US Ex Rel. Marc Wichansky v. Zoel Holding Co.

                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                             JUL 31 2017
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
MARC A. WICHANSKY, a natural                     No.   14-17528
person; United States of America, ex rel.,
                                                 D.C. No. 2:13-cv-01924-DGC
              Plaintiff-Appellant,

v.                                               MEMORANDUM*

ZOEL HOLDING COMPANY, INC., et
al,

              Defendants-Appellees.


                   Appeal from the United States District Court
                            for the District of Arizona
                   David G. Campbell, District Judge, Presiding

                        Argued and Submitted April 4, 2017
                               Pasadena, California

Before: WARDLAW and CALLAHAN, Circuit Judges, and KENDALL,**
District Judge.

      Marc Wichansky (“Wichansky”) appeals the district court’s order granting

Defendants-Appellees’ (“Defendants”) motion to dismiss Wichansky’s False

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Virginia M. Kendall, United States District Judge for
the Northern District of Illinois, sitting by designation.
Claims Act (“FCA”) qui tam action. We have jurisdiction pursuant to 28 U.S.C.

§ 1291, and we reverse and remand.

      Defendants moved to dismiss Wichansky’s complaint pursuant to Federal

Rule of Civil Procedure 12(b)(6). Defendants argued that Wichansky’s FCA

action was barred by the public disclosure bar. Defendants asserted that

Wichansky’s allegations failed to establish that he was an original source, and

attached exhibits to demonstrate that the allegations in the complaint had been

disclosed through the first federal action and a news article. Wichansky responded

by arguing the merit of his allegations, and by attaching an exhibit. Without

further notice to the parties, the district court treated the motion as a factual attack

brought under Rule 12(b)(1), considered factual matters outside the pleadings, and

dismissed without leave to amend.

      The district court correctly found that the applicable version of the FCA is

the version predating the 2010 amendments to the statute and that the public

disclosure bar is therefore jurisdictional. See Prather v. AT&T, Inc., 847 F.3d




                                            2
1097, 1102–03 (9th Cir. 2017). Accordingly, the district court did not err in

addressing the motion under Rule 12(b)(1) rather than Rule 12(b)(6).1

      “A Rule 12(b)(1) jurisdictional attack may be facial or factual. In a facial

attack, the challenger asserts that the allegations contained in a complaint are

insufficient on their face to invoke federal jurisdiction. By contrast, in a factual

attack, the challenger disputes the truth of the allegations that, by themselves,

would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer,

373 F.3d 1035, 1039 (9th Cir. 2004) (citation omitted). The moving party may

“convert[] the motion to dismiss into a factual motion by presenting affidavits or

other evidence properly brought before the court . . . .” Savage v. Glendale Union

High Sch., Dist. No. 205, 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). And, as a

general matter, a district court deciding a factual attack on jurisdiction “need not

presume the truthfulness of the plaintiffs’ allegations” and may “look beyond the

complaint . . . without having to convert the motion into one for summary

judgment.” United States ex rel Meyer v. Horizon Health Corp., 565 F.3d 1195,




      1
       We note, however, that the district court proceeded to analyze whether
Wichansky qualifies as an original source by quoting and referring to the post-
amendment statutory language. On remand, the district court must apply the pre-
2010 amendments version of the statutory language.
                                           3
1200 n.2 (9th Cir. 2009) (citation omitted), overruled on other grounds by United

States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121 (9th Cir. 2015).

      But here, whether Defendants’ motion posed a facial or a factual attack was

ambiguous, and neither Defendants nor Wichansky appears to have contemplated

that the court would resolve this issue on an exclusively factual basis. The district

court thus erred in construing Defendants’ motion to dismiss as a factual, rather

than facial, attack under Rule 12(b)(1), and in relying on factual materials to

conclude that Wichansky “failed to meet his burden of showing by a

preponderance of the evidence that he is an original source as defined in the FCA.”

Making this determination on the basis of an ambiguous motion denied Wichansky

adequate notice and opportunity to bring forward factual matters pertinent to the

dispositive issue of whether he qualified as an “original source” under the FCA and

thus could avoid the public disclosure bar to FCA qui tam actions. See 31 U.S.C.

§ 3730(e) (2006).

      REVERSED and REMANDED.




                                           4