United States v. Johnson Controls, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA; 

STATE OF CALIFORNIA, ex rel.

ROMAN ZARETSKY; ROBERT

YARDLEY,

Plaintiffs-Appellants, No. 04-55536

v.

JOHNSON CONTROLS, INC.; MICHAEL  D.C. No.

CV-03-00028-DOC

MATHES; RICHARD BEDDIE, OPINION

Defendants-Appellees,

and

MICHAEL PUTICH,

Defendant.



Appeal from the United States District Court

for the Central District of California

David O. Carter, District Judge, Presiding

Argued and Submitted

February 13, 2006—Pasadena, California

Filed August 9, 2006

Before: William C. Canby, Jr., John T. Noonan, and

Marsha S. Berzon, Circuit Judges.

Opinion by Judge Berzon

9129

9132 UNITED STATES v. JOHNSON CONTROLS, INC.

COUNSEL

Richard C. Goodman and Marc J. Schneider, Stradling Yocca

Carlson & Rauth, Newport Beach, California, for the

plaintiffs-appellants.

UNITED STATES v. JOHNSON CONTROLS, INC. 9133

Brian W. McGrath and David W. Simon, Foley & Lardner

LLP, Milwaukee, Wisconsin, and Susanne C. Washington,

Foley & Lardner LLP, San Diego, California, for the

defendants-appellees.

OPINION

BERZON, Circuit Judge:

This case requires us to interpret, once again, the statutory

provisions relating to the “public disclosure” bar and the

“original source” exception to that bar in the Federal False

Claims Act (FCA), 31 U.S.C. §§ 3729-3733, and the Califor-

nia False Claims Act (CFCA), CAL. GOV’T CODE §§ 12650-

12656. We hold that the federal and state statutes do not

require that an individual report relevant information to the

government prior to the “public disclosure” at issue to qualify

as an “original source.”

I.

Johnson Controls, Inc. (Johnson Controls, or the Company)

manufactures control systems that monitor and coordinate the

air environment in large buildings and building complexes.

The Company sells its control systems both directly to end-

users and through a network of independent distributors called

“Authorized Building Controls Specialists” (ABCSs).

Yardley-Zaretsky, Inc. and the George Yardley Co. (collec-

tively, the Yardley Companies) operate as an ABCS. Accord-

ing to Roman Zaretsky, President of Yardley-Zaretsky, Inc.,

Johnson Controls threatened the Yardley Companies with ter-

mination if they bid against Johnson Controls itself on certain

government jobs, including jobs at the Long Beach Veterans

Administration Hospital and the University of California, Riv-

erside.

9134 UNITED STATES v. JOHNSON CONTROLS, INC.

The Yardley Companies filed a civil complaint in Califor-

nia state court against Johnson Controls and several of its

employees alleging, inter alia, that Johnson Controls was

engaged in a bid-rigging scheme in violation of section 1 of

the Sherman Act, 15 U.S.C. § 1. Johnson Controls removed

the case to federal court. The Yardley Companies subse-

quently voluntarily dismissed the lawsuit and filed a demand

for arbitration with the American Arbitration Association,

asserting the same claims.1

Shortly thereafter Zaretsky and Robert Yardley, Vice-

President of Yardley-Zaretsky, Inc., sent letters to officials at

the Long Beach Veterans Administration Hospital, the United

States Attorney’s Office, the University of California, River-

side, and the Office of the California Attorney General, alleg-

ing that Johnson Controls violated the FCA and the CFCA.

The letters stated that Zaretsky and Yardley (Relators) would

file a qui tam complaint,2 a draft of which was included with

the letters, two weeks later, unless state or federal officials

contacted them in the meantime.

No governmental officials contacted Relators during the

two-week period. Shortly after the two-week period expired,

Relators filed under seal a qui tam complaint against Johnson

1

According to appellants’ letter submitted to us in accordance with Fed-

eral Rule of Appellate Procedure 28(j), the arbitration panel eventually

held that the defendants “committed a per se antitrust violation, tortious

interference, and breach of contract.”

2

Under 31 U.S.C. § 3730, a “qui tam plaintiff,” also known as a “rela-

tor,” may bring a civil action for a violation of the FCA for herself and

for the United States government, in the name of the government. See 31

U.S.C. § 3730(b)(1).

Under California Government Code section 12652, a “qui tam plaintiff”

may bring a civil action for a violation of the CFCA “for [herself] and

either for the State of California in the name of the state, if any state funds

are involved, or for a political subdivision in the name of the political sub-

division, if political subdivision funds are exclusively involved.” CAL.

GOV’T CODE § 12652(c)(1).

UNITED STATES v. JOHNSON CONTROLS, INC. 9135

Controls and several of its employees (collectively, JCI),

alleging that JCI violated the FCA and the CFCA by engaging

in bid-rigging on federal and state government jobs, including

jobs at the Long Beach Veterans Administration Hospital and

the University of California, Riverside.

After the federal and state governments declined to inter-

vene, the district court filed an order unsealing the complaint.3

Before Relators obtained discovery from JCI or third parties,

and well before the discovery cutoff dates set by the district

court, JCI moved for summary judgment on two grounds: (1)

that the district court lacked subject matter jurisdiction under

31 U.S.C. § 3730(e)(4) because the complaint was “based

upon [a] public disclosure,” but Relators were not an “original

source”; and (2) that Relators’ FCA and CFCA claims fail on

the merits because they are “based on an alleged Rule of Rea-

son antitrust violation, a subjective, fact-specific analysis that

cannot support False Claims Act liability.” Relators’ opposi-

tion to the motion for summary judgment contended that

Relators are an “original source” and that the motion should

be denied with respect to the second ground because Relators

had not been able to obtain discovery that might reveal perti-

nent facts.

