Opinion ID: 388061
Heading Depth: 2
Heading Rank: 1

Heading: The Requirements of Section 232(C)

Text: 7 The False Claims Act 22 was adopted during the Civil War, a time when massive frauds were being committed against the Government. 23 To encourage action against defrauders, 24 Congress authorized private citizens to bring civil actions against wrongdoers on the Government's behalf, and to retain half of any recovery. 25 The Act's original language permitted a plaintiff to launch a suit and collect his share of the damages even when he contributed absolutely nothing to exposure of the crime, 26 however, and this provision was much abused in later years by piranha-like plaintiffs who sued solely on the basis of information already contained in governmental files and indictments. 27 The Act was therefore amended in 1943 28 to permit only those persons unveiling new information to sue: 8 The court shall have no jurisdiction to proceed with any such suit brought under clause (B) of this section or pending suit brought under this section whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States, or any agency, officer, or employee thereof, at the time such suit was brought.... 29 9 The District Court concluded that appellant had not surmounted this statutory barrier because the Secretary of the Senate had in his files Senator Cannon's written designation of Sobsey to administer campaign contributions. 30 We cannot, however, subscribe to this holding. Merely because the Government holds some information related to an allegedly false claim does not mean that suit under the Act is barred by Section 232(C). As the Ninth Circuit has trenchantly observed: 10 To require that the evidence and information possessed by the United States be a mirror image of that in the hands of the qui tam plaintiff would virtually eliminate the bar. On the other hand, to permit the bar to be invoked when the United States possesses only rumors while the qui tam plaintiff has evidence and information would be to permit the bar to repeal effectively much of the False Claims Act. Between these extremes lies the answer. 11 More precisely, the answer rests in that area where it is possible to say that the evidence and information in the possession of the United States at the time the False Claims Act suit was brought was sufficient to enable it adequately to investigate the case and to make a decision whether to prosecute. 31 12 The question, properly, then, is whether the information conveyed by the designation transmittal to the Secretary of the Senate could have formed the basis for a governmental decision on prosecution, or could at least have alerted law-enforcement authorities to the likelihood of wrongdoing; quite obviously it could have had no such effect. The designation, filed in accordance with then Senate Rule 43(1), 32 revealed only that Sobsey was authorized to solicit and handle campaign contributions. And because Sobsey could have discharged this function without neglecting his official duties in any way, the Rule 43 filing by itself cannot be deemed to have adequately informed the Government of possible wrongdoing by either Senator Cannon or his aide. Only when combined with appellant's allegation that Sobsey completely disregarded his duties as the Senator's administrative assistant does any possibility of a cause of action emerge. This case thus differs radically from those where the Government possessed comprehensive and crucial evidence prior to initiation of a Section 231 suit. 33 Since the information the Government derived from the Senator's designation was innocuous by itself, we conclude that Section 232(C) does not apply and that the District Court improperly predicated its dismissal of count one upon that provision.