Below, Stanford Law School’s Jacqueline de Armas recaps Tuesday’s ruling in Graham County Soil & Water Dist. v. U.S. ex rel. Wilson.  Jacqueline previewed and recapped oral arguments in the case in November, and on Tuesday, Lyle commented on the opinion here.  Check the Graham County (08-304) SCOTUSwiki page for further information.

On March 30th, in an opinion by Justice Stevens, the Court held by a vote of seven to two that the term "administrative" in the False Claims Act's public disclosure bar was not limited to information contained in federal reports, audits, and investigations, but instead, extends also to reports, audits, and investigations by state and local authorities. Justice Scalia concurred in the judgment and agreed with most of the majority opinion, but he parted ways with the majority opinion to the extent that it suggested that consideration of legislative history might be appropriate to determine legislative purpose.  Justice Sotomayer dissented, joined by Justice Breyer. While "“ as Lyle discussed Tuesday "“ the thrust of this opinion may be short-lived due to Congressional action, the decision contains helpful analysis.

The Court took particular issue with the lower court's application of the principle of noscitur a sociis, dubbing the approach of the court of appeals the "Sandwich Theory" because its conclusion that the term "administrative" referred to strictly federal sources was based on the term's position between two federal sources.  In its own application of noscitur a sociis, the Court looked to two factors "“ the number of listed words and the "harmon[y]" among those words "“ to determine meaning. Here, it found, there were too few words in the list, and those words were not sufficiently harmonious, to conclude that the word "administrative" referred only to federal sources.  Indeed, Justice Stevens notably observed, "[a] list of three items, each quite distinct from the other no matter how construed is too short to be particularly illuminating." (Addressing this question in her dissent Justice Sotomayor countered, "[w]e have not previously constrained the canon in this way, and I would not do so here.")

Looking at the broader text of the public disclosure bar, the Court emphasized that the term "administrative" had elsewhere been used to refer to state and county hearings. The Court thus rejected the notion that the FCA was exclusively federal.

Turning to legislative intent, the Court discussed Congress's intent to balance "parasitic" qui tam actions with those of genuine whistleblowers.  Here, the Court found that the "history of the public disclosure bar raises more questions than it answers," and it rejected the respondent's assertion that Congress intended administrative to be strictly federal, that Congress intended the public disclosure bar to be narrow, and that the Attorney General would have a difficult time learning of fraud found in state and county sources.

Ultimately, the Court rested its judgment on whether the allegations have been "publicly disclosed," rather than on the accessibility of information to the Attorney General. In dissenting, Justice Sotomayor deemed the Court's interpretation overly restrictive, arguing that Congress intended a more liberal result.  Indeed, although the Court recognized that "Congress may well have endorsed those views in its recent amendment," it emphasized that the version of Section 3730 (e)(4)(A) at issue in this case was not limited to federal sources.

Posted in Graham County v. US ex rel. Wilson, Merits Cases, Uncategorized