The district court granted JCI’s motion on the ground that

there was no subject matter jurisdiction under 31 U.S.C.

§ 3730(e)(4). The court held that to qualify as an “original

source” under the FCA, a prospective relator must provide the

government with the pertinent information prior to the “public

3

Under 31 U.S.C. § 3730(b), an FCA qui tam complaint must be filed

under seal and served, initially, on the government only. 31 U.S.C.

§ 3730(b)(2). The qui tam complaint remains under seal for a period of

sixty days (or longer, if the government obtains an extension), during

which time the government must determine whether to intervene and pro-

ceed with the action. Id. § 3730(b)(2)-(4). If the government elects not to

proceed with the action, the person who initiated the action has the right

to conduct the action. Id. § 3730(c)(3). The CFCA includes similar

requirements. See CAL. GOV’T CODE § 12652(c)(2)-(8).

9136 UNITED STATES v. JOHNSON CONTROLS, INC.

disclosure” at issue if, but only if, the “public disclosure”

occurs through a private lawsuit brought by the prospective

relator. The district court’s order did not address JCI’s alter-

nate contention that Relators could not prove a substantive

violation of the FCA or the Relators’ assertion that decision

on that issue should be delayed to allow for development of

the record through discovery.

On appeal, Relators contend that the FCA and CFCA do

not require them to inform the government prior to public dis-

closure to qualify as “original sources.” JCI disagrees and also

argues, in the alternative, that we should affirm on the ground

that Relators have not stated a substantive FCA or CFCA vio-

lation.

II.

We review a district court’s grant of summary judgment de

novo. Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.

1995). We must “determine whether the evidence, viewed in

a light most favorable to the nonmoving party, presents any

genuine issues of material fact and whether the district court

correctly applied the law.” Id.

A.

1.

Section 3730(e)(4) of Title 31 of the United States Code

provides, in full:

(4)(A) No court shall have jurisdiction over an

action under this section based upon the public dis-

closure of allegations or transactions in a criminal,

civil, or administrative hearing, in a congressional,

administrative, or Government Accounting Office

report, hearing, audit, or investigation, or from the

news media, unless the action is brought by the

UNITED STATES v. JOHNSON CONTROLS, INC. 9137

Attorney General or the person bringing the action is

an original source of the information.

(B) For purposes of this paragraph, “original

source” means an individual who has direct and

independent knowledge of the information on which

the allegations are based and has voluntarily pro-

vided the information to the Government before fil-

ing an action under this section which is based on the

information.

31 U.S.C. § 3730(e)(4) (footnote omitted).

[1] The parties agree that the Yardley Companies’ civil

complaint in state court alleging, inter alia, antitrust violations

was a “public disclosure” of pertinent allegations or transac-

tions, see United States v. Alcan Elec. & Eng’g, Inc., 197 F.3d

1014, 1018-21 (9th Cir. 1999), and that Relators’ qui tam

action is “based upon” that public disclosure because it con-

tains the same factual allegations, see United States ex rel.

Biddle v. Bd. of Trs. of the Leland Stanford, Jr. Univ., 161

F.3d 533, 536-40 (9th Cir. 1998). The district court thus had

jurisdiction under § 3730(e)(4) only if Relators are an “origi-

nal source” within the meaning of the statute.

[2] As we noted in Wang v. FMC Corp., § 3730(e)(4)(B)

dictates that to be an “original source” a plaintiff must fulfill

several requirements: He must “show that he has ‘direct and

independent knowledge of the information on which his alle-

gation is based’ . . . and . . . that he ‘has voluntarily provided

the information to the Government before filing’ his qui tam

action.” 975 F.2d 1412, 1417 (9th Cir. 1992) (emphasis omit-

ted) (quoting 31 U.S.C. § 3730(e)(4)(B)). These requirements

flow directly from the text of the statute. Wang went on to

hold that to be an “original source,” a prospective relator must

satisfy an additional requirement under § 3730(e)(4)(A) that

is not in the statute in haec verba but that Wang held inherent

in it: He must have “had a hand in the public disclosure of

9138 UNITED STATES v. JOHNSON CONTROLS, INC.

allegations that are a part of [his] suit.” Id. at 1418. Thus,

post-Wang, we have summarized the requirements as follows:

To qualify as an original source, a relator must

show that he or she has direct and independent

knowledge of the information on which the allega-

tions are based, voluntarily provided the information

to the government before filing his or her qui tam

action, and had a hand in the public disclosure of

allegations that are a part of . . . [the] suit.

United States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d

1027, 1033 (9th Cir. 1998) (internal quotation marks omitted).

[3] JCI does not contend that Relators fail to satisfy any of

the preceding criteria, so, for purposes of this opinion, we

treat them as established.4 Instead, JCI’s jurisdictional argu-

ment is that Relators fail to satisfy what they argue is an addi-

tional criterion under § 3730(e)(4): that prospective relators

provide the requisite information directly to the government

prior to the public disclosure at issue. It is undisputed that

Relators provided the federal government with no information

prior to the filing of the civil complaint in state court, the pub-

lic disclosure in the present case. Rather, the first time Rela-

tors directly provided the federal government with

information was when they sent letters to government offi-

cials indicating their intent to file a qui tam action, an event

which occurred after they filed their civil complaint in state

court.

