USA Ex Rel. Wilson, et al v. Graham Co Soil & Wat, et al

Filing 332

ORDER parties shall appear at a status conference in this matter on 12/6/11, in Bryson City. Signed by District Judge Martin Reidinger on 10/19/11. (Pro se litigant served by US Mail.)(ejb)

THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
BRYSON CITY DIVISION
CIVIL CASE NO. 2:01cv19

UNITED STATES OF AMERICA,
ex rel. KAREN T. WILSON,

)
)
)
Plaintiff,
)
)
vs.
)
)
GRAHAM COUNTY SOIL &
)
WATER CONSERVATION DISTRICT, )
et. al.,
)
)
Defendants.
)
)

ORDER

THIS MATTER is before the Court on remand from the United States
Fourth Circuit Court of Appeals, 399 F.Appx. 774 (4 th Cir. 2010) [Doc. 329]
and the mandate thereof [Doc. 330].
PROCEDURAL HISTORY
In 1995 the United States Department of Agriculture (USDA)
entered into contracts with two counties in North Carolina
authorizing them to perform, or to hire others to perform, cleanup
and repair work in areas that had suffered extensive flooding.
The Federal Government agreed to shoulder 75 percent of the
contract costs. Respondent Karen T. Wilson was at that time an
employee of the Graham County Soil and Conservation District,
a special-purpose government body that had been delegated
partial responsibility for coordinating and performing the

remediation effort. Suspecting possible fraud in connection with
this effort, Wilson voiced her concerns to local officials in the
summer of 1995. She also sent a letter to, and had a meeting
with, agents of the USDA.
Graham County officials began an investigation. An accounting
firm hired by the county performed an audit and, in 1996, issued
a report (Audit Report) that identified several potential
irregularities in the county’s administration of the contracts.
Shortly thereafter, the North Carolina Department of Environment,
Health, and Natural Resources issued a report (DEHNR Report)
identifying similar problems. The USDA’s Office of Inspector
General eventually issued a third report that contained additional
findings.
In 2001 Wilson filed this action, alleging that petitioners, the
Graham County and Cherokee County Soil and Water
Conservation Districts and a number of local and federal officials,
violated the False Claims Act (FCA) by knowingly submitting false
claims for payment pursuant to the 1995 contracts. She further
alleged that petitioners retaliated against her for aiding the federal
investigation of those false claims. Following this Court’s review
of the statute of limitations applicable to Wilson’s retaliation claim,
Graham County Soil & Water Conservation Dist. v. United States
ex rel. W ilson, 545 U.S. 409, 125 S.Ct. 2444, 162 L.Ed.2d 390
(2005), the Court of Appeals ordered that that claim be dismissed
as time barred. 424 F.3d 437 (C.A.4 2005). On remand, the
District Court subsequently dismissed Wilson’s qui tam action for
lack of jurisdiction. The court found that Wilson had failed to
refute that her action was based upon allegations publicly
disclosed in the Audit Report and the DEHNR Report. Those
reports, the District Court determined, constituted “administrative
... report[s], ... audit[s], or investigation[s]” within the meaning of
the FCA’s public disclosure bar, 31 U.S.C. §3730(e)(4)(A).
The Court of Appeals reversed the judgment of the District Court
because the reports had been generated by state and local
entities.
“[O]nly federal administrative reports, audits or
investigations,” the Fourth Circuit concluded, “qualify as public
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disclosures under the FCA.” 528 F.3d 292, 301 (2008) (emphasis
added). The Circuits having divided over this issue, [the Supreme
Court] granted certiorari to resolve the conflict. 557 U.S. , 125
S.Ct. 823, 160 L.Ed.2d 609 (2009).
Graham County Soil and Water Conservation Dist. v. U.S. ex rel. Wilson, 130
S.Ct. 1396, 1400-01, 176 L.Ed.2d 225 (2010). In resolving that conflict, the
Supreme Court held that the reference to “administrative” reports, audits, and
investigations in §3730(e)(4)(A) encompasses disclosures made in state and
local sources as well as federal sources. Id., at 1398. Finding the Fourth
Circuit’s interpretation erroneous, the Supreme Court reversed and remanded.
Id.
On remand, the Fourth Circuit acknowledged the Supreme Court’s ruling
“that the public-disclosure bar is not limited to federal reports and audits, but
also applies to reports, audits, and the like conducted or issued by state and
local governments.” United States ex rel. Wilson v. Graham County Soil &
Water Conservation District, et. al., 399 F.Appx at 775 (4 th Cir. 2010).
The Supreme Court’s opinion, of course, establishes the scope of
the public-disclosure bar. The Court’s opinion, however, does not
affect our previously expressed view that a remand to the district
court is required before we can consider the substance of
Wilson’s claims. As is relevant to this case, the public-disclosure
bar strips courts of jurisdiction over FCA actions that are “based
upon the public disclosure of allegations or transactions in a
congressional, administrative, or Government Accounting Office
report, hearing, audit, or investigation.” As noted in our prior
opinion, the district court did not make the necessary factual
findings to establish that Wilson’s claims were “based upon” any
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of the reports at issue in this case. The district court likewise failed
to make the requisite findings to establish that the reports at issue
were in fact publicly disclosed. Given the jurisdictional nature of
the public-disclosure bar, these subsidiary issues must be
resolved before we can proceed to consider the merits of the
Wilson’s FCA claims.
Id. at 775-76
The Fourth Circuit thus instructed this Court1 to make the necessary
factual determinations as to (1) whether the relevant federal, state or local
governmental audits, reports, hearings or investigations were publicly
disclosed; (2) whether Wilson’s claims were derived from any such public
disclosures; and (3) if both of these requirements have been met, reconsider
whether Wilson qualifies as an original source for any claims. Id. The Circuit
also directed that “the district court shall permit the parties to submit additional
evidence as may be necessary for the court to make the factual
determinations upon which the jurisdictional questions turn.” Id.
In light of the Fourth Circuit’s decision, the Court finds that a status
conference is necessary. At that status conference the parties are directed
to be prepared to address what further evidence, if any, needs to be
presented, and in what manner this case needs to proceed in order to accord
with the Fourth Circuit’s decision.
1

Upon the retirement of Judge Thornburg, the case was reassigned to the
undersigned.
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ORDER
IT IS, THEREFORE, ORDERED that the parties shall appear at a status
conference in this matter on December 6, 2011,2 in Bryson City.
Signed: October 19, 2011

2

The status conference will be scheduled for the afternoon of December 6, 2011,
at a time yet to be determined by the Clerk of Court.
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