Joint Appendix — Rockwell Intern. Corp. v. United States

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FILED

= SoU) TL OFAICE OF THE AERC

Jn the

Supreme Court of the Gnited States

ROCKWELL INTERNATIONAL CORP. AND BOEING NORTH

AMERICAN, INC.,

PETITIONERS,

UNITED STATES OF AMERICA AND UNITED STATES OF

AMERICA £X REL. JAMES S. STONE,

RESPONDENTS.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT

OF APPEALS For Tet TENTH CIRCUIT

JOINT APPENDIX

Counsel for Petitioners Counsel for Respondeuts

MAUREEN BE. MAHONEY MARIA T. VULLO

Counsel of Record Counsel of Record

J.ScoTr BALLENGER EVAN NORRIS

MATTHEW K. ROSKOSKI PAUL, WEISS, RIF KIND.

NATHAN H. SELTZER WHARTON & GARRISON,

LATHAM & WATKINS LLP LLP

5535 11TH STREET, N.W. 12385 AVENUE GF THE

Suireé 1000 AMERICAS

WASHINGTON, DC 20004 NEw YORK, NY 10019

(202) 637-2206 (212) 373-3000

Additional Counsel Listed on Inside Cover

_—_— ——

———

PETITION FOR CERTIORARI FILED APRIL 4, 2006

CERTIORARI GRANTED SEPTEMBER 26, 2006

Additional Counsel for Additional Counsel for

Petitioners

Respondents

CHRISTOPHER J. KOENIGS HARTLEY DAVID ALLEY

MICHAEL B. CARROLL LAW OFFICES OF

SHERMAN & HOWARD HARTLEY D. ALLEY

L.L.C. . 12499 W. COLFAX AVE.

633 17TH STREET P.O. Box 280868

SUITE 3000 7 LAKEWOOD, CO 80228

Denver, CO 80202, (303) 431-8660

(303) 297-2900 ~

PAUL D. CLEMENT

Solicitor General

UNITED STATES

DEPARTMENT OF JUSTICE

950 PENNSYLVANIA AVE.,

‘ ~NW

RooM 5614

WASHINGTON, DC 20530

(202) 514-2217

JOINT APPENDIX

TABLE OF CONTENTS

United States Court of Appeals for the Tenth Circuit

Relevant Docket Entries: United States of

America ex rel. James S. Stone and United States

of America v. Rockwell International Corp. and

Boeing North American, Inc., No. 99-1351

United States District Court for the District of

Colorado Relevant Docket Entries: Stone et al. v.

Rockwell Automation, et al., No. 1:89-ev-01154-

PERE EEE EERE EEE EEE EEE EEE HEE EE EEE TEESE SEES SESE E EE EE EE EEE EEE SE TEEEEEEEE ET

Complaint and Jury Demand (July 6, 1989) (excerpts)

(CA! 81 to 97)

Plaintiffs Exhibit 1: Plea Agreement and Statement of

Factual Basis (Mar. 26, 1992) (excerpts) (CA 1861,

1864-72, 1874-91)

Brief in Support of Defendant’s Motion to Dismiss

Plaintiffs Complaint Under Rule 12(b)(1) for Lack

of Subject Matter Jurisdiction (with motion) (Dec.

15, 1992) (CA 116 to 135)

Affidavit of Christopher J. Koenigs (Dec. 15, 1992):

Exhibit 1, Application and Affidavit of Mr. Lipsky

(excerpts) (CA 0139 to 0145, 152 to 154, 157,

Page

1“CA _” refers to the pagination used in the Tenth Circuit Appendix.

Exhibit 8, Plaintiff James S. Stone’s Amended

Responses to Interrogatory Nos. 1(d), (1), (m),

(n) and (0), 5, 6, 7, 11(a), 12-16, 21(d) and 23(a),

(b) and (d) of Defendant’s First

Interrogatories (excerpts) (CA 0225 to 0226)...... 102

Exhibit 9, Excerpts from the Deposition of James

Stone (CA 0229 to 0231) ...........ceccccssssssrsessssesseseeseses 105

Exhibit 10, 06/1989 Newspaner Articles (photos

and marginalia omitted) (CA 0232 to 0252).......... 113

Affidavit of James S. Stone in Opposition to

Defendant’s Motion to Dismiss for Lack of Subject

Matter Jurisdiction (Feb. 27, 1993) (CA 290-310)........ 169

Exk<bit B, Excerpts from Plaintiffs’ Consolidated

Answers and Responses to Discovery (CA

375, 380, 384, 386 to 387, 390 to 393, 394 to

Exhibit C, Excerpt from Engineering Calculation

BOS COA, GID a ccccccncccnsensncsereececnsesensntscssvesnssansesenses 224

Exhibit D, March 20, 1984 letter from Stone to

CI Gree Ge cieeniictctetriennesctneninctnenninipiintintineiia 226

Exhibit E, Engineering Order (CA 439) ........se+esesseeee: 228

Exhibit F, October 1, 1985 memo from Stone to

IG AI icicccienseticinnanieenarpiaiiasiatinininnmaniinadi 229

Exhibit G, Records from Health and Physics

Department (excerpts) (CA 442) .........sesceseeseeneees 231

Exhibit H, Employee Suggestion Form (CA 447 to

Exhibit I, May 28, 1985 Memorandum from Eden

ED Ferree a ne nr eae me 242

Exhibit J, June 28, 1985 letter from Eden to

Ry te GI ctscesccnnisiinietiiniensinnesenscninignienctith 243

Exhibit K, January 15, 1986 letter from Stone to

SERPS EPR ce RerceanC es ee: 245

Exhibit L, CPAF Rating and Functional

Performance Areas (CA 455 to 456)............ccceeee- 247

Exhibit M, July 28, 1987 FBI Interview of Stone

SSeS om erepee rent Wenner nee mrt Ee 250

Exhibit N, February 17, 1988 FBI Interview of

ier Cae ee cccerentcrensncttnnasisnenncictieinincssnin 254

Exhibit O, Miscellaneous Reports of Stone’s

Communications with the FBI (CA 464 to

Exhibit P, Complaint in Stone v. Rockwell et al.

