GRAHAM COUNTY SOIL AND WATER CONSERVATION DISTRICT v. UNITED STATES
In 1995, a storm hit parts of western North Carolina causing extensive flooding and erosion. Graham and Cherokee Counties applied for assistance under the Emergency Watershed Protection Program ("EWPP"). Under the program, the counties would perform or hire to perform the necessary cleanup and repair work, paying for 25% of the costs, while the United States Department of Agriculture paid for the rest. During the cleanup, Karen Wilson, a secretary for the Graham Conservation District, raised concerns that she had about the legality of the awarded contracts. She filed suit in a North Carolina federal district court against Graham and Cherokee Counties, among others, under the False Claims Act. She alleged a conspiracy that tainted the execution of the EWPP contracts and rendered the claims for reimbursement false within the meaning of the False Claims Act. The defendants moved for summary judgment, arguing that the information underlying Ms. Wilson's claim was public disclosure and thus barred the court jurisdiction over the case. The court agreed and dismissed.
On appeal, the U.S. Court of Appeals for the Fourth Circuit reversed. It held that the audit reports that underlied Ms. Wilson's claim was not public disclosure for the purpose of the False Claim Act, and thus the district court was not barred from hearing her case.
Does an audit performed by a state or its political subdivisions constitute an administrative report within the meaning of the public disclosure jurisdictional bar of the False Claims Act?
Yes. The Supreme Court reversed the Fourth Circuit, holding that the reference to "administrative" reports, audits, and investigations within the FCA encompasses disclosures made in state and local sources as well as federal sources – like at issue in this case. With Justice John Paul Stevens writing for the majority, the Court reasoned that the FCA's plain language did not limit "administrative" to federal sources, nor did it preclude the inclusion of state sources. Moreover, the Court looked at the legislative history of the FCA and found it inconclusive.
Justice Antonin G. Scalia wrote separately, concurring in part and concurring in the judgment. He emphasized that the legislative history of a statute is not relevant in analyzing what a statute means. Justice Sonia Sotamayor joined by Justice Stephen G. Breyer also wrote separately, dissenting. She disagreed with the majority opinion in that it did not give sufficient weight to contextual and historical evidence of Congress' purpose in enacting the FCA. Under her analysis, she would hold that "administrative" refers only to federal sources.
ORAL ARGUMENT OF CHRISTOPHER G. BROWNING, JR. ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We'll hear argument first this morning in Case 08-304, Graham County Soil and Water Conservation District v. The United States, ex rel. Wilson.
Mr. Browning: Mr. Chief Justice, and may it please the Court:
The issue in this case is whether the word "administrative" as used in the public disclosure bar of the False Claims Act includes State audits and reports or is limited to Federal sources.
If this Court were to hold that a relator can simply copy a State report or a State criminal indictment and then proceed with a qui tam action, there will be a proliferation of opportunistic qui tam actions brought under this statute.
Such construction of the statute would have a devastating effect upon States, local governments, and the Federal fisc.
Much of the work of State government involves cooperative Federal and State programs.
States have been an effective partner in fighting against fraud and abuse with respect to those programs.
For example, many States have turned to computerized software to identify irregularities in connection with Medicaid billings.
California has implemented a process of analyzing both its Medicare and its Medicaid databases in order to identify doctors who bill in excess of 24 hours in a given day.
Under the decision below, that investigatory work can simply be copied by a qui tam plaintiff and an action brought based upon that public report.
The result is--
Justice Antonin Scalia: But under your proposal a State that itself is guilty of fraud can, in effect, immunize -- if not immunize itself, at least render the information unusable by conducting a hearing.
Mr. Browning: --Well, Your Honor, the government certainly argues that it would result in State and local governments immunizing themselves from qui tam liability.
With respect to States, the Fourth Circuit's decision expressly includes reports of the State government.
States, of course, are not liable under the qui tam provisions, as a result of this Court's decision in Vermont Department of Natural Resources v. United States ex rel. Stevens.
Justice Ruth Bader Ginsburg: And it's also the original source, if -- if the relator is the original source of the information.
Mr. Browning: Yes -- yes, Justice Ginsburg, that -- even if there is a State report that a -- that a -- is in the public domain, a local government could still be sued under that document, if -- in spite of that document, by either the United States or a qui tam plaintiff that stands as an original source.
Justice Ruth Bader Ginsburg: But what about the argument that Congress wanted to, in its most recent provisions, wanted to expand qui tam availability and this would -- if you would -- if you include State and local reports, that will shrink the availability?
Mr. Browning: --Your Honor, there is no question that Congress looked at the pre-1986 public disclosure bar, the provisions that existed between 1943 and 1986, and during that time frame an action, a qui tam action, would be barred if it was based upon information that was available to the -- the Federal Government.
Congress decided that that cut off too many qui tam actions, and as a result it reached a compromise.
Many members of Congress wanted to totally eliminate the government knowledge bar.
On the other hand, the United States Department of Justice at the time was arguing that the existing bar should remain in effect as a result of abusive and frivolous qui tam actions and their concern with respect to that.
So a compromise was reached in which the bar was completely changed.
It was changed to allow for a -- for an original source to bring the qui tam action, essentially a relief valve that addressed Congress's concerns with respect to cases such as United States ex rel. Wisconsin v. Dean.
It also in the 1986 amendments set out specific sources of information and directly identified the type of public information that a qui tam action can be based upon.
That list, of course, includes many sources that might or might not be readily available to the United States Government.
For example, it includes reports by a news media.
A -- an obscure article in a weekly publication of limited circulation does not realistically put the government on notice of a particular fraud.
The same can be true -- said with regard to an action filed in Federal court, a private action between civil litigants based upon diversity jurisdiction.
If that -- if there is a summary judgment motion filed in that case and there are a number of depositions, one of which might indicate fraud, that are filed in that summary judgment motion and the case settles, that -- there will never be -- that summary judgment motion wouldn't be reviewed by the Federal district court judge.
But still, there is no question that the filing of that document with the Federal court would constitute a public disclosure under the first clause of the public disclosure bar.
Justice Antonin Scalia: It would be a -- would it be a civil hearing?
A deposition -- you would consider a deposition to be a civil hearing?
Mr. Browning: Your Honor, I am referring to a deposition that is actually filed with the court in connection with the summary judgment motion and the case then settles.
Generally, the -- the courts have--
Justice Antonin Scalia: What -- what provision would it come under?
Mr. Browning: --Justice Scalia, the phrase
"criminal, civil, or administrative hearing. "
The courts have consistently read that word "hearing" as -- as including all courts' proceedings, not simply the hearing itself, documents that are filed with the clerk's office--
Justice Antonin Scalia: Documents are -- documents are a hearing?
