Case: 10-60376 Document: 00511562991 Page: 1 Date Filed: 08/05/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 5, 2011
No. 10-60376
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA ex rel. THOMAS F. JAMISON,
Plaintiff-Appellant,
versus
MCKESSON CORPORATION;
MCKESSON MEDICAL-SURGICAL MEDINET, INC.;
GGNSC HOLDINGS, L.L.C.; GOLDEN GATE ANCILLARY, L.L.C.;
BEVERLY ENTERPRISES, INC.; CERES STRATEGIES, INCORPORATED;
CERES STRATEGIES MEDICAL SERVICES, INCORPORATED,
Defendants-Appellees.
Appeals from the United States District Court
for the Northern District of Mississippi
Before SMITH and STEWART, Circuit Judges.*
JERRY E. SMITH, Circuit Judge:
The public disclosure bar of the False Claims Act (“FCA”) deprives the dis-
trict court of jurisdiction whenever qui tam relators bring a suit based on pub-
lically available information. The district court held that it lacked jurisdiction.
*
Judge Garwood was a member of this panel but died, after oral argument, on July 14,
2011. This matter is decided by a quorum. See 28 U.S.C. § 46(d).
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Because the relator’s action included no allegations specific to the defendants,
but merely repeated a general description of fraud easily available in several
government documents, we affirm.
I.
Thomas Jamison operates a Durable Medical Equipment (“DME” or
“DMEPOS”) business that provides enteral nutrition products to nursing homes.
Under Medicare Part B, such suppliers can obtain a supplier number that allows
them to submit reimbursement claims assigned to them by the insured benefici-
ary. While attempting to sell his product during the late 1990’s, Jamison noticed
that some nursing homes, including some run by defendant Beverly Enterprises
(“Beverly”), turned him down because they had set up joint ventures with other
DME suppliers. Jamison soon learned that Beverly had created a subsidiary,
Ceres Strategies, Inc. (“Ceres”), which had its own Medicare supplier number.1
Ceres in turn had entered into a joint venture with McKesson Corporation and
its subsidiary, McKesson Medical-Surgical Medinet, Inc.2 (collectively “McKes-
son”), a DME supplier, to provide DME to Beverly’s nursing homes.
Shortly thereafter, Jamison consulted government reports indicating that
Beverly’s scheme might be fraudulent. Specifically, he read the 2003 Special
Advisory Bulletin, regarding “Contractual Joint Ventures,” from the Health and
Human Services Office of the Inspector General (“OIG”).” That report provided
an example of a fraudulent arrangement:
A hospital establishes a subsidiary to provide DME. The new sub-
1
Jamison’s information was partly inaccurate. The Beverly subsidiary with a DME
supplier number was Ceres Strategies Medical Services, Inc. (“CSMS”). Ceres Strategies was
also a subsidiary of Beverly but was a procurement company that did not have a supplier num-
ber. See infra note 5.
2
At the time of Jamison’s investigation, McKesson Medical-Surgical Medinet, Inc., was
known as “Red Line Healthcare.”
2
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sidiary enters into a contract with an existing DME company to
operate the new subsidiary and to provide the new subsidiary with
DME inventory. The existing DME company already provides DME
services comparable to those provided by the new hospital DME
subsidiary and bills insurers and patients for them.
Under such an arrangement, the DME supplier allows the nursing home
to keep a portion of the reimbursement from Medicare in return for a guarantee
that the nursing home will buy all of its DME from that supplier. With a guar-
anteed customer, the supplier can charge more for its products, and Medicare
will pay the extra cost. At the same time, the nursing home gets less expensive
DME. Nonetheless, the arrangement is fraudulent, because the nursing home
represents itself as a DME supplier but has merely created a shell company that
in fact plays no part in the delivery of DME and that consequently cannot com-
ply with the standards for DME suppliers. See 42 C.F.R. § 424.57(c).
In December 2004, Jamison filed a qui tam complaint under the FCA
against McKesson and Beverly, alleging that they participated in such a fraudu-
lent scheme.3 The complaint named about 450 other defendants, including
other nursing homes, DME suppliers, and owners or officers of such organiza-
tions, whom Jamison suspected of setting up similar arrangements.4 Although
Beverly, McKesson, and related entities were included in a list of offenders, the
3
The FCA permits suits by private parties, called “relators,” on behalf of the United
States against anyone submitting false claims to the government. If the relator is successful,
he keeps a percentage of the recovery. 31 U.S.C. § 3730(d). After the relator has filed suit,
the action is sealed for sixty days while the government decides whether to intervene. § 3730-
(b)(2). If the government chooses not to intervene, the relator may proceed independently.