(Jefferson County, Colo.) (excerpts) (CA 472,

Fe cticiiciinsicenctineniienieuiincaniinniiatiptiiiatnininiibianionndite 268

Exhibit Q, Plaintiff's Confidential Disclosure

Statement of Material Evidence and

Information (excerpts) (CA 491 to 523, 559 to

iii iincitecnininctiiioniines dilate tli ichdailtdhintiabienalniateeedatidii 276

Plaintiffs Memorandum of Law in Opposition to

Defendant’s Motion to Dismiss Complaint for Lack

of Subject Matter Jurisdiction (Mar. 5, 1993) (CA.

Affidavit of Christopher J. Koenigs (Apr. 12, 1993):

Exhibit 3, James S. Stone’s Third Supplemental

Responses to Rockwell’s Discovery Requests

(June 5, 1992) (excerpts) (CA 710 to 717) ............. 327

Exhibit 6, James S. Stone’s Amended Response to

Rockwell’s Discovery Requests (Oct. 27, 1992)

(excerpts) (CA 729 to 730) .......-cccecserceorsessssessesees 338

Exhibit 19, Supplement to Statement of Michael J.

Norton (excerpts) (CA 831 to 832) ........scsseeeeeees 341

Boulder Daily Camera: Pat Schroeder calls Flats

whistleblower ‘a hero’ (CA 889.48) .....cssccecsereerseeseeesees 344

Government Motion for Leave to Intervene (Nov. 13,

Be Oak Se Oe GD cciccicenesicnsineecitsttestetinisianmnnitaadanaiiiiaiais 347

Declaration of John A. Kolar (Nov. 13, 1995) (CA 0902

Supplemental Declaration of John A. Kolar (Dec. 20,

CAA Sy Bb GID eccceesesstcnscsessnisineneintitataintiinitaiciiniidaniiia 354

Memorandum Opinion and Order (Nov. 19, 1996) (CA

964 to 971).......... ascesseecensenesessonssnnssesenscsnsonscboseesonsesssssseesseees 382

Transcript of Scheduling Conference (Dec. 5, 1996)

(excerpts) (SA 78, 82 tO 88)......csccscsecsesscessereessseesensseeeees 389

Amended Complaint (Dec. 20, 1996) (CA 972 to 1006)........ 395

Answer to Amended Complaint (Jan. 21, 1997)

SII il cnicinritnnncsndiepindtnsaneceseicmneuminenicenaimaseneassescennenneieccasaes 427

Preliminary Pretrial Conference Transcript of

Proceedings (Jan. 21, 1997) (excerpt) ........-.ccccecersseeeess 428

Appendix to Defendants’ Motion in Limine, excerpt

from Affidavit of Mr. Lipsky (Nov. 10, 1997) ..........-.-+. 429

Scheduling Order (Dec. 5, 1997) (excerpt). ........cccceeeeeeeeeeees 430

Se INCEIIII, 10UL, TIITIIIII o05 ss cesntenniprenssinsnnntennsneemeumecesccasceseans 434

Defendants’ Memorandum of Law Supporting Their

Proposed Jury Instructions Relating to False

Claims Act Elements of Liability (Sept. 21, 1998)

(excerpts) (CA 1628 t0 1632)............ ..cccccseersssesesesesensees 437

Transcript of Status Conference (Sept. 25, 1998)

(excerpt) (CA 1051 to 1062)...........ccc.iccorcorseoeceoeseesessreosens 443

Mr. Stone’s Response to Defendants’ Memorandum on

Proposed Jury Instructions Pertaining to Mr.

Stone’s Role as Relator (Oct. 9, 1998) (excerpts)......... 447

Final Pretrial Order (Feb. 4, 1999) (excerpts) ..............:0008 459

2 “SA” refers to the Mr. Stone’s Supplemental Appendix before the

Tenth Circuit.

Plaintiff's Statement of Claims (attached to Final

FORTE GRE) cnceccesesusncccscanesmnsenssncannanneseennemeensemmanaians 463

False Statements and Claims by Fiscal Year and Date

(attached to Final Pretrial Order) ............::s:serssssseresenees 494

Excerpts from Trial Transcript, Day 2 (Feb. 23, 1999) ......508

Excerpts from Trial Transcript, Day 3 (Feb. 24, 1999) ......509

Excerpts from Trial Transcript, Day 4 (Feb. 25, 1999) ......514

Bascente from Trial Transcript, Day 5 (Feb. 26, 1999) ......516

Excerpts from Trial Transcript, Day 6 (Mar. 1, 1999)........ 523

Excerpts from Trial Transcript, Day 7 (Mar. 2, 1999)........ 525

Excerpts from Trial Transcript, Day 13 (Mar. 11, 1999) ....531

Excerpts from Trial Transcript, Day 15 (Mar. 16, 1999) ....533

Excerpts from Trial Transcript, Day 20 (Mar. 23, 1999) ....538

Excerpts from Trial Transcript, Day 21 (Mar. 24, 1999) ....540

_ Excerpts from Trial Transcript, Day 24 (Mar. 29, 1999) ....543

Jury Verdict (Apr. 1, 1999) (CA 1119 to 1121)... eee 548

Newspaper Articles (CA 1342 to 1345) .........ccsssssessseeseeeeeees 551

Vii

James S. Stone’s Response to Defendants’

