United States of America ex v. Keypoint Government Solutions

FILED
United States Court of Appeals
Tenth Circuit
PUBLISH April 30, 2019
Elisabeth A. Shumaker
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
UNITED STATES OF AMERICA
EX REL., JULIE REED,
Plaintiff - Appellant,
v. No. 17-1379
KEYPOINT GOVERNMENT
SOLUTIONS,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:14-CV-00004-CMA-MJW)
Richard E. Condit, Mehri & Skalet PLLC, Washington, District of Columbia
(Steven A. Skalet and Brett D. Watson, Mehri & Skalet PLLC, Washington,
District of Columbia, and John T. Harrington and Robert S. Oswald, The
Employment Law Group, Washington, District of Columbia, with him on the
briefs), for Plaintiff-Appellant.
Robert C. Blume, Gibson, Dunn & Crutcher LLP, Denver, Colorado (Ryan
T. Bergsieker and Allison Chapin, Gibson, Dunn & Crutcher LLP, Denver,
Colorado, with him on the brief), for Defendant-Appellee.
Before BRISCOE, SEYMOUR, and HOLMES, Circuit Judges.
HOLMES, Circuit Judge.
The False Claims Act (or the “Act”) allows for the recovery of civil
penalties and treble damages from anyone who defrauds the government by
submitting fraudulent claims for payment. 31 U.S.C. §§ 3729–3733. To
enforce its provisions, the Act empowers individuals to file suits on behalf
of the government alleging that a third party made a fraudulent claim for
payment to the government. Id. § 3730(b)(1). These suits are known as
“qui tam” suits, and the individual plaintiffs are called “relators.”
Recognizing the risks relators face as prospective whistleblowers, the Act
prohibits employers from retaliating against employees who try to stop
violations of the Act. Id. § 3730(h).
Julie Reed sued her former employer, KeyPoint Government
Solutions, LLC (“KeyPoint”), for violating the False Claims Act. Her qui
tam claims alleged that KeyPoint violated the Act by knowingly and
fraudulently billing the government for work that was inadequately or
improperly completed. Ms. Reed also claimed that KeyPoint fired her in
retaliation for her efforts to stop KeyPoint’s fraud.
This case presents two overarching questions. First, did the district
court err in granting summary judgment in KeyPoint’s favor on Ms. Reed’s
qui tam claims? Second, did the district court err in dismissing Ms. Reed’s
2
retaliation claim under Federal Rule of Civil Procedure (“Rule”) 12(b)(6)?
Exercising jurisdiction under 28 U.S.C. § 1291, we hold that the
district court erred in the first respect but not in the second. We therefore
vacate the district court’s order insofar as it granted summary judgment on
Ms. Reed’s qui tam claims and remand for further proceedings. We affirm
the district court’s order insofar as it dismissed Ms. Reed’s retaliation
claim.
I
This is a whistleblower case. The relevant background has three
parts: (1) the statutory background, (2) the underlying (alleged) bad acts,
and (3) the whistleblowing and ensuing procedural history. We recount
each part below.
A
The False Claims Act “covers all fraudulent attempts to cause the
government to pay out sums of money.” United States ex rel. Conner v.
Salina Reg’l Health Ctr., Inc., 543 F.3d 1211, 1217 (10th Cir. 2008)
(quoting United States ex rel. Boothe v. Sun Healthcare Grp., Inc., 496 F.3d
1169, 1172 (10th Cir. 2007)). It does so by permitting the recovery of civil
penalties and treble damages from anyone who “knowingly presents . . . a
false or fraudulent claim for payment or approval.” 31 U.S.C.
3
§ 3729(a)(1)(A). Liability also attaches to anyone who “knowingly makes,
uses, or causes to be made or used, a false record or statement material to a
false or fraudulent claim.” Id. § 3729(a)(1)(B).
The Act’s proscriptions may be effectuated in two ways. “First, the
Government itself may” sue “the alleged false claimant” to remedy the
fraud. Vt. Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S.
765, 769 (2000). Second, “a private person (the relator) may bring a qui
tam” suit on behalf of the government and also for herself alleging that a
third party made fraudulent claims for payment to the government. Id. “As
a bounty for identifying and prosecuting fraud,” relators get to keep a
portion “of any recovery they obtain.” Boothe, 496 F.3d at 1172 (citing 31
U.S.C. § 3730(d)).
But there are limits to a relator’s right to bring a qui tam suit. One
such limit is “known as the public disclosure bar.” Id.; see State Farm Fire
& Cas. Co. v. United States ex rel. Rigsby, 580 U.S. ----, 137 S. Ct. 436,
440 (2016) (describing the public disclosure bar as a threshold relators must
pass for their qui tam suits to proceed). That bar compels courts to dismiss
qui tam claims “if substantially the same allegations . . . as alleged in the
action or claim were publicly disclosed,” unless the relator “is an original
4
source of the information.” 1 31 U.S.C. § 3730(e)(4)(A). The public
1
Before Congress amended the False Claims Act in 2010, the public
disclosure bar was jurisdictional—that is, if the bar applied, courts lacked subject-matter
jurisdiction. See Boothe, 496 F.3d at 1177 (explaining that, as of 2007, the public
disclosure bar was jurisdictional). The pre-2010 provision read: “No court shall have
jurisdiction over” a qui tam action “based upon the public disclosure of allegations.” 31
U.S.C. § 3730(e)(4)(A) (2006). The 2010 amendments removed the reference to
jurisdiction, counseling district courts instead to “dismiss an action” if the public
disclosure bar applies. 31 U.S.C. § 3730(e)(4)(A) (2010). The federal courts of appeals
that have confronted the issue have unanimously held that the 2010 “amendments
transformed the public disclosure bar from a jurisdictional bar to an affirmative defense.”
United States ex rel. Prather v. AT&T, Inc., 847 F.3d 1097, 1102 (9th Cir.), cert denied,
137 S. Ct. 2309 (2017); see also United States ex rel. Beauchamp v. Academi Training
Ctr., 816 F.3d 37, 40 (4th Cir. 2016) (holding the amended “public-disclosure bar is . . .
an affirmative defense,” not “a jurisdictional bar”); United States ex rel. Moore & Co. v.
Majestic Blue Fisheries, LLC, 812 F.3d 294, 300 (3d Cir. 2016) (same); United States ex
rel. Osheroff v. Humana Inc., 776 F.3d 805, 810 (11th Cir. 2015) (same).
Our circuit has yet to opine on this issue. And we need not do so today. Let us
briefly explain the most salient reasons. KeyPoint properly raised the public disclosure
bar as a defense in its motion to dismiss before the district court. As a result, we need not
determine the jurisdictional status of the public disclosure bar here. If KeyPoint had
failed to raise the bar before the district court and had asserted it for the first time on
appeal, we would have been obliged to consider the issue only if it was
jurisdictional—that is, if it implicated our jurisdiction to hear the merits of Ms. Reed’s qui
tam claims—not if it was merely an affirmative defense. Therefore, under such
hypothetical circumstances, the jurisdictional status of the issue would have been an
important question that we needed to resolve. See Smith v. Cheyenne Ret. Inv’rs L.P.,
904 F.3d 1159, 1164 (10th Cir. 2018) (noting that “[i]n most cases, including this one,
this distinction between a jurisdictional requirement and an affirmative defense is
immaterial” because the party has “pled failure to exhaust as an affirmative defense”);
McQueen ex rel. McQueen v. Colo. Springs Sch. Dist., 488 F.3d 868, 873 (10th Cir. 2007)
(explaining that the distinction between an affirmative defense and a jurisdictional
prerequisite “is important . . . only when the defendant has waived or forfeited the issue”
but because “there is no question of waiver or forfeiture” the court “need not decide
whether exhaustion is jurisdictional”); accord Coleman v. Newburgh Enlarged City Sch.
Dist., 503 F.3d 198, 204 (2d Cir. 2007) (“[W]e are not forced to decide whether our
precedent, which labels the IDEA’s exhaustion requirement as a rule affecting subject
(continued...)
5
disclosure bar aims to strike “the golden mean between” encouraging
“whistle-blowing insiders with genuinely valuable information” to come
forward while discouraging “opportunistic plaintiffs who have no
significant information to contribute of their own.” United States ex rel.
Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir. 1995) (quoting United
States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 649 (D.C.
Cir. 1994)).
1
(...continued)
matter jurisdiction rather than an ‘inflexible claim-processing’ rule that may be waived or
forfeited, remains good law . . . because there can be no claim of waiver or forfeiture
here.”); see also Davoll v. Webb, 194 F.3d 1116, 1128 (10th Cir. 1999) (“If [an] issue
implicates subject matter jurisdiction, we have an obligation to address it ‘regardless of
normal rules governing the presentation of issues.’” (quoting Int’l Union of Operating
Eng’rs, Local 150 v. Rabine, 161 F.3d 427, 429 (7th Cir. 1998))). But those hypothetical
circumstances are not present here; therefore, we need not consider the jurisdictional
status of the public disclosure bar. Furthermore, as we explain later, we conclude that the
original-source analysis that the district court used in concluding that the public
disclosure bar precludes Ms. Reed’s qui tam claims is legally flawed. Accordingly, we
vacate its judgment and remand for further proceedings. As a product of that disposition,
Ms. Reed’s qui tam claims are not (at least for the time being) subject to the public
disclosure bar. Thus, also for this reason, whether that bar is jurisdictional or not is
immaterial. Finally, we observe that the parties did not meaningfully address the public
disclosure bar’s proper characterization—i.e., jurisdictional or an affirmative defense.
Although this failure would not obviate the need for us to independently consider that
question if our jurisdiction over the merits depended on the answer, the parties’
underdeveloped arguments on this score further militate against us trying to answer the
question when the answer is not material here, let alone determinative of our jurisdiction.
Cf. Hill v. Kemp, 478 F.3d 1236, 1251 (10th Cir. 2007) (“Our system of justice, after all,
is not a self-directed inquisitorial one; to avoid error, we are dependent on the full
development of issues through the adversarial process . . . .”).
6
And because insiders might be reluctant to use these qui tam
provisions due to fear of employer backlash, the False Claims Act protects
whistleblowers from employer retaliation. See Potts v. Ctr. for Excellence
in Higher Educ., Inc., 908 F.3d 610, 613–14 (10th Cir. 2018) (discussing 31
U.S.C. § 3730(h)). To qualify for whistleblower protection, an employee
must engage in “protected activity.” Armstrong v. Arcanum Grp., Inc., 897
F.3d 1283, 1286 (10th Cir. 2018). Until 2009, protected activity included
only “lawful acts done by the employee . . . in furtherance of an action
under this section [i.e., a qui tam suit].” 31 U.S.C. § 3730(h) (2008). But
Congress amended the anti-retaliation provision in 2009 and 2010, and it
now protects employees who take steps “in furtherance of” either a qui tam
claim or “other efforts to stop 1 or more violations” of the Act. 31 U.S.C.
§ 3730(h)(1). A whistleblower who prevails on her retaliation claim is
entitled to reinstatement, double back pay, litigation costs, and attorneys’
fees. Id. § 3730(h)(2). The events giving rise to this litigation took place
against this statutory backdrop.
B
1
KeyPoint is a private company that conducts background
investigations for the federal government—specifically, the Office of
7
Personnel Management (“OPM”). OPM uses KeyPoint to investigate
prospective federal employees. The depth of KeyPoint’s investigations
varies according to the level of security clearance involved. Most
investigations, though, entail running background checks, interviewing the
subject of the investigation, gathering testimony from the subject’s
neighbors and coworkers, and then compiling the information in a report.
Government agencies rely on these reports in making employment decisions
and deciding whether to issue (or reject) security clearances.
OPM’s contract with KeyPoint rewards timeliness. If KeyPoint
finishes its investigations on time, OPM pays KeyPoint a premium. But
KeyPoint’s pay decreases for each day an investigation runs past the
deadline.
The contract also includes safeguards to ensure that KeyPoint’s
investigations are complete and accurate. For example, KeyPoint must do
thorough case reviews of each investigation and reinterview a percentage of
all sources. Another safeguard is the Telephone Testimony Program
(“TTP”); KeyPoint developed such a program at OPM’s request, and OPM
endorsed KeyPoint’s program. Ordinarily, investigators must conduct in-
person interviews. But they may do telephone interviews under some
circumstances, so long as they keep their total number of telephone
8
interviews below a certain percentage threshold. Under the TTP, each
month OPM sends KeyPoint a list of investigators who exceeded their
allotted number of telephone interviews during the last month. KeyPoint
then must send OPM “corrective action report[s]” explaining each
infraction and what it is doing to remedy the problem. Aplt.’s App. at 31, ¶
54 (Second Am. Compl., filed Dec. 5, 2016). The contract and OPM’s
Investigator’s Handbook, which the contract incorporates, spell out these
and other quality-control measures.
2
Along with KeyPoint, the background-investigation industry has two
other main players—U.S. Investigations Services (“USIS”) and CACI
International, Inc. (“CACI”). This insular industry has had its share of
troubles. From 2008 to 2010, the government prosecuted several individual
investigators, including a former KeyPoint employee, for rushing
investigations and falsifying information in reports to OPM. And a 2010
report summarizing an OPM audit concluded that KeyPoint’s and its
competitors’ “quality assurance process” needed improvement. Id. at 273
(Final Audit Report, dated June 22, 2010).
The year 2013 was a particularly turbulent one for the industry. That
year two federal government contractors—Edward Snowden and Aaron
9
Alexis—committed high-profile crimes after having received security
clearances. These embarrassing episodes put the industry under intense
scrutiny.
With scrutiny came unflattering news reports. A June 2013 article
reporting on allegations against USIS noted that the “concerns about
background checks [were] not limited to USIS” and later named KeyPoint
and CACI as USIS’s “two main competitors.” Id. at 159, 160 (Wash. Post
Article, dated June 27, 2013). Another article that month reported that “a
select group of private contractors conducting background checks for high-
security jobs were not doing enough to ensure the quality of their
investigations.” Id. at 302 (Reuters Article, dated June 26, 2013). The
article noted “problems with procedures and safeguards used by all three
private contractors—USIS, KeyPoint . . . and CACI.” Id. at 303. A slew of
other news reports covered such allegations roiling the background-
investigation industry.
The allegations in the press worried Congress and OPM. Those
worries led to several congressional hearings to probe the industry’s alleged
practice of using “false, incomplete, or rushed information gathering” in its
background investigations. Id. at 411 & n.3 (Order, entered Sept. 28,
2017). And the bad press of its contractors prompted OPM to commission
10
an audit of KeyPoint’s and its competitors’ practices. The audit concluded
that “OPM need[ed] to strengthen its controls over its Contractors and the
background investigation review process.” Id. at 164 (Audit Report, dated
June 4, 2014). 2
Exacerbating the industry’s woes, a federal court unsealed a
complaint against USIS in October 2013. See United States ex rel. Percival
v. U.S. Investigations Servs., LLC, No. 2:11-cv-00527-WKW-WC (M.D.
Ala. July 1, 2011) (complaint reproduced in Aplt.’s Reply Br., Addendum
A). That complaint leveled three accusations against USIS: first, that USIS
“failed to provide accurate and complete investigations prior to Cases being
submitted to the government,” Aplt.’s Reply Br., Addendum A, at 10;
second, that USIS “knowingly submitted Cases to OPM for payment that [it]
knew had not been reviewed,” id. at 6; and third, that USIS exploited “the
Blue Zone software . . . . to submit Cases to OPM under the false pretense
that the Cases had been complete[d] and accurately and properly reviewed,”
id. at 12. This USIS suit and the government’s intervention into it incited
2
The copy of the audit report included in the record is undated. But a copy
of the report that is publicly available via the Internet lists the date the report was
published as June 4, 2014. See OFFICE OF PERS. MGMT., AUDIT OF THE FEDERAL
INVESTIGATIVE SERVICES’ CASE REVIEW PROCESS OVER BACKGROUND INVESTIGATIONS
(2014), https://www.opm.gov/our-inspector-general/publications/reports/2014/audit-of-
the-federal-investigative-services-case-review-process-over-background-
investigations.pdf.
