Ridenour v. Kaiser-Hill Co.

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
FEB 9 2005
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

DAVID E. RIDENOUR; JEFFREY B.
PETERS; MARK GRAF,

Plaintiffs-Appellants,

UNITED STATES OF AMERICA, ex
rel.,

Plaintiff-Appellee,

v. No. 01-1510

KAISER-HILL COMPANY, L.L.C.,
and Statutory Agent: Corporation
Services Company; WACKENHUT
SERVICES LIMITED LIABILITY
COMPANY, and Statutory Agent:
James A. Dierker; EG&G ROCKY
FLATS, INC., and Statutory Agent:
C.T. Corporation,

Defendants-Appellees.

Appeal from the United States District Court
for the District of Colorado
(D.C. No. 97-WM-2191)

Wilbert Benjamin Markovits of Markovits and Greiwe Co., L.P.A., Cincinnati,
Ohio, (Phyllis E. Brown of Copeland & Brown Co., L.P.A., Cincinnati, Ohio;
Louise Roselle of Waite, Schneider, Bayless & Chesley Co., L.P.A., of
Cincinnati, Ohio; and James J. Christoph of McCormick & Christoph, P.C.,
Boulder, Colorado, with him on the briefs) for Plaintiffs-Appellants.
Douglas N. Letter, Appellate Litigation Counsel, (Robert D. McCallum, Jr.,
Assistant Attorney General, and John W. Suthers, United States Attorney, with
him on the brief) Department of Justice, Washington, D.C., for Plaintiff-Appellee.

Gail D. Zirkelbach and Michael D. Schag of McKenna Long & Aldridge, L.L.P.,
Denver, Colorado; Gregory Kellam Scott of Kaiser-Hill Company, L.L.C.,
Golden, Colorado; Thomas J. Heiden of Miller, Canfield, Paddock & Stone,
P.L.C., Grand Rapids, Michigan, on the briefs for Defendant-Appellee Kaiser-Hill
Company, LLC.

Richard J. Webber of Arent Fox Kintner Plotkin & Kahn, P.L.L.C., Washington,
D.C.; Dennis W. Brown and Stacy A. Carpenter of Baldwin & Brown, P.C.,
Denver, Colorado, on the brief for Defendant-Appellee Wackenhut Services
Limited Liability Company.

John T. Boese and Michael J. Anstett of Fried, Frank, Harris, Shriver & Jacobson,
Washington, D.C.; and F. Gregory McKenna and Alan Epstein of Hall & Evans,
L.L.C., Denver, Colorado, on the brief for Defendant-Appellee EG&G Rocky
Flats, Inc.

Before KELLY and O’BRIEN, Circuit Judges and EAGAN 1, District Judge.

O’BRIEN, Circuit Judge.

This is a qui tam action, 2 filed under the False Claims Act (FCA), 31

1
The Honorable Claire V. Eagan, U.S. District Judge, Northern District of
Oklahoma, sitting by designation.
2
The Latin phrase “qui tam” is an abbreviation for “qui tam pro domino
rege quam pro se ipso in hac parte sequitur,” meaning, “who as well for the king
as for himself sues in this matter.” Black’s Law Dictionary 1262 (7th ed. 1999).

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U.S.C. § 3729. David E. Ridenour, Jeffrey B. Peters, and Mark Graf (Relators)

contend Appellees, security providers 3 at Rocky Flats Nuclear Weapons Plant

(Rocky Flats), conspired to present for payment, knowingly presented, and were

paid for, false claims for deficient, defective, or non-existent security measures,

in violation of 31 U.S.C. § 3729(a)(1), (a)(2) and (a)(3). After declining to

intervene, the Government filed a motion to dismiss the action, which the district

court granted. United States ex rel. Ridenour v. Kaiser-Hill Co., L.L.C., 174 F.

Supp.2d 1147 (D. Colo. 2001). Relators appeal.

Relators present several issues on appeal: (1) whether the district court

applied the correct standard of review in granting the Government’s motion to

dismiss; (2) whether it erred in finding the Government met its burdens under the

applied standard; (3) whether it erred in denying Relators’ request to conduct

certain discovery in preparation for hearing on the Government’s motion to

dismiss, their request to subpoena the Government’s person most knowledgeable

about the decision to seek dismissal, and their request to inquire at the hearing

into the reasons underlying the dismissal decision; and (4) whether it erred in

allowing the Government to present evidence refuting certain of the Relators’

allegations where the parties had stipulated Relators’ claim had merit. We

3
Kaiser-Hill Company, L.L.C.; Wackenhut Services, L.L.C.; EG&G Rocky
Flats, Inc.

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exercise jurisdiction pursuant to 28 U.S.C. § 1291 4 and affirm.

FACTUAL BACKGROUND

The Department of Energy (DOE) operated Rocky Flats 5 as a nuclear

weapons manufacturing facility from 1953 through 1992. Rocky Flats is located

near Golden, Colorado. In 1989, the Environmental Protection Agency (EPA)

designated the by-then radiologically-contaminated facility a CERCLA 6

Superfund 7 site. The site is to be decontaminated and closed by 2006.

4
Originally, the district court only dismissed with prejudice Relators’ two
counts brought under 31 U.S.C. § 3729(a)(1), (a)(2) and (a)(3). The court
dismissed without prejudice their constructive discharge claim in violation of 31
U.S.C. § 3730(h). Relators filed their appeal before the resolution of this third
claim. To cure this jurisdictional defect, they voluntarily dismissed with
prejudice the constructive discharge claim. Because all claims that were
presented to the district court are resolved, we have jurisdiction to hear this
appeal.
5
Rocky Flats and its operators have been involved in several other actions
before us, dealing in some manner with nuclear contamination problems. See
United States ex rel. Stone v. Rockwell Int’l Corp., 282 F.3d 787 (10th Cir. 2002)
(qui tam action charging environmental violations); Brever v. Rockwell Int’l
Corp., 40 F.3d 1119 (10th Cir. 1994) (employees alleged retaliation for
cooperating with the FBI in its investigation of environmental crimes); Building
& Const. Dept. v. Rockwell Int’l Corp., 7 F.3d 1487 (10th Cir. 1993) (employees
presented medical monitoring claim for exposure to unsafe levels of radioactive
and hazardous substances); McKay v. United States, 703 F.2d 464 (10th Cir.
1983) (land owners adjacent to Rocky Flats sued for damage to property caused
by nuclear contaminants).
6
CERCLA is the acronym for the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq.
7
Sites listed as CERCLA priority are entitled to EPA cleanup funding
under a general federal fund for hazardous waste management. 42 U.S.C. § 9611;

