559 U.S. 280 (2010), 08-304, Graham County Soil and Water Conservation District v. United States ex rel. Wilson

Docket Nº:08-304.
Citation:559 U.S. 280, 130 S.Ct. 1396, 176 L.Ed.2d 225, 78 U.S.L.W. 4214
Opinion Judge:STEVENS, Justice.
Party Name:GRAHAM COUNTY SOIL AND WATER CONSERVATION DISTRICT et al., Petitioners v. UNITED STATES ex rel. Karen T. WILSON.
Attorney:Christopher G. Browning, Jr., Solicitor General, Roy Cooper, Attorney General of North Carolina, Raleigh, NC, for Petitioner. Mark T. Hurt, Abingdon, VA, for Respondent. Douglas Hallward-Driemeier, for United States as amicus curiae. Zeyland G. McKinney, Robbinsville, NC, for Petitioner Keith Orr...
Judge Panel:STEVENS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, GINSBURG, and ALITO, JJ., joined, and in which SCALIA, J., joined except as to Part IV. SCALIA, J., filed an opinion concurring in part and concurring in the judgment. SOTOMAYOR, J., filed a dissenting ...
Case Date:March 30, 2010
Court:United States Supreme Court
 
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Page 280

559 U.S. 280 (2010)

130 S.Ct. 1396, 176 L.Ed.2d 225, 78 U.S.L.W. 4214

GRAHAM COUNTY SOIL AND WATER CONSERVATION DISTRICT et al., Petitioners

v.

UNITED STATES ex rel. Karen T. WILSON.

No. 08-304.

United States Supreme Court

March 30, 2010

Argued November 30, 2009

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 08–304.

[130 S.Ct. 1398] Syllabus [*]

The False Claims Act (FCA) authorizes both the Attorney General and private qui tarn relators to recover from persons who make false or fraudulent payment claims to the United States, but it bars qui tarn [176 L.Ed.2d 228] actions based upon the public disclosure of allegations or transactions in, inter alia, "a congressional, administrative, or Government Ac­counting Office [(GAO)] report, hearing, audit, or investigation." 31 U.S.C. §3730(e)(4)(A). Here, federal contracts provided that two North Carolina counties would remediate areas damaged by flooding and that the Federal Government would shoulder most of the costs. Respondent Wilson, then an employee of a local government body in­volved in this effort, alerted local and federal officials about possible fraud. Both the county and the State issued reports identifying po­tential irregularities in the contracts' administration. Subsequently, Wilson filed a qui tam action, alleging, as relevant here, that peti­tioners, county conservation districts and local and federal officials, knowingly submitted false payment claims in violation of the FCA. The District Court ultimately dismissed for lack of jurisdiction be­cause Wilson had not refuted that her action was based upon allega­tions publicly disclosed in the county and state reports, which it held were "administrative" reports under the FCA's public disclosure bar. In reversing, the Fourth Circuit concluded that only federal adminis­trative reports may trigger the public disclosure bar.

Held:

The reference to "administrative" reports, audits, and investiga­tions in §3730(e)(4)(A) encompasses disclosures made in state and lo­cal sources as well as federal sources. Pp. 1401-1411, 176 L.Ed.2d, at 231-241.

(a) Section 3730(e)(4)(A) specifies three categories of disclosures that can deprive federal courts of jurisdiction over qui tarn suits. The language at issue is contained in the second category (Category 2). Pp. 1401-1402, 176 L.Ed.2d, at 231.

(b) The FCA's plain text does not limit "administrative" to federal sources. Because that term modifies "report, hearing, audit, or inves­tigation" in a provision about "the public disclosure" of fraud on the United States, it is most naturally read [130 S.Ct. 1399] to describe government agency

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activities. But since "administrative" is not itself modified by "federal," there is no immediately apparent basis for excluding state and local agency activities from its ambit. The interpretive maxim noscitur asociis—"a word may be known by the company it keeps," Russell Motor Car Co. v. United States, 261 U.S. 514, 519, 43 S.Ct. 428, 67 L.Ed. 778, 58 Ct. Cl. 708 --does not support the Fourth Circuit's more limited view. In Category 2, "ad­ministrative" is sandwiched between the federal terms "congres­sional" and "[GAO]," but these items are too few and too disparate to qualify as "a string of statutory terms," S. D. Warren Co. v. Maine Bd. of Environmental Protection, 547 U.S. 370, 378, 126 S.Ct. 1843, 164 L.Ed.2d 625, or "items in a list," Beecham v. United States, 511 U.S. 368, 371, 114 S.Ct. 1669, 128 L.Ed.2d 383, for noscitur a sociis purposes. Furthermore, evaluating "administrative" within the public disclosure bar's larger scheme, the Court observes that Cate­gory 2's terms are themselves sandwiched between phrases in Cate­gory 1 ("criminal, civil, or administrative hearing") and Category 3 ("news media") that are generally understood to include nonfederal sources; and Category 1 contains the same term ("administrative") that is at issue. Even if Category 1 were best understood to refer to adjudicative proceedings and Category 2 to legislative or quasi- [176 L.Ed.2d 229] legislative activities, state and local administrative sources of a legis­lative-type character are presumably just as public, and just as likely to put the Federal Government on notice of a potential fraud, as state and local administrative hearings of an adjudicatory character. The FCA's overall federal focus shines no light on the specific question whether the public disclosure bar extends to nonfederal contexts. And the fact that state legislative sources are not included in §3730(e)(4)(A) carries no clear implications for the status of state administrative sources. Pp. 1402-1406, 176 L.Ed.2d, at 232-236.