Mr. Browning: --Your Honor, the -- if Congress had meant to limit that word "hearing" to literally in-person oral arguments or in-person testimony, it -- the result would be that a criminal indictment could be copied by a qui tam plaintiff and an action brought based upon that.
That, of course, was this Court's decision in United States ex rel. Marcus v. Hess.
The -- it is clear from the congressional history that Congress wanted to change that result by -- so Congress used the word "hearing" that obviously meant more than -- than simply--
Justice Antonin Scalia: Meant more than hearing?
Mr. Browning: --Yes, Your Honor, and that's the part of the problem, is--
Justice Antonin Scalia: That's an argument that doesn't go very far with me.
I mean, "hearing" means hearing.
Mr. Browning: --Your Honor, the -- the problem is -- is that Congress really did not speak very clearly at all with respect to the False Claims Act, and so we're -- we're left with this mess of trying to figure out exactly what Congress intended.
Justice Samuel Alito: In your view, must an administrative report be a report that is generated by some government unit?
Could it be a report by the administration of a university, for example?
Mr. Browning: --Justice Alito, the Petitioners would not read that phrase as -- that broadly.
When the Congress has used the word "administrative hearing", that would appear to indicate action by the government.
And, under any of the dictionary definitions of "administration", clearly a State administrative proceeding, a State administrative report, would fall within the scope of the dictionary definition.
We don't believe the Court needs to read that language as including private hospitals, private universities.
Justice Samuel Alito: But I'm not sure why.
You -- if -- unless "administrative" is informed by the other adjectives in that prepositional phrase,
"in a congressional, administrative, or Government Accounting Office. "
presumably GAO, "report", it -- unless that is the -- you know, unless it's informed by those other references, and that's why it has to be governmental, I'm not sure how you limit "administrative" to governmental reports.
Mr. Browning: Well, Your Honor, the public disclosure bar uses the phrase "administrative hearing" twice, and it's referring to Black's Law Dictionary.
It defines "administrative hearing" as, essentially, a hearing conducted by an administrative agency.
Justice Ruth Bader Ginsburg: When you say "twice", you mean in the first clause that says
"in a criminal, civil, or administrative hearing? "
Mr. Browning: Yes, Your Honor.
And then in the second clause it proceeds to use the phrase
"congressional, administrative, Government Accounting Office hearing, audit, investigation, or report. "
Justice Ruth Bader Ginsburg: But there is a redundancy there if the statute means what you say it does; it says "administrative hearing" in both the first clause and the second clause.
Mr. Browning: Yes, Your Honor, there is a redundancy based upon Petitioner's construction of the statute.
But Congress was not particularly concerned about redundancy in the False Claims Act.
For example, again it uses the phrase
"congressional, administrative, or GAO. "
GAO, of course, is a body that reports to Congress.
Its head is appointed by the President.
So under any definition GAO would either be congressional or administrative, so there is a redundancy there.
Justice Antonin Scalia: Well, I think there would be a good lawsuit as to whether GAO report.
I think that's a lawsuit.
I don't think it's at all as clear as you suggest.
Mr. Browning: --Well, Justice Scalia, let me also point out that there is a redundancy in connection with the use of
"audit, report, or investigation. "
Essentially, Congress is using the same word to mean essentially the same thing in that clause as well.
But yes, our reading does result in a redundancy in the statute.
Of course, the government reads this entire clause as being limited to Federal proceedings.
They would urge a redundancy in the statute as well.
But what's more important is this Court has consistently said that it will not read the same phrase as having a different meaning in the same sentence.
Yes, Congress has created a redundancy, but that is no more egregious than the fact that it used the phrase "Government Accounting Office" to refer to what was clearly the General Accounting Office.
Justice Antonin Scalia: Yes, well, that argument does not scare the government.
I think the government would like to read "administrative hearing" in the first -- in the first phrase as being limited to Federal administrative hearing as well.
Mr. Browning: Yes, Justice Scalia.
That is their argument today.
Of course, just 11 months ago in United States ex rel. Poteet v. Medtronic, the government argued in the Sixth Circuit that a qui tam action should be dismissed based upon a State court complaint.
They convinced the Sixth Circuit to accept that position and dismissed that complaint on January 14 of this year.
Justice Antonin Scalia: And that was on -- on the basis of the first, the first phrase rather than the second?
Mr. Browning: Yes, Your Honor, based upon the first clause of the statute.
Justice Ruth Bader Ginsburg: Is this particular audit report we are talking about, this is the audit report was done by an independent accountant?
Mr. Browning: Yes, Your Honor.
There are two audit reports -- I'm sorry, there are two reports.
The key one is the report that identifies or asserts that this work at issue should have been sent out by bid.
That was prepared by an accounting firm for Graham County, North Carolina, the same auditor that was engaged by the county to comply with the Single Audit Act--
Justice Ruth Bader Ginsburg: --Is that -- is that audit on file with the Department of Agriculture?
Mr. Browning: --Your Honor, I would have to go beyond the record, but yes, we have conducted a -- submitted a Public Information Act request, and essentially a week after the document was transmitted to Graham County it was transmitted to the United States Department of Agriculture.
Justice Stephen G. Breyer: The arguments in this case, my initial reading of them, are more balanced than any I can remember, really.
For each one, there is a counterargument and I'm somewhat left up in the air.
So if -- since we have to decide it, it should -- should I take this into account: That if the Respondents are right, you are absolutely correct that there will be a lot of people, perhaps, who get rewards at the Federal Government's expense who shouldn't have them.
They front-run the government.
They read the report, run in court fast, before it's in the newspaper.
But if you are right, then they are going to have to assign people to look at these obscure administrative reports that didn't even get in the newspaper.
So they want to do that, they don't have people to do it, and they say these people are performing a service of sorts by reading them, the reports, for them and telling them about it.
And there it is, balanced.
But they are the ones who suffer.
You see, they suffer both ways.
They suffer if people don't tell them; they suffer if in fact too many people are getting unjustified rewards because the money comes from the Federal Government, the 10 percent, 25 percent.
So if they're the ones who suffer, should I not pay special attention to their views as to how the balance works out?
Mr. Browning: Well, Your Honor, Justice Breyer, first of all, the government hasn't been consistent.
As we pointed out in United States ex rel. Poteet, they have taken the exact opposite position with regard to clause 1 in the first circuit.
But the real issue here and what should concern the Court is the fact that there will be a tremendous number of opportunistic qui tam plaintiffs that arise.