11
more press accounts of the industry’s shoddy investigations.
3
Ms. Reed worked for KeyPoint during this turbulent period. As a
Senior Quality Control Analyst, she reviewed investigators’ work and
documented incomplete investigations in monthly reports. Ms. Reed also
ran KeyPoint’s TTP by performing a “regular monthly audit of KeyPoint
investigators who violated” the program. Aplt.’s App. at 34, ¶ 81. Along
with her “regular duties,” Ms. Reed “was occasionally tasked with extra
audits of investigators,” id. at 61, ¶ 165, or assigned “to determine the
nature of . . . chronic infractions,” id. at 84, ¶ 228. The precise scope of
Ms. Reed’s responsibilities as a Senior Quality Control Analyst and where
she fell in the KeyPoint hierarchy, however, are not specified in the
operative complaint.
Nevertheless, that complaint does clearly aver that, in discharging her
duties, Ms. Reed observed what she described as “KeyPoint’s systemic
violations” of its contract with OPM and persistent submission of
fraudulent claims for payment to the government based on incomplete or
improperly completed investigations. Id. at 29, ¶ 34. Ms. Reed’s position
allowed her to see investigators falsely reporting applicants’ backgrounds
as “clean” and omitting information showing otherwise, completing fewer
12
than the required number of interviews, and generally cutting corners. Ms.
Reed also believed that she witnessed rampant violations of the TTP and a
scheme by KeyPoint management to hide the violations by submitting
knowingly false corrective action reports to OPM.
According to Ms. Reed, KeyPoint’s management not only knew of the
foregoing systemic violations but also encouraged them by pressuring
investigators to rush investigations to maximize revenue. Alarmed by the
abuses, Ms. Reed voiced her concerns within the company. Periodically,
Ms. Reed and her staff uncovered and reported violations. Ms. Reed also
“regularly reported [certain] infractions to her supervisor . . . by submitting
and discussing a monthly spreadsheet.” Id. at 62, ¶ 171. Along with these
monthly reports, Ms. Reed repeatedly shared her concerns with her
supervisor. She also discussed the problems with other individuals at
KeyPoint, such as the Director of Training, the OPM Contract Director,
Regional Managers, and certain Field Managers. But Ms. Reed’s efforts to
curb the violations failed. In fact, she alleges that the problems multiplied
over time.
Eventually, KeyPoint fired Ms. Reed in October 2013. About a month
later, Ms. Reed and her counsel contacted the Department of Justice
(“DOJ”). She told DOJ about the abuses she claimed to have witnessed
13
while at KeyPoint. To back up her allegations, Ms. Reed provided a pre-
disclosure statement and a presentation detailing KeyPoint’s alleged
violations.
C
At the government’s urging, Ms. Reed sued KeyPoint in January 2014.
Her operative complaint raised three qui tam claims and a retaliation
claim. 3 The qui tam claims alleged that KeyPoint violated the False Claims
Act by: (1) falsely certifying that it performed complete and accurate
investigations, (2) falsely certifying that it did proper case reviews and
quality-control checks, and (3) falsifying corrective action reports. Ms.
Reed’s retaliation claim alleged that KeyPoint fired her for trying to stop it
from violating the False Claims Act.
After the government declined to intervene in the case, KeyPoint
moved to dismiss the suit. The district court then informed the parties that
it intended to convert the portion of KeyPoint’s motion concerning the qui
tam claims into a summary-judgment motion; the court did not perform a
similar conversion on KeyPoint’s motion to dismiss the retaliation claim.
3
Ms. Reed also alleged that KeyPoint violated the Americans with
Disabilities Act by retaliating against her because of her disability. The district court
granted KeyPoint’s motion to dismiss that claim. Ms. Reed does not challenge that ruling
on appeal.
14
At the court’s invitation, Ms. Reed filed additional evidence to defend her
qui tam claims from summary judgment.
In September 2017, the district court entered judgment for KeyPoint
on all counts. Regarding the qui tam claims, the court declined to consider
some of the supplemental materials that Ms. Reed had proffered to oppose
KeyPoint’s summary-judgment motion. And, on the merits, the court
determined that the allegations in Ms. Reed’s qui tam claims were
“substantially the same” as those that had been publicly disclosed in (1) the
criminal investigations of individual investigators, (2) the unflattering news
reports about the background-investigation industry, (3) the congressional
hearings and OPM audits, and (4) the USIS suit. Id. at 411. And, because
the court also concluded that Ms. Reed did not qualify as “an ‘original
source,’” it dismissed her qui tam claims under the public disclosure bar.
Id. at 414. As for Ms. Reed’s retaliation claim, the district court granted
KeyPoint’s Rule 12(b)(6) motion to dismiss after determining that she had
inadequately pleaded that KeyPoint was on notice that she was engaging in
protected activity.
Ms. Reed now appeals from the district court’s order entering
judgment for KeyPoint. Her appeal presents two questions. First, did the
district court err in granting KeyPoint summary judgment on the qui tam
15
claims under the public disclosure bar? And second, did the district court
err in granting KeyPoint’s Rule 12(b)(6) motion to dismiss the retaliation
claim? For the reasons explicated below, we answer the first question in
the affirmative and the second in the negative.
II
We start with the first question. The public disclosure bar compels
courts to dismiss qui tam claims if (1) “substantially the same allegations . .
. were publicly disclosed,” unless (2) the relator is “an original source of
the information.” 31 U.S.C. § 3730(e)(4)(A). The district court thought
the allegations in Ms. Reed’s qui tam claims were substantially the same as
those that had been publicly disclosed. And it further reasoned that Ms.
Reed was not an original source of that information. Thus, the district
court granted KeyPoint summary judgment on Ms. Reed’s qui tam claims.
We review that conclusion de novo and apply the same legal standard
that the district court used. See United States ex rel. Smith v. Boeing Co.,
825 F.3d 1138, 1145 (10th Cir. 2016). “Summary judgment is appropriate
‘if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.’” Id. (quoting
F E D . R. C I V . P. 56(a)). When, as here, the district court granted the
defendant’s motion for summary judgment, “we accept as true the
16
relator[’s] evidence and draw all reasonable inferences in [her] favor.” Id.Ms. Reed argues that the district court erred twice en route to
dismissing her qui tam claims under the public disclosure bar. 4 Its first
error, she says, was concluding that the allegations in her complaint were
substantially the same as those aired in earlier public disclosures.
Compounding that error, in her view, the district court then wrongly
determined that she did not fall under the “original source” exception to the
public disclosure bar.
Put differently, the fate of Ms. Reed’s qui tam claims hangs on two
questions. First, are the allegations in those claims substantially the same
as those in earlier public disclosures? And second, if so, is Ms. Reed an
“original source” of the information in her claims? Our answer to the first
question does not favor Ms. Reed, but our answer to the second one does. 5
4
For the public disclosure bar to apply, two other conditions must be met.
First, “the alleged ‘public disclosure’” must “contain[] allegations . . . from one of the
listed sources” in the Act. In re Nat. Gas Royalties, 562 F.3d 1032, 1039 (10th Cir. 2009)
(quoting United States ex rel. Holmes v. Consumer Ins. Grp., 318 F.3d 1199, 1203 (10th
Cir. 2003)); see 31 U.S.C. § 3730(e)(4)(A)(i)–(iii) (listing, among other things, news
reports, congressional hearings, prior lawsuits, and federal audits as “sources”). Second,
the disclosure must be “public.” See In re Nat. Gas Royalties, 562 F.3d at 1039. Because
the parties agree that these conditions are met, we need not (and do not) consider them.
5
We typically answer “only the questions we must, not those we can.”
Valley Forge Ins. Co. v. Health Care Mgmt. Partners, Ltd., 616 F.3d 1086, 1094 (10th
Cir. 2010). Thus, we pause to explain our rationale for resolving the substantially-the-
same question even though we ultimately vacate the district court’s judgment regarding
(continued...)
17
5
(...continued)
the qui tam claims because of its error in resolving the original-source question. In other
words, because the original-source error is ultimately determinative here in our resolution
of the public-disclosure-bar issue, some might question the need to first rule on the
substantially-the-same component of the public-disclosure-bar issue. But our precedent
teaches that application of the public disclosure bar “requires a four-step inquiry.”
Kennard v. Comstock Res., Inc., 363 F.3d 1039, 1042 (10th Cir. 2004). The first two
steps—which are not at issue here—relate to whether the information in question
qualifies under the Act as a public disclosure. See id. The third step is the substantially-
the-same inquiry. These first three steps determine whether, absent an exception, the
public disclosure bar applies at all. See id. And so our circuit has counseled courts to
“address the first three public disclosure issues first.” Id. (quoting United States ex rel.
Hafter v. Spectrum Emergency Care, 190 F.3d 1156, 1161 (10th Cir. 1999)). Reaching
“the fourth, ‘original source’ issue is necessary only if the court answers the first three
questions in the affirmative.” Id. (emphasis added) (quoting Hafter, 190 F.3d at 1161).
In Kennard, for example, we first concluded that the public disclosure bar’s three
prerequisites applied. Id. Then we held that the relators “qualif[ied] as an original
source,” thus reversing the district court’s order. Id. at 1046.
Admittedly, this precedent instructing courts to reach the original-source question
only after answering in the affirmative the substantially-the-same question interpreted the
pre-2010 version of the public disclosure bar, which was jurisdictional. That said, we see
no reason why the 2010 amendment—irrespective of its jurisdictional import—should
change our view that the substantially-the-same “analysis is a threshold inquiry” that we
should resolve before “reach[ing] the ‘original source’ analysis.” United States ex rel.
Fine v. MK-Ferguson Co., 99 F.3d 1538, 1545 (10th Cir. 1996) (quoting United States ex
rel. Precision Co. v. Koch Indus., Inc., 971 F.2d 548, 552 (10th Cir. 1992)). After all, as
we explain below, the 2010 amendment establishes an analytical rubric consistent with
our pre-2010 precedent. Moreover, the structure of the amended provision—like the
unamended version—supports the proposition that the substantially-the-same inquiry is a
threshold one. That provision instructs courts to dismiss a qui tam claim “if substantially
the same allegations . . . were publicly disclosed . . . . unless . . . the person bringing the
action is an original source of the information.” 31 U.S.C. § 3730(e)(4)(A) (2010)
(emphasis added); see Moore, 812 F.3d at 297–98 (quoting this amended language and
concluding that a relator’s allegations were substantially the same as those in the public
sphere, “but that [the relator] was nevertheless an original source”). Thus, we adhere to
our pre-2010-amendment view that courts should resolve the substantially-the-same
question before considering whether a relator’s qui tam claims may proceed under the
(continued...)
18
Specifically, we hold that Ms. Reed’s complaint averments are substantially
the same as the allegations in the available public disclosures, but the
district court erred in finding that Ms. Reed’s averments do not materially
add to those disclosures’ allegations, such that she does not qualify as an
original source. But this holding does not fully resolve the original-source
question. Consequently, we vacate the district court’s summary-judgment
order and remand for further proceedings regarding whether Ms. Reed
qualifies as an original source.
A
We agree with the district court that Ms. Reed’s allegations
undergirding her qui tam claims are “substantially the same” as the
allegations in the public disclosures. We explain this conclusion in three
steps. First, we discuss the applicable legal standard that guides our
substantially-the-same inquiry. Second, we compare the allegations in Ms.
Reed’s qui tam claims with those in the public disclosures. And third, we
close by concluding that the allegations in the qui tam claims are
“substantially the same” as the publicly disclosed allegations.
5
(...continued)
original-source exception.
19
1
Congress amended the False Claims Act in 2010. See Pub. L. No.
111-148, § 10104(j)(2), 124 Stat. 119, 901–02 (“2010 amendment”). Before
that year, the provision setting out the public disclosure bar read: “No
court shall have jurisdiction over an action under this section based upon
the public disclosure of allegations or transactions . . . .” 31 U.S.C.
§ 3730(e)(4)(A) (2008) (emphasis added). The amended provision reads:
“The court shall dismiss an action . . . if substantially the same allegations .
. . as alleged in the action or claim were publicly disclosed.” 31 U.S.C.
§ 3730(e)(4)(A) (2010) (emphasis added).
Our court has yet to opine on the degree of similarity necessary to
satisfy this new substantially-the-same standard. That said, even before
2010, our circuit read the unamended provision’s “based upon” language to
mean that the public disclosure bar applied when “the allegations in the
complaint were substantially the same as allegations in the public
disclosures.” Fine, 70 F.3d at 572; see also Glaser v. Wound Care
Consultants, Inc., 570 F.3d 907, 910 (7th Cir. 2009) (noting that “eight
other circuits have read the phrase ‘based upon’” to encompass allegations
that are “substantially similar” to those publicly disclosed). That the
substantially-the-same standard adopted in the 2010 amendment resembles
20
the standard we already used is no accident; the amendment “expressly
incorporates the ‘substantially similar’ standard in accordance with the
interpretation of this circuit and most other circuits.” Bellevue v. Universal
Health Servs. of Hartgrove, Inc., 867 F.3d 712, 718 (7th Cir. 2017), cert.
denied, 138 S. Ct. 1284 (2018). Thus, the 2010 amendment confirms the
vitality of our pre-2010 standard. 6
In her reply brief, Ms. Reed argues for the first time that the 2010
amendment nullifies our earlier cases. See Aplt.’s Reply Br. at 8. In her
view, the amendment “made clear” Congress’s “desire to narrow the impact
of the public disclosure bar.” Id. Indeed, Ms. Reed believes that Congress
acted specifically to jettison the reasoning used in our pre-2010 cases. And
so she warns us not to rely on those earlier cases in our substantially-the-
same inquiry.
Ms. Reed’s argument is too little too late. For starters, by waiting
6
Accord United States ex rel. Winkelman v. CVS Caremark Corp., 827 F.3d
201, 208 n.4 (1st Cir. 2016) (“The revised statutory langauge—‘substantially the
same’—merely confirms our earlier understanding.”); United States ex rel. Mateski v.
Raytheon Co., 816 F.3d 565, 569 n.7 (9th Cir. 2016) (“[O]ur analysis of the issue of
substantial similarity would be the same under either version [of the public-disclosure-bar
provision].”); Cause of Action v. Chi. Transit Auth., 815 F.3d 267, 281 n.20 (7th Cir.
2016) (“Our analysis [of substantial similarity] is therefore the same under either version
of the statute.”); see also United States ex rel. Armes v. Garman, 719 F. App’x 459, 463
n.2 (6th Cir. 2017) (unpublished) (“[T]he 2010 amendment does not affect our public-
disclosure analysis . . . .”).
21
until her reply brief to argue that the 2010 amendment narrowed the public
disclosure bar’s sweep and undermined our earlier cases, Ms. Reed waived
that argument. See, e.g., White v. Chafin, 862 F.3d 1065, 1067 (10th Cir.
2017) (“Mr. White waived this contention by waiting to present it for the
first time in his reply brief.”). Furthermore, were we to overlook this
waiver, we nevertheless would decline Ms. Reed’s invitation to discard our
earlier precedent because of Congress’s supposed “desire to narrow the
impact of the public disclosure bar.” Aplt.’s Reply Br. at 8.