Memorandum Regarding Entry of Judgment (May

4, 1999) (excerpts) (CA 1408, 1416 to 1424)... 559

Plaintiff United States’ Supplemental Responses to

Defendants’ Memorandum Regarding Entry of

Judgment (May 17, 1999) (SA 23 to 28) ...........cecseeseeses 568

Defendants’ Reply to James S. Stone’s Response to

Defendants’ Memorandum Regarding Entry of

Judgment (May 6, 1999)

Exhibit 6, Stone’s First Supplemental Responses

dated Apr. 4, 1992) (excerpts) (CA 1529 to

EE xsercserasecnsasnansenensnenessenenitnasummenenniapiasinanemnensmntette 573

Transcript of Oral Argument on Judment Issues (May

7, 1999) (EXCETPts)..........-.cscscsereeesererrcsereserssssensssessnsesserees 577

Order Reserving Ruling on Motions for Fees and

Expenses (June 10, 1999) (excerpt) (CA 1570)............. 578

Appellants’ Opening Brief (Feb. 7, 2000) (excerpts)........... 580

Appellee/Cross-Appellant James S. Stone’s Opening

Response Brief (Mar. 17, 2000) (excerpts).......---c.-0++ 582

Plaintiff James. S. Stone’s Motion for a Finding on

Limited Remand that Mr. Stone Made the

Requisite Disclosures to the Government Prior to

Filing This Action (Apr. 3, 2002) ..........ccscsssssssesessceeseeees 584

Plaintiff James S. Stone’s Memorandum in Support of

Motion for a Finding on Limited Remand (Jan. 21,

ee 587

viii

Plaintiff-Appellee/Cross-Appellant James S. Stone’s

Motion to Supplement the Record on Appeal (Jan.

I crccccitasinimiintinantanecepiliniddutasecineimiiiants

Affidavit of James S. Stone, including Exhibit A

ESE Ser 9 ae

Declaration of Hartley David Alley (Dec. 23, 2002)

Order Denying Motion for Reconsideration And

To Supplement The Record (Jan. 21, 2003) ..............

Order Granting Motion for Award of Attorneys’ Fees

(Apr. 5, 2006)

Affidavit of Maria T. Vullo in Support of Motion for

Attorney Fees and Expenses (Apr. 22, 2004)

SEER E EEE ESET EE EEE SETHE ET ESEE EE EE ESET EEES ED

JA-1

RELEVANT DOCKET ENTRIES

U.S. Court of Appeals for the Tenth Circuit

8/10/99

8/19/99

10/27/99

No. 99-1351

[1255290] Civil case docketed. Preliminary

record filed. DATE RECEIVED: 8/9/99.

Transcript order form due 8/20/99 for Charlotte

Hoard in 99-1351, 99-1352, and 99-1353

pursuant to R.42.1. Docketing statement due

8/20/99 for USA ex rel, Stone in 99-1351, for

Boeing No. American and Rockwell Internat’l.

in 99-1352, and for United States in 99-1353.

Notice of appearance due 8/20/99 for Boeing No.

American, Rockwell Internat’l. USA ex rel,

Stone and USA 99-1351, 99-1352, and 99-1353.

(afw) (99-1351 99-1352 99-1353]

* * *

[1258138] Notice filed that the transcript is

already on file in district court. Notice due that

record is complete 8/25/99 for Richard P.

Matsch. (afw) {99-1351

[1258140] Docketing statement filed by USA ex

rel, Stone in 99-1351. Original and 4 copies. c/s:

y. (afw) [99-1351]

* * x

[1275087] Filed notice record is complete

10/27/99. (nak) [99-1351 99-1352 99-1353]

* * *

2/7/00

3/20/00

3/22/00

JA-2

[1300144] Brief filed by Rockwell Internat’l.,

Boeing No. American in 99-1351, 99-1352, 99-

1353. Original and 7 copies. c/s: y. Served on

2/7/00. Oral argument? y. Appendix filed (9

volumes). Original and 1 appendix copy.

Appendix Pages: 5346. (pdw) [99-1351 99-1352

99-1353]

[1511864] Oversized record filed. Record can

be located at Section: I Shelf: 2 (jaz) [99-1351

99-1352 99-1353]

* * *

[1310564] Brief filed by USA ex rel, Stone in

99-1351, 99-1352 and 99-1353. Original and 7

copies. ¢/s: y. Oral Argument? y (afw) [99-1351

99-1352 99-1353]

* * *

[1310573] Appendix filed by USA ex rel, Stone

in 99-1351, 99-1352 and 99-1353. Original and 1

copy. Appendix pages: 145. c/s: y. (afw) [99-

1351 99-1352 99-1353] :

* * *

[1311730] Appellee’s motion to file an oversize

brief 11,666 long (99-1351, 99-1352, 99-1353]

filed by USA ex rel, Stone and United States.

Original and 3 copies. c/s: y (nak) [99-1351 99-

1352 99-1353]

3/28/00

4/13/00

5/10/00

9/24/01

9/27/01

JA-3

{1312528} Order filed by Judges Porfilio,

Murphy granting in part United States, ex rel.

James Stone’s motion to file an oversize brief.

The governments’ brief may not exceed 7000

words, the brief remains due on or before 4/7/00

[1311730-1} in 99-1351, 99-1352, 99-1353.

Parties served by mail. (nak) [99-1351 99-1352

99-1353]

[1317199] Brief filed by United States in 99-

1351, 99-1352 and 99-1353. Original and 7

copies. c/s: y. Oral Argument? y. Answer and

reply brief due for Rockwell on 5/8/00. (kf) [99-

1351 99-1352 99-1353)

* * *

Brief filed by Appellant/Cross-Appellee

Rockwell Internat’). in 99-1351, 99-1352 and in

99-1353. Original and 7 copies. c/s: y.

