Court Opinion

ID: 9491689
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:20:44.879778+00
Date Added: 2024-06-11T17:54:53.308206
License: Public Domain

KLEINFELD, Circuit Judge,
dissenting:
I respectfully dissent.
The question of whether Biddle’s disclosure was voluntary is difficult, and were it *544not for Hagood v. Sonoma County Water Agency, 81 F.3d 1465 (9th Cir.1996), I would not dissent. But the petition for rehearing persuades me that Hagood cannot properly be distinguished from our decision in the case at bar.
In Hagood, we held that an attorney employed by the Army Corps of Engineers was an original source, despite his fiduciary responsibility as an attorney to disclose to his superiors what he thought the law required. In Hagood, we distinguished United States ex rel. Fine v. Chevron, 72 F.3d 740 (9th Cir.1995), on the ground that “Hagood’s job was not to expose fraud, but to draft contracts and perform other legal services for the Corps.” I did not agree, because in my view a lawyer cannot be a mere scrivener, and by reason of his employment as a lawyer has a fiduciary responsibility to give his client his honest opinion, and may not knowingly assist in committing a fraud. Hagood, 81 F.3d at 1479 (Kleinfeld, J., concurring). But the majority’s view in Hagood, not mine, is the law.
Biddle thought Stanford’s lavish spending on what it considered overhead violated its contract terms. He duly reported what he thought were violations of contract specifications to his superiors. But they did not act on his reports. Instead they told him “You’re not a bean counter now, you’re an ACO.” That meant, in context, that in his superiors’ view, further reports of what he regarded as contract violations were not his job. Up to where he was told that further such reports were not his job, I agree with the majority that Biddle made no voluntary disclosure, and was just doing the job he was getting paid for.
But then Biddle did something that was not his job. He continued to do the audits he had been told were not his job, told a committee of Congress what he had found, and triggered an investigation. The investigation bore fruit. Biddle wants his slice of the fruit, under the qui tam act. I think he voluntarily made the disclosure to Congress, so is entitled to be treated as an original source for purposes of the statute.
The regulation upon which the majority relies says that Biddle was to ensure compliance with the terms of contract, “safeguarding the interests of the United States.” 48 C.F.R. § 1.602-l(a). I do not see how this regulation took away the voluntariness of Biddle’s report to Congress of Stanford University’s wrongdoing, when in Hagood a Corps of Engineers lawyer’s duty to tell the United States as his client that- the cost allocation in a contract he was drawing up was fraudulent did not.
Does Biddle mean that no government employee can recover in a qui tam case? We noted in Fine that an executive order obligates all government employees to “disclose waste, fraud, abuse, and corruption to appropriate authorities.” Fine, 72 F.3d at 744; see Executive Order No 12, 674, 54 Fed.Reg. 15,159, at § 101(k) (1989). That executive order is considerably clearer in obligating employees to report fraud than the regulation we rely on in the case at bar, so if the regulation in the case at bar eliminates vol-untariness, it would seem to follow a fortiori that the executive order cited in Fine eliminates voluntariness for all government employees.
We did not rest on the regulation in Fine, and the petition for rehearing in the case at bar points out the significance to our Fine decision of the fact that Fine’s “paramount” responsibility was ferreting out fraud. Also, as Judge Kozinski noted in his Fine concurrence, Inspector General employees have special protection from chain of command pressures. Fine, 72 F.3d at 746-47.
There is something to be said in favor of a very restrictive construction of “voluntary disclosure” for government employees. It will not do to have government employees save up fraud information they discover using their government power to enrich their retirements. But it is hard to conclude that a government employee’s duty of voluntary disclosure to appropriate authorities includes going over his boss’s head to a Congressional committee, and it is hard to reconcile so restrictive a construction with our own precedents, particularly Hagood.