If someone can simply go to an ongoing State or local government investigation, copy it, and bring it--
Justice Stephen G. Breyer: As you can tell, I have taken that point in.
Mr. Browning: --Yes.
Justice Stephen G. Breyer: So my question wasn't that.
My question was, Should I or should I not give them a little expertise weight on the grounds that they are the ones who know it best, that they are the victims?
Mr. Browning: Well, I would suggest that the weight that should be given is to the partners of the Federal government, States and local governments that are in the trenches administering these programs, that will have tremendous difficulty if there is a rash of qui tam actions that are brought that disrupt ongoing Medicaid and other investigations.
Justice Sonia Sotomayor: How will that happen?
Meaning, how will they know, A, that the investigation is occurring; and second, what can they do under Federal or State law to require the disclose of ongoing investigative materials?
I don't know -- mind you, I haven't studied them -- but the ones that I am familiar with never permit the public -- none of the Freedom of Information Act-type legislation, never permit the disclosure of ongoing investigative material.
So I am a little bit confused by how that would happen.
Mr. Browning: Justice Sotomayor, there are going to be some exceptions to many States' Public Information Act requests, things such as attorney-client communications, in some cases criminal investigations.
But for most States there will not be any sort of prohibition against a plaintiff's attorney filing a Public Information Act request saying, print out -- give us a copy of all printouts that show disparities and irregularities with regard to Medicaid billings.
Moreover, most States are -- by law are required to receive complaints concerning the State's Medicaid program.
Those are generally processed by the State's system integrity program.
And those reports are going to be readily available to Public Information Act requests.
Essentially, what this Court should be worried about are State employees who know where the documents can be located.
You can simply copy the document, bring a qui tam action, and produce a windfall for yourself, potentially disrupting the State investigation.
And if Congress really wanted to do that, if they wanted to create this rash of ill-advised qui tam actions, this flood that's about to fall upon the States, Congress should have written a little bit more clearly before doing so.
It isn't consistent with the language of the statute or with congressional intent.
Throughout the legislative history it is clear that what Congress was intending to do was to have access to true insiders, the whistleblowers, to obtain information that would be confidential, that would not otherwise be available to the Federal Government.
Justice Sonia Sotomayor: But Congress obviously wanted more than that, because if Congress's intent was the one that you are announcing then it should have just permitted original sources to sue.
But that's not the choice it made.
It broadened the scope of qui tam actions to include more sources or more reward for individuals who don't have original information.
Mr. Browning: Yes, Your Honor, it -- it added the original source provision, and it identified certainly sources of information and said, you cannot bring an action based upon those specific sources.
Justice John Paul Stevens: May I--
Mr. Browning: Those include--
Justice John Paul Stevens: --May I ask this question: Is the fact that they've included the news media consistent with your view?
Mr. Browning: --Yes, Your Honor.
Justice John Paul Stevens: That seems to be a much more open source of information than you're raising.
Mr. Browning: Exactly.
The government argues that the False Claims Act is exclusively Federal, the public disclosure bar should therefore be read as exclusively Federal.
But the existence of this category of news media indicates that Congress did not intend the public disclosure bar to be exclusively Federal sources.
There -- there -- under the government's theory that all of this fall -- the entire public disclosure bar should be read as limited to Federal sources, the only news media that would be able to -- to fall within the scope of the public disclosure bar would be the Voice of America, which is the only Federal news media currently in existence, to my knowledge.
Justice Antonin Scalia: Stars and Stripes, maybe.
Mr. Browning: Yes, Your Honor.
Thank you, Justice Scalia.
Chief Justice John G. Roberts: Well, but that's not terribly persuasive.
In the statute there are separate provisions, they talk about disclosures
"in criminal, civil or administrative hearings. "
"in a congressional administrative or Government Accounting Office report, or from the news media. "
Simply because you want to limit "administrative" or not limit "administrative" does not mean that the other side's view requires news media to be modified by "Federal".
Mr. Browning: Mr. Chief Justice, two points I would like to make in response is: First, these clauses -- and there are three clauses, the first one beginning with "in" and the third one beginning with "from" -- they do not serve different purposes.
Rather, they serve to identify the sources that Congress did not want to give rise to a qui tam action.
So this list has to be read as a whole.
The second point I would like to make is throughout--
Justice Antonin Scalia: We should stop calling them clauses.
They are really phrases.
Mr. Browning: --Yes, Your Honor.
With respect to these three phrases, the -- throughout the legislative history, the year and a half that the False Claims Act was being debated, there were only two clauses that began with--
Justice Antonin Scalia: Phrases.
Mr. Browning: --the preposition "in" -- phrases.
--that began with the preposition "in" and then "from" in connection with "news media".
It was only on October 3, 1986, that the -- when it was -- the provision was finally enacted by the Senate, that this second "in" was added before the second clause.
So, Congress undoubtedly did not intend to make this 11th-hour change and have some substantive change to the statute.
Rather, it should best be read as a last-minute insert to make the clause, the three clauses as a whole, read and flow much better than they did prior to that time.
Justice Anthony Kennedy: Can you tell me just as a practical matter, suppose -- suppose the county says, you know, we found out that we were defrauded by this contractor, and it sues the contractor.
But its suit doesn't cover really all of the damages, only half of it.
Can a qui tam action then be commenced for the portion that the county isn't seeking?
I mean, how does that work?
Mr. Browning: Your Honor, if there has been a public disclosure--
Justice Anthony Kennedy: Which there would be if there's a complaint filed by the county--
Mr. Browning: --Yes.
Justice Anthony Kennedy: --against the contractor.
Mr. Browning: Essentially what the lower courts have done is they would allowed a qui tam action to go with regard to a completely different claim.
But if it were simply the fact that the public disclosure covered a portion of the time period but not all of it--
Justice Anthony Kennedy: Depends on the identity of the claim?
Mr. Browning: --Yes.
Justice Anthony Kennedy: And -- and suppose in their race to the courthouse, the qui tam plaintiff files on Monday and the county files on Tuesday?
Mr. Browning: Under -- under that scenario, if the qui tam action is filed before the public disclosure, then the qui tam action would not be bourne--
If there are no further questions, I'd like--
Justice John Paul Stevens: May I, just one -- one quick question.
I -- I -- I just want to be sure I understood.
Do you draw any distinction between the preposition "in" and the preposition "from"?
Mr. Browning: --No, Your Honor.
I think it is -- as Justice Alito pointed out when he served on the Third Circuit, that some of these prepositions are very awkward indeed.
Justice Antonin Scalia: Part of the random nature of the whole provision, right?
Mr. Browning: Yes, Justice Scalia.