Supplemental Appendix Volume X (Original

and 1 copy) filed by Rockwell Internat’l. Reply

brief due for Stone on 5/24/00. (kf) [99-1351 99-

1352 99-1353]

* * *

[1450136] Terminated on the Merits after Oral

Hearing; Judgment Affirmed; Written, Signed,

Published. Briscoe, concurring and dissenting

on the conclusion that James Stone qualifies as

an “original source” under 31 U.S.C.

3730(e)(4)(E); Holloway, authoring judge;

Politz. (99-1351, 99-1352, 99-1353] (kf) [99-1351

99-1352 99-1353]

[1451137] Amendment to opinion (correction of

site referenced) filed. (gah) [99-1351 99-1352 99-

1353]

11/2/01

11/23/01

12/11/01

12/17/01

JA-4

[1460970] Petition for rehearing en banc [99-

1351, 99-1352, 99-1353] filed by Rockwell

Internat’l. in 99-1351, 99-1352 and 99-1353.

Original and 14 copies. c/s: y (afw) [99-1351 99-

1352 99-1353)

* * *

[1465412] Response to Rockwell’s petition for

rehearing en banc filed by USA ex rel, Stone in

99-1351, 99-1352 and 99-1353 submitted to

court. Original and 14 copies. c/s: y. (jal) [99-

1351 99-1352 99-1353]

* * *

[1469690] Appellants’ motion filed by

Appellants Rockwell Internat’] and Boeing No.

American in 99-1351, 99-1352, and 99-1353 to

strike argument one in Stone’s response or in

the alternative, for leave to file reply to Stone’s

response. Original and 4 copies. c/s: y. (gah)

[1469692] Reply to Stone’s response received

from Rockwell Internat’] and Boeing No.

American in 99-1351, 99-1352, and 99-1353

(reply attached to motion), but not filed.

Original and 4 copies. c/s: y. (gah) [99-1351 99-

1352 99-1353]

* +* *

[1471268] Response to motion to strike

argument, filed by USA ex rel, Stone in 99-

1351, 99-1352, and 99-1353. Original and 14

copies. c/s: y. (gah) [99-1351 99-1352 99-1353]

* * *

3/4/02

12/23/02

JA-5

[1490712] Order filed by Judges Briscoe,

Holloway and Politz granting Petition for

rehearing for the limited purpose of modifying

the opinion and ordering a limited remand to

the district court and denying suggestion of

rehearing en bane. [1460970-1] This court

retains jurisdiction in 99-1351, 99-1352 and 99-

1353. (afw) (99-1351 99-1352 99-1353]

[1490739] Order filed by Judges Briscoe,

Holloway and Politz reopening appeal and

remanding case for the limited purpose of

modifying the opinion and ordering a limited

remand to the district court for the purpose of

that court making findings of fact and

conclusions concerning the issue of disclosure

prior to filing of this action in accordance with

the False Claims Act, concerning the saltcrete,

pondcrete and irrigation matters. Upon

completion of those proceedings, a

supplemental record will be transmitted to this

court. On all other issues except that requiring

the additional factual findings and conclusions

on saltcrete, pondcrete and irrigation matters,

the rulings made previously in our opinion are

undisturbed. (See Order on Rehearing)

Supplemental record on appeal due 4/30/02 for

Richard P. Matsch in 99-1351, 99-1352 and 99-

1353. Parties served by mail. (afw) [99-1351 99-

1352 99-1353)

[1573918] Supplemental record filed: 3

Volumes—Supp. ROA Pages: 3 volumes. Copy

filed in Volumes: y. (jal) [99-1351 99-1352 99-

1353]

12/23/02

12/26/02

1/6/03

1/24/03

JA-6

[1573941] Appellee’s motion for order vacating

judgment for qui tam plaintiff James S. Stone in

accordance with district court’s findings and

conclusions on limited remand filed by

Rockwell Internat’l. in 99-1351, 99-1352 and 99-

1353. Original and 3 copies. c/s: y. (jal)

[1574169] Response and motion for extension of

time of plaintiff-appellee/cross-appellant James

S. Stone to Rockwell’s motion for and order

vacating judgment for Qui Tam plaintiff 99-

1351, 99-1352 and 99-1353. Original and 3

copies. c/s: y. (klp) (99-1351 99-1352 99-1353]

[1574171] Response and motion for extension of

time of plaintiff-appellee/cross-appellant James

S. Stone to Rockwell’s motion for an ordere

vacating judgment for Qui Tam Plaintiff

Document [1574169-1} in 99-1351, 99-1352 and

99-1353 submitted to court. (klp) [99-1351 99-

1352 99-1353]

[1575917] Order filed by Judges Briscoe and

Holloway- the panel has decided that they shall

proceed as a two-judge panel in view of the

death of Judge Politz. Appellees- Cross-

Appellants’ motion for extension of time to

respond to appellants-cross-appellees’ motion

for order vacating judgment is _ granted.

Response to motion due 1/29/03 for USA ex rel,

Stone and United States in 99-1351, 99-1352,

and 99-1353. Parties served by mail. (gah) [99-

1351 99-1352 99-1353}

* * *

[1582687] Supplement to Preliminary record on

appeal transmitted on 8/9/99 and 8/12/99 filed.

(afw) [99-1351 99-1352 99-1353]

—

1/29/03

2/18/03

3/7/03

3/5/04

4/16/04

JA-7

[1583009] Appellee/cross-appellant James S.

Stone’s (1) response to Rockwell’s motion dated

12/23/02 for an order vacating judgment for Qui

Tam plaintiff and (2) motion for a ruling

affirming the judgment in its entirety filed by

USA ex rel, Stone in 99-1351, 99-1352 and 99-

1353. Original and 3 copies. c/s: y. (kip) [99-

1351 99-1352 99-1353]

* * *

[1588370] Reply brief in support of motion for

order vacating judgment filed by Rockwell

Internat’l. in 99-1351, 99-1352, and 99-1353.

