Opinion
Civil No. 93-2960-H/B.
September 9, 1996
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
This case is before the Court on defendants' motion to dismiss pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. For the reasons stated herein, the motion is GRANTED. This case is DISMISSED.
Background
Plaintiffs filed this qui tam action on October 28, 1993, pursuant to the False Claims Act, 31 U.S.C. § 3729et. seq. (the "FCA" or the "Act"). Essentially, plaintiffs claim the defendants sold the government millions of dollars worth of Pryfon-6, a purported termiticide, that defendants allegedly knew was ineffective. Defendants contend that jurisdiction over plaintiffs' claim is barred by Section 3730(e)(4)(A) of the FCA based on prior public disclosure of the allegations in professional and trade journals as well as in scientific research papers and articles. Defendants also assert there was public disclosure of the allegations in two prior civil actions.In response to defendants' assertions, plaintiffs claim they are direct, independent and original sources of the information and therefore entitled to maintain this action. Plaintiff's also contend they were unaware of any alleged public disclosures and therefore qualify as "original sources" under the Act.
It appears undisputed there were several instances of published reports and scientific studies as to the ineffectiveness of the active ingredient in Pryfon-6 as a termiticide when it is placed in the soil containing a certain strain of bacteria. (See, Original Compl. paragraphs 16, 19-21, 26, and 31).
Discussion
Section 3730(e)(4)(A) of the False Claims Act provides thatqui tam actions based on information publicly disclosed prior to initiation of the action will be barred unless the plaintiff who brings the action is an "original source" of the information underlying the complaint. See, United States v. TRW, Inc., 4 F.3d 417, 420 (6th Cir. 1993). Unfortunately, it seems the Sixth Circuit Court of Appeals has not addressed the issue of who qualifies as an "original source." Two Circuit Courts of Appeals are split on the issue. The Fourth Circuit has held that a qui tam plaintiff does not have to be a source to an entity that publicly discloses the allegations in order to be an "original source." United States ex rel. Siller v. Becton Dickinson Co., 21 F.3d 1339, 1348-49 (4th Cir. 1994). The Second Circuit has held however that "if the information upon which a qui tam suit is based is in the public domain, and the qui tam plaintiff was not a source of that information, then the suit is barred." United States ex. rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2nd Cir. 1990); see also, United States ex rel. Springfield Terminal Ry. Co. et al. v. Quinn, 14 F.3d 645, 655 (D.C. Cir. 1994) (qui tam action cannot be sustained where all of the material elements of the fraudulent transaction are already in the public domain . . .).After carefully considering the positions of the respective Circuit Courts, this Court concludes it should follow the Second Circuit's interpretation of the statute as announced in United States ex. rel. Dick v. Long Island Lighting Co., 912 F.2d 13, 18 (2nd Cir. 1990). The Second Circuit's interpretation is highly persuasive based upon their careful examination the statutory language and legislative history. In addition, this Court finds the present case more closely analogous to the facts in Dick, supra. Moreover, this Court finds that the information upon which plaintiffs' allegation are based were in the public domain prior to plaintiff's initiation of this suit. Thus, this Court finds that plaintiffs do not qualify as an "original source" of the information under the statute.
Defendants' motion to dismiss for lack of jurisdiction is therefore GRANTED. This case is DISMISSED.