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US Ex Rel. Karen T. Wilson v. Graham County Soil & Water, 4th Cir. (2015)
US Ex Rel. Karen T. Wilson v. Graham County Soil & Water, 4th Cir. (2015)
No. 13-2345
Appeal from the United States District Court for the Western
District of North Carolina, at Bryson City.
Martin K.
Reidinger, District Judge. (2:01-cv-00019-MR)
Argued:
December 9, 2014
Decided:
February 3, 2015
I.
We need only briefly recount the factual and procedural
history.
Watershed
Protection
Program
(EWP
Program).
See
Forest
assistance
to
Service,
eligible
the
states
EWP
and
3
Program
provides
political
financial
subdivisions
to
relieve
imminent
hazards
. . . created
by
natural
disaster
Id. 624.2.
Relator
Karen
Wilson,
worked
at
the
Graham
Graham
County
received
approval
for
the
EWP
Soon
Program,
colleagues
at
the
SWCD,
but
also
by
NRCS
officials
who
USDA
Richard
Special
Agent
Gallo
outlining
her
concerns.
and
William
Timpson,
had
agreed
with
the
independent
that the
Graham
County
SWCD
had
chosen
as
its
independent
Gallo, the Graham County SWCD was at that time being audited by
county auditors.
Four months later, in April 1996, those auditors formalized
their findings in an Agreed Upon Procedures Report (the Audit
Report)
SWCDs
detailing
handling
several
of
characterized
Orrs
Countys
of
code
the
problems
EWP
with
program.
hiring
as
conduct,
and
likely
pointed
to
the
Graham
County
The
Audit
Report
violation
a
lack
of
of
the
proper
Graham County received four copies of the Audit Report, two for
the Countys own records, and one each for the Graham County
Soil & Water Conservation District and . . . the US Department
of Agriculture, should you be required to distribute copies to
them.
responsible for the Audit Report also reported sending one copy
to the North Carolina Local Government Commission and one to the
North Carolina Division of Soil and Water Conservation.
The
Audit
suspicions.
another
USDA
Report
failed
to
put
an
end
to
Wilsons
Agent,
A.
5
Kenneth
Golec,
not
only
The
In August 1997,
and
your
warning
agency
that
.
it
was
without
not
to
prior
be
distributed
clearance
from
the
qui
tam
2001,
Wilson
filed
suit
under
the
FCAs
Counties.
In
2006,
Wilson
filed
her
third
amended
years, and decisions of both this court and the Supreme Court,
have eliminated several of Wilsons claims for relief, her core
FCA
claims
pertaining
to
the
EWP
6
Program
in
both
counties
II.
In
its
qui
tam
provision,
the
False
Claims
Act
permits
Graham
statutes
earlier
version,
which
applies
to
this
the
public
to
expose
fraud
on
the
one
hand,
and
United States ex
rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1348 (4th
Cir.
1994)
(citation
omitted).
In
short,
it
mandates
the
Pursuant to
(2)
whether
disclosures;
nonetheless
an
Wilson
and
original
based
her
claims
(3)
if
so,
whether
source
of
those
claims.
on
any
such
Wilson
was
See
United
the court concluded that both the Audit Report and the USDA
Report had been publicly disclosed, that Wilson based her claims
on these reports, and that she was not an original source of any
of those claims.
therefore
dismissed
Wilsons
action
in
its
holding
Id. at 776.
jurisdictional
findings
is
deferential.
United
States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 350 (4th Cir.
2009).
it
is
clearly
erroneous.
Id.
at
348.
The
legal
III.
To sustain the district courts holding, we must find that
the court correctly concluded that (1) all relevant reports had
been
publicly
disclosed,
and
(2)
Wilson
based
her
claims
on
those public disclosures, and (3) Wilson was not the original
source of her claims.
the
fraud,
because
USDA
Report,
constituted
they
had
both
public
been
of
which
contained
disclosures
distributed
of
to
allegations
relevant
public
of
reports
officials
The distribution
courts
Id.
factual
the
court
applied
an
upon
the
transactions
in
an
public
audit
3730(e)(4)(A) (2006).
Report
clearly
disclosure
qualify
or
of
allegations
investigation.
31
or
U.S.C.
eligible
sources
under
controlling
plain
that
affirmative
meaning
they
act.
of
were
See
the
phrase
not.