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 Between 1989 and 1995, EG&G Rocky Flats, Inc., was the primary

contractor with DOE for management and operations at Rocky Flats, which

included security. During these same years, Wackenhut Services, L.L.C.,

contracted directly with the DOE to provide security at the site. In 1995, the

DOE awarded Kaiser-Hill Co., L.L.C., the environmental cleanup contract at

Rocky Flats. Since 1995, Kaiser-Hill has subcontracted the security portion of its

contract to Wackenhut.

Relators performed security work at Rocky Flats, and each Relator

independently voiced his concern about what he perceived as weak security. They

ultimately filed suit as qui tam relators under the FCA on October 8, 1997,

alleging EG&G, Wackenhut, and Kaiser-Hill were paid for security measures they

either did not provide or provided below acceptable levels. At the time of the

filing, Rocky Flats housed more than fourteen tons of weapons grade plutonium

and six tons of highly enriched uranium. The Government requested and received

several time extensions from the district court, totaling two years, in which it

investigated the merits of the qui tam action. Pursuant to 31 U.S.C. § 3730(b)(2)

and (b)(3), the case remained under seal during this investigation. Ultimately, the

Government declined to intervene and the case was unsealed on December 14,

1999.

26 U.S.C. § 9507.

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 On April 13, 2000, the Government requested the DOE be added to the

certificate of service to be kept aware of the progress of the suit. The

Government became concerned about the handling of classified information and

filed a status report concerning this issue on July 5, 2000. At a hearing on

Defendants-Appellees’ motion to stay proceedings pending the Government’s

resolution of classified information, the Government announced it would file a

motion to dismiss, which it did on August 21, 2000.

The Government argued its motion to dismiss should be granted because

the lawsuit would delay the cleanup and closure of Rocky Flats, as well as

compromise national security interests by risking inadvertent disclosure of

classified information. Relators opposed dismissal, claiming the Government was

seeking dismissal for fraudulent and arbitrary and capricious reasons and the

reasons for dismissal were not rationally related to a legitimate government

purpose. They also argued the Government could not seek to dismiss the action

without first intervening under 31 U.S.C. § 3730(c)(3). Relators sought discovery

regarding the Government’s stated reasons for dismissal and endeavored to

subpoena the “most knowledgeable” government witness regarding the

Government’s reasons for dismissal. (Appellants’ Br. at 2.) The district court

denied these requests. After a five-day evidentiary hearing conducted pursuant to

31 U.S.C. § 3730(c)(2)(A), in which the Government stipulated for purposes of

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the hearing that the Relators’ claims were meritorious, the magistrate

recommended the Government’s motion to dismiss be granted. The district court

adopted the recommendation and dismissed with prejudice the claims considered

in this appeal.

DISCUSSION

I. FCA claims

We review de novo the district court’s interpretation of the FCA and its

determination of what standard to apply to the Government when it moves to

dismiss a qui tam action. See Foutz v. United States, 72 F.3d 802, 804 (10th Cir.

1995) (construction of federal statutes reviewed de novo). We review the district

court’s dismissal of a qui tam action with prejudice for abuse of discretion.

Stone, 282 F.3d at 809.

A. The FCA’s Purposes and Provisions

The purpose of the FCA “is to enhance the Government’s ability to recover

losses sustained as a result of fraud against the Government.” S. Rep. No. 99-

345, at 1 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5266. It empowers a

private individual (a relator) to bring a civil claim on his or her own behalf, and

on behalf of the Government, against a person or company who knowingly

presents a false claim to the Government for payment. 31 U.S.C. §§ 3729(a),

3730(a) and (b)(1). The relator can only dismiss the action upon written consent

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of the court and the Attorney General. 8 § 3730(b)(1). Amended in 1986, the most

substantial modifications to the FCA created an increased incentive for private

individuals to bring qui tam suits and granted the Government greater control

over these privately brought actions. Congress increased the relator’s incentive 9

to bring qui tam actions by guaranteeing them a percentage of the recovery if the

action is successful, and slightly increasing their maximum potential recovery. S.

Rep. No. 99-345, at 27 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5292.

Relators are entitled to fifteen to twenty-five percent of the proceeds of the action

or settlement of the claim if the Government intervenes. § 3730(d)(1). If the

8
Even where the Government has declined to intervene, relators are
required to obtain government approval prior to entering a settlement or
voluntarily dismissing the action. See Searcy v. Philips Electronics N. Amer.
Corp., 117 F.3d 154, 155 (5th Cir. 1997); United States v. Health Possibilities,
P.S.C., 207 F.3d 335, 339 (6th Cir. 2000) (section 3730(b)(1) provides the
Government with an absolute veto of any proposed qui tam settlement because the
plain language of the statute does not limit this right). But see United States ex
rel. Hullinger v. Hercules, Inc., 80 F. Supp.2d 1234, 1240 (D. Utah 1999)
(limiting relator’s obligation to seek government approval of a settlement to the
initial sixty days plus extensions); United States ex rel. Stinson, Lyons, Gerlin &
Bustamante, P.A. v. Provident Life & Accident Ins. Co., 811 F. Supp. 346, 347
(E.D. Tenn. 1992).
9
The increased incentives to private individuals have proven effective at
helping the Government recover substantial sums of fraudulently obtained
payments. From the effective date of the 1986 amendments to 2002, more than
3,000 qui tam cases were filed, resulting in nearly $5 billion in recovered monies
from settlements and awards. Gregory G. Brooker, The False Claims Act:
Congress Giveth and the Courts Taketh Away, 25 Hamline L. Rev. 373, 382-84
(Spring 2002). In just one fiscal year, from October 1, 2000, to September 30,
2001, relators received more than $210 million as part of their statutory share of
the settlements and awards. Id. at 383 n.72.