If there are no further questions, I would like to reserve the remainder of my time for rebuttal.
Chief Justice John G. Roberts: Thank you counsel.
ORAL ARGUMENT OF MARK T. HURT ON BEHALF OF THE RESPONDENT
Mr. Hurt: Mr. Chief Justice, and may it please the Court:
The decision of the Fourth Circuit is correct because the text of the False Claims Act compels the result, and the purpose -- and also the purposes of the 1986 amendments to the Act.
As the Fourth Circuit noted, Congress grouped the disclosure sources in paragraph (a) of the public disclosure bar into three distinct categories.
In CATEGORY 2, the term "administrative" which is at issue here is sandwiched between the terms "congressional"--
Justice Ruth Bader Ginsburg: Let's begin at the beginning, and that is with the first phrase with the, what is it,
"civil, criminal, administrative hearing. "
Do you as the government -- do you agree with the government that you have to insert "Federal" there, too?
Or does that phrase--
Mr. Hurt: --No.
Justice Ruth Bader Ginsburg: --include States?
Mr. Hurt: No, the -- the text of category 2 compels the result here, although we do believe that the better view of category 1 is that it is also Federal as well, and the context -- the overall context--
Justice Ruth Bader Ginsburg: Suppose -- suppose it isn't?
Suppose the general "civil, criminal, administrative" is read to mean -- include State.
Why shouldn't the second, if it we are picking Latin phrases, be read in pari materia?
Mr. Hurt: --Because each of those categories is distinct, not only grammatically, but as far as function.
The first category is clearly adjudicative in nature.
The second is non-adjudicative.
And the third category is -- is news media and stands on its own.
Justice Antonin Scalia: Why -- why should we read the second category back to alter the meaning of the first, rather than reading the first phrase forward to alter the meaning of the second?
It -- it is absolutely clear when you read this,
"in a criminal, civil, or administrative hearing. "
there is no limitation to Federal on that.
And you acknowledge that the criminal and civil apply to -- to State civil and criminal proceedings, right?
So when you read that phrase, "administrative" simply means, obviously means State administrative.
Now, why shouldn't I read that forward and say, well, since it means State there, it must mean State in the next one, in a congressional, administrative, or GAO report.
Mr. Hurt: The argument for category 2 is less compelling, we agree.
The argument for category 1 is most compelling because these categories are distinct and should be looked at as separate units for that purpose.
You have category 2 as non-adjudicative, and category 1 is adjudicative.
And so you have -- you have distinction there.
If you were looking at the three categories and, for instance, you don't say category 3 and say category 3 is nongovernmental, so therefore we should construe category 2 to include private administrative reports.
Justice Stephen G. Breyer: The question is, what sense does that make?
I mean -- and I thought you said that the category 1, which is the criminal proceeding, civil or administrative proceeding, I thought you said it does not apply to State proceedings in your view.
You said that was the better view.
Mr. Hurt: Yes.
Justice Stephen G. Breyer: What's the state of the law on that?
I thought it was virtually -- what is the state of the law?
Justice Antonin Scalia: You say that just as to administrative.
Don't you acknowledge that the criminal and civil apply to State criminal and civil?
Mr. Hurt: No.
Justice Antonin Scalia: You want the whole thing to be just Federal?
Mr. Hurt: No, we think the better view is that the whole category is--
Justice Antonin Scalia: The whole category?
Mr. Hurt: --exclusively Federal.
Justice Stephen G. Breyer: I think you'd have to say that.
But -- but now, what is the state of law on that?
Mr. Hurt: The -- the court of appeals have basically gone the other way, but they have looked at it in a very superficial matter and have not really directly addressed the issue.
Justice Stephen G. Breyer: What are we supposed to do?
I mean, to me it makes no sense.
We are only talking about things that don't get into the newspapers.
So -- and the purpose of the Federal Government's reading of this would be, look, we don't have people to go send around to every -- read every State report.
We just don't have that personnel.
So we rely on these whistleblowers and we know some will be unjustified.
I would think the same thing would be absolutely true of State criminal proceedings that don't get into the newspaper.
There are probably 50 -- several thousands -- thousands and thousands.
So how to read these differently is a problem for me.
And I think that's on your side of it.
But we are back to Justice Scalia's question, which to me is the -- is the question here.
Mr. Hurt: Well, the False Claims Act in sections, the pertinent sections 3729 and 3730, refers to the Federal Government many times but never with the modifier "Federal".
They do it through context.
And in fact--
Justice Stephen G. Breyer: Is there any history, which I pay attention to -- is there any legislative history or anything else that you can point to, to me that's important, showing that that first criminal hearing means just Federal?
Mr. Hurt: --Yes, the -- the legislative history shows throughout -- beginning with the House and Senate bills and going forward that these -- the earlier version shows these were exclusively Federal.
Justice Stephen G. Breyer: And they meant criminal hearing.
Criminal hearing meant Federal criminal hearing, not State.
Mr. Hurt: Exactly, and you have references--
Justice Stephen G. Breyer: You say "exactly".
I was looking for the backup for that.
Mr. Hurt: --Yes.
The legislative history is clear on that point, and in fact if you look at the Senate bill that was passed August 11, you have the final version of paragraph (A), and then you -- which was enacted in law, and paragraph (B) was somewhat different, but it had the phrase "government or news media",
"disclosures to government or news media. "
It's clearly referencing back to paragraph (A) and categorizing those sources as either sources of capital "G" government, the Federal Government, or the news media.
And the changes -- the subsequent changes to paragraph (B) give no indication that Congress's background understanding of that changed.
There is no indication of that.
And of course you have the Senate sponsors of the bill making the same statements that this was clearly Federal.
Justice Ruth Bader Ginsburg: Why -- what was the reason for that be, given that there are so many joint Federal-State grant programs, like the one that's involved here?
Why wouldn't a State report be as much of a public disclosure as a Federal report?
I mean, we are told that this particular report was filed with the U.S. Department of Agriculture.
Mr. Hurt: Because it gives no -- a report produced by a State or a local government -- and again, their argument is not just State but every little local entity producing these reports fall under the category 2, according to them.
Simply the fact that a local or State official might be producing this report gives no indication that the Federal Government is focusing on it or looking at it.
And in fact--
Justice Samuel Alito: You think the Federal Government is focusing on everything that is disclosed in every civil proceeding that occurs in Federal court?
Mr. Hurt: --No, but Congress was selecting general categories and as a general category the Federal proceedings they thought were more likely to put the government on notice--
Justice Antonin Scalia: News media, they are likely to be keeping track of all local newspapers as well?
