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Jurisdiction Existed over Government Employee's FCA Action

A qui tam False Claims Act suit was not dismissed for lack of jurisdiction by the District Court for the District of Nebraska, because the relator, a government employee, sufficiently alleged he was the original source of information regarding the contractor's fraud. The relator was a government Quality Assurance Specialist assigned to work at a defense contractor's plant. According to the relator, the contractor violated the FCA (31 USC 3729) by "billing for services not rendered" and making "false submissions for certification" to the government. The contractor moved to dismiss, contending the relator previously made the same allegations in an unsealed pleading in a different lawsuit, and he could not avoid the FCA's "public disclosure" bar because he learned of the contractor's alleged fraud while working for the government. The FCA prevents district courts from exercising jurisdiction if the allegations underpinning the suit are based on certain publicly disclosed information, unless the person bringing the action is an original source of the information (31 USC 3730(e)(4)(A)). The relator did not dispute his pleadings in prior litigation constituted a public disclosure, and it was clear the allegations the relator made against the contractor in the instant action were also made in the prior proceeding.

Original Source

The contractor argued the relator was disqualified from bringing the instant action because he was required, as part of his duties, to provide information about fraud to the government. Under section 3730(e)(4)(B), a relator is deemed an original source if he has "direct and independent knowledge of the information on which the allegations are based" and has voluntarily provided the information to the government before filing suit. The FCA does not require a relator to have revealed the allegations to the government before public disclosure to qualify as an original source. Also, pursuant to the 1986 amendments to the FCA, a government employee who obtains information about fraud in the scope of his employment and is required to report that fraud is not prevented from acting as a relator. Here, the relator worked to ensure the quality of goods the contractor produced and, as alleged, he reported false claims made by the contractor to the government. It could not be determined from the face of the complaint if discovery and reporting of false claims was part of the relator's duties, but the relator sufficiently alleged he was the original source of alleged information based on direct and independent knowledge and he voluntarily provided the information to the government before filing his FCA action. (U.S. ex rel. Cox v. General Dynamics Armament and Technical Products, Inc., DC Neb, 54 CCF 79,241)




(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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