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Government declines intervention, relators receive twenty-five to thirty percent.

§ 3730(d)(2). Relators are also given certain guarantees of involvement: if the

Government proceeds with the action, the relators have the right to continue as a

party, § 3730(c)(1); if the Government moves to dismiss the claim over relators’

objections, they are entitled to a hearing, § 3730(c)(2)(A); and if the Government

settles the claim, relators are entitled to judicial determination, via a hearing, that

the Government’s proposed settlement is fair, adequate, and reasonable,

§ 3730(c)(2)(B). S. Rep. 99-345, at 25-26 (1986), reprinted in 1986

U.S.C.C.A.N. 5266, 5290-91. See also Vermont Agency of Natural Res. v. United

States ex rel. Stevens, 529 U.S. 765, 772 (2000) (Stevens, J., dissenting). These

hearings, however, are only to be granted if relators can show a “substantial and

particularized need for a hearing.” 10 S. Rep. 99-345, at 26 (1986), reprinted in

1986 U.S.C.C.A.N. 5266, 5291.

Through the 1986 amendments, Congress granted the Government

additional opportunities to intervene and increased its power to control qui tam

10
It is not clear whether in practice this notice and hearing
requirement has amounted to much of a hurdle for the
government. However, we note that Congress
apparently intended that the provision authorizing
relators to formally object to any motions to dismiss or
proposed settlements between the government and
defendant should not pose a significant burden for the
government or courts.
United States ex rel. Kelly v. Boeing Co., 9 F.3d 743, 754 n.11 (9th Cir. 1993).

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actions. Under the old Act, the Government only had the initial sixty days in

which to decide to intervene. The 1986 amendments allow the Government to

obtain extensions beyond the initial sixty days in which to investigate the claims,

and even if the Government initially declines to intervene, it can intervene later,

at any time, upon a showing of good cause. S. Rep. 99-345 at 26-27 (1986),

reprinted in 1986 U.S.C.C.A.N. 5266, 5291-92; 31 U.S.C. § 3730(b)(3) and

(c)(3).

The FCA prescribes the process for a qui tam action. After the relator files,

the complaint remains under seal for at least sixty days, plus any extensions,

during which time the Government has the opportunity to investigate the claim

and determine whether it wants to intervene. § 3730(b)(2) and (3). After the

Government intervenes or declines to intervene, the complaint is unsealed and

served on the defendant. § 3730(b)(3). If the Government intervenes, whether

initially or later under § 3730(c)(3), it takes over the primary responsibility of

prosecuting the action and is not bound by the relator’s acts. § 3730(c)(1). If the

Government intervenes, the relator retains the right to continue as a party, subject

to certain limitations. Id. Not only may the Government limit a relator’s

involvement, it may also stay discovery, or pursue alternate remedies against the

defendant. § 3730(c)(2)(C), (c)(2)(D), (c)(4), and (c)(5). If the Government

declines to intervene in the action, the relators have the right to conduct the

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action, subject, however, to possible future intervention by the Government upon

a showing of good cause. § 3730(c)(3). The Government can dismiss or settle

the action despite the relator’s objections. § 3730(c)(2)(A) and (c)(2)(B).

B. Intervention

At the outset, we consider Relators’ argument that the Government must

intervene under § 3730(c)(3) before moving to dismiss under § 3730(c)(2)(A). 11

The magistrate determined the FCA did not contain this requirement. The district

court disagreed. Nonetheless, it construed the Government’s motion to dismiss as

including an implied motion to intervene, and identified as good cause for the

motion the intent of the Government to dismiss the case. 12 We decline to construe

11
This argument relates to our consideration of the correct standard of
review for dismissal as follows. The Relators contend we should apply a good
cause standard to the Government’s motion to dismiss because this is the standard
for late intervention. As they put it,
It is impossible to analyze whether there is “good cause” for late
intervention without also analyzing whether there is “good cause” for
the dismissal that prompts the intervention. The False Claims Act’s
“good cause” provision should be interpreted to require a
meaningful, probing and substantive review of the government’s
decision to seek dismissal.
(Appellants’ Br. at 11.) Thus, in aid of resolving the issue of the correct standard
of review to apply to the Government’s dismissal, we first consider whether the
Government must intervene under § 3730(c)(3) before moving to dismiss under §
3730(c)(2)(A).
12
“Having decided . . . that the government may move to dismiss a
meritorious case in which it initially declined to participate, it is an unavoidable
conclusion that the movant has good cause to intervene to exercise that right.”
(Appellants’ Br., Tab D at 5.)

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the FCA as requiring intervention for cause before dismissal because a plain

reading of the statute does not require it, canons of statutory construction do not

support such a result, and in our view, such a reading would render the FCA

constitutionally infirm.

The FCA provides “[t]he Government may dismiss the action

notwithstanding the objections of the person initiating the action if the person has

been notified by the Government of the filing of the motion and the court has

provided the person with an opportunity for a hearing on the motion.” 31 U.S.C.

§ 3730(c)(2)(A). In interpreting this provision, we rely on a longstanding canon

of statutory construction which we recently revisited in NISH v. Rumsfeld:

As a general rule, statutory language is to be interpreted according to
the common meaning of the terms employed. Our analysis of
statutory construction must begin with the language of the statute
itself, and [absent] a clearly expressed legislative intention to the
contrary, that language must ordinarily be regarded as conclusive.

348 F.3d 1263, 1268 (10th Cir. 2003) (quotation marks, citations and alteration

omitted). Applying this canon, we identify nothing in the language of §

3730(c)(2)(A) to suggest the authority of the Government to dismiss a qui tam

action is dependent upon prior intervention in the case. Nor can we identify

legislative intent to the contrary. In fact, the Senate report incident to passage of

the measure spelled out the purpose of late intervention.