§ 3730(4)(B). In this case, the government received extensions for its decision, allowing the
complaint to remain sealed through 2008, when the government intervened against Beverly
and McKesson.
4
After the government intervened against Beverly and McKesson, the complaint
against the other entities remained sealed until 2010, when the government chose not to inter-
vene. Most of the defendants were dismissed, but Jamison continued his action individually
in two cases, United States ex rel. Jamison v. Gulf South Medical Supply, Inc., No. 2:10-
CV-147 (N.D. Miss.), which has been stayed pending this appeal, and United States ex rel.
Jamison v. Delta Health Group, Inc., No. 2:10-CV-146 (N.D. Miss.).
3
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complaint included no specific allegations and described the scheme only
generally.
While waiting for the government’s decision on intervention, Jamison
focused his continued investigations on Beverly and McKesson. He summarized
his findings in a letter from his lawyer to the Department of Justice (“DoJ”) in
November 2005 indicating that Jamison had traveled to Beverly’s headquarters
and discovered that no entity named “Ceres” had a physical office there. He
described further conversations with Beverly’s employees through which he
learned that McKesson “handles everything” for Beverly and that McKesson, not
Ceres, received Beverly’s DME orders, delivered the DME, and submitted the
claims for reimbursement to Medicare using Ceres’s supplier number.
In June 2006, Jamison filed his First Amended Complaint, which con-
tained the same theories of fraud but included specific allegations against Bev-
erly and McKesson.5 In October 2008, the DoJ decided to intervene. The district
court then dismissed Jamison on the ground that his action violated the public
disclosure provisions of the FCA.6 Jamison appeals, arguing that his suit was
not based on public disclosures and that he was an original source of the infor-
mation on which his suit was based.
II.
“‘[A] challenge under the FCA jurisdictional bar is necessarily intertwined
with the merits’ and is, therefore, properly treated as a motion for summary
5
The First Amended Complaint added CSMS as a defendant, because Jamison had
learned that the Beverly subsidiary with a DME supplier number was actually CSMS, not
Ceres, as he had previously thought.
6
Those provisions were amended effective July 22, 2010. Pub. L. No. 111–148, 124
Stat. 119, 901, § 10104(j)(2) (Mar. 23, 2010). The amendments do not apply retroactively to
suits pending at the time they became effective. Graham Cnty. Soil & Water Conservation
Dist. v. United States ex rel. Wilson, 130 S. Ct. 1396, 1400 n.1 (2010). We thus address the
statute as it existed before the amendments.
4
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judgment.” United States ex rel. Reagan v. E. Tex. Med. Ctr. Reg’l Healthcare
Sys., 384 F.3d 168, 173 (5th Cir. 2004) (citation omitted). We review a summary
judgment de novo, applying the same standard as the district court. Id. Sum-
mary judgment will be granted if, viewing the evidence in the light most favora-
ble to the non-moving party, there is no genuine dispute at to any material fact
and the movant is entitled to judgment as a matter of law. Id. See FED. R. CIV.
P. 56(a).
III.
Before the 2010 amendments, the public disclosure provisions of the FCA
provided that
(A) No court shall have jurisdiction over an action under this section
based upon the public disclosure of allegations or transactions in a
criminal, civil, or administrative hearing, in a congressional, admin-
istrative, or Government Accounting Office report, hearing, audit,
or investigation, or from the news media, unless the action is
brought by the Attorney General or the person bringing the action
is an original source of the information.
(B) For purposes of this paragraph, “original source” means an indi-
vidual who has direct and independent knowledge of the informa-
tion on which the allegations are based and has voluntarily provided
the information to the Government before filing an action under this
section which is based on the information.
31 U.S.C. § 3730(e)(4) (2006). We have distilled those provisions into a three-
part test, asking “1) whether there has been a ‘public disclosure’ of allegations
or transactions, 2) whether the qui tam action is ‘based upon’ such publicly dis-
closed allegations, and 3) if so, whether the relator is the ‘original source’ of the
information.” Fed. Recovery Servs., Inc. v. United States, 72 F.3d 447, 450 (5th
Cir. 1995).
