access, but which has not actually been released to the public, cannot be the basis of a parasitic lawsuit because the relator must base the qui tam suit on information gathered from his or her own investigation. If a specific report detailing instances of fraud is not affirmatively disclosed, but rather is simply ensconced in an obscure government file, an opportunist qui tam plaintiff first would have to know of the report's existence in order to request access to it. 38 Id. at 1520. This rationale, however, does not apply to government employees who know of the allegations because of their jobs. Government employees frequently have access to government information even though it has not been publicly disclosed, as defined in Ramseyer. Thus, there is a potential for parasitic qui tam suits by government employees before public disclosure occurs, just as there is a potential for such suits by private persons following public disclosure. 12