Does the reference to “administrative” reports, audits, and investigations in U.S.C. 3730(e)(4) include state and local sources in addition to federal sources?
The relator, Karen Wilson, brought a qui tam action against the petitioner, Graham County Soil and Water Conservation District, alleging that the petitioner violated the False Claims Act (FCA) and retaliated against Wilson for bringing the claims.
The soil and water conservation district allegedly mismanaged federal funds in relation to the administration of contracts to remediate areas that were damaged by flooding. Wilson, who was then employed by the government entity responsible for administering the contracts, alerted local and state officials to the potential fraud. Both the state and county subsequently published reports identifying possible inconsistencies in the administration of the contracts. Wilson then filed a qui tam complaint, which alleged that the county knowingly submitted false claims for payment under the contract.
Ultimately, the District Court dismissed the complaint, finding that the relator’s claims were precluded by the public disclosure bar, and holding that the county and state reports were “administrative” reports under the FCA. The Fourth Circuit vacated and remanded the District Court’s decision, finding that the public disclosure bar was only triggered by federal administrative reports. The petitioners appealed and certiorari was granted.
The Supreme Court held that the term “administrative” was broad enough to include state and local administrative reports, hearings, audits, or investigations, thereby reversing and remanding the 4th Circuit’s decision.
The public disclosure bar, U.S.C. 3730(e)(4), identifies three categories of disclosures that can deprive federal courts of jurisdiction. The language at issue is contained in the second category: “when relevant information has already entered public domain as result of disclosure… (2) in a congressional, administrative or General Accounting Office (GAO) report, hearing, audit or investigation.”
Using noscitur a sociis – “a word may be known by the company it keeps” – the relator argued and the 4th Circuit held that “administrative reports” referred to federal administrative reports, as the term was sandwiched between two terms referring to federal bodies, “congressional” and “GAO.” The relator further argued that the history and policy surrounding the False Claims Act indicated that Congress intended to strengthen the hand of the federal government in fighting fraud and that broadening the public disclosure bar would weaken the FCA. The defendants argued that the plain meaning of the text favored a broad interpretation of “administrative,” including state and local reports.
The Supreme Court indicated that it was not persuaded by the contextualized arguments presented by the relator and that in keeping with the plain meaning of the text, the term “administrative” should be interpreted broadly to include state and local sources. The Court stated that adhering to the plain text would preserve the main purpose of the public disclosure bar – to prevent parasitic complaints. Consequently, the relator’s complaint was barred due to prior public disclosure of the key facts.