We need not follow the three steps rigidly, however. See, e.g., United
States ex rel. Fried v. W. Indep. Sch. Dist., 527 F.3d 439, 442 (5th Cir. 2008)
5
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(combining the first two steps). Indeed, combining the first two steps can be use-
ful, because it allows the scope of the relator’s action in step two to define the
“allegations or transactions” that must be publicly disclosed in step one. That
is, for the public-disclosure bar to apply, the publicly disclosed allegations or
transactions need only be as broad and as detailed as those in the relator’s com-
plaint, because that is all that is needed for the action to be “based on” the pub-
lically disclosed allegations.
A.
Consequently, we ask first whether Jamison’s action was based upon pub-
lic disclosures of allegations or transactions. Before we undertake that inquiry,
however, there are two preliminary issues.
1.
The first relates to the burden of proof. Typically, the party seeking to
invoke federal jurisdiction bears the burden of demonstrating that jurisdiction
is proper. Santos v. Reno, 228 F.3d 591, 594 (5th Cir. 2000). In regard to the
first two steps of the public disclosure bar under the FCA, however, that rule
would require the relator to prove a negative: that there are no public disclo-
sures of allegations or transactions upon which his action is based. We do not
construe our precedent to require such an impossibility. Nonetheless, once the
opposing party has identified public documents that could plausibly contain alle-
gations or transactions upon which the relator’s action is based, the relator bears
the burden of demonstrating that they do not.
In the context of this summary judgment motion, that rule means that the
defendants must first point to documents plausibly containing allegations or
transactions on which Jamison’s complaint is based. Then, to survive summary
judgment, Jamison must produce evidence sufficient to show that there is a gen-
6
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uine issue of material fact as to whether his action was based on those public
disclosures.7 In evaluating that question, we view the evidence Jamison pro-
duces in the light most favorable to him.
2.
Second, before defining the scope of Jamison’s action, we must decide
which of his complaints is relevant to that issue. He contends that we should
look to his first amended complaint, the last complaint before the government’s
intervention, as the most complete picture of his allegations. For support, he
relies on Rockwell International Corp. v. United States, 549 U.S. 457, 473-74
(2007), which held that the court can lose jurisdiction over an otherwise sound
action if the relator amends his complaint to remove the basis of the jurisdiction.
“[T]he term ‘allegations’ is not limited to the allegations of the original
complaint.” Id. at 473 (emphasis added). The Court did not hold, however, that
the original complaint is irrelevant to jurisdiction or that a relator need not
establish jurisdiction from the moment he first files his action. Indeed, Rockwell
did not speak to the question whether a relator can use an amended complaint
to establish jurisdiction when the original complaint is lacking. Consequently,
we fall back on the longstanding rule that the amendment process cannot “be
used to create jurisdiction retroactively where it did not previously exist.”8 If
7
Cf. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (describing the allocation of the
burden of proof in a typical summary judgment case).
8
Aetna Cas. & Sur. Co. v. Hillman, 796 F.2d 770, 775 (5th Cir. 1986) (holding that jur-
isdiction “cannot be created retroactively by substituting a diverse claimant for a nondiverse
party,” because the district court must have jurisdiction “[a]t the commencement of th[e] suit”).
As the Aetna court recognized, 28 U.S.C. § 1653, which allows amendment of “[d]efective alle-
gations of jurisdiction,” applies to cure only technical defects in the allegations of jurisdiction,
not substantive defects in jurisdiction. Aetna, 796 F.2d at 775-76 (emphasis added). Jamison
wishes to invoke the first amended complaint’s amendments to the scope of Jamison’s action,
which is a substantive jurisdictional fact under the FCA’s public disclosure provisions.
7
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Jamison’s complaint did not establish jurisdiction, it should have been dis-
missed; his amendments cannot save it.
B.
We thus look to Jamison’s original complaint to define the scope of his
action and to determine whether it was based on public disclosures of allegations
or transactions. That complaint described various fraudulent schemes only gen-
erally. For example, it alleged that “Defendants have entered into illegal joint
ventures in order to obtain referrals and increase the amount of money paid to
Defendants through Medicare Part B. Defendants are engaged in a variety of
such illegal joint ventures, and they are created through a number of schemes.”
