Petition for Writ of Certiorari — United States, ex rel. Leatra Harper, et al., Petitioners v. Muskingum Watershed Conservancy District

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APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 17-4098

D.C. Docket No. 5:15-cv-1608

UNITED STATES OF AMERICA

EX REL. LEATRA HARPER,

AND STEVEN JANSTO

Relators-Appellants,

v.

MUSKINGUM WATERSHED

CONSERVANCY DISTRICT,

Defendant-Appellee.

/

Appeal from the United States District Court

for the Northern District of Ohio at Akron

No. 5:15-cv-1608—Sara E. Lioi, District Judge.

Decided and Filed: June 26, 2018

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Before: COOK and DONALD, Circuit Judges

and HALE, District Judge.

_________________

COUNSEL

ON BRIEF: Thomas W. Connors, BLACK,

MCCUSKEY, SOUERS & ARBAUGH, Canton,

Ohio, Warner Mendenhall, Akron, Ohio, for

Plaintiffs-Appellants. Jennifer Dowdell Armstrong,

MCDONALD HOPKINS, Cleveland, Ohio, for

Defendant-Appellee.

HALE, J., delivered the opinion of the court

in which COOK, J., and DONALD, J. joined.

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OPINION AND JUDGMENT

HALE, District Judge.

*1 This is the second appeal involving a False

Claims Act challenge by relators Leatra Harper

and Steven Jansto to oil and gas leases entered into

by Muskingum Watershed Conservancy District. In

the first, United States ex rel. Harper v.

Muskingum Watershed Conservancy District

(Harper I ), 842 F.3d 430 (6th Cir. 2016), this court

found that the relators failed to state a claim under

the FCA’s conversion and reverse-false-claim

provisions because their complaint did not

adequately allege that the District knew it had

violated an obligation to the United States.

Although the alleged obligation at issue here differs

from that in Harper I, the complaint is similarly

deficient. Moreover, the relators gave no indication

that their complaint could be amended to satisfy

federal pleading standards. We therefore AFFIRM

the district court’s dismissal of the case with

prejudice.

I.

The following facts are set forth in the complaint

and accepted as true for purposes of our review. See

United States ex rel. Ibanez v. Bristol-Myers Squibb

Co., 874 F.3d 905, 914 (6th Cir. 2017) (citing United

States ex rel. SNAPP, Inc. v. Ford Motor Co., 532

F.3d 496, 502 (6th Cir. 2008) ). The Muskingum

Watershed Conservancy District (MWCD) was

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created in 1933 for flood-control and waterconservation purposes. The following year, MWCD

entered an agreement with the United States to

construct dams and reservoirs within the district;

that project (the “MWCD Project”) was later

declared a flood-control project pursuant to the

Flood Control Act of 1939. Under the Act, the

Secretary of the Army was to pay MWCD

$1,500,000 in exchange for title to MWCD Project

“lands, easements, rights-of-way, and other

property,” and the Department of the Army paid

that amount, less $100,000 in expenses, in August

1939. In November of that year, MWCD requested

that the Governor of Ohio seek the state attorney

general’s opinion as to MWCD’s authority to

transfer the property. The Ohio Attorney General

concluded that MWCD lacked authority to transfer

property interests that were necessary to perform

its charter purposes. The Army accepted flowage

easements on Project lands in May 1940, but

MWCD transferred no other property interests to

the United States.

From 2011 to 2014, MWCD entered several leases

allowing various companies to extract oil, gas, and

other minerals from Project lands via hydraulic

fracturing, or “fracking.” Beginning in 2012,

MWCD also sold water from reservoirs on Project

lands. It has received and retained millions of

dollars as a result of the leases and water sales.

In Harper I, the relators alleged that MWCD was

obligated to return certain property deeded to it by

the United States in 1949. The deed “provided that

if MWCD ‘shall cease using said lands’ for

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recreation,

conservation,

and

reservoir

development, or if MWCD ‘alienate[s] or attempt[s]

to alienate any part or parts thereof, the title to

said lands shall revert to and revest in the United

States.’ ” 842 F.3d at 434 (alterations in original).

According to the relators, the fracking leases either

“represented an ‘attempt to alienate’ the land that

triggered the reverter clause in the deed” or

signaled “that the land was no longer being used

for ‘recreation, conservation, and reservoir

development’ as the deed required.” Id. Thus, the

relators argued, “MWCD was improperly in

possession of United States property.” Id. They

sued, invoking the reverse-false-claim and

conversion provisions of the FCA. Id. The United

States declined to intervene. Id.

*2 The district court concluded that the Harper I

claims were barred by the FCA’s public disclosure

provision, which requires dismissal

if substantially the same allegations or

transactions as alleged in the action or claim were

publicly disclosed—

(i) in a Federal criminal, civil, or administrative

hearing in which the Government or its agent is a

party;

(ii) in a congressional, Government Accountability

Office, or other Federal report, hearing, audit, or

investigation; or

(iii) 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.

31 U.S.C. § 3730(e)(4)(A); see Harper I, 842 F.3d at

434. In the alternative, the district court found that

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the complaint failed to state a claim because it did

not allege fraud with particularity as required by

Federal Rule of Civil Procedure 9(b). Harper I, 842

F.3d at 434. This court affirmed on the ground that

the relators had failed to adequately allege the

requisite knowledge “even under the more liberal

pleading standard set forth in” Rule 8. Id. at 436.

While Harper I was pending, the relators filed the

instant action, alleging that MWCD violated

statutory and contractual obligations by failing to

transfer property interests to the United States

after determining that those interests were no

longer necessary to perform its charter purposes.

As in Harper I, they brought suit under the FCA’s

reverse-false-claim and conversion provisions. The

government again declined to intervene. MWCD

moved to dismiss for failure to state a claim, and

the district court granted the motion, concluding

that the claims asserted here were barred under

the doctrine of claim preclusion because they

should have been brought in Harper I.1 The relators

appeal that decision.

II.

As before, we review the dismissal under Rule

12(b)(6) de novo, and we “may affirm on any

grounds supported by the record, even those not

relied on by the district court.” Harper I, 842 F.3d

at 435 (citations omitted). To survive a motion to

dismiss under Rule 12(b)(6), “a plaintiff’s complaint

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must allege facts that ‘state a claim to relief that is

plausible on its face and that, if accepted as true,

are sufficient to raise a right to relief above the

speculative level.’ ” Id. at 435 (quoting Wesley v.