4

JCI’s motion for summary judgment stated that “[f]or purposes of this

motion, JCI will assume that Relators have ‘direct and independent knowl-

edge’ of the circumstances underlying the so-called bid-rigging scheme

that forms the basis of their FCA claim.” JCI’s brief to this court states

that JCI has “accepted [the] assertion [that Relators had direct and inde-

pendent knowledge] for the purposes of this analysis, but do not concede

that it is true.”

UNITED STATES v. JOHNSON CONTROLS, INC. 9139

[4] The only dispute regarding the FCA claim is thus over

a single question of law: Does the FCA require — all of the

time or, as the district court held, under some circumstances

— that prospective relators provide relevant information to

the government prior to the public disclosure at issue? The

Eighth Circuit has held that the FCA does not so require, and

the Sixth and D.C. Circuits have held that it does. See Minn.

Ass’n of Nurse Anesthetists v. Allina Health Sys. Corp., 276

F.3d 1032, 1050-51 (8th Cir. 2002); United States ex rel.

McKenzie v. BellSouth Telecomms., Inc., 123 F.3d 935, 941-

43 (6th Cir. 1997); United States ex rel. Findley v. FPC-

Boron Employees’ Club, 105 F.3d 675, 690-91 (D.C. Cir.

1997). No other circuit court has directly addressed the issue,

although the Tenth Circuit has commented on it in dicta. See

United States ex rel. King v. Hillcrest Health Ctr., Inc., 264

F.3d 1271, 1281 n.3 (10th Cir. 2001) (stating that “the appel-

lees ask the court to read § 3730(e)(4)(B) as requiring a rela-

tor to make the voluntary disclosure to the government not

just ‘before filing’ the qui tam action but before the public

disclosure,” noting that “[t]he Tenth Circuit has discussed the

voluntary disclosure element as something to be accom-

plished ‘prior to filing suit,’ ” and then not deciding the ques-

tion). In concert with the Eighth Circuit and in light of our

related FCA case law — which differs from that in the cir-

cuits that have answered the prior disclosure question differ-

ently — we hold that there is no such requirement.

2.

[5] In determining whether there is a pre-disclosure notice

requirement, we must interpret the FCA “to give effect to the

intent of Congress.” United States v. Am. Trucking Ass’ns,

310 U.S. 534, 542 (1940). The starting point for doing so is,

of course, the language of the statute itself. Consumer Prod.

Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108

(1980). “ ‘If a legislative purpose is expressed in plain and

unambiguous language, . . . the . . . duty of the courts is to

give it effect according to its terms. Exceptions to clearly

9140 UNITED STATES v. JOHNSON CONTROLS, INC.

delineated statutes will be implied only where essential to pre-

vent absurd results or consequences obviously at variance

with the policy of the enactment as a whole.’ ” United States

ex rel. Lujan v. Hughes Aircraft Co., 243 F.3d 1181, 1187

(9th Cir. 2001) (omission in original) (quoting United States

v. Rutherford, 442 U.S. 544, 551-52 (1979)).

[6] Here, the language is plain and unambiguous with

respect to whether it will bear JCI’s interpretation. See Allina,

276 F.3d at 1050 (“This additional requirement has no textual

basis in the statute.”). Subsection (B) of § 3730(e)(4) explic-

itly provides a time frame for when individuals wanting to

take advantage of the “original source” exception to the “pub-

lic disclosure” bar must “voluntarily provide[ ] information to

the government,” stating in no uncertain terms that they must

do so “before filing an action under this section.”

§ 3730(e)(4)(B) (emphasis added). Because subsection (B)

expressly states a timing requirement different from the one

JCI proposes, that subsection is not susceptible to JCI’s inter-

pretation. Quite to the contrary, the language of subsection

(B) is not compatible with any requirement that the informa-

tion disclosure occur before some event other than the one

stated, the time of “filing an action.”

[7] Subsection (A) § 3730(e)(4) also cannot withstand JCI’s

interpretation. That subsection states that public disclosure is

not a jurisdictional bar if “the person bringing the action is an

original source of the information.” § 3730(e)(4)(A). This lan-

guage is ambiguous with respect to the question of whether

the prospective relator must be a source for the government

or for the entity responsible for the public disclosure, an

ambiguity resolved by Wang in favor of the latter interpreta-

tion. See Wang, 975 F.2d at 1418. This language is not ambig-

uous, however, with respect to the question whether the

statute requires that the government be notified prior to public

disclosure. In light of Wang, subsection (A) states an excep-

tion to the public disclosure bar if the person who brings the

action is an original source for the public disclosure, a con-

UNITED STATES v. JOHNSON CONTROLS, INC. 9141

cept then defined, in part, in subsection (B) by the require-

ment that information be provided to the government before

suit is filed, not before the public disclosure that triggered the

need for an exception in the first place.

In Findley, the D.C. Circuit noted that “the government

notice part of the ‘original source’ exception may appear

extraneous in light of the statute’s filing provisions, which

require cases to be filed under seal for a period of at least

sixty days and served only on the government.” 105 F.3d at

690 (referring to provisions in § 3730(e)(4)(B) and

3730(b)(2), respectively). The court went on to observe that

the government notification provision in § 3730(e)(4)(B) is

not superfluous if it is interpreted to require notice to the gov-

ernment prior to any public disclosure. See id. at 690-91. On

the basis of that and other considerations — but with no basis

in the language of the pertinent sections — the court held that

§ 3730(e)(4) requires that an individual notify the government

prior to any public disclosure to qualify as an original source.

