information from arbitration proceedings, draft administrative reports and
learned of the fact of the fraud through articles in a regional newspaper
and an engineering periodical. See Gold v. Morrison Knudsen,
68 F.3d 1475 (2d Cir. 1995).
Alcohol Foundation argued that the scientific and scholarly works from
which it developed the Submission are too technical for the average
member of the public to understand and are distributed to a reader base
that is smaller and professionally specialized. Thus, in Alcohol
Foundation's view, such publications cannot constitute a public
disclosure through the "news media" under 31 U.S.C. § 3730. This
Court notes that the ordinary meaning of the statutory term "news media,"
would encompass the publication of information in scholarly or scientific
periodicals. No different from newspaper reporters, scholarly and
scientific authors also disseminate information to the public in a
periodic manner. As Alcohol Foundation acknowledged at oral argument, such
sources are as generally accessible to any other strangers to the fraud
as would be a newspaper article. See United States ex rel. Pentagen
Technologies Int'l, Ltd. v. CACI Int'l Inc., No. 94 Civ. 2925, 1996 WL
11299, *8 (S.D.N.Y. Jan. 4, 1996) ("The papers were in the public domain
not because the public at large knew of the papers and the contents, but
because filing with the court meant that any stranger to the fraud could
access them as could the relator.") (citing Kreindler, 985 F.2d at
1158). No principle of statutory construction or public policy would
compel a cramped reading of the term "news media" or the imposition of a
judicially created limit of "news media" to encompass only the newspaper
context. See, e.g., A-1 Ambulance Service, Inc. v. State of California,
202 F.3d 1238, 1244 (9th Cir. 2000) (rejecting the use of a "cramped"
reading of the term "legislative hearing" in § 3730(e)(4)).
To summarize, then, if a third party first distributed information
through any of the fora identified in § 3730(e)(4)(a), and a
putative relator relied on that information in bringing a qui tam suit, a
federal court lacks subject matter jurisdiction over the suit. In this
case, based on its review of the material Alcohol Foundation has
submitted for consideration, the Court concludes that the information
collected and compiled by Alcohol Foundation had previously been prepared
and made generally accessible to the public by third parties.
It is Alcohol Foundation's position that it has direct and independent
information based on its creation of the "mosaic" of information that
shows a fraud on the United States and that an average member of the
public could neither understand the information available in the news
media nor perceive a fraud absent Alcohol Foundation's compilation.
The Court does not find in the Submission that Alcohol Foundation's
recitation of various facts and figures related to the marketing,
consumption and regulation of alcoholic beverages transforms Alcohol
Foundation into an "original source." Critically, the facts of the fraud
claimed by Alcohol Foundation, that every year the federal government
spends money treating alcohol-related medical conditions and
consequences, has already been identified in reports issued by and for
the federal government itself. (See Submission, ¶¶ 17-21, 25-27, 51,
108, 123, 191, 368, 376-79, 396, 414, 643, 650, 732.) Alcohol Foundation
essentially admits that its related observation, that the alcohol
industry has no financial incentive to curtail abusive alcohol
consumption, is self-evident.*fn3 On the basis of
its two observations, and by virtue of its allegedly unique
perspective,*fn4 Alcohol Foundation alleges that there is a
conspiracy among the alcoholic beverage producers and marketers to
defraud the public and Government and to deprive citizens of their civil
rights. See supra note 2.
The persuasiveness of Alcohol Foundation's argument would depend upon
an unprecedented, expansive reading of the term "false or fraudulent
claim." Under the False Claims Act, liability is imposed on one who (1)
"knowingly presents, or causes to be presented, to . . . the United
States Government . . . a false or fraudulent claim for payment or
approval," (2) "knowingly makes, uses, or causes to be made or used, a
false record or statement to get a false or fraudulent claim paid or
approved by the Government," or (3) "conspires to defraud the Government
by getting a false or fraudulent claim allowed or paid."