Under current law, the Government is barred from reentering the
litigation once it has declined to intervene during this initial period.

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 The Committee recognizes that this limited opportunity for
Government involvement could in some cases work to the detriment
of the Government's interests. Conceivably, new evidence
discovered after the first 60 days of the litigation could escalate the
magnitude or complexity of the fraud, causing the Government to
reevaluate its initial assessment or making it difficult for the qui tam
relator to litigate alone. In those situations where new and
significant evidence is found and the Government can show 'good
cause' for intervening, paragraph (2) provides that the court may
allow the Government to take over the suit.

S. Rep. 99-345, at 26-27 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5291-92.

This language clearly suggests the purpose of late intervention is to pursue

litigation, not dismiss it.

The D.C. Circuit has recently held the Government need not first intervene

in a qui tam action before moving to dismiss it. Although the case concerned a

government motion to dismiss during the seal period, the court’s reasoning

applies with equal force to a motion to dismiss filed after the seal period:

[Section] 3730(b)(2) makes intervention necessary only if the
government wishes to “proceed with the action.” Ending the case by
dismissing it is not proceeding with the action; to “proceed with the
action” means, in the False Claims Act, that the case will go forward
with the government running the litigation.

Swift v. United States, 318 F.3d 250, 251 (D.C. Cir.), cert. denied, 539 U.S. 944

(2003). 13 As we just noted, the purpose of late intervention, as with intervention

13
The Swift court suggested the justification for dismissal would
necessarily provide the good cause for intervention:

In any event, the question whether the False Claims Act requires the

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in the seal period, is to proceed with the action. Other courts have agreed in dicta

that prior intervention is not necessary to enable a government motion to dismiss.

See Juliano v. Fed. Asset Disposition Ass’n, 736 F. Supp. 348, 351 (D. D.C.

1990), aff’d, 959 F.2d 1101 (D.C. Cir. 1992); Kelly, 9 F.3d at 753 n.10; United

States ex rel. Sequoia Orange Co. v. Baird-Neece Packing Corp., 151 F.3d 1139,

1145 (9th Cir. 1998); United States ex rel. Friedman v. Rite Aid Corp., 152 F.

Supp.2d 766, 772 (E.D. Pa. 2001).

Our holding comports with constitutional concerns as well. As the

Supreme Court has instructed, “it is a cardinal principle of statutory interpretation

. . . that when an Act of Congress raises a serious doubt as to its constitutionality,

[we] will first ascertain whether a construction of the statute is fairly possible by

which the question may be avoided.” Zadvydas v. Davis, 533 U.S. 678, 689

(2001) (quotation marks omitted). The constitutionality of the FCA has been

challenged several times under the claim it violates the separation of powers

doctrine inherent in the Take Care Clause. 14 In this case, we examine whether the

government to intervene before dismissing an action is largely
academic. As Swift conceded at oral argument, if there were such a
requirement, we could construe the government's motion to dismiss
as including a motion to intervene, a motion the district court granted
by ordering dismissal.

318 F.3d at 252.
14
The Executive Branch is entrusted with the duty to “take Care that the
Laws be faithfully executed . . . .” U.S. Const., art. II, § 3.

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Government would be unconstitutionally hamstrung by a requirement, as urged by

Relators, to intervene with a showing of good cause before moving to dismiss a

qui tam action.

In a case where the Government successfully intervened upon a showing of

good cause, we have previously held the qui tam provisions are constitutional

under the Take Care Clause. Stone, 282 F.3d at 807. We expressly reserved the

question of whether the qui tam provisions would pass constitutional muster if the

Government was denied intervention for cause. Id. at 806 n.6. Stone cited

favorably to decisions of other circuits that have uniformly held the FCA is

constitutionally sound as long as it is interpreted as vesting in the Executive

Branch sufficient control over qui tam actions so there is no violation of its duty

to enforce the laws of the land. The Fifth Circuit has stated the Government

retains sufficient control of a qui tam action to save the FCA from being

unconstitutional because the Government can veto settlements without

intervening, and it “retains the unilateral power to dismiss an action

notwithstanding the objections of the person.” Riley v. St. Luke’s Episcopal

Hosp., 252 F.3d 749, 753 (5th Cir. 2001) (en banc) (quotation marks omitted).

The Ninth Circuit has concluded the FCA does not violate the doctrine of

separation of powers because the Government retains sufficient control over qui

tam actions, including the power “albeit somewhat qualified, to end qui tam

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litigation.” Kelly, 9 F.3d at 754. These limitations to which the Kelly court refers

are the FCA requirements to give the relator notice and a hearing. Id. at 753.

The Sixth Circuit has also concluded the FCA scheme embraces sufficient

provisions to assure the freedom of the Government to control a qui tam action.

United States ex rel. Taxpayers Against Fraud v. General Elec. Co., 41 F.3d

1032, 1041 (6th Cir. 1994). See also Stevens, 529 U.S. at 801 (history of qui tam

action in England and America sufficient to establish it does not implicate Take

Care Clause).

Although the qui tam provisions have thus far withstood constitutional

challenge, we conclude that to condition the Government’s right to move to

dismiss an action in which it did not initially intervene upon a requirement of late

intervention tied to a showing of good cause would place the FCA on

constitutionally unsteady ground. Because we are to interpret statutes in a manner

that renders them constitutionally valid, Zadvydas, 533 U.S. at 689, we should

avoid an interpretation that unnecessarily binds the Government. Therefore, we

conclude that the Government, in a case in which it has declined to intervene in

the seal period, is not required to intervene with a showing of good cause under §

3730(c)(3) before moving to dismiss the action under § 3730(c)(2)(A). Nor do we

engraft a good cause requirement on a government motion to dismiss.