(c) The legislative record does not support an exclusively federal in­terpretation of "administrative." The current §3730(e)(4)(A) was en­acted to strike a balance between encouraging private persons to root out fraud and stifling parasitic lawsuits. How exactly the statute came to strike this balance as it did is uncertain, as significant sub­stantive changes—including the introduction of "administrative" in Category 2—were inserted without floor debate or other discussion, as "technical" amendments. Though Congress wanted "to strengthen the Government's hand in fighting false claims," Cook County v. United States ex rel. Chandler, 538 U.S. 119, 133–134, 123 S.Ct. 1239, 155 L.Ed.2d 247, and encour­age more qui tam suits, it also determined to bar a subset of those suits that it deemed unmeritorious or downright harmful. The ques­tion here concerns that subset's precise scope; and on that matter, the record is all but opaque, leaving no "evident legislative purpose" to guide resolution of this discrete issue, United States v. Bornstein, 423 U.S. 303, 310, 96 S.Ct. 523, 46 L.Ed.2d 514. Pp. 1406-1409, 176 L.Ed.2d, at 236-239.

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(d) Respondent's additional arguments in favor of limiting "admin­istrative" to federal sources are unpersuasive. Pp. 1409-1411, 176 L.Ed.2d, at 239-241.

528 F.3d 292, reversed and remanded.

STEVENS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, GINSBURG, and ALITO, JJ., joined, and in which SCALIA, J., joined except as to Part IV. SCALIA, J., filed an opinion concurring in part and concurring in the judgment. SOTOMAYOR, J., filed a dissenting opinion, in which BREYER, J., joined.

OPINION

Page 283

[130 S.Ct. 1400] Christopher G. Browning, Jr., Solicitor General, Roy Cooper, Attorney General of North Carolina, Raleigh, NC, for Petitioner.

Mark T. Hurt, Abingdon, VA, for Respondent.

Douglas Hallward-Driemeier, for United States as amicus curiae.

Zeyland G. McKinney, Robbinsville, NC, for Petitioner Keith Orr.

Sean F. Perrin, Womble Carlyle, Sandridge & Rice, PLLC, for Petitioners Graham County, Raymond Williams, Dale Wiggins and Lynn Cody.

Brian S. McCoy, Rock Hill, SC, for Respondent.

OPINION

STEVENS, Justice.

Since its enactment during the Civil War, the False Claims Act, 31 U.S.C. §§3729-3733, has authorized both the Attorney General and private qui tam relators to recover from persons who make false or fraudulent claims for payment to the United States. The Act now contains a provision barring qui tam actions based upon the public disclosure of allegations or transactions in certain speci­fied sources. §3730(e)(4)(A). The question before us is whether the reference to "administrative" reports, audits, and investigations in that provision [176 L.Ed.2d 230] encompasses disclo­sures made in state and local sources as well as federal sources. We hold that it does. 1

I

In 1995 the United States Department of Agriculture (USDA) entered into contracts with two counties in North Carolina authorizing them to perform, or to hire others to perform, cleanup and repair work in areas that had suf­fered extensive flooding. The Federal Government agreed to shoulder 75 percent of the contract costs. Respondent Karen T. Wilson was at that time an employee of the Graham

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County Soil and Conservation District, a special-purpose government body that had been delegated partial responsibility for coordinating and performing the reme­diation effort. Suspecting possible fraud in connection with this effort, Wilson voiced her concerns to local offi­cials in the summer of 1995. She also sent a letter to, and had a meeting with, agents of the USDA.

Graham County officials began an investigation. An accounting firm hired by the county performed an audit and, in 1996, issued a report (Audit Report) that identified several potential irregularities in the county's administra­tion of the contracts. Shortly thereafter, the North Caro­lina Department of Environment, Health, and Natural Resources issued a report (DEHNR Report) identifying similar problems. The USDA's Office of Inspector General eventually issued a third report that contained additional findings.

In 2001 Wilson filed this action, alleging that petition­ers, the Graham County and [130 S.Ct. 1401] Cherokee County Soil and Water Conservation Districts and a number of local and federal officials, violated the False Claims Act (FCA) by knowingly submitting false claims for payment pursuant to the 1995 contracts. She further alleged that petitioners retaliated against her for aiding the federal investigation of those false claims. Following this Court's review of the statute of limitations applicable to Wilson's retaliation claim, Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409, 125 S.Ct. 2444, 162 L.Ed.2d 390 (2005), the Court of Appeals ordered that that claim be dismissed as time barred. 424 F.3d 437 (CA4 2005). On remand, the District Court subsequently dismissed Wilson's qui tam action for lack of...

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