The complaint then described several possible schemes, but without alleging
which defendants engaged in which schemes or what particular actions were
fraudulent. At no point did the complaint include particular allegations against
any defendant. Instead, it merely listed almost 450 nursing homes, DME suppli-
ers, and their owners or employees, and it indicated generally that they partici-
pated in some of the schemes Jamison described.9
Accordingly, we ask whether the “action” described in the complaintSS
general allegations of fraud combined with an undifferentiated list of defen-
dants—is “based upon” allegations or transactions in publically disclosed docu-
ments. The defendants point to ten documents that they say publicly disclosed
Jamison’s allegations.10 Some of those documents, such as the DMERC Medicare
9
Indeed, it is highly unlikely that Jamison’s original complaint satisfied the heightened
pleading requirement of Federal Rule of Civil Procedure 9(b) that “[i]n alleging fraud or mis-
take, a party must state with particularity the circumstances constituting fraud or mistake.”
See United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903
(5th Cir. 1997) (applying Rule 9(b) to actions under the FCA). That issue is not before us.
10
The documents include a series of reports from the Department of Health and Human
Services Office of the Inspector General (“OIG”), including: OIG, Special Advisory Bulletin:
(continued...)
8
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Advisory article, merely restate the law applicable to DME suppliers. Others
describe a typical joint-venture fraud. Those documents include general state-
ments that such fraud is “proliferating” and also list signs that indicate when
such fraud may be present. None of those documents names any particular per-
petrators or the defendants.
The only public disclosure that names any of the defendants is the
National Supplier Clearinghouse DME Supplier Directory, which is merely a list
of companies with a DME supplier number and which includes an entry for
CSMS. It does not indicate that any of the listed companies engaged in fraud.
Nonetheless, the public disclosures need not name particular defendants
so long as they “alerted the government to the industry-wide nature of the fraud
and enabled the government to readily identify wrongdoers through an investi-
gation.” In re Natural Gas Royalties, 562 F.3d 1032, 1039 (10th Cir. 2009). For
example, in Natural Gas Royalties, a Senate report indicated that drillers on fed-
eral lands were improperly measuring the extracted gas. The disclosures
“named a significant percentage of industry participants as wrongdoers and indi-
cated that others in the industry were very likely engaged in the same prac-
tices.” Id. at 1042. Although the reports had not named all the defendants, they
made it easy for the government to examine its royalty contracts to discover
which drillers were using fraudulent measurement techniques. “[T]he public
10
(...continued)
Contractual Joint Ventures (2003); OIG, Medical Equipment Suppliers: Compliance with Medi-
care Standards (2001); Compliance Program Guidance for the Durable Medical Equipment,
Prosthetics, Orthotics and Supply Industry, 64 Fed. Reg. 36368 (OIG July 6, 1999); Compli-
ance Program Guidance for Third Party Medical Billing Companies, 63 Fed. Reg. 70138 (OIG
Dec. 18, 1998); OIG, Enteral Nutrient Payments in Nursing Homes (1996); OIG, Medicare Ser-
vices Provided to Residents of Skilled Nursing Facilities (1994); OIG, Special Fraud Alert:
Joint Venture Arrangements (1989). The defendants also cite a 2005 GAO report. See GAO,
Medicare: More Effective Screening and Stronger Enrollment Standards Needed for Medical
Equipment Suppliers (2005). Finally, they point to the National Supplier Clearinghouse Medi-
care Part B DMEPOS Supplier Directory and an article from the September 1996 DMERC
Medicare Advisory entitled “National Supplier Clearinghouse Supplier Standards Expanded.”
9
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disclosures provided specific details about the fraudulent scheme and the types
of actors involved in it” sufficient to “set the government on the trail of the
fraud” and ensure that the government will not “need to comb through myriad
transactions performed by various types of entities in search of potential fraud.”
Id. at 1042-43.11
The decision in Cooper v. Blue Cross & Blue Shield of Florida, Inc., 19 F.3d
562 (11th Cir. 1994), however, cautions against applying the reasoning behind
Natural Gas Royalties too broadly. In Cooper, government reports indicated
widespread fraud in the health insurance industry. The reports did not serve to
lead the government to the defendant, however, because the industry was too
large, and the industry-wide allegations were not specific enough. The court
noted that barring a relator’s suit in that circumstance
would preclude any qui tam suit once widespread—but not univer-
sal—fraud in an industry was revealed. The government often
knows on a general level that fraud is taking place and that it, and
the taxpayers, are losing money. But it has difficulty identifying all
of the individual actors engaged in the fraudulent activity. This
casting of a net to catch all wrongdoers is precisely where the gov-
ernment needs the help of its “private attorneys general.”
