United States Ex Rel. Holmes v. Consumer Insurance Group

F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
FEB 10 2003
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT

UNITED STATES OF AMERICA, ex rel.
MARY L. HOLMES,

Plaintiff - Appellant,

and

UNITED STATES OF AMERICA,
No. 01-1077
Movant-Appellee,

v.

CONSUMER INSURANCE GROUP;
JOHN R. HIGHTOWER,

Defendants.

ON REHEARING EN BANC
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. No. 99-D-665)

Craig D. Joyce, Walters & Joyce, P.C., Denver, Colorado, for the Plaintiff-Appellant.

Charles W. Scarborough, Appellate Staff Civil Division, Department of Justice, (Robert
D. McCallum, Jr., Assistant Attorney General; John W. Suthers, United States Attorney;
Douglas N. Letter, Appellate Staff Civil Division, Department of Justice with him on the
brief) Washington, D.C., for the Movant-Appellee.
Before TACHA, Chief Judge, SEYMOUR, EBEL, KELLY, HENRY, BRISCOE,
MURPHY, LUCERO, HARTZ, and O'BRIEN, Circuit Judges.

BRISCOE, Circuit Judge.

Relator Mary L. Holmes appeals the district court’s dismissal, for lack of subject

matter jurisdiction, of her claims under the False Claims Act (FCA), 31 U.S.C. §§ 3729-

33. A divided panel of this court affirmed the district court's judgment. See United

States ex rel. Holmes v. Consumer Ins. Group, 279 F.3d 1245 (10th Cir. 2002). This

court subsequently granted rehearing en banc. Upon rehearing, we vacate our prior

opinion in this case, reverse the judgment of the district court, and remand for further

proceedings.

I.

Since 1985, Holmes has served as the postmaster in Poncha Springs, Colorado. In

October 1995, Cameron Benton and Henry Modrejewski, employees of defendant

Consumer Insurance Group (CIG), inquired at the Poncha Springs post office about the

cost of bulk mailing. After Holmes calculated the cost of CIG’s intended mailing,

Modrejewski told Holmes “that was not the rate they were being charged for the same

type [of] mailing at the Howard, Colorado post office.” App. at 101. More specifically,

Holmes was informed that CIG was being charged “per pound,” rather than “per piece,”

at the Howard post office. Id. at 10. The “per pound” rate, which is significantly lower

than the “per piece” rate, applies if each individual piece of mail weighs in excess of

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3.3062 ounces. Holmes called Jenny McKinnon, the Howard postmaster, who confirmed

that CIG was receiving the “per pound” rate at the Howard post office. Assuming that

McKinnon was correct, Holmes accepted CIG’s bulk mailing at the “per pound” rate.

After further checking, Holmes concluded that her initial calculation was correct

and that CIG’s bulk mailing did not qualify for the “per pound” rate because each

individual piece weighed only .3 ounces. Holmes informed Benton of her conclusion.

Benton responded that CIG could not afford to use the “per piece” rate because it was

“prohibitively expensive.” Id. at 11. After speaking with Benton, Holmes contacted

McKinnon at the Howard post office and informed her that CIG’s bulk mailings did not,

in fact, qualify for the “per pound” rate.

Nearly two years later, in August 1997, Holmes was training an acting postmaster,

Al Ferguson, at the Howard post office concerning how to “close out the books and make

sure everything balanced for the year.” Id. at 85. During a lunch break, Holmes asked

Ferguson the rate CIG was being charged for bulk mailings. According to Holmes, she

was curious whether McKinnon had corrected the bulk mail rates for CIG because CIG

was trucking all of its mail to the Howard post office. Ferguson told Holmes that CIG

was still being charged the “per pound” rate. Upon returning to the Howard post office,

Holmes and Ferguson “did some calculations and determined that the CIG mailings were

. . . being undercharged by about $200,000 per year.” Id. at 86. Holmes also discovered

that CIG had been falsely certifying that its bulk mailings weighed in excess of 3.3062

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ounces per piece. Holmes reported her findings concerning CIG's bulk mailings to her

manager, who oversaw both the Poncha Springs and Howard post offices.

In December 1997, after allegedly hearing nothing from postal inspectors, Holmes

wrote to the Inspector General’s Office in Washington, D.C., and reported the problem

concerning CIG’s bulk mailings. The Inspector General’s Office responded by letter in

March 1998, stating, in pertinent part, that Holmes’ “information” had been “reviewed

. . . and referred . . . to the appropriate Office of Inspector General Director for action

deemed warranted,” and that Holmes would “be contacted if additional details [we]re

needed.” Id. at 54. As Holmes was allegedly concerned that the Inspector General’s

Office would take no action, she also reported the problem to a postal systems

coordinator.

In late March 1998, the Postal Inspection Service began an administrative

investigation into Holmes’ allegations regarding CIG’s bulk mailings. On April 1, 1998,

postal inspector James Hayson (the lead agent), accompanied by three other postal

inspectors, a postal inspector general agent, and two revenue assurance analysts, spent a

week at the Howard post office collecting and reviewing documents concerning CIG’s

mailings. “During the subsequent months,” Hayson “located and interviewed at least ten

individuals including current and former employees of [CIG] and current and former

employees of the Postal Service.” Id. In particular, Hayson interviewed Benton and

Modrejewski, who no longer worked for CIG. Hayson also interviewed Jim Benbrook, a

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current employee of CIG who acknowledged transporting many of the mailings at issue to

the Howard post office. Benbrook initially denied knowledge of the alleged fraud, but

evidence subsequently obtained by the government “suggests that [he] was an active

participant in the fraud.” Govt. Br. at 10. During all of the interviews, Hayson “disclosed

the Government’s suspicions that CIG had knowingly underpaid postage based on false

mailing statements . . . and that John Hightower[, CIG’s owner,] knew the mailing

statements were false.” App. at 35.

In July 1998, Hayson referred the case to the United States Attorney’s Office for

the District of Colorado, which began working on the case jointly with the Postal

Inspection Service. In August 1998, the Postal Inspection Service served an

administrative subpoena on CIG demanding production of documents and information

related to the company’s mailings, and CIG responded to the subpoena in November

1998. “From December 1998 through 1999, the U.S. Attorney’s Office and the Postal

Inspection Service continued jointly to build a case against CIG by analyzing the

documents produced by CIG pursuant to the . . . [s]ubpoena.” Id. at 36.

On April 2, 1999, Holmes filed this qui tam action under seal. The government

intervened and moved to dismiss Holmes as a party for lack of subject matter jurisdiction

pursuant to 31 U.S.C. § 3730(e)(4). The government asserted that (1) it had publicly

disclosed information concerning the fraud allegations against CIG in the course of its

administrative investigation (i.e., by interviewing Benbrook, Benton, and Modrejewski

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and informing them about its suspicions); (2) Holmes’ qui tam action was based upon

those “publicly disclosed” allegations; and (3) Holmes did not qualify as an “original

source” of the information contained in her complaint because she was obligated, as part

of her job duties, to report fraud and procedural irregularities. The district court granted

the government’s motion to dismiss Holmes as a party and, at her request, entered

judgment against her so that she could immediately appeal her dismissal from the case.

II.

Holmes contends that the district court erred in dismissing her from the case for

lack of subject matter jurisdiction pursuant to 31 U.S.C. § 3730(e)(4). According to

Holmes, § 3730(e)(4) does not bar her from proceeding as a relator because there had

been no “public disclosure” of information at the time she filed the action, and, in any

event, she qualifies as an “original source” of the information upon which her complaint

was based.

Section 3730(e)(4) provides:

(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, administrative, 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
individual who has direct and independent knowledge of the information 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.

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31 U.S.C. § 3730(e)(4)(A), (B). “Satisfaction of the provisions of 31 U.S.C. § 3730(e)(4)

is a question of subject matter jurisdiction.” United States ex rel. Fine v. Advanced

Sciences, Inc., 99 F.3d 1000, 1003 (10th Cir. 1996). Thus, issues involving the

interpretation and application of § 3730(e)(4) are reviewed de novo. United States ex rel.

Precision Co. v. Koch Indus., Inc., 971 F.2d 548, 551 (10th Cir. 1992). Because federal

courts are courts of limited jurisdiction, “we presume no jurisdiction exists absent a

showing of proof by the party asserting federal jurisdiction.” Id. Therefore, Holmes, the

party invoking federal jurisdiction, bears “the burden of alleging facts essential to show

jurisdiction under the False Claims Act as well as supporting those allegations by

competent proof.” Fine, 99 F.3d at 1004.1

When, as here, a court’s subject matter jurisdiction depends upon the same statute

that creates the substantive claims, the jurisdictional inquiry is necessarily intertwined

with the merits. Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995). More

specifically, the jurisdictional question of whether a “public disclosure” has occurred

arises out of the same statute that creates the cause of action. United States ex rel.

Ramseyer v. Century Healthcare Corp., 90 F.3d 1514, 1518 (10th Cir. 1996). We have

determined that these “intertwined” jurisdictional inquiries should be resolved under

1
The dissent criticizes our discussion of and reliance on Fine. In our view, the
rationale for our analysis of Fine is clear. In the proceedings in the district court, the
government argued, and the district court agreed, there was a lack of subject matter
jurisdiction pursuant to 31 U.S.C. § 3730(e)(4). Since Holmes, the appellant, contends
the district court erred in its ruling, it is logical to first address that issue.

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Federal Rule of Civil Procedure 12(b)(6) or, after proper conversion into a motion for

summary judgment, under Rule 56. Id. The district court here purportedly resolved the

government’s motion to dismiss under Rule 12(b)(6). However, because the district court

relied on affidavits and other evidence submitted by the parties, the motion should have

been treated as a motion for summary judgment under Rule 56. We therefore proceed to

review the motion as one for summary judgment.

Generally speaking, the jurisdictional inquiry under 31 U.S.C. § 3730(e)(4)(A)

involves four questions: (1) whether the alleged “public disclosure” contains allegations

or transactions from one of the listed sources; (2) whether the alleged disclosure has been

made “public” within the meaning of the FCA; (3) whether the relator’s complaint is

“based upon” this “public disclosure”; and, if so, (4) whether the relator qualifies as an

“original source” under § 3730(e)(4)(B). Fine, 99 F.3d at 1004. If the answer to any of

the first three questions is “no,” the jurisdictional inquiry ends and the qui tam action

proceeds, regardless of whether the relator is an original source. The last inquiry,

whether the relator is an original source, is necessary only if the answer to each of the

first three questions is “yes,” indicating the relator’s complaint is based upon a specified

public disclosure. Id.; see Precision, 971 F.2d at 552 & n. 2.

