Original Source: Who Knew What, And When

Rockwell Int'l Corp. v. United States

From 1975 to 1989 Rockwell Int. Corp. was under a management contract with the Department of Energy to run the Rocky Flats nuclear weapons plant. Rockwell planned to dispose of its waste by mixing it with concrete thereby creating blocks that could be easily disposed. Stone, an employee, wrote an evaluation arguing the plan would not work. Rockwell proceeded anyway, and the plan failed, but not for the reasons that Stone cited. Stone went to the FBI and alleged wrongdoing at the plant; allegations which provided the basis for a federal search warrant. The charges were widely publicized. Stone brought an action for civil remedies provide under the False Claims Act which eliminates federal-court jurisdiction over actions under the Act that are based upon the public disclosure of allegations or transactions “unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.” Rockwell argues that Stone’s information was based on publicly disclosed allegations. The amended complaint did not allege the defects in the concrete plan. Stone acknowledged that his claims were based on publicly disclosed allegations but asserted original-source status. This case addresses whether respondent, Stone, was an original source.

An “original source” is “an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action.” Whether Rockwell conceded Stone’s original-source status or not is irrelevant because the statute is jurisdictional (governs jurisdiction per se, not merely jurisdiction over the statute and therefore rightly construed as a limit on damages).

“Information on which the allegations are based” refers to information upon which the relators’ allegations are based, and not the information on which the publicly disclosed allegations that triggered the public disclosure are based. The words “allegations or transactions” differentiates the information that an original-source must have from information underlying public disclosure, referred to simply as “allegations.” Anyway, it would not make any sense to bar actions based on the information underlying a public disclosure when the relator had independent knowledge of that information, especially since this would require comparing the relator’s knowledge to the often unknowable information that was relayed to newspapers.

Rockwell argues that Stone must have satisfied the original-source exception at all stages of the action, and not, as Stone argues, simply in his original complaint. Absent some limitation to the initial complaint the Court interprets the word “allegations” to include Stone’s allegations at all stages of litigation. Even if this would discourage relators to submit to the Government’s litigation tactics of narrowing complaints this policy concern will not compel a different interpretation.

The only allegations that were supported in a jury verdict arose from wrongdoing that occurred after Stone had been fired, and Stone did not know that the concrete plan had failed – he predicted it. Even if prediction can qualify as direct and independent knowledge, it does not when its premise of cause and effect is wrong.

While the Government’s intervention might have provided an independent source of jurisdiction the statute draws a sharp distinction between actions brought by the Attorney General and those brought by private persons. An action brought by a person, taken over by the Attorney General becomes an action brought by the Attorney General and courts may dismiss a dispensable nondiverse party.

Justice Stevens, dissenting, argues that the information underlying a claim and the information underlying public disclosure of the allegations are distinct, and the Act’s use of the term “an original source” rather than “the original source” indicates that the relator need not be the sole source of the information. Jurisdiction is to be evaluated at the outset, not every time the complaint is amended.

This is a complicated opinion, wide swaths of which I do not fully comprehend.