Campbell, 779 F.3d 421, 427 (6th Cir. 2015) ).

A.

The reverse-false-claim provision of the FCA

subjects to liability any person who “knowingly

conceals or knowingly and improperly avoids or

decreases an obligation to pay or transmit money or

property to the Government.” 31 U.S.C. §

3729(a)(1)(G). This court explained in Harper I that

“the term ‘knowingly,’ ” as used in § 3729(a)(1)(G),

“must be interpreted to refer to a defendant’s

awareness of both an obligation to the United

States and his violation of that obligation.” 842

F.3d at 436. There, because “neither the relators’

complaint nor their proposed amended complaint

include[d] facts that show[ed] how MWCD would

have known that the fracking leases violated the

deed restrictions or how MWCD ‘act[ed] in

deliberate ignorance’ or in ‘reckless disregard’ of

that fact,” the relators “failed to show anything

more than a possibility that MWCD acted

unlawfully,” and the complaints thus fell short of

federal pleading standards.2 Id. at 438 (last

alteration in original) (quoting 31 U.S.C. §

3729(b)(1)(A) ). In this case, the relators have again

failed to adequately plead awareness by MWCD

that the leases violated an obligation to the United

States.

*3 The relators’ amended complaint alleges that

“[a]s shown by MWCD’s [1939] board minutes,

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MWCD was on notice of its statutory and

contractual obligations to transfer the MWCD

Project lands to the United States”; that there “was

no limitation on MWCD’s authority to fulfill its

obligation to transfer” the property interests

covered by the oil and gas leases to the United

States because MWCD had determined that those

interests “were no longer necessary for the

performance of its charter purposes”; and that

“[d]espite being on notice of the issues related to its

statutory and contractual obligations as shown by

MWCD’s board minutes, and being legally

obligated to address them, MWCD did nothing

about its obligations.” Viewed in the light most

favorable to the relators, these allegations “could

create the inference that MWCD knew about the

[obligation to transfer] when it signed the leases,

and such an inference would be consistent with the

theoretical possibility that MWCD in fact believed

that the [obligation] forbade it from executing the

oil and gas leases.” Harper I, 842 F.3d at 438. But a

complaint that shows no more than “the mere

possibility of misconduct” on MWCD’s part is

insufficient. Id. at 438 (quoting Ashcroft v. Iqbal,

556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868

(2009) ). Again, “unless the circumstances of a case

show that a defendant knows of, or ‘acts in

deliberate ignorance’ or ‘reckless disregard’ of, the

fact that he is involved in conduct that violates a

legal obligation to the United States, the defendant

cannot be held liable under the FCA.” Id. at 437

(quoting 31 U.S.C. § 3729(b) ). The fact that MWCD

was aware of an obligation in 1939 could mean that

it believed more than seventy years later that the

oil and gas leases violated that obligation, but as

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pleaded, the amended complaint fails to “nudge[ ]

[the relators’] claims across the line from

conceivable to plausible.” Bell. Atl. Corp. v.

Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167

L.Ed.2d 929 (2007).

The relators insist that they “have plausibly pled

actual knowledge or reckless disregard of the

obligation and its avoidance.” Specifically, they

assert that they “pled facts creating the inference

that MWCD knew of the 1939 obligation provisions

at the time of the leases”; that Ohio law “supports

an inference of the accrual of the obligation at the

time of the leases”; and that “other facts pled

support the inference that MWCD failed to fulfill

and therefore avoided the obligation.” This

argument misses the point made clear in Harper I:

it is not enough that a defendant was aware of an

obligation and failed to fulfill it; rather, the

defendant must also have been aware (or

deliberately ignored or recklessly disregarded) that

its actions violated the obligation. See 842 F.3d at

437-38. A complaint that requires us to “make[ ]

inference upon inferences” to supply missing facts

does not satisfy Rule 8’s pleading requirements. Id.

at 438 (quoting Mitchell v. Proctor & Gamble, No.

2:09-CV-426, 2010 U.S. Dist. LEXIS 17956, 2010

WL 728222, at *5 (S.D. Ohio Mar. 1, 2010) ). The

relators’ amended complaint does not plausibly

allege that MWCD knew, at the time it entered the

fracking leases, that the leases violated an

obligation incurred in 1939. It thus fails to state a

plausible claim for relief under the reverse-falseclaim provision of the FCA.

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B.

The relators’ claim of conversion likewise fails. The

FCA’s conversion provision applies to any person

who “has possession, custody, or control of property

or money used, or to be used, by the Government

and knowingly delivers, or causes to be delivered,

less than all of that money or property.” 31 U.S.C. §

3729(a)(1)(D). As explained above—and as in

Harper I—the complaint here lacks factual

allegations showing that MWCD knew it was in

possession of property belonging to the United

States. See 842 F.3d at 439. The conversion claim

was therefore properly dismissed.

C.

Appellants also maintain that their complaint

should not have been dismissed with prejudice

without leave to amend. In support, they rely on

this court’s statement in Newberry v. Silverman,

789 F.3d 636 (6th Cir. 2015), that “[d]ismissal with

prejudice and without leave to amend is not

appropriate unless it is clear on de novo review that

the complaint could not be saved by amendment.”

Id. at 646 (alteration in original) (quoting Eminence

Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052

(9th Cir. 2003) ). In Newberry, we concluded that

the district court had erred in dismissing the

plaintiff’s fraud claim with prejudice because there

was “a reasonable probability that the complaint

could have been saved by an amendment.” Id.

There, however, the plaintiff had submitted a tenpage affidavit in opposition to the motion to dismiss

that contained “significantly greater detail

regarding [the defendant’s] alleged fraud” than did

the complaint (which, unlike the complaint in this

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case, was originally filed in state court). Id. at 645;

see id. at 640. Since the affidavit “strongly

suggest[ed] that Newberry could amend his

complaint to include allegations going into a

similar degree of detail” and meeting federal

pleading standards, we found that the district court

should have dismissed Newberry’s claim “without

prejudice and with leave to amend.” Id. at 645-46.