In concluding that it lacked subject matter jurisdiction over Holmes’ qui tam

claims, the district court acknowledged, but did not ultimately apply, the four-part

inquiry. According to the district court, the four-part inquiry is applicable only “where

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the government is not actively investigating the alleged wrongdoing.” App. at 125. The

district court concluded that the purpose of the four-part inquiry under such circumstances

is to determine “whether the government is ‘capable’ of pursuing the suit itself.” Id. The

court further concluded that, in situations where the “government is actively pursuing the

alleged wrongdoing when the qui tam action is sought,” the four-part inquiry is

unnecessary “because it is clear that the government has already identified the problem.”

Id. (internal quotation and citation omitted). Applying this unique analytical framework,

the district court concluded that it lacked subject matter jurisdiction over Holmes’ qui tam

claims:

In this case, it is undisputed that, prior to the filing of the qui tam
complaint by Holmes, the OIG [Office of Inspector General] and PIS
[Postal Inspection Service] were involved in an active administrative
investigation of the matters at issue in this suit and had identified the
probable offenders. When the investigation substantiated fraud by CIG,
Holmes was publicly commended and received a $500 bonus from her
employer for her service. In July of 1998, prior to the filing of Holmes’
Complaint, the matter was referred to the Attorney General’s office and
accepted for civil action. Between 1998 and the time the Complaint was
filed, the Attorney General’s office continued to build a case against CIG.
Because the PIS and OIG investigation and their subsequent referral of the
matter to the Attorney General set the government “squarely on the trail of
the alleged fraud,” it would therefore “be contrary to the purposes of the
FCA to exercise jurisdiction over [the relator’s] claim.” Because my
fundamental task in interpreting the FCA is “to give effect to the intent of
Congress,” I must grant the United States’ Motion to Dismiss Holmes. It
makes no difference that Holmes, as part of her role as postmaster, initially
alerted the PIS and OIG to the alleged wrongdoing and spurred them to
investigate.

Id. at 126 (internal citations omitted).

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 We reject the district court’s analysis. Applicability of the four-part jurisdictional

inquiry set forth in § 3730(e)(4) does not hinge upon whether the government is actively

involved in an investigation of the alleged fraud. Rather, the four-part jurisdictional

inquiry is applicable in all cases filed by qui tam relators and, as outlined above, subject

matter jurisdiction hinges upon the outcome of that inquiry. Although the presence or

absence of an ongoing government investigation is relevant in applying the inquiry, it

clearly is not the determinative factor. Under the district court’s analytical framework, a

prospective relator would have to report his or her information to the government and

then immediately file suit in an attempt to act before the government instituted an

investigation into the allegations. Further, the district court’s analytical framework is

contrary to Congressional intent in that it could prevent persons with legitimate inside

knowledge of wrongdoing from pursuing a qui tam action.

The government asserts we can affirm the district court’s judgment on alternative

grounds. Focusing on parts two and four of the four-part inquiry, the government argues

that a “public disclosure” occurred when government investigators questioned the three

current and former CIG employees,2 and, in any event, Holmes does not qualify as an

2
Although it is uncontroverted that a number of postal employees were also
interviewed during the course of the administrative investigation, the government makes
no attempt to assert that these resulted in a “public disclosure” of the allegations at issue.
Indeed, the government concedes that its “disclosures to former and current employees of
CIG . . . have always been the sole basis for application of the public disclosure bar in this
case.” Govt. Br. at 37.

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“original source” because she was obligated to report the alleged fraud (and thus did not

“voluntarily” report it). Because we conclude that no “public disclosure” occurred, under

Fine we do not proceed to address the “original source” question. The government also

argues that a government employee who obtains information about fraud in the scope of

his or her employment, and who is required to report that fraud, is not a “person” entitled

to bring a civil action under 31 U.S.C. § 3730(b)(1). We conclude the government

employee who discovers fraud under these circumstances is a “person” entitled to bring

suit under the FCA. The fact that an employee learns of fraud in the course of his or her

employment and has a duty to report fraud does not bar the government employee's FCA

action.

Public disclosure

The term “public disclosure” is not defined in the FCA. In Ramseyer, we held that

the term “signifies more than the mere theoretical or potential availability of

information.” 90 F.3d at 1519. “[I]n order to be publicly disclosed, the allegations or

transactions upon which a qui tam suit is based must have been made known to the public

through some affirmative act of disclosure.” Id. Thus, we stated:

The mere possession by a person or an entity of information pertaining to
fraud, obtained through an independent investigation and not disclosed to
others, does not amount to “public disclosure.” Rather, public disclosure
occurs only when the allegations or fraudulent transactions are affirmatively
provided to others not previously informed thereof.

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Id. at 1521 (emphasis added).

Applying these principles to the case at hand, we conclude that a public disclosure

did not occur when, during the course of their administrative investigation, government

investigators questioned Benbrook, Benton, and Modrejewski. It is uncontroverted that

all three individuals participated, to some degree, in the alleged fraudulent scheme, and

thus were “previously informed” of the fraudulent scheme prior to their respective

interviews with government investigators.3

The government concedes “there is some support” in Ramseyer and its progeny for

the notion that, in order for there to be a public disclosure, the recipient of the disclosed

information must be a stranger to the fraud. Govt. Br. at 22. Notwithstanding this

concession, however, the government attempts to distinguish these cases by arguing that

they “do not address the different situation where there have been no disclosures to

strangers to the fraud, but the Government is fully aware of the allegations and is actively

pursuing its own investigation.” Id. Although the government's argument is not exactly

clear, it appears the government is effectively asking us to modify the “public disclosure”

3
Benbrook “transported many of the mailings at issue from CIG to the Howard
post office” and “submitted false certifications to the Howard post office in order to
qualify the CIG bulk mailings for the lower postage rates.” Holmes Br. at 8. Benton had
talked to Holmes about a bulk mailing in October 1995, and he was aware “that CIG’s
bulk mailings did not qualify for the lower postage rates CIG was receiving from the
Howard post office.” Id. at 9. Modrejewski “accompanied . . . Benton during the visit to
the Poncha Springs post office” in October 1995, and “knew that the rates for CIG’s bulk
mailing quoted by [Holmes] . . . were higher than the rates CIG was receiving from the
Howard post office.” Id.

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test if the government is aware of the allegations, actively pursuing an investigation into

the allegations, and responsible for the disclosure(s).

The government argues that, at a minimum, its “disclosures to the two former CIG

employees [Benton and Modrejewski] during its investigation [in this case] should trigger

the public disclosure bar, even though it turned out that they were not strangers to the

fraud.” Id. at 34. However, the government does not clearly explain why the disclosure

to these two individuals should be deemed sufficient to constitute a “public disclosure.”

Apparently, the government finds significant the fact that the two men no longer work for

CIG. However, it offers no principled distinction between these two men and the one

man (Benbrook) who still works for CIG, since all three men had prior knowledge of the

alleged wrongdoing. Further, the government cites no case where a court has held that a

disclosure to a person familiar with the fraud constitutes a “public disclosure” for

purposes of § 3730(e)(4).

The government makes several other perplexing, and at times disingenuous,

arguments in an effort to demonstrate why a “public disclosure” has occurred within the

meaning of § 3730(e)(4). Citing United States ex. rel Doe v. John Doe Corp., 960 F.2d

318 (2d Cir. 1992), it suggests that “the Second Circuit has squarely held that disclosures

made by the Government to employees of a defendant corporation during the course of a

fraud investigation constitute public disclosures under section 3730(e)(4)(A).” Govt. Br.

at 21. A review of the Doe decision, however, demonstrates that the holding is not as

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broad as described by the government. In concluding that a public disclosure had

occurred within the meaning of § 3730(e)(4)(A), the court focused not on the fact that the

government generally had disclosed information to the defendant’s employees, but rather

that the disclosures had been made to many employees who were innocent and knew

nothing about the defendant’s wrongdoing:

Here, . . . the allegations of fraud were not just potentially accessible
to strangers, they were actually divulged to strangers to the fraud, namely
the innocent employees of John Doe Corp. While the search warrant was
being executed, the investigators spoke to numerous employees of John Doe
Corp., some of whom knew of the fraud. But, more importantly, many of
these individuals knew nothing about defendants’ ongoing scheme; they
were strangers to the fraud. These people were neither targets of the
investigation nor potential witnesses. The government may have hoped that
these individuals were potential witnesses, but it is clear that they were not.

960 F.2d at 322-23.4 Thus, contrary to the government’s assertions, the decision in Doe

supports the conclusion that no public disclosure occurred in this case when the

government interviewed persons who were involved in, or had prior knowledge of, the

alleged wrongdoing.5

4
In light of the fact that all three witnesses at issue in this case had prior
knowledge of the fraud, it is unnecessary for us to decide whether questioning “innocent”
employees of a company suspected of wrongdoing constitutes a “public disclosure” for
purposes of the FCA.
5
The government makes a similar, overly broad characterization of our decision
in Fine. See Govt. Br. at 21 (“Likewise, this Court has made clear that a disclosure of
allegations to even a single person outside the Government will trigger the jurisdictional
bar.”). Although we concluded that a “public disclosure” had occurred based upon the
disclosure of information to a single individual, a key aspect of our conclusion was that
the individual to whom the information was disclosed was “previously unconnected with
the alleged fraud.” 99 F.3d at 1005.