We ordinarily derive Congress’s intent “from the text, not from
extrinsic sources.” Antonin Scalia & Bryan A. Garner, R E A D I N G L A W : T H E
INTERPRETATION OF L E G A L T E X T S 56 (2012). The amended text says that
the public disclosure bar applies when substantially the same allegations
had been publicly disclosed; that is how our circuit (and most others)
applied the public disclosure bar pre-amendment, see Fine, 70 F.3d at 572,
and that is how we will continue to apply it until Congress or the Supreme
Court tells us otherwise. In any event, Congress’s supposed desire to
narrow the public disclosure bar presumably would relate to only those
circuits that had used a standard other than the substantially-the-same
standard adopted in the 2010 amendment. See, e.g., United States ex rel.
May v. Purdue Pharma L.P., 737 F.3d 908, 917 (4th Cir. 2013) (explaining
22
that because the Fourth Circuit had not used the substantially-the-same
standard, the 2010 amendment “changed the required connection between
the plaintiff’s claims and the qualifying public disclosure” in that circuit).
But in this circuit—where we already used the substantially-the-same
standard—the 2010 amendment “merely confirms our earlier
understanding.” United States ex rel. Winkelman v. CVS Caremark Corp.,
827 F.3d 201, 208 n.4 (1st Cir. 2016). Thus, our pre-2010-amendment
cases guide our substantially-the-same inquiry.
Those cases teach that the operative question is whether the public
disclosures were sufficient to set the government “on the trail of the alleged
fraud without [the relator’s] assistance.” 7 Fine, 70 F.3d at 571. And we
must recognize that the government’s nose for fraud may be sensitive
enough to pick up the scent even if the public disclosures did not “identify
7
We are aware of scholarly criticism of the on-the-trail-of-fraud standard.
See Susan Schneider Thomas & Jonathan Z. DeSantis, Misguided Meanders: The “Trail
of Fraud” Under the Public Disclosure Bar of the False Claims Act, 43 UNIV. OF
DAYTON L. REV. 161, 182 (2018) (“[R]ather than using the innately ambiguous
assessment of whether the alleged public disclosures ‘might have’ ‘set’ the government
on the ‘trail’ of fraud, it would be a far more meaningful analysis to examine, as the plain
language of the statue commands, whether the potentially disabling public disclosures in
fact disclosed allegations or transactions of fraud, or made actual allegations of fraudulent
conduct.”). However, Fine and its progeny are binding precedent in this circuit.
Moreover, Ms. Reed does not challenge the propriety of this standard in her Opening
Brief.
23
any specific compan[y].” 8 See In re Nat. Gas Royalties, 562 F.3d 1032,
1039, 1042 (10th Cir. 2009). The need to identify the defendant by name is
particularly weak when “the government has already identified the problem
and has an easily identifiable group of probable offenders.” 9 Fine, 70 F.3d
at 572. Similarly, “[a] relator need not have learned of the basis for the qui
tam action from the public disclosure” to trigger the public disclosure bar.
Kennard v. Comstock Res., Inc., 363 F.3d 1039, 1044 (10th Cir. 2004). Nor
is “a complete identity of allegations, even as to time, place, and manner . .
. required to implicate the public disclosure bar.” Boothe, 496 F.3d at
1174. Rather, it is enough if “the essence of” the relator’s allegations was
“‘derived from’ a prior public disclosure.” Id. In fact, the public
8
See also United States ex rel. Lager v. CSL Behring, L.L.C., 855 F.3d 935,
946 (8th Cir. 2017) (concluding that the disclosures “‘set the government squarely on the
trail’ of the defendants’” fraud even though the disclosures did not name defendants
(quoting In re Nat. Gas Royalties, 562 F.3d at 1041)); United States ex rel. Zizic v.
Q2Administrators, LLC, 728 F.3d 228, 238 (3d Cir. 2013) (concluding allegations were
substantially similar even though defendants “were not actually identified” in the public
disclosure).
9
See also Lager, 855 F.3d at 946 (finding substantial similarity when
disclosures gave enough information about an industry-scheme to “identify the
defendants” without naming them); cf. United States ex rel. Jamison v. McKesson Corp.,
649 F.3d 322, 329, 330 (5th Cir. 2011) (observing that “the public disclosures need not
name particular defendants so long as they ‘alerted the government to the industry-wide
nature of the fraud and enabled the government to readily identify wrongdoers through an
investigation,” but reasoning that “the defendants’ documents, considered alone, likely
are not sufficient publically to disclose allegations specific to” them because their
industries “are large” and “[t]he public disclosures do not indicate that fraud is universal
or even widespread within them” (quoting In re Nat. Gas Royalties, 562 F.3d at 1039)).
24
disclosures need not allege any False Claims Act violations or even “any
wrongdoing”; they need only disclose “the material elements of the
fraudulent transaction.” 10 Fine, 70 F.3d at 572.
In summary, the public disclosure bar applies to qui tam claims “if
substantially the same allegations . . . were publicly disclosed.” 31 U.S.C.
§ 3730(e)(4)(A). Our pre-2010-amendment cases primarily guide our
substantially-the-same inquiry. And those cases teach that the operative
question is whether the public disclosures were sufficient to set the
government “on the trail of the alleged fraud without [the relator’s]
assistance.” Fine, 70 F.3d at 571.
2
Having settled on the proper standard governing the substantially-the-
same inquiry, we now must compare Ms. Reed’s allegations with those in
the public disclosures.
Ms. Reed’s Allegations. At a high level of generality, Ms. Reed’s qui
tam claims allege that KeyPoint “was engaging in systemic fraud.” Aplt.’s
10
See also Bellevue, 867 F.3d at 718–19 (noting that the substantially-the-
same standard requires only “that the government had enough information” from the
public disclosures to infer that the defendant knowingly violated the False Claims Act);
Winkelman, 827 F.3d at 208 (explaining that it is enough that the public disclosures “lead
to a plausible inference of fraud” (quoting United States ex rel. Ondis v. City of
Woonsocket, 587 F.3d 49, 54 (1st Cir. 2009))); Osheroff, 776 F.3d at 814 (same).
25
Opening Br. at 1. This fraud grew from KeyPoint’s “focus[] on meeting . .
. deadlines” and winning bonuses “at the expense of the quality,
completeness, and accuracy” of its investigations, Ms. Reed says. Aplt.’s
App. at 29, ¶ 38. For instance, Ms. Reed accuses KeyPoint of pressuring
investigators to rush investigations to maximize revenue. This pressure led,
generally, to rampant violations of KeyPoint’s contract with OPM and, in
particular, of the TTP. Notably, as to the TTP, the pressure led to the
submission of knowingly false corrective action reports designed to hide the
violations. At bottom, Ms. Reed alleges that KeyPoint knowingly
defrauded the government to “enrich itself and its executives at the expense
of national security.” Aplt.’s Opening Br. at 6.
Zooming in on the details, Ms. Reed claims that KeyPoint’s fraud
manifested itself in three main ways. First, she says that KeyPoint falsely
certified to OPM that it had performed complete and accurate
investigations. To support this charge, Ms. Reed points to specific
instances in which investigators failed to do mandatory interviews of
sources. She also details how individual investigators uncovered
derogatory information about subjects but failed to report that information
in their reports to OPM. Piling on, Ms. Reed lists over 100 instances in
which investigators cut interviews short and then lied about it to OPM. She
26
adds to this by exposing scores of violations of the TTP.
Ms. Reed contends that the second manifestation of KeyPoint’s fraud
entailed falsely representing to OPM that it had done proper case reviews
and quality-control checks. For instance, she documents at least five times
that, “despite . . . readily apparent violations,” KeyPoint reviewers violated
OPM requirements by failing to reopen cases. Aplt.’s App. at 88, ¶ 248.
And to circumvent the TTP, “quality control staff failed to perform the
proper number of re-interviews.” Id. at 89, ¶ 252.
The third (related) strain of fraud Ms. Reed identifies is KeyPoint’s
submission of falsified corrective action reports. Recall that these reports
“are supposed to detail the specific actions taken by KeyPoint management
to address” violations of OPM rules and programs—most notably, the TTP.
Id. at 89, ¶ 255. To hide its rampant violations and institutional
acquiescence to those violations, Ms. Reed alleges that “KeyPoint falsified
corrective action reports to OPM” to give the appearance that it “was
actively addressing [violations], when it was not.” Id. at 89, ¶ 256. To Ms.
Reed’s knowledge, KeyPoint falsified dozens of reports to hide malfeasance
by at least four individual investigators.
Publicly Disclosed Allegations. There are four categories of relevant
public disclosures: (1) criminal investigations of individual investigators,
27
(2) the news reports, (3) congressional hearings and OPM audits, and (4)
the previously mentioned USIS suit.
Criminal Investigations. Between 2007 and 2013, the government
prosecuted individual investigators for allegedly falsifying information in
their reports. At least one of these “criminal cases involve[d] . . . a former
Key[P]oint employee who ‘raced through investigations to get more work’
and lied about conducting thorough background checks when they were
incomplete and rushed.” Id. at 410.
News Reports. In 2013, a slew of news reports chronicled the
suspected fraud and widespread sloppiness in the background-investigation
industry. One article in September 2013 reported that the government was
“‘pursuing suspected fraud in the granting of security clearances,’ including
‘19 private and government investigators for submitting fabricated
reports.’” Id. (quoting id. at 307–09 (NBC Article, dated Sept. 18, 2013)).
Another article in June 2013 relayed that OPM had found problems “with
procedures and safeguards used by all three private contractors—USIS,
KeyPoint . . . and CACI.” Id. at 303. This article added that “[a]ll three
companies have had investigators who were found to have done substandard
work in background checks.” Id. Another June 2013 article reporting on
allegations against USIS noted that “concerns about background checks
28
[were] not limited to USIS.” Id. at 159.
Congressional Hearings & OPM Audits. In 2013, Congress twice
held hearings to investigate the background-investigation industry’s
practice of using “false, incomplete, or rushed information gathering” in its
background investigations. Id. at 411 & n.3. OPM reacted by
commissioning an audit of KeyPoint’s and its competitors’ practices. This
audit determined that OPM “need[ed] to strengthen its controls over its
Contractors and the background investigation review process.” Id. at 164.
Back in 2010, OPM had completed a report on another audit of the
background-investigation industry. This earlier report concluded that
KeyPoint’s and its competitors’ “quality assurance process” needed
improvement. Id. at 273. The 2010 report also revealed that KeyPoint
sometimes “did not conduct the required amount of re-contacts” in its
investigations, id. at 289, and that there were “falsification and[] integrity
issues” with investigations done by USIS, KeyPoint, and CACI, id. at 261.
The USIS Suit. In October 2013—a month before Ms. Reed conveyed
her allegations to DOJ and two months before she filed her qui tam suit—a
federal court unsealed a complaint against USIS. The complaint included
three qui tam claims against USIS. First, it alleged that USIS had a
practice of “dumping” cases. That is, USIS allegedly sent cases “to OPM
29
that were represented as Field Finished” when, in truth, they were
unreviewed or “had not been investigated at all.” Aplt.’s Reply Br.,
Addendum A, at 5. Second, the complaint claimed that USIS “failed to
provide accurate and complete investigations.” Id. at 10. Third, USIS
supposedly falsely represented to OPM the extent to which it used a
software program known as the “Blue Zone.” Id. at 12. But the suit neither
mentioned KeyPoint nor implied that USIS’s fraud extended to its
competitors or the industry as a whole.
3
The question now is: Are the allegations in Ms. Reed’s qui tam
claims substantially the same as those in the publicly disclosed sources?
We agree with the district court that the answer to that question is “yes.”
That is, we conclude that the public disclosures were sufficient to set the
government on the trail of KeyPoint’s alleged fraud without Ms. Reed’s
assistance. 11
11
Ms. Reed alleges on appeal that the district court “fail[ed] to do a diligent
comparison of the putative public disclosures with [her] allegations.” Aplt.’s Opening Br.
at 3. Not so. Beyond incorporating the magistrate judge’s discussion of the relevant
allegations, see Aplt.’s App. at 409, the district court dutifully recounted Ms. Reed’s
allegations and the publicly disclosed allegations in turn, see id. at 408–12. From this
comparison, the court then concluded that Ms. Reed’s allegations were substantially
similar to the publicly disclosed allegations. The sufficiency of this analysis cannot be
questioned. In any event, our review is de novo, and we have thoroughly compared the
(continued...)
30
At their most general, Ms. Reed’s qui tam claims allege systemic
sloppiness and fraud in the background-investigation industry. 12 But the
government and the public knew that much already from the news reports.
Those news articles painted a picture of widespread problems with the
thoroughness and accuracy of the private contractors’ background
11
(...continued)
averments of Ms. Reed’s operative complaint to the identified public disclosures.
Accordingly, Ms. Reed’s assertion that the district court conducted a faulty analysis of the
summary judgment record is ultimately of no moment. Cf. Rivera v. City & County of
Denver, 365 F.3d 912, 920 (10th Cir. 2004) (“Because our review is de novo, we need not
separately address Plaintiff’s argument that the district court erred by viewing evidence in
the light most favorable to the City and by treating disputed issues of fact as
undisputed.”).
12
We, like other circuits, would have reservations about keeping our analysis
of Ms. Reed’s allegations solely at such a high level of generality. See Mateski, 816 F.3d
at 578 (agreeing with the “Seventh Circuit’s warning against reading qui tam complaints
at only the ‘highest level of generality’” (quoting Leveski v. ITT Educ. Servs., Inc., 719
F.3d 818, 831 (7th Cir. 2013))). But at what precise level of generality we should
compare a relator’s claims with allegations in public disclosures is a difficult question.
The Act tells us to ask if the relator’s claims are “substantially the same.” 31 U.S.C.
§ 3730(e)(4)(A). The ordinary meaning of “substantial” is: “concerning the essentials of
something.” THE NEW OXFORD AMERICAN DICTIONARY 1687 (2d ed. 2005). And the
ordinary meaning of “same” is: “identical; not different; unchanged” or “of an identical
type.” Id. at 1498. “Substantially the same,” then, connotes a standard that requires only
the essentials of the relator’s allegations to be identical to or of an identical type as those
disclosed publicly. This plain-meaning analysis comports with our precedent. See
Boothe, 496 F.3d at 1174 (noting that “a complete identity of allegations” is unnecessary;
it is enough for “the essence of” the relator’s allegations to be “‘derived from’ a prior
public disclosure”). We need not put a finer point on this issue in this case. That is
because it is clear to us that only if we accept Ms. Reed’s hyper-specific reading that
requires near-complete identity of allegations could we conclude that her allegations are
not substantially similar to those in the public disclosures. And our precedent forecloses
such a hyper-specific reading. See id.31
investigations. And that Congress held hearings to probe the background-
investigation industry’s alleged practice of using “false, incomplete, or
rushed information gathering” underscored the pre-existing public
awareness of a strong probability of fraud in the industry. Aplt.’s App. at
411 & n.3. What is more, the criminal prosecutions of individual
investigators confirmed that the government knew that investigators in the
industry were falsifying information in their reports.
Moving down a rung on the generality ladder to more specific footing,
Ms. Reed’s claims allege fraud not only in the background-investigation
industry generally, but also in KeyPoint’s specific background-investigative
practices. That information, too, was old news to the government. After
all, the government prosecuted a former KeyPoint employee for “rac[ing]
through investigations” and lying “about conducting thorough background
checks when they were incomplete and rushed.” Id. at 410. News reports
from 2013 added to this knowledge by reporting that OPM had found
problems “with procedures and safeguards used by all three private
contractors—USIS, KeyPoint . . . and CACI.” Id. at 303. To be sure, the
news reports avoided explicitly accusing KeyPoint of defrauding the
government. But direct allegations of fraud were unnecessary to put the
government on the trail of KeyPoint’s fraud. Cf. Winkelman, 827 F.3d at
32
208 (explaining that it is enough that the disclosures “lead to a plausible
inference of fraud” (quoting United States ex rel. Ondis v. City of
Woonsocket, 587 F.3d 49, 54 (1st Cir. 2009))); United States ex rel.