*4 As this court has explained both before and

since Newberry, however, a district court does not

abuse its discretion by failing to grant leave to

amend where the plaintiff has not sought leave and

offers no basis for any proposed amendment. See,

e.g., Islamic Ctr. of Nashville v. Tennessee, 872 F.3d

377, 387 (6th Cir. 2017); Tucker v. MiddleburgLegacy Place, LLC, 539 F.3d 545, 551 (6th Cir.

2008). “The problem with the lack of a motion or

proposed amendment ... is that ‘[w]ithout viewing

the proposed amendment, it [is] impossible for the

district court to determine whether leave to amend

should have been granted.’ ” Islamic Ctr., 872 F.3d

at 387 n.7 (alterations in original) (quoting

Spadafore v. Gardner, 330 F.3d 849, 853 (6th Cir.

2003) ); see also Beydoun v. Sessions, 871 F.3d 459,

470 (6th Cir. 2017) (“[I]mplicit in [Rule 15(a) ] is

that the district court must be able to determine

whether justice so requires, and in order to do this,

the court must have before it the substance of the

proposed amendment.” (second alteration in

original) (quoting Roskam Baking Co. v. Lanham

Mach. Co., 288 F.3d 895, 906 (6th Cir. 2002) ) ).

Here, although the relators sought leave to

supplement their briefing on the 12(b)(6) motion to

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address this court’s ruling in Harper I, they made

no attempt to amend their complaint in accordance

with that ruling. Unlike Harper I, they did not file

a motion for leave to amend in conjunction with

their response to MWCD’s motion to dismiss. See

842 F.3d at 434. Nor have they offered any other

hint as to what they could add to their complaint

that might satisfy Rule 8’s pleading requirements.

Cf. United States ex rel. Roycroft v. Geo Grp., Inc.,

722 F. App’x 404, 408-09 (6th Cir. 2018) (finding

Newberry distinguishable where plaintiff “failed to

identify what she might plead to save her claim

below or on appeal” and rejecting “bare request for

another opportunity” to amend as “insufficient

when made before a district court and ...

insufficient here”); Beydoun, 871 F.3d at 470

(finding no abuse of discretion in denial of oral

motion for leave to amend where plaintiff “never

informed the district court of what facts he would

use to supplement his claim, thus allowing him to

withstand a motion to dismiss). Even on appeal, the

relators merely assert in the final sentence of their

brief that “[t]he above discussion regarding the

pleading details along with Relator[s’] disclosure of

materials to the government supports a conclusion

that ‘a more carefully drafted complaint might

state a claim.’ ” Nothing in the relators’ briefing

suggests that they possess additional facts

pertaining to MWCD’s knowledge, however. The

district court thus did not abuse its discretion in

dismissing their complaint without leave to amend.

See Islamic Ctr., 872 F.3d at 387.

III.

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For the reasons set forth above, we AFFIRM the

district court’s decision.

All Citations

--- Fed.Appx. ----, 2018 WL 3153674

Footnotes

*

1. The Honorable David J. Hale, United

States District Judge for the Western

District of Kentucky, sitting by designation.

1

2. The parties dispute whether the Harper

I complaint could properly have been

amended to add the claims asserted in this

action. They also disagree as to whether the

relators’ claims are barred by the statute of

limitations, as was suggested in a footnote

to the district court’s decision. Because we

find that the amended complaint fails to

state a viable claim in any event, we need

not decide these issues.

2

3.

The FCA defines “knowing” and

“knowingly” to “mean that a person, with

respect to information—(i) has actual

knowledge of the information; (ii) acts in

deliberate ignorance of the truth or falsity

of the information; or (iii) acts in reckless

disregard of the truth or falsity of the

information.” 31 U.S.C. § 3729(b)(1).

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APPENDIX B

IN THE UNITED STATES DISTRICT COURT

N.D. OHIO, EASTERN DIVISION

UNITED STATES OF AMERICA

EX REL. LEATRA HARPER,

STEVEN JANSTO, AND

LESLIE HARPER,

Relators-Appellants,

CASE NO.:

5:15-CV-1608

v.

MUSKINGUM WATERSHED

CONSERVANCY DISTRICT,

Defendant-Appellee.

/

Signed September 15, 2017

_________________

COUNSEL

Steven J. Paffilas, Office of the U.S. Attorney,

Cleveland, OH, Thomas W. Connors, Black,

McCuskey, Souers & Arbaugh, Canton, OH,

Warner Mendenhall, Akron, OH, for Relators.

J. Kevin Lundholm, James J. Pringle, Jr., Kyler,

Pringle, Lundholm & Durmann, New Philadelphia,

OH, Jennifer D. Armstrong, McDonald Hopkins,

Cleveland, OH, Peter D. Welin, McDonald Hopkins,

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O. Judson Scheaf, III, Hahn, Loeser & Parks,

Columbus, OH, for Respondent.

MEMORANDUM OPINION

HONORABLE

SARA

STATES DISTRICT JUDGE

LIOI,

UNITED

*1 Before the Court is the motion of respondent

Muskingum Watershed Conservancy District

(“respondent” or “MWCD”) to dismiss this qui tam

action, pursuant to Fed. R. Civ. P. 12(b)(6). (Doc.

No. 17 [“MTD”].) Relators Leatra Harper, Steven

Jansto, and Leslie Harper (collectively “relators”)

oppose the motion (Doc. No. 20 [“MTD Opp’n”] ),

and respondent has replied. (Doc. No. 21 [“MTD

Reply”].) The Court permitted, and the parties have

filed, supplemental briefing. (Doc. No. 24

[“Relators’ Suppl.”]; Doc. No. 25 [“Respondent’s

Suppl.”].) Because the doctrine of res judicata bars

relators’ claims, as more fully explained below,

respondent’s motion is granted and this case is

dismissed.

I. BACKGROUND

The background facts set forth herein are taken

from relators’ first amended complaint (“FAC”).

Where appropriate, these facts are supplemented

by reference to the documents attached to and

referenced by relators’ amended pleading, or

otherwise by matters for which the Court may take

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judicial notice. Relators Leatra Harper and Steven

Jansto “own property abutting Seneca Lake” in

Ohio. (Doc. No. 11 (FAC) ¶ 51.) MWCD “is a

political subdivision of Ohio” that was “organized in

1933 to reduce the effects of flooding and conserve

water for beneficial public uses under the Ohio

Revised Code Chapter 6101 (commonly called the

Conservancy Act).” (Id. ¶ 6.) “The MWCD has

jurisdiction in an 18-county area of Ohio including

Ashland, Belmont, Carroll, Coshocton, Guernsey,

Holmes, Harrison, Knox, Licking, Morgan,

Muskingum, Noble, Richland, Stark, Summit,

Tuscarawas, Wayne and Washington counties.”