Original and 3 copies. c/s: y. (gah) [99-1351 99-

1352 99-1353]

* * *

[1593825] Reply in support of cross-motion for

ruling affirming judgment in its entirety filed

by USA ex rel, Stone and United States in 99-

1351, 99-1352 and 99-1353. Original and 3

copies. c/s: y. (gah) [99-1351 99-1352 99-1353]

* * *

[1691281] Terminated on the Merits after

Submission Without Oral Hearing; Affirmed;

Written, Signed, Unpublished. Briscoe,

dissenting; Holloway, authoring judge; Hartz.

[99-1351, 99-1352, 99-1353]. Parties served by

mail on 3/5/04. (na) (99-1351 99-1352 99-1353)

* ” *

{1701567} Petition for rehearing in bane filed by

Rockwell Internat’l.and Boeing No. American

in 99-1351, 99-1352 and 99-1353. Original and 18

copies. c/s: y. (gah) [99-1351 99-1352 99-1353)

4/22/04

5/6/04

1/4/06

JA-8

[1702976] Appellee’s motion for attorney fees

(99-1351, 99-1352, 99-1353, 03-1093] filed by

USA ex rel, Stone. Original and 3 copies. ¢/s: y

(na) (03-1093 99-1351 99-1352 99-1353]

{1702981} Declaration of Hartley David Alley

regarding fees filed by USA ex rel, Stone in 99-

1351, 99-1352, 99-1353, and 03-1093. Original

and 3 copies. ¢/s: y (na) [03-1093 99-1351 99-1352

99-1353]

[1702983] Affidavit of Maria T. Vullo in support

of motion for attorney fees and expenses filed

by USA ex rel, Stone 99-1351, 99-1352, 99-1353,

03-1093. Original and 3 copies. c/s: y (na) [03-

1093 99-1351 99-1352 99-1353]

* * x

[1706680] Response filed by USA ex rel, Stone

in 99-1351, 99-1352, and 99-1353 to Rockwell’s

petition for rehearing and submitted to court.

Original and 18 copies. ¢/s: y. (gah) [99-1351 99-

1352 99-1353]

* * *

[1875325] Order filed by Judges Briscoe,

Holloway & Hartz denying rehearing and

rehearing en banc [1701567-1] in 99-1351, 99-

1352, 99-1353. (sts) [99-1351 99-1352 99-1353)

+ * *

4/5/06

4/10/06

10/11/06

10/19/06

JA-9

[1904818] Order filed by Judges Briscoe,

dissenting, Holloway and Hartz granting

Appellee Stone’s motion for attorney fees

[1702976-1] and remanding to district court for

a determination of a reasonable fee award in 99-

1351, 99-1352 and 99-1353. Parties served by

mail. (afw) [99-1351 99-1352 99-1353]

[1906863] Petition for writ of certiorari filed on

April 4, 2006. Supreme Court Number 05-1272.

(sts) (99-1351 99-1352 99-1353]

{1964030] Supreme Court order dated 9/26/06

granting certiorari limited to question 1

presented by the petition filed. (sts) [99-1351

99-1352 99-1353]

[1966565] Certiorari record transmitted to

Supreme Court. Index follows: Volume 1 - 10th

Cir. dockets for nos. 99-1351, 99-1352 & 99-1353;

motion to dismiss; response to motion to

dismiss; response to motion to dismiss; reply in

support of motion to dismiss; order referring

motion to dismiss to merits panel; supplemental

authority; submission order; supplemental

authority; judgment and opinion; Volume 2 -

amendment to opinion; petition for rehearing en

banc; response to petition for rehearing; motion

to strike or file reply; order on rehearing;

motion to vacate judgment;; response to motion

to vacate/motion for extension; order re: change

in panel; Volume 3 - response to motion to

vacate/x-motion for enforcement; motion to

supplement; response to motion to supplement;

reply in support of motion to vacate/response to

x-motion for enforcement; reply in support of

motion for enforcement; reply in support of

motion to supplement; order and judgment;

petition for rehearing en banc; response to

JA-10

petition for rehearing; supplemental authority;

supplemental authority; order denying

rehearing en banc; Enclosed separately -

appendix and supplemental appendix to motion

to dismiss; opening brief and appendix; brief of

amici curiae; opening/response brief and

supplemental appendix; opening response brief;

answer/reply brief and supplemental appendix;

reply brief; reply brief; 3-volume supplemental

record on appeal (d.c.); 2nd supplemental

appendix; clerk’s statement -re: record; and

clerk’s certificate. (sts) [99-1351 99-1352 99-

1353]

07/06/1989

12/28/1990

01/14/1991

04/08/1991

JA-11

U.S. District Court for the

District of Colorado

No. 1:89-ev-01154-RPM

N/A

Complaint [not on docket sheet

because filed under seal]

* + *

Motion by defendant Rockwell Intl

Corp to dismiss case before Judge

Jim R. Carrigan (lam) Entered:

12/31/1990)

* * *

BRIEF by defendant Rockwell Intl

Corp in support of motion to dismiss

ease before Judge Jim R. Carrigan

[26-1] (lam) (Entered: 12/31/1990)

* + *

RESPONSE by plaintiff James S.

Stone to motion to dismiss [26-1]

(lam) (Entered: 01/15/1991)

* + «

RESPONSE by plaintiff James S.