31 U.S.C. § 3729 (a)(1)-(3); see also United States ex rel. Mikes v.
Straus, 84 F. Supp. 427, 432 (S.D.N.Y. 1999).
Alcohol Foundation's conclusory and seemingly doctrinal allegations of
liability under the False Claims Act require the reader to make numerous
inferences. In particular, Alcohol Foundation does not specify what or
whose particular false or fraudulent claims deriving from Defendants were
submitted to the Government for payment or approval.*fn5 Thus, Alcohol
Foundation's theory seeks to expand the definition of the statutory term
to address a generic definition of "fraud" without direct link to
specific claims submitted to the Government for approval or payment. This
definition would enlarge the qui tam mechanism to address all manner of
misrepresentations, without link to federal statute or a particular
state's common law, if ultimately it might result in the federal
Government's payment of a bill. Such a result would effectively eliminate
any concept of proximate causation from litigation under the False Claims
Act. Regardless of what theorists might opine about the hegemonic market
powers at play, as a legal matter, the showing made by Alcohol Foundation
cannot satisfy the requirements of 31 U.S.C. § 3730. Thus, this Court
concludes that it lacks subject matter jurisdiction in this matter and
the case must be dismissed.
This outcome is consistent with the policies underlying the qui tam
procedure. Congress enacted the False Claims Act to create an incentive
for civic-minded whistle-blowers, that is, insiders who put their
personal employment or other interests at risk in order to vindicate the
pecuniary rights of the United States. See Kreindler,
985 F.2d at 1157-58; S. Rep. No. 99-345 (1986), at 5, 8-10. At the same
time, Congress intended to bar opportunistic persons from abusing the qui
tam procedure for self aggrandizement. See Kreindler (citing
31 U.S.C. § 3730 (e)(4)); S. Rep. No. 99-345 (1986), at 2, 8-10.
There is no indication that Congress intended for the qui tam procedure
to be available to those pursuing a less pecuniary and more expansive
social agenda.*fn6 Thus, even if Alcohol Foundation is not motivated by
the prospect of a share in any ultimate pecuniary recovery, Alcohol
Foundation's public-interest spirit falls outside the narrower purpose
contemplated by the statute.
Finally, the Government requested that, except for the complaint, the
matter remain under seal permanently pursuant to 31 U.S.C. § 3730
(b)(3) which permits the government "for good cause shown, move the court
for extensions of the time during which the complaint remains under
seal." Such a motion "may be supported by affidavits or other submissions
in camera." Id. Judicial records presumptively are to be made available
to the public. See United States v. Amodeo, 71 F.3d 1044, 1047-51 (2d
Cir. 1995). The weight of the presumption varies according to the
document at issue and "is at its strongest when the document in
question, as here, has been submitted as a basis for judicial decision
making." Greater Miami Baseball Club Limited Partnership v. Selig,
955 F. Supp. 37, 39 (S.D.N.Y. 1997); Amodeo, 71 F.3d at 1048-49. By
contrast, the presumption is particularly weak if the document plays "no
role in the performance of Article III functions, such as those passed
between the parties in discovery." Amodeo, 71 F.3d at 1048. The party
requesting that a matter be filed and kept under seal bears the burden of
showing why the material should be kept from public view. See DiRussa v.
Dean Witter Reynolds, Inc., 121 F.3d 818, 826 (2d Cir. 1997). Here, the
presumption in favor of public access is at its peak because the documents
at issue were submitted to and used by the Court in rendering this
Decision. Nevertheless, the Government's conclusory request did not
provide the Court with a showing of "good cause" or any other rationale
for keeping the official record under seal. Thus, the Court denies the
Government's request that the matter remain under seal.
For the foregoing reasons, it is hereby
ORDERED that the Clerk of Court unseal this case; and it is further
ORDERED, that the complaint is dismissed; and it is finally
ORDERED that the case is closed.