Osheroff v. Humana Inc., 776 F.3d 805, 814 (11th Cir. 2015) (same);
Boothe, 496 F.3d at 1174 (“[A] complete identity of allegations, even as to
time, place, and manner [is unnecessary].”); Fine, 70 F.3d at 572 (noting
that public disclosures need not allege “any wrongdoing”). Moreover, a
2010 OPM audit report revealed both that KeyPoint sometimes “did not
conduct the required amount of re-contacts” in its investigations, Aplt.’s
App. at 289, and that there were “falsification and[] integrity issues” with
investigations done by USIS, KeyPoint, and CACI, id. at 261. The
government, then, did not need Ms. Reed’s allegations to pick up the scent
of fraud at KeyPoint.
At their most specific, Ms. Reed’s claims allege that KeyPoint
knowingly defrauded the government by submitting fraudulent reports about
the completeness and accuracy of its investigations. The government could
have inferred as much from the public disclosures. Consider the USIS
lawsuit. That suit alleged that USIS failed to review investigations, failed
to do adequate investigations, and sent false reports to OPM. Those are the
same basic failings Ms. Reed accuses KeyPoint of. Furthermore, the USIS
33
suit alleged that investigators sent cases “to OPM that were represented as
Field Finished” when, in truth, they were unreviewed or “had not been
investigated at all.” Aplt.’s Reply Br., Addendum A, at 5. Ms. Reed’s suit
similarly asserts that KeyPoint sent OPM false claims “certifying that [its]
investigators conducted complete, accurate, and proper investigations.”
Aplt.’s App. at 104, ¶ 359.
Considering this information from the USIS lawsuit and the other
publicly disclosed matters discussed above, we conclude that the public
disclosures were sufficient to set the government on the trail of KeyPoint’s
alleged fraud without Ms. Reed’s assistance. Our cases reinforce this
conclusion. Take Fine, for example. The relator there accused Sandia
Corporation of misappropriating nuclear waste funds. 70 F.3d at 569. At
the time, Sandia was one of only nine laboratories receiving federal funds
from the Department of Energy. Before the relator’s suit, a government
report documented how three such laboratories, including Sandia, funded
their discretionary research. The report concluded that the two other
laboratories—but, notably, not Sandia—were fraudulently “taxing” nuclear
waste funds in order to bolster their research programs, possibly in
violation of federal law. Id. Again without implicating Sandia, a later
congressional hearing further probed the Department of Energy’s
34
acquiescence to such behavior from its laboratories. As we saw it, that
neither the report nor the congressional hearing named Sandia as a
wrongdoer was not determinative. Id. at 572. We reasoned that because the
public disclosures had “identified the problem and [there was] an easily
identifiable group of probable offenders,” the disclosures “were sufficient
to put the government on notice as to Sandia’s potential for
misappropriating nuclear waste funds.” Id. Thus, we held that the relator’s
allegations were substantially the same to those in the report and the
congressional hearing. Id.The same reasoning applies here. As in Fine, the public disclosures
here identified the problem—fraud in background investigations—and
traced that problem to an easily identifiable group of probable offenders
(USIS, KeyPoint, and CACI). As in Fine, Congress held hearings to probe
the suspected fraud in this limited industry. Moreover, akin to Fine, a
government report (here, the 2010 OPM audit report) laid bare the heart of
the matter—i.e., the falsification and integrity issues that plagued the
background-investigation industry.
But unlike in Fine, some of the public disclosures explicitly linked
KeyPoint to the suspected fraud. The OPM audit said that “Contractors”
had falsification issues; that defined term meant USIS, KeyPoint, and
35
CACI. And the news reports publicized that OPM had “found problems
with procedures and safeguards used by all three private contractors—USIS,
KeyPoint . . . and CACI.” Aplt.’s App. at 303. Thus, although the public
disclosures did not say the words “KeyPoint defrauded the government,” the
link that the disclosures forged between KeyPoint and the fraud was even
stronger than the one in Fine, where we held that the substantially-the-same
standard was satisfied. It ineluctably follows that this link was sufficient
here to satisfy that standard—that is, to have set the government on the trail
of KeyPoint’s alleged fraud without Ms. Reed’s help.
Ms. Reed’s attempts to distinguish Fine fall short. For starters, Ms.
Reed is mistaken in asserting that “no publicly disclosed information prior
to [her] lawsuit indicated that KeyPoint was a wrongdoer.” Aplt.’s Reply
Br. at 10. The news reports linked KeyPoint to the fraud allegations roiling
the industry. Even Ms. Reed’s statement that “KeyPoint was not
investigated for any suspected wrongdoing,” id., rings somewhat hollow.
After all, the government prosecuted a former KeyPoint employee for lying
“about conducting thorough background checks when they were incomplete
and rushed.” Aplt.’s App. at 410. Even if Ms. Reed’s characterization of
the absence of a KeyPoint-specific investigation were correct, the fact that
KeyPoint was not named as a wrongdoer would not distinguish Fine;
36
instead, it would reinforce the parallels with it. And those parallels persist
even though—as Ms. Reed points out—unlike the Department of Energy,
OPM never “acquiesced to or implicitly approved any fraudulent schemes.”
Aplt.’s Reply Br. at 10. Ms. Reed overstates the significance of the
Department of Energy’s acquiescence in Fine. We noted this agency
conduct there to emphasize that the government knew of the underlying
problem at issue in a limited industry; our point was not that the
acquiescence itself was independently important. See Fine, 70 F.3d at 571.
In sum, Ms. Reed errs in suggesting that Fine is materially distinguishable.
It is not. To the contrary, it bolsters our conclusion that Ms. Reed’s
allegations are substantially the same as the publicly disclosed allegations.
In re Natural Gas Royalties further supports our view on the
substantially-the-same question. The relator there alleged that certain
natural gas companies used fraudulent measurement techniques to underpay
federal royalties. The relevant public disclosures included (1)
congressional documents revealing problems with measurement techniques
in the natural-gas industry, (2) an earlier qui tam suit against different gas
companies for the same fraudulent practices, and (3) press accounts
reporting on the earlier suit and “disclos[ing] the industrywide nature of
[the suit’s] broad allegations.” 562 F.3d at 1042. On appeal, the relator
37
argued that these disclosures were not substantially the same as his
allegations because the specific “Defendants and techniques were not
identified in any public disclosed allegation.” Id. at 1040. This court
disagreed.
Citing Fine, we explained in In re Natural Gas Royalties that “the
public disclosures at issue named a significant percentage of industry
participants as wrongdoers and indicated that others in the industry were
very likely engaged in the same practices.” Id. at 1042. These revelations
alleviated the burden for the government “to comb through myriad
transactions performed by various types of entities in search of potential
fraud.” Id. Rather, the government needed only to investigate the
measurement techniques used by a small pool of actors to ferret out the
fraud. For those reasons, we held that, even without naming the specific
defendants and techniques identified by the relator, “the allegations of
industrywide gas mismeasurment disclosed” in the public documents “were
sufficient to set the government on the trail of the fraud as to all
Defendants.” Id. at 1043.
So too here. The allegations in the public disclosures identified
pervasive fraud in the background-investigation industry. Recall that in the
years before Ms. Reed’s suit, the government prosecuted individual
38
investigators for allegedly falsifying information in their reports.
Furthermore, a 2013 news article reported that the government was
“pursuing suspected fraud in the granting of security clearances” by
contractors. Aplt.’s App. at 308. And the USIS suit alleged that one of
KeyPoint’s two main competitors (i.e., USIS) falsely told OPM that it had
provided “accurate and complete investigations.” Aplt.’s Reply Br.,
Addendum A, at 10.
As in In re Natural Gas Royalties, the public disclosures here
obviated the need for the government “to comb through myriad transactions
performed by various types of entities in search of potential fraud.” 562
F.3d at 1042. The disclosures identified three main players (including
KeyPoint), and generally unearthed the type of fraud—false certifications
of accurate and complete investigations—that the government needed to
look for. Guided by In re Natural Gas Royalties, we conclude that the
publicly available information here was more than enough to set the
government on the trail of KeyPoint’s fraud without Ms. Reed’s allegations.
Ms. Reed rejects such a conclusion. She first argues that her
allegations “relate to a different entity” than the entities—notably,
USIS—accused of wrongdoing in the public disclosures. Aplt.’s Opening
Br. at 12. Ms. Reed is quick to point out that the USIS suit made “no
39
allegations against KeyPoint” and that none of the public disclosures
expressly accused KeyPoint of defrauding the government. Id. at 18.
Maybe so. But the substantially-the-same standard does not demand that
the disclosures identify the defendant by name as the wrongdoer. See In re
Nat. Gas Royalties, 562 F.3d at 1039. To the contrary, it is enough that the
“public disclosures alleged industry-wide fraud” and “provide[d] enough
information” to link the defendant to the scheme. 13 United States ex rel.
Lager v. CSL Behring, L.L.C., 855 F.3d 935, 946 (8th Cir. 2017). In a
similar way, “the public disclosure bar contains no requirement that a
public disclosure use magic words.” Winkelman, 827 F.3d at 209. Thus,
although the public disclosures did not say the magic words “KeyPoint
defrauded the government,” the disclosures were sufficient to link KeyPoint
to fraud in an industry with only three players. No more is required.
Ms. Reed next argues that her allegations substantially differ from the
13
See also Bellevue, 867 F.3d at 719 (noting that the substantially-the-same
standard requires only “that the government had enough information” from the public
disclosures to infer that the defendant knowingly violated the Act); Osheroff, 776 F.3d at
814 (same); Jamison, 649 F.3d at 329 (“[T]he public disclosures need not name particular
defendants so long as they ‘alerted the government to the industry-wide nature of the
fraud and enabled the government to readily identify wrongdoers through an
investigation.’” (quoting In re Nat. Gas Royalties, 562 F.3d at 1039)); United States ex
rel. Gear v. Emergency Med. Assocs. of Ill., Inc., 436 F.3d 726, 729 (7th Cir. 2006)
(rejecting “argument that for there to be public disclosure, the specific defendants named
in the lawsuit must have been identified in the public records”).
40
publicly disclosed allegations because she exposed different schemes. For
instance, she maintains that “USIS had a very specific fraudulent scheme
that it used to facilitate ‘dumping’ cases.” Aplt.’s Reply Br. at 5. That
scheme, Ms. Reed explains, involved representing to OPM that cases were
complete when they actually were unfinished or “had not been investigated
at all.” Id. Her complaint, by contrast, describes “several types of
fraudulent schemes specific to KeyPoint that are entirely unrelated to the
USIS case or any of the other publicly disclosed information.” Id. at 6.
Ms. Reed is right that some of the schemes she exposed—especially,
the scheme involving the TTP—added to the government’s knowledge
(more on this subject later), but these additions do not alter our
substantially-the-same assessment. For now, the relevant question is only
whether the public disclosures set the government on the trail of KeyPoint’s
fraud. As we have explained, this does not require “complete identity of
allegations.” Boothe, 496 F.3d at 1174. Rather, it is enough if the relator’s
complaint is “at least ‘in . . . part’” substantially the same as “the publicly
disclosed information.” Osheroff, 776 F.3d at 814 (alteration in original)
(quoting Battle v. Bd. of Regents, 468 F.3d 755, 762 (11th Cir. 2006) (per
curiam)).
Moreover, it cannot be gainsaid that in significant, material respects
41
Ms. Reed’s complaint averments are substantially the same as the complaint
averments in the USIS suit. For instance, Ms. Reed’s complaint alleges that
KeyPoint conducted “improper, incomplete, and inaccurate investigations.”
Aplt.’s App. at 33, ¶ 74. The USIS complaint likewise alleges that USIS
“failed to provide accurate and complete investigations.” Aplt.’s Reply Br.,
Addendum A, at 10. 14 And there are other substantial similarities between
the complaints. Compare Aplt.’s App. at 32, ¶ 64 (alleging that KeyPoint
“transformed almost every aspect of its investigative processes to maximize
profits by hitting deadlines and taking on as much work as possible, without
concern for the quality, accuracy, or completeness of its investigations”),
with Aplt.’s Reply Br., Addendum A, at 5 (alleging that USIS pressured
“Field Investigators to submit a large number of [reports of investigations]
in a short amount of time in order to meet the revenue goals”). Therefore,
given these substantial similarities, that Ms. Reed’s complaint revealed one
or more KeyPoint fraudulent schemes that are distinct from those alleged in
the USIS lawsuit does not dissuade us from the view that the USIS suit
helped put the government on the trail of KeyPoint’s alleged fraud.
14
Compare also Aplt.’s App. at 88, ¶ 244 (“Each case was submitted as
though it had been properly completed, reviewed, and checked when none had received
the required oversight.”), with Aplt.’s Reply Br., Addendum A, at 6 (“USIS knowingly
submitted Cases to OPM for payment that they knew had not been reviewed . . . .”).
42
Finally, Ms. Reed argues that the district court erred by not
considering 2014 congressional testimony from a KeyPoint executive, Ms.
Ordakowski, in its substantially-the-same analysis. In that testimony, Ms.
Ordakowski told Congress that KeyPoint met or exceeded OPM standards
and had “never wavered from its focus on quality.” Aplt.’s Opening Br. at
21. Ms. Reed reasons that “if the government had some suspicions about
the quality of KeyPoint’s work,” this testimony would have “throw[n] the
government off the trail of the type of fraud [that Ms. Reed] alleges.” Id.This argument crumbles upon even brief reflection. First of all, Ms.
Ordakowski testified months after Ms. Reed communicated her allegations
to DOJ and after she sued KeyPoint. So the substance of Ms. Ordakowski’s
testimony tells us nothing about whether the government would have picked
up the trail of fraud at KeyPoint based on the information it already had
when Ms. Reed sued KeyPoint. Leaving aside this space-time-continuum
problem, Ms. Reed’s argument defies common sense. That Congress called
a KeyPoint executive to testify about problems with background
investigations strongly suggests that Congress thought there was a problem
and that KeyPoint potentially was among the culprits. Cf. Fine, 70 F.3d at
572 (“[T]he public disclosures here were sufficient to put the government
on notice as to Sandia’s potential for misappropriating nuclear waste funds
43
. . . .”). Simply put, Ms. Ordakowski’s testimony supports the district
court’s (and our) conclusion that the public disclosures were sufficient to
have alerted the government to KeyPoint’s potential for fraud.
In summary, we agree with the district court that the allegations in
Ms. Reed’s qui tam claims are substantially the same as those in the public
disclosures. Thus, unless Ms. Reed is an “original source” of the
information in her claims, the public disclosure bar prevents those claims
from proceeding.
B
We now take up the question of whether Ms. Reed is an original
source. Recall that the district court concluded that Ms. Reed was not an
original source and therefore dismissed her qui tam claims under the public
disclosure bar. Ms. Reed argues that in doing so the district court made
both a procedural and a substantive error. The court’s procedural error, she
says, was excluding some of the evidence that she submitted to the court
after it converted KeyPoint’s motion to dismiss to a summary-judgment
motion. As for the alleged substantive error, Ms. Reed contends that the
district court erred in concluding that she was not an original source, in
particular, because her complaint averments did not materially add to the
information in the public disclosures.
44
As we explain below, Ms. Reed loses the procedural battle but wins
the substantive war. That is, we hold that the district court did not err in
excluding certain proffered evidence at summary judgment, but we hold that
the court did err in concluding that Ms. Reed was not an original source
because her complaint averments did not satisfy the materially-adds
standard.