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 One other aspect of Doe requires mention. Throughout its “public disclosure”

discussion, the government repeatedly cites Doe for the proposition that the purpose of

the “public disclosure” test “was ‘to prod the government into action, rather than allowing

it to sit on, and possibly suppress, allegations of fraud when inaction might seem to be in

the best interest of the government.’” Govt. Br. at 25 (quoting Doe, 960 F.2d at 323). A

careful review of the Doe decision demonstrates that the government is again

misconstruing what was stated. Importantly, the language quoted by the government does

not refer to the “public disclosure” test implemented by the 1986 amendments, but rather

to the 1986 amendments in general. See 960 F.2d at 323 (“One reason for the 1986

amendments was to prod the government into action.”). We agree that “prodding” the

government into action was obviously Congress’ impetus for jettisoning the pre-1986

“government knowledge” standard, under which qui tam actions were barred if the

federal government already possessed information upon which a qui tam action was

based. That does not mean, however, that the purpose of the “public disclosure” test was

the same. Rather, a review of the amendments and the legislative history makes clear that

the purpose of the “public disclosure” test was to help identify and prevent “parasitic” qui

tam actions.6 E.g., Susan G. Fentin, The False Claims Act – Finding Middle Ground

6
The government makes several arguments that are tied to its mischaracterization
of the Doe quotation. For example, the government argues that “[i]n cases where there is
no evidence that the Government is aware of fraud allegations prior to a qui tam filing,
. . . determining whether a disclosure of fraud allegations has been made to at least one
individual ‘not previously informed thereof’ is a reasonable proxy for assessing whether

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Between Opportunity and Opportunism: The “Original Source” provision of 31 U.S.C.

§ 3730(e)(4), 17 W. New Eng. L. Rev. 255, 296 (1995) (noting that “Congress’

fundamental purpose in the 1986 amendments was to encourage qui tam suits that were

not parasitic in nature”).

The government suggests that if we do not accept its position, it will be forced “to

make disclosures of relevant allegations to ‘innocent’ third parties in order to satisfy the

public disclosure bar - and ensure that opportunistic qui tam suits will be barred.” Govt.

Br. at 31. We reject the government’s argument for two reasons. First, we question its

blanket characterization of qui tam suits filed by government employees as

“opportunistic.” While it is certainly possible for a government employee to file a

parasitic qui tam action (e.g., based on knowledge obtained secondhand through other

employees), that is not always the case. Here, for example, we do not view Holmes’

action as parasitic or opportunistic.7 Rather, Holmes has direct and independent

the Government will be made aware of the allegations - and feel some pressure to act on
them - even without the impetus of a qui tam suit.” Govt. Br. at 30. However, the point
of the public disclosure requirement is not to determine whether there is an impetus for
the government to take action – the filing of the qui tam lawsuit takes care of that.
Rather, the point of the public disclosure test is to determine whether the qui tam lawsuit
is a parasitic one. The government also repeatedly suggests that “the sole purpose of
looking for a disclosure is to determine if the Government is already on the trail of the
fraud.” Govt. Br. at 39. This is clearly incorrect.
7
We reject the various criticisms leveled by the dissent at Holmes' suit and
motives. A parasitic suit is one in which the relator uses information already in the public
domain rather than information personally obtained in order to file suit. Holmes' suit
obviously does not fit that mold. As for the dissent's comment that Holmes' “sole reason
for filing [suit] was her own financial gain,” Dissent at 18, that is obviously the motive of

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knowledge of the fraud allegedly committed by CIG, since she is the person responsible

for ferreting it out in the first place. Second, we believe the test we have adopted for

determining whether a “public disclosure” has occurred is sound, and we are not

persuaded there is an alternative test that accurately reflects the statutory language of

§ 3730(e)(4)(A).

The government next complains that a rule requiring disclosure “to individuals

with no prior knowledge of the fraud would necessitate a bizarre mini-trial concerning the

state of mind of various witnesses.” Govt. Br. at 31-32. Obviously, a court faced with a

public disclosure question may have to make factual findings regarding when and to

whom a disclosure occurred. Nothing in the FCA suggests this is inappropriate. In any

event, nothing of the sort was required in this case, where the government has conceded

that the three witnesses at issue were all involved in, or at least had prior knowledge of,

the alleged wrongdoing.

Finally, the government argues that the “stranger-to-the-fraud” test “is flawed on

its own terms because not all ‘strangers’ have incentives to disseminate information about

fraud, and some individuals who have prior knowledge of fraud may have compelling

incentives not to further publicize it.” Govt. Br. at 33. In other words, the government

most, if not all, relators. Without the financial incentives of the qui tam provisions, few,
if any, qui tam actions would be filed. Further, as the language of § 3730(b)(1) makes
clear, every qui tam action is considered to be filed on behalf of the relator and the
government and both parties benefit from any financial recovery obtained in the action.

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complains that “[t]he stranger-to-the fraud theory assumes that only those who have no

prior knowledge of fraud are likely to make information about fraud public.” Id.

Although the government is undoubtedly correct that different people may have varying

incentives to publicize information, that factor, in our view, is not relevant in determining

whether a “public disclosure” has occurred within the meaning of the FCA. Moreover,

the government has not offered a convincing test that could adequately replace the

“stranger-to-the-fraud” rule.

We conclude that the government’s disclosure of information to the three

witnesses did not result in a “public disclosure” for purposes of § 3730(e)(4)(A).

Original source

Having concluded that no “public disclosure” occurred within the meaning of

§ 3730(e)(4), we need not determine whether Holmes was an “original source” of the

information underlying her complaint. As previously discussed, where, as here, there was

no public disclosure, the jurisdictional inquiry under § 3730(e)(4) ceases, regardless of

whether the relator qualifies as an original source.

“Person” entitled to bring action under 31 U.S.C. § 3730(b)(1)

In its en banc brief, the government contends for the first time that Holmes cannot

qualify as a potential relator under the FCA's general qui tam provision, 31 U.S.C.

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§ 3730(b)(1). Specifically, the government argues that a government employee who

obtains information about fraud in the scope of his or her employment and who is

required to report that fraud is not a “person” entitled to bring a civil action under

§ 3730(b)(1).

“As in all cases involving statutory construction, our starting point must be the

language employed by Congress, . . . and we assume that the legislative purpose is

expressed by the ordinary meaning of the words used.” American Tobacco Co. v.

Patterson, 456 U.S. 63, 68 (1982) (internal quotations and citations omitted). “Absent a

clearly expressed legislative intention to the contrary, that language must ordinarily be

regarded as conclusive.” Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447

U.S. 102, 108 (1980).

Section 3730(b)(1) provides, in pertinent part, that “[a] person may bring a civil

action for a violation of section 3729 for the person and for the United States

Government.” The word “person” is not defined in the FCA. The Dictionary Act,

however, defines the word “person” for purposes of “determining the meaning of any Act

of Congress” as including “individuals.” 1 U.S.C. § 1. Likewise, authoritative

dictionaries generally define the word “person” as a “human being.” See Oxford English

Dictionary Online (2002) (defining “person” as “[a]n individual human being; a man,

woman, or child”); Webster’s Third New Int’l Dictionary 1686 (1993) (defining “person”

as “an individual human being”); Black’s Law Dictionary 1142 (6th ed. 1990) (defining

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“person” as “a human being (i.e. natural person)”). Thus, while it reasonably might be

debated whether the word “person” includes or excludes certain types of entities (e.g.,

corporations), there can be no doubt that it unambiguously encompasses all individual

human beings, including Holmes. Cf. Hafer v. Melo, 502 U.S. 21, 27 (1991) (concluding,

in context of case filed pursuant to 42 U.S.C. § 1983, that “[a] government official in the

role of personal-capacity defendant . . . fits comfortably within the statutory term

‘person’”); see generally Smith v. United States, 508 U.S. 223, 228 (1993) (“When a

word is not defined by statute, we normally construe it in accord with its ordinary or

natural meaning.”).8

The government also directs our attention to § 3730(b)’s title, “Actions by private

persons,” suggesting that this somehow limits who may qualify as a relator under the

provision. In our view, § 3730(b)'s title, which was added by Congress in 1986, was

simply intended as an easy reference for the reader of the statute, and not as a substantive

amendment to the statute. In any event, the Supreme court has explained that the title of a

statutory provision “‘cannot limit the plain meaning of the text,’” and instead can only be

used “‘when [it] shed[s] light on some ambiguous word or phrase.’” Pennsylvania Dept.

8
The dissent disputes that it is redefining the term “person” as used in
§ 3730(b)(1). However, by applying its “distinctness” test, it seeks to narrow the plain
meaning of the word “person” in order to exclude those natural persons who work for the
federal government, have job duties that include uncovering and reporting fraud, and are
participating in an ongoing investigation of alleged fraud. This three-part test is not
contained within the language of the statute.

-20-
of Corr. v. Yeskey, 524 U.S. 206, 212 (1998) (quoting Trainmen v. Baltimore & Ohio R.

Co., 331 U.S. 519, 528-29 (1947)). Even assuming the word “person” is ambiguous

(which we conclude it is not), employment of § 3730(b)’s title could only lead to one of

two conclusions -- either that all government employees fall within the class of “persons”

capable of filing suit under the qui tam provisions, or that all government employees fall

outside that class. See Black’s Law Dictionary 1196 (indicating “private person” is a

“[t]erm sometimes used to refer to persons other than those holding public office or in

military services”). Not only would adoption of the latter conclusion result in a total ban

on government employees filing suit under the qui tam act, it would render superfluous

the specific exclusions adopted by Congress in 31 U.S.C. § 3730(e)(1) (prohibiting

“former or present member[s] of the armed forces” from filing qui tam actions “against a

member of the armed forces arising out of such person’s service in the armed forces”).

We also reject any assertion that the word “person” can be uniquely defined on the

basis of a “scrivener’s error.” Under the doctrine of “scrivener’s error,” a court may

“give an unusual (though not unheard-of) meaning to a word which, if given its normal

meaning, would produce an absurd and arguably unconstitutional result.” United States

v. X-Citement Video, Inc., 513 U.S. 64, 82 (1994) (Scalia, J., dissenting). Although there

may be valid public policy reasons why certain government employees should be

precluded from availing themselves of the qui tam provisions of the FCA, it cannot be

said that defining the word “person” as encompassing all individuals, including

-21-
government employees, would produce an “absurd and arguably unconstitutional result.”

Nor can it be said that the interpretation now urged by the government was “genuinely

intended [by Congress] but inadequately expressed.” Id. In enacting the 1986

amendments to the FCA, it appears clear that Congress did not consider the question of

whether government employees should be allowed to use information obtained in the

course of their employment as the basis for a qui tam action. If we were to interpret the

word “person” in the unusual manner urged by the government, we would end up

“rewriting the statute rather than correcting a technical mistake.” Id.