Stone to motion for protective order

staying discovery [36-1] (lam)

(Entered: 04/09/1991)

* * *

08/08/1991

09/09/1991

11/07/1991

03/26/1992

05/2 1/1992

JA-12

ORDER by Judge Jim R. Carrigan:

dft’s mtn to dismiss is granted in

part and denied in part [26-1]; as to

plfs first claim, the dft’s mtn to

dismiss is denied; as to plfs second

claim, the dft’s mtn is granted; plfs

second claim is dismissed; and parties

are to meet w/in 11 days in attempt

to settle remaining claim; cs1 shall

report in writing w/in 15 days after

they meet re settlement negotiations

(ce: all counsel) ; entry date: 8/12/91

(lam) (Entered: 08/12/1991)

* * *

ANSWER by defendant Rockwell

Int] Corp (lam) (Entered: 09/11/1991)

* * *

MINUTE ORDER: by Judge Jim R.

Carrigan; Jury Trial 8:30 1/4/93 (ce:

all counsel) ; entry date : 11/12/91

(lam) (Entered: 11/12/1991)

* * *

NOTICE by USA declining to

intervene in this action (lam)

(Entered: 03/27/1992)

* * *

MOTION by defendant Rockwell Int]

Corp to compel adequate written

discovery responses by plf James S.

Stone (lam) (Entered: 05/22/1992)

* . *

05/26/1992

08/28/1992

JA-13

Second supplemental RESPONSES

to dft’s first interrogatories by

plaintiff James S. Stone to case [0-0)

(lam) (Entered: 05/27/1992)

* * *

MOTION by defendant Rockwell Intl

Corp for sanctions against plf for

failure to comply with discovery

order (in bound volume) (gms)

(Entered: 08/28/1992)

Attachments (APPENDIX) filed by

defendant Rockwell Intl Corp to

motion for sanctions against plf for

failure to comply with discovery

order [76-1] (in bound volume) (gms)

(Entered: 08/28/1992)

* * *

09/09/1992

JA-14

COURTROOM MINUTES (Hearing

on dft Rockwell’s second mtn to

compel responses to req for prod # 5

& 6 and dft’s mtn for sanctions

against plf for failure to comply with

discovery order) by Magistrate

Judge Bruce D. Pringle: Parties

inform court request for production

#6 has been resolved; ORDERED

request #5 of the mtn to compel is

taken under advisement, pifs

disclosure statement submitted to

court for in camera _ review;

ORDERED plf to provide to dft a list

of each category of area of violation,

plf to identify each regulation and

statute that was violated and

supports the claims in the lawsuit ...

documents and information to be

supplied w/in 40 days or on or before

10/20/92 [74-1]; ORDERED mtn for

sanctions is granted in part. Only as

to plfs 3rd suppl response, dft is

allowed reasonable and necessary

fees in determining responses were

inapplicable. Dft to submit an

affidavit on or before 9/23/92, plf may

respond to affidavit on or before

10/5/92. In all other aspects, the mtn

for sanctions is denied [76-1]; ; Mag

Conf 3:30 10/30/92 ; entry date:

9/16/92 (lam) (Entered: 09/16/1992)

* * *

10/29/1992

12/09/1992

12/15/1992

03/08/1993

120

121

125

126

149

JA-15

MOTION by defendant Rockwell Intl

Corp for order limiting the evidence

pif can present at trial (lam) Modified

on 11/04/1992 (Entered: 10/30/1992)

* * +

MOTION by plaintiff James S. Stone

for partial summary judgment (on

the issue of dft’s liability under False

Claims Act) before Judge Jim R.

Carrigan (lam) (Entered: 12/09/1992)

Memorandum BRIEF by plaintiff

James S. Stone in support of motion

for partial summary judgment [120-1]

(lam) (Entered: 12/09/1992)

x * *

MOTION by defendant Rockwell Int]

Corp to dismiss complaint before

Judge Carrigan for lack of subj

matter jurisdiction (lam) Modified on

01/14/1994 (Entered: 12/16/1992)

BRIEF by defendant Rockwell Intl

Corp in support of motion to dismiss

complaint for lack of subject matter

jurisdiction before Judge Jim R.

Carrigan [125-1] (lam) (Entered:

12/16/1992)

* * *

MEMORANDUM OF LAW by

plaintiff James S. Stone in opposition

to motion to dismiss complaint for

lack of subject matter jurisdiction

before Judge Jim R. Carrigan [125-1]

(lam) (Entered: 03/08/1993)

03/08/1993

04/13/1993

05/12/1993

05/20/1993

150

154

156

157

162

165

JA-16

AFFIDAVIT of James S. Stone

regarding opposition brief [149-1]

(lam) (Entered: 03/08/1993)

* * *

REPLY Brief by defendant Rockwell

Int] Corp in support of dft’s motion to

dismiss complaint for lack of subject

matter jurisdiction [125-1] (lam)

(Entered: 04/13/1993)

* * *

AFFIDAVIT of John F. McNett

(faxed signature) (lam) (Entered:

04/13/1993)

AFFIDAVIT of Christopher J.

Koenigs (lam) (Entered: 04/13/1993)

* * *

SURREPLY Memorandum of law by

plaintiff James S. Stone in opp to

dft’s motion to dismiss complaint for

lack of subject matter jurisdiction

[125-1] (lam) (Entered: 05/13/1993)

* * *

Sur-SURREPLY brief by defendant

Rockwell Intl Corp in support [125-1]

of motion to dismiss complaint for

lack of subject matter jurisdiction

[125-1] (lam) (Entered: 05/21/1993)

11/30/1993

12/14/1993

02/02/1994

11/07/1995

11/14/1995

166

169

173

257

258

JA-17

STATEMENT (Letter) by plaintiff

James S. Stone in regards recently

decided case and proposed legislation

that bear on motion by dfi Rockwell

to dismiss complaint {125-1} (lam)

(Entered: 12/01/1993)

* * *

Supplemental BRIEF FILED by

defendant Rockwell Intl Corp in

support of dft’s mtn to dismiss [125-1]

(lam) (Entered: 12/15/1993)

* * *

ORDER by Judge Jim R. Carrigan:

denying dft’s motion to dismiss for

lack of subject matter jurisdiction is

denied [125-1] ; status report re

settlement negotiations 2/17/94 (ce:

all counsel) ; entry date: 2/3/94 (lam)

(Entered: 02/03/1994)

* * *

ORDER by Chief Judge Richard P.