Mr. Hurt: --Well, I think that as a general category it was reasonable for Congress to assume that the news media disclosures would be disseminated in general to the general public and would put pressure on the government to take action, and the government would pay attention to that in general.
Justice Antonin Scalia: I mean, they could have said "national news media".
It didn't say "national news media".
It said "news media".
Mr. Hurt: It said "news media".
Justice Antonin Scalia: It includes a local radio station, a local community newspaper, right?
All of that is included.
Mr. Hurt: Congress was drawing the lines--
Justice Antonin Scalia: And yet, State proceedings, which are excluded, right?
Mr. Hurt: --Yes.
Justice Antonin Scalia: Even state supreme court cases and so forth.
It seems strange to me.
Mr. Hurt: Well, under, under -- this Court recognized in Cook County that the 1986 amendments abolished the government knowledge rule and allowed the qui tam relators to bring cases even where the government, Federal Government, had possession of information about the fraud.
What we are doing here is not even -- we are not even sure the government has possession of these reports.
A lot of these reports are just sitting in file cabinets all around the country in these little administrative office buildings.
Justice John Paul Stevens: Mr. Hurt, let me just give you what's really troubling me about this case.
You have two citizens of a small town.
One of them goes to the hearing and gets all this information, the other one doesn't go to the hearing and reads about it in the newspaper.
The latter is a permissible plaintiff, the former is not; is that correct?
Mr. Hurt: Correct.
Justice John Paul Stevens: Does that make any sense?
Mr. Hurt: It does, because Congress drew it -- picked it as a general category.
They were thinking probably most likely The New York Times or newspapers that have actual investigative reporting resources, and that was what they had in mind.
Here you have a whole--
Justice Antonin Scalia: That doesn't show that it makes sense.
It just shows that Congress wasn't thinking clearly.
There's as difference between the two.
Mr. Hurt: --One of the huge problems with Petitioners' position is it's going to sweep into category 2 an enormous number of reports and audits that the Federal Government is likely to never see, never come across, and you need these concerned citizens to go -- you want the citizens to go and look at these.
Chief Justice John G. Roberts: Counsel, are you sure that -- your argument is that this is sandwiched between two Federal descriptions?
Are you sure "congressional" is limited to Federal Congress?
The first definition in Black's Dictionary is "a formal meeting of delegates".
And I don't know -- maybe I should -- I don't know if all 50 States refer to their legislature by some term other than "Congress".
Mr. Hurt: The Petitioners have not pointed to an example of a State congress.
I think it's generally conceded that that would be Federal.
And also, when you look at GAO, that's clearly a Federal entity there as well.
Justice Anthony Kennedy: I'd like to go back to Justice Ginsburg's very first question.
I want you to assume that in category 1 it means State or Federal.
Maybe you disagree, maybe you don't.
I want you to assume that.
If we assume that, does it make any sense to confine category 2 to Federal only?
Mr. Hurt: Yes--
Justice Anthony Kennedy: And what's the practical -- your answer was, well, that's because -- I want to know the practical rationale for that, the practical reasons why that should make sense.
Mr. Hurt: --Because reports and audits are just a totally -- a category that is much -- many magnitudes greater than the number of criminal, civil, and administrative hearings.
You are going to have millions of documents all over this country in file cabinets that are generated by local and State governments that there is no possibility the vast majority of those would ever come across the attention of the Federal Government.
And so you want concerned citizens to be looking through, monitoring their local governments, digging up these reports and bringing lawsuits based on those.
The Federal Government's simply not going to do it.
Justice Antonin Scalia: Which decision of ours do you think would prompt Congress to go back and do this right?
I mean, do you think that finding the way the government wants us to find will produce a revision of this really terrible text so that it makes sense; or do you think that finding for the other side, giving the government some incentive to get this fixed, would likely produce a proper amendment?
What do you think?
I think the latter, to tell you the truth.
Mr. Hurt: Well, unfortunately we have to deal with the statute as it is.
And, you know, the -- our position uses all the clues in the statute to construe it.
The other side construes it in a crude manner and says, let's treat it like a laundry list, let's not use any of the grammatical clues in construing this language, and also let's construe it in a way that ignores what Congress did in 1986, which was to abolish the government knowledge part.
This is a reimposition of that bar.
Justice Samuel Alito: Suppose that the second phrase said
"in a congressional, news media, or GAO report. "
Would you read "news media" to be governmental?
Mr. Hurt: No, I would not.
Justice Samuel Alito: What's the difference between that and the way it's phrased now?
Mr. Hurt: Because it is -- Congress did put it in a separate category, so--
Justice Samuel Alito: No, no.
Right now we have
"in a congressional, administrative, or Government Accounting Office report. "
And you say you have to read GAO> ["].
But what if it said
"in a congressional, news media, or Government Accounting Office report? "
Mr. Hurt: --I think that--
Justice Samuel Alito: Why wouldn't you make the same argument with relation to "news media"?
Mr. Hurt: --I think the contextual clues would be less compelling there in that situation, and you would have--
Justice Samuel Alito: Why is that?
Mr. Hurt: --Because you would have a category that would have a mixture of exclusively Federal and nonfederal.
Here you have a category that you can't construe consistently as exclusively Federal, given the contextual clues in there.
So as it is drafted now, if you look at all the clues you do have distinct categories that can be construed each on its own merits.
Justice Ruth Bader Ginsburg: This audit report is required by Federal law, isn't it?
Mr. Hurt: Yes, as are many reports, Medicaid reports by private recipients, today.
This report was only done because the local government was a recipient of Federal money, no different from any private recipient, a not-for-profit.
So there was no real distinction there.
It was not really a governmental report, in the truest sense of the word, as it should be construed or regarded for purposes of the public disclosure bar.
And that's -- that shows the real -- one of the real problems of going down to the -- to the local and State level.
You get all of these problems where the recipient is generating the reports rather than the -- the administrator versus the recipient.
You get all those problems going down to this level, the local and State governments, and it shows the real problem with that.
Again, this is the -- the overall statute is Federal, it's to recover the Federal Government's money.
The statute has a strict dichotomy between the Federal Government and everyone else.
If the States or local governments are going to be qui tam relators, they bring it as a private person.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF DOUGLAS HALLWARD-DRIEMEIER, ON BEHALF OF UNITED STATES, AS AMICUS CURIAE, SUPPORTING THE RESPONDENT
Douglas Hallward-driemeier: Mr. Chief Justice, and may it please the Court:
As I think the discussion this morning illustrates, the Federal nature of the second category, the phrase that is directly at issue in this case, is self-evident from the text.
The terms congressional and GAO are Federal and under the doctrine or canon of construction noscitur a sociis--
Justice Ruth Bader Ginsburg: Let me go back to the other Latin phrase.