1
When a district court relies on material outside the complaint to
resolve a Rule 12(b)(6) motion, it ordinarily must convert that motion “into
a motion for summary judgment.” Burnham v. Humphrey Hosp. REIT Tr.,
Inc., 403 F.3d 709, 713 (10th Cir. 2005); see F E D . R. C I V . P. 12(d). If a
district court intends to convert a motion, it should inform the parties of
this intention and give them “the opportunity to present to the court all
material made pertinent to such motion by Rule 56.” Nichols v. United
States, 796 F.2d 361, 364 (10th Cir. 1986) (quoting Ohio v. Peterson,
Lowry, Rall, Barber & Ross, 585 F.2d 454, 457 (10th Cir. 1978)).
Converting a motion “without giving the adverse party an opportunity to
present pertinent material is error.” Adams v. Campbell Cty. Sch. Dist., 483
F.2d 1351, 1353 (10th Cir. 1973).
We review a district court’s choice to exclude evidence at the
45
summary-judgment stage, however, “only for an abuse of discretion.”
LifeWise Master Funding v. Telebank, 374 F.3d 917, 927 (10th Cir. 2004).
Without “a definite and firm conviction that the [district] court made a
clear error of judgment or exceeded the bounds of permissible choice,” we
cannot say that the court abused its discretion. Id. (quoting Lantec, Inc. v.
Novell, Inc., 306 F.3d 1003, 1016 (10th Cir. 2002)).
The district court converted KeyPoint’s Rule 12(b)(6) motion into a
summary-judgment motion. Before doing so, it allowed the parties to
present relevant material. Ms. Reed asked to present three sets of
materials: (1) documents that she had given the government both before and
after she filed her qui tam suit, (2) a declaration in which she attested “to
the source of her allegations,” and (3) more “briefing on the public
disclosure and original source issues.” Aplt.’s Opening Br. at 30.
After considering Ms. Reed’s proffered materials, the district court
allowed her to submit only the documents she gave the government in her
pre-filing disclosures: specifically, the court excluded any post-filing
disclosures to the government, Ms. Reed’s declaration, and the additional
briefing. Those other materials, the court reasoned, would not add “any
material information” helpful to the public-disclosure-bar inquiry because
Ms. Reed’s complaint made “clear what the source of [her] knowledge was”
46
and because the parties had fully briefed the applicable legal standards.
Aplt.’s App. at 404. Thus, under the court’s view, the post-filing
documents, declaration, and additional briefing “were not ‘made pertinent’
by the conversion.” Id. (quoting Nichols, 796 F.2d at 364).
To the extent that Ms. Reed argues that the district court erred by
refusing “to allow [her] the opportunity to provide all material evidence,”
Aplt.’s Opening Br. at 30 (emphasis added), the record proves otherwise.
The court notified the parties of its intention to convert the motion to a
summary-judgment motion, and it gave them time to provide pertinent
material. Unlike the parties in the cases she cites, 15 Ms. Reed had ample
opportunity to provide the court with “material made pertinent by Rule 56.”
Nichols, 796 F.2d at 364 (quoting Peterson, 585 F.2d at 457). Indeed, the
court twice permitted Ms. Reed to amend her complaint to include the post-
filing information she now complains the court excluded. In the end, the
court gave Ms. Reed notice of the conversion, considered her proffered
material, and even accepted some of that evidence.
And the district court’s exclusion of the post-filing disclosures, Ms.
Reed’s declaration, and the added briefing was well within “the bounds of
15
See Peterson, 585 F.2d at 457 (reversing because district court gave party
no chance to present material); Adams, 483 F.2d at 1353 (same).
47
permissible choice.” LifeWise Master Funding, 374 F.3d at 927 (quoting
Lantec, 306 F.3d at 1016). Simply put, the court reasonably concluded that
none of those items contained material and relevant information that the
court did not already possess. Therefore, the excluded materials were not
“made pertinent” by the conversion. Nichols, 796 F.2d at 364 (quoting
Peterson, 585 F.2d at 457).
Ms. Reed, however, begs to differ. She says the excluded post-filing
disclosure statement and personal declaration were “pertinent” to
“establish[ing] her status as an original source.” Aplt.’s Opening Br. at 30.
These materials, Ms. Reed contends, would have shown “the extent to
which [her] allegations materially added to those allegations that had
purportedly been publicly disclosed.” Id. at 33. The problem for Ms. Reed
is that—as she admitted—the allegations in her complaint were “based
almost entirely upon the documents that were discussed during the
pre-filing meeting with [DOJ].” Aplee.’s Suppl. App., Vol. VII, at 1419
(Ms. Reed’s Objs. to R. & R., filed Sept. 12, 2017). And Ms. Reed twice
amended her complaint to include the crux of the information from her
post-filing disclosures to the government. Ms. Reed’s proffered materials,
then, would have merely duplicated that existing information in the twice-
amended complaint.
48
In the end, we cannot say that the district court abused its discretion
as to this procedural matter. Thus, we leave undisturbed the district court’s
ruling excluding the post-filing disclosures, Ms. Reed’s declaration, and the
additional briefing.
2
a
Having resolved the procedural issue, we turn to the substance of the
original-source question. The False Claims Act instructs courts to dismiss
qui tam claims under the public disclosure bar “if substantially the same
allegations . . . were publicly disclosed”—unless the relator is “an original
source of the information.” 31 U.S.C. § 3730(e)(4)(A). We have already
resolved the substantially-the-same question in KeyPoint’s favor. We now
must decide whether the district court erred in determining that Ms. Reed’s
qui tam claims cannot escape the public disclosure bar through the original-
source exception.
Two types of relators qualify as “original sources.” The first type is a
relator who, “prior to a public disclosure [within the meaning of the Act] . .
. , has voluntarily disclosed to the Government the information on which
allegations or transactions in a claim are based.” Id. § 3730(e)(4)(B). The
second type is a relator with “knowledge that is independent of and
49
materially adds to the publicly disclosed allegations” and who gave the
government this information before filing her qui tam claims. Id.
Before the district court, Ms. Reed argued that she was an original
source of the second type. The district court agreed that Ms. Reed had in
fact given the government her information before she sued KeyPoint. But
the court ruled that Ms. Reed’s allegations did not “materially add” to the
public disclosures. And so, without addressing whether Ms. Reed’s
knowledge was “independent of” the public disclosures, the district court
concluded that Ms. Reed was not an original source.
On appeal, Ms. Reed argues that the district court erred in concluding
that her allegations did not “materially add” to the public disclosures. As
for the “independent of” portion of the original-source inquiry, Ms. Reed
says in a short footnote that she satisfies that criterion, too. See Aplt.’s
Opening Br. at 29 n.8. For its part, KeyPoint posits that “regardless of
whether her knowledge was ‘independent of’ the public disclosures,” Ms.
Reed is not an original source because her allegations “did not materially
add to the public disclosures.” Aplee.’s Resp. Br. at 34.
Our circuit has yet to expound on the meaning of the “materially
adds” language in the original-source exception. Congress added this
language in the same 2010 amendment discussed earlier but did not define
50
the term. Since then, however, several other courts of appeals have
interpreted the “materially adds” requirement. 16
We are particularly persuaded by the First Circuit’s analysis in
Winkelman. There, the court framed the relevant question for the
materially-adds inquiry as “whether the relators’ allegedly new information
is sufficiently significant or essential so as to fall into the narrow category
of information that materially adds to what has already been revealed
through public disclosures.” 827 F.3d at 211. To determine what
information falls into the materially-adds bucket, the First Circuit looked to
the ordinary legal meaning of “material”—i.e., an addition that “is ‘[o]f
such a nature that knowledge of the item would affect a person’s decision-
making,’ or if it is ‘significant,’ or if it is ‘essential.’” Id. (quoting
B LA C K ’ S L A W D I C T I O N A R Y 1124 (10th ed. 2014) [hereinafter B LA C K ’ S ]). In
other words, Winkelman teaches that a relator “materially adds” to public
16
Although KeyPoint concedes that the meaning of “materially adds” “is a
matter of first impression for the Tenth Circuit,” Aplee.’s Resp. Br. at 34, it nonetheless
relies on pre-2010-amendment cases to argue that Ms. Reed’s allegations do not
materially add to the public disclosures, see id. at 36–37. Although the 2010 amendment
ratified our prior cases by adopting the “substantially the same” language that we already
used, the amendment added a new component to the original-source analysis—namely,
the materially-adds inquiry. Before the 2010 amendment, our original-source analysis
asked whether the relator “had direct and independent knowledge of the information
underlying his allegations.” In re Nat. Gas Royalties, 562 F.3d at 1043. We did not ask
whether the relator’s knowledge materially added to the public disclosures. Thus, our
pre-2010-amendment cases are not germane to the materially-adds inquiry.
51
disclosures if her information “is sufficiently important to influence the
behavior of the recipient.” Id.The Winkelman definition of “materially adds” finds support in the
Act’s provisions defining the scope of liability, which state that “the term
‘material’ means having a natural tendency to influence, or be capable of
influencing, the payment or receipt of money or property.” 31 U.S.C.
§ 3729(b)(4); see also Joel D. Hesch, Restating the “Original Source
Exception” to the False Claims Act’s “Public Disclosure Bar” in Light of
the 2010 Amendments, 51 U. OF R I C H . L. R E V . 991, 1019 (2017) (looking to
§ 3729(b)(4) in attempting to discern the meaning of “materially adds” and
ultimately concluding that it means that “a reasonable person would attach
importance to the information”). Furthermore, though they have applied the
definition in different ways, a few federal circuit courts have expressly
adopted a like definition of “materially adds.” See United States ex rel.
Advocates for Basic Legal Equal., Inc. v. U.S. Bank, N.A., 816 F.3d 428,
431 (6th Cir. 2016) (“Materiality in this setting requires the claimant to
show it had information ‘[o]f such a nature that knowledge of the item
would affect a person’s decision-making,’ is ‘significant,’ or is ‘essential.’”
(quoting B LA C K ’ S , supra, at 1124)); United States ex rel. Moore & Co. v.
Majestic Blue Fisheries, LLC, 812 F.3d 294, 306 (3d Cir. 2016) (concluding
52
based on dictionary definitions of the separate words “materially” and
“add” that to “‘materially add[]’ to “the publicly disclosed allegation or
transaction of fraud, a relator must contribute significant additional
information to that which has been publicly disclosed so as to improve its
quality”); see also United States ex rel. Paulos v. Stryker Corp., 762 F.3d
688, 694–95 (8th Cir. 2014) (relying on dictionary definitions of the
separate words “material” and “add” and suggesting that information
“materially adds” to something when it “substantially” or “considerably”
“improve[s] or alter[s] its quality or nature” (quoting T H E N E W O X F O R D
A M E R I C A N D I C T I O N A R Y 18, 1079 (3d ed. 2010))).
Winkelman also offered several helpful guideposts for how to
distinguish between new but immaterial information and material additions.
It noted that what is “significant” or “essential” depends in part on “the
level of detail in [the] public disclosures.” 827 F.3d at 211. That is, the
fewer questions the public disclosures answer, the more room there is for a
relator’s allegations to add material information. However, the court
pointed out that “a relator who merely adds detail or color to previously
disclosed elements of an alleged scheme is not materially adding to the
public disclosures.” Id. at 213. Winkelman also recognized the potential
overlap between the materially-adds inquiry and the inquiry into “whether
53
the relator’s allegations are substantially the same as th[e] prior
revelations.” Id. at 211. “Despite this potential for overlap,” the First
Circuit explained, “the ‘materially adds’ inquiry must remain conceptually
distinct; otherwise, the original source exception would be rendered
nugatory.” Id. at 211–12.
In sum, we find persuasive the materially-adds standard that the First
Circuit articulated in Winkelman. Under that standard, a relator who
discloses new information that is sufficiently significant or important that it
would be capable of “influenc[ing] the behavior of the recipient”—i.e., the
government—ordinarily will satisfy the materially-adds standard. Id. at
211. On the other hand, a relator who merely adds background information
or details about a known fraudulent scheme typically will be found not to
have materially added to the publicly disclosed information. See id. at 213.
We recognize that the Seventh Circuit has taken a different path. For
example, in Cause of Action v. Chicago Transit Authority, 815 F.3d 267(7th Cir. 2016), the court held that if a relator’s “allegations are
substantially similar to those contained in the” public disclosures, her
allegations cannot “‘materially add[]’ to the public disclosure[s].” Id. at
283. This standard, however, has the effect of collapsing the materially-
adds inquiry into the substantially-the-same inquiry. As such, we cannot
54
embrace it.
The plain terms of the original-source exception contemplate that
some qui tam claims involving allegations that are substantially the same as
publicly disclosed allegations nevertheless will survive the public
disclosure bar because they materially add to the publicly disclosed
information. Yet, the Seventh Circuit’s view runs counter to this idea. And
as a logical matter, its view is simply unpersuasive. After all, what good is
an exception (i.e., the original-source exception) that does not actually
except anything? See Hesch, supra, at 1016 (noting that because the
materially-adds condition “is designed to be an exception to the public
disclosure bar,” it “is not meant to block out relators simply because there
had been a qualifying public disclosure that contains similar allegations”).
Reflecting this sort of reasoning, one commentator observed:
The addition of the new requirement that the information
“materially add” to the publicly disclosed information has
caused some confusion. Some courts have required the
information to be “qualitatively different” from the publicly
disclosed information or not substantially the same as the
public disclosure. That approach renders the [materially-
adds] requirement the same as the public disclosure
question rather than part of an exception to the public
disclosure bar. Materially adds connotes the addition of
something of significance or import and whether it is
substantially the same as the type of information already
publicly disclosed should not matter.
Claire M. Sylvia, T H E F A LS E C LA I M S A C T : F R A U D A G A I N S T THE
55
G O V E R N M E N T § 11:68, Westlaw (database updated June 2018) (emphasis
added) (footnote omitted); see also Hesch, supra, at 1017 (“[M]erely
because the allegations are substantially the same as a qualifying public
disclosure, a relator still qualifies as an original source if she brings
something to the table that adds value.”). In sum, we agree with the First
Circuit’s assessment in Winkelman: “[T]he ‘materially adds’ inquiry must
remain conceptually distinct; otherwise, the original source exception
would be rendered nugatory.” 827 F.3d at 211–12.
The path plotted by the Third Circuit in its noteworthy decision,
Moore, is less clearly defined. However, in fleshing out our approach, we
highlight a possible point of distinction with it. In Moore, the Third Circuit
looked to “Rule 9(b)’s pleading requirement,” 812 F.3d at 306, as “a
helpful benchmark for measuring ‘materially adds,’” id. at 307. Relying on
this “standard” from Rule 9(b), the court took the position that “a relator
materially adds to the publicly disclosed allegation or transaction of fraud
when it contributes information—distinct from what was publicly
disclosed—that adds in a significant way to the essential factual
background: ‘the who, what, when, where and how of the events at issue.’”
Id. (quoting In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198,
217 (3d Cir. 2002)).
56
Perhaps Moore is amenable to a narrow interpretation. Cf. id. at 307(noting that the materially-adds standard is not met unless the relator’s
information “adds in a significant way to the essential factual background”
and describing the Rule 9(b) factors as only “a helpful benchmark,” without
expressly saying that the presence of one or more of the factors is always
dispositive) (emphasis added)). But see United States v. Medtronic, Inc.,
327 F. Supp. 3d 831, 851 (E.D. Pa. 2018) (contrasting Moore’s “relatively
broad definition of materiality” with “Winkelman[’s] . . . narrower
definition”). However, insofar as Moore is (reasonably) interpreted as
holding that a relator’s averments that add a not-insignificant who, what,
when, where, or how to a publicly disclosed fraudulent scheme should be
uniformly deemed to meet the materially-adds standard, we must disagree.
In our view, the materially-adds analysis must be firmly grounded in
the facts and circumstances of a particular case. And those facts and
circumstances will guide our determination of whether the who, what,
when, where, or how actually should be considered sufficiently significant
or important to affect the government’s actions regarding the fraudulent
scheme. For example, as discussed further below, when, as here, the
publicly disclosed fraud exists within an industry with only a few players, a
relator who identifies a particular industry actor engaged in the fraud (i.e.,
57
the “who”) is unlikely to materially add to the information that the public
disclosures had already given the government.
