C. The Johnson Litigation as a Public Disclosure Kerr-McGee's final argument is that the information upon which Mr. Maxwell's suit was based was publicly disclosed in the course of the litigation and settlement of United States ex rel. Johnson v. Shell Oil Co., 33 F.Supp.2d 528 (E.D.Tex. 1999). Johnson was a federal qui tam action filed against Kerr-McGee for the alleged fraudulent underpayment of royalties on federal leases covering a period from 1988 through 1998. If Mr. Maxwell's suit is "based upon" information publicly disclosed in Johnson, then the court would have no subject matter jurisdiction to hear the case.
Although the Fifth Circuit has not addressed this specific statutory provision in any detail, other appellate and district courts have done so. See, e.g., A-1 Ambulance Serv., Inc. v. California, 202 F.3d 1238, 1243 (9th Cir. 2000); U.S. ex rel. Jones v. Horizon Healthcare Corp., 160 F.3d 326, 331-32 (6th Cir. 1998); U.S. ex rel. Dunleavy v. County of Delaware, 123 F.3d 734, 740-41 (3rd Cir. 1997); U.S. ex rel. Rabushka v. Crane Co., 40 F.3d 1509, 1511-14 (8th Cir. 1994); Springfield, 14 F.3d at 653-54; Wang v. FMC Corp., 975 F.2d 1412, 1418 (9th Cir. 1992); U.S. ex rel. Johnson v. Shell Oil Co., 33 F.Supp.2d 528, 533-34 (E.D.Tex. 1999) (" Shell Oil II"); Wercinski, 982 F.Supp. at 458. The prevailing law on this section of the Act was first articulated by the United States Court of Appeals for the District of Columbia Circuit in U.S. ex rel. Springfield Terminal Railway Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994).
The Tenth Circuit addressed a similar public disclosure argument concerning Johnson in United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., 540 F.3d 1180 (10th Cir. 2008): Kerr-McGee's final argument is that the information upon which Mr. Maxwell's suit was based was publicly disclosed in the course of the litigation and settlement of United States ex rel. Johnson v. Shell Oil Co., 33 F. Supp. 2d 528 (E.D. Tex. 1999). Johnson was a federalqui tam action filed against Kerr-McGee [and Shell] for the alleged fraudulent underpayment of royalties on federal leases covering a period from 1988 through 1998.
In evaluating whether a relator's suit is barred by the public disclosure bar of the FCA, several district courts in this circuit have looked to the influential case of United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645 (D.C. Cir. 1994), in which the court emphasized that for the purposes of determining whether the public disclosure bar applied, it was the public disclosure of transactions or allegations and not merely of information, that was relevant. See, e.g., United States ex rel. Colquitt v. Abbott Lab., 864 F.Supp.2d 499, 519 (N.D. Tex. 2012); United States ex rel. Smart v. Christus Health, 626 F.Supp.2d 647, 653-54 (S.D. Tex. 2009); United States ex rel. Johnson v. Shell Oil Co., 33 F.Supp.2d 528, 533-34 (E.D. Tex. 1999). To illustrate its analysis, the Springfield court employed a mathematical equation: X + Y = Z, where "Z represents the allegation of fraud and X and Y represent its essential elements."
Plaintiff, citing the Tenth Circuit's holding in Maxwell, 540 F.3d at 1187, asserts his action is not "based upon" information disclosed in the prior investigation. In Maxwell, defendant Kerr McGee argued a qui tam plaintiff's FCA suit for alleged fraudulent underpayment of sales proceeds and accompanying underpayment of royalties on more than 50 offshore federal leases, was barred because it was based on information publicly disclosed in the course of the litigation and settlement of United States ex rel. Johnson v. Shell Oil Co., 33 F.Supp.2d 528 (E.D. Tex. 1999). The Tenth Circuit stated, "Although we have held that a subsequent lawsuit can be `based upon' allegations made in a prior lawsuit even when the two suits cover different periods of time, the `essential claim[s]' must be substantially `similar.' 540 F.3d at 1187.
Therefore, Relator's HM E design claim is jurisdictionally barred unless he is an original source of the information underlying his allegations.See United States ex rel. Johnson v. Shell Oil Co., 33 F. Supp.2d 528, 540-41 (E.D. Tex. 1999).See United States ex rel. Fried v. West Indep. Sch. Dist., 527 F.3d 439, 442 (5th Cir. 2008).
reports clearly constitute public disclosures); United States ex rel. Feingold v. Adminastar Fed.,Inc., 324 F.3d 492, 496 (7th Cir. 2003) (fraud alerts classified as administrative reports because they were issued by an "administrative" agency and constitute official government action of information or notification); Cooper, 19 F.3d at 566 (OIG reports indicating an "ongoing investigation" of fraud constituted administrative reports); United States ex rel. Baltazar, 2009 U.S. Dist. LEXIS 28639, *20 (N.D. Ill. Apr. 2, 2009) (OIG report as "more than sufficient to show a public disclosure"); Gross v. Aids Research Alliance-Chicago, 2004 U.S. Dist. LEXIS 7302, *20 (N.D. Ill. Apr. 27, 2004) (FDA letter considered an "administrative report" because it was government authority addressing the claim in question); United States ex rel. Barrett v. Johnson Controls, 2003 U.S. Dist. LEXIS 5973, *17 (N.D. Tex. Apr. 9, 2003) (administrative reports are any documents which a federal agency issues); United States ex rel. Johnson v. Shell Oil Co., 33 F. Supp. 2d 528, 538 (E.D. Tex. 1999) (same). Using these parameters and judicial guidance, the Court finds that the following constitute "administrative reports" under the FCA:
Defendants argue that the lack of reference to the False Claims Act in the Ross litigation does not save Relator from the jurisdictional bar, citing United States ex rel. Fine v. Sandia Corp., 70 F.3d 568 (10th Cir. 1995), United States ex rel. Lissack v. Sakura Global Capital Markets, No. 95 Civ. 1363, 2003 WL 21998968 (S.D.N.Y. Aug. 21, 2003), Ward, 2007 WL 1390612, and United States ex rel. Johnson v. Shell Oil, 33 F. Supp. 2d 528 (E.D. Tex. 1999). Neither these cases nor any other the Court has found supports Defendants' argument.
The exception is simply a corollary to the axiom that a qui tam action is based upon the allegations in a prior public disclosure if the disclosure squarely places the government on the trail of the alleged fraud. See Sandia, 70 F.3d at 571; see also United States ex rel. Ervin Assocs. v. Hamilton Sec. Group, Inc., 332 F. Supp. 2d 1, 7 (D.D.C. 2003); United States ex rel. Johnson v. Shell Oil Co., 33 F. Supp. 2d 528, 540 (E.D. Tex. 1999).
In his January 1999 order in a qui tam posted price suit, Judge John Hannah of the Eastern District of Texas listed many instances where public allegations were made that posted price were below market price, and many of these instances pre-date April 1992. ( SeeUnited States of America ex rel. Johnson v. Shell Oil Co., 33 F.Supp.2d 528 (E.D.Tex.1999)). Finally, there is little potential for an actual conflict of interest between the owners of early barrels and owners of late barrels since any given class member is most likely an owner of both early and late barrels.