11
Other cases in which courts have found a qui tam suit barred by disclosures of indus-
try-wide fraud include United States v. Alcan Electrical & Engineering, Inc., 197 F.3d 1014
(9th Cir. 1999) (holding that where public disclosure identified a “narrow class of suspected
wrongdoers—local electrical contractors who had worked on federally funded projects over a
four-year period,” the government, as the one who hired the contractors, has ready access to
documents identifying which contractors in particular committed fraud); United States ex rel.
Findley v. FPC-Boron Employees’ Club, 105 F.3d 675 (D.C. Cir. 1997) (holding that disclosure
that employees’ clubs throughout the federal government were inappropriately retaining rev-
enue from vending services was sufficient to alert the government to the practice); and United
States ex rel. Fine v. Sandia Corp., 70 F.3d 568 (10th Cir. 1995) (holding that disclosure that
two of nine DOE laboratories were engaging in the fraudulent practice “sufficiently alerted the
government to the likelihood” that the other seven laboratories might also engage in the prac-
tice).
10
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Id. at 566 (citations omitted).12
By applying Cooper’s guidance, we see that the defendants’ documents,
considered alone, likely are not sufficient publically to disclose allegations spe-
cific to Beverly and McKesson. The DME Medicare supplier industry13 and the
nursing home industry14 are large. The public disclosures do not indicate that
fraud is universal or even widespread within them, but merely that OIG is “con-
cerned that contractual joint venture arrangements are proliferating.”15 More-
over, nothing in the documents would “set the government on the trail of” Bev-
erly or McKesson in particular.
One of the documents, the 1996 OIG report on Enteral Nutrient Payments
in Nursing Homes, zeros in on a somewhat smaller industry—enteral nutrient
providers—by indicating that most nursing homes pay too much for enteral
nutrition. That report does not identify fraud as a possible cause of the high
prices, however, so there is no reason to assume that the joint-venture schemes
identified in the other reports are any more common among suppliers of enteral
nutrients. It thus would have been exceedingly difficult for the government to
identify, from the public disclosures, which particular suppliers or nursing
12
Accord United States ex rel. Baltazar v. Warden, 635 F.3d 866, 868 (7th Cir. 2011)
(holding that a public disclosure indicating that 57% of the Medicare claims from chiropractors
are fraudulent was not sufficient to bar a suit against one chiropractor, because it still “takes
a provider-by-provider investigation to locate the wrongdoers”).
13
In 2009, there were about 70,000 entities with DME supplier numbers. See Press
Release, Centers for Medicare and Medicaid Services, New Medicare Requirements Take
Effect for Suppliers of Medical Equipment and Supplies (Oct. 1, 2009) (stating that the 50,000
DME suppliers who have been accredited are “over 70 percent” of current DME suppliers).
14
In 2004, there were approximately 16,000 nursing homes in the United States. Cen-
ters for Disease Control and Prevention, http://www.cdc.gov/nchs/fastats/nursingh.htm (last
visited July 13, 2011).
15
OIG, Special Advisory Bulletin: Contractual Joint Ventures (2003).
11
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homes were committing fraud.16
As indicated above, however, we are not examining the public disclosures
in the abstract but rather are comparing them to the allegations in Jamison’s
original complaint. As we have said, that complaint contained only general alle-
gations. Like the public disclosures, it contained no information about any
actions specific to Beverly or McKesson. Indeed, one could have produced the
substance of the complaint merely by synthesizing the public disclosures’
description of the joint venture scheme in the DME supplier industry. The com-
plaint thus appears to be “based upon” the public disclosures, despite their gen-
erality.
There is one piece of information that the original complaint provides that
cannot be found in the public disclosures: the identification of the defendants.
Because the original complaint names almost 450 defendants, however, even
that identification may have failed to provide any new information. Rather than
gathering evidence and zeroing in on particular perpetrators, Jamison appears
merely to have listed a large cross-section of possible defendants.17 It takes no
particular knowledge or effort to describe a general scheme of fraud and then list
arbitrarily a large group of possible perpetrators, but that is all Jamison appears
to have done.
16
Indeed, the government stated in argument to the district court that the public dis-
closures were insufficient to lead it to the fraud:
Simply put, [none of the public disclosures] would lead a reasonable Govern-
ment investigator to suspect that Defendants engaged in the kickback and
sham DME scheme at issue in the [suit]. . . . The United States unequivocally
supports Mr. Jamison’s contention that he brought the allegations of Defen-
dants’ misconduct to the United States’ attention.