We are concerned that Moore (as interpreted above) could allow the
original-source exception to swallow the public disclosure bar.
Specifically, one might read the Third Circuit’s approach in that case to
permit “a relator who merely adds detail or color to previously disclosed
elements of an alleged scheme” to qualify as an original source.
Winkelman, 827 F.3d at 213; see Medtronic, 327 F. Supp. 3d at 851
(“Moore and Winkelman apply two different standards: Moore adopted a
relatively broad definition of materiality while Winkelman adopted the
narrower definition from Universal Health [Services, Inc. v. United States
ex rel. Escobar, 579 U.S. ----, 136 S. Ct. 1989 (2016)].” (citation omitted)).
Like the First Circuit, we do not think that adding detail or color is enough.
See also United States ex rel. Hastings v. Wells Fargo Bank, NA, Inc., 656
F. App’x 328, 331–32 (9th Cir. 2016) (unpublished) (Mem. Op.)
(“Allegations do not materially add to public disclosures when they provide
only background information and details relating to the alleged fraud—they
must add value to what the government already knew.”).
Thus, we are guided here by materially-adds principles that are
generally consistent with those the First Circuit articulated in Winkelman.
58
We believe that these principles are faithful to the balance struck by
Congress, in amending the original-source exception in 2010, between
“attracting whistleblowers and not paying rewards” to relators who fail to
provide information that “materially adds value.” Hesch, supra, 1026,
1040.
b
We now turn to the question of whether Ms. Reed satisfies this
standard. Although we conclude that most of Ms. Reed’s arguments
relative to this standard fall short, we are persuaded that her complaint
averments regarding the TTP program materially add to the information in
the public disclosures. Therefore, she prevails on this component of the
original-source inquiry.
Ms. Reed argues that her allegations materially add to the public
disclosures in several ways. First, Ms. Reed points out that her complaint
identifies “a new defendant” (KeyPoint). Aplt.’s Opening Br. at 25.
Second, she reasons that naming individual “investigators who violated
OPM requirements” adds to the disclosures. Id. Third, Ms. Reed posits
that she materially adds to the disclosures because she did her own
investigation into KeyPoint. Fourth, she says that her allegations
uncovered “new schemes to defraud the government (e.g., the telephone
59
testimony violations).” Id.
To begin, we disagree that naming KeyPoint as a wrongdoer
materially adds to the public disclosures. After all, the news reports linked
KeyPoint to the suspected fraud in the background-investigation industry.
And the 2010 OPM audit report revealed that there were “falsification and[]
integrity issues” with investigations done by USIS, KeyPoint, and CACI.
Aplt.’s App. at 261. Consequently, Ms. Reed is mistaken in suggesting that
there was “no information concerning KeyPoint specifically in the public
domain.” Aplt.’s Opening Br. at 28. To be sure, the disclosures did not
“use the word ‘fraud’” when discussing KeyPoint. Advocates for Basic
Legal Equal., 816 F.3d at 432. But that omission is irrelevant because the
disclosures “presented enough facts to create an inference of wrongdoing”
by KeyPoint. Id. at 433 (quoting United States ex rel. Jones v. Horizon
Healthcare Corp., 160 F.3d 326, 332 (6th Cir. 1998)).
At bottom, the government already suspected fraud in the background-
investigation industry. Counting KeyPoint, that industry only has three
main players; and the disclosures linked KeyPoint to the suspected fraud.
We cannot see how naming KeyPoint adds information of sufficient
significance or importance “to influence the [government’s] behavior.”
Winkelman, 827 F.3d at 211. Put another way, this is an instance in which
60
averments regarding the “who” of a publicly disclosed fraudulent scheme
are not a material addition within the meaning of the original-source
exception. Cf. Moore, 812 F.3d at 307.
Similarly, identifying individual investigators as wrongdoers “merely
adds detail or color to previously disclosed elements of an alleged scheme.”
Winkelman, 827 F.3d at 213. The government knew that individual
investigators (including a former KeyPoint employee) “lied about
conducting thorough background checks when they were incomplete and
rushed.” Aplt.’s App. at 410. And a September 2013 article reported that
the government was “pursuing suspected fraud in granting of security
clearances” and had already convicted at least “19 private and government
investigators for submitting fabricated reports.” Id. at 308. True, Ms.
Reed’s allegations suggested that the problem was more pervasive at
KeyPoint than the public disclosures hinted. But if identifying new
employees engaged in fraud were enough, the original-source exception
would burst from overbreadth. Cf. Winkelman, 827 F.3d at 212 (explaining
that giving “specific examples of” publicly known fraud “does not provide
any significant new information”).
Ms. Reed also is mistaken that her allegations materially add to the
public disclosures because she did her own investigation into KeyPoint.
61
For starters, as KeyPoint rightly points out, “the ‘materially adds’
requirement . . . focuses on the substance of the allegations, not the
source.” Aplee.’s Resp. Br. at 37. That Ms. Reed’s independent
investigation confirmed, as to KeyPoint, some of the allegations floating
around the public sphere is arguably relevant to the question of whether her
knowledge is independent of the public disclosures, but that question is not
presently before us. See Kennard, 363 F.3d at 1046–47 (explaining that
relators had “direct and independent knowledge” because they did “their
own investigation”). In sum, in our view, Ms. Reed’s separate investigation
is irrelevant to the materially-adds question. See Winkelman, 827 F.3d at
212 (rejecting argument that relators materially added to the public
disclosures by “trumpet[ing] their personal knowledge of specific instances
of alleged [fraud]”). As the Eighth Circuit remarked, “A relator is not an
original source of information . . . simply because he discovered or
suspected it first” through his own investigation if that investigation only
confirms what was “already thoroughly revealed.” Paulos, 762 F.3d at 694.
All that said, we ultimately conclude that Ms. Reed does satisfy the
materially-adds standard. We reach that conclusion because we determine
that Ms. Reed’s allegations regarding the TTP materially add to the
information available in the public disclosures for two related and
62
intertwined reasons. First, Ms. Reed makes specific allegations of both
investigator- and management-level fraud in the distinct context of the TTP.
Second, many of Ms. Reed’s allegations concerning KeyPoint’s responses to
her reports of possible fraud in the TTP provide direct evidence of
KeyPoint’s scienter. Neither the allegations of investigator- and
management-level fraud in the TTP context nor the allegations of
KeyPoint’s scienter were available via the public disclosures. Considered
together, these allegations reveal a “new scheme[] to defraud the
government” involving repeated violations of the TTP by KeyPoint
investigators and management. Aplt.’s Opening Br. at 25. And they offer
“[t]rue evidence of intent or guilty knowledge” by KeyPoint, Hesch, supra,
at 1026, insofar as they aver Ms. Reed’s specific knowledge of KeyPoint
managers’ efforts to knowingly cover up the TTP violations. Cf. United
States ex rel. Ambrosecchia v. Paddock Labs., LLC, 855 F.3d 949, 955 (8th
Cir. 2017) (“[Relator] claims that her information materially adds to the
existing information by demonstrating scienter. However, the complaint
provides no more than the simple, conclusory allegation that Defendants’
actions were knowing . . . . Accordingly, [relator’s] complaint is
insufficient to plausibly state that she qualifies as an original source.”
(citation omitted)).
63
Ms. Reed’s allegations of scienter make us especially confident that
her allegations regarding KeyPoint’s fraudulent TTP practices satisfy the
materially-adds standard. False Claims Act “cases often turn on the issue
of scienter.” Hesch, supra, at 1024. Yet, “the government is never in a
good position to have direct evidence of guilty knowledge.” Id. Thus, Ms.
Reed’s allegations that KeyPoint’s investigators and managers tried to
knowingly cover up the TTP violations amplify the materiality of the
underlying allegations of TTP fraud. Cf. Winkelman, 827 F.3d at 213 (“We
do not rule out the possibility that furnishing information that a particular
defendant is acting ‘knowingly’ (as opposed to negligently) sometimes may
suffice as a material addition to information already publicly disclosed.”);
Hesch, supra, at 1027 (“[R]egardless of how well defined the fraud
allegations are in a qualifying public disclosure, when a relator brings forth
knowledge of scienter that is not specifically contained in a qualifying
public disclosure it should be presumed to materially add value.”).
Now consider those underlying allegations. Recall that investigators
were generally required to conduct in-person interviews, but the TTP
permitted them to do telephone interviews under some circumstances so
long as they kept their total number of telephone interviews below a certain
percentage threshold. Each month, OPM would send KeyPoint a list of
64
investigators who exceeded their allotted number of telephone interviews
during the last month. KeyPoint then would be obliged to send OPM
“corrective action report[s]” explaining each infraction and what it was
doing to remedy the problem. Aplt.’s App. at 31, ¶ 54.
Ms. Reed avers that KeyPoint investigators repeatedly violated the
TTP and KeyPoint management regularly falsified corrective action reports
to cover up the violations. For instance, one corrective action report by a
KeyPoint Field Manager justified an investigator’s violations by claiming
that telephone interviews were “justified due to weather and due ‘to the
remote and large geographical area [the investigator] work[ed].’” Id. at 90,
¶ 262. When Ms. Reed looked into the matter, she discovered that the
report was false; the investigator’s sources were actually “located in nearby
Colorado, well within the territory he was required to cover in person” Id.
at 90, ¶ 264. When Ms. Reed recommended that the investigator be
disciplined for violating the TTP, rather than do so and correct the false
corrective action report, a KeyPoint Regional Manager “tried to persuade
[Ms.] Reed that [the investigator] was covering remote territory in
Wyoming.” Id. at 90, ¶¶ 265–267.
Similarly, Ms. Reed determined that another investigator was
violating the TTP by “not giv[ing] many sources the opportunity for in-
65
person interviews,” id. at 95 ¶ 298, and that KeyPoint management had
falsely “certified that [the investigator] had not conducted the telephonic
testimonies that OPM had indicated,” id. at 96, ¶ 300. Ms. Reed
specifically informed identified members of KeyPoint management that the
investigator was violating the TTP—which meant that KeyPoint’s prior
certifications to OPM to the contrary were false. See id. But rather than
discipline the investigator and correct the false certifications, the
investigator’s “Field Manager continued to issue Corrective Action Reports
to OPM about [the investigator] that claimed geographic distance and
source request, when Reed had already shown KeyPoint’s management that
[the investigator] had conducted phone interviews without attempting to
conduct in-person interviews.” Id. at 96, ¶ 310.
Furthermore, on more than one occasion, in response to Ms. Reed’s
efforts to correct problems in the TTP, “KeyPoint management told [her] to
stop interfering.” Id. at 95, ¶ 292; see also id. at 96, ¶ 308 (“[Ms.] Reed
was later told to ‘stop interfering.’”). In short, Ms. Reed’s complaint offers
pages of details describing how KeyPoint managers knowingly schemed to
defraud the government by covering up systemic violations of the TTP.
None of the public disclosures accused KeyPoint—or the industry
generally—of fraud relating to a TTP. The news reports, for instance,
66
focused generally on problems in the industry with “investigators who were
found to have done substandard work in background checks.” Id. at 303.
The articles do not hint at systemic investigator fraud designed to evade the
requirements of a TTP (e.g., its percentage ceiling for conducting telephone
interviews), let alone discuss knowing efforts of management personnel to
cover up that fraud. Likewise, Congress suspected KeyPoint and its
competitors only of using “false, incomplete, or rushed information
gathering” in its background investigations but unearthed no evidence that
industry management knowingly lied about the circumstances in which they
gathered information by telephone. Id. at 411 & n.3. The two OPM audits
do not even reference a TTP or fraudulent corrective action reports
covering up violations of such a program. And the USIS suit alleged that
USIS investigators “dumped” incomplete and unreviewed cases to OPM and
abused OPM’s “Blue Zone software.” Aplt.’s Reply Br., Addendum A, at
6–12. But this suit makes no mention of a TTP, corrective action reports,
or a scheme by management to cover up deficiencies under that program.
In short, Ms. Reed’s allegations regarding KeyPoint’s fraudulent
practices related to its TTP added material information to the public
disclosures that satisfied the Act’s materially-adds standard. These
allegations had the effect of “expanding the scope of the fraud” revealed in
67
the public disclosures and introducing “knowledge of scienter that is not
specifically contained in a qualifying public disclosure.” Hesch, supra, at
1023, 1027. This is not a case where the relator’s allegations contributed
nothing more than personal “knowledge (even if gained early and
independently).” Paulos, 762 F.3d at 694. Nor is it a situation where the
allegations of fraud in the public disclosures were so detailed that there was
no room for Ms. Reed to materially add to them with her allegations of
KeyPoint’s fraudulent TTP practices. Winkelman, 827 F.3d at 211 (“As the
level of detail in public disclosures increases, the universe of potentially
material additions shrinks.”). Indeed, her allegations about KeyPoint’s
scheme to evade the TTP did more than “add[] detail or color to previously
disclosed elements of an alleged scheme.” Id. at 213; see also Hastings,
656 F. App’x at 331–32 (“Allegations do not materially add to public
disclosures when they provide only background information and details
relating to the alleged fraud—they must add value to what the government
already knew.”). Hence, we conclude that Ms. Reed’s complaint averments
relating to KeyPoint’s fraudulent TTP practices reveal information “[o]f
such a nature that knowledge of the item would affect [the government’s]
decision-making.” Winkelman, 827 F.3d at 211 (first alteration in original)
(quoting B LA C K ’ S , supra, at 1124). In other words, her allegations
68
materially add to the public disclosures.
The soundness of this conclusion is highlighted when one contrasts
the materiality of the new fraudulent scheme that Ms. Reed alleges
regarding the TTP with the immateriality of the added information at issue
in Osheroff. The relator in Osheroff alleged that certain medical clinics
were violating the federal anti-kickback law and related government
contracts by providing “a variety of free services for patients . . . ,
including transportation, meals, spa and salon services, and entertainment.”
776 F.3d at 808. An earlier lawsuit had disclosed a different clinic’s
similar practices. And news reports publicized that the defendant-clinics
provided “‘free lunch’ . . . and free transportation.” Id. at 813. In arguing
that he was an original source, the relator emphasized that his complaint
added to the public disclosures by revealing “the type of food the clinics
served . . . , the destinations of some of the free transportation, the
frequency of salon services, and the price of the substitute services or
goods.” Id. at 815. The Eleventh Circuit, however, was “not persuaded.”
Id. At best, the court explained, the relator’s “complaint add[ed]
background information and details relating to the value of the services
offered, making it somewhat more plain that the clinics’ programs could
violate the [statute].” Id. That was not enough. The court held that under
69
the 2010 version of the False Claims Act, the relator’s “information d[id]
not materially add to the public disclosures, which were already sufficient
to give rise to an inference that the clinics were providing illegal
remuneration to patients.” Id.
Ms. Reed’s complaint averments relating to KeyPoint’s distinct TTP
fraud stand in stark contrast to the general background information
regarding an existing fraudulent scheme that the relator delivered in
Osheroff. Unlike in Osheroff, Ms. Reed’s allegations do not add a few
more breadcrumbs on an existing trail; they blaze a new trail.
We underscore that we do not rest our holding that Ms. Reed has
satisfied the materially-adds standard based solely on either her allegations
concerning specific instances of investigator- and management-level fraud
in the TTP or her allegations concerning KeyPoint’s responses to her
reports of possible TTP fraud—notably, to cover up fraud—that evinced
KeyPoint’s scienter. Instead, we base our holding on the combined,
synergistic effect of the allegations of distinct misconduct in the TTP and
the related and intertwined allegations detailing KeyPoint’s knowing efforts
to cover up TTP violations. The combination of these allegations clearly
permit Ms. Reed to satisfy the materially-adds standard. We need not—and
thus do not—opine on whether either of the two related and intertwined
70
features of Ms. Reed’s TTP allegations, standing alone, would be sufficient
to satisfy the materially-adds standard.