Id.

We are far from sure that even the redundancy Findley sup-

poses would justify inserting an additional requirement at

odds with the plain language of § 3730(e)(4)(B). See Morton

v. United Parcel Serv., Inc., 272 F.3d 1249, 1257 n.8 (9th Cir.

2001) (concluding that, “[d]espite the general principle

against construing a statute so as to contain redundancies,”

two statutory provisions in the Americans with Disabilities

Act were “intended to encompass the same basic require-

ments”).

In any event, we disagree with Findley’s predicate assump-

tion that the government notice provision in § 3730(e)(4)(B)

is redundant with the filing and notice provisions in

§ 3730(b). The statutory provisions are different in a number

of respects, indicating that they serve different functions. Sec-

tion 3730(e)(4)(B)’s notice provisions apply only to qui tam

plaintiffs seeking to avoid the “public disclosure” bar by

9142 UNITED STATES v. JOHNSON CONTROLS, INC.

establishing that they are “original sources,” whereas

§ 3730(b)’s notice provisions apply to all qui tam plaintiffs.

Moreover, the provisions differ with respect to what must be

turned over to the government: Section 3730(e)(4)(B) requires

individuals to provide the government with “information”

only, while § 3730(b) requires individuals to provide the gov-

ernment with much more — “[a] copy of the complaint and

written disclosure of substantially all material evidence and

information the person possesses.” § 3730(b)(2). At the same

time, the provisions vary in that § 3730(e)(4)(B) incorporates

a requirement that information be provided to the government

“voluntarily,” a requirement wholly absent from § 3730(b).

See United States ex rel. Fine v. Chevron, U.S.A., Inc., 72

F.3d 740, 744 (9th Cir. 1995) (en banc) (holding that disclo-

sures of a government auditor who “was employed specifi-

cally to disclose fraud” were “nonvoluntary” and that the

auditor was thus not an “original source”). Finally, submis-

sions to the government at the same time the lawsuit is filed

under seal under § 3730(b) protect the relator’s right to a

bounty, see 31 U.S.C. § 3730(d), while there is no such

explicit protection in the statute for pre-filing submissions

under § 3730(e)(4)(B).

We therefore do not find the D.C. Circuit’s redundancy

point helpful in construing § 3730(e)(4)(B). The statutory lan-

guage is simply not ambiguous with respect to JCI’s proposed

requirement.

Even if we were to conclude otherwise and “look not only

to the particular statutory language, but to the design of the

statute as a whole and to its object and policy,” Crandon v.

United States, 494 U.S. 152, 158 (1990), JCI’s reading could

not be sustained. The proposed requirement does not advance

the object and policy of the statute as a whole, or of the public

disclosure provision in particular.

The purposes of the FCA as reflected in the Act’s history

UNITED STATES v. JOHNSON CONTROLS, INC. 9143

have been well documented elsewhere.5 See, e.g., Allina, 276

F.3d at 1041-42; McKenzie, 123 F.3d at 938; Findley, 105

F.3d at 679-81; Wang, 975 F.2d at 1418-19. Suffice it to say

that, in enacting the current version of the qui tam provisions

in 1986, Congress attempted to strike a delicate balance

between several competing objectives. First and foremost,

Congress meant “to encourage private individuals who are

aware of fraud being perpetrated against the Government to

bring such information forward.” H.R. Rep. No. 99-660, at 23

(1986). At the same time, Congress sought to discourage

“parasitic” suits brought by individuals with no information of

5

We summarize the key points in the history of the FCA: The original

FCA was enacted in 1863, Act of March 2, 1863, ch. 67, § 4, 12 Stat. 696,

698 (current version at 31 U.S.C. §§ 3729-3733), to combat fraud by Civil

War defense contractors. S. REP. NO. 99-345, at 8 (1986), as reprinted in

1986 U.S.C.C.A.N. 5266, 5273. The Act contained a qui tam provision

allowing any person to sue as a relator representing the government’s

interests. Id. at 10. In United States ex rel. Marcus v. Hess, the Supreme

Court held that even individuals who had done nothing more than copy

allegations from a criminal indictment could be qui tam relators. 317 U.S.

537, 545-46 (1943).

In response to Hess, Congress amended the Act in 1943, removing

jurisdiction over qui tam actions “whenever it shall be made to appear that

such suit was based upon evidence or information in the possession of the

United States, or any agency, officer or employee thereof, at the time such

suit was brought.” 31 U.S.C. § 232(C) (1946) (amended 1986). This provi-

sion was meant to “curtail parasitical suits in which the informer ‘rendered

no service’ to the government.” Allina, 276 F.3d at 1041 (quoting 89

CONG. REC. 10844, 10846 (1943)). Courts interpreted this jurisdictional

bar restrictively. For example, in 1984, the Seventh Circuit held that a

state that had disclosed Medicaid fraud to the government, as it was

required to do by statute, was jurisdictionally barred from being a qui tam

relator. See United States ex rel. Wisconsin v. Dean, 729 F.2d 1100, 1103-

07 (7th Cir. 1984).

