Pettis ex rel. U.S. v. Morrison-Knudsen Co., Inc.

• Decision Date: 05 July 1978
• Docket Number: No. 77-2825,MORRISON-KNUDSEN,77-2825
• Citation: 577 F.2d 668
• Parties: , 25 Cont.Cas.Fed. (CCH) 82,700 Charles PETTIS ex rel. UNITED STATES, Plaintiff-Appellant, v.CO., INC. and Brown & Root, Inc., et al., Defendants- Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 668

577 F.2d 668

49 A.L.R.Fed. 836, 25 Cont.Cas.Fed. (CCH) 82,700

Charles PETTIS ex rel. UNITED STATES, Plaintiff-Appellant, v. MORRISON-KNUDSEN CO., INC. and Brown & Root, Inc., et al Defendants- Appellees.

No. 77-2825.

United States Court of Appeals, Ninth Circuit.

July 5, 1978.

Bruce J. Terris (argued), Washington, D. C., John W. Stayton, Jr. (argued), Austin, Tex., for plaintiff-appellant.

Thomas Richard Spradlin (argued), Clifford, Warnke, Glass, McIlwain & Finney, Washington, D. C., John W. Slayton, Jr., (argued), Austin, Tex., for defendants-appellees.

Appeal from the United States District Court for the District of Idaho.

Before SNEED and TANG, Circuit Judges, and INGRAM, ^* District Judge.

SNEED, Circuit Judge:

This case comes to us on Pettis' appeal from the district court's dismissal of his False Claims Act suit against Morrison-Knudsen and Brown & Root on the grounds that 31 U.S.C. § 232(C) deprived the court of jurisdiction because the information on which the suit was based was already in the possession of the United States at the time the suit was brought. ¹ Pettis contends that this provision is inapplicable to an informer who supplied the government with the information on which the denial of jurisdiction must rest; that, even if applicable, insufficient evidence was in possession of the United States prior to suit to invoke the bar; and that, under the circumstances of this case, the district court should not have dismissed Pettis' suit in the absence of a hearing to determine whether the bar was properly invoked.

We hold against Pettis on each of his contentions. That is, we conclude that jurisdiction is lacking even when an informer prior to bringing suit supplies the government with the information which under 31 U.S.C. § 232(C) invokes the bar. Furthermore, we hold that the district court did not err in determining that sufficient evidence was in possession of the United States prior to the suit by Pettis to deprive it of jurisdiction and that the hearing Pettis seeks was unnecessary under the circumstances of this case.

I.

FACTS.

Pettis was employed as the resident engineer on a road construction project in Peru from 1966-1968. His employer, Brown & Root Overseas (hereinafter Overseas), a subsidiary of Brown & Root, Inc., was the general engineer on the project. Constructora Emkay (hereinafter Emkay), a subsidiary of Morrison-Knudsen Co., was the general contractor for the project and the United States Agency for International Development was involved in its financing.

The project ran into problems from the start. Unexpected landslides made construction difficult and required reengineering of many sections of the road. Pettis' observations of these developments led him to complain about what he considered to be irregularities. He believed that certain officials of both Overseas and Emkay were attempting to cover up some of these problems, as well as fraudulently to charge redesign and repeat construction work to the contract. He saw other practices that he also considered fraudulent. He approached both Peruvian and United States officials in 1967 to inform them of these irregularities. In December 1968 Pettis was discharged from his employment, allegedly as a result of the charges he had made. The Peruvian government, which was conducting an investigation of the project, required Pettis to remain in Peru and assist in the investigation. As a result of this investigation, the contract with Overseas and Emkay was terminated and the Peruvian government took over work on the project. A negotiated settlement of the claims made by Peru against Emkay and Overseas was finally entered into on February 19, 1974.

The Agency for International Development conducted two audits of the project, at least partially as a result of the charges made by Mr. Pettis. One audit was completed in 1969 and the other in 1970. A study of the project was also done in 1969 by an independent consulting geologist. Pettis was still dissatisfied and notified the office of United States Senator William Proxmire, at whose request the General Accounting Office conducted an investigation. A report on the project was issued by the GAO on December 2, 1971.