If you begin at the beginning and you begin with a phrase that you have no reason to say is modified by Federal,
"civil, criminal or administrative proceeding. "
why shouldn't that drive the statute, what's in the first phrase?
Douglas Hallward-driemeier: --Well, Your Honor, I -- I want to start by making clear that we disagree that that's a better interpretation of the first clause, but I will take it as the premise.
Justice Ruth Bader Ginsburg: Well, it's a lot hard to say you have to put a caret mark and say -- vidi -- means Federal civil, criminal and administrative hearings.
Douglas Hallward-driemeier: It -- it may indeed be harder to do that.
We think that it is warranted in light of the policy that motivated Congress and in light of other references to Federal administrative, civil and criminal hearings in the statute.
But even if those reasons which we think justify limiting the first category to Federal proceedings -- the Court were to disagree with that, that would not justify disregarding the clear indications of the Federal limitations on the second clause.
And there is no policy--
Chief Justice John G. Roberts: Well -- I didn't mean to interrupt.
Clear limitations, you really have only one, right?
I mean you have no argument construing administrative in a Federal way other than it is sandwiched between two other Federal--
Douglas Hallward-driemeier: --Well, Your Honor, I think that -- that again, as Justice Alito's question at the very beginning of the argument illustrated, the literal language of the word administrative would encompass hearings conducted by private hospitals or universities as well.
Now Petitioner es hewed that interpretation--
Chief Justice John G. Roberts: --Well, we would just -- we would just take the sections from your brief today and say well no, you have got to read it in the context in which it appears and this is all Federal, which means it's all governmental.
Douglas Hallward-driemeier: --That's -- that's right, Your Honor, and governmental in a particular nature, of a particular nature, the Federal Government.
As is the Court's decision in Cook County made clear, municipal governmental entities are with respect to the False Claims Act the same as private corporations.
The -- the Court recognized that municipalities are the recipients of many Federal dollars.
In that case the local governmental entity whose conduct is at issue was a county hospital.
And -- and county hospitals receive funds under the same programs that private hospitals--
Justice Stephen G. Breyer: I just want to get your expertise on this, because you have probably read the legislative history of the 1986 amendment.
All right, am I right in thinking this?
If I go back and read it -- which I will -- I will discover, not once in this entire 1986 history anywhere, House, Senate or conference, does the word State appear in any relevant context?
Douglas Hallward-driemeier: --No.
Justice Stephen G. Breyer: I'm not right.
So when it appears--
Douglas Hallward-driemeier: Well, I guess it depends on what you mean by the relevant context.
Justice Stephen G. Breyer: --What I'm -- the relevant context has to do in my mind at the moment primarily in respect to the first clause,
"criminal, civil, or administrative proceeding. "
Is there any indication that those were meant to apply -- any indication that those were meant to apply to State as opposed to uniquely Federal, criminal, civil, or administrative proceedings?
Douglas Hallward-driemeier: No, Your Honor, it is -- it is clear from the legislative--
Justice Stephen G. Breyer: Yeah.
Clear from the record -- clear that--
Douglas Hallward-driemeier: --That it was Federal proceedings that Congress had in mind.
And -- and if you would take--
Justice Stephen G. Breyer: --And the word hearing--
Douglas Hallward-driemeier: --If you would look on page 19 of the--
Justice Antonin Scalia: Could you be more specific when you say that Congress had in mind?
Just so I know what you are talking about?
Douglas Hallward-driemeier: --I'm sorry, Your Honor.
Justice Antonin Scalia: The committee that reported the bill.
Douglas Hallward-driemeier: I'm -- that's right.
That's right, Your Honor.
Justice Antonin Scalia: In both houses or just one house?
Douglas Hallward-driemeier: Well, we have the -- the committee report and the bill that was recorded by the House which states specifically at that point, the public disclosure bar referenced information which the Government, capital G, disclosed the basis of allegations in a prior administrative civil proceeding.
That was the House.
Justice Antonin Scalia: The House.
Chief Justice John G. Roberts: Well -- well, North Carolina has got a government, too.
Douglas Hallward-driemeier: Excuse me?
Chief Justice John G. Roberts: North Carolina has a government, too.
Douglas Hallward-driemeier: Well, as we note, Your Honor, the statute uses the term "Government" with a capital G throughout to refer to the Federal Government.
Chief Justice John G. Roberts: Same rule for Congress?
Douglas Hallward-driemeier: Excuse me?
Chief Justice John G. Roberts: Same rule for congressional?
Douglas Hallward-driemeier: Well, congressional -- the -- the term congressional is frequently used without a capital, but State legislatures are not referred to as congresses.
And that is one of the anomalies that petitioners simply cannot explain: why Congress would have thought that an administrative report issued by a local school board should give rise to the bar, but a report or a hearing conducted by a State legislature would not.
Justice Ruth Bader Ginsburg: There was an explanation for it in the opposing brief, that Congress in -- what was it -- 1986 didn't think that the legislature was generating reports, audits, as distinguished from administrative agencies.
Douglas Hallward-driemeier: Well -- well, Your Honor, it is of course a -- a truism, that -- that programs are administered by the executive branch more than the legislative branch, but that is no reason to think that Congress would have meant to exclude, if those State legislatures did conduct a hearing with respect to fraud by the State, exclude that as a public disclosure.
The reason that Congress didn't include State legislative reports is because it didn't include State reports at all.
Justice Ruth Bader Ginsburg: Well that -- that doesn't follow like the night the day.
It could be, as it was explained, they didn't include State legislatures because they didn't think they would be generating relevant material.
Douglas Hallward-driemeier: --Well, Your Honor, I -- I think that it is more likely as -- as the development and progress of the clause reflects, that Congress was focused on what does the government know and what does the disclosure show about the whether the government is already or is likely to focus on the fraud.
Justice Antonin Scalia: Is the Justice Department seeking to get this -- this piece of -- of statutory text clarified?
I mean, you do have some operation over there that proposes to Congress amendments of those provisions that are not working out well.
Is there -- is there any effort to get this clarified?
Douglas Hallward-driemeier: There -- I -- there are currently under consideration bills or, and as I understand it, they are not, there are other bills that are in contemplation that would revise the language of the statute, but -- but would not necessarily focus on this.
There are a number of other issues connected--
Justice Antonin Scalia: Could it make it worse?
Douglas Hallward-driemeier: --I -- I don't know.
