Walburn v. Lockheed Martin Corp.

• Decision Date: 20 December 2005
• Docket Number: No. 04-3458.,04-3458.
• Citation: 431 F.3d 966
• Parties: Jeff WALBURN, Plaintiff-Appellant, v. LOCKHEED MARTIN CORPORATION; Lockheed Martin Utility Services, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

431 F.3d 966

Jeff WALBURN, Plaintiff-Appellant, v. LOCKHEED MARTIN CORPORATION; Lockheed Martin Utility Services, Inc., Defendants-Appellees.

No. 04-3458.

United States Court of Appeals, Sixth Circuit.

Argued: April 28, 2005.

Decided and Filed: December 20, 2005.

COPYRIGHT MATERIAL OMITTED

ARGUED:

Steve J. Edwards, Grove City, Ohio, for Appellant. Glenn V. Whitaker, Vorys, Sater, Seymour & Pease, Cincinnati, Ohio, for Appellee.

ON BRIEF:

Steve J. Edwards, Grove City, Ohio, for Appellant. Glenn V. Whitaker, Vorys, Sater, Seymour & Pease, Cincinnati, Ohio, for Appellee.

Before: SUHRHEINRICH, BATCHELDER, and JOHN R. GIBSON, Circuit Judges.^*

OPINION

JOHN R. GIBSON, Circuit Judge.

Relator Jeff Walburn appeals the district court's dismissal of his qui tam action brought under the False Claims Act, 31 U.S.C. §§ 3729-33. Walburn's suit alleges that defendant Lockheed Martin altered and submitted false documents for compensation and incentive payments under its agreement with the United States to operate the Portsmouth Gaseous Diffusion Plant in Piketon, Ohio. The district court dismissed the action under the first-to-file bar of 31 U.S.C. § 3730(b)(5). We affirm the dismissal.

Relator Walburn alleges that he was employed as a security officer at the Portsmouth Plant, patrolling areas of the plant used to enrich uranium and store nuclear materials. The plant is owned by the United States and leased by the United States Enrichment Corporation, an entity created by Congress under the Energy Policy Act of 1992, 42 U.S.C. § 2297 (repealed). Lockheed enriches uranium for commercial and national defense purposes at the plant pursuant to a contract with the United States. Walburn alleges that federal law required Lockheed to maintain accreditation with the Department of Energy in order to conduct these operations. Beginning in 1981, employees at the plant were required to wear thermoluminescent dosimeters that would mechanically measure individual doses of radiation exposure. As a condition of its Department of Energy accreditation, Lockheed was required to keep records of the dosimeter readings together with a record of each employee's dosage. Walburn alleges that after he was exposed to gases at the plant in 1994, Lockheed changed the recorded reading of his dosimeter, and that this was just one of at least 400 to 600 such changes Lockheed made to employees' dosage readings each year. He alleges that Lockheed perpetrated this fraud in order to maintain its Department of Energy accreditation and continue to receive payments from the United States under its contract to operate the Portsmouth Plant.

On July 23, 1996, Walburn filed a multi-count action against Lockheed seeking compensatory and punitive damages as a result of his exposure to gases at the Portsmouth Plant. Walburn sought relief in federal court on theories of (1) breach of contract, (2) civil rights violations under 42 U.S.C. § 1983, (3) intentional tort, and (4) loss of consortium. On July 16, 1997, the district court entered an order dismissing the action. On May 25, 2000, Walburn filed the present qui tam action under seal with the United States Department of Justice, alleging that Lockheed's falsification of the dosage readings violated § 3729(a) of the False Claims Act. See 31 U.S.C. § 3730(b)(2). Following an investigation into Walburn's allegations, the United States declined to intervene. Id.; 31 U.S.C. § 3730(b)(4)(B). Walburn elected to prosecute the action himself, and on November 12, 2002, the action was unsealed. See 31 U.S.C. § 3730(b)(4)(B). Reviewing Lockheed's motion to dismiss, the district court concluded that Walburn's allegations were encompassed by the allegations in United States ex rel. Kenneth Brooks v. Lockheed Martin Corp., et al., No. Civ. L-00-1088, 2005 WL 841997, filed in the District of Maryland on April 24, 2000. Because the Brooks complaint was filed first, the district court dismissed Walburn's action for lack of subject matter jurisdiction under the first-to-file bar of 31 U.S.C. § 3730(b)(5). United States ex rel. Walburn v. Lockheed Martin Corp., 312 F.Supp.2d 936, 940-41 (S.D.Ohio 2004). Walburn appeals the dismissal. 28 U.S.C. § 1291.

I.

We review de novo the dismissal of an action under the False Claims Act for lack of subject matter jurisdiction. United States ex rel. McKenzie v. BellSouth Telecommunications, Inc., 123 F.3d 935, 938 (6th Cir.1997); see also United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1187 (9th Cir.2001); Minnesota Ass'n of Nurse Anesthetists v. Allina Health System Corp., 276 F.3d 1032, 1040 (8th Cir.2002). Because federal courts are courts of limited jurisdiction, the plaintiff must establish subject matter jurisdiction. McKenzie, 123 F.3d at 938. We may affirm the district court's dismissal for lack of subject matter jurisdiction on any grounds supported by the record. Southwest Williamson Cty. Cmty. Ass'n, Inc. v. Slater, 173 F.3d 1033, 1036 (6th Cir.1999).