In 1986, Congress again amended the False Claims Act, in part to “cor-

rect[ ] restrictive [court] interpretations” that “tend to thwart the effective-

ness of the statute,” S. REP. NO. 99-345, at 4, and to “encourage more

private enforcement suits,” id. at 23-24. The 1986 amendments included

the public disclosure and original source provisions that now appear at 31

U.S.C. § 3730(e)(4).

9144 UNITED STATES v. JOHNSON CONTROLS, INC.

their own to contribute to the suit. See Seal 1 v. Seal A, 255

F.3d 1154, 1158 (9th Cir. 2001). Congress also meant to add

to the corps of enforcers of the law — “to encourage more

private enforcement suits,” S. REP. NO. 99-345, at 23-24

(1986), as reprinted in 1986 U.S.C.C.A.N. 5266, 5288-89 —

while “ensuring that the United States’ rights are not preju-

diced by the relator’s conducting of the action,” United States

ex rel. Green v. Northrop Corp., 59 F.3d 953, 964 (9th Cir.

1995). JCI’s proposed requirement does not further these

carefully balanced congressional goals.

As to the first goal, encouraging citizens to come forward

with information concerning fraud on the federal government,

the Sixth Circuit contends that JCI’s proposed rule, requiring

notification to the government prior to any public disclosure

to qualify as an original source, “is most likely to bring

‘wrongdoing to light,’ ” because the proposed rule “discour-

ages persons with relevant information from remaining silent

and encourages them to report such information at the earliest

possible time.” McKenzie, 123 F.3d at 943 (internal quotation

marks omitted). This rationale is not persuasive in our circuit,

given our rulings.

Biddle held that a qui tam action is “based upon” a public

disclosure within the meaning of the statute if the allegations

or transactions of the complaint have been publicly disclosed

and the qui tam action follows, even if the qui tam action alle-

gations were not “derived from” the public disclosure. 161

F.3d at 540. Thus, under Biddle, an individual with informa-

tion about fraud against the government will be barred from

bringing suit if there has been a public disclosure of the alle-

gations or transactions in her complaint unless she is an “orig-

inal source,” even if she found out about the allegations in her

complaint not from the public disclosure but from another

source (such as an informant). Such an individual therefore

has the incentive to either (1) file a qui tam complaint before

the pertinent information is publicly disclosed, or (2) ensure

that she qualifies as an “original source.” Because Wang, in

UNITED STATES v. JOHNSON CONTROLS, INC. 9145

turn, holds that one must have had a hand in the public disclo-

sure to qualify as an “original source,” an individual with per-

tinent information can ensure she qualifies as an “original

source” under the statute only by playing a role in the public

disclosure at issue. Thus, Wang and Biddle operate together

to assure that individuals who have direct information about

fraud against the government have a strong incentive to come

forward with that information early, either by (1) filing a qui

tam complaint, or (2) playing a role in publicly disclosing the

information so as to ensure they are “original sources.” Either

way, Wang and Biddle provide potential relators with an

incentive to come forward with information rather than keep-

ing it secret until the last possible minute. JCI’s proposed

requirement does not create an incentive for individuals to

come forward with information earlier than do the Wang and

Biddle rules, taken together. That requirement therefore does

not serve the first goal of the statute.

As to the second goal, discouraging parasitic lawsuits, the

Sixth Circuit maintains that the requirement that the prospec-

tive relator report information to the government prior to the

public disclosure effectuates Congress’s goal of protecting

only the “true whistleblower,” not individuals bringing “para-

sitic qui tam actions.” McKenzie, 123 F.3d at 943 (internal

quotation marks omitted). It is true that in the Sixth and D.C.

Circuits, given those circuits’ surrounding law, the proposed

requirement may help to some degree to serve this goal.

Those circuits permit relators to be “original sources” even if

they had nothing to do with the public disclosures. See id. at

943; Findley, 105 F.3d at 690. On this view of the connection

between an original source and the public disclosure, a

“source” that provides information to the government pri-

vately only after there has been public disclosure by someone

else has performed little useful information-providing func-

tion, because the government could get the same information

from the public source. In contrast, we (along with the Second

Circuit, see United States ex rel. Dick v. Long Island Lighting

Co., 912 F.2d 13, 16 (2d Cir. 1990)), have interpreted the stat-

9146 UNITED STATES v. JOHNSON CONTROLS, INC.

ute to require that prospective relators play a role in the public

disclosure at issue if they are to partake of the original source

exception. Wang, 975 F.2d at 1418. Under our interpretation

of that exception, then, relators must provide a useful

information-providing role or they cannot file suit. JCI’s pro-

posed requirement therefore does nothing to further the pur-

pose of weeding out parasitic lawsuits, as Wang already

accomplishes that goal.

Finally, JCI’s proposed requirement also does not further

the third goal of the statute, encouraging more private

enforcement suits while ensuring that the government’s rights

are not prejudiced by the manner in which relators conduct

those suits. The proposed requirement discourages qui tam

suits, as it establishes yet another roadblock to obtaining juris-

diction for such suits. At the same time, it provides no protec-

tion of the government’s rights concerning qui tam suits not

already provided by (1) § 3730(e)(4)(B), which requires that

an individual provide information to the government prior to

filing a qui tam complaint to qualify as an “original source,”

and (2) § 3730(b), which provides that qui tam complaints

must be filed under seal and served solely on the government

so as to provide the government with an opportunity to deter-

mine whether to intervene and proceed with the action before

the defendant learns of the action, see § 3730(b)(2). In partic-

ular, the proposed requirement would not ensure against “tip

offs” by prospective qui tam plaintiffs to the targets of ongo-

ing government investigations. Cf. S. REP. NO. 99-345, at 24

(noting that § 3730(b) is motivated, in part, by a concern that

the filing of a qui tam action could “tip off” targets of ongoing

government criminal investigations). The proposed require-

ment provides no mechanism for requiring or inducing pro-

spective relators not to publicly disclose pertinent information

once they have provided information to the government, and

so does not preclude tip-offs to prospective defendants.

