FILED NOT FOR PUBLICATION JUL 01 2010
MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
P. VICTOR GONZALEZ, Qui Tam No. 09-55010 Plaintiff, on behalf of the United States and State of California, D.C. No. 2:05-cv-08818-AHM- FMO Plaintiff - Appellant,
v. MEMORANDUM *
PLANNED PARENTHOOD OF LOS ANGELES, AKA Seal A; PLANNED PARENTHOOD SHASTA-DIABLO, AKA Seal B; PLANNED PARENTHOOD GOLDEN GATE; PLANNED PARENTHOOD MAR MONTE, AKA Seal D; PLANNED PARENTHOOD RIVERSIDE AND SAN DIEGO COUNTIES, INC., AKA Seal E; PLANNED PARENTHOOD ORANGE AND SAN BERNARDINO COUNTIES, INC., AKA Seal F; PLANNED PARENTHOOD PASADENA AND SAN GABRIEL VALLEY, INC., AKA Seal G; PLANNED PARENTHOOD SANTA BARBARA, VENTURA AND SAN LUIS OBISPO COUNTIES, INC., AKA Seal H; PLANNED PARENTHOOD SIX RIVERS, AKA Seal I; PLANNED PARENTHOOD AFFILIATES OF
* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. CALIFORNIA, AKA Seal J; MARY JANE WAGLE, AKA Seal K; MARTHA SWILLER, AKA Seal L; KATHY KNEER, AKA Seal M,
Defendants - Appellees.
Appeal from the United States District Court for the Central District of California A. Howard Matz, District Judge, Presiding
Argued and Submitted January 15, 2010 Submission Vacated January 20, 2010 Resubmitted for Decision June 29, 2010 Pasadena, California
Before: GOODWIN, SCHROEDER and FISHER, Circuit Judges.
P. Victor Gonzalez, relator, appeals the dismissal of his qui tam action
against Planned Parenthood of Los Angeles, et al. (“Planned Parenthood”), under
the federal False Claims Act (“FCA”) and the California False Claims Act
(“CFCA”).
The district court held that the FCA’s public disclosure bar at 31 U.S.C.
§ 3730(e)(4)(A) divested it of jurisdiction over the federal claim because the
contents of the FCA suit had been disclosed previously in a state court complaint
and a state legislative committee report, and because Gonzalez was not the original
source of the information previously disclosed. The district court additionally
2 dismissed the CFCA claim because Gonzalez had characterized the claim under the
state statute as “materially identical” to his claim under the federal FCA.
During the pendency of this appeal, two significant developments in the law
occurred. First, the Supreme Court issued a decision that interpreted part of the
jurisdictional provision at issue in this case. See Graham County Soil & Water
Conservation Dist. v. United States ex rel. Wilson, 559 U.S. ___, 130 S. Ct. 1396
(2010). Second, Congress amended the same jurisdictional provision as part of the
Patient Protection and Affordable Care Act (“PPACA”). See Pub. L. No. 111-148,
§ 10104(j)(2), 124 Stat. 119, 902 (2010).
The parties briefed these developments after argument, and they agree that
the PPACA’s statutory amendments should not be applied retroactively to this
case. We decide the case under the prior statute as interpreted by Graham County.
We review de novo the district court’s dismissal of a qui tam action on the basis of
§ 3730(e)(4)(A). United States ex rel. Meyer v. Horizon Health Corp., 565 F.3d
1195, 1198 (9th Cir. 2009).
To determine whether the jurisdictional bar of § 3730(e)(4) precludes a qui
tam action, we must first determine “whether there has been a prior public
disclosure of the allegations or transactions underlying the qui tam suit.” A-1
Ambulance Serv., Inc., v. California, 202 F.3d 1238, 1243 (9th Cir. 2000) (internal
3 quotation marks omitted). Once a public disclosure has occurred, the suit is
jurisdictionally barred unless the relator bringing suit is an “original source” of the
information disclosed. Id.