Finally, the government argues that a federal employee who discovers fraud in the

course of his or her employment and who is required to report it, is not a “person” entitled

to bring a civil action under § 3730(b)(1) because the acquisition of such information

within the scope of a federal employee's job eliminates the critical distinction between the

government and the individual qui tam plaintiff. This argument finds no support in the

ordinary meaning of the word “person.” In particular, we fail to see how the word could

rationally be construed to exclude some, but not all, government employees, and under

some, but not all, conditions. Further, we find no support for this argument in principles

of agency law, which control the relationship between a federal employee, such as

Holmes, and the government. For example, it is apparent that Holmes, in filing her

complaint in this matter, was not acting within the scope of her employment and was

therefore not acting “as the government” since she was not employed to file suit under the

-22-
FCA and there is no indication that the preparation or filing of her suit occurred

substantially within the time and space limits imposed on her employment by the

government. See Restatement (Second) of Agency § 228 (1957) (discussing when the

conduct of a servant is or is not within the scope of his or her employment); see generally

Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 755 (1998) (noting that “the Restatement

. . . is a useful beginning point for a discussion of general agency principles”). Thus, even

though she may have been acting “as the government,” i.e., in her official capacity, when

she obtained the information that now forms the basis of her qui tam complaint, it is

apparent that she is acting as a “person,” i.e., in her individual capacity, in filing and

pursuing this qui tam action. Cf. Hafer, 502 U.S. at 25 (discussing, in context of § 1983

action, the difference between suing government officials in their official and individual

capacities). This conclusion is further supported by the language of § 3730(b)(1) which

states that a “person may bring a civil action for violation of section 3729 for the person

and for the United States Government.” (Emphasis added.) As applied here, Holmes

brought this action in her individual capacity and sought relief for herself and for the

government.

In our view, the dissent reads too much into the phrase “for the person and for the

United States Government.” As we read it, the phrase simply indicates that the relator

functions as the partial assignee of the United States and emphasizes that both the relator

and the government have an interest in the lawsuit and both will benefit should any

-23-
recovery occur. See generally Vermont Agency of Natural Resources v. United States ex

rel. Stevens, 529 U.S. 765, 772-74 (2000). To suggest that the phrase also limits the term

“person” by imposing a “distinctness” requirement stretches the phrase too far. Further, if

Congress intended to exclude some or all federal government employees from the class of

persons able to file suit under § 3730(b)(1), it knew how to do so in a much clearer

fashion than by use of the phrase “for the person and for the United States Government.”

For example, when Congress originally enacted 31 U.S.C. § 3729, the general liability

provision of the FCA, it indicated that liability could be imposed only on “any person not

in the military or naval forces of the United States, nor in the militia called into or actually

employed in the service of the United States.” Act of Mar. 2, 1863, ch. 67, § 3, 12 Stat.

698. Similar exclusionary language, e.g., “a person not employed in the service of the

United States,” could have been used in § 3730(b)(1) if Congress intended to carve out

some type of exception for government employees.

The dissent's attempted narrowing of the term “person” flies in the face of the

principle that “identical words used in different parts of the same act are intended to have

the same meaning.” Dep't of Revenue v. ACF Indus., Inc., 510 U.S. 332, 342 (1994)

(internal quotations omitted). Not only is the term “person” used in other provisions of

§ 3730, e.g., § 3730(a) (authorizing the Attorney General to file suit against any “person”

-24-
determined to have violated § 3729), it is used throughout the FCA in general.9

The dissent charges us with construing § 3730(b)(1) as if it read “any person,” and

suggests there is a critical distinction between the phrase “a person” and the phrase “any

person.” However, the Supreme Court refuted this very notion in Vermont Agency,

concluding the 1986 amendments to the FCA, which changed the phrasing of § 3729

from “a person” to “any person” had no effect on the meaning of the term “person.” 529

U.S. at 783 n.12. We likewise conclude it is irrelevant whether the term “person” as used

in § 3730(b)(1) is preceded by “a” or “any.”

Finally, we believe that the history of the FCA's qui tam provision clearly rebuts

the dissent's position. As originally enacted in 1863, the qui tam provision provided:

“Such suit may be brought and carried on by any person, as well for himself as for the

United States.” Act of March 2, 1863, ch. 67, § 4, 12 Stat. 696 (emphasis added). The

Supreme Court interpreted this language in a broad fashion, stating:

Neither the language of the statute nor its history lends support to the

9
For example, § 3729(a) imposes liability on any “person” who commits one of
several listed violations. A reading of this statute indicates, and case law confirms, that it
is entirely possible that such “person” can include a government employee who commits
violations related to employment (i.e., in the parlance of the dissent, a person who is
acting “as the government). See United States v. Carpentieri, 23 F. Supp. 2d 433 (S.D.
N.Y. 1998) (FCA suit brought by government against postal employee alleging that
employee made false statements regarding his medical history in application for
employment and in subsequent applications for disability benefits); United States v.
Bottini, 19 F. Supp. 2d 632 (W.D. La. 1997) (FCA suit brought by government federal
employee who allegedly presented false or fraudulent claims for payment of workers'
compensation benefits under the Federal Employees Compensation Act).

-25-
 contention made by respondents and the government. “Suit may be brought
and carried on by any person,” says the Act, and there are no words of
exception or qualification such as we are asked to find. The Senate sponsor
of the bill explicitly pointed out that he was not offering a plan aimed solely
at rewarding the conspirator who betrays his fellows, but that even a district
attorney, who would presumably gain all knowledge of a fraud from his
official position, might sue as the informer.

United States ex rel. Marcus v. Hess, 317 U.S. 537, 546 (1943) (footnote omitted).

Obviously, the Court found no exception or qualification in the phrase “as well for

himself as for the United States.” Although the statutory phrase was altered by Congress

in 1982 to read “for the person and for the United States Government,” 31 U.S.C.

§ 3730(b)(1) (1982), we find it difficult to believe the change was intended to override

Marcus and implement new restrictions on who could qualify as a relator. Thus, we

believe that Marcus, to the extent it construed the qui tam provision as allowing a

government official to file suit as a relator based upon information obtained in the course

of his or her official duties, remains valid. In other words, if the original phrase, “as well

for himself as for the United States,” did not prohibit such relators, then neither does the

current phrase, “for the person and for the United States Government.”

III.

In a fall-back argument, the government offers several public policy reasons why

federal employees should not be allowed to maintain qui tam actions based upon

information obtained during the course of their employment. According to the

government, “[p]ermitting Holmes to pursue a qui tam action on the facts here would be

-26-
inconsistent with her specific duty as a United States Postmaster to report fraud and with

numerous legal duties imposed on all federal employees.” Govt. Br. at 43. For example,

the government argues, permitting Holmes to proceed as a relator would be contrary to

federal regulations prohibiting “the use of public office for private gain,” “the use of

Government property or time for personal purposes,” “the use of ‘nonpublic Government

information’ to further private interests,” and “the holding of any financial interests that

may conflict with the impartial performance of Government duties.” Id. at 44-45. The

government further argues “there is no intent expressed in the [FCA] to permit qui tam

suits by federal employees whose job it is to report fraud when they encounter it,” and in

fact “the legislative history of the 1986 amendments to the FCA reveals an intent to

‘encourage more private enforcement suits,’ . . . not to encourage suits by public

employees seeking to capitalize on information learned during the course of their federal

employment.” Id. at 45. Finally, the government argues that “permitting qui tam suits by

federal employees who are already under an obligation to disclose fraud would, as a

practical matter, create perverse incentives for Government employees.” Id. at 45-46.

Although the government’s arguments have some appeal, the fact is that nothing in

the FCA expressly precludes federal employees from filing qui tam suits. Prior to 1986,

the FCA “precluded jurisdiction where the action was based upon information in the

possession of the United States or any of its employees at the time of the suit.” United

States ex rel. Burns v. A.D. Roe Co., 186 F.3d 717, 722 n.5 (6th Cir. 1999). Thus,

-27-
“government employees effectively were prohibited from bringing claims under the qui

tam provision.” Id. The 1986 amendments to the FCA, however, revised the qui tam

provision to allow any “person” to bring such a suit. See id.; 31 U.S.C. § 3730(b). “It is

not clear whether Congress intended by the amendments to allow government employees

to bring suit,” Burns, 186 F.3d at 722 n.5, since nothing in the amendments or the

legislative history thereto addresses the issue. Indeed, it appears that Congress gave no

thought to the issue at the time it formulated and enacted the 1986 amendments. See

Major David Wallace, Government Employees as Qui Tam Relators, 1996-AUG Army

Law. 14, 22 (1996) (“The sponsors of the 1986 FCA amendments simply did not

contemplate the issue of government employees using information they learned in the

course of their duties as the basis of lawsuits in their own names.”); Patrick W. Hanifin,

Qui Tam Suits by Federal Government Employees Based on Government Information, 20

Pub. Cont. L.J. 556, 570-71 (1991) (“The legislative history does not expressly resolve

the question of whether Congress intended to permit federal source suits. This is an

instance where determining what Congress thought about an issue is difficult because

Congress never thought about the issue, or at least did not express itself clearly.”).

Post-1986 congressional activity suggests that Congress views the FCA as

allowing federal employees to file qui tam actions.10 “In 1990, the Subcommittee on

10
Although subsequent legislative history has been described as “less illuminating
than the contemporaneous evidence,” Hagen v. Utah, 510 U.S. 399, 420 (1994), we
believe it is of some assistance in this case where there is little contemporaneous evidence

-28-
Administrative and Governmental Relations of the House Judiciary Committee held the

first oversight hearings on the Act.” Virginia C. Theis, Government Employees as Qui

Tam Plaintiffs: Subverting the Purposes of the False Claims Act, 28 Pub. Cont. L.J. 225,

238 (1999). During those hearings, “[t]he Justice Department, the Inspector General of

the Department of Health and Human Services, and John R. Phillips, an attorney who

participated in drafting the amendments . . . , proposed limits on federal employees

seeking to bring [FCA] actions.” Id. “In 1992, Congress introduced two bills intended,

in part, to address the issue of government employee relators.” Wallace, supra, at 22.

The first bill, H.R. 4563, “would have established limitations on government employees

who file[d] qui tam suits based on information gained during the course of their

employment.” Theis, supra, at 238-39. The second bill, S. 2785, proposed banning “all

qui tam suits brought by government employees who base[d] their actions on information

obtained during the course of their government employment.” Wallace, supra, at 23.

Both bills had critics, and neither ultimately became law.

Consistent with this history, “no court has accepted the argument that government

employees per se can never be relators in a qui tam action.” Burns, 186 F.3d at 722 n.5.

