Rockwell International v. United States ex rel. Stone
Stone filed a qui tam (or whistle blower) action on behalf of the United States against Rockwell International alleging that Rockwell violated various federal environmental regulations while processing waste at a nuclear weapons facility, and that Rockwell falsely represented to the Department of Energy (DOE) that it had complied with these regulations when submitting reimbursements under its contract. By the time Stone sued, the news media had already published several reports detailing environmental violations at that facility (the Rocky Flats nuclear weapons plant). Under the False Claims Act (FCA), a private plaintiff (or "relator") can file a whistle blower claim based on publicly known information only if that person was an “original source” with “direct and independent knowledge of the information” on which the allegation is based. 31 U.S.C. § 3730(e)(4)(A) & (B).
Rockwell moved to dismiss Stone's complaint based on the prior public disclosure of the charges, arguing that Stone was not an “original source” because he could identify neither the specific individuals who made misrepresentations to the government nor the specific documents in which those misrepresentations were made. The district court denied the motion, finding that Stone, who had been the principal engineer at Rocky Flats for several years, qualified as an original source because he had direct and independent knowledge of Rockwell’s environmental violations and knew that Rockwell’s governmental compensation was linked to its compliance with environmental regulations. After trial, a jury returned a verdict in favor of the United States and Stone for over $4 million.
The Tenth Circuit Court of Appeals affirmed, holding that the False Claim Act’s “direct and independent knowledge” requirement is satisfied by the relator's knowledge of information “underlying or supporting” the fraud allegation, rather than knowledge of the "actual fraudulent submission to the government.”
Question Presented:
Whether the Tenth Circuit erred by affirming the entry of judgment in favor of a qui tam relator under the False Claims Act, based on a misinterpretation of the statutory definition of an "original source" set forth in 31 U.S.C. § 3730(e)(4)?