Websters
public
Disclosure
Third
New
disclosure
requires
an
International
By specifying
had
jurisdictional
significance.
Neither
the
Audit
holding
to
disclosed
the
--
contrary
the
--
district
that
court
the
reports
quoted
and
were
almost
on which the relator based her qui tam action had been publicly
disclosed because it had been disclosed to a competent public
official.
Id. at 861.
the
disclosure,
not
rather
to
Bank
of
actually
public
Farmington
made
to
official,
11
the
court
public
sufficed
held
at
to
that
large,
trigger
a
but
the
relevant
oversight,
the
reports
had
been
publicly
disclosed.
No
other
circuit,
however,
has
adopted
the
Seventh
rel. Oliver v. Philip Morris USA, Inc., 763 F.3d 36, 42 (D.C.
Cir. 2014); United States ex rel. Meyer v. Horizon Health Corp.,
565 F.3d 1195, 1200 & n.3 (9th Cir. 2009); United States ex rel.
Rost
v.
Pfizer,
overruled
on
Inc.,
other
507
grounds
F.3d
by
720,
Allison
730
(1st
Engine
Cir.
Co.
v.
2007),
United
the
superfluous
government
with
public
disclosure
the
bar
only
the
public,
bars
rendering
namesake
phrase.
applies
when
allegations
or
transactions
As we have
noted in the past, the FCAs public disclosure bar is far from
a model of careful draftsmanship.
305.
sources
from
which
qui
tam
relator
could
acquire
Schindler Elevator
th[is]
so-called
Government
knowledge
bar
with
governments
public
Id.
awareness
disclosure
bar
of
potential
would
fraud
essentially
triggers
the
reinstate
the
Oliver, 763
In short, while both the Audit Report and the USDA Report
were disclosed to government officials charged with policing the
type of fraud Wilson alleges, nothing in the record suggests
that either report actually reached the public domain.
Thus,
the
reports
were
disclosed
to
state
and
local
and
shared
it
with
in,
or
other
local,
federal
involved
Program.
state
agencies
with
enforcement
14
the
and
entities
with
overseeing,
state,
cooperative
responsibilities.
EWP
In
neither
instance
did
the
relevant
information
move
beyond
USE
ONLY.
It
and
its
contents
are
not
to
be
Court
explained
at
an
earlier
juncture
in
As the
this
very
case:
Just how accessible to the Attorney General a typical
state or local source will be, as compared to a
federal source, is an open question. And it is not
even the right question.
The statutory touchstone,
once again, is whether the allegations of fraud have
been public[ly] disclos[ed], 3730(e)(4)(A), not
whether they have landed on the desk of a DOJ lawyer.
Graham Cnty., 559 U.S. at 299-300; see also United States ex
rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 540 F.3d 1180, 1184
3
(10th
Cir.
between
2008)
federal
and
(finding
certain
information
state
government
not
transferred
publicly
disclosed
that
such
information
has
been
We simply cannot
made
public
without
pivot
slightly
from
that
courts
rationale.
They
argue that the Audit Report entered the public domain because it
would have been available to the public via a public records
request.
disclosed
because
receive
the
members
audit,
both
of
the
[u]nder
public
the
could
North
Carolina
10-11.
The
distinguish
available
argument
between
--
upon
is
meritless.
information
request
--
information
or
399
F. Appx
at
776
(quoting
United
Public
fail
to
potentially
affirmatively
and
Appellees
Appellees
theoretically
and
request
States
Graham
ex
rel.
circuits
placed
[a]
has
report
noted,
in
its
state
agency
investigative
As one of our
that
file
and
has
simply
restricted
it
has
not
publicly
disclosed
that
report
within
the
Records
Act.
But
the
district
court
made
no
such
recollection
instructions,
secretary
at
the
comports
but
Graham
also
County
not
only
with
common
SWCD,
Wilson
with
the
cover
sense.
spoke
As
with
a
and
Thus, she
Nothing
Far
that
insider[]
she
the
is
precisely
statute
18
seeks
the
to
sort
of
encourage.
whistleGraham
IV.
Satisfied that nothing triggered the public disclosure bar
in this case, we hold that the district court had jurisdiction
over this action.
the
limited
issue
of
subject-matter
jurisdiction.
Whether