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UNITED STATES EX REL. VANCE v. WESTINGHOUSE ELEC.

September 15, 1973

UNITED STATES of America ex rel. Henry Z. VANCE
v.
WESTINGHOUSE ELECTRIC CORP.


Knox, District Judge.


The opinion of the court was delivered by: KNOX

The court has before it a motion to dismiss a qui tam *fn1" action brought by the relator Henry Z. Vance on behalf of himself as an informer and the United States versus Westinghouse Electric Corporation under the provisions of the False Claims Act, 31 U.S.C. §§ 231 and 232. Relator had been employed by the defendant for twenty nine years until August 1971 when he states that he was forced to take early retirement after he had protested the methods followed in presenting claims on the project in question. He was supervisory buyer in the later years in the Astro Nuclear Division of defendant by which the allegedly false claims were filed.

 Complaint was filed June 23, 1972, and pursuant to 31 U.S.C. § 232(C), *fn2" copies were served upon the Attorney General and the United States Attorney for this District. On August 24, 1972, the United States filed a statement informing the court that it declined to enter the suit.

 On October 18, 1972, the defendant filed a motion to dismiss on the grounds that the "suit was based upon evidence or information in possession of the United States or any agency, officer or employee thereof at the time such suit was brought" and claiming that therefore under 31 U.S.C. § 232(C) the court had no jurisdiction to proceed with the suit.

 On filing of this motion and after a preliminary pretrial conference, the court ordered discovery to proceed limited, however, to matters pertaining to the motion, i.e., whether or not the evidence or information upon which the suit was based was in possession of the government at the time the suit was brought. Discovery thereupon proceeded limited to these matters and various affidavits were filed following which briefs were filed and argument held. The motion also raises the question of applicability of the statute of limitations (31 U.S.C. § 235) to certain counts in the complaint.

 It seems to be the contention of the defendant that the motion to dismiss is a motion raising the defense of lack of jurisdiction over the subject matter under Rule 12(b)(1). The difficulty with this is that such a motion must be presented under 12(b) prior to pleading. In this case the defendant answered on the merits before filing this motion. It is the contention of the plaintiff that the motion is one for summary judgment under Rule 56 and that the issue before the court is whether there is any genuine issue of material fact. As noted, various materials and depositions have been presented to the court for consideration in connection with the disposition of the motion as in the usual motion for summary judgment under Rule 56. This, however, is not conclusive since the court often receives affidavits, depositions, etc., in connection with motions to dismiss for lack of jurisdiction over the person or over the subject matter.

 It is the opinion of the court, however, that this procedural problem is of no importance. The act in question clearly states in 31 U.S.C. § 232(C). " The court shall have no jurisdiction to proceed with any such suit brought under clause (B) of this section or pending suit brought under this section whenever it shall be made to appear that such suit was based upon evidence or information in the possession of the United States or any agency, officer or employee thereof at the time such suit was brought". We thus have a question of jurisdiction over the subject matter which can be raised at any time and may even be raised by the court on its own motion. In the light of the disposition which we make of this motion, it makes no difference whether this is treated as a motion under Rule 12 or motion for summary judgment under Rule 56.

 In approaching the problem presented by this motion, the court has considered the literal wording of the act, the decision of the various courts interpreting this language relative to evidence or information in possession of the government at the time the suit was brought, and the debates and materials contained in 89 Congressional Record, pages 10744-10752 and 10844 and 10846 relative to the passage of the bill containing the language in question on December 23, 1943. There can be little doubt that the 1943 Amendment was occasioned by the decision of the United States Supreme Court in United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S. Ct. 379, 87 L. Ed. 443 (Jan. 18, 1943) in which case (originating in this district) the court allowed an informer to recover on a complaint which was based upon facts obtained from an indictment procured by the government against contractors filing false claims. The evils of permitting informers to merely copy indictments or complaints filed by the government which has already worked up the evidence and recovering a fifty percent commission were decried by the then Attorney General Biddle and the dissent of Mr. Justice Jackson at 317 U.S. at 556, 63 S. Ct. at 391 et seq. *fn3"

