The opinion of the court was delivered by: McCURN, Chief Judge.
MEMORANDUM-DECISION AND ORDER
The plaintiff, Kreindler & Kreindler, known as the "relator"
in this type of qui tam proceeding, is a law firm which has
filed fraud claims against the defendant, United Technologies
Corp. ("UTC"), pursuant to the provisions of the False Claims
Act, particularly 31 U.S.C. § 3729 and 3730. The relator
claims that defendant UTC concealed a design defect in the
rotors of helicopters it sold to the U.S. Army. The defendant
has filed four separate motions — two motions to dismiss and
two motions for summary judgment. The defendant moves to
dismiss on the grounds that the portions of the False Claims
Act which permit relator to sue on behalf of the United States
government are unconstitutional inasmuch as they violate the
separation of powers doctrine and the Appointments Clause of
the U.S. Constitution, and because relator does not have
standing to bring the claims. Defendant also moves to dismiss
for lack of subject matter jurisdiction because the relator is
not an "original source" of the information upon which its
claims are based, as required by 31 U.S.C. § 3730(e)(4)(A).
Defendant moves for summary judgment, contending that relator's
claims are barred by the applicable statute
of limitations, and that relator is prohibited from using most
of the evidence on which it bases its claims by a settlement
agreement and protective order involving the same two parties
in a previous wrongful death action.
The relator, Kreindler & Kreindler, represented Audrey
Bryant, the wife of U.S. Army Warrant Officer Charles Edward
Bryant, in a wrongful death action brought in this court as a
result of Mr. Bryant's death on August 5, 1982, in the crash
of an Army helicopter manufactured by the defendant UTC. That
litigation was terminated by a settlement agreement entered
into by Mrs. Bryant and Sikorsky Aircraft, a division of UTC,
on July 21, 1987. The parties had also previously entered into
a stipulation and protective order, dated November 21, 1984,
which provided that "the documents, data, information and
other materials provided by [UTC] in the defense of this
action and/or pursuant to plaintiff's pretrial discovery
requests . . . shall be used by plaintiff solely for the
purposes of this action." The settlement agreement stated: "As
a condition to this Agreement, Mrs. Bryant and her attorneys
expressly agree to [return the documents and materials and] .
. . to honor all other terms and conditions of the Stipulation
and Protective Order." The settlement agreement stated further
that it was "binding upon Mrs. Bryant and United Technologies
Corporation and their respective . . . attorneys. . . ." The
settlement agreement was signed by Mrs. Bryant,
representatives from UTC, and Francis Fleming, an attorney for
Kreindler & Kreindler.
As relator states in the complaint, its claims in the
present action are based on information obtained from UTC in
discovery in the previous action, Bryant v. United Technologies
Corp. Complaint, para. 2, 5. The relator claims that UTC was
awarded a contract by the United States government to provide
the Army with several hundred UH-60A "Black Hawk" helicopters.
One of the features required by the contract was the ability to
fold the rotor blades of the helicopters so they could be
transported in Army transport planes. Relator claims that in
late 1977 or early 1978, UTC discovered that its design to
incorporate this feature, in which "blade fold pins" were to be
inserted into the "flight control assembly system" to eliminate
pressure on the flight control system, was defective in that
the prefabricated holes into which the pins were to be inserted
did not line up. This aspect of the design proposal has never
been corrected by UTC, relator asserts, although approximately
690 Black Hawk helicopters have been delivered by UTC to the
Army. Relator alleges that UTC secretly revised its design
rather than refabricate the affected components so that the
pins could be inserted. Relator alleges that UTC made its
design change, which consisted of changing the type of bearing
used in the flight control assembly system, without advising
the United States that the change was being made or obtaining
required approval for the change. Relator also claims that UTC
failed to advise the United States that a hazard had been
created by the abandonment of the blade fold pin design, and
that UTC knew of the hazard. Relator claims that UTC changed
the procedure by which rotor blades could be folded, calling
for pitch control rods to be disconnected, although this change
in procedure would make it impossible for the blade folding
process to be completed in the time limits specified in the
Army production contract. UTC later informed the Army of an
alternative process which entailed inserting a block of wood
into the rotor assembly to relieve pressure on the rotor system
during the blade folding process. These failures to meet the
required specifications and failure to inform the United States
about the safety hazard constitute a fraud on the government,
relator asserts. In addition, the relator claims, the design
defect resulted in the crash of five Black Hawk helicopters
between the years of 1982 and 1987.