Although some judges from the Ninth Circuit have criticized the practice of allowing

federal employees to bring qui tam actions, see United States ex rel. Fine v. Chevron,

of Congress’ intent with respect to allowing government employees to file qui tam
actions.

-29-
U.S.A., Inc., 72 F.3d 740, 747 (9th Cir. 1995) (Trott, J., concurring); id. at 749 (Hawkins,

J. concurring), the court has, at least in one instance, allowed a federal employee to

proceed as a relator in a qui tam action. See Hagood v. Sonoma Co. Water Agency, 81

F.3d 1465, 1476 (9th Cir. 1996). Likewise, the First Circuit has held that § 3730(e)(4)(A)

does not per se “prevent government employees from bringing qui tam actions based on

information acquired during the course of their employment.” United States ex rel.

LeBlanc v. Raytheon Co., 913 F.2d 17, 20 (1st Cir. 1990).

In our view, the most persuasive discussion of the issue comes from the Eleventh

Circuit in United States ex rel. Williams v. NEC Corp., 931 F.2d 1493 (11th Cir. 1991).

There, the relator was an attorney for the United States Air Force who, “[d]uring the

course of his employment with the government, . . . became aware of bidrigging on the

part of a corporation seeking telecommunications contracts with the United States.” Id. at

1494. The district court dismissed the suit on the grounds that the FCA contained a

jurisdictional bar against suits brought by government employees based upon information

acquired in the course of their employment. On appeal, the Eleventh Circuit initially

determined that no public disclosure had occurred prior to the relator filing suit, and thus

concluded that it was unnecessary for the relator to establish that he was an “original

source” of the information on which his suit was based. Id. at 1499-1501. The court then

rejected the government’s argument that “the comprehensive bar against qui tam suits by

government employees in the 1943 version of the [FCA] was never repealed by the 1986

-30-
amendments.” Id. at 1501. In particular, the court concluded that “[t]he structure of the

1986 version of the Act and several basic canons of statutory interpretation make it clear

that no such general prohibition any longer exists.” Id. at 1502. Finally, the court

rejected various public policy arguments forwarded by the government “for finding that

Congress intended to bar government employees from initiating qui tam suits based upon

information acquired in the course of their government employment.” Id. at 1503.

Specifically, the court held:

We recognize that the concerns articulated by the United States may
be legitimate ones, and that the application of the False Claims Act since its
1986 amendment may have revealed difficulties in the administration of qui
tam suits, particularly those brought by government employees. (Footnote
omitted.) Notwithstanding this recognition, however, we are charged only
with interpreting the statute before us and not with amending it to eliminate
administrative difficulties. The limits upon the judicial prerogative in
interpreting statutory language were well articulated by the Supreme Court
when it cautioned:
Legislation introducing a new system is at best empirical,
and not infrequently administration reveals gaps or
inadequacies of one sort or another that may call for
amendatory legislation. But it is no warrant for extending a
statute that experience may disclose that it should have been
made more comprehensive. “The natural meaning of words
cannot be displaced by reference to difficulties in
administration.” Commonwealth v. Grunseit,[ (1943) 67
C.L.R. 58, 80]. For the ultimate question is what has
Congress commanded, when it has given no clue to its
intentions except familiar English words and no hint by the
draftsmen of the words that they meant to use them in any but
an ordinary sense. The idea which is now sought to be read
into the [Act] . . . is not so complicated nor is English speech
so poor that words were not easily available to express the
idea or at least to suggest it.
Addison v. Holly Hill Fruit Prods., 322 U.S. 607, 617-18, 64 S. Ct. 1215,

-31-
 1221, 88 L. Ed. 1488 (1944). Congress could have certainly indicated its
desire to prevent government employees from filing qui tam suits based
upon information acquired in the course of their government employment.
(Footnote and citations omitted.) The False Claims Act is devoid of any
statutory language that indicates a jurisdictional bar against government
employees as qui tam plaintiffs. We also note an absence of any clear
indication that Congress intended such a bar to be implied in spite of the
plain language of the statute. Therefore, we decline to judicially create an
exception where none exists.

Id. at 1503-04.

For these same reasons, we reject the government’s public policy arguments and

decline to hold that government employees are per se precluded from filing qui tam

actions based upon information obtained during the course of their employment.

Although there may be sound public policy reasons for limiting government employees’

ability to file qui tam actions, that is Congress’ prerogative, not ours.11

IV.

We conclude that Mary Holmes was entitled to proceed as a relator under 31

U.S.C. § 3730(b)(1), and, because no “public disclosure” occurred within the meaning of

31 U.S.C. § 3730(e)(4), the district court had subject matter jurisdiction over her

complaint. We VACATE our prior opinion in this case, REVERSE the judgment of the

11
At oral argument, several members of the court noted the possibility that federal
conflict-of-interest laws might be implicated by a government employee filing a qui tam
action based upon information obtained in the course of his or her employment. In
particular, the possibility was mentioned that such an employee might have to forfeit all
or part of the recovery obtained in a qui tam action. Because the issue was not raised by
the government or briefed by the parties, we find it unnecessary to resolve the issue at this
time.

-32-
district court, and REMAND for further proceedings.

-33-
01-1077, United States of America, ex rel. Mary L. Holmes v. Consumer Insurance

Group

TACHA, Chief Circuit Judge, dissenting, with whom KELLY and LUCERO, Circuit

Judges, join.

I. INTRODUCTION

This is the first case in which we have squarely faced the issue of whether a

federal employee who (1) has a specific duty to report a specific kind of fraud, (2)

discovered the alleged fraud at issue pursuant to her regular job duties, and (3) is

participating in an ongoing fraud investigation as part of her job duties may bring a qui

tam action based upon the alleged fraud that is the subject of the investigation. Our

previous cases have expressly declined to address the question of when a federal

employee may bring a qui tam action. United States ex rel. Fine v. MK-Ferguson Co., 99

F.3d 1538, 1541 n.1 (10th Cir. 1996); United States ex rel. Fine v. Advanced Sciences,

Inc., 99 F.3d 1000, 1003 n.1 (10th Cir. 1996). Because M-K Ferguson expressly avoided

this issue, it is no surprise that the four-part test we articulated there is inapposite here.

The MK-Ferguson test focuses exclusively on the public disclosure bar contained

in section 3730(e)(4)(A). As such, the test assumes that jurisdiction exists unless the

public disclosure bar applies. Neither MK-Ferguson nor any other case in this circuit,

however, has analyzed the FCA’s initial grant of jurisdiction to determine whether and
when its scope includes federal employees as potential relators. This latter inquiry

logically precedes the question of whether the public disclosure bar applies. I therefore

disagree with the majority’s insistence that we rely on the MK-Ferguson test.

In a section titled “Actions by private persons,” the FCA provides that “[a] person

may bring a civil action for a violation of section 3729 for the person and for the United

States Government.” 31 U.S.C. § 3730(b)(1). This initial grant of jurisdiction plainly

assumes a distinction between the government and the qui tam relator. Because such a

distinction was not present in this case, I would hold that the district court lacked

jurisdiction over Holmes’ qui tam suit. Accordingly, I would affirm the district court’s

dismissal of Holmes from the case.

II. DISCUSSION

Federal courts are courts of limited jurisdiction. When considering federal subject-

matter jurisdiction, we must presume that jurisdiction is lacking, require the party

asserting jurisdiction to prove that it exists, and resolve all doubts against jurisdiction.

For several reasons, there is grave doubt as to whether jurisdiction exists in this case, and

dismissal is therefore required.

First, a person is only a proper qui tam relator if she is distinct from the

government. This requirement follows from the qualifying language in section

3730(b)(1)’s initial grant of jurisdiction, which only confers jurisdiction over qui tam

actions brought “for the [relator] and for the United States Government.” This distinction

-2-
is absent where, as in this case, the relator is (1) a government employee whose job duties

include uncovering and reporting the particular type of fraud that grounds the qui tam

action, and (2) the relator is participating in an ongoing investigation of that very same

fraud.

Second, the Supreme Court has instructed us to employ statutory titles to resolve

ambiguity arising from a discrepancy between the title and the text. Such ambiguity is

present here, because the statute’s title refers to actions by “private persons,” while the

text refers only to “a person.” Per the Supreme Court’s instruction, we must resolve this

ambiguity by reading “person” as a reference to the “private persons” referred to in the

title and not to persons acting as the government with regards to the fraud at issue.

Third, the ambiguity of the text and the fact that Congress did not expressly speak

to the question of federal employee relators require us to consult the purposes of the qui

tam provisions. Permitting Holmes’ action would not serve any of the purposes of the

FCA and its 1986 amendments and would, in fact, frustrate Congress’ goal of preventing

parasitic suits.

Fourth, finding jurisdiction over Holmes’ action is glaringly inconsistent with

specific prohibitions requiring federal employees to avoid conflicts of interest. Because

the qui tam provisions do not per se exclude federal employee relators, they are

necessarily in some tension with conflict of interest rules governing federal employees.

The majority’s construction of the initial grant of jurisdiction as plenary maximizes that

-3-
tension; a properly narrow construction of section 3730(b)(1) minimizes it.

A. The Presumption Against Jurisdiction

We must remember, at the outset and throughout our consideration of the statutory

language, that federal courts are courts of limited jurisdiction. The first step in our

analysis is to presume that the district court lacks jurisdiction and to require the party

asserting jurisdiction to allege and prove that jurisdiction exists. Kokkonen v. Guardian

Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Montoya v. Chao, 296 F.3d 952, 955 (10th

Cir. 2002); MK-Ferguson, 99 F.3d at 1543; United States ex rel. Precision Co. v. Koch

Indus., 971 F.2d 548, 551 (10th Cir. 1992). Moreover, we must strictly construe statutes

conferring jurisdiction, resolving any doubts against jurisdiction. Advanced Sciences, 99

F.3d at 1004; MK-Ferguson, 99 F. 3d at 1543-44. Thus, a scintilla of doubt as to

jurisdiction over Holmes’ suit mandates dismissal.

B. The Distinction Between the Qui Tam Relator and the Government

In construing a statute, “our overriding purpose is to determine congressional

intent.” Chickasaw Nation v. United States, 208 F.3d 871, 878 (10th Cir. 2000) (citing

Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 570 (1982)). To determine a statute’s

plain meaning, “‘[we] must look to the particular statutory language at issue, as well as

the language and design of the statute as a whole.” Id. (quoting K Mart Corp. v. Cartier,

Inc., 486 U.S. 281, 291 (1988)).