Matsch Case reassigned to Chief

Judge Richard P. Matsch (ce: all

counsel) ; entry date: 11/9/95 (lam)

(Entered: 11/09/1995)

MOTION by USA to intervene, ex

rel. (lam) (Entered: 11/17/1995)

DECLARATION of John A. Kolar as

esl for intv plf USA re motion to

intervene, ex rel. [257-1) (lam)

(Entered: 11/17/1995)

11/14/1995

12/14/1995

11/19/1996

12/20/1996

01/21/1997

259

271

303

JA-18

BRIEF (Memorandum of points &

authorities) by intervenor-plaintiff

USA in support of motion to

intervene [257-1] (lam) (Entered:

11/17/1995)

* * *

RESPONSE by defendant Rockwell

Intl Corp to Gov’ts motion to

intervene, ex rel. (257-1] (lam)

(Entered: 12/15/1995)

* * *

MEMORANDUM, OPINION, AND

ORDER: by Chief Judge Richard P.

Matsch granting motion to intervene,

ex rel. by US (257-1) adding plaintiff

USA, ex rel. (cc: all counsel) ; entry

date: 11/20/96 (lam) (Entered:

11/20/1996)

* * *

AMENDED COMPLAINT _ by

plaintiff USA, ex. rel. James S.

Stone; adding The Boeing Corp.,

Boeing North American, Inc. (lam)

(Entered: 12/20/1996)

* * *

ANSWER by defendants to amended

complaint [299-1] (lam) (Entered:

01/22/1997)

* * /~

10/01/1997

11/10/1997

11/14/1997

394

395

396

398

JA-19

TRANSCRIPT of proceedings before

JudgeMatsch of preliminary ptc of

9/26/97 ( 1-57 pages) Prepared By:

Federal Reporting Service Inc (lam)

(Entered: 10/02/1997))

* * *

MOTION by defendant Rockwell Intl

Corp in limine re: criminal charges

(former emp1) Modified on 11/12/1997

(Entered: 11/12/1997)

EXHIBIT 49 to dfts’ motion in limine

re: criminal charges [394-1] (placed in

exhibit room) (former empl)

Modified on 11/12/1997 (Entered:

11/12/1997)

APPENDIX (Vols I-V) filed by

defendants to motion in limine re:

criminal charges [394-1] (placed in

exhibit room) (lam) Modified on

11/12/1997 (Entered: 11/12/1997)

* * *

COURTROOM MINUTES by Chief

Judge Richard P. Matsch denying

motion in limine re: criminal charges

[394-1] ; claim re: plutonium in duct

work will be severed attrial; status

confheld 11/14/97 , ; further status

conf set for 3:00 12/5/97 ; entry date:

11/17/97 Court Reporter: Kathy

Terasaki, ECR (former empl)

(Entered: 11/17/1997)

11/14/1997

04/16/1998

09/21/1998

09/28/1998

10/09/1998

399

424

JA-20

ORDER by Chief Judge Richard P.

Matsch denying motion in limine re:

criminal charges [394-1] (cc: all

counsel) ; entry date: 11/17/97 (former

emp1) (Entered: 11/17/1997)

* * *

AMENDED ANSWER to amended

emp [303-1] by defendant Rockwell

Int! Corp, defendant Boeing

Corporation, defendant Boeing

North Amer (lam) (Entered:

04/17/1998)

* * *

Memorandum of Law (BRIEF)

FILED by defendants supporting

their proposed jury instructions

relating to false claims act elements

of ~ liability and damages (lam)

(Entered: 09/22/1998)

* * *

TRANSCRIPT of _ proceedings

before Chief Judge Matsch of 9/25/98

Status Conf ( 1-53 pages) Prepared

By: Federal Reporting Service Inc

(lam) (Entered: 09/29/1998)

* * *

RESPONSE by plaintiff James S.

Stone to dfts’ memorandum on

proposed jury instructions pertaining

to Mr. Stone’s role as relator re brief

[556-1] (lam) (Entered: 10/09/1998)

* * *

10/28/1998

11/20/1998

11/24/1998

N/A

575

576

JA-21

Unopposed MOTION by defendants

for jeave to file reply brief re Stone’s

alleged role as qui tam relator

(former empl) (Entered: 10/29/1998)

Tendered Reply Brief Re Stone’s

Alleged Role As Qui Tam Relator

submitted by defendants pending

ruling on motion for leave to file reply

brief re Stone’s alleged role as qui

tam relator [565-1] (former empl)

(Entered: 10/29/1998)

* * *

MOTION by plaintiff James S. Stone

for leave to file surreply brief re

alelged role as qui tam relator

(former emp1) (Entered: 11/23/1998)

Tendered surreply brief submitted

by plaintiff James S. Stone motion

for leave to file surreply brief re

alelged role as qui tam relator [568-

1} (former empl) (Entered:

11/23/1998)

* * *

Supplemental REPLY brief by

defendant Rockwell [Intl Corp,

defendant Boeing North Amer re:

Mr. Stone’s alleged role as qui tam

realtor (former emp!) (Entered:

11/27/1998)

SurREPLY by plaintiff James S.

Stone to def reply brief re: Mr.