17
Indeed, the defendants assert that Jamison merely sued the entire Mississippi
DMEPOS industry. We have no way of verifying that assertion, but their general point is
persuasive: Jamison’s complaint paints with a broad brush and fails to target any particular
defendant.
12
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The arbitrariness of Jamison’s selection of defendants is indicated by the
fruits of his suit. After a lengthy investigation, the government chose to inter-
vene against only the seven defendants named in this appeal, out of the almost
450 defendants. The cases against the others presumably lacked merit, which
would be consistent with the inference that Jamison selected them arbitrarily.
Jamison points to no evidence that would cause us to question that conclu-
sion. At his deposition, his attorney repeatedly objected whenever Jamison was
asked to explain how he chose the defendants, on the ground that the qui tam
complaint was sealed to protect the identity of the other defendants. We thus
have no evidence about how Jamison made the selection.18 The burden is on
him, however, to show that his identification of the defendants provided useful
information and that his complaint was thus not “based upon” general allega-
tions of fraud and an arbitrary list. Jamison has provided no such evidence, so
there is no issue of material fact as to whether that is the case.19
18
Jamison did state generally that he gathered information about the defendants
through his experience as a DME seller, conversations with others in the industry, and
research on the internet. For example, he stated that
this has been a long process of gathering information over years and learning
companies and who they are since I got into this business. And—but basically,
the names of the defendant came from doing research in nursing homes, on the
internet, just basically digging, because that’s—that’s my job as a salesperson.
Those statements are too vague and general, however, to provide useful information about how
Jamison identified the defendants.
Jamison also knew that before filing his complaint, Beverly had a subsidiary with its
own DME supplier number. After identifying Beverly as a possible defendant, however, that
information was easily available from public sources. In any event, although a nursing home
possessing a DME supplier number is a possible indicator of fraud, that is by no means con-
clusive. Jamison’s identification of Beverly’s DME supplier subsidiary thus is not sufficient
to show that his investigation usefully identified perpetrators of joint-venture fraud.
19
After filing the original complaint, of course Jamison began to focus his investigation
on Beverly and McKesson. At that time, he engaged in a series of conversations with Beverly’s
employees, had one of his own employees, Leslie Barlow, engage in similar conversations, and
(continued...)
13
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Were we to rule otherwise, a qui tam relator could arbitrarily select a large
group of defendants in any industry in which public disclosures have revealed
significant fraud, in hopes that his allegations will prove true for at least a few
defendants. We do not countenance such relator lotteries, which are quintessen-
tially “parasitic suits by opportunistic late-comers who add nothing to the expos-
ure of fraud” and which the public disclosure bar is designed to prevent. Reagan,
384 F.3d at 174. We thus conclude that Jamison’s action was based upon pub-
licly disclosed allegations or transactions.
C.
Consequently, we move to step three, under which the district court had
jurisdiction over the action only if Jamison was “an original source of the infor-
mation” supporting his allegations. 31 U.S.C. § 3730(e)(4)(A) (2006).20 The FCA
defines “original source” to mean “an individual who has direct and independent
knowledge of the information on which the allegations are based and has volun-
tarily provided the information to the Government before filing an action under
this section which is based on the information.” 31 U.S.C. § 3730(e)(4)(B) (2006).
Knowledge is direct if it is “derived from the source without interruption or
gained by the relator’s own efforts rather than learned second-hand through the
efforts of others.” Reagan, 384 F.3d at 177 (citation and internal quotation
marks omitted). Moreover, knowledge is independent if it “is not derived from
the public disclosure.” Id. (citations omitted).
19
(...continued)
even traveled to Beverly’s headquarters for an onsite investigation. In light of our conclusion
that we must focus on the original complaint, however, we do not consider the information
Jamison uncovered in those investigations when evaluating whether his action was based on
the allegations in the public disclosures.
20
Section 3730(e)(4)(A) also allows the action if it is “brought by the Attorney General,”
an exception that no party argues is applicable.
14
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In light of our observation that Jamison’s complaint merely listed a large
group of possible defendants, without identifying specific allegations about any
particular one, it is obvious that he was not a “direct” or “independent” source
of any of the “information on which the allegations are based.” Indeed, “the
information on which the allegations are based” includes merely the general
description of the fraud and an arbitrary list of many of the DME suppliers and
nursing home operators in Mississippi. Consequently, Jamison is not at original
source of the allegations in his complaint.
In sum, the FCA public disclosure bar applies, and the district court lacked
jurisdiction. The judgment of dismissal is AFFIRMED.
15