But of course--
Justice Ruth Bader Ginsburg: I think the question was has the Department of Justice, recognizing that there's a circuit split this very question recommended that Congress amend the statute in this particular--
Douglas Hallward-driemeier: --I -- I don't believe that as of yet the department has taken a specific position on -- on the legislation that is contemplated in this particular ambiguity.
Justice Stephen G. Breyer: --There is one ambiguity whether this clause, the first -- what we call first and second refers to State as well as Federal.
If the debate took place in a context where everyone's just thinking of Federal, it's not surprising they didn't put in the word Federal.
They don't think of everything.
Now, that's my question.
You started with the House.
The House to me does think just of Federal.
The Senate's ambiguous on that point--
Douglas Hallward-driemeier: The Senate--
Justice Stephen G. Breyer: --and the conference is yet more ambiguous on that point.
So is there anything -- when I look at the conference and the Senate versions, I'm going to say, gee, they did -- sorry, they did actually think of Federal and State, too, and it's sort of mixed up?
Or am I going to see that that context there is Federal?
Douglas Hallward-driemeier: --The context is -- is Federal.
References to States in connection with the act that Congress has thought about it are treating States like other private qui tam relators.
They Petitioner referred to the Dean case, and, in fact, that was something that the -- the legislative history refers to, but what was offensive about the decision in the Dean case was that Wisconsin had been the original source of the information, but had been barred because it had provided that information to the government.
And, under the government knowledge bar, they had been precluded, so -- so Wisconsin would have been taken care of under the original source provision, but it doesn't reflect a view that States have a particular distinctive role.
In fact, as this Court's decision in Cook County reflects, municipalities are treated just like any private corporation for purposes of the act.
They can be defendants, they could be plaintiffs, qui tam relators, but there is no reason to construe the statute in a way that would allow a local government, technically, to shield itself from qui tam suits by disclosing the facts that would be the underlying information support of the fraud claim in, perhaps, a report that was intended to -- to whitewash the situation--
Justice Ruth Bader Ginsburg: --Do you think that the -- when a -- when State employees want to immunize themselves from fraud, they are going to say, okay, we will disclose it where anybody -- a prosecutor could pick it up, but we will take care of the qui tam obligation.
Douglas Hallward-driemeier: --Well, Your Honor, I think it's important to note that, in order to be a public disclosure -- the second category at the very least -- all that needs to have happened is that information be disclosed to -- to one additional person.
That -- and that makes a lot of sense when we are talking about disclosures of the government -- Federal government's own reports because, if the Federal government is already investigating and pursuing the fraud, one other person that finds out about it and then files a qui tam action on the basis of the government's own effort is precisely the situation that Congress sought to preclude.
But it doesn't make any senses when we are talking about a disclosure to an individual by a State or local--
Justice Ruth Bader Ginsburg: But there's lots of disclosures -- there's lots of disclosures in Federal reports that the government isn't pursuing.
Douglas Hallward-driemeier: --Well, we think that the -- the disclosures -- the allegations in the types of reports, audits, investigations, that are referenced in the clause are the type that would evidence that the government is pursuing them.
And -- but where a State -- perhaps a local school board discloses facts that might give rise to an allegation of fraud in a hearing where there was only one or two members of the public in attendance, there is no reason to think that that information is going to be brought to the Federal government's attention.
The purpose of the bar is to balance -- Congress was seeking to balance two rules.
One is to encourage qui tam relators to bring information and bring suit where the information was unlikely to be something that the government -- Federal government was focusing on.
Where the Federal government was able to protect itself and bring this suit on its own, then there's no reason for the Federal government to have to share its recovery.
Justice Sonia Sotomayor: But why can't it -- why can't it protect itself if these reports are in its possession?
How are they any more in the -- or less in the government's possession than articles in the news media, than State, criminal, civil, and administrative hearings?
You, yourself, make it very clear that the government -- it isn't keeping track of all of those other sources.
Douglas Hallward-driemeier: Well, Your Honor, Petitioners' reference to this audit being in the possession of the government -- it's happenstance that this particular report, the Crisp & Hughes report, was sent to the Federal government official.
But the vast majority of State and local governmental investigations, audits, and reports, are not going to be given to the Federal government, and even though they are -- they cite the Single Audit Act, which is only a very narrow subset of audits that States or local governments perform -- do not actually disclose the allegations of the fraud.
In order to get to the actual information of the fraud, the -- first of all, it would have to be brought to the attention of the relevant Federal agency.
Usually, the cognizant agency is the one that has the most money at stake, but the fraud may have to do with a different Federal program, so it has to be brought to the attention of the program whose interests are actually at stake.
They have to go beyond the report that is -- that is publicly available in the clearinghouse website, which tells you virtually nothing, to an underlying report which is itself, generally, fairly vague, and all Petitioners say is that the working papers of the auditor are available to the government, not even in the government's possession, they are available to the government if it requests it.
The government has to drill down many levels before it necessarily is going to know about that fraud.
Justice Sonia Sotomayor: Isn't that argument suggesting that the court didn't even need to reach this issue, even assuming that the State administrative reports are included in the bar?
Douglas Hallward-driemeier: No -- no, Your Honor, I don't think so.
Justice Sonia Sotomayor: Well, aren't you arguing that what was in this audit report wasn't sufficient to show the fraud?
That's not your argument?
Douglas Hallward-driemeier: No -- again, this report here did have information that was indicative of fraud, and this report--
Justice Sonia Sotomayor: In which way?
Douglas Hallward-driemeier: --Excuse me?
Justice Sonia Sotomayor: Which way?
All it said was that this person wasn't chosen by bidding.
But aren't there situations in which non-bids are permitted?
Douglas Hallward-driemeier: There -- there were multiple allegations.
One of the allegations underlying the relator's claim is that the government -- the county certified that certain procedures were followed that would have included a requirement that it be bid out, and that it was not.
Another was that certain work was paid for or billed for, but wasn't performed or was not performed well, so there were -- there were different allegations, and where that would be disclosed to a single person, that would constitute a public disclosure, at least with respect to Federal--
Justice Antonin Scalia: Of course, the Attorney General can always bring suit, right?
I mean, all we are arguing about is whether this information that is in the in the State and local thing could be the basis of a qui tam suit.
Douglas Hallward-driemeier: --But only if we--
Justice Antonin Scalia: If the government finds out about it, the Attorney General could always bring suit, right?
Douglas Hallward-driemeier: --And what is at issue here is whether the Federal government is ever going to learn of the fraud.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. Browning, you have six minutes.
REBUTTAL ARGUMENT OF CHRISTOPHER G. BROWNING, JR. ON BEHALF OF THE PETITIONERS
Mr. Browning: Thank you, Mr. Chief Justice.