C. Dismissal

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 We turn now to the correct standard of review of a government motion to

dismiss a qui tam action under 31 U.S.C. § 3730(c)(2)(A). Although the Act

itself is silent as to the standard of review of a motion to dismiss, the Senate

Report incident to passage of this section explained its purpose:

[W]hen the Government takes over a privately initiated action, the
individual who brought the suit will be served, upon request, with
copies of all pleadings filed as well as deposition transcripts.
Additionally, the person who brought the action may formally object
to any motions to dismiss or proposed settlements between the
Government and the defendant.

Any objections filed by the qui tam plaintiff may be
accompanied by a petition for an evidentiary hearing on those
objections. The Committee does not intend, however, that
evidentiary hearings be granted as a matter of right. We recognize
that an automatic right could provoke unnecessary litigation delays.
Rather, evidentiary hearings should be granted when the qui tam
relator shows a 'substantial and particularized need' for a hearing.
Such a showing could be made if the relator presents a colorable
claim that the settlement or dismissal is unreasonable in light of
existing evidence, that the Government has not fully investigated the
allegations, or that the Government's decision was based on arbitrary
and improper considerations.

S. Rep. 99-345, at 26 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5291. 15

15
In Swift, the D.C. Circuit discounted this language insofar as it might
illuminate the standard of review of a government motion to dismiss a qui tam
action in which it had not intervened because the language related to an earlier
version of § 3730(c)(2)(A) that was not enacted. 318 F.3d at 253. The earlier
version permitted a relator to object to government dismissal only in cases in
which the Government had intervened. Id. Notwithstanding this distinction, we
consider the language of the Senate report instructive on the standard of review of
a government motion to dismiss a qui tam action whether or not the Government
has previously intervened.

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 In Swift, the D.C. Circuit considered the standard to apply to a government

motion to dismiss a qui tam action where the Government has not previously

intervened and the defendant has not yet been served. 318 F.3d at 251. In its

view, the Government’s decision to dismiss is nearly unreviewable. 16 Section

3730(c)(2)(A)’s “opportunity for a hearing” language is simply intended to

provide a forum for the relator to try to convince the Government not to dismiss

the case. Id. at 253. The court reserved deciding the correct standard to apply in

instances where the defendant was already served. Id. at 252-53. Because the

case we review is one in which the defendants were served, and because under

these circumstances we construe the hearing language of § 3730(c)(2)(A) to

impart more substantive rights for a relator, we look to the Ninth Circuit for

guidance.

The Ninth Circuit took up the standard of review of a government motion to

dismiss a qui tam action in Sequoia v. Baird-Neece, 151 F.3d 1139. In that case,

relators filed thirty-four qui tam actions against entities involved in the citrus

industry, alleging violations of citrus fruit marketing orders promulgated by the

Secretary of Agriculture. Id. at 1141. The Government elected to intervene in

only ten of these actions. Id. at 1142. Five years after the initial filing of the qui

16
The Swift court indicated there might be exceptions to unfettered
government discretion to dismiss a qui tam action as, for example, where fraud on
the court is alleged. 318 F. 3d at 253.

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tam actions, the Government moved to intervene in the remaining cases under §

3730(c)(3), upon showing good cause. Id. The Government declared it would

litigate the qui tam actions if settlement could not be reached. Id. A year later,

the Government announced its intent to withdraw from the qui tam cases. Id.

Later still, the Government moved to dismiss the cases under § 3730(c)(2)(A),

over relators’ objections. Id. For purposes of the motion to dismiss, the

Government, as in this case, conceded the relators’ claims were meritorious. Id.

at 1143.

The Ninth Circuit established the following standard for testing whether

dismissal by the Government is appropriate: “(1) identification of a valid

government purpose; and (2) a rational relation between dismissal and

accomplishment of the purpose.” Id. at 1145 (quotation marks omitted). If the

Government satisfies this two-step test, “the burden switches to the relator to

demonstrate that dismissal is fraudulent, arbitrary and capricious, or illegal.” Id.

(quotation marks omitted). The district court here applied this standard, and we

adopt it. In our view, it recognizes the constitutional prerogative of the

Government under the Take Care Clause, comports with legislative history, and

protects the rights of relators to judicial review of a government motion to

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dismiss. 17

We next examine whether the district court erred in finding the Government

met the standard set in Sequoia v. Baird-Neece, and in dismissing with prejudice

the Relators’ action. After an exhaustive review of the record, we conclude the

court did not abuse its discretion in dismissing the qui tam action.

1. Rational Relation to Valid Government Purpose

The Government argues that protecting classified information from

disclosure and the timely closing of the contaminated Rocky Flats facility 18 are

valid governmental purposes supporting its motion to dismiss the qui tam action.

Relators agree. Where the parties part company, however, is on the question of

whether dismissal of the action bears a rational relation to the stated objectives.

Based on evidence adduced at the five-day evidentiary hearing, the district court,

adopting the recommendation of the magistrate, concluded that it does. We

concur.

17
We do not decide at this time whether § 3730(c)(2)(A) gives the
judiciary the right to pass judgment on the Government’s decision to dismiss an
action where the defendant has not been served and where the Government did
not intervene in the action, facts of the sort presented in Swift.
18
Rocky Flats houses radiological and chemical contaminants that pose a
risk to public safety and the environment. It is scheduled to close in December
2006, and clean-up is currently in progress. A closure delay would cost
approximately one million dollars a day and expose area residents to continued
health and environmental risks. In excess of two and a half million people live
within a fifty-mile radius of Rocky Flats.

-20-
 The Government demonstrated that classified documents required in the

litigation 19 would present a risk of inadvertent disclosure, implicating national

security. The degree to which classified documents could be declassified or

redacted was unknown. However, anyone handling classified information would

need a security clearance. The magistrate judge found that the risk of inadvertent

disclosure of classified information was greatest where much classified

information was involved in the litigation; the risk lessened where classified

information could be declassified or redacted. In the court’s view, the risk of

inadvertent disclosure, even if theoretically minimal, as the Relators argued, was

sufficient to justify dismissal of the action. As the Sequoia test instructs, to

establish a rational relation to a valid governmental purpose, “[t]here need not be

a tight fitting relationship between the two; it is enough that there are plausible,

or arguable, reasons supporting the agency decision.” United States ex. rel.

