United States ex rel. McKenzie v. Bellsouth Telecommunications, Inc.

123 F.3d 935, 1997 WL 510191
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 26, 1997
DocketNo. 96-5268
StatusPublished
Cited by59 cases

This text of 123 F.3d 935 (United States ex rel. McKenzie v. Bellsouth Telecommunications, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States ex rel. McKenzie v. Bellsouth Telecommunications, Inc., 123 F.3d 935, 1997 WL 510191 (6th Cir. 1997).

Opinions

RUSSELL, D.J., delivered the opinion of the court, in which MOORE, J., joined. NORRIS, J. (p. 945), delivered a separate dissenting opinion.

RUSSELL, District Judge.

The plaintiff, Mary McKenzie, brought this qui tam action1 under the False Claims Act (“FCA”), 31 U.S.C. § 3729-3733, for Bell-South Telecommunications, Inc.’s (“Bell-South”) allegedly fraudulent activities against the United States government. McKenzie also asserted a claim on her own behalf under the FCA’s whistleblower protection provision. The district court dismissed McKenzie’s complaint for lack of subject matter jurisdiction under the FCA, which prohibits qui tam actions “based upon” public disclosures of fraud unless the relator is an “original source” of the information. We affirm in part and reverse in part.

I.

McKenzie was an employee of BellSouth’s subsidiary, South Central Bell, from December 1966 until March 1992 when she left work on permanent disability status. For most of her career at South Central Bell McKenzie was a dispatcher for the company’s maintenance technicians. This position included receiving and processing complaints about telephone service, dispatching repair personnel, and closing these “trouble reports” once repairs were completed.

South Central Bell provides telephone service throughout Tennessee, Kentucky, Alabama, Mississippi, and Louisiana and its customers include the Tennessee Valley Authority and a Department of Energy facility at Oak Ridge, Tennessee, both federal facilities. When a telephone line is out of service for more than 24 hours, South Central Bell must refund the cost of that day’s service for those customers who request a refund, except in the following circumstances: service is diminished but the line is not completely out of service; repairs are impossible because the customer’s premises are inaccessible; the condition is reported by an employee and not the customer; and the customer extends the period of time for repairs to be completed.

According to McKenzie’s complaint, South Central Bell, to avoid having to make refunds to the United States and other customers, falsified trouble reports so that it would appear that lines were repaired within 24 hours or that one of the exceptions applied. McKenzie says that she and other dispatchers routinely misclassified telephone lines as either in service or diminished service when the lines were actually out of service, reported that service had been restored within 24 hours when it had not been, reported that premises were inaccessible when they were not, and misclassified trouble reports as having been initiated by a South Central Bell employee when they were actually initiated by the customer.

McKenzie began complaining to her supervisors at South Central Bell about these practices in 1984 and continued to complain until she left her position on disability status. On one occasion McKenzie showed her supervisor a newspaper article describing a similar fraud being perpetrated in Florida. McKenzie claims that as a result of her complaints she was harassed and threatened with discharge. After suffering two emotional breakdowns a company psychiatrist placed McKenzie on permanent disability leave.

McKenzie filed suit under the FCA, which allows individuals with information regarding the commission of fraud against the United States to bring suit on the government’s behalf.2 McKenzie also brought a retaliation [938]*938claim on her own behalf under 31 U.S.C. § 3730(h).

II.

We review the district court’s dismissal under Rule 12(b)(1) for lack of subject matter jurisdiction de novo. Duncan v. Rolm Mil-Spec Computers, 917 F.2d 261, 263 (6th Cir.1990). A motion to dismiss is properly granted only if it appears that the plaintiff can prove no set of facts which would entitle her to relief. All factual allegations in the complaint are accepted as true and construed in the light most favorable to the plaintiff. Ang v. Procter & Gamble Co., 932 F.2d 540, 544 (6th Cir.1991). Federal courts are courts of limited jurisdiction. Aldinger v. Howard, 427 U.S. 1, 15, 96 S.Ct. 2413, 2421, 49 L.Ed.2d 276 (1976). Therefore, the plaintiff bears the burden of establishing jurisdiction. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991).

III.

The qui tam provision of the False Claims Act allows private citizens, acting on behalf of the government, to recover treble damages from anyone who has committed a fraud upon the government.3 Any individual bringing such an action can receive up to 30% of the money recovered. 31 U.S.C. § 3730(d)(2). Congress has placed some jurisdictional limits on qui tam actions, however, in the interest of avoiding parasitic suits. See United States ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1347 (4th Cir.), cert. denied, 513 U.S. 928, 115 S.Ct. 316, 130 L.Ed.2d 278 (1994). Specifically, the Act provides: “No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, ... or from the news media, unless the action is brought by the Attorney General or the person bringing the action is the original source of the information.” 31 U.S.C. § 3730(e)(4)(A) (emphasis added).

The original version of the FCA, enacted in 1863, allowed anyone to bring a qui tam action and receive 50 percent of the amount recovered. S. Rep. no. 345, 99th Cong., 2d Sess. 8-10 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5273. This broad provision led to abuse and in 1943, following the Supreme Court’s decision in United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443 (1943), which held that a relator could bring a qui tam action even though the action was based entirely upon information contained in a government indictment, Congress amended the FCA. The 1943 version precluded actions “based on evidence or information the government had when the action was brought.” United States ex rel. Stinson v. Prudential Insurance Co., 944 F.2d 1149, 1153 (3d Cir.1991) (quoting 31 U.S.C. § 3730(b)(4) (1982) (superseded)). This led to claims being barred even in cases where the qui tam plaintiff supplied the information to the government before filing the claim. See United States ex rel. Wisconsin v. Dean,

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Bluebook (online)
123 F.3d 935, 1997 WL 510191, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-ex-rel-mckenzie-v-bellsouth-telecommunications-inc-ca6-1997.