United States of America, Ex Rel., Paul Biddle v. Board of Trustees of the Leland Stanford, Jr. University

161 F.3d 533, 1998 WL 762525
Court of Appeals for the Ninth Circuit·Decided November 3, 1998·No. 96-16911·Published·Cited by 70 cases

Opinions

Opinion by District Judge WILSON; Dissent by Judge KLEINFELD.

ORDER

The Slip Opinion filed May 26, 1998 is amended to include Judge Kleinfeld’s dissent.

OPINION

WILSON, District Judge:

Paul Biddle appeals the district court’s dismissal of his cause of action for lack of subject matter jurisdiction. Biddle brought a qui tam lawsuit against the Board of Trustees of the Leland Stanford, Jr. University (“Stanford”) pursuant to the False Claims Act (“FCA”), 31 U.S.C. § 3730, alleging that Stanford defrauded the United States Government. Because the district court lacks subject matter jurisdiction over Biddle’s lawsuit, we affirm.

BACKGROUND

Federal government agencies regularly enter into agreements with Stanford and other universities for research and other activities to be performed by the universities. The agreements are designed to reimburse the universities for both direct and indirect costs, as well as staff benefits. Direct costs include salaries and supplies for a particular project. Indirect costs are a method to allow a univer[535] sity to be reimbursed for a share of its overhead, such as costs of buildings, equipment, utilities, and administrative support. The Office of Naval Research (“ONR”) is responsible for setting indirect cost rates and staff benefits at Stanford. The agreements between ONR and Stanford for calculating indirect costs are called Memoranda of Understanding.

In October of 1988, Biddle was hired as Administrative Contracting Officer (“ACO”) and Resident Representative for ONR at Stanford. Soon thereafter, Biddle came to believe that Stanford was overcharging the government for indirect costs. After informing his supervisors to no avail, Biddle relayed his concerns to a congressional subcommittee in the summer of 1990. As a result of Biddle’s revelations, the General Accounting Office and the Defense Contract Audit Agency began an investigation of Stanford.

In September of 1990, the media began reporting on Riddle’s allegations against Stanford. Biddle was interviewed by numerous newspapers and magazines, and was featured on the ABC news program “20/20.” In 1991, Stanford’s indirect cost rate was reduced from 76% to 55.5%.

On September 9,1991, after more than one year of extensive media coverage of Stanford’s alleged overcharges, Biddle filed a qui tam suit under the False Claims Act. Following a two-year investigation, the Department of Justice decided not to intervene in Biddle’s lawsuit. Biddle’s complaint was then served on Stanford. On August 30, 1995, Biddle filed his third amended complaint. Stanford moved to dismiss the complaint for lack of subject matter jurisdiction. On August 26, 1996, the district court granted Stanford’s motion. Specifically, the district court held that Biddle’s complaint was jurisdictionally barred because (1) it was based upon public disclosures, and (2) Biddle did not qualify as an original source of the information he provided to the government.

STANDARD OF REVIEW

The existence of subject matter jurisdiction is a question of law reviewed de novo. Ma v. Reno, 114 F.3d 128, 130 (9th Cir.1997). This court also reviews de novo the district court’s conclusion that it lacks subject matter jurisdiction. H2O Houseboat Vacations, Inc. v. Hernandez, 103 F.3d 914, 916 (9th Cir.1996). In making its determination, the district court may resolve factual disputes based on the evidence presented where the jurisdictional issue is separable from the merits of the case. Rosales v. United States, 824 F.2d 799, 803 (9th Cir.1987). The district court’s findings of fact relevant to its determination of subject matter jurisdiction are reviewed for clear error. Id.

DISCUSSION

Under the False Claims Act, any person who defrauds the United States Government is liable for civil penalties. 31 U.S.C. § 3729 (1994). Although the FCA requires the Attorney General to investigate possible violations, id. § 3730(a), the FCA also permits civil qui tam actions by private persons, known as relators, id. § 3730(b). In a qui tam action, the relator sues on behalf of the government as well as himself. If the relator prevails, he receives a percentage of the recovery, with the remainder being paid to the government. Congress, however, has limited the jurisdiction of courts over qui tam actions:

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, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless ... the person bringing the action is an original source of the information.

Id. § 3730(e)(4)(A). “Original source” is defined as “an individual who 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 an action under this section which is based on the information.” Id. § 3730(e)(4)(B).

I. Were the disclosures of Stanford’s alleged fraud “public disclosures” under the FCA?

Biddle first argues that the district court erred in ruling that the disclosures of [536] Stanford’s alleged fraud through governmental investigations and media reports constituted “public disclosures” under the FCA. Biddle relies on United States ex rel. Barajas v. Northrop Corp., 5 F.3d 407 (9th Cir.1993), cert. denied, 511 U.S. 1033, 114 S.Ct. 1543, 128 L.Ed.2d 195 (1994), for the proposition that if an individual provides information to the government that causes a governmental investigation, and evidence of fraud or wrongdoing is made public during the government’s investigation, then allegations regarding the fraud are not treated as publicly-disclosed under the FCA.

Free access — add to your briefcase to read the full text and ask questions with AI

United States of America, Ex Rel., Paul Biddle v. Board of Trustees of the Leland Stanford, Jr. University, 161 F.3d 533, 1998 WL 762525 (9th Cir. 1998).

161 F.3d 533 (United States of America, Ex Rel., Paul Biddle v. Board of Trustees of the Leland Stanford, Jr. University) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

United States v. Allergan, Inc.
C.D. California, 2019
Ellis v. Zheng
D. Nevada, 2019
Amphastar Pharmaceuticals Inc. v. Aventis Pharma SA
856 F.3d 696 (Ninth Circuit, 2017)
United States v. Sprint Communications, Inc.
855 F.3d 985 (Ninth Circuit, 2017)
Prather v. AT&T, Inc.
847 F.3d 1097 (Ninth Circuit, 2017)
United States Ex Rel. Davidov v. NHIC Corp.
623 F. App'x 376 (Ninth Circuit, 2015)
United States ex rel. Gohil v. Sanofi-Aventis U.S. Inc.
96 F. Supp. 3d 504 (E.D. Pennsylvania, 2015)
Paramjeet Malhotra v. Robert Steinberg
770 F.3d 853 (Ninth Circuit, 2014)
Stenehjem v. Sareen
226 Cal. App. 4th 1405 (California Court of Appeal, 2014)
Prather v. AT & T Inc.
996 F. Supp. 2d 861 (N.D. California, 2013)
State ex rel. Standard Elevator Co. v. West Bay Builders, Inc.
197 Cal. App. 4th 963 (California Court of Appeal, 2011)
United States Ex Rel. Mosler v. City of Los Angeles
414 F. App'x 10 (Ninth Circuit, 2010)
United States Ex Rel. Ondis v. City of Woonsocket
587 F.3d 49 (First Circuit, 2009)
Grayson v. AT & T CORP.
980 A.2d 1137 (District of Columbia Court of Appeals, 2009)
Glaser v. Wound Care Consultants, Inc.
570 F.3d 907 (Seventh Circuit, 2009)