(Id.)

This is not the first time that the parties have been

embroiled in litigation. Indeed, the primary

impetus for respondent’s motion is its belief that

this action is virtually identical to a prior qui tam

action filed by relators in this Court. Because an

understanding of this prior litigation is critical to

the analysis of respondent’s dispositive motion, the

Court begins with a discussion of relators’ 2013

federal action.

Harper I

On September 27, 2013, relators filed a federal qui

tam action under the False Claims Act (“FCA”), 31

U.S.C. § 3729.2 (U.S. ex rel. Harper v. Muskingum

Watershed Conservancy Dist., Case No. 5:13-cv2145 (N.D. Ohio) (“Harper I”)). The first amended

complaint referenced a 1949 deed that was issued

by the federal government, deeding to MWCD

certain land in Ohio, including land abutting

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Seneca Lake in Guernsey and Noble Counties.

(Harper I, Doc. No. 8 (First Amended Complaint

[“FAC”] ) ¶¶ 7-8; Harper I, Doc. No. 8-1 [“Deed”].)

The deed provided that MWCD would retain

ownership of the property “so long as said described

lands shall be held and utilized for recreation,

conservation

and

reservoir

development

purposes[.]” (Harper I, FAC ¶ 9; Harper I, Deed at

1323.) The Deed also contained a reverter clause

providing that title to the property would revert

back to the federal government if MWCD alienated

the property by ceasing to use the lands for the

stated purposes of recreation, conservation, and

reservoir development. (Harper I, Deed at 132-33;

FAC ¶ 9.)

*2 The focal point of Harper I was four leases

MWCD entered into between June 2011 and April

2014 conveying gas and mineral rights to various

energy businesses for the purpose of conducting

horizontal

hydraulic

fracturing

(“fracking”).

(Harper I, FAC ¶¶ 10-13.) The leases all involved

property that was subject to the Deed. It was

relators’ position that MWCD alienated the deeded

property by entering into the aforementioned gas

and oil leases (and, in doing so, ceasing to use the

property for its stated purpose), thereby triggering

the reverter clause and entitling the federal

government to immediate possession of the lands.

(Id. ¶¶ 16-19.) Relators maintained that, by failing

to return the property, and by retaining the

proceeds from the fracking leases, MWCD had

violated the FCA. Relators brought a possession

claim under 31 U.S.C. § 3729(a)(1)(D), and a

reverse false claim under 31 U.S.C. § 3729(a)(1)(G).

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The government declined to intervene, and the

Court ordered the complaint unsealed and served

upon MWCD. On November 25, 2015, the Court

issued a memorandum opinion dismissing Harper I

upon respondent’s motion to dismiss. (Harper I,

Doc. No. 24 [“MO”].) The Court found that relators’

claims were precluded by the FCA’s public

disclosure bar, and further determined that the

claims failed to meet the pleading requirements of

Rule 8(a) and 9(b) of the Federal Rules of Civil

Procedure. (Id. at 470-71.) As to the prior finding,

the Court held that relators were not the original

source of the information supporting the action

because the complaint allegations were the subject

of prior public disclosures in the media. (Id. at 46165.) As to the latter, the Court held that relators

failed to come forward with factual allegations that

MWCD knowingly concealed or improperly avoided

an obligation to return the deeded property to the

federal government. In other words, relators failed

to plead facts that would have elevated their simple

breach of contract allegations to the level of

actionable fraud under the FCA. (Id. at 468-70.)

On November 21, 2016, the Sixth Circuit affirmed

this Court’s dismissal. See U.S. ex rel. Harper v.

Muskingum Watershed Conservancy Dist., 842 F.3d

430 (6th Cir. 2016). Focusing on Rule 8(a)’s

pleading requirements, the court of appeals held

that relators’ claims failed to support the scienter

required to state reverse false and conversion

claims under the FCA. Id. at 436-39. The Sixth

Circuit denied relators’ request for en banc

rehearing on January 24, 2017. Relators have

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sought certiorari review before the United States

Supreme Court. (Harper I, Doc. No. 48 (Notice of

Filing Petition for a Writ of Certiorari)).

Harper II

While Harper I was still pending, on August 12,

2015, relators filed the present action (hereinafter

referred to as “Harper II.”) Like Harper I, the

relevant pleading in Harper II alleges that MWCD

has violated the FCA and purports to set forth a

possession claim under 31 U.S.C. § 3729(a)(1)(D)

and reverse false claim under § 3729(a)(1)(G). Also

like Harper I, the present FAC highlights the four

fracking leases entered into by MWCD between

June 2011 and April 2014. (Harper II, FAC ¶¶ 2528.) Further, as was the case in Harper I, the

relators allege that, following the execution of these

leases, the MWCD wrongfully and knowingly

concealed and failed to transfer the subject

property to the federal government and

impermissibly withheld the proceeds from the

leases. (Id. ¶¶ 30, 32-33.)

According to relators, that is where the similarities

between the two litigations end. While relators

asserted in Harper I that the leases triggered the

reverter clause in the deed, in Harper II relators

premise liability on the Flood Control Act of 1939

(“the 1939 Act”). The FAC explains that in 1934

MWCD entered into an agreement with the United

States government to construct dams and

reservoirs in MWCD’s jurisdiction (“the MWCD

Project”). (Harper II, FAC ¶ 7.) The 1939 Act

declared the MWCD Project “to be a flood control

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project for purposes of the Flood Control Acts of

1938 and 1936 [.]” (Id. ¶ 8, citing record.) The 1939

Act permitted the federal government to acquire all

property and right-of-way accesses necessary to

fulfill the purposes of the legislation. (Id. ¶ 9.)

*3 After passage of the 1939 Act, a representative

of the Army Corps of Engineers met with MWCD to

discuss the transfer of the property. (Id. ¶ 12, citing

record.) MWCD ultimately declined to transfer the

property, relying on an opinion from the Ohio

Attorney General that MWCD was not authorized

to transfer the property if doing so would prevent it

from performing its charter purposes. (Id. ¶¶ 1315.) When MWCD entered into the fracking leases

in 2011-2014, however, “MWCD determined that

the property interests to be transferred pursuant to

the [fracking leases] were no longer necessary for

the performance of its charter purposes i.e.

recreation and conservation. As a result, there was

no limitation on MWCD’s authority to fulfill its

obligation to transfer such interests to the United

States.” (Id. ¶ 30.)

