An allegation that a named purchaser of gas at the wellhead is underpaying because it intentionally mismeasures volume and heating content is sufficient to alert anyone with a financial stake in gas acquired by the same purchaser that their interests are in jeopardy. Relator relies heavily on United States ex rel. Yannacopolous v. General Dynamics, 315 F. Supp. 2d 939 (N.D. Ill. 2004) for the proposition that a document containing allegations or transactions from a statutory listed source does not trigger the public disclosure bar unless it identifies the federal government as the victim of the wrongful conduct. The Special Master finds and concludes that Relator's reliance upon Yannacopolous is misplaced.
Section 1-22-030(f) identifies only three types of disclosures that trigger the disclosure bar: (1) a "criminal, civil, or administrative hearing"; (2) "a legislative, administrative, or Inspector General's report, hearing, audit, or investigation"; or (3) "the news media." As for the argument that "foreign" disclosures do not satisfy the enumerated criteria, Rosenberg cites only United States ex rel. Yannacopolous v. General Dynamics, 315 F. Supp. 2d 939, 948 (N.D. Ill. 2004) for that proposition, but that case addressed a foreign proceeding under seal—i.e., proceedings that were not publicly disclosed. As for the question of whether Redflex's public securities filing satisfies the disclosure criteria, Redflex cites a number of district court decisions holding that securities filings, company press releases, and information available on company web sites are included within the ambit of public disclosures.
Rule 9(b) requires the "who, what, when, where, and how: the first paragraph of any newspaper story," of the "circumstances constituting fraud." Goldberg v. Rush Univ. Med. Ctr., 929 F. Supp. 2d 807, 815 (N.D. Ill. 2013) (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)); see also United States ex rel. Yannacopolous v. Gen. Dynamics, 315 F. Supp. 2d 939, 946 (N.D. Ill. 2004) (News stories are "short and to the point."). Discussion
The Seventh Circuit has made clear that § 3730(e)(4)(A) & (B) are matters of substantive law, and not an actual “jurisdictional bar” as other courts have suggested. SeeUnited States ex rel. Feingold v. AdminaStar Federal, Inc., 324 F.3d 492, 494 (7th Cir.2003) (citing Hughes Aircraft Co. v. United States, 520 U.S. 939, 950–51, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997)); see alsoU.S. ex rel. Yannacopolous v. General Dynamics, 315 F.Supp.2d 939, 946–47 (N.D.Ill.2004). Thus, to consider evidence outside the pleadings as Kmart proposes, the Court would have to convert the motion to one for summary judgment.
To the extent that Relator asks this court to join other circuits in holding that discovery and synthesis of information from different public sources during the course of an independentinvestigation can result in original sourcing, we decline to do so. This, because of the scant and vague evidentiary basis upon which Relator makes his claims both as to Aspects 1 and 3 of the alleged fraud and as to the nature of his purported “independent investigation” beyond interviews with Calloway's sales force and leading industry personnel. See, e.g., Kennard v. Comstock Resources, Inc., 363 F.3d 1039 (10th Cir.2004); United States v. Bank of Farmington, 166 F.3d 853, 864 (7th Cir.1999); United States ex rel. Barajas v. Northrop Corp., 5 F.3d 407, 410 (9th Cir.1993); see also United States ex rel. Yannacopolous v. Gen. Dynamics, 315 F.Supp.2d 939, 953–54 (N.D.Ill.2004). In Relator's reply brief on appeal, he argues that he raised the original source argument in his sur-reply to Millennium's motion to dismiss before the district court.
Similarly, here, Relators are certainly not the original source of the allegedly false statements in the plans and reports submitted to the government. See also United States ex rel. Yannacopolous v. Gen. Dynamics, 315 F.Supp.2d 939, 951 (N.D. Ill. 2004) (public records are not “public disclosures” and even if the initial terms are disclosed, “without the relator's allegations of subsequent fraud, one cannot reasonably infer” an FCA violation). However, the amended complaint alleges myriad examples of Relators' direct and independent personal observations of Defendants' alleged violations.
Although their complaint does not contain all the nitty-gritty, it provides those facts one expects to find in the first paragraph of a newspaper story. United States ex rel. Yannacopolous v. Gen. Dynamics , 315 F. Supp. 2d 939, 946 (N.D. Ill. 2004) (emphasizing that "[t]he first paragraph of a newspaper story is short and to the point" and that a complaint is sufficient if defendants "have sufficient notice of the fraud alleged against them and [plaintiff] alleges enough particular facts to foreclose fears of a fishing expedition").
But a "when" challenge under Rule 9(b) is equally ill-fated, because Defendants need not state exact dates on which Stewart allegedly made the representations. See, e.g., Prince-Servance v. BankUnited, FSB, No. 07 C 1259, 2007 WL 3254432, at *6 (N.D. Ill. Nov. 1, 2007) (finding "general allegations as to time" sufficient to comply with Rule 9(b) where the "who" and "what" of the fraud clam were pled with "great specificity"); U.S. ex rel. Yannacopolous v. General Dynamics, 315 F.Supp.2d 939, 945-46 (N.D. Ill. 2004) (qualifying the two asserted cases in which courts required the pleader to allege specific dates under Rule 9(b)); Heller Bros. Bedding, Inc. v. Leggett & Platt, Inc., No. 01 C 3409, 2001 WL 740514, at *3 (N.D. Ill. June 28, 2001) ("[T]he fact that Heller Bros.' complaint fails to cite the exact dates of the alleged misrepresentations does not warrant dismissal. Heller Bros. identifies the general time frame in which the alleged misrepresentations occurred.
As this court has noted, three primary policies support Rule 9(b)'s requirement that fraud be pled with particularity: (1) protecting a defendant's reputation from harm; (2) minimizing "strike suits" and "fishing expeditions"; and (3) providing notice of the claim to the adverse party. U.S. ex rel. Yannacopolous v. General Dynamics, 315 F. Supp.2d 939, 944 (N.D. Ill. 2004). Rule 9(b) does not require that Relator explain his entire case, only that he state the actions that allegedly constitute fraud.
In light of Plaintiff's independent synthesis and analysis of Defendant's seemingly innocuous financial materials, it is highly probable that Plaintiff would also satisfy the "original source" analysis. See, e.g., U.S. ex rel. Yannacopolous v. General Dynamics, 315 F. Supp. 2d 939, 954 (N.D. Ill. 2004) ("Even if relator based the second amended complaint on publicly disclosed material, the trier of fact could reasonably decide that he was an "original source" because he discovered and synthesized that information during an independent investigation.") b. Failure to State a Claim Upon Which Relief Can Be Granted