In short, given existing case law in our circuit, JCI’s pro-

posed requirement does nothing to further the purposes of the

UNITED STATES v. JOHNSON CONTROLS, INC. 9147

FCA. Instead, the requirement is contrary to those purposes,

as it precludes qui tam actions that are not parasitic in nature.

3.

The district court in this case attempted to respond to some

of these problems with the position advocated by JCI by

adopting a more limited approach. The district court held that

prospective relators must inform the government prior to pub-

lic disclosure if, but only if, the public disclosure is in the

form of a lawsuit filed by the prospective relators. This lim-

ited version of JCI’s proposed requirement exacerbates rather

than cures the problems with a non-literal interpretation of the

statute.

The district court maintained, first, that without such a

requirement, a prospective whistleblower could use the threat

of a qui tam action as leverage in private settlement negotia-

tions of a private lawsuit filed prior to giving information to

the federal government. The district court reasoned that if pro-

spective defendants were able to “buy” from prospective rela-

tors a promise not to bring a qui tam action, the government

would never learn about the fraud and thus may never recover

its losses. For other kinds of public disclosures — releases to

the media, for example — this consideration, suggested the

district court, does not obtain, so for those circumstances the

literal interpretation adopted by the Eighth Circuit is proper.

This reasoning in support of a special rule that applies only

when the “public disclosure” at issue occurs through the filing

of a lawsuit is flawed for several reasons. First and most

important, a special rule for disclosure through lawsuits has

absolutely no basis in the statutory language or structure. The

statute treats all forms of public disclosure equally. The spe-

cial problems the district court perceived with lawsuits as

opposed to other forms of public disclosure are related not to

the “disclosure” aspect of lawsuits — that a complaint is a

public document — but to their ultimate dispute-resolution

9148 UNITED STATES v. JOHNSON CONTROLS, INC.

function, a function that could be pursued through private

mediation or arbitration not giving rise to any public disclo-

sure.

Second, one of the premises underlying the district court’s

reasoning — that a prefiling agreement by a prospective rela-

tor not to bring a qui tam action, entered into without the gov-

ernment’s knowledge or consent, is enforceable — is false.

We so held in Green. See 59 F.3d at 969; see also United

States ex rel. Hall v. Teledyne Wah Chang Albany, 104 F.3d

230, 233 (9th Cir. 1997) (distinguishing Green and enforcing

such an agreement in a case in which the government was

aware of and had investigated the relevant allegations). Thus,

the district court’s approach does little to further the goal of

ensuring that prefiling releases do not squelch the flow of

information about fraud to the government, as Green and Hall

already serve this goal.

Third, the district court’s requirement does little to cure the

problem at which it is directed. Prospective relators could still

issue demand letters and settle prospective suits before filing

the suit that would constitute a public disclosure. Here, for

example, there is no reason Zaretsky or Yardley could not

have written to Johnson Controls threatening to bring the

original antitrust suit and pointing out that the suit, if filed,

could result in governmental knowledge and involvement. If

settlement ensued, the result would be greater secrecy, not

less, as the information underlying the suit would never have

seen the light of day. In contrast, once a predicate suit is filed,

the government could learn of the information on which it is

based — which is why it is considered a public disclosure.

[8] In sum, we agree with the Eighth Circuit’s conclusion

that it “would change the balance Congress struck if we were

to further restrict the class of those whose discoveries had

been made public but who were nevertheless permitted to pro-

ceed as relators.” Allina, 276 F.3d at 1051. We therefore hold

that the FCA does not require individuals to inform the gov-

UNITED STATES v. JOHNSON CONTROLS, INC. 9149

ernment prior to the public disclosure at issue to qualify as

“original sources.” We accordingly reverse the district court’s

grant of summary judgment to JCI on the FCA claim.

B.

[9] The California False Claims Act has a jurisdictional

public disclosure bar almost identical to the federal one,

except that it makes explicit the rule adopted by our circuit in

Wang.6 It states, in full:

(3)(A) No court shall have jurisdiction over an

action under this article based upon the public dis-

closure of allegations or transactions in a criminal,

civil, or administrative hearing, in an investigation,

report, hearing, or audit conducted by or at the

request of the Senate, Assembly, auditor, or govern-

ing body of a political subdivision, or by the news

media, unless the action is brought by the Attorney

General or the prosecuting authority of a political

subdivision, or the person bringing the action is an

original source of the information.

(B) For purposes of subparagraph (A), “original

source” means an individual who has direct and

independent knowledge of the information on which

the allegations are based, who voluntarily provided

the information to the state or political subdivision

before filing an action based on that information, and

whose information provided the basis or catalyst for

the investigation, hearing, audit, or report that led to

the public disclosure as described in subparagraph

(A).