Justice Breyer, if I could first turn to your comments or your questions about legislative history; here, I think the legislative history tells us very little because of the many changes in the Senate version and the House version, and unfortunately, there was not a conference committee report, so we won't know the nature of the compromise.
At most, the legislative history helps us to show what Congress was generally concerned about, and throughout the original committee, the Senate and House report, there is a concern about qui tam actions based upon public information.
Justice Stephen G. Breyer: Now, I agree with you about that.
I think it's the silence, though, that might cut against you.
Mr. Browning: Well--
Justice Stephen G. Breyer: And the reason that it's -- it's basically silence -- the reason I am thinking that cuts against you is because of this sorting of the context where they are focusing on Federal.
And, if everybody is working in that context, then nothing said about State means they are just assuming it's all applying to Federal.
Now, what I'm looking for, you might be able to put your finger on, is something that shows that my last statement is not right.
Mr. Browning: --Yes, Justice Breyer, that the government assumes and repeats throughout its brief that the False Claims Act is exclusively Federal in nature; therefore, you read all of its terms as essentially being -- being Federal.
That, of course, does not answer what Congress intended with the public disclosure bar--
Justice Antonin Scalia: When we say everybody's working in a certain context, how -- how many people is everybody?
What percentage of the House and of the Senate were involved in these committees that were drafting these bills and that issued the committee report?
Mr. Browning: --Yes, Justice Scalia, your point is well-taken, that this would only be--
Justice Stephen G. Breyer: I think in the -- it was -- it probably came out in governmental affairs in the Senate, which I think had 17 members at the time.
Mr. Browning: --Yes.
Continuing with your -- your question, if I could, Justice Breyer, that there is nothing to indicate that the public disclosure bar should be exclusively Federal.
It, of course, includes news media, which is not Federal.
It also includes criminal, civil, or administrative hearings.
But moreover, there are many aspects of the False Claims Act that are not exclusively Federal in nature.
The very change that we are talking about -- the -- the change to the public disclosure bar was a result of a push by the National Association of Attorney Generals to actually change the public disclosure bar to make sure that States could bring qui tam actions.
That is why the public disclosure bar includes an original source provision.
Chief Justice John G. Roberts: To -- to follow up, I think it was a question that Justice Breyer asked earlier.
Do you have any tie-breaker on your side?
I mean, if we do decide the arguments are pretty much in equipoise, the suggestion was that the Federal government is both the beneficiary and the loser in the qui tam actions, from the sense they lose a percentage of recovery, and so we ought to let them strike the balance.
What argument do you have on your side?
Mr. Browning: Your Honor, again, that our concern from the perspective of the States -- and it's a concern shared by local governments -- is the reading that Respondents advocate will produce a flood of qui tam--
Chief Justice John G. Roberts: That's the same -- that's one of the arguments that, I think, is balanced on the other side.
For example, is -- do -- have we ever said -- and this is an unusual statute, of course, with a private Attorney General and all that.
Have we -- does -- is there any authority for the idea that we should read it restrictively because of that?
Mr. Browning: --Your Honor, it does give rise to a -- a false claim will, of course, give rise to criminal liability.
Moreover, it is a case dealing with--
Chief Justice John G. Roberts: Have we ever -- have we ever said that that's a basis for reading the act restrictively?
Mr. Browning: --Your Honor, there is some older authority to that affect.
The specific case -- I apologize.
The name escapes me.
Justice Antonin Scalia: But what your claim is -- is that the government -- the Federal government is not the only person harmed?
Mr. Browning: Yes.
Justice Antonin Scalia: And, therefore -- you know, we should listen to them, so long as they don't -- they want to come out this way, you are saying the State and local governments--
Mr. Browning: Absolutely, Justice Scalia.
Justice Antonin Scalia: --are significantly harmed.
Mr. Browning: We are -- we are partners--
Justice Antonin Scalia: Which the Federal government doesn't care about, right?
Mr. Browning: --The Federal government has, I think, taken a very short-sighted view because these sort of qui tam actions will be very disruptive to what the Federal government's partners are actually doing in the trenches in administering these programs.
Moreover, the Federal False Claims Act -- it is clear that it is not exclusively Federal.
When it was amended in 1986, Congress changed Section 3732(b), which allowed pendent State claims to be brought, so a State, if there is a Federal false claims action, could intervene to protect the State's portions of the -- the monies that are at issue.
Moreover, in Section 3733(l)(7)(A), the civil investigative demand provisions, Congress expressly viewed the word "administrative" to include, not only Federal administrative proceedings, but State administrative proceedings as well.
Justice Stephen G. Breyer: So your point here is -- I will put it in cash terms, is the Federal government, who will pay a lot of qui tam lawyers some percent to go and look through all these State criminal hearings and State reports and all these things that didn't get into the newspaper and to bring cases, so it may be cheaper to pay them then it would be to hire staff to do that.
Now, your point is that they get a little over-enthusiastic sometimes, and they can bring actions that maybe not be so well-justified, and the -- the Federal government is going to have to hire people to sort those out anyway, and so would the States in that kind of mess.
Is that your point?
Mr. Browning: Yes.
They will be very enthusiastic if they can simply take a State report showing Medicaid fraud and bring a qui tam action.
That will be very disruptive to states and to local governments.
Thank you, Your Honor.
Chief Justice John G. Roberts: Thank you, counsel.
The case is submitted.
Chief Justice John G. Roberts Jr.: Justice Stevens has our opinion this morning in case 08-304, Graham County Soil and Water Conservation District versus the United States.
Justice John Paul Stevens: The False Claims Act, which was enacted during the Civil War, authorizes not only the Attorney General, but also private parties known as qui tam relators to recover from those who make false or fraudulent claims for payment to the United States.
Since 1986, the Act has contained a provision known as the public disclosure bar that forbids qui tam suits when the underlying information has already entered the public domain through certain channels.
In particular, the 1986 Act bars qui tam suits based on allegations disclosed “in a congressional, administrative, or GAO report.”
The question in this case is whether that public disclosure bar extends not just to federal administrative sources, but also to state and local sources.
For reasons set forth in an opinion filed with the clerk, we hold that the bar does apply to nonfederal sources and therefore reverse the judgment of the Court of Appeals in this case.
In a portion of the Patient Protection and Affordable Care Act, enacted a few days ago, Congress adopted an amendment to the False Claim Act that expressly limits the disclosure bar to Federal Administrative Reports.
Because that amendment is not retroactive, it does not affect our decision today.
Justice Scalia has filed an opinion concurring in part and concurring in the judgment.
Justice Sotomayor has filed a dissenting opinion in which Justice Breyer has joined.