* * *
In sum, we agree with the district court that the allegations in Ms.
Reed’s qui tam claims are substantially the same as those in the public
disclosures. But we disagree with the court’s conclusion that Ms. Reed’s
allegations do not materially add to the public disclosures, such that she did
not qualify as an original source. As a consequence, we vacate the district
court’s summary-judgment order that dismissed Ms. Reed’s qui tam claims.
However, because the district court did not reach the second part of the
original-source standard—i.e., whether Ms. Reed’s allegations are
“independent of” the public disclosures—we remand the case for the
district court to resolve that question in the first instance. 17 See Tabor v.
17
We likewise decline KeyPoint’s invitation to affirm the district court’s
judgment on alternative bases not ruled on by the district court. See Aplee.’s Resp. Br. at
58–60 (arguing that Ms. Reed’s FCA claims fail for want of (1) particularity under Rule
9(b), (2) falsity, (3) materiality, and (4) scienter). Although it is true that we may affirm
on any basis finding support in the record, see Richison v. Ernest Grp., Inc., 634 F.3d
1123, 1130 (10th Cir. 2011), we are often “reluctant” to do so when “we are deprived of
the benefit of vigorous adversarial testing of the issue, not to mention a reasoned district
court decision on the subject.” Abernathy v. Wandes, 713 F.3d 538, 552 (10th Cir. 2013);
accord Sylvia v. Wisler, 875 F.3d 1307, 1325 (10th Cir. 2017). KeyPoint offers only brief
arguments in support of the alternative bases for affirmance. In these circumstances, the
superior course of action is to remand so that district court may decide the issues in the
first instance. See United States v. McLinn, 896 F.3d 1152, 1157 (10th Cir. 2018)
(declining to rule on inadequately briefed issues “not fully addressed by the district
(continued...)
71
Hilti, Inc., 703 F.3d 1206, 1227 (10th Cir. 2013) (“Where an issue has not
been ruled on by the court below, we generally favor remand for the district
court to examine the issue.”); see also Singleton v. Wulff, 428 U.S. 106, 120
(1976) (“It is the general rule, of course, that a federal appellate court does
not consider an issue not passed upon below.”).
III
We now turn to Ms. Reed’s retaliation claim. The False Claims Act
protects whistleblowers from retaliation by their employers. See Potts, 908
F.3d at 613–14 (discussing 31 U.S.C. § 3730(h)). To state a claim of
retaliation, a plaintiff must meet her “burden of pleading facts” that prove
(1) she engaged in protected activity, (2) the defendant “had been put on
notice” of that protected activity, and (3) the defendant retaliated against
the plaintiff “because of” that activity. McBride v. Peak Wellness Ctr.,
Inc., 688 F.3d 698, 704 (10th Cir. 2012); see also 31 U.S.C. § 3730(h).
Ms. Reed alleges that KeyPoint retaliated against her by firing her for
trying to stop it from violating the False Claims Act. The district court
granted KeyPoint’s Rule 12(b)(6) motion to dismiss this retaliation claim
because Ms. Reed had, in the district court’s view, inadequately pleaded
that KeyPoint was on notice that she was engaging in protected activity.
17
(...continued)
court”).
72
We review de novo “the district court’s dismissal under Rule
12(b)(6).” United States ex rel. Polukoff v. St. Mark’s Hosp., 895 F.3d 730,
740 (10th Cir. 2018) (quoting United States ex rel. Lemmon v. Envirocare
of Utah, Inc., 614 F.3d 1163, 1167 (10th Cir. 2010)). Dismissal under Rule
12(b)(6) “is appropriate only if the complaint, viewed in the light most
favorable to plaintiff, ‘lacks “enough facts to state a claim to relief that is
plausible on its face.”’” Conner, 543 F.3d at 1217 (quoting Trentadue v.
Integrity Comm., 501 F.3d 1215, 1236 (10th Cir. 2007)).
Applying these standards, we affirm the district court’s dismissal of
Ms. Reed’s retaliation claim. At the outset, we are constrained to point out
that the district court relied on a legally erroneous view of what constitutes
protected activity. But we “can affirm the district court’s dismissal on any
ground sufficiently supported by the record.” GF Gaming Corp. v. City of
Black Hawk, 405 F.3d 876, 882 (10th Cir. 2005); accord George v. Urban
Settlement Servs., 833 F.3d 1242, 1254 (10th Cir. 2016). And we determine
that, under the correct legal understanding of protected activity, Ms. Reed
has failed to plead sufficient facts to show that KeyPoint was on notice of
her purported protected activity. For that reason, we affirm the district
court’s order dismissing Ms. Reed’s retaliation claim.
A
73
The False Claims Act protects whistleblowers who engage in
“protected activity.” Armstrong, 897 F.3d at 1286. Until 2009, protected
activity included only “lawful acts done by the employee . . . in furtherance
of an action under this section [i.e., a qui tam suit].” 31 U.S.C. § 3730(h)
(2008). The circuit courts split over what conduct qualified as “in
furtherance of” a qui tam action. Our circuit and several others interpreted
that language to mean that protected activity encompassed conduct
preparing for “a private qui tam action or assisting in an . . . action brought
by the government.” United States ex rel. Ramseyer v. Century Healthcare
Corp., 90 F.3d 1514, 1522 (10th Cir. 1996); accord Robertson v. Bell
Helicopter Textron, Inc., 32 F.3d 948, 951 (5th Cir. 1994). In these
circuits, an employee who, for example, reported a False Claims Act
violation to her supervisor but did not pursue a qui tam action had not
engaged in protected activity. See, e.g., Zahodnick v. Int’l Bus. Machs.
Corp., 135 F.3d 911, 914 (4th Cir. 1997). Other circuits, by contrast, read
“in furtherance of” more broadly to include protection against “retaliation
for filing an internal complaint.” United States ex rel. Grenadyor v.
Ukrainian Vill. Pharmacy, Inc., 772 F.3d 1102, 1108–09 (7th Cir. 2014)
(describing the Seventh Circuit’s pre-2009 precedent).
Congress resolved this circuit split in 2009. That year, it amended
74
the False Claims Act’s whistleblower protections to protect employees who
take “lawful” actions “in furtherance of other efforts to stop 1 or more
violations” of the False Claims Act. 31 U.S.C. § 3730(h)(1) (2009)
(emphasis added). With this amendment, Congress thereby expanded “the
universe of protected conduct.” 18 United States ex rel. Chorches v. Am.
Med. Response, Inc., 865 F.3d 71, 97 (2d Cir. 2017). In this expanded
universe, whistleblowers who lawfully try to stop one or more violations of
the Act are protected, without regard to whether their conduct advances a
private or government lawsuit under the Act.
Congress did amend the whistleblower protections again in 2010. As
a consequence, the now-effective protections expressly apply to an
employee’s “lawful” acts “in furtherance of” either “an action” under the
Act “or other efforts to stop 1 or more violations of” the Act. 31 U.S.C.
§ 3730(h)(1); see also United Stated ex rel. Grant v. United Airlines Inc.,
912 F.3d 190, 201 & n.3 (4th Cir. 2018) (noting these two amendments to
the Act). But as is evident, the 2010 amendment left intact the 2009
amendment’s broad “other efforts to stop” language, which is our focus in
18
See also United States ex rel. Grant v. United Airlines Inc., 912 F.3d 190,
201 (4th Cir. 2018) (“[W]e and other circuits have recognized that the amended language
broadens the scope of protected activity.”); Halasa v. ITT Educ. Servs., Inc., 690 F.3d
844, 847–48 (7th Cir. 2012) (noting the broader scope of protected activity under the
amended provision).
75
this appeal. Thus, Ms. Reed could avail herself of this “other efforts to
stop” language in this action.
The district court, however, failed to acknowledge the expanded
universe that the 2009 amendment defined. Instead, it assessed the
sufficiency of Ms. Reed’s averments under the pre-2009 rubric. In this
regard, the court wrongly declared that under the False Claims Act “the
activity prompting plaintiff’s discharge must have been taken ‘in
furtherance of’ a[] [qui tam] action.” Aplt.’s App. at 417 (quoting
McBride, 688 F.3d at 703–04). 19 The plain text of the amended
whistleblower provisions does not support such a narrow view. Congress
added the “other efforts to stop” language for a reason—namely, to stretch
19
Although we decided McBride in 2012, the conduct at issue there occurred
in January 2009—before the 2009 amendment took effect in May of that year. See Fraud
Enforcement and Recovery Act of 2009, Pub. L. No. 111-21, § 4(f), 123 Stat. 1617(2009) (effective date May 20, 2009). McBride, then, had no reason to consider or apply
the amended whistleblower provision. Hence, its analysis is inapposite to post-2009
protected conduct. That said, in a 2017 unpublished opinion, a panel of our court quoted
McBride for the proposition that “without evidence that [plaintiff] was planning to report
[defendant] to the government or file a qui tam suit, [plaintiff’s] retaliation claim cannot
survive summary judgment.” Cash v. Lockheed Martin Corp., 684 F. App’x 755, 764
(10th Cir. 2017) (unpublished) (quoting McBride, 688 F.3d at 704). That seeming
declaration of post-2009-amendment law (embodied in a 2017 decision) is of course not
binding on us; Cash is not precedential. See 10TH CIR. R. 32.1(A). More fundamentally,
Cash is problematic because (1) it is contrary to the plain text of the current (i.e., post-
amendment) whistleblower provisions, (2) contains no analysis of the change in statutory
language, and (3) conflicts with the decisions of our sister circuits that have construed the
current provisions, see, e.g., Grant, 912 F.3d at 201. Accordingly, we decline to follow
Cash’s lead, and KeyPoint’s reliance on Cash is unavailing.
76
the “protected activity” umbrella to cover additional conduct. When
“Congress expands the scope of activity protected by a statute, we cannot
restrict ourselves to applying a narrower old standard that the expansion . .
. eschew[ed].” Grant, 912 F.3d at 201. The district court mistakenly did
just that. Tellingly, the phrase “other efforts to stop” does not appear in
the district court’s order, and the court fails to cite a single case applying
the amended provision. Simply put, the district court applied the wrong
version of the statute.
This error necessarily affected the district court’s consideration of
whether Ms. Reed adequately pleaded notice. To adequately plead a
retaliation claim, a plaintiff must aver that the defendant was on notice of
her protected activity. See Armstrong, 897 F.3d at 1286. Once Congress
expanded the scope of protected activity, the universe of conduct that a
plaintiff could allege to show notice also necessarily expanded. See United
States ex rel. Smith v. Clark/Smoot/Russell, 796 F.3d 424, 434 & n.6 (4th
Cir. 2015) (explaining that the amendment expanded the boundaries of what
constitutes notice of protected activity). But because the district court
thought that only conduct in furtherance of a qui tam lawsuit was properly
classified as “protected activity,” the court asked the wrong question—an
improperly narrow one. It asked only whether Ms. Reed pleaded facts
77
sufficient to show that KeyPoint was on notice that she was “taking action
in furtherance of a private qui tam action or assisting in an . . . action
brought by the government.” Aplt.’s App. at 417 (quoting Ramseyer, 90
F.3d at 1522). And the court answered that question in the negative and,
accordingly, dismissed Ms. Reed’s claim.
But as framed by Ms. Reed’s arguments, the right question regarding
the notice element of the retaliation claim centers on the language Congress
added to the Act in 2009. The district court should have gone beyond its
previous inquiry and asked whether Ms. Reed pleaded facts that plausibly
show that KeyPoint was on notice that she had tried to stop its alleged False
Claims Act violations. The answer to that question determines whether Ms.
Reed’s retaliation claim stands or falls. Reviewing her complaint de novo,
we answer that question in the negative.
B
Specifically, we hold that Ms. Reed has not pleaded sufficient facts to
state a claim of retaliation because she has failed to establish the notice
element of that claim. We explain that conclusion in two parts. First, we
clarify what kind of facts Ms. Reed must plead to show that KeyPoint knew
she was trying to stop its violations of the False Claims Act. Second, we
determine that Ms. Reed’s complaint averments come up short.
78
1
Our circuit has yet to begin the work of defining the boundaries of
what constitutes protected efforts to stop a violation of the False Claims
Act. Naturally, we cannot narrow our consideration to our pre-2009 view
that an employee must prove in every instance that the employer knew that
she was acting “in furtherance of” a qui tam action. Ramseyer, 90 F.3d at
1522. Beginning the outline of those boundaries, we state our agreement
with KeyPoint “that a relator’s actions still must convey a connection to the
[False Claims Act].” Aplee.’s Resp. Br. at 52; see Grant, 912 F.3d at 202
(noting that “plaintiff’s actions need not lead to a viable” qui tam action,
but “they must still have a nexus to a[] [False Claims Act] violation”);
United States ex rel. Booker v. Pfizer, Inc., 847 F.3d 52, 59 n.8 (1st Cir.
2017) (explaining that relator’s “activities must pertain to violations” of the
Act). After all, the text of the amendment says the “other efforts” must be
“to stop 1 or more violations of [the False Claims Act].” 31 U.S.C.
§ 3730(h)(1).
We also agree with KeyPoint that compliance employees typically
must do more than other employees to show that their employer knew of the
protected activity. Our cases applying the pre-2009 whistleblower
provisions explained that an employee “whose job entails the investigation
79
of fraud . . . . must make clear” that she engaged in protected activity “to
overcome the presumption that [she was] merely acting in accordance with
[her] employment obligations.” Ramseyer, 90 F.3d at 1523 n.7; accord
United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472
F.3d 702, 729 (10th Cir. 2006). In other words, in these decisions, we
recognized that an employer might reasonably presume that when a
compliance employee reports incidents of fraud she is just doing her job.
So to hold an employer liable under the Act’s whistleblower provisions, our
pre-2009 precedent required a compliance employee to overcome that
presumption by showing that she was engaging in protected activity, not
just doing her job.
We think this reasoning has survived the 2009 amendment. True, as
we have explained above, that amendment expanded the scope of protected
activity and thus expanded the universe of conduct that a relator may plead
in giving the employer notice of the protected activity. But nothing about
the 2009 amendment undercuts the rationale of our precedent addressing
compliance officers who are charged by their employer with investigating
fraud. See United States ex rel. Campie v. Gilead Scis., Inc., 862 F.3d 890,
908 (9th Cir. 2017) (deeming our pre-2009 Ramseyer decision “instructive,”
in a post-amendment context, on the point that compliance employees must
80
do more to show an employer’s knowledge), cert. denied, 139 S. Ct. 783(2019).
In sum, to state a retaliation claim, as relevant here, an employee’s
complaint must allege facts that show her employer knew of her efforts to
stop a False Claims Act violation. The 2009 amendment left intact our
precedent requiring compliance employees to do more than other employees
to meet the notice element. And so, to adequately plead notice, a
compliance employee must allege facts that, viewed in her favor, make
clear that her employer had been put on notice that she was trying to stop it
from violating the False Claims Act and not merely doing her job.
2
We conclude that Ms. Reed’s complaint averments come up short of
this standard. To be sure, Ms. Reed is correct that her complaint shows that
she voiced objections regarding the alleged fraud “to everyone at KeyPoint
who would listen.” Aplt.’s Opening Br. at 41. For instance, the complaint
alleges that “she approached KeyPoint’s Director of Training” and “raised
concerns to her supervisor,” the “OPM Contract Director,” and “the
Regional Managers and certain Field Managers.” Aplt.’s App. at 31–32, ¶¶
59, 65. Indeed, the complaint notes that Ms. Reed brought some of “the
most egregious instances” of fraud at the investigator level to the attention
81
of “field managers and . . . regional managers.” Id. at 62, ¶ 172. Likewise,
Ms. Reed allegedly told “her supervisor . . . on numerous occasions” about
violations of the TTP. Id. at 89, ¶ 253.