The relator brings this qui tam*fn1 action on behalf of the
United States pursuant to
provisions of the False Claims Act, 31 U.S.C. § 3729 et
seq.*fn2 The False Claims Act was originally enacted in 1863
during the Lincoln Administration, and has been amended twice,
in 1943 and 1986. Under all versions of the Act, individuals
have been authorized to "bring a civil action for a violation
of [the Act] for the person and for the United States
Government." 31 U.S.C. § 3730(b)(1).
Briefly, the statute as now amended specifies the following
procedure with respect to qui tam actions: The relator must
file his complaint in camera where it remains under seal for at
least 60 days to allow the government sufficient time to decide
whether to enter the action. 31 U.S.C. § 3730(b)(2). If the
government decides not to join the action — as it did in the
instant case — the action will proceed in its behalf at the
direction of the relator. 31 U.S.C. § 3730(c)(3). The government
may, however, intervene at a later date upon a showing of "good
cause." 31 U.S.C. § 3730(c)(3).
If the government does intervene, it assumes primary
responsibility for the prosecution of the case, "and shall not
be bound by an act of the person bringing the action."
31 U.S.C. § 3730(c)(1). The relator remains as a party to the
action, however, and his participation may be limited only by
order of the court. 31 U.S.C. § 3730(c)(2)(C)-(D).
Whether or not the government joins the suit, the qui tam
relator is entitled to a portion of the proceeds if the
prosecution is successful. If the government participates, the
relator will receive no less than 15 percent and no more than
25 percent of the recovery. 31 U.S.C. § 3730(d)(1). If the
government does not join in the action, recovery is set at 25
percent to 30 percent. 31 U.S.C. § 3730(d)(2).
The question of the constitutionality of the qui tam
provisions of the False Claims Act has been the subject of a
number of recent cases in the federal courts, and of great
interest to the defense contracting industry, the government,
and the public. Several amicus curiae briefs were submitted to
the court on the issue, and counsel representing the United
States Senate and the House of Representatives presented oral
argument to the court on the return date for these motions.
Before reaching the question of the statute's
constitutionality, however, the motions based on other grounds
will be considered, since the court should not decide federal
constitutional questions where a dispositive nonconstitutional
ground is available. Hagans v. Lavine, 415 U.S. 528, 547, 94
S.Ct. 1372, 1384, 39 L.Ed.2d 577 (1974); United States v. Leon,
766 F.2d 77, 78 (2d Cir. 1985) ("a court should not reach
constitutional issues when there are other, nonconstitutional
grounds upon which it can resolve the case"). Of those, the
jurisdictional issues — plaintiff's standing and the
applicability of the statute of limitations — will be
Defendant argues that the relator lacks standing because it
has no "`personal stake in the outcome of the controversy' .
. . to ensure . . . an adversarial [proceeding] capable of
judicial resolution." Sierra Club v. Morton, 405 U.S. 727, 732,
92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972) (quoting Baker v.
Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663
(1962)). Of course, Article III of the Constitution limits
federal court jurisdiction to the resolution of "cases" or
"controversies," and federal courts thus lack the power to
render advisory opinions, to resolve political questions, or to
entertain friendly suits. See Sierra Club, 405 U.S. at 732 n.
3, 92 S.Ct. at 1365 n. 3.
The standing of a qui tam plaintiff in a False Claims Act
action has been upheld in three cases cited to the court by the
plaintiff. See United States ex rel. Truong v. Northrop Corp.,
728 F. Supp. 615 (C.D.Cal. 1989); United States ex rel. Newsham
v. Lockheed Missiles and Space Co., 722 F. Supp. 607 (N.D.Cal.
1989); United States ex rel. Stillwell v. Hughes Helicopters,
Inc., 714 F. Supp. 1084 (C.D.Cal. 1989). As the court notes in
Stillwell, Congress may create a legal interest and confer
standing to assert that right. Stillwell, 714 F. Supp. at 1096
(citing Trafficante v. Metropolitan Life Insurance Co.,
409 U.S. 205, 208-09, 93 S.Ct. 364, 366-67, 34 L.Ed.2d 415 (1972)).
If Congress does create statutory standing, the normal
requirements of standing — particularly the requirement that
the plaintiff's injury be individualized and particularized —
are not considered by the reviewing court. Stillwell, 714
F. Supp. at 1096 (citing Havens Realty Corp. v. Coleman,
455 U.S. 363, 372, 102 S.Ct. 1114, 1120, 71 L.Ed.2d 214 (1982)).
Nevertheless, "Congress may not confer standing on a ...