The FAC alleges that, aware of its obligation to

transfer the property under the 1939 Act, MWCD

knowingly failed to satisfy its transfer obligations

and unlawfully retained income derived from the

leases. (Id. ¶¶ 31-33.) The FAC further alleges that

from 2012 MWCD has “sold water belonging to the

United States” and has unlawfully retained the

proceeds from these sales. (Id. ¶ 34.) Relators seek

to recover an amount equal to three times the

damages the United States has sustained, in

addition to a civil penalty for each alleged violation

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of 31 U.S.C. § 3729, costs and reasonable attorney’s

fees. (Id. at 259-60.)

The United States declined to intervene and, on

May 16, 2016, the Court ordered the complaint

unsealed and served upon MWCD. (Doc. No. 4

(Election to Decline Intervention); Doc. No. 5

(Order of Unsealing).) After the pleadings were

amended, MWCD moved to dismiss the FAC.

Respondent’s motion is fully briefed and ripe for

resolution.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) tests the

sufficiency of the pleading. Davis H. Elliot Co., Inc.

v. Caribbean Util. Co., Ltd., 513 F.2d 1176, 1182

(6th Cir. 1975). All allegations of fact by the nonmoving party are accepted as true and construed in

the light most favorable to that party. See

Grindstaff v. Green, 133 F.3d416, 421 (6th Cir.

1998) (citing Meador v. Cabinet for Human Res.,

902 F.2d 474, 475 (6th Cir. 1990)). The Court,

however, “need not accept as true legal conclusions

or unwarranted factual inferences.” Mixon v. Ohio,

193 F.3d 389, 400 (6th Cir. 1999) (citing Morgan v.

Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.

1987)). Nor is the Court required to accept as true

complaint allegations that are contradicted by

public records and other evidentiary materials of

which the Court may take judicial notice. See

Moody v. CitiMortgage, Inc., 32 F.Supp.3d 869, 87475 (W.D. Mich. 2014) (“court may disregard

allegations in the complaint if contradicted by facts

established by exhibits attached to the complaint”)

A-22

(quotation marks and citations omitted); see also

Williams v. CitiMortgage, Inc., 498 Fed.Appx. 532,

536 (6th Cir. 2012) (“if a factual assertion in the

pleadings is inconsistent with a document attached

for support, the Court is to accept the facts as

stated in the attached document”) (quotation marks

and citation omitted).

*4 The sufficiency of the pleading is tested against

the notice pleading requirements of Fed. R. Civ. P.

8. Rule 8(a)(2) provides that a complaint must

contain “a short and plain statement of the claim

showing that the pleader is entitled to relief[.]”

Although this standard is liberal, Rule 8 still

requires a complaint to provide the defendant with

“enough facts to state a claim to relief that is

plausible on its face.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed. 2d 929

(2007). Thus, “[t]o survive a motion to dismiss, a

complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim that is plausible

on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678,

129 S.Ct. 1937, 173 L.Ed. 2d 868 (2009) (quoting

Twombly, 550 U.S. at 570, 127 S.Ct. 1955). A claim

is facially plausible “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. (citing Twombly, 550

U.S. at 556, 127 S.Ct. 1955). If the plaintiff has not

“nudged [her] claims across the line from

conceivable to plausible, [the] complaint must be

dismissed.” Twombly, 550 U.S. at 570, 127 S.Ct.

1955 (citation omitted).

A-23

In deciding a motion to dismiss under Rule 12, the

Court generally may not consider matters outside

of the pleadings without converting the motion into

a motion for summary judgment under Rule 56. As

the Sixth Circuit has held, however, there are a

number of exceptions to this rule. Indeed, it is well

settled that, in ruling on a Rule 12 dispositive

motion, a district court “may consider the

Complaint and any exhibits attached thereto,

public records, items appearing in the record of the

case and exhibits attached to defendant’s motion to

dismiss so long as they are referred to in the

Complaint and are central to the claims contained

therein.” Bassett v. Nat’l Collegiate Athletic Ass’n,

528 F.3d 426, 430 (6th Cir. 2008) (citation omitted);

see Gavitt v. Born, 835 F.3d 623, 640 (6th Cir. 2016)

(citation omitted); see also Commercial Money Ctr.,

Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 335

(6th Cir. 2007) (court may consider documents that

govern a party’s rights and are necessarily

incorporated by reference in the complaint on a

motion to dismiss) (citations omitted).

III. DISCUSSION

Respondent seeks Rule 12(b)(6) dismissal asserting

that relators’ claims are barred under claim

preclusion and that they are untimely. Further, it

argues that, like the Court found in Harper I, this

Court should find that relators’ claims are

precluded by the public disclosure bar of the FCA

and fail to meet the pleading requirements of Rules

8(a) and 9(b). The Court finds that relators’ case is

barred by the doctrine of claim preclusion. Thus,

A-24

the Court need not reach respondent’s alternative

arguments.

“The doctrine of res judicata is often used broadly

to encompass both claim preclusion (res judicata)

and issue preclusion (collateral estoppel).” Cedillo

v. TransCor Am., LLC, 131 F.Supp.3d 734, 740

(M.D. Tenn. 2015) (citing J.Z.G. Res., Inc. v. Shelby

Ins. Co., 84 F.3d 211, 214 (6th Cir. 1996)); see

Taylor v. Sturgell, 553 U.S. 880, 892-93, 128 S.Ct.

2161, 171 L.Ed. 2d 155 (2008). Under issue

preclusion, once an issue is actually determined by

a

court

of

competent

jurisdiction,

that

determination is conclusive in subsequent suits

based on different causes of action when used

against any party to the prior litigation. Mont. v.

United States, 440 U.S. 147, 153-54, 99 S.Ct. 970,

59 L.Ed. 2d 210 (1979) (citations omitted); see Heike

v. Cent. Mich. Univ. Bd. of Tr., 573 Fed.Appx. 476,

480 (6th Cir. 2014) (citations omitted). In contrast,

under claim preclusion, “a final judgment on the

merits bars any and all claims by the parties or

their privies based on the same cause of action, as

to every matter actually litigated, as well as every

theory of recovery that could have been presented.”

