Court Opinion

ID: 9489739
Source: CourtListenerOpinion
Date Created: 2023-08-05 13:22:51.252146+00
Date Added: 2024-06-11T17:53:41.249675
License: Public Domain

HENRY, Circuit Judge,
concurring.
I concur in the majority’s result, but write separately to express my disagreement with the its analysis of part of the public disclosure issue and to voice my concern with the expansive interpretation of “based upon” to which our circuit has bound itself in United States ex rel. Precision Co. v. Koch Indus., 971 F.2d 548 (10th Cir.1992), cert. denied, 507 U.S. 951, 113 S.Ct. 1364, 122 L.Ed.2d 742 (1993).
First, the majority holds that the disclosure of the April 9 memorandum by Mr. Fine to Donald Sikora of the American Association of Retired Persons was a “public disclosure.” Op. at 1006. This disclosure was made in the context of Mr. Sikora’s representation of Mr. Fine during an age discrimination-case that Mr. Fine brought against the Department of Energy. The majority cites Precision for the proposition that “a reviewing court should not evaluate the quality and quantity of information in the public domain as part of its jurisdictional inquiry.” Id. (citing Precision, 971 F.2d at 553). Although I agree *1008that the court should not attempt such an inquiry, the stated proposition presupposes that the information is in the “public domain.” Here, the April 9 memorandum was only given to Mr. Sikora in the context of Mr. Sikora’s representation of Mr. Fine during an age discrimination proceeding; Mr. Siko-ra appears to have been, in legal terms, an agent of Mr. Fine. Certainly, discussing a potential qui tam suit with one’s lawyer does not amount to a public disclosure. Similarly, an employee’s discussion of allegations of fraud with his representative in an age discrimination case, when such allegations may have led to his discharge, cannot amount to a public disclosure.
I concur with the majority, however, based upon the disclosure of the March 20 letter to Mr. Burt Mazer of Birnbaum & Associates. This letter contained allegations that Advanced Sciences, Inc. had claimed unallowa-ble costs and was widely disseminated to the public. Mr. Fine himself stated in deposition testimony that “God, I think, received a copy of it. This went all over the country.” Aple’s Br. at 15 n. 9 (citing Aplt’s App. at 288). Unlike Mr. Sikora, Mr. Mazer clearly had no obligation to keep the allegations made in the March 20 letter secret. Mr. Sikora, as Mr. Fine’s agent, could neither disclose to others nor use for his own benefit the information disclosed to him by Mr. Fine during the course of the representation. See Restatement (Second) of Agency § 387 (1958) (“Unless otherwise agreed, an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency.”). Mr. Mazer, on the other hand, was under no fiduciary duty to Mr. Fine or the Department of Energy, when Mr. Fine sent him the March 20 letter seeking his opinion of the allegations contained therein. Thus, Mr. Fine’s disclosure of the March 20 letter to Mr. Mazer, who was a stranger to the fraud and was under no obligation to keep the letter secret, amounts to a public disclosure for the purpose of qui tam jurisdiction.
My second reason for writing separately is to express my concern with Precision’s expansive definition of “based upon”: “[a] qui tam action even partly based upon publicly disclosed allegations or transactions is nonetheless ‘based upon’ such allegations or transactions.” Precision, 971 F.2d at 552. I believe this definition overly restricts qui tam jurisdiction and substantially thwarts the important goal of qui tam suits to uncover fraud against the government. The District of Columbia Circuit writes:
The remedial purposes of the [Fraud Claims Act] are inadequately served by an expansive interpretation of the jurisdictional bar that prevents qui tam suits when only innocuous or spotty informar tion — insufficient in itself to constitute an allegation of fraud or to reveal the essential elements of a fraudulent transaction — exist in the public domain. The goal of avoiding suits that merely drain the public fisc is amply advanced by a construction of [31 U.S.C.] § 3730(e)(4)(A) that bars suit only when specific allegations of fraud or the vital ingredients to a fraudulent transaction exist in the public eye.
See United States ex rel. Springfield Terminal Ry. v. Quinn, 14 F.3d 645, 657 (D.C.Cir.1994) (emphasis added).
By creating such a “quick trigger” to the original source analysis, see id., Precision ignores the fact that much fraud is discovered at the management level where individuals receive information from many disparate sources and “put the puzzle together” to uncover the fraud. The “original sources” will often only see small pieces of a large puzzle and hence, be unable'to put it together. See 31 U.S.C. § 3730(e)(4)(B) (restricting “original source” to individuals “who ha[ve] direct and independent knowledge of the information on which the allegations are based”).
I do not suggest a strict “derived from” test where the qui tam complaint must derive solely from the publicly disclosed information, as such a scheme would lead to artful pleading as Precision suggests, see id. I merely suggest the court determine whether the qui tam complaint logically follows from information in the public domain. See I The Oxford English Dictionary 979 (2d ed. 1989) (defining “base” as “[t]o place on or upon a foundation or logical basis”). Thus, if a piece *1009of information disclosed to a member of the public, supports the complaint, but would not in and of itself provide the logical basis for that person to make allegations similar to those in the complaint, qui tarn jurisdiction should ensue.
However, as this court is bound by the definition of “based upon” given in Precision, I must concur in the result of this case. I note that under my formulation, Mr. Fine’s complaint is “based upon” the March 20 letter, which contained allegations that Advanced Sciences, Inc. had claimed unallowa-ble costs. These allegations form the basis of Mr. Fine’s complaint.