A disclosure is a “public disclosure” as contemplated by the statute only if
(1) the disclosure “originated in one of the sources enumerated in the statute,” and
(2) “the content of the disclosure consisted of the ‘allegations or transactions’
giving rise to the relator’s claim, as opposed to ‘mere information.’” Id. (quoting
Hagood v. Sonoma County Water Agency, 81 F.3d 1465, 1473 (9th Cir. 1996)).
The former statute identified three categories of enumerated sources: (1)
disclosures occurring “in a criminal, civil, or administrative hearing”; (2)
disclosures occurring “in a congressional, administrative, or Government
Accounting Office report, hearing, audit, or investigation”; and (3) disclosures
occurring “from the news media.” 31 U.S.C. § 3730(e)(4)(A) (2006).
Planned Parenthood contends that an audit by the California Department of
Health Services of Planned Parenthood of San Diego and Riverside Counties
constituted a prior public disclosure. The district court correctly rejected this
contention. Although Planned Parenthood argues that the audit was made public
when it was discussed in an e-mail on January 26, 2004, sent from Planned
Parenthood of San Diego to other Planned Parenthood affiliates in California, the
4 internal e-mail was not a “public disclosure” in any sense. Planned Parenthood
affiliates may be incorporated separately, but they all performed similar services,
maintained the same billing practices, and thus faced a common threat at that time.
The affiliates receiving the e-mail therefore had an incentive to keep the
information to themselves. There was no disclosure to an outsider. Cf. Seal 1 v.
Seal A, 255 F.3d 1154, 1161 (9th Cir. 2001).
The district court erred, however, when it held that a California Senate
committee report from August 9, 2004, was a prior disclosure that barred
Gonzalez’s qui tam action. The relevant provision barred any suit based on
information publicly disclosed in a “congressional, administrative, or Government
Accounting Office report . . . .” 31 U.S.C. § 3730(e)(4)(A) (2006). The Supreme
Court has now clarified that “congressional” denotes only the federal legislature,
and a state legislative report is therefore not an enumerated source under the prior
statute. See Graham County, 130 S. Ct. at 1402-03; see also United States ex rel.
Bly-Magee v. Premo, 470 F.3d 914, 917 (9th Cir. 2006). The state legislative
committee report therefore cannot serve as a jurisdictional bar to suit. The district
court, however, did not have the benefit of the Court’s explanation in Graham
County.
5 Planned Parenthood also points to an Internet report as well as contents of
certain newspaper articles that focus on the activities of pharmaceutical companies,
suggesting these qualify as disclosures “from the news media.” The materials,
however, do not disclose the material elements of the alleged fraud that forms the
basis for this action, as required under our law. See A-1 Ambulance, 202 F.3d at
1243.
The district court additionally concluded that disclosures in Gonzalez’s own
state court lawsuit against Planned Parenthood for wrongful termination in June
2005 triggered the jurisdictional bar. State court lawsuits are indeed an
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FILED NOT FOR PUBLICATION JUL 01 2010
MOLLY C. DWYER, CLERK UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
P. VICTOR GONZALEZ, Qui Tam No. 09-55010 Plaintiff, on behalf of the United States and State of California, D.C. No. 2:05-cv-08818-AHM- FMO Plaintiff - Appellant,
v. MEMORANDUM *
PLANNED PARENTHOOD OF LOS ANGELES, AKA Seal A; PLANNED PARENTHOOD SHASTA-DIABLO, AKA Seal B; PLANNED PARENTHOOD GOLDEN GATE; PLANNED PARENTHOOD MAR MONTE, AKA Seal D; PLANNED PARENTHOOD RIVERSIDE AND SAN DIEGO COUNTIES, INC., AKA Seal E; PLANNED PARENTHOOD ORANGE AND SAN BERNARDINO COUNTIES, INC., AKA Seal F; PLANNED PARENTHOOD PASADENA AND SAN GABRIEL VALLEY, INC., AKA Seal G; PLANNED PARENTHOOD SANTA BARBARA, VENTURA AND SAN LUIS OBISPO COUNTIES, INC., AKA Seal H; PLANNED PARENTHOOD SIX RIVERS, AKA Seal I; PLANNED PARENTHOOD AFFILIATES OF
* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. CALIFORNIA, AKA Seal J; MARY JANE WAGLE, AKA Seal K; MARTHA SWILLER, AKA Seal L; KATHY KNEER, AKA Seal M,
Defendants - Appellees.