Cedillo, 131 F.Supp.3d at 740 (citation omitted); see

Taylor, 553 U.S. at 892-93, 128 S.Ct. 2161; Heike,

573 Fed.Appx. at 480 (quoting Rivet v. Regions

Bank of La., 522 U.S. 470, 476, 118 S.Ct. 921, 139

L.Ed. 2d 912 (1998) (quotation marks omitted)).

“The purpose of claim preclusion ‘is to promote the

finality of judgments and thereby increase

certainty, discourage multiple litigation, and

conserve judicial resources.’ ” Heike, 573 Fed.Appx.

A-25

at 479 (quoting Westwood Chem. Co., Inc. v. Kulick,

656 F.2d 1224, 1227 (6th Cir. 1981)).

*5 Federal common law governs the preclusive

effect of a prior federal court judgment. See

Hamilton’s Bogarts, Inc. v. Mich., 501 F.3d 644, 650

(6th Cir. 2007); see also 18B Charles Alan Wright,

et al., Federal Practice and Procedure § 446 (2d ed.

2011); Restatement (Second) of Judgments § 87

(1982) (“Federal law determines the effects under

the rules of res judicata of a judgment of a federal

court.”). Under the Sixth Circuit’s articulation of

federal claim preclusion, a claim will be barred by

prior litigation if the following four elements are

present: (1) a final decision on the merits by a court

of competent jurisdiction; (2) a subsequent action

between the same parties or their “privies”; (3) an

issue in the subsequent action which was litigated

or should have been litigated in the prior action;

and (4) an identity of the causes of action. Rawe v.

Liberty Mut. Fire Ins. Co., 462 F.3d 521, 528 (6th

Cir. 2006) (citing Kane v. Magna Mixer Co., 71 F.3d

555, 560 (6th Cir. 1995)); Bittinger v. Tecumseh

Prods. Co., 123 F.3d 877, 880 (6th Cir. 1997)

(citations omitted). Relators only challenge the last

two elements. Consequently, the Court will only

briefly discuss the first two elements, focusing,

instead, on whether the issues raised in Harper II

should have been litigated in Harper I and whether

there is an identity of causes of action.

Final Decision on the Merits

It is undisputed that the Court entered final

judgment in Harper I in favor of respondent when

A-26

it dismissed the action under Fed. R. Civ. P.

12(b)(6). “In the federal courts, a dismissal

pursuant to Rule 12(b)(6) is considered a decision

on the merits with full res judicta effect.” Dyer v.

Intera Corp., 870 F.2d 1063, 1066 (6th Cir. 1989)

(citing, among authority, Federated Dept. Stores,

Inc. v. Moitie, 452 U.S. 394, 399 n.3, 101 S.Ct. 2424,

69 L.Ed. 2d 103 (1981)); see, e.g., Hughes v. U.S.

Dep’t of Housing & Urban Dev., 238 F.3d 421 (table

decision), 2000 WL 1828275, at *2, 238 F.3d 421

(6th Cir. Dec. 8, 2000) (“The dismissal of

[plaintiff’s] 1996 complaint has res judicata effect,

as [plaintiff’s] 1996 lawsuit was dismissed when

the district court granted the defendants’ Fed. R.

Civ. P. 12(b)(6) motions.”) (citations omitted). The

first element is satisfied.

Same Parties or their Privies

MWCD also satisfies the second element of claim

preclusion because Harper II involves the exact

same litigants as Harper I.

Issues Actually Litigated or Should have been

Litigated

“The third element of res judicata ‘not only

prohibits parties from bringing claims they already

have brought, but also from bringing those claims

they should have brought.’ ” Cedillo, 131 F.Supp.3d

at 742 (quoting Heike, 573 Fed.Appx. at 482)

(emphasis in original) (further citation omitted).

For this reason, litigants “cannot avoid the effects

of claim preclusion by merely repacking their

grievances into alternative theories of recovery or

A-27

by seeking different remedies.” Heike, 573

Fed.Appx. at 482 (citing Rawe, 462 F.3d at 529); see

Scozzari v. City of Clare, No. 08-10997-BC, 2012

WL 1900600, at *4 (E.D. Mich. May 24, 2012) (“The

third element recognizes that having failed to

recover on one legal theory, a litigant cannot

attempt to relitigate the same claim under a

different theory of recovery.”) (citing Poe v. John

Deer Co., 695 F.2d 1103, 1105 (8th Cir. 1982);

Restatement (Second) of Judgments § 25).

“To determine whether a claim ‘should have been

litigated’ in an earlier action, the Sixth Circuit has

stated that ‘[w]here the two causes of action arise

from the same transaction, or series of

transactions, a plaintiff should have litigated both

causes in the first action and may not litigate the

second issue latter.’ ” Scozzari, 2012 WL 1900600,

at *4 (quoting Holder v. City of Cleveland, 287

Fed.Appx. 468, 471 (6th Cir. 2008) (further citation

omitted)); see Hammond v. Vill. of Crooksville, No.

2:08-cv-1049, 2009 WL 2524636, at *3 (S.D. Ohio

Aug. 18, 2009) (“An issue could have been litigated

in a prior case, and should have been litigated for

res judicata purposes, if the facts underlying that

issue are the same as the operative, or essential,

facts in the prior case.”) (citation and italics

omitted).

*6 Here, both actions arise from the exact same

series of transactions—the four fracking leases

entered into by MWCD between 2011 and 2014. In

each case, relators have maintained that, upon

entering into these leases, MWCD was obligated to

return the property to the federal government. The

A-28

only legal difference between the two actions is the

basis upon which relators believe the signing of the

leases triggered a duty to return the property. In

Harper I, relators relied on the reverter clause in

the 1949 deed to impose liability under the FCA. In

contrast, in Harper II, relators look to the 1939 Act

for the legal hook for their FCA claims. Still, in

both cases, relators have alleged that the act of

entering into the leases signaled the fact that

MWCD was no longer utilizing the property for its

intended purposes of recreation and conservation.

(Harper I, FAC ¶¶ 9, 17-18; Harper II, FAC ¶¶ 15,

30.)

