Grynberg ex rel. United States v. Pacific Gas & Electric Co.

562 F.3d 1032, 174 Oil & Gas Rep. 136, 2009 U.S. App. LEXIS 5912
CourtCourt of Appeals for the Tenth Circuit
DecidedMarch 17, 2009
DocketNos. 06-8099, 06-8101, 06-8102, 06-8103, 06-8104, 06-8105, 06-8106, 06-8107, 06-8108, 06-8110, 06-8111, 06-8112, 06-8120, 06-8121, 06-8123, 06-8124, 06-8125, 06-8127, 06-8129, 06-8130, 06-8131, 06-8132, 06-8133, 06-8135, 06-8136, 06-8141, 06-8145, 06-8147, 06-8149, 06-8151, 06-8157, 06-8159, 06-8160, 06-8161, 06-8164, 06-8166, 06-8168, 06-8170, 06-8171, 06-8172, 06-8173, 06-8174, 06-8176, 06-8177, 06-8178
StatusPublished
Cited by5 cases

This text of 562 F.3d 1032 (Grynberg ex rel. United States v. Pacific Gas & Electric Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grynberg ex rel. United States v. Pacific Gas & Electric Co., 562 F.3d 1032, 174 Oil & Gas Rep. 136, 2009 U.S. App. LEXIS 5912 (10th Cir. 2009).

Opinion

McKAY, Circuit Judge.

In these consolidated appeals, Relator-Appellant Jack Grynberg appeals the district court’s dismissal of a large number of coordinated qui tam cases Relator had brought against numerous natural gas pipelines and other companies involved in measuring natural gas produced from federal or Indian lands.1 The district court dismissed the cases for lack of subject matter jurisdiction under 31 U.S.C. § 3730(e)(4), holding that Relator’s complaints were based upon publicly disclosed allegations and that Relator was not an original source of the information upon which the allegations in his complaints were based. We affirm.

Background

Beginning in June of 1997, Relator filed a series of seventy-three lawsuits under the qui tam provisions of the False Claims Act against a large number of natural gas pipeline companies and their various parents, subsidiaries, and affiliates, accusing them of underpaying royalties to the government in violation of 31 U.S.C. § 3729(a)(7). Each complaint accused the Defendants named therein of utilizing several identified mismeasurement techniques [1038]*1038to knowingly underreport or cause others to underreport the heating content and volume of gas, with a resultant underpayment of federal royalties. Most of the alleged mismeasurement techniques were common to all seventy-three cases.

The cases were transferred as multidistrict litigation to the District of Wyoming, where Defendants filed motions to dismiss for lack of subject matter jurisdiction. Under the direction of a special master, the parties conducted limited discovery on this issue. Because the special master and district court considered evidentiary materials and because the jurisdictional question was intertwined with the merits, the special master and district court properly treated Defendants’ motions to dismiss as motions for summary judgment under Rule 56(c) of the Federal Rules of Civil Procedure. See United States ex rel. Hafter v. Spectrum Emergency Care, Inc., 190 F.3d 1156, 1159 (10th Cir.1999).

In his report and recommendations, the special master concluded that forty of the seventy-three cases should be dismissed under § 3730(e)(4) because the allegations in these cases had been publicly disclosed and Relator was not an original source of the information upon which the allegations were based. The special master concluded that the remaining thirty-three cases were not jurisdictionally barred because none of the Defendants in these cases were identified in any public disclosure alleging mismeasurement of natural gas. The district court adopted in part and modified in part the special master’s report, holding that all of the cases were barred under § 3730(e)(4) because the publicly disclosed allegations of widespread mismeasurement were sufficient to set the government on the trail of the fraud as to all Defendants and Relator did not fit within the original source exception to the public disclosure bar. The court therefore entered judgment in favor of Defendants in each of the seventy three cases.2

On appeal, Relator challenges the district court’s conclusions that the public disclosure bar was triggered as to all Defendants and that Relator was not an original source of the information upon which the allegations were based. We review these issues of subject matter jurisdiction de novo, employing the same legal standard as the district court. See United States ex rel. Grynberg v. Praxair, Inc., 389 F.3d 1038, 1047 (10th Cir.2004).

Discussion

The False Claims Act imposes liability on any person who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government.” 31 U.S.C. § 3729(a)(7). The FCA’s qui tarn provisions allow a private individual, known as a relator, to bring a civil action on behalf of the government against such persons and to share in any resulting government recovery. See Kennard v. Comstock Res., Inc., 363 F.3d 1039, 1041 (10th Cir.2004) (citing 31 U.S.C. § 3730(b)(1) and (d)). “The purpose of the FCA ‘is to enhance the Government’s ability to recover losses sustained as a result of fraud against the Government.’ ” Praxair, 389 F.3d at 1041 (quoting S.Rep. No. 99-345, at 1 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5266). To further that purpose, Congress has sought through the qui tarn provisions to achieve “ ‘the golden [1039]*1039mean between adequate incentives for whistle-blowing insiders with genuinely valuable information and discouragement of opportunistic plaintiffs who have no significant information to contribute of their own.’ ” United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir.1995) (quoting United States ex rel. Springfield Terminal Ry. v. Quinn, 14 F.3d 645, 649 (D.C.Cir.1994)). Accordingly, a relator’s action will be jurisdictionally barred if it is based on allegations or transactions already in the public domain unless the relator can show that he is an “original source” of the information on which the allegations are based. 31 U.S.C. § 3730(e)(4)(A). “If jurisdiction is challenged, the burden is on the party claiming jurisdiction to show it by a preponderance of the evidence.” Hafter, 190 F.3d at 1160.

To determine whether the FCA’s public disclosure bar has been triggered, we consider “(1) whether the alleged ‘public disclosure’ contains allegations or transactions from one of the listed sources; (2) whether the alleged disclosure has been made ‘public’ within the meaning of the FCA; [and] (3) whether the relator’s complaint is ‘based upon’ this ‘public disclosure.’ ” United States ex rel. Holmes v. Consumer Ins. Group, 318 F.3d 1199, 1203 (10th Cir.2003). If each of these three questions is answered in the affirmative, the public disclosure bar is triggered and the relator must demonstrate original source status in order to proceed with his qui tam action. United States ex rel. Fine v. Advanced Scis., Inc., 99 F.3d 1000, 1004 (10th Cir.1996).

Public Disclosure

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Bluebook (online)
562 F.3d 1032, 174 Oil & Gas Rep. 136, 2009 U.S. App. LEXIS 5912, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grynberg-ex-rel-united-states-v-pacific-gas-electric-co-ca10-2009.