Appeal from the United States District Court for the Central District of California A. Howard Matz, District Judge, Presiding
Argued and Submitted January 15, 2010 Submission Vacated January 20, 2010 Resubmitted for Decision June 29, 2010 Pasadena, California
Before: GOODWIN, SCHROEDER and FISHER, Circuit Judges.
P. Victor Gonzalez, relator, appeals the dismissal of his qui tam action
against Planned Parenthood of Los Angeles, et al. (“Planned Parenthood”), under
the federal False Claims Act (“FCA”) and the California False Claims Act
(“CFCA”).
The district court held that the FCA’s public disclosure bar at 31 U.S.C.
§ 3730(e)(4)(A) divested it of jurisdiction over the federal claim because the
contents of the FCA suit had been disclosed previously in a state court complaint
and a state legislative committee report, and because Gonzalez was not the original
source of the information previously disclosed. The district court additionally
2 dismissed the CFCA claim because Gonzalez had characterized the claim under the
state statute as “materially identical” to his claim under the federal FCA.
During the pendency of this appeal, two significant developments in the law
occurred. First, the Supreme Court issued a decision that interpreted part of the
jurisdictional provision at issue in this case. See Graham County Soil & Water
Conservation Dist. v. United States ex rel. Wilson, 559 U.S. ___, 130 S. Ct. 1396
(2010). Second, Congress amended the same jurisdictional provision as part of the
Patient Protection and Affordable Care Act (“PPACA”). See Pub. L. No. 111-148,
§ 10104(j)(2), 124 Stat. 119, 902 (2010).
The parties briefed these developments after argument, and they agree that
the PPACA’s statutory amendments should not be applied retroactively to this
case. We decide the case under the prior statute as interpreted by Graham County.
We review de novo the district court’s dismissal of a qui tam action on the basis of
§ 3730(e)(4)(A). United States ex rel. Meyer v. Horizon Health Corp., 565 F.3d
1195, 1198 (9th Cir. 2009).
To determine whether the jurisdictional bar of § 3730(e)(4) precludes a qui
tam action, we must first determine “whether there has been a prior public
disclosure of the allegations or transactions underlying the qui tam suit.” A-1
Ambulance Serv., Inc., v. California, 202 F.3d 1238, 1243 (9th Cir. 2000) (internal
3 quotation marks omitted). Once a public disclosure has occurred, the suit is
jurisdictionally barred unless the relator bringing suit is an “original source” of the
information disclosed. Id.
A disclosure is a “public disclosure” as contemplated by the statute only if
(1) the disclosure “originated in one of the sources enumerated in the statute,” and
(2) “the content of the disclosure consisted of the ‘allegations or transactions’
giving rise to the relator’s claim, as opposed to ‘mere information.’” Id. (quoting
Hagood v. Sonoma County Water Agency, 81 F.3d 1465, 1473 (9th Cir. 1996)).
The former statute identified three categories of enumerated sources: (1)
disclosures occurring “in a criminal, civil, or administrative hearing”; (2)
disclosures occurring “in a congressional, administrative, or Government
Accounting Office report, hearing, audit, or investigation”; and (3) disclosures
occurring “from the news media.” 31 U.S.C. § 3730(e)(4)(A) (2006).
Planned Parenthood contends that an audit by the California Department of
Health Services of Planned Parenthood of San Diego and Riverside Counties
constituted a prior public disclosure. The district court correctly rejected this
contention. Although Planned Parenthood argues that the audit was made public
when it was discussed in an e-mail on January 26, 2004, sent from Planned
Parenthood of San Diego to other Planned Parenthood affiliates in California, the
4 internal e-mail was not a “public disclosure” in any sense. Planned Parenthood
affiliates may be incorporated separately, but they all performed similar services,
maintained the same billing practices, and thus faced a common threat at that time.