On December 17, 1971, Pettis filed a False Claims Act suit against Morrison-Knudsen, Brown & Root, and Overseas in the District Court for the District of Columbia. On April 24, 1972, this action was dismissed for failure to join Emkay, an indispensable party defendant. Just prior to this dismissal Pettis had filed similar False Claims Act suits in the District of Idaho against Morrison-Knudsen and Emkay and in the Southern District of Texas against Brown & Root and Overseas. The Idaho and Texas suits were held in abeyance pending the outcome of Pettis' appeal from the dismissal in the District of Columbia court. In January 1974 the order of dismissal was affirmed by the Court of Appeals for the District of Columbia Circuit, solely on the ground of forum non conveniens. On August 28, 1974, the Judicial Panel on Multidistrict Litigation ordered that the Texas case be transferred to the District of Idaho for consolidated pretrial proceedings.

All the defendants then moved for dismissal on the basis of the bar of 31 U.S.C. § 232(C) and supported their motion with affidavits. Pettis' only response was a memorandum arguing that a hearing should be held on the issue. On April 10, 1975, the district court, without holding a hearing, granted the motion to dismiss for lack of jurisdiction. This appeal followed. We affirm.

We shall examine each of Pettis' contentions in the order set forth in the introduction of this opinion.

II.

SCOPE OF THE JURISDICTIONAL BAR OF 31 U.S.C. § 232(C).

The applicable portion of 31 U.S.C. § 232(C) provides that "(t)he court shall have no jurisdiction to proceed with any such suit brought under clause (B) of this section or pending suit brought under this section whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States, or any agency, officer or employee thereof, at the time such suit was brought." Appellant asks us to read into this provision an exception applicable to situations in which the person bringing suit is the source of the information possessed by the government prior to suit.

We begin by noting that the language of 31 U.S.C. § 232(C) affords no crevice of ambiguity within which to nestle the exception Pettis seeks. It presents a face, smooth, sharp, and unyielding. Nonetheless, we must heed the Supreme Court's recent admonition in Train v. Colorado Public Interest Research Group, 426 U.S. 1, 9-10, 96 S.Ct. 1938, 48 L.Ed.2d 434 (1976), to examine relevant legislative history in the search for the intent of Congress even when the statute is clear and unambiguous on its face. It is always possible that Congress did not quite mean what it said and did not quite say what it meant.

The portion of the statute at issue here was added to the False Claims Act by the extensive amendments of 1943. 57 Stat. 608. Early in 1943 the Supreme Court held, under the then existing version of the False Claims Act, which had its origin in the Act of March 2, 1863, 12 Stat. 696, c. 67, that a qui tam or informer action could be maintained by a private person on behalf of the United States even when based solely on information acquired from an indictment. United States ex rel. Marcus v. Hess, 317 U.S. 537, 545-48, 63 S.Ct. 379, 87 L.Ed. 443 (1943). The immediate concern of Congress was to do away with these so-called "parisitical suits." United States v. Pittman, 151 F.2d 851, 854 (5th Cir. 1945), cert. denied, 328 U.S. 843, 66 S.Ct. 1022, 90 L.Ed. 1617 (1946); United States v. Rippetoe, 178 F.2d 735, 736 (4th Cir. 1949).

The House and Senate, however, adopted different approaches for accomplishing this end. The House bill completely abolished qui tam actions. 89 Cong.Rec. 10844 (Dec. 17, 1943). The Senate's approach was less drastic. Qui tam actions survived when based upon information, evidence and sources "not then in the possession of the United States, unless obtained from such person (bringing the suit) by the United States in the course of any investigation by a grand jury, Congressional Committee, or other public body, or before a United States Commissioner or other proceeding instituted or conducted by it." 89 Cong.Rec. 10845 (Dec. 17, 1943).

Had this language survived, the exception Pettis seeks perhaps could fairly be found to have been intended by Congress. The difficulty is that it did not. The Conference Committee substituted the language which now appears in the statute for that in the Senate version. The Conference Report stated:

Jurisdiction is denied to the court to proceed with any suit brought under clause (B) or pending suit brought under section 3491 of the Revised Statutes (private suits) whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States, or any agency, officer or employee thereof, at the time such suit was brought.

89 Cong.Rec. 10845 (Dec. 17, 1943).

There exists in the legislative history no explicit explanation for the Conference Committee's action. That it compromised the differences between the Senate and House versions is clear; but why it struck the particular compromise it did remains obscure. Opponents of the compromise in the House recognized that the honest informer would be barred from bringing suit if he had turned his information over to the government prior to filing suit. Remarks of Congressman Miller of Missouri, 89 Cong.Rec. 10847 (Dec. 17, 1943). On the other hand, it was recognized that the honest informer, under another portion of 31 U.S.C. § 232(C), ² could bring suit prior to divulging his information to the United States and maintain that suit if the United States did not choose in the appropriate manner to assume the burden. It is quite...