Sequoia Orange Co. v. Sunland Packing House Co., 912 F. Supp. 1325, 1341

(E.D. Ca. 1995) (quotation marks omitted). The Government met the test here.

The Government also demonstrated the litigation would delay the clean-up

and closure of Rocky Flats by diverting the focus of security planners and

management from the clean-up effort, by requiring the reassignment of personnel

19
The Government estimates litigation would require review of thousands
of classified documents; Relators claim this estimate is highly exaggerated.

-21-
from the project to a review of classified documents for declassification or

redaction in aid of litigation, and by placing an added financial burden on the

project through a requirement to shift funds from clean-up to litigation. The

Relators argued that many of their claims could have been determined without a

significant diversion of resources by the Government. The magistrate concluded

that while the evidence of diversion of resources from the clean-up effort to

litigation was not “concrete” (Appellants’ Br., Tab I at 21), it sufficiently

established the likelihood of some diversion of resources, and “any diversion of

personnel attention away from the closure project would negatively impact the

closure schedule.” 20 (Id. at 22) Once again, the Government satisfied the Sequoia

test by advancing a “plausible, or arguable” reason for the dismissal. Id.

2. Arbitrary and Capricious

Once the Government meets its burden of establishing a rational

relationship between dismissal of a qui tam action and a valid government

purpose, the “burden switches to the relator to demonstrate that dismissal is

fraudulent, arbitrary and capricious, or illegal.” Sequoia v. Baird-Neece, 151 F.3d

at 1145 (quotation marks omitted). Relators’ principal argument is that the

20
The district court took into account a rational cost/benefit analysis
conducted by the Government establishing that the benefits that might be obtained
by successful prosecution of the qui tam action were outweighed by the risk the
litigation would divert resources from the clean-up effort and delay closure of
Rocky Flats.

-22-
Government’s motion to dismiss was fraudulent because it was motivated by a

desire to spare DOE embarrassment over security lapses at Rocky Flats. 21 They

contend a revolving door of employment between the DOE and its contractors at

Rocky Flats fostered a climate of cover-up of security violations at the facility,

including misuse of classification of documents in aid of the cover-up, and

inspired both the DOE and its contractors to prevail upon the Department of

Justice to dismiss the qui tam action. The district court found that while there

was evidence of innocent cross-employment between the DOE and its contractors,

there was no evidence that either the DOE or any of its contractors prevailed upon

the Department of Justice to dismiss the action for improper purposes. In fact,

there was no evidence the Department of Justice exercised anything other than its

independent judgment in deciding to dismiss the case. While the evidence

suggested vigorous disagreement over security at Rocky Flats, the court declined

to construe this as evidence that the Government’s decision to dismiss was in aid

of a cover-up. In fact, as the court noted, the alleged security deficiencies were

reported to the Secretary of Energy, Congress and the press, and led to an

21
Relators offered additional evidence of an arbitrary and capricious
decision to dismiss: the Government waited until eight months after the seal
period to move to dismiss, even though the reasons it offered for dismissal were
known to it when the complaint was filed; and the Government did not dismiss a
similar case. The district court concluded these allegations, while true, did not,
without more, demonstrate the decision to dismiss was arbitrary and capricious.

-23-
investigation by the DOE Inspector General. In all of this heat, the district court

found no light. Neither do we. The district court correctly concluded the

Relators failed to meet their burden to show the Government’s motion to dismiss

was fraudulent, arbitrary and capricious, or illegal.

II. Discovery and Other Rulings in Limine

In preparation for the hearing on the Government’s motion to dismiss, the

magistrate stayed discovery. The district court approved the stay. We review

discovery rulings for an abuse of discretion. Motley v. Marathon Oil Co., 71 F.3d

1547, 1550 (10th Cir. 1995), cert. denied, 517 U.S. 1190 (1996). The discovery

Relators wanted to conduct would have involved classified documents. Thus,

discovery would have allowed what the Government was trying to avoid in

moving to dismiss the action: divulging classified information. Furthermore, the

Relators sought through discovery to challenge the Government’s motivation

behind the dismissal. 22 The magistrate denied the requested discovery on the

grounds it would reach classified information and was irrelevant to the question

of whether the proposed dismissal was rationally related to a valid governmental

22
Relators sought to depose “the Government personnel whose affidavits
were attached in support of the United States Motion to Dismiss, Government
personnel with primary involvement in the United States decision to decline
intervention, and Government personnel with primary involvement in the United
States decision to file the Government’s motion to dismiss.” (Appellants’ App.,
Vol. III at 779.)

-24-
purpose. The court limited Relators’ proof to their own witnesses and documents

and cross-examination of government witnesses.

We expect the district court to exercise its discretion in determining when

and how to limit discovery. Clearly, the district court did not abuse its discretion

in this case in limiting discovery so as to avoid revelation of classified

information, particularly when this was one of the very purposes behind the

Government’s motion to dismiss. Neither, for the reasons we next discuss in

relation to the deliberative process privilege, did it err in denying inquiry into the

Government’s subjective motivation behind its dismissal.

Ruling in limine, the magistrate quashed the Relators’ subpoena of the

Government’s person most knowledgeable about its motion to dismiss. 23

Furthermore, she indicated she would apply the deliberative process privilege at

the hearing to any communications between government agents that were pre-

decisional or deliberative relative to the motion to dismiss. Relators object to

both rulings as a bar to what they claim is a legitimate inquiry into the subjective

motivation of the Government in filing its motion to dismiss. We review a

decision to quash a subpoena and evidentiary rulings of the trial court for abuse

of discretion. Heat & Control, Inc. v. Hester Indus., Inc., 785 F.2d 1017, 1022

23
Relators issued a subpoena under Fed. R. Civ. P. 30(b)(6) for the
testimony of the “person most knowledgeable” about the Government’s motion to
dismiss.