The FCA provides, in a section headed “Actions by private persons,” that “[a]

-4-
person may bring a civil action for a violation of section 3729 for the person and for the

United States Government.” 31 U.S.C. § 3730(b)(1). The Act does not make explicit the

class of persons eligible to file civil suits under subsection (b). As the majority

acknowledges, Congress did not explicitly consider the possibility of qui tam suits by

government employees.1 Maj. op., supra at 22, 28. But while we lack any direct

congressional statement, or even any legislative history, the text of section 3730(b)(1)

does provide direction. Our starting point must be the meaning of Congress’ statement

that “[a] person may bring a civil action . . . for the person and for the United States

Government.” 31 U.S.C. § 3730(b)(1). Determining the scope of the initial grant of

jurisdiction logically precedes any consideration of the public disclosure and original

source inquiries.

The phrase “for the person and for the United States Government” reveals a

fundamental assumption about the individuals filing qui tam suits – namely, that they are

distinct from the government. The government is not a discrete organism; it exists and

acts only through people. The government cannot get up out of its chair and pursue

1
The majority does address subsequent attempts in Congress to address this issue.
Maj. op., supra at 28-29. These attempts never resulted in amendments to the FCA,
however, and discussions that fail to produce legislation cannot, by definition, constitute
legislative history. Congress has not spoken to the issue, and, “in any event, the view of a
later Congress cannot control the interpretation of an earlier enacted statute.” O’Gilvie v.
United States, 519 U.S. 79, 90 (1996) (internal citations omitted). Post-1986
congressional discussions are irrelevant to the meaning of the statute as a prior Congress
wrote it.

-5-
fraud; if it does so at all, it does so through its employees. The phrase, “for the person

and for the United States Government,” then, requires that there be some distinction

between a potential qui tam relator and the people acting as “the government” with regard

to the fraud at issue. I therefore read the statute as authorizing qui tam actions only by

those individuals who are distinct from the government.

When a federal employee acting pursuant to job responsibilities obtains

information about possible fraud, that employee obtains that information as the

government. A federal employee who is involved in an ongoing government

investigation pursuant to employment duties is the government. The distinction between

the individual federal employee and the government disappears in this context.

Therefore, such an employee cannot use that information to file an action under section

3730(b) “for the person and for the United States Government.”

Holmes is such an employee.2 She initially learned of the alleged fraud while

2
As the majority correctly points out, the reason Holmes knew of the fraud
allegedly committed by CIG was because “she is the person responsible for ferreting it
out in the first place.” Maj. op., supra, at 17 (emphasis added). This is precisely the
point. The outcome, in my judgment, is dictated by the facts in this case. At some point,
a potential relator’s specific duty to discover and report a particular kind of fraud aligns
so closely with the alleged fraud grounding her qui tam action that the distinction required
by section 3730(b)(1) – between the employee as private relator and the employee as the
government – collapses. The test for when that distinction collapses is necessarily fact-
driven, and I do not propose that we attempt to answer in advance every scenario that
might arise. We should allow the caselaw to develop the contours of such a fact-specific
test.
In this case, three facts situate Holmes outside the scope of section 3730(b)(1): (1)
Holmes’ express duty as postmaster to discover and report the particular kind of postal

-6-
acting in her capacity as postmaster. She learned that the alleged fraud was ongoing

while acting as a postmaster trainer, a role within the scope of her employment. Once she

had obtained information about this particular type of fraud, she had a specific duty as a

postmaster to report it. Regulation 224.3 in the Postal Service’s Administrative Support

Manual requires a postmaster to report by memorandum “[f]ailure to pay postage,

violation of franking privilege, misuse of penalty mail, depositing of advertising material

in mailboxes without payment of postage, and similar schemes to evade payment of

postage.” (Emphasis added). Holmes does not dispute that this regulation applies to her.

Nothing in the regulation limits its scope, and Holmes has provided no evidence to

suggest that its scope is limited to fraud conducted or discovered at her home post office.3

In fact, Holmes concedes its applicability when she states in her brief that she “could have

fraud alleged against CIG; (2) the fact that she discovered the alleged fraud as part of her
job duties; and (3) the fact that she is participating in the ongoing government
investigation – which indicates that the government has neither declined to pursue nor
covered up the alleged fraud. But the fact that Holmes may not bring this qui tam action
in no way implies a per se ban on federal employee relators. It is the specific alignment
of her job duties with the particular fraud alleged, along with her participation in the
ongoing government investigation, that disqualify her. The relationship between a
particular federal employee’s job duties and the particular fraud alleged will vary from
case to case. For example, nothing in this decision would prevent Holmes from filing a
qui tam action based upon information she obtained, outside the scope of her federal
employment, regarding bidrigging in the Department of Defense, because her express job
duties do not direct her to discover and report such fraud. Likewise, nothing in this
opinion would prevent a federal employee in the Department of Energy from basing a qui
tam action on the alleged fraud in this case.
3
Moreover, Boyle’s affidavit specifically states that a postmaster who is acting as
a postmaster trainer “is not relieved of his responsibilities as a postmaster, as they pertain
to reporting fraud.”

-7-
met her job description responsibility to report suspected fraud by simply sending a

memorandum to the Postal Inspection Service.” I therefore conclude that Holmes, a

federal employee with a specific duty to report the particular type of fraud at issue and a

participant in the ongoing investigation, is outside the FCA’s initial grant of jurisdiction.

My statutory analysis has been criticized as requiring an unwarranted redefinition

of the word “person.” It requires no such thing. We must read the word “person” in

context. The relevant inquiry is what the first sentence of section 3730(b)(1) means, not

what one word, removed from context, means.4 I can only conclude, therefore, that those

who have criticized my analysis as a factually dependent redefinition of the word

“person” have either ignored or rejected the premise of my analysis, which is that we

should read all the language granting jurisdiction in order to construe its scope.

My reading of the statute does not focus on the word “person” or on any other

word in isolation. I know of no principle of statutory construction that instructs us – or

permits us – to apply the plain meaning of individual words of a statute in isolation,

without considering the statutory context. See, e.g., United States Nat’l Bank of Oregon

v. Indep. Ins. Agents of America, Inc., 508 U.S. 439, 455 (1993) (“Over and over we have

stressed that ‘[i]n expounding a statute, we must not be guided by a single sentence or

4
See, e.g., Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 134 (1995) (“It is a
fundamental principle of statutory construction (and, indeed, of language itself) that the
meaning of a word cannot be determined in isolation, but must be drawn from the context
in which it is used.”) (quoting Deal v. United States, 508 U.S. 129, 132 (1993) (internal
quotations omitted)).

-8-
member of a sentence, but look to the provisions of the whole law, and to its object and

policy.”) (internal citations and quotations omitted). Rather, my analysis seeks to

understand from the statutory context what class of persons Congress intended to be

potential qui tam relators.

The majority construes section 3730(b)(1) as conferring jurisdiction over suits

brought by “any person,” subject only to the four subsequent express exclusions. This

construction ignores the remainder of the very brief statutory language, which qualifies

the initial grant of jurisdiction.5 Moreover, this interpretation turns on its head the general

rule that we must construe jurisdictional grants narrowly.

By construing the initial grant as plenary, the majority follows the Eleventh

Circuit’s analysis in United States ex rel. Williams v. NEC Corp., 931 F.2d 1493 (11th

Cir. 1991). But the analysis in Williams turns upon the same crucial error made by the

majority: instead of applying the entire sentence of section 3730(b)(1), it applies only the

first two words (“a person”).

The Williams court makes a fundamental and crucial assumption: that the 1986

amendments begin by conferring jurisdiction upon everyone, then restrict it in the four

express exceptions.

5
For this reason, the canon of expressio unius est exclusio alterius is inapplicable.
The four subsequent, express exclusions operate only within the scope of the initial grant.
The mere existence of subsequent express exceptions cannot ex ante transform a qualified
grant of jurisdiction into a plenary one.

-9-
 In defining the classes of persons eligible to bring qui tam actions, Congress had a
choice:

It could have chosen to make eligible as qui tam relators only
certain defined groups of persons and exclude all others or it
could have chosen to include all persons as eligible qui tam
relators with certain specific exceptions. It chose the latter
scheme. The statute first permits any “person” to bring a qui
tam action, and then specifically excludes four groups. . . .
Government employees are included in the general universe
of permissible qui tam plaintiffs unless, in the particular
circumstances, they fall into one of the four specifically
defined excluded groups.

931 F.2d at 1502 (quoting Erickson ex rel. United States v. Am. Inst. of Biological

Sciences, 716 F. Supp. 908, 912–13 (E.D. Va. 1989)) (emphasis added).

This analysis is rather conclusory and depends completely on the assumption that

(1) the statute begins by conferring jurisdiction over “any person” and (2) the rest of

section 3730(b)(1) is meaningless. According to Erickson, on which the Williams court

relied for its construction of the jurisdictional provisions, the statute “permits any

‘person’ to bring a qui tam action”; and Congress therefore intended that “Government

employees are included in the general universe of permissible qui tam plaintiffs unless, in

the particular circumstances, they fall into one of the four specifically excluded groups.”

Erickson, 716 F. Supp. at 912-13.

Taking the same view, the majority boldly states that the 1986 amendments

“revised the qui tam provision to allow any ‘person’ to bring such a suit.” Maj. op.,

supra, at 27 (emphasis added). But the statute does not begin by conferring jurisdiction

-10-
upon “any person.” It says that “a person may bring a civil action for violation of section

3729 for the person and for the United States Government.” That is, the original grant of

jurisdiction extends not to everyone but only to those persons in a position to bring suit on

behalf of themselves and the government. If there is no distinction between the person

and the government, section 3730(b)(1) does not confer jurisdiction on the person.6

Following Erickson and Williams’ lead, the majority has simply reworded the statute.

Reading the words “a person” out of context distorts the meaning of the statute by

ignoring the rest of the jurisdictional language. This we may not do. A unanimous

Supreme Court recently reminded us that

[statutory] text consists of words living a communal existence . . . the
meaning of each word informing the others and all in their aggregate
tak[ing] their purport from the setting in which they are used. . . . Over and
over we have stressed that [i]n expounding a statute, we must not be guided
by a single sentence or member of a sentence, but look to the provisions of
the whole law, and to its object and policy. . . . Statutory construction is a
holistic endeavor, and, at a minimum, must account for a statute’s full text.

