Opinion ID: 171887
Heading Depth: 3
Heading Rank: 1

Heading: Role of Jurisdictional Bars in the False Claims Act

Text: Section 3730(b)(1) of the False Claims Act gives a private citizen the right to bring a cause of action on behalf of the United States government; in return, the citizen recovers a portion of the damages for himself. This encourages citizens who know of fraud against the government to bring that fraud to light and assist in enforcement, but also carries with it the risk of parasitic suits brought by relators who add little in value but siphon off part of the government's recovery (or, in the case of a meritless claim that the government has chosen not to pursue, perhaps to coerce a settlement through the threat of expensive litigation). Congress has therefore included a number of provisions that further[] the golden mean between adequate incentives for whistle-blowing insiders with genuinely valuable information and discouragement of opportunistic plaintiffs who have no significant information to contribute of their own. United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 540 F.3d 1180, 1184 (10th Cir.2008); see also United States ex rel. Precision Co. v. Koch Indus., Inc., 971 F.2d 548, 552 (10th Cir.1992) (Section 3730Civil actions for false claims, has two basic goals: 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.). One such provision is the public disclosure bar of 31 U.S.C. § 3730(e)(4)(A), which removes jurisdiction over an action based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or [GAO] report, hearing, audit, or investigation, or from the news media. The public disclosure bar has an exception for when the person bringing the action is an original source of the information. Id. To qualify as an original source, the individual must have 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. § 3730(e)(4)(B). The public disclosure bar is thus chiefly designed to separate the opportunistic relator from the relator who has genuine, useful information that the government lacks. With this in mind, we have held that a disclosure need not identify a defendant by name to trigger the public disclosure bar, so long as the disclosures are sufficient to set the government on the trail of the fraud as to [the] Defendants. In re Natural Gas Royalties Qui Tam Litigation, No. 06-8099, at 15; see also United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir.1995). If the government can readily identify the defendant from the public disclosure, then the bar is triggered unless the plaintiff can show he is an original source. In re Natural Gas Royalties Qui Tam Litigation, No. 06-8099, at 7. Although the district court dismissed Mr. Grynberg's mismeasurement claims under the public disclosure bar, it applied a different barthe first-to-file provision of § 3730(b)(5)to his CO2 claims. We have described this provision, like the public disclosure bar, as functioning to weed out parasitic claims. See Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 (10th Cir.2004) (Once the government is put on notice of its potential fraud claim, the purpose behind allowing qui tam litigation is satisfied.). But we have also recognized its additional purpose of creating an incentive for relators with valuable information to fileand file quickly. See id. (Further, original qui tam relators would be less likely to act on the government's behalf if they had to share in their recovery with third parties who do no more than tack on additional factual allegations to the same essential claim.); see also Wisconsin v. Amgen, Inc., 516 F.3d 530, 532 (7th Cir.2008) (Congress didn't want these bounty hunters piling into the first-filed suit and fighting over the division of the spoils, or, to the same end, bringing separate such suits.); Campbell v. Redding Med. Center, 421 F.3d 817, 821 (9th Cir.2005) (This is the first-to-file bar, which encourages prompt disclosure of fraud by creating a race to the courthouse among those with knowledge of fraud.). The first-to-file bar thus functions both to eliminate parasitic plaintiffs who piggyback off the claims of a prior relator, and to encourage legitimate relators to file quickly by protecting the spoils of the first to bring a claim.