-25-
(Fed. Cir. 1986) (quash subpoena); Faulkner v. Super Valu Stores, Inc., 3 F.3d

1419, 1433 (10th Cir. 1993) (evidentiary ruling).

The magistrate was correct to quash the subpoena for the Government’s

person most knowledgeable about its motion to dismiss for the plain reason that

Fed. R. Civ. P. 30(b)(6), the provision under which the subpoena issued,

authorizes a subpoena for deposition, and not in-court testimony. As to the

deliberative process privilege, it

“rests on the obvious realization that officials will not communicate
candidly among themselves if each remark is a potential item of
discovery and front page news, and its object is to enhance the
quality of agency decisions by protecting open and frank discussion
among those who make them within the Government.”

Casad v. U.S. Dep’t of Health & Human Servs., 301 F.3d 1247, 1251 (10th Cir.

2002) (quoting U.S. Dep’t of Interior v. Klamath Water Users Protective Ass’n,

532 U.S. 1, 8-9 (2001) (quotations and citations omitted)). Relators argue the

Government should not be allowed the protection of the deliberative process

privilege because they seek to establish the Government’s motivation, for which

the privilege is unavailable. They rely on In re: Subpoena Duces Tecum Served

on the Office of the Comptroller of the Currency, 156 F.3d 1279 (D.C. Cir. 1998).

The unavailability of the privilege in that case, however, did not extend to

inquiries into the Government’s subjective motivation for a decision. Id. at 1280.

“When a party challenges agency action as arbitrary and capricious the

-26-
reasonableness of the agency’s action is judged in accordance with its stated

reasons. Agency deliberations not part of the record are deemed immaterial.” Id.

at 1279 (citation omitted). Therefore, the district court was correct to apply the

deliberative process privilege.

III. Stipulation of Facts

Prior to the evidentiary hearing on the motion to dismiss, the Government

agreed to stipulate, for purposes of the hearing, that Relators’ claims of security

deficiencies at Rocky Flats had merit. Relators quibble that the district court

erred in allowing the Government to present evidence refuting certain of the

Relators’ factual allegations. We review the lower court’s decision to admit,

exclude, limit or refuse to limit the scope of the evidence for abuse of discretion.

McCue v. State of Kansas, Dept. of Human Res., 165 F.3d 784, 788 (10th Cir.

1999).

Relators list only two examples of statements they believe challenged the

merits of their claims. In one, a Government witness expressed doubts the

Relators would win anything in the lawsuit. He felt the nuclear material at Rocky

Flats was secure. He believed the potential benefits of prosecuting the lawsuit

were outweighed by the benefits of timely closure of the facility. In the same

vein, the Government argued in closing that it preferred timely closure to the

uncertain benefits at the end of a lawsuit. We first note that a stipulation to the

-27-
merit of a claim does not translate into automatic recovery on the claim.

Therefore, it was fair for the Government to weigh potential benefits from the

lawsuit against the perceived benefits of terminating the action immediately.

Next, Relators do not explain, nor can we understand, how the Government

statements they cite negate the stipulation that there were security deficiencies at

Rocky Flats. Finally, Relators provide no authority to support their contention

that when parties stipulate that one side’s claim has merit for purposes of

streamlining a hearing, the opposing party is prevented from presenting evidence

pertaining to the very questions for which the hearing is being conducted.

Because Relators failed to cite to legal authority regarding this argument, and

because we find this argument completely lacks merit, it fails. F.D.I.C. v.

Schuchmann, 235 F.3d 1217, 1230 (10th Cir. 2000).

CONCLUSION

We hold the FCA does not require the Government to intervene prior to

moving to dismiss a qui tam action, we adopt the Sequoia standard for reviewing

the Government’s motion to dismiss, and we find it has met its burden under

Sequoia v. Baird-Neece. We also hold the district court did not abuse its

discretion in its rulings in discovery or in limine. We AFFIRM the decision of

the district court.

-28-
No. 01-1510, Ridenour v. Kaiser-Hill Co., L.L.C.,

EAGAN, J., dissenting in part and concurring in part and in the result.

I dissent only on the basis of the majority’s determination that the FCA

does not require the Government to intervene prior to moving to dismiss a qui tam

action. In my view, where the Government has declined to intervene during the

sixty-day seal period, it is required to intervene upon a showing of good cause

under 31 U.S.C. § 3730(c)(3) before moving to dismiss the action. I believe a

plain reading of the statute requires it, canons of statutory construction support

such a result, and such a reading does not render the FCA unconstitutionally

infirm.

The majority’s focus on the provision of the statute which permits the

Government to dismiss a qui tam action, 31 U.S.C. § 3730(c)(2)(A), disregards

the surrounding provisions and the context in which the dismissal provision

appears. Subsection (c)(2) relates to (c)(1), which provides:

If the Government proceeds with the action, it shall have the primary
responsibility for prosecuting the action, and shall not be bound by
an act of the person bringing the action. Such person shall have the
right to continue as a party to the action subject to the limitations
set forth in paragraph (2).

31 U.S.C. § 3730(c)(1)(emphasis added). Thus, subsection (c)(2) contains

limitations applicable only to subsection (c)(1), the provision relating to the

Government’s election to proceed with the action. By their terms, subsections
(c)(1) and (c)(2) do not apply where the government elects not to proceed during

the seal period. Subsection (c)(3), however, relates to the Government’s election

not to proceed, as here. It provides, in relevant part:

If the Government elects not to proceed with the action, the person
who initiated the action shall have the right to conduct the action. . . .
When a person proceeds with the action, the court, without limiting
the status and rights of the person initiating the action, may
nevertheless permit the Government to intervene at a later date upon
a showing of good cause.

Id., § 3730(c)(3). This is the subsection which provides for late intervention by

the Government after an initial determination not to proceed.

In effect, the majority’s reading of the statute eviscerates the provision

addressing late intervention. Familiar canons of statutory construction direct the

court to avoid such an interpretation. E.g., Oxy USA, Inc. v. Babbitt, 268 F.3d

1001, 1006 (10th Cir. 2001) (“We must avoid, whenever possible, a statutory

interpretation that would ‘render superfluous other provisions in the same

enactment.’” (quoting Freytag v. Commissioner of Internal Revenue, 501 U.S.