Relators contend that the two actions do not arise

from the same series of transactions because the

claims in Harper I “arise from a reversion clause in

a 1949 deed ...” and the claims in Harper II “arise

from a 1939 statute requiring the MWCD to

transfer its property to the United States[.]” (MTD

Opp’n at 453-54.) Relators are confusing the factual

transactions that underlie their cases with the

legal theories upon which they believe they are

entitled to relief. The series of transactions that

give rise to each case are the fracking leases, the

1939 Act and the 1949 deed merely supply the legal

theories for recovery.4 See, e.g., Smith v. Lerner,

Sampson & Rothfuss, L.P.A., 658 Fed.Appx. 268,

277-78 (6th Cir. 2016) (federal RICO action was

properly dismissed under claim preclusion because

the transaction at the action’s core—the allegedly

fraudulent assignment of property—was the same

transaction at issue in a prior state court

foreclosure action); Wilkins v. Jakeway, 993

F.Supp. 635, 646 (S.D. Ohio 1998) (plaintiff’s § 1983

A-29

and First and Fourteenth Amendment claims

should have been brought in prior action

challenging wrongful termination in violation of the

“whistleblower” portion of the FCA because both

actions were based on the same facts and asserted

the same injury—plaintiff’s alleged wrongful

termination), rev’d and remanded, in part, on other

grounds, 183 F.3d 528 (6th Cir. 1999). Relators

have, in essence, attempted to repack their

grievances regarding the fracking leases by

pursuing different theories of liability. Consistent

with the rule of claim preclusion, relators cannot

challenge the legality of the leases on one theory in

Harper I and assert a different theory in this case.

Consequently, the Court finds that respondent has

met the third requirement for claim preclusion.

Identity of Claims

Because the fourth element also looks to the factual

predicate for the claims, the same reasons support

a finding that this element has been met. “Causes

of action share an identity where the facts and

events creating the right of action and the evidence

necessary to sustain each claim are the same.”

Heike, 573 Fed.Appx. at 483 (citation omitted). “In

the words of the Supreme Court ‘[t]he now-accepted

test in preclusion law for determining whether two

suits involve the same claim or cause of action

depends on factual overlap.’ ” Id. (quoting United

States v. Tohono O’odham Nation, 563 U.S. 307,

316, 131 S.Ct. 1723, 179 L.Ed. 2d 723 (2011)

(emphasis in original)). “Two suits are for or [are]

in respect to the same claim ... if they are based on

substantially the same operative facts, regardless

A-30

of the relief sought in each suit.” Id. (alteration in

original) (quotation marks and citation omitted);

see Smith, 658 Fed.Appx. at 278 (“The fourth

element of the res judicata analysis is whether the

second action arose out of the same transaction or

occurrence.”).

*7 Here, both actions arose out of the lease

agreements MWCD entered into between 2011 and

2014, and therefore both share the same core of

operative facts. In fact, the FAC lifts almost

verbatim much of the pleading in Harper I for use

in Harper II. It does not matter that the underlying

bases for recovery in Harper I and Harper II are

different. See Heike, 573 Fed.Appx. at 483 (“It

therefore is of no moment that the statutory

elements of Titles VI and Title IX claims differ from

those of an equal-protection or due-process claim

raised under § 1983.”). Additionally, the fact that

relators also seek to recover proceeds from MWCD’s

water sales does not change the significant factual

overlap between the two actions.5 See Tohono

O’odham Nation, 563 U.S. at 318, 131 S.Ct. 1723.

This final element is met.

Exception to Res Judicata

Relators maintain, however, that an exception to

the claim preclusion doctrine exists where “there is

a limitation on the court’s subject matter

jurisdiction as described in Restatement (Second) of

Judgments § 26[.]” (MTD Opp’n at 456.) According

to relators, they could not have amended the

complaint in Harper I to bring their claims relative

to the 1939 Act because it would have required the

A-31

refiling of the action under seal and a failure to file

under seal would have deprived the Court of

subject matter jurisdiction over the new claims. (Id.

at 457.) Relators’ argument implicates the FCA’s

sealing requirement, 31 U.S.C. § 3730(b)(2), which

requires all FCA complaints to be filed under seal

for at least 60 days while the government

contemplates whether it will elect to intervene in

the action. It is relators’ position that they would

not have been permitted to file their amended

complaint under seal, with the new claim under the

1939 Act, and if they filed it without sealing it

would have been automatically dismissed.

While the FCA’s sealing provision is mandatory, a

failure to abide by the sealing requirement does not

require automatic dismissal. In State Farm Fire &

Cas. Co. v. U.S. ex rel. Rigsby, ––– U.S. ––––, 137

S.Ct. 436, 442, 196 L.Ed. 2d 340 (2016), the

Supreme Court held that the sealing provision is a

procedural rather than a jurisdictional rule.

Specifically, the Court held that, while the FCA’s

sealing provision is mandatory, a failure to follow

the sealing rule did not necessarily require

dismissal because the provision is not tied to a

party’s right to bring a qui tam action. Id. at 443.

In so ruling, the Court specifically rejected circuit

decisions—including U.S. ex rel. Summers v. LHC

Grp., Inc., 623 F.3d 287 (6th Cir. 2010), a decision

relied upon by relators—finding that the failure to

file under seal required mandatory dismissal of a

relator’s complaint.6 Id. at 442 (collecting circuit

court cases, including Summers).

A-32

*8 Yet, even before the ruling in Rigsby, the

majority of district courts had held that the FCA’s

mandatory filing requirement did not apply to

amended complaints, especially where, as here, an

amended complaint makes similar allegations of

fraud and the government has already been

afforded an opportunity to consider whether to

intervene.7 See U.S. ex rel. Kolchinsky v. Moody’s

Corp., 162 F.Supp.3d 186, 198 (S.D.N.Y. 2016)

(district courts have generally agreed that resealing

is not required when an amended complaint makes

similar allegations of fraud) (collecting cases); U.S.

ex rel. Saldivar v. Fresenius Med. Care Holdings,

Inc., 972 F.Supp.2d 1317, 1325 (N.D. Ga. 2013)

(filing of amended complaint adding new claims did

not require refiling under seal and the government

still had the right to reconsider its decision not to

intervene); see also U.S. ex rel. Ubl v. IIF Data

Solutions, No. 1:06-cv-641, 2009 WL 1254704, at *4

(E.D. Va. May 5, 2009) (“[W]here the court already

has unsealed the case and granted the relator leave

to amend the complaint, the policy arguments

supporting dismissal for failure to comply with the

filing and service requirements no longer hold.”)