United States National Bank of Oregon v. Independent Insurance Agents of America, Inc.,

508 U.S. 439, 454-55 (1993) (internal citations and quotations omitted) (emphasis added).

6
In holding that the qui tam provisions of the FCA do not impose a per se ban on
government employees as relators, the First Circuit cited the same language from
Erickson in United States ex rel. LeBlanc v. Raytheon Co., 913 F.2d 17 (1st Cir. 1990).
Neither court seems to have considered the language very carefully, and both repeat the
Erickson construction of the language without apparent analysis, as if it were a fait
accompli. It is not. Furthermore, at issue in Erickson was whether the statute imposed a
per se ban on federal employee relators, an issue distinct from the one before us –
whether relators in the course of their duties and thereby acting as the government are
within the scope of the jurisdictional provisions.

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If, as we must, we assume that Congress intended the entire sentence of section

3730(b)(1) to apply, we cannot begin the jurisdictional analysis with the assumption that

there must be some express or clearly implied subsequent exclusion. Rather, we begin

with the assumption that when Congress delineated the class of persons who may bring

qui tam actions, that class only included persons distinct from the government. The

words “a person” do not confer jurisdiction over everyone unless they are read out of

context.

C. The Section Title: “Actions by Private Persons”

The initial grant of jurisdiction in section 3730(b)(1) appears under the heading

“Actions by Private Persons.” Although the Supreme Court has cautioned that a heading

may not limit a statute’s plain and unambiguous meaning, see, e.g., Pennsylvania Dep’t of

Corr. v. Yeskey, 524 U.S. 206, 212 (1998), the Court has on numerous occasions

employed headings and titles as “tools available for the resolution of a doubt,” Bhd. of

R.R. Trainmen v. Baltimore & O.R. Co., 331 U.S. 519, 529 (1947).7 A title or heading is

7
See, e.g., Almendarez-Torres v. United States, 523 U.S. 224, 234 (1998) (quoting
Bhd. of R.R. Trainmen, 331 U.S. at 528-29) (noting that “‘the title of a statute and the
heading of a section’” are “‘tools available for the resolution of a doubt’” about a statute’s
meaning, and relying on presence of the word “penalties” in title of section as evidence
that the section dealt with substantive crime); Mead Corp. v. Tilley, 490 U.S. 714, 723
(1989) (employing title of regulation to resolve “any possible ambiguity”); FTC v.
Mandel Bros., 359 U.S. 385, 388–89 (1959) (noting that the “Title of [an] Act . . . though
not limiting the plain meaning of the text, is nonetheless a useful aid in resolving
ambiguity” and beginning the Court’s construction of false invoicing provisions of the
Fur Products Labeling Act by looking to its title and its underlying purposes); Maguire v.
Comm’r, 313 U.S. 1, 9 (1941) (employing title of tax statute as evidence of congressional

-12-
useful when it “shed[s] light on some ambiguous word or phrase.” Id. If there is

ambiguity, then, in the text of section 3730(b), and if its heading helps clarify matters, we

should consult the heading as long as we do not invoke it to limit the text’s plain

meaning.

In INS v. National Center for Immigrants’ Rights, 502 U.S. 183 (1991), a

unanimous Supreme Court relied on the title of a regulation in circumstances similar to

those in this case. INS required the Court to construe a section of a regulation entitled

“Condition against unauthorized employment.” The text of the section referred only to

“condition barring employment,” without specifying “unauthorized” employment. This

inconsistency was sufficient to create ambiguity in the text: “The most critical ambiguity

in the regulation is whether the proposed no-work conditions bar all employment or only

unauthorized employment . . . . Although the relevant paragraph of the regulation is

entitled ‘Condition against unauthorized employment,’ the text describes the restriction

more broadly, as a ‘condition barring employment.’” Id. at 189. The Court indicated

that, in such circumstances, it would read the text as if the omitted adjective were present:

In other contexts, we have stated that the title of a statute or section can aid
in resolving an ambiguity in the legislation’s text. Such analysis obtains in
this case as well. The text’s generic reference to “employment” should be
read as a reference to the “unauthorized employment” identified in the
paragraph’s title.

intent to confine application of its text to specific property owned by decedent at the time
of death).

-13-
Id. at 189 (emphasis in original) (internal citations omitted).

Section 3730(b)(1) is ambiguous, and the section heading aids us in resolving that

ambiguity. None of the individual words in section 3730(b)(1) is exotic or confusing, but

we must construe the entire sentence, not individual words out of context. To me, the

qualifying phrase “for the person and for the United States Government” plainly assumes

a distinction between the government and the qui tam relator. In addition to the

qualifying phrase in the text itself, there is also dissonance between the title’s reference to

“private persons” and the text’s more general reference to “a person.”

Thus, ambiguity resides in (1) the phrase by which Congress qualifies the “person”

entitled to bring a qui tam action and (2) the omission from the text of the adjective

“private,” which modifies “persons” in the heading. To resolve this ambiguity, the

Supreme Court instructs us to read the word “person” in the text as a reference to the

“private persons” more specifically identified in section 3730(b)’s heading. INS, 502

U.S. at 189.

Holmes obtained information of fraudulent activity in the course of her

employment; she was required to report that information pursuant to her specific job

duties; and she was a participant, as part of her job duties, in the ongoing government

investigation of that alleged fraud. She is clearly not a “private person” in this context,

and she is therefore not a proper qui tam plaintiff under the FCA. 31 U.S.C.

§ 3730(b)(1).

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 I strongly disagree with the majority’s assertion that employing section 3730(b)’s

title mandates a conclusion either that (1) all federal employees are within “the class of

‘persons’ capable of filing suit under the qui tam provision,” or (2) all federal employees

fall outside that class. Maj. op., supra, at 21. This case has never been about a per se ban

on federal employee relators, and the assertion fails for two reasons. First, the majority

premises its argument on a faulty assumption – namely, that my analysis is based upon an

unwarranted redefinition of “person.” It is not. Rather, I consider the nexus present

between the person and the government in deciding whether the potential relator satisfies

section 3730(b)(1)’s distinctness requirement. Second, the only government employees

outside the initial grant of jurisdiction are those acting as the government with regard to

the particular evidence of fraud that grounds their qui tam suits. I do not argue – and the

facts of this case make it unnecessary for me to argue – that Holmes should be barred

merely because she is a federal employee. Rather, I would hold that she is outside the

scope of the jurisdictional provisions because her job duties expressly require her to

uncover and report the particular type of fraud that grounds her qui tam action. She

therefore acts as the government with regard to that information and cannot bring a qui

tam action for herself and for the government.

D. The Purposes of the FCA and the 1986 Amendments

It is well established that when statutory language and legislative history are

inadequate, suggesting that Congress did not think about a particular problem that might

-15-
arise when applying a statute, “we must analyze the policies underlying the statutory

provision to determine its proper scope.” Rose v. Lundy, 455 U.S. 509, 516-17 (1982); see

also, e.g., United States v. Sisson, 399 U.S. 267, 297-98 (1970) (“The axiom that courts

should endeavor to give statutory language that meaning that nurtures the policies

underlying legislation is one that guides us when circumstances not plainly covered by the

terms of a statute are subsumed by the underlying policies to which Congress was

committed”). The majority and I agree that “[i]t is not clear whether Congress intended

by [the 1986] amendments to allow government employees to bring suit.” Maj. op., supra

at 28 (citation omitted). Congress apparently gave no thought to the issue. Id. We must,

therefore, consider the purposes of the FCA’s qui tam provisions to determine the proper

scope of section 3730(b)(1).

While my analysis remains grounded in the statutory language of section

3730(b)(1), the purposes of the FCA’s qui tam provisions and its 1986 amendments

bolster the conclusion that jurisdiction is lacking. “Congress instituted the qui tam

provisions of the FCA to encourage private citizens to expose fraud that the government

itself cannot easily uncover.” United States ex rel. Fine v. Sandia Corp., 70 F.3d 568,

572 (10th Cir. 1995). Moreover, the 1986 amendments’ expansion of jurisdiction over

qui tam actions reflects Congress’ “concern that the government was not pursuing known

instances of fraud.” Ramseyer, 90 F.3d at 1520 (quoting MK-Ferguson Co., 861 F. Supp.

at 1551). The statute as amended aims “(1) to encourage private citizens with first-hand

-16-
knowledge to expose fraud; and (2) to avoid civil actions by opportunists attempting to

capitalize on public information without seriously contributing to the disclosure of the

fraud.” Id. at 1519-20 (quoting Precision, 971 F.2d at 552).

Exercising jurisdiction over Holmes’ action would not serve the FCA’s purposes

of encouraging exposure of fraud and would frustrate its goal of preventing parasitic

suits. First, where a government employee has a duty to report fraud, as Holmes does as

postmaster, the information underlying that employee’s suit does not constitute

information that the government would not otherwise uncover. The duty to report itself

assures that her information is the government’s information.

Second, a qui tam action by someone in Holmes’ position is not prodding the

government to pursue fraud allegations it would not otherwise pursue. The undisputed

facts show that the government is engaged in active pursuit of the alleged fraud. In fact,

Holmes’ own brief states plainly that encouraging government action was not the purpose

of her suit: “After Relator was confident that the government was adequately

investigating her information, she filed her lawsuit under the FCA to recover her lawful

share of the proceeds.”8 Therefore, permitting Holmes’ qui tam suit would not serve the

8
The majority misreads both my analysis and the statute when it suggests that
Holmes acted “as the government” when she obtained the information that grounds her
qui tam actions and as a “person” when she filed that action to secure a “share of the
proceeds” – thereby, the argument goes, satisfying section 3730(b)(1)’s requirement that
she file on behalf of herself and the government. Maj. op., supra, at 22-23. First, my
construction of the initial grant of jurisdiction is not premised on a factually dependent
redefinition of the term “person”; thus, the majority’s attempt to associate “person” with

-17-
FCA’s purposes of exposing fraud or encouraging the government to pursue fraud

allegations.

Nor are these circumstances ones in which a private person needs to be encouraged

to expose fraud. On the contrary, having acquired the information in the course of her

duties as a postmaster, Holmes had a specific obligation as a postmaster to report it.

Again I note that, in the performance of her duties as a postmaster, she is the government.