868, 877 (1991)); New Mexico Cattle Growers Ass’n v. United States Fish and

Wildlife Serv., 248 F.3d 1277, 1285 (10th Cir. 2001) (“We will not construe a

statute in a way that renders words or phrases meaningless, redundant, or

superfluous.” (quoting Bridger Coal Co./Pac. Minerals, Inc. v. Director, Office of

Workers’ Compensation Programs, 927 F.2d 1150, 1153 (10th Cir.1991)).

Congress clearly intended to provide for late intervention by the Government.

-2-
 Further, this court has long acknowledged: “The plainness or ambiguity of

statutory language is determined by reference to the language itself, the specific

context in which that language is used, and the broader context of the statute as a

whole.” In re Wise, 346 F.3d 1239, 1241 (10th Cir. 2003) (quoting Robinson v.

Shell Oil Co., 519 U.S. 337, 341, (1997)); see Ferroni v. Teamsters, Chauffeurs &

Warehousemen Local No. 222, 297 F.3d 1146, 1151 (10th Cir. 2002) (citations

omitted) (“To determine the plain meaning of the statute, we must consider the

statute as a whole.”); Wyoming v. United States, 279 F.3d 1214, 1230 (10th Cir.

2002) (To construe legislation, the court examines “the purpose, structure, and

legislative history of the entire statute.” (quoting California v. Federal Energy

Regulatory Comm’n, 495 U.S. 490, 504 (1990)); In re Overland Park Financial

Corp., 236 F.3d 1246, 1252 (10th Cir. 2001) (“When interpreting statutory

language, this court ‘must look to the particular statutory language at issue, as

well as the language and design of the statute as a whole.’”) (citation omitted.);

United States v. Nichols, 184 F.3d 1169, 1171 (10th Cir. 1999) (“When

interpreting statutory language, however, appellate courts must examine the ...

language in context, not in isolation.”). Here, the context, design, and structure

of the statute as a whole indicate that the government has unfettered discretion to

dismiss if it intervenes within the sixty-day seal period, but not after.

-3-
 The legislative history cited by the majority speaks to the circumstances of

this case: “In those situations where new and significant evidence is found and

the Government can show ‘good cause’ for intervening, paragraph (2) provides

that the court may allow the Government to take over the suit.” S. Rep. 99-345,

at 26-27 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5292. This legislative

history relates to the section of the amendment which became subsection (c)(3) of

the statute. The legislative history is clear that late intervention requires good

cause and even suggests that it requires new and significant evidence. Contrary

to the conclusion of the majority, taking over the suit does not mean that

intervention under subsection (c)(3) is permitted only if the government plans to

proceed. Such is too expansive a reading of the legislative history. It does mean

taking control of the action -- which inherently includes the ability to seek

dismissal.

Examination of the statutory language in context and in light of the

legislative history does not place the FCA on unsteady constitutional ground. The

Take Care Clause of the United States Constitution entrusts the Executive Branch

with the duty to “take Care that the Laws be faithfully executed . . . .” U.S. Const.

art. II, § 3. The FCA vests in the Executive Branch sufficient control over qui

tam actions; I do not read it to vest the Executive Branch with absolute control

where the Executive Branch effectively abdicates its duty to control the litigation

-4-
by failing to intervene initially within the seal period or to show good cause for

late intervention. The Government is not bound unnecessarily by a requirement to

intervene with a showing of good cause before moving to dismiss a qui tam

action.

To the extent the Government’s motion to dismiss can be construed as an

implied motion to intervene, the issue becomes, then, whether the Government

showed good cause for intervention. The district court found that mere intent of

the Government to dismiss the case constitutes good cause. Such finding

effectively eliminates the need to intervene at all, a finding which, again, renders

the FCA’s late intervention provision superfluous. I therefore disagree with the

district court as to what constitutes good cause. In my view, the Government did

show good cause by demonstrating that the lawsuit would compromise national

security interests and delay the cleanup and closure of Rocky Flats.

I recognize that there is persuasive authority from other jurisdictions to

support the majority’s conclusion as to intervention, but I believe that those

courts have engaged in iconoclastic statutory construction to reach that

conclusion. As the majority acknowledges, the decision in Swift v. United States,

318 F.3d 250, 251 (D.C. Cir.), cert. denied, 539 U.S. 944 (2003), concerned a

government motion to dismiss during the seal period, and the language in other

cases occurs in dicta, Kelly, 9 F.3d at 753 n.10; United States ex rel. Friedman v.

-5-
Rite Aid Corp., 152 F. Supp. 2d 766, 772 (E.D. Pa. 2001); Juliano v. Fed. Asset

Disposition Ass’n , 736 F. Supp. 348, 351 (D.D.C. 1990), or simply ignores the

language in 31 U.S.C. § 3730(c)(3) that the court may permit late intervention

“without limiting the status and rights of the person initiating the action.” See

Sequoia, 151 F.3d at 1145 (9th Cir. 1998). The Juliano court recognized that

subsection (c)(2)(A), “by its placement in the statute, appears to pertain to actions

in which the government has already intervened,” but reasoned that the

“distinction is not crucial.” 736 F. Supp. at 351. In my opinion, the distinction is

crucial. If Congress intended the construction placed upon the statute by these

courts, it would have chosen an alternative placement or omitted the limitations

present in the statutory language.

The majority declined to “engraft a good cause requirement on a

government motion to dismiss.” Maj. Op. 17. I believe that its holding as to

intervention essentially engrafts the Sequoia standard on a government motion to

intervene after the seal period, and that such action contravenes the express

language of the statute, as well as Congressional intent. For these reasons, I

respectfully dissent. However, I concur in the result because, here, the

Government has shown good cause to intervene under 31 U.S.C. § 3730(c)(3), as

the district court found, and the reasons for intervention support dismissal under

any standard.

-6-