Opinion ID: 3031341
Heading Depth: 5
Heading Rank: 7

Heading: Counts Ten and Eleven: Allegations of False

Text: and Reverse False Claims Stemming From Misrepresentations Regarding Contract Modifications These allegations revolve around alleged implicit representations made by Penn Ship’s President, Ronald J. Stevens, during negotiations over Modifications 05 and 11 to the Oiler contract.34 Atkinson asserts that Stevens impliedly promised that Penn Ship would perform under the Modification terms and that Penn Ship had perfected the Navy’s security interests under the Trust Indenture. But, asserts Atkinson, Penn Ship had no intention of performing under the Modifications and had not recorded the security instruments. The intent not to record is gleaned in part from the eventual failure to do so. Atkinson also alleges that had Fidelity either recorded the 33 Atkinson, as he did for count six, argues that these counts are viable as acts in furtherance of the conspiracy in count one. Because there is no jurisdiction over count one, this argument is unavailing. Similarly, these counts cannot survive as aspects of the Trust Indenture fraud alleged in count six because there is no jurisdiction over that claim. 34 Modification 05 deleted the two option Oilers from the contract and changed Penn Ship’s reimbursement regime to a fixed price agreement. Modification 11 provided for an advance payment from the Navy to Penn Ship of up to $17 million to be secured by a floating drydock. 48 instruments itself or informed the Navy of their non-recordation, the Navy would never have agreed to the Modifications. The District Court broke down these counts into three separate transactions to facilitate the jurisdictional analysis under Springfield Terminal, and we find this approach helpful. (A) Penn Ship’s representation that it would perform under Modifications 05 and 11: X: Penn Ship implicitly represents that it will perform. Y: Penn Ship has no intention of performing as evidenced by the failure to record. (B) Penn Ship’s representation that it had perfected the Navy’s security interests under the Trust Indenture: X: Penn Ship implicitly represents that it has perfected the security interests. Y: Penn Ship does not record the security interests. (C) Fidelity’s breach of its fiduciary duty to the Navy: X: Fidelity promises to serve as fiduciary 49 by agreeing to be trustee. Y: Fidelity breaches the duty by convincing the Navy not to insist upon a delivery provision, failing to ensure that the instruments are promptly and properly recorded, and by failing to sign the financing statements. The X element of transactions A and B can be addressed easily. It is the Modifications themselves that provide the basis for inferring the existence of an implied representation, and these were publicly disclosed within the meaning of § 3730(e)(4)(A). Atkinson contends, however, that the Y element of transactions A and B (failure to record) was not publicly disclosed. We have already addressed this argument and held, like the District Court, that the non-recordation was publicly disclosed under § 3730(e)(4)(A) in the response to Schorsch’s 1993 FOIA request and in the DoD IG Report. As discussed above, we part ways with the District Court on its conclusion that Atkinson is an original source of the non-recordation. We hold that the District Court was without jurisdiction to hear these counts to the extent they rely upon allegations and transactions set forth in transactions A and B. Turning to transaction C, both the X and Y elements of this transaction were publicly disclosed as well. The X element, Fidelity’s promise to serve as fiduciary, was revealed when the Trust Indenture was turned over following a FOIA request. Stinson, 944 F.2d at 1160. We have already established that the 50 components of the Y element (Fidelity’s breach of fiduciary duty) were publicly disclosed under § 3730(e)(4)(A) and Atkinson does not appear to contest this assertion. Atkinson is not an original source of the X element because he learned of it from the Trust Indenture which was publicly disclosed for purposes of § 3730(e)(4)(A). Likewise, for the reasons now referred to and relied upon numerous times, Atkinson is not an original source of Fidelity’s failure to ensure recordation by mere virtue of the fact that he learned of the non-recordation by examining publicly available county records. Because each element of the C transaction is based upon public disclosures and Atkinson is not an original source, the District Court properly dismissed these counts under Rule 12(b)(1) for lack of subject matter jurisdiction.35