6

The California adoption of the rule that the original source must be the

source of any public disclosure pre-dated Wang, as California adopted its

version of that rule in 1987. See Act of Sept. 30, 1987, ch. 1420, § 1, 1987

Cal. Stat. 5237, 5242 (codified at CAL. GOV’T CODE § 12652(d)(3)(B)).

9150 UNITED STATES v. JOHNSON CONTROLS, INC.

CAL. GOV’T CODE § 12652(d)(3).

JCI’s argument concerning why there is no jurisdiction

under the CFCA is identical to its parallel argument under the

FCA — that the CFCA requires that a prospective relator

inform relevant governmental authorities prior to public dis-

closure to qualify as an “original source.” Only one published

California case has had occasion to interpret the “public dis-

closure” bar of the CFCA,7 City of Hawthorne ex rel. Wohlner

v. H&C Disposal Co., 109 Cal. App. 4th 1668, 1676-86 (Ct.

App. 2003), while two California cases have interpreted a

similar “public disclosure” bar under section 1871.7(h)(2) of

the California Insurance Code,8 see People ex rel. Monterey

Mushrooms, Inc. v. Thompson, 136 Cal. App. 4th 24, 32-34

(Ct. App. 2006); People ex rel. Allstate Ins. Co. v. Weitzman,

107 Cal. App. 4th 534, 545-66 (Ct. App. 2003). None of these

cases addressed whether an individual must inform the gov-

ernment prior to “public disclosure” to qualify as an “original

source.”

7

A case currently pending before the California Supreme Court involves

the public disclosure bar but not the original source provision. See State

ex rel. Harris v. PricewaterhouseCoopers LLP, 23 Cal. Rptr. 3d 529, 547-

49 (Ct. App. 2005), review granted, 28 Cal. Rptr. 3d 646 (2005); see also

Cal. R. Ct. 976(d) (stating that unless otherwise ordered, lower court opin-

ions are depublished when the California Supreme Court grants review).

8

California Insurance Code section 1871.7(h)(2) provides:

(A) No court shall have jurisdiction over an action under this

section based upon the public disclosure of allegations or transac-

tions in a criminal, civil, or administrative hearing in a legislative

or administrative report, hearing, audit, or investigation, or from

the news media, unless the action is brought by the Attorney

General or the person bringing the action is an original source of

the information.

(B) For purposes of this paragraph, “original source” means

an individual who has direct and independent knowledge of the

information on which the allegations are based and has voluntar-

ily provided the information to the district attorney or commis-

sioner before filing an action under this section which is based on

the information.

UNITED STATES v. JOHNSON CONTROLS, INC. 9151

Where the wording and objectives of a California statute

are similar to the wording and objectives of a federal statute,

California courts look to interpretations of the federal statute

for guidance in interpreting the state statute. See Richards v.

CH2M Hill, Inc., 26 Cal. 4th 798, 812 (2001); Allstate, 107

Cal. App. 4th at 563 (applying this principle to California

Insurance Code section 1871.7(h)(2) and 31 U.S.C.

§ 3730(e)(4)). Applying this precept, California courts inter-

preting the CFCA generally rely on FCA cases. See City of

Pomona v. Superior Court, 89 Cal. App. 4th 793, 802 (Ct.

App. 2001) (“Given the lack of California authority and the

very close similarity of [the CFCA] to [the FCA], it is appro-

priate to turn to federal cases for guidance in interpreting the

act.”); Wohlner, 109 Cal. App. 4th at 1677-86 (looking to fed-

eral cases in interpreting the CFCA, including the public dis-

closure provisions). Where, however, “there are varying

circuit approaches to a federal statute,” California courts need

not follow any one of those circuit approaches and instead

may take a “flexible” approach to interpreting a statute, taking

into consideration a number of other factors. Allstate, 107 Cal.

App. 4th at 563.

Here, the relevant language in the CFCA and the FCA —

as interpreted by us in Wang and the Second Circuit in Dick

— is materially identical. All requirements in § 3730(e)(4) of

the FCA are also in section 12652(d)(3) of the CFCA, and the

only requirement in the CFCA not explicit in the text of the

FCA — the requirement that for an individual to qualify as an

“original source,” that individual’s “information [must have]

provided the basis or catalyst for the investigation, hearing,

audit, or report that led to the public disclosure as described

in subparagraph (A),” CAL. GOV’T CODE § 12652(d)(3)(B) —

has been held implicit in the FCA by our circuit and the Sec-

ond Circuit, see Wang, 975 F.2d at 1418; Dick, 912 F.2d at

16. Also, the purposes of the California and federal statutes —

and, in particular, the purposes of the public disclosure bar

provisions of those statutes — are similar. See Wohlner, 109

Cal. App. 4th at 1676 (“California’s False Claims Act was

9152 UNITED STATES v. JOHNSON CONTROLS, INC.

enacted in 1987 and is patterned largely on similar federal

legislation. (31 U.S.C. § 3729 et seq.).”); id. at 1683 (“The

public disclosure jurisdictional bar [in the CFCA] . . . is

designed to bar parasitic or opportunistic qui tam actions by

persons simply taking advantage of public information with-

out contributing to or assisting in the exposure of the fraud.”);

Allstate, 107 Cal. App. 4th at 566 (“Like the federal False

Claims Act, the [CFCA] was intended to limit the availability

of qui tam actions so as to protect against ‘opportunistic’ or

‘parasitic’ actions.”).

