U.S. ex rel. Wilson v. Graham County Soil & Water

• Decision Date: 09 June 2008
• Docket Number: No. 07-1910.,No. 07-1322.,07-1322.,07-1910.
• Citation: 528 F.3d 292
• Parties: UNITED STATES of America ex rel. Karen T. WILSON, Plaintiff-Appellant, v. GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT; Cherokee County Soil & Water Conservation District; Richard Greene, in his individual capacity; William Timpson, in his individual capacity; Keith Orr, in his individual and official capacities; Raymond Williams, in his individual capacity; Dale Wiggins, in his individual capacity; Gerald Phillips, in his individual capacity; Allen Dehart, in his individual capacity; Lloyd Millsaps; Jerry Williams, in his individual capacity; Billy Brown, in his individual capacity; Lynn Cody, in his individual capacity; Bill Tipton; C.B. Newton, in his individual capacity; Eddie Wood, in his individual capacity; Graham County, Defendants-Appellees, and Graham County Board Of County Commissioners; Cherokee County Board Of County Commissioners; Cherie Greene; Ricky Stiles; Betty Jean Orr; Joyce Lane; Jimmy Orr; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Lloyd Kissleburg; Ted Orr; Bernice Orr; John Doe, Jr.; John Doe Corporation; Governmental Entities, 1-99, Defendants. United States of America ex rel. Karen T. Wilson, Plaintiff-Appellee, v. Keith Orr, in his individual and official capacities; Jerry Williams, in his individual capacity, Defendants-Appellants, and Graham County Soil & Water Conservation District; Graham County Board of County Commissioners; Cherokee County Soil & Water Conservation District; Cherokee County Board of County Commissioners; Richard Greene, in his individual capacity; Cherie Greene; William Timpson, in his individual capacity; Ricky Stiles; Betty Jean Orr; Raymond Williams, in his individual capacity; Dale Wiggins, in his individual capacity; Joyce Lane; Gerald Phillips, in his individual capacity; Allen Dehart, in his individual capacity; Jimmy Orr; Lloyd Millsaps; Billy Brown, in his individual capacity; Lynn Cody, in his individual capacity; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Bill Tipton; Lloyd Kissleburg; C.B. Newton, in his individual capacity; Eddie Wood, in his individual capacity; Ted Orr; Bernice Orr; John Doe, Jr.; John Doe Corporation; Governmental Entities, 1-99; Graham County, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

528 F.3d 292

UNITED STATES of America ex rel. Karen T. WILSON, Plaintiff-Appellant, v. GRAHAM COUNTY SOIL & WATER CONSERVATION DISTRICT; Cherokee County Soil & Water Conservation District; Richard Greene, in his individual capacity; William Timpson, in his individual capacity; Keith Orr, in his individual and official capacities; Raymond Williams, in his individual capacity; Dale Wiggins, in his individual capacity; Gerald Phillips, in his individual capacity; Allen Dehart, in his individual capacity; Lloyd Millsaps; Jerry Williams, in his individual capacity; Billy Brown, in his individual capacity; Lynn Cody, in his individual capacity; Bill Tipton; C.B. Newton, in his individual capacity; Eddie Wood, in his individual capacity; Graham County, Defendants-Appellees, and Graham County Board Of County Commissioners; Cherokee County Board Of County Commissioners; Cherie Greene; Ricky Stiles; Betty Jean Orr; Joyce Lane; Jimmy Orr; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Lloyd Kissleburg; Ted Orr; Bernice Orr; John Doe, Jr.; John Doe Corporation; Governmental Entities, 1-99, Defendants.

United States of America ex rel. Karen T. Wilson, Plaintiff-Appellee, v. Keith Orr, in his individual and official capacities; Jerry Williams, in his individual capacity, Defendants-Appellants, and Graham County Soil & Water Conservation District; Graham County Board of County Commissioners; Cherokee County Soil & Water Conservation District; Cherokee County Board of County Commissioners; Richard Greene, in his individual capacity; Cherie Greene; William Timpson, in his individual capacity; Ricky Stiles; Betty Jean Orr; Raymond Williams, in his individual capacity; Dale Wiggins, in his individual capacity; Joyce Lane; Gerald Phillips, in his individual capacity; Allen Dehart, in his individual capacity; Jimmy Orr; Lloyd Millsaps; Billy Brown, in his individual capacity; Lynn Cody, in his individual capacity; Eugene Morrow; Charles Lane; Charles Laney; George Postell; Bill Tipton; Lloyd Kissleburg; C.B. Newton, in his individual capacity; Eddie Wood, in his individual capacity; Ted Orr; Bernice Orr; John Doe, Jr.; John Doe Corporation; Governmental Entities, 1-99; Graham County, Defendants.

No. 07-1322.

No. 07-1910.

United States Court of Appeals, Fourth Circuit.

Argued: January 29, 2008.

Decided: June 9, 2008.

ARGUED: Mark Tucker Hurt, Abingdon, Virginia, for United States of America ex rel. Karen T. Wilson. Christopher G. Browning, Jr., Solicitor General, North Carolina Department of Justice, Raleigh, North Carolina; Zeyland G. McKinney, Jr., Robbinsville, North Carolina, for Graham County Soil & Water Conservation District, Cherokee County Soil & Water Conservation District, Richard Greene, in his individual capacity, William Timpson, in his individual capacity, Keith Orr, in his individual and official capacities, Raymond Williams, in his individual capacity, Dale Wiggins, in his individual capacity, Gerald Phillips, in his individual capacity, Allen Dehart, in his individual capacity, Lloyd Millsaps, Jerry Williams, in his individual capacity, Billy Brown, in his individual capacity, Lynn Cody, in his individual capacity, Bill Tipton, C.B. Newton, in his individual capacity, Eddie Wood, in his individual capacity, Graham County. ON BRIEF: Roy Cooper, Attorney General, Raleigh, North Carolina, for Graham County Soil & Water Conservation District, Gerald Phillips, Allen Dehart, Lloyd Millsaps, Cherokee County Soil & Water Conservation District, Bill Tipton, C.B. Newton and Eddie Wood; Sean F. Perrin, Womble, Carlyle, Sandridge & Rice, P.L.L.C., Charlotte, North Carolina, for Graham County, Raymond Williams, Dale Wiggins and Lynn Cody; Roy Patton, Canton, North Carolina, for Richard Greene and Billy Brown.