 We have carefully examined 89 Congressional Record 10744-10752 and 10844-10846 and have endeavored to find some trace of an explanation of the language in question. It appears that there was originally a House bill which was designed practically to abolish informer suits. The Senate, however, did not agree with this, feeling that the False Claims Act permitting informer's suits which originally had been enacted at the time of the Civil War at the urgent request of President Lincoln, who was disturbed at contractors robbing the country during its time of travail, served a useful purpose. However, as disclosed in the Marcus case and other incidents which were brought to light, it had become a fertile field for activities of racketeers who would copy indictments or material developed by a Senate Investigating Committee, bring an informer's suit and reap a bounteous harvest, the percentage at that time being fifty percent. The Senate took the position that the informer's suit served a useful purpose as long as racketeering was prevented and in the Senate Amendments for the first time appeared the language that the court should have no jurisdiction to proceed with any suit when it was made to appear that it was based upon evidence or information in the possession of the United States, etc., at the time the suit was brought. See 89 Congressional Record 10745. The matter went to conference and the conference report and statement with respect thereto is set forth in the proceedings of December 17, 1943 (House) 89 Congressional Record 10844, et seq. The only thing which really casts any light upon the purpose of the language is contained in the statement of Congressman Walter one of the House managers at page 10846. *fn4"

 This legislative history as the result of the confusion existing at the time of the adoption of the conference report by both Houses is, as has been pointed out by several courts, inconclusive with respect to the exact meaning of the language in question. Circuit Judge Hastie considered this matter of legislative history in United States v. Aster, 176 F. Supp. 208 (E.D.Pa.1959), aff'd United States v. Aster, 275 F.2d 281 (3d Cir. 1960). He recognized that the case of United States ex rel. Marcus v. Hess, supra, and other evils exposed at the same time constituted the stimuli resulting in the legislation and that the debates, particularly the remarks made by Senator Langer, indicated that the Congress only wanted to abolish "parasitical" actions which were based upon public information already in the possession of the government. In Aster, Judge Hastie pointed out: "The essential information upon which the suit is predicated" was already in possession of the government at the time of filing suit. Aster presented the peculiar situation where the informer had given the government all the information upon which suit was based four to five months before instituting suit himself and the court held that this barred the action applying the literal interpretation to the language in question. The legislative history of this act has been further examined in United States ex rel. McCanns v. Armour and Company, 146 F. Supp. 546 (D.C.1956), aff'd 102 U.S.App.D.C. 391, 254 F.2d 90 (1958) (where the informer had been employed by the government and used evidence obtained during employment) and United States v. Pittman, 151 F.2d 851 (5th Cir. 1945).

 Regardless of the background and the reason for this legislation, we are bound by the determination with respect to this language made by our Court of Appeals in United States v. Aster, supra, to wit: that the absolute language of the act controls regardless of Congressional intent, and suits by informers are barred where the essential information upon which they are based is already in the hands of the government regardless of the government's source of information.

 While ordinarily the burden is upon the person who asserts federal jurisdiction to bring himself within the language of the act conferring such jurisdiction upon the court, the clause in question here is rather an exception to a general grant of jurisdiction. It will be noted that the words are: "whenever it shall be made to appear". It has been held in a very well-reasoned decision by Chief Judge Parker in United States v. Rippetoe, 178 F.2d 735 (4th Cir. 1949) that it is not the plaintiff's burden to negative knowledge of government officials of the evidence and information. In other words, it is not incumbent upon the plaintiff to prove a negative. The court in Rippetoe said:

 
"In this holding we think there was error. In the first place, we do not think it incumbent upon plaintiff to negative knowledge on the part of government officials of the evidence upon which his action is based. The provision of the statute is that when 'it is made to appear' that the suit is based upon evidence or information in possession of the United States, etc., the court shall be without jurisdiction to proceed with it. This clearly means, not that plaintiff must in his pleadings or otherwise negative ...

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