The affiliates receiving the e-mail therefore had an incentive to keep the
information to themselves. There was no disclosure to an outsider. Cf. Seal 1 v.
Seal A, 255 F.3d 1154, 1161 (9th Cir. 2001).
The district court erred, however, when it held that a California Senate
committee report from August 9, 2004, was a prior disclosure that barred
Gonzalez’s qui tam action. The relevant provision barred any suit based on
information publicly disclosed in a “congressional, administrative, or Government
Accounting Office report . . . .” 31 U.S.C. § 3730(e)(4)(A) (2006). The Supreme
Court has now clarified that “congressional” denotes only the federal legislature,
and a state legislative report is therefore not an enumerated source under the prior
statute. See Graham County, 130 S. Ct. at 1402-03; see also United States ex rel.
Bly-Magee v. Premo, 470 F.3d 914, 917 (9th Cir. 2006). The state legislative
committee report therefore cannot serve as a jurisdictional bar to suit. The district
court, however, did not have the benefit of the Court’s explanation in Graham
County.
5 Planned Parenthood also points to an Internet report as well as contents of
certain newspaper articles that focus on the activities of pharmaceutical companies,
suggesting these qualify as disclosures “from the news media.” The materials,
however, do not disclose the material elements of the alleged fraud that forms the
basis for this action, as required under our law. See A-1 Ambulance, 202 F.3d at
1243.
The district court additionally concluded that disclosures in Gonzalez’s own
state court lawsuit against Planned Parenthood for wrongful termination in June
2005 triggered the jurisdictional bar. State court lawsuits are indeed an
enumerated source of a public disclosure under the statute. United States ex rel.
Green v. Northrop Corp., 59 F.3d 953, 966-67 (9th Cir. 1995). The parties do not
dispute on appeal that Gonzalez’s state court complaint disclosed the same
allegations giving rise to this qui tam action. The state court lawsuit therefore
qualified as a “public disclosure” under the FCA. The district court concluded,
however, that Gonzalez was not an “original source” of the information disclosed,
and that the state court lawsuit for that reason served to bar the qui tam suit. We
disagree.
An original source must have “direct and independent knowledge of the
information on which the allegations are based.” 31 U.S.C. § 3730(e)(4)(B). Here
6 Gonzalez obtained knowledge of the questionable practices in the scope of his
employment when he learned that the allegedly fraudulent practices were being
investigated by the state. Under settled Ninth Circuit law, a relator who acquires
knowledge during the course and scope of his employment has acquired that
knowledge directly. Compare United States ex rel. Barajas v. Northrop Corp., 5
F.3d 407, 411 (9th Cir. 1993) (relator’s knowledge direct where acquired “during
the course of his employment”), and Wang v. FMC Corp., 975 F.2d 1412, 1417
(9th Cir. 1992) (relator’s knowledge direct where he was “called in to study the
problem” at his workplace related to the alleged fraud), with United States ex rel.
Devlin v. California, 84 F.3d 358, 361 (9th Cir. 1996) (relator’s knowledge not
direct because derived secondhand from insider employee). The parties do not
dispute that Gonzalez’s knowledge was “independent” of the disclosure in his state
court complaint because Gonzalez acquired the information before the complaint
was filed. See Meyer, 565 F.3d at 1202. Gonzalez therefore qualified as an
“original source” of the allegations in the state court complaint, and thus the public
disclosures in that complaint cannot bar jurisdiction over the qui tam suit.
Under the applicable federal statute, prior to its recent amendments, the
federal claims are not jurisdictionally barred. We reverse the judgment dismissing
the federal claim and remand for further proceedings. On remand, the district court
7 may consider whether, in light of the differences between state and federal law as
to enumerated sources, the state action should be treated differently. We do not
consider the merits of the fraud allegations.
REVERSED and REMANDED.