Before MOTZ, TRAXLER, and DUNCAN, Circuit Judges.

Vacated and remanded by published opinion. Judge Traxler wrote the opinion, in which Judge Motz and Judge Duncan joined.

OPINION

TRAXLER, Circuit Judge:

The central issue in this appeal is the scope of the "public disclosure" jurisdictional bar contained in the False Claims Act, 31 U.S.C.A. §§ 3729-33 (West 2003 & Supp.2007).¹ Addressing an issue that has divided the circuit courts, the district court concluded that certain audits and reports issued by state and local governmental entities satisfied the requirements of the public disclosure bar and therefore deprived it of subject matter jurisdiction over this action. We conclude that the public disclosure bar applies to federal administrative audits, reports, hearings or investigations, but not to those conducted or issued by a state or local governmental entity. Factual questions remain in this case, however, about whether an investigation and report issued by a federal agency satisfy certain other requirements of the public disclosure bar, and those factual issues must be resolved by the district court in the first instance. Accordingly, we vacate the district court's decision rejecting Wilson's claims and its decision denying the defendants' request for attorneys' fees, and we remand for further proceedings.

I.

A.

In February 1995, a storm hit parts of western North Carolina, causing extensive flooding and erosion. Defendants Graham County and Cherokee County applied for assistance under the Emergency Watershed Protection Program (the "EWP Program"), a federal disaster assistance program operated by the United States Department of Agriculture (the "USDA") and administered through the National Resources Conservation Service (the "NRCS") and the United States Forest Service. See 7 C.F.R. §§ 624.1-624.11 (2008). The NRCS entered into agreements with the counties (the "EWP contracts") under which the counties would perform or hire a contractor to perform the necessary clean-up and repair work, with the county bearing 25% of the costs and the USDA bearing the remaining costs.

The EWP contracts permitted the counties to coordinate and perform the clean-up through their soil and water conservation districts. As to the EWP contracts that are relevant to this appeal, Graham County and Cherokee County delegated the work to their soil and water conservation districts. Rather than using their own employees, the conservation districts decided to hire independent contractors to perform the remediation work.

The EWP program required an NRCS employee to inspect all work done and certify its compliance with the EWP contract before a county could be reimbursed for the costs of the repair work. Typically, the NRCS's government representative would fill out the reimbursement request based on job diaries and the like maintained by those performing the work. The government representative would submit the reimbursement form to the county for its approval and signature. The government inspector (also an NRCS employee) would inspect the work and certify the claim for payment.

Defendant Richard Greene was the NRCS's district conservationist for the area encompassing Graham and Cherokee counties. Although he was a federal employee, Greene worked out of the offices of the Graham County Soil and Water Conservation District (the "Graham Conservation District"). Greene was the government representative for the Graham County and Cherokee County EWP contracts, and he was also named one of the government inspectors for those contracts. Defendant Bill Timpson, an NRCS soil conservationist, was also designated as a government inspector for the Graham County and Cherokee County EWP contracts.

As the government representative for the EWP contracts, Greene was involved in the selection of a contractor to perform the work on behalf of the counties. Greene had difficulty finding a contractor to perform the Graham County EWP work within the time frame called for by the EWP contract. Defendant and cross-appellant Keith Orr was an employee of the Graham Conservation District. With the approval of Graham County, the Graham Conservation District awarded its EWP work to Orr. Orr was expected to perform the EWP work on his own time, rather than during the hours he was working for the Graham Conservation District, and the parties agreed that he would be paid for the work as any other contractor would be paid. Greene and other federal officials knew that Orr was a conservation district employee and that he had been awarded the EWP work. At Greene's suggestion, the contract to perform Cherokee County's EWP work was awarded to defendant Billy Brown, a friend of Greene's.

Karen Wilson was a secretary for the Graham Conservation District. She contends that in her capacity as secretary, she learned of irregularities in the performance of the EWP contracts by the Graham Conservation District and by the Cherokee County Soil and Water Conservation District (the "Cherokee Conservation District"). Wilson was troubled by the fact Orr had been hired to perform Graham County's EWP work, and she became suspicious of the arrangements between Greene, Brown, Orr, and Timpson after Orr told her that the men were splitting the proceeds of the EWP contract. One aspect of the Cherokee County EWP work called for downed trees from the affected area to be used to shore up eroded creek banks. Although Greene told Wilson that the logs had been stolen, she later learned that Greene had sold the logs to a lumbermill and kept the proceeds for himself.²

In the summer of 1995, Wilson raised her concerns with various county and conservation district officials. Wilson discussed her concerns with two NRCS employees in November 1995 and sent a letter setting out her concerns to the NRCS state office in December 1995. In November 1996, Wilson was interviewed by an agent from the USDA's Office of Inspector General about the EWP contracts.

After learning of the problems with the EWP contracts, Graham County officials began an investigation of their own. County officials eventually determined that Orr had charged them for some EWP work that had not been performed....