Court Opinion

ID: 4249146
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:00:37.180934+00
Date Added: 2024-06-11T07:48:11.325992
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 28 2018
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES ex rel. JUAN HONG, A              No.    16-55851
Law Corp,
                                                D.C. No.
                Plaintiff-Appellant,            8:13-cv-01164-JLS-JPR

 v.
                                                MEMORANDUM*
NEWPORT SENSORS, INC; et al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                   Josephine L. Staton, District Judge, Presiding

                      Argued and Submitted February 5, 2018
                               Pasadena, California

Before: W. FLETCHER, BERZON, and OWENS, Circuit Judges.

      Relator Juan Hong, A Law Corporation (“Relator”) appeals from the

dismissal of his qui tam False Claims Act (“FCA”) suit against the engineering

firm Newport Sensors, Inc. and its founder, Dr. Maria Q. Feng (together,

“Newport”). The district court granted Newport’s motion to dismiss on the ground

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
that Relator’s claims were barred by the FCA’s jurisdictional public-disclosure bar.

As the parties are familiar with the facts, we do not recount them here. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

      1. The district court did not abuse its discretion in taking judicial notice of

the seven documents that Newport submitted to demonstrate public disclosure. See

Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).

      Under Federal Rule of Evidence 201, a court may take judicial notice of a

fact that is “not subject to reasonable dispute,” either “because it is generally

known within the court’s territorial jurisdiction,” or because it “can be accurately

and readily determined from sources whose accuracy cannot reasonably be

questioned.” Fed. R. Evid. 201(b). Notably, Newport requested—and the district

court granted—judicial notice of the seven documents “not for the truth of the

information” contained within them, but “merely to show that [the] information

was publicly available.” While Relator challenges the accuracy of Dr. Feng’s

faculty profile from the website of the University of California, Irvine (“UC

Irvine”), he does not dispute the authenticity of the website itself, nor does he

dispute Newport’s suggestion that the profile was publicly available on that site.

Accordingly, the fact of the seven documents’ public availability was not disputed

by the parties nor “subject to reasonable dispute,” and so the district court did not

abuse its discretion in taking judicial notice of that fact. Cf. Daniels-Hall v. Nat’l

                                           2
Educ. Ass’n, 629 F.3d 992, 998–99 (9th Cir. 2010).

      Even assuming the seventh document, the SEC filing, was improper

evidence raised for the first time in a reply, cf. Provenz v. Miller, 102 F.3d 1478,

1483 (9th Cir. 1996), the other six documents adequately support Newport’s

argument: that public documents revealed Dr. Feng’s role at Newport Sensors,

Inc., and her simultaneous employment as a professor at UC Irvine. Accordingly,

if the district court erred in taking judicial notice of the SEC filing, that error was

harmless.1

      2. The district court correctly found that Relator’s claims were “based

upon” publicly disclosed transactions, justifying dismissal for lack of subject-

matter jurisdiction. See United States ex rel. Mateski v. Raytheon Co., 816 F.3d
565, 570–74 (9th Cir. 2016).

      At all times relevant, the FCA prohibited “knowingly present[ing], or

caus[ing] to be presented, . . . a false or fraudulent claim for payment or approval;

[or] knowingly mak[ing], us[ing], or caus[ing] to be made or used, a false record or

statement to get a false or fraudulent claim paid or approved” by the federal

government. 31 U.S.C. § 3729(a)(1), (2) (2006). To weed out FCA claims not

      1
          Relator further argues that the district court erred in taking judicial notice
of those documents because the declaration of Newport’s counsel, to which the
first six documents are attached, fails to state that the statements within are “true
and correct.” The district court rejected this argument because the declaration is
properly sworn and certified. This was not an abuse of discretion.

                                            3
based on genuine whistleblower information, the FCA contains a “public-

disclosure bar” that requires dismissal of any claim grounded on publicly available

information, such as a government report or a news article. See Graham Cty. Soil

& Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 294–95

(2010). As enacted in 1986,2 the public-disclosure bar provides that

            No court shall have jurisdiction over an action under this
            section based upon the public disclosure of allegations or
            transactions in a criminal, civil, or administrative hearing,
            in a congressional, administrative, or Government
            Accounting Office report, hearing, audit, or investigation,
            or from the news media, unless the action is brought by the
            Attorney General or the person bringing the action is an
            original source of the information.

Pub. L. No. 99-562, 100 Stat. 3153, 3157 (1986) (codified as amended at 31 U.S.C.

§ 3730(e)(4)(A)).

      Relator’s claim is “based upon” the allegedly fraudulent “transaction”

disclosed in the seven judicially-noticed documents—that is, that Dr. Feng was

simultaneously employed as a professor at UC Irvine and as the principal

investigator at Newport Sensors, Inc. See Raytheon, 816 F.3d at 570–73. Finally,

      2
         Though the public-disclosure provision was amended by the Patient
Protection and Affordable Care Act in 2010, Pub. L. No. 111-148, 124 Stat. 119
(2010); see also United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d
1121, 1123 n.1 (9th Cir. 2015) (en banc), the district court applied the pre-2010
version. On appeal the parties do not dispute that the pre-2010 version applies to
the claims in this case. Accordingly, we assume for purposes of this appeal that
the pre-2010 version applies.

                                         4
Relator argues that the UC Irvine webpage cannot qualify as “news media,” one of

the designated channels for public disclosure under the FCA, because the

webpage’s disclaimer renders it too unreliable to come within that category. We

have already rejected that argument. Relator does not independently challenge the

district court’s broad holding that most public webpages, including the UC Irvine

faculty profile, generally fall within the category of “news media.” Accordingly,

we do not address that argument here. See Loher v. Thomas, 825 F.3d 1103, 1120

(9th Cir. 2016).3

      AFFIRMED.

      3
        Relator also raises several technical challenges to the district court’s order:
that Newport’s “Notice of Motion and Motion to Dismiss and Strike” fails to “state
with particularity” Newport’s public-disclosure argument; that this same Notice
mislabels the declaration submitted in support of Newport’s motion to dismiss; and
that Newport failed to cite Federal Rule of Evidence 12(b)(1) in its motion to
dismiss, despite the jurisdictional nature of the pre-2010 public-disclosure bar.
The district court rejected these arguments, and as Relator has alleged no prejudice
resulting from the mistakes or the district court’s acceptance of them, none
warrants reversal.

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