However, Ms. Reed was a “Senior Quality Control Analyst”—that is,
a compliance officer. Id. at 24, ¶ 3. Thus, under our precedent, we may
presume that Ms. Reed—as a compliance officer—was just doing her job in
repeatedly reporting fraud internally to employees at KeyPoint. And Ms.
Reed’s complaint averments do not overcome that presumption—indeed,
they tend to underscore the soundness of it. In this regard, Ms. Reed
herself links her knowledge of, and efforts to report, the alleged fraud at
KeyPoint to her role “as a Senior Quality Control Analyst.” 20 Id. at 25, ¶ 4.
For instance, the complaint notes that Ms. “Reed and her staff
discover[ed]” fraud. Id. at 75, ¶ 201 (emphasis added). And at points, the
20
See also Aplt.’s App. at 28–29, ¶¶ 29, 33 (noting that KeyPoint put Ms.
“Reed in charge of the [TTP],” and through these duties, she “uncovered systemic
violations” of the OPM contract); id. at 31, ¶¶ 52, 55 (noting that Ms. “Reed developed
and ran” the TTP, and in that role, she “discovered that KeyPoint management repeatedly
falsified corrective action reports by fabricating justifications for the violations”); id. at
33, ¶ 78 (explaining that Ms. Reed’s job “allowed her to review investigators’ work” and
“compile[] extensive records of [improper] investigations”); id. at 61, ¶ 165 (alleging that
when extra compliance work was needed, KeyPoint “occasionally tasked [Ms. Reed] with
extra audits of investigators”); id. at 84, ¶ 228 (“Reed was assigned to determine the
nature of the chronic infractions.”); id. at 86, ¶¶ 231–232 (pointing out that “[i]n the
course of her duties, Reed discovered that certain investigators were” circumventing
OPM requirements); id. at 90, ¶ 260 (“Reed was tasked with investigating . . . each
investigator’s high frequency of telephone testimonies.”).
82
complaint specifies that Ms. “Reed and her staff reported [certain]
violations.” Id. at 78, ¶ 207 (emphasis added); see also id. at 76, 80, ¶¶
203, 210. That her staff was assisting Ms. Reed in fraud detection and
reporting activities suggests that such activities fell within the ambit of Ms.
Reed’s responsibilities as a Senior Quality Control Analyst because one
might reasonably infer that Ms. Reed’s staff would not be assisting her in
off-book operations or matters of personal preference, rather than duty.
Even when Ms. Reed acted alone, the complaint suggests that she reported
misconduct on a regularized schedule as part of her job—averring that she
“regularly reported [certain] infractions to her supervisor . . . by submitting
and discussing a monthly spreadsheet.” Id. at 62, ¶ 171 (emphasis added);
see also id. at 86, ¶ 230. And for investigators who persistently violated
policies, Ms. Reed reported them “for disciplinary action by
KeyPoint”—which strongly suggests that she had some job-related mandate
to do so. Id. at 90, ¶ 265; see also id. at 36, ¶ 99.
In sum, as the district court correctly observed, “[T]he monitoring and
reporting activities described in her Complaint were exactly those activities
Ms. Reed was required to undertake . . . as a Senior Quality Control
Analyst.” Id. at 418–19. In other words, Ms. Reed’s complaint averments
do not rebut—and, indeed, tend to highlight the soundness of—the
83
presumption that her conduct was just part of her job.
Ms. Reed tries to rebut this presumption by showing that she went
“outside [her] normal chain of command to report fraudulent conduct.”
Aplt.’s Opening Br. at 37. In this regard, Ms. Reed conclusorily asserts
that she complained about the fraud to “people well outside her chain of
command.” Id. at 41. In particular, Ms. Reed avers that she reported the
fraud to “the OPM Contract Director . . . , the Regional Managers[,] and
certain Field Managers.” Aplt.’s App. at 32, ¶ 65. Her complaint also
refers to a conversation with “KeyPoint’s Director of Training.” Id. at
31–32, ¶ 59. By reporting fraud to these individuals, Ms. Reed argues that
she “acted beyond the scope of her ordinary duties in attempting to stop
KeyPoint’s false statements” and that “[t]he KeyPoint employees who
decided to fire [her] knew” as much. Id. at 108, ¶¶ 389, 396. Hence, Ms.
Reed reasons, KeyPoint knew that her reports of fraud were not part of her
job but, instead, efforts to stop False Claims Act violations.
KeyPoint disagrees. It says that Ms. Reed’s actions were exactly
what she “was required to undertake in fulfillment of her job duties” as a
Senior Quality Control Analyst. Aplee.’s Resp. Br. at 53 (quoting
Ramseyer, 90 F.3d at 1523). KeyPoint also denies that it was properly put
on notice of Ms. Reed’s protected activity because she ostensibly “went
84
outside of her usual chain of command.” Id. at 55. Indeed, KeyPoint notes
that Ms. Reed “does not cite any binding authority for the proposition that
alleged discussions with individuals inside the company but outside of her
normal reporting structure would suffice to overcome the presumption that
she was acting within the scope of her ordinary duties.” Id. at 56. Hence,
KeyPoint argues that it “could not have been on notice of [Ms. Reed’s]
allegedly protected actions.” Id. at 53.
KeyPoint is correct that our court has never expressly held that a
compliance employee may put her employer on notice of her efforts to stop
False Claims Act violations by reporting fraud internally but outside her
chain of command. But other circuits have. The Ninth and D.C. Circuits,
for example, each have held that, under certain circumstances, a compliance
employee may meet the notice element of retaliation by pleading that her
employer knew that she had reported fraud within the company in a manner
that violated or went outside the established chain of command. See, e.g.,
Campie, 862 F.3d at 897, 908 (holding that retaliation complaint by a
“Senior Director of Global Quality Assurance” adequately pleaded notice
because, inter alia, the employer knew the employee had “conversations
outside of his chain of command regarding his concerns”); United States ex
rel. Schweizer v. Oce N.V., 677 F.3d 1228, 1239–40 (D.C. Cir. 2012)
85
(holding that a compliance employee’s retaliation claim survived summary
judgment because employer knew she had “ignor[ed] ‘the chain of
command’” by reporting fraud to her boss’s boss); cf. United States ex rel.
Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1261 (D.C. Cir.
2004) (stating the general proposition that “when an employee acts outside
his normal job responsibilities or alerts a party outside the usual chain of
command, such action may suffice to notify the employer that the employee
is engaging in protected activity,” in a case in which the employee “went
outside the company and alerted the government”).
We need not definitively opine here, however, on the cogency of this
precedent. Even if Ms. Reed could legally overcome the compliance-
employee presumption by showing that she went outside of the chain of
command to report fraud, her complaint averments do not plausibly
establish, as a factual matter, that she did so. That is, she has not pleaded
facts showing that she indeed went outside her ordinary reporting structure
as a compliance officer. To be sure, we must “assume the truth of all well-
pleaded facts in the complaint[] and draw all reasonable inferences” in Ms.
Reed’s favor. Leverington v. City of Colorado Springs, 643 F.3d 719, 723
(10th Cir. 2011) (quoting Dias v. City & County of Denver, 567 F.3d 1169,
1178 (10th Cir. 2009)). And Ms. Reed avers that she reported fraud to
86
persons other than her direct supervisor—namely, “the OPM Contract
Director. . . , Regional Managers[,] and certain Field Managers,” as well as
the “Director of Training.” Aplt.’s App. at 31–32, ¶¶ 59, 65. But Ms. Reed
never pleaded facts delineating her specific job description or defining the
scope of her duties such that we could discern with some specificity the
contours of Ms. Reed’s chain of command or ordinary reporting structure
related to fraud matters. Without that information, we cannot say, or
reasonably infer, that Ms. Reed broke the chain of command or ordinary
communication protocol by speaking with the Director of Training, OPM
Contract Director, Regional Managers, or Field Managers.
For example, as a compliance officer, Ms. Reed may have been
obliged as part of her job duties to communicate with, and seek remedial
action from, those at KeyPoint other than her direct supervisor regarding
instances of employee fraud—especially if her supervisor did not
adequately respond to her concerns. If so, that Ms. Reed turned to, for
example, the Regional Managers or Field Managers to address her fraud
concerns could not properly be viewed as an instance of Ms. Reed violating
the established communication protocol or chain of command. Ms. Reed’s
complaint averments shed no appreciable light on whether her job
description did in fact contemplate such communications beyond her direct
87
supervisor—much less negate this possibility.
Tellingly, in responding to KeyPoint’s similar comments regarding
factual gaps in her complaint, the best that Ms. Reed seemingly could
muster in her Reply Brief was a plea for merciful forbearance: “With
respect to her retaliation claim, [Ms. Reed] is arguing that, at the motion to
dismiss stage, she gets the benefit of the doubt.” Aplt.’s Reply Br. at 22
(emphasis added). But the one case that she cites for support—Gee v.
Pacheco, 627 F.3d 1178 (10th Cir. 2010)—says no such thing. That case
and other controlling decisions make quite clear that, “[t]o survive a motion
to dismiss,” a plaintiff’s complaint averments must be factually plausible.
Id. at 1184 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). And that
plausibility standard is satisfied “when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. (quoting Iqbal, 556 U.S. at 678). As
relevant here, Ms. Reed had to plead facts from which we could reasonably
infer that she put KeyPoint on notice of her protected activity by going
outside the established communication protocol or chain of command. But
she has failed to plead such facts. 21
21
Putting aside Ms. Reed’s failure to demonstrate KeyPoint’s notice through a
chain-of-command theory, Ms. Reed’s complaint averments do not provide sufficient
facts from which we could conclude that the content of her communications with the
(continued...)
88
The D.C. Circuit’s analysis in Schweizer offers a useful contrast.
Like Ms. Reed, the relator there was responsible for ensuring “compliance
with government contracts.” 677 F.3d at 1239. Upon uncovering fraud, the
relator voiced concerns to her supervisor and then “repeatedly disobeyed
the orders of . . . her supervisor[] to stop investigating” the alleged fraud.
Id. In fact, the relator went over her boss’s head to his supervisor “on two
separate occasions.” Id. In those conversations, “she alleged a variety of
specific False Claims Act violations” and “made an emotional plea to
‘sav[e] the company’ from ‘legal trouble.’” Id. at 1239–40 (alteration in
21
(...continued)
identified KeyPoint officials would have put KeyPoint on notice that she was doing
something more than her job. For example, regarding Ms. Reed’s conversation with the
“OPM Contract Director,” we do not know which “concerns” she voiced or whether
voicing those unspecified concerns was inconsistent with her job duties. Aplt.’s App. at
32, ¶ 65. It is the same story with Ms. Reed’s discussions with “the Regional Managers
and certain Field Managers.” Id. And, as to the Director of Training, we are especially
hard-pressed to see how Ms. Reed’s communications with that official would have alerted
KeyPoint to the fact that she was seeking to prevent the company from committing a
violation the False Claims Act. Specifically, Ms. Reed’s complaint speaks of the
problems that the Director of Training brought to Ms. Reed’s attention—not
the other way around. See id. at 32, ¶¶ 60–63. That the Director of Training reported
problems to Ms. Reed tells us nothing about whether KeyPoint knew of Ms. Reed’s
efforts to stop a False Claims Act violation. Therefore, her complaint averments
regarding the content of her communications with the identified KeyPoint officials do not
aid her argument that KeyPoint was on notice of her protected activity. Moreover, lest
there be any doubt, Ms. Reed’s averments also cannot support a reasonable inference that
her reports of fraud to her direct supervisor were outside her ordinary job duties. In fact,
the complaint suggests otherwise. Recall that Ms. Reed often reported violations “to her
supervisor . . . by submitting and discussing a monthly spreadsheet.” Id. at 62, ¶ 171.
Ms. Reed’s descriptions of these meetings with her direct supervisor strongly suggest that
she was just doing her “regular monthly duties.” Id. at 38, ¶ 127.
89
original). Some weeks later, “[t]he company fired” the relator. Id. at 1240.
Her termination letter specified that she was fired for “‘refusing to follow
orders’ and ignoring ‘the chain of command.’” Id. From this evidence, the
D.C. Circuit held that the relator’s “factual allegations [were] sufficient to
overcome ‘the presumption that [she was] merely acting in accordance with
[her] employment obligations.’” Id. (second and third alterations in
original) (quoting Williams, 389 F.3d at 1261).
Measured against the allegations in Schweizer, the paucity of the
factual content in Ms. Reed’s complaint averments is patent. Unlike in
Schweizer, we have no specifically pleaded facts here indicating that Ms.
Reed violated the chain of command in reporting suspected fraud to
KeyPoint officials other than her direct supervisor. Whereas the relator in
Schweizer was ordered to stop investigating the fraud, Ms. Reed was
“tasked with extra audits of investigators.” Aplt.’s App. at 61, ¶ 165. And
while the employer in Schweizer fired the relator for “failing to follow
orders and the chain of command,” 677 F.3d at 1240, we lack any
specific—much less express—basis in Ms. Reed’s complaint from which to
infer that Ms. Reed’s activities in reporting suspected fraud, in her capacity
as a compliance officer, violated KeyPoint’s established communication
protocols or broke her chain of command. Simply put, Ms. Reed’s
90
complaint averments fail to rebut the presumption that her actions were just
doing her job.
* * *
In summary, Ms. Reed has the burden of pleading sufficient facts to
show that KeyPoint knew of her protected activity. See McBride, 688 F.3d
at 704. To do so, she must overcome the presumption that her internal
reports of fraud were part of her job as a Senior Quality Control Analyst.
This she cannot do. Accordingly, we hold that Ms. Reed has failed to
adequately allege that KeyPoint was on notice of her efforts to stop its
alleged False Claims Act violations. Consequently, her retaliation claim
fails.
IV
For the reasons stated above, we VACATE the district court’s
judgment and order insofar as it granted summary judgment on Ms. Reed’s
qui tam claims. We AFFIRM the district court’s order insofar as it
91
dismissed Ms. Reed’s retaliation claim. And we REMAND for further
proceedings consistent with this opinion. 22
22
We also GRANT KeyPoint’s unopposed motion to seal Volumes II
through VI of its unredacted supplemental appendix. KeyPoint filed two versions
of its seven-volume supplemental appendix, one redacted and one unredacted.
KeyPoint moves to seal Volumes II through VI of the unredacted materials, which
include OPM’s contract with KeyPoint and OPM’s Investigator’s Handbook. The
public has a “right of access to judicial records.” Eugene S. v. Horizon Blue
Cross Blue Shield of N.J., 663 F.3d 1124, 1135 (10th Cir. 2011); 10 TH C IR . R.
30.1(D). To seal court records and thus impair that right, a party “must articulate
a real and substantial interest that justifies depriving the public of access to the
records that inform our decision-making process.” Helm v. Kansas, 656 F.3d
1277, 1292 (10th Cir. 2011). Three considerations lead us to conclude that
sealing is appropriate here. First, KeyPoint has articulated a strong
national-security interest in sealing. The OPM contract and handbook contain
sensitive materials regarding the techniques used in performing background
checks; revealing this information could compromise future background
investigations. Second, KeyPoint has preserved the public’s right to view judicial
records by publicly filing a redacted version of the appendices proffered under
seal. This publicly available—albeit redacted— version of the appendices leaves
the content of the appendices visible in significant measure. Finally, sealing is
appropriate because the documents at issue “play[ed] no role in our resolution of
this appeal.” Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221,
1246 n.14 (10th Cir. 2017). Although KeyPoint’s Response Brief references the
unredacted materials, we did not rely on the underlying unredacted documents in
deciding this appeal.
92