As such, she acquired the information for the government. Moreover, a federal employee

who reports a private company’s fraud on the government does not have the same fear of

reprisal as a company insider who acts as a whistleblower, further reducing the need for

financial incentives to encourage them to disclose information about fraud.9

Finally, allowing federal employees’ qui tam suits in these circumstances would

not serve, and would in fact frustrate, Congress’ goal of preventing parasitic suits. I agree

Holmes’ “individual capacity” and “government” with her “official capacity” misses the
point. It also, ironically, appears to engage in factually dependent reading of “person.”
Second, if the qualifying language “for the person and for the United States Government”
means anything at all, it means that there is some distinction between the two that is
relevant to the existence of jurisdiction. The majority’s reading requires that a single
individual can be both at the same time, simply because “the preparation and filing of her
suit” need not occur at her workplace. Id. Such a construction renders the language
meaningless – as does the majority opinion in general. Moreover, as Holmes
acknowledges, the official investigation was already underway when she filed her action,
and her sole reason for filing was her own financial gain. It is a parasitic suit, filed solely
on her own behalf, not the government’s.
9
In addition to the financial incentives for a qui tam plaintiff, the statute addresses
this particular concern by providing that an employee who suffers retaliatory action as a
result of pursuing or assisting in an action under section 3730 “shall be entitled to all
relief necessary to make the employee whole.” 31 U.S.C. § 3730(h).

-18-
with the majority that “the point of the public disclosure test is to determine whether the

qui tam suit is a parasitic one.” Maj. op., supra, at 16 n.6. The public disclosure bar,

however, does not address the problem of parasitic suits by government employees; it

only addresses the problem of parasitic suits by private persons, who have no access to

government information that has not been “publicly disclosed.”

Section 3730(b)(1)’s distinctness requirement furthers the FCA’s purposes. The

statute’s authorization of suits by “[a] person . . . for the person and for the United States

Government,” along with the section heading “Action by Private Persons,” reflect a

contrast between public and private, between the federal government’s information and

private citizens’ independent knowledge. Our analysis in Ramseyer is instructive. In that

case, we concluded that the public disclosure bar requires actual, not merely theoretical,

disclosure. 90 F.3d at 1519. Underlying our reasoning was the assumption that potential

qui tam relators do not have access to governmental information that has not been made

public:

Information to which the public has potential access, but which has not
actually been released to the public, cannot be the basis of a parasitic
lawsuit because the relator must base the qui tam suit on information
gathered from his or her own investigation. If a specific report detailing
instances of fraud is not affirmatively disclosed, but rather is simply
ensconced in an obscure government file, an opportunist qui tam plaintiff
first would have to know of the report’s existence in order to request access
to it.

Id. at 1520. This rationale, however, does not apply to government employees who know

of the allegations because of their jobs. Government employees frequently have access to

-19-
government information even though it has not been “publicly disclosed,” as defined in

Ramseyer. Thus, there is a potential for parasitic qui tam suits by government employees

before “public disclosure” occurs, just as there is a potential for such suits by private

persons following public disclosure. In my view, Holmes’ suit is a parasitic one for

precisely this reason.10 Holmes learned of the alleged fraud while acting in the scope of

her employment as a federal employee, and she had a specific duty to report this

particular type of information. As such, she obtained the information on behalf of the

government, and the information belongs to the government. Of course, these facts also

mean that she had access to the information regardless of whether it had been “publicly

disclosed.”11

E. Conflict of Interest

Federal employees’ obligations to avoid conflicts of interest further distinguish

them from others who file qui tam suits. Clearly, Congress did not intend to adopt a per

se ban against federal employee relators – the four express exclusions directed towards

federal employees that follow the initial qualified grant of jurisdiction would otherwise be

10
Again I note that Holmes’ own brief evidences a specific intent to piggyback on
the government’s efforts.
11
The majority concludes that the “original source” inquiry need not be conducted
here because there has been no public disclosure. The majority nevertheless seems to
assume that Holmes would qualify as an original source, for it states – borrowing a phrase
directly from the statutory definition of “original source,” 31 U.S.C. § 3730(e)(4)(B) –
that Holmes has “direct and independent knowledge” of the alleged fraud. Maj. op.,
supra, at 16-17.

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superfluous. Thus, the FCA will at times be in tension with conflict of interest provisions

governing federal employees. But the glaring inconsistency between these limitations on

federal employees and allowing federal employees to pursue qui tam suits based upon

information obtained as part of their job duties, and which their jobs require them to

report, supports the conclusion that Congress intended to minimize the extent to which

the FCA derogated from the requirement that federal employees avoid conflicts of

interest. The majority’s broad reading of the initial grant of jurisdiction maximizes the

inherent tension between the qui tam provisions and the conflict of interest rules. We are,

however, bound to construe statutes granting federal subject-matter jurisdiction narrowly;

such a construction also minimizes the tension between section 3730(b)(1) and the

conflict of interest rules.

The most relevant among the specific prohibitions on federal employees is the

prohibition on the use of “nonpublic Government information”12 to “further any private

interest.” 5 C.F.R. §§ 2635.101(b)(3), 2635.703(a). Other regulations prohibit

participation in a government matter in which the employee has a financial interest, id.

§§ 2635.402, 2635.501, 2635.502; the use of public office for private gain, id.

§§ 2635.101(b)(7), 2635.702; the use of government property or time for personal

purposes, id. §§ 2635.704, 2635.705; and holding a financial interest that may conflict

12
“Nonpublic information” means “information that the employee gains by reason
of Federal employment and that he knows or reasonably should know has not been made
available to the public.” 5 C.F.R. § 2635.703(b).

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with the impartial performance of government duties, id. § 2635.403. Moreover,

Congress has specifically imposed criminal penalties on government employees who

participate in matters in which they have financial interests. 18 U.S.C. § 208.

Holmes based her qui tam suit on information that she acquired in the course of

her employment as a postmaster and had a specific duty to disclose. At least while the

government is conducting an ongoing investigation of the allegations, Holmes’ claim for

a portion of the proceeds directly reduces the amount that the government may ultimately

collect. To allow an employee in Holmes’ position to pursue qui tam claims in these

circumstances would create a personal financial stake in the relevant information.13

“Rather than perform their jobs as they are required, government employees obligated to

disclose suspected fraud may inappropriately hide fraud from their supervisors while

preparing their qui tam actions for filing.” United States ex rel. Biddle v. Bd. of Trustees,

161 F.3d 533, 542 (9th Cir. 1998) (citation omitted). We cannot conclude that Congress

intended to create an incentive for government employees to withhold information about

suspected fraud contrary to their specific employment obligations.14

13
Indeed, according to the majority opinion, it appears that Congress intended to
authorize a federal employee to “cash in” whenever her job duties bring evidence of fraud
across her desk – even if her job is to investigate fraud.
14
I contrast my reasoning here with the primary policy arguments that the Eleventh
Circuit rejected in Williams involving administrative difficulties – specifically,
interference with the government’s case and premature disclosure of allegations to
defendants. 931 F.2d at 1503. I agree that these concerns do not require excluding
government employees from the class of eligible qui tam plaintiffs, and we accord them
no weight. The statute demonstrates that Congress considered these concerns (though not

-22-
 The FCA does not specify how it applies to federal employees. The majority’s

construction of the initial grant of jurisdiction as plenary exacerbates the inherent tension

between the qui tam provisions and the conflict of interest rules, whereas a properly

narrow construction of section 3730(b)(1) minimizes that tension. We must assume that

Congress did not intend to abrogate the conflict of interest rules beyond what is required

for a properly narrow construction of section 3730(b)(1)’s initial grant of jurisdiction. To

do otherwise needlessly fosters incoherence and flies in the face of our obligation to

construe statutes granting federal subject-matter jurisdiction narrowly. Assuming that

Congress intended for federal employees to adhere to applicable statutes and regulations,

we should construe the FCA in a manner that is consistent with federal employees’

obligations. In light of these obligations, along with the statute’s evident purposes and

specifically with respect to government employees) and chose to mitigate them by other
means. 31 U.S.C. § 3730(b)(2)-(3) (requiring that a qui tam plaintiff file the complaint
under seal, and allowing the government to seek an extension of the 60-day period during
which the complaint remains under seal); (b)(4) (allowing the government to take over a
qui tam action by intervention); (c) (limiting the qui tam plaintiff’s rights when the
government intervenes).
The Williams court, although it noted the government’s argument that “the False
Claims Act should not allow a personal reward to government employees for the
‘parasitical’ use of information obtained and developed in the course of government
employment,” 931 F.2d at 1503, did not consider the plaintiff’s particular employment
obligations in this context. Such obligations are an important aspect of my analysis of
Holmes’ case. Moreover, to the extent that I rely upon the obligations of federal
employees, I use these to inform my interpretation of the statutory language in section
3730(b)(1). I thus disagree with the Eleventh Circuit’s statement that “[t]he False Claims
Act is devoid of any statutory language that indicates a jurisdictional bar against
government employees as qui tam plaintiffs.” Williams, 931 F.2d at 1504.

-23-
section 3730(b)(1)’s distinction between the government and the private relator, it is my

view that Congress did not intend to permit a federal employee’s qui tam suit where she

has a specific duty to report the specific kind of fraud that grounds the suit and is

participating in an ongoing investigation as part of her job duties.

III. CONCLUSION

The words “a person” in the text do not indicate that section 3730(b)(1)’s initial

grant of jurisdiction is plenary. The qualifying language in the text (“for the person and

the . . . Government”) must be given meaning, as must the adjective “private” in the title.

The statute simply does not say that any person may bring a qui tam action. Such a

reading ignores both the text of the qualifying phrase and the fact that the section refers to

private persons, not federal employees participating as part of their job duties in the very

investigations that ground their qui tam actions. It produces results that conflict with the

statute’s purposes, and it maximizes the inherent tension between the FCA and conflict of

interest rules that apply to federal employees – whereas an appropriately narrow reading

of the initial grant of jurisdiction minimizes that tension.

Moreover, Holmes has confronted these obstacles in an atmosphere necessarily

hostile to jurisdiction, for we must presume that no jurisdiction exists, and we are obliged

to strictly construe statutes conferring jurisdiction on the federal courts. The burden is on

Holmes to prove that the district court had jurisdiction. She has not done so.

For these reasons, I respectfully dissent.

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