The False Claims Act "provide[s] for restitution to the government of money taken from it by fraud." United States ex rel. Augustine v. Century Health Services, Inc., 289 F.3d 409, 413 (6th Cir.2002) (quoting United States ex rel. Marcus v. Hess, 317 U.S. 537, 551, 63 S.Ct. 379, 87 L.Ed. 443 (1943)). Under the Act's qui tam provisions, a private individual may bring a civil action on behalf of the United States against persons who knowingly submit false or fraudulent claims to the government for payment in violation of 31 U.S.C. § 3729(a).¹ See 31 U.S.C. §§ 3730(b)(d). Before proceeding with the suit, a qui tam plaintiff must disclose to the government the information on which his or her claim is based. 31 U.S.C. § 3730(b)(2). If the government chooses to intervene in the action, it assumes the role of lead prosecutor. Id.; 31 U.S.C. § 3730(b)(4)(A), (c)(1). If the government declines to intervene, the qui tam plaintiff may serve the complaint on the defendant and proceed with the action on its own. 31 U.S.C. § 3730(b)(4)(B). As an incentive to bring such claims, private plaintiffs suing on behalf of the government receive a portion of the funds recovered in a successful suit. See 31 U.S.C. § 3730(d).²

The history of the False Claims Act's qui tam provisions demonstrates repeated attempts by Congress to balance two competing policies. McKenzie, 123 F.3d at 938 (discussing legislative history); United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 649-51 (D.C.Cir.1994) (same). On the one hand, the qui tam provisions seek to encourage "whistleblowers to act as private attorneys-general" in bringing suits for the common good. See United States ex rel. Taxpayers Against Fraud v. General Elec. Co., 41 F.3d 1032, 1041-42 (6th Cir.1994). On the other, the provisions seek to discourage opportunistic plaintiffs from bringing parasitic lawsuits whereby would-be relators merely feed off a previous disclosure of fraud. United States ex rel. Jones v. Horizon Healthcare Corp., 160 F.3d 326, 335 (6th Cir.1998) (citing McKenzie, 123 F.3d at 942-943). To further the latter policy, Congress has placed a number of jurisdictional limitations on qui tam actions, two of which are relevant here: the first-to-file bar of 31 U.S.C. § 3730(b)(5) and the public disclosure bar of 31 U.S.C. § 3730(e)(4)(A). Under these provisions, if Walburn's qui tam action was based upon information previously made public or if the claim had already been filed by another, the district court was required to dismiss the action. Taxpayers Against Fraud, 41 F.3d at 1035. We address the application of each provision in turn.

II.

The district court dismissed Walburn's action based on 31 U.S.C. § 3730(b)(5), concluding that the allegations contained in an earlier complaint filed against Lockheed by relator Brooks "encompassed" the allegations of Walburn's complaint. Section 3730(b)(5) provides:

When a person brings a [qui tam action], no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.

By its terms, this section "unambiguously establishes a first-to-file bar, preventing successive plaintiffs from bringing related actions based on the same underlying facts." United States ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1187 (9th Cir.2001); see also United States ex rel. LaCorte v. SmithKline Beecham Clinical Labs., Inc., 149 F.3d 227, 232 (3d Cir.1998). The first-to-file bar furthers the policy of the False Claims Act in that "[t]he first-filed claim provides the government notice of the essential facts of an alleged fraud, while the first-to-file bar stops repetitive claims." Lujan, 243 F.3d at 1187 (citing LaCorte, 149 F.3d at 233-34 (discussing legislative history)).

In deciding whether Walburn's action runs afoul of this bar, we compare his complaint with that in Brooks.³ See La Corte, 149 F.3d at 234. If both allege "all the essential facts" of the underlying fraud, the earlier-filed Brooks action bars Walburn's action, even if Walburn's complaint "incorporates somewhat different details." Id. at 232-33; Grynberg v. Koch Gateway Pipeline Co., 390 F.3d 1276, 1279 (10th Cir.2004); United States ex rel. Hampton v. Columbia/HCA Healthcare Corp., 318 F.3d 214, 217-18 (D.C.Cir.2003); Lujan, 243 F.3d at 1189. Both complaints allege that Lockheed defrauded the government in violation of the False Claims Act.⁴ The Brooks relator alleges that Lockheed "falsified, concealed and destroyed documentation" relating to "plant management and operations" and knowingly submitted these "false records and statements" to the government, all in an effort to fraudulently induce government payment under Lockheed's contract to operate the Portsmouth Plant. Walburn alleges that Lockheed maintained its Department of Energy accreditation by "knowingly concealing" its practice of "assign[ing] dosages to a person that differed from the dosages that were read from the [dosimeter] that...