Because of the similarity between the relevant wording and

purposes of the CFCA and the FCA, as interpreted by our cir-

cuit and the Second Circuit, California courts would look to

pertinent federal precedent in the Second and Ninth Circuits

in interpreting the CFCA. Although there is a circuit split on

whether the federal statute requires that individuals inform the

government prior to making the “public disclosure” at issue,

there is not a circuit split on whether the federal statute so

requires in those circuits that recognize under the FCA the

requirement that the CFCA explicitly states — that individu-

als play a role in the “public disclosure” at issue to qualify as

“original sources.” The question whether these statutes

require notification to the government prior to public disclo-

sure is, as established earlier, closely linked to the question

whether these statutes require that individuals have a hand in

the public disclosure. Because the CFCA incorporates the lat-

ter requirement, we expect that California courts would look

to federal precedent from only those circuits recognizing that

requirement in determining whether the former requirement

obtains under the CFCA.

[10] In any case, the same reasons we cited to justify our

holding that the federal statute does not incorporate JCI’s pro-

posed requirement apply with at least equal force to the Cali-

fornia statute. Indeed, there are two respects in which the

reasons we cited earlier apply with greater cogency in the

context of interpreting the CFCA. First, the fact that all

UNITED STATES v. JOHNSON CONTROLS, INC. 9153

requirements under the CFCA heretofore recognized, includ-

ing the requirement that individuals must have had a hand in

the “public disclosure” at issue to qualify as “original

sources,” are explicit in the CFCA suggests that we should be

especially loath to read into the CFCA implicit requirements.

Second, California courts have stated that “the public disclo-

sure bar should be applied only as necessary to preclude para-

sitic or opportunistic actions, but not so broadly as to

undermine the Legislature’s intent that relators assist in the

prevention, identification, investigation, and prosecution of

false claims.” Wohlner, 109 Cal. App. 4th at 1683. Reading

JCI’s proposed requirement into the CFCA is not “necessary

to preclude parasitic or opportunistic actions,” suggesting that

California courts would not recognize such a requirement.

[11] For all of the foregoing reasons, we hold that there is

no requirement under the CFCA that individuals inform the

government prior to the “public disclosure” at issue to qualify

as “original sources.” We therefore reverse the district court’s

contrary holding.9

C.

JCI points out that, even though the district court’s grant of

summary judgment relied only on jurisdictional grounds, we

may affirm the district court’s grant of summary judgment on

any ground supported in the record. See Summers v. Teichert

& Son, Inc., 127 F.3d 1150, 1152 (9th Cir. 1997). JCI con-

tends that “[a] separate basis for affirming the district court’s

decision lies in the fact that Relators’ substantive allegations

cannot support a claim under the FCA” because they are

“based on an alleged Rule of Reason antitrust violation, a sub-

9

Because of our holding, we do not reach Relators’ argument that even

if the California statute encompasses JCI’s proposed requirement, they sat-

isfied that requirement by informing officials at the University of Califor-

nia, Riverside about Johnson Controls’ “bid rigging” prior to filing the

civil complaint in state court.

9154 UNITED STATES v. JOHNSON CONTROLS, INC.

jective, fact specific analysis that cannot support False Claims

Act liability.”

We decline JCI’s invitation to affirm on this alternate

ground. We have noted that while “we may affirm the district

court’s judgment on a different ground, we need not do so,”

and “we usually do not.” Broudo v. Dura Pharms., Inc., 339

F.3d 933, 941 (9th Cir. 2003) (emphasis added), rev’d on

other grounds, 544 U.S. 336 (2005).

The question of whether, and if so when, bid rigging

amounts to an FCA violation is complex, nuanced, and fact-

dependent. See Harrison v. Westinghouse Savannah River

Co., 176 F.3d 776, 787 & n.11, 788 (4th Cir. 1999) (observing

that FCA cases involving collusive bidding can be brought

under “false certification” or “fraud-in-the-inducement” theo-

ries and making clear through its description of these theories

that such claims are complex and fact-dependent). Here, the

summary judgment motion was brought well before the

scheduled close of discovery dates. The parties dispute

whether additional discovery is needed before the court can

rule on the summary judgment motion. Because of its holding

on the original source question, the district court has not had

an opportunity to rule on the discovery question.

[12] District courts have wide latitude in controlling dis-

covery, and decisions not to permit further discovery in

response to motions made pursuant to Federal Rule of Civil

Procedure 56(f)10 are reviewed for abuse of discretion. United

10

Federal Rule of Civil Procedure 56(f) provides:

Should it appear from the affidavits of a party opposing the

motion [for summary judgment] that the party cannot for reasons

stated present by affidavit facts essential to justify the party’s

opposition, the court may refuse the application for judgment or

may order a continuance to permit affidavits to be obtained or

depositions to be taken or discovery to be had or may make such

other order as is just.

UNITED STATES v. JOHNSON CONTROLS, INC. 9155

States ex rel. Aflatooni v. Kitsap Physicians Serv., 314 F.3d

995, 1000 (9th Cir. 2002). Because Relators’ FCA claims are

complex and fact-dependent and because the district court has

not ruled on Relators’ request for additional discovery and has

broad discretion to decide that issue, we decline to affirm the

district court’s decision on this alternate ground on the current

record.

[13] We therefore reverse the district court’s grant of sum-

mary judgment for JCI on both the FCA and CFCA claims

and remand for proceedings consistent with this opinion.

REVERSED and REMANDED.