(citation omitted).

Further, even if the resealing of an amended

complaint had been a jurisdictional requirement,

relators have failed to identify any impediments in

Harper I to seeking leave to file an amended

complaint under seal. Relators never sought, and

therefore were never denied leave—to amend the

complaint in Harper I to add their claims under the

1939 Act. This is true even though relators now

claim that it was “[d]uring [Harper I that] relators

A-33

learned of a basis for FCA claims involving

property unrelated to the 1949 deed.” (MTD Opp’n

at 450.) Moreover, the fact that it might have been

“tactically inconvenient” to amend because the

Court could have stayed the case while the

government reconsidered whether it wished to

intervene does not excuse relators from their

obligation to bring all claims that could have been

raised at the same time or in the same litigation.

See, e.g., U.S. ex rel. Sheldon v. Kettering Health

Network, 816 F.3d 399, 417 (6th Cir. 2016) (fact

that bringing FCA claims with state tort claims

would have required sealing and a stay under §

3730(b)(2) did not relieve relator of duty to bring all

claims with similar fact patterns in the same

forum) (citing Restatement (Second) of Judgments

§ 24 cmt. d).

IV. CONCLUSION

Relators are precluded from pursuing their FCA

claims in this action because they arise from the

same factual transactions as the FCA claims raised

in Harper I, which achieved a final decision on the

merits and involved the same parties as this case.

As such, they could have and should have been

brought in that prior action and the doctrine of res

judicata bars relators from raising them now. For

these reasons, respondent’s motion to dismiss is

granted, and this case is dismissed.

*9 IT IS SO ORDERED.

All Citations

Slip Copy, 2017 WL 4102371

A-34

Footnotes

1

1. Unless otherwise noted, all record cites

are to the present case.

2

2. Relators filed a similar action in the

Southern District of Ohio. See Harper v.

Muskingum Watershed Conservancy Dist.,

Case No. 2:14-cv-02539 (S.D. Ohio). That

parallel action was dismissed, upon

relators’ motion, on May 4, 2015. (Doc. No.

14 at 348). Further, there is no dispute

that, prior to filing in federal court, relators

had unsuccessfully prosecuted tort actions

against MWCD in state court.

3

3. All page number references are to the

page identification number generated by

the Court’s electronic docketing system.

4

4. Even though this provides a separate

basis upon which to grant respondent’s

motion, relators’ response to respondent’s

timeliness argument also illustrates the

fatal flaw in relators’ position on claim

preclusion. Respondent argues that Harper

II is time-barred based on allegations in the

FAC that MWCD was aware of its duty to

transfer the property as early as 1939.

(MTD at 398.) In response, relators insist

that the present action was not filed beyond

the FCA’s 6 year statute of limitations

because it was not until 2011 to 2014 (the

time MWCD executed the fracking leases)

A-35

that MWCD no longer had a legal

limitation on its ability to transfer the

property to the federal government. (MTD

Opp’n at 457-58.) Relators simply cannot

have it both ways. If the operative facts at

the heart of Harper II giving rise to the

claims asserted therein really were the

actions centering on the 1939 Act, then the

present action was filed approximately 70

years too late.

5

5. Relators insist that the “property” at

issue in the two lawsuits is different

because the property in Harper I was

“transferred to the MWCD in 1949[,]” while

the property in Harper II “involves MWCD

property, which is separate and distinct

from the property, which is the subject of”

Harper I. (MTD Opp’n at 451.) Relators

then cite generally to the FAC in Harper II

for support. (Id.) Once again, relators have

conflated the factual underpinnings of each

action with the theories supporting

recovery. Moreover, even if the property

boundaries of the deeded property and the

property covered by the 1939 Act do not

align precisely—something that is entirely

unclear from the virtually identical factual

allegations in the two actions—it is

undisputed that the property that is the

subject of the fracking leases is the same.

Accordingly, it is clear that there is

substantial factual overlap between the two

actions.

A-36

6

6. The Court recognizes that the decision in

Rigsby was issued after relators filed

Harper II, and after the Court dismissed

Harper I. However, as discussed infra., the

decision in Summers would not have saved

relators.

7

7. Relators insist that they filed the claims

in Harper II in a separate action because

the government needed an opportunity to

consider whether it would intervene and

prosecute these new claims. (MTD Opp’n at

450.) Of course, the government had

already been given an opportunity to

consider the legal implications of MWCD’s

execution of the fracking leases. Moreover,

even without sealing, the government could

revisit that decision at any time and

intervene upon a showing of good cause. See

Saldivar, 972 F.Supp.2d at 1326 (citing 31

U.S.C. § 3730(c)(2)(D)(3); United States ex

rel. Walle v. Martin Marietta Corp., No. 923677, 1994 WL 518307, at *2 (E.D. La.

Sept. 21, 1994) (granting leave to amend

and add a new claim after discovery

because “the Government has statutory

authority to intervene at a later date,” and

further stating “[t]he Court is not

persuaded by [relator’s] concern for the

Government” because “NASA is not going to

walk away from any viable allegations that

might

put

money

back

into

the

Government’s pocket”)).

A-37

APPENDIX C

31 U.S.C. § 3729 False Claims

§ 3729 provides in relevant part:

(a) Liability for certain acts.—

(1) In general.—Subject to paragraph (2),

any person who—

...

(D) has possession, custody, or control of

property or money used, or to be

used, by the Government and

knowingly delivers, or causes to be

delivered, less than all of that money

or property

...

(G) knowingly makes, uses, or causes to

be made or used, a false record or

statement material to an obligation

to pay or transmit money or

property to the Government, or

knowingly conceals or knowingly

and improperly avoids or decreases

an obligation to pay or transmit

money or property to Government

...

A-38

is liable to the United States Government

…

...

(b) Definitions.—For purposes of

This section—

(1) the terms “knowing” and

“knowingly” –

(A) mean that a person,

With respect to

information—

(i) has actual

knowledge of the

information;

(ii) acts in deliberate

ignorance of the

truth or falsity

of the information;

or

(iii) acts in reckless

disregard of the truth

or falsity of the

information; and

(B) require no proof of

specific intent to

defraud.