Stone’s alleged role as qui tam realtor

(former empl) (Entered: 11/27/1998)

02/04/1999

02/12/1999

02/17/1999

02/22/1999

02/23/1999

616

628

630

643

JA-22

PRE- TRIAL ORDER by Chief

Judge Richard P. Matsch (ce: all

counsel) (former empl) (Entered:

02/05/1999)

* * *

MOTION by plaintiff, defendant,

special master, in‘ervenor, plaintiff,

defendant for order accepting

stipulation to admissibility of exhibits

(former empl) (Entered. 02/16/1999)

* * *

STIPULATION re Mr. Stone status

as relator or right to relief (former

empl) (Entered: 02/18/1999)

* * *

TRANSCRIPT of proceedings of

FINAL PRETRIAL

CONFERENCE (2/19/99) (pages 1-

41) Prepared By: Federal Reporting

Service (former empl) (Entered:

02/22/1999)

* * *

TRANSCRIPT of proceedings of

2/22/99 ( 202 pages) Prepared By:

Fed Rptg (former empl) (Entered:

02/24/1999)

* * *

02/24/1999

_ 02/25/1999

02/26/1999

03/01/1999

03/02/1999

03/03/1999

647

649

JA-23

TRANSCRIPT of proceedings of

2/23/99 ( 442 pages) Prepared By:

Fed Rptg (former empl) (Entered:

02/25/1999)

* * *

TRANSCRIPT of proceedings of

2/24/99 ( 706 pages) Prepared By:

Fed Rptg (former emp!) (Entered:

02/26/1999)

* * *

TRANSCRIPT of proceedings of

2/25/99 { 945 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/01/1999)

* x *

TRANSCRIPT of proceedings of

2/26/99 ( 1064 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/01/1999)

* * *

TRANSCRIPT of proceedings of

3/1/99 ( 1313 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/02/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

7 on 3/2/99 before Chief Judge

Matsch ( 1314-1569 pages) Prepared

By: Federal Rpt Sve (gms) (Entered:

03/03/1999)

* * +*

03/04/1999

03/05/1999

03/09/1999

03/10/1999

03/11/1999

03/12/1999

669

681

689

695

698

JA-24

TRANSCRIPT of proceedings of

3/3/99 ( 1815 pages) Prepared By:

Fed Rptg (former emp1) (Entered:

03/05/1999)

* + *

TRANSCRIPT of proceedings of

3/4/99 (2055 pages) Prepared By: Fed

Rptg (former empl) (Entered:

03/08/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

10 before Judge Matsch (2056-2323

pages) Prepared By: Federal Rpt

Sve. (gms) (xintered: 03/09/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

11 on 3/9/99 before Judge Matsch

(2324-2585 pages) Prepared By:

Federal] Rpt Sve (gms) (Entered:

03/11/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

12 before Judge Matsch ( 2586

through 2809 pages) Prepared By:

Federal Rpt Sve (gms) (Entered:

03/12/1999)

x * *

TRANSCRIPT of Trial to Jury, Day

13 before Judge Matsch (2810-3068

pages) Prepared By: Federal Rpt Sve

(gms) (Entered: 03/12/1999)

03/16/1999

03/17/1999

03/18/1999

03/19/1999

03/22/1999

702

710

711

712

718

JA-25

TRANSCRIPT of Trial to Jury, Day

14 before Judge Matsch (3069-3346

pages) Prepared By: Federal Rpt Sve

(gms) (Entered: 03/16/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

15 before Judge Matsch (3347-3575

pages) Prepared By: Federal Rpt Sve

(gms) (Entered: 03/18/1999)

TRANSCRIPT of Trial to Jury, Day

16 before Judge Matsch (3576-3849

pages) Prepared By: Federal

Reporting Service (former empl)

(Entered: 03/19/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

17 before Judge Matsch on 3/18/99

(3850-4119 pages) Prepared By:

Federal Rpt Sve (gms) (Entered:

03/22/1999)

* * *

TRANSCRIPT of Trial to Jury, Day

18 on 3/19/99 before Judge Matsch.

(4120-4238 pages) Prepared By:

Federal Rpt Sve (gms) (Entered:

03/23/1999)

* * *

03/23/1999

03/24/1999

03/25/1999

03/26/1999

03/29/1999

03/30/1999

724

728

737

740

JA-26

TRANSCRIPT of Trial to Jury, Day

19 on 3/22/99 before Judge Matsch.

(4239-4509 pages) Prepared By:

Federal Rpt Sve (gms) (Entered:

03/24/1999)

* * *

TRANSCRIPT of proceedings of

Trial to Jury, day 20 on 3/23/99 before

Judge Matsch (4510-4762 pages)

Prepared By: Federal Rpt Sve (gms)

(Entered: 03/24/1999)

* * *

TRANSCRIPT of proceedings of

3/24/99 ( 4914 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/25/1999)

* * *

TRANSCRIPT of proceedings of

3/25/99 ( 5032 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/30/1999)

* * *

TRANSCRIPT of proceedings of

3/26/99 (5057 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/30/1999)

* * *

TRANSCRIPT of proceedings of

3/29/99 (5276 pages) Prepared By:

Fed Rptg (former empl) (Entered:

03/30/1999)

03/31/1999

04/01/1999

04/02/1999

04/16/1999

742

744

747

748

751

752

JA-27

TRANSCRIPT of proceedings of

3/30/99 ( 5326 pages) Prepared By:

Fed Rptg (former empl) (Entered:

04/01/1999)

* * *

TRANSCRIPT of proceedings of

3/31/99 (5336 pages) Prepared By:

Fed Rptg (former empl) (Entered:

04/02/1999)

+ * *

VERDICT for plaintiff James S.

Stone, plaintiff USA against

defendant Rockwell Intl Corp,

defendant Boeing North Amer ;

entry date: 4/2/99 (former empl)

(Entered: 04/02/1999)

TRANSCRIPT of proceedings of

4/1/99 ( 5346 pages) Prepared By:

Fed Rptg (former empl) (Entered:

04/05/1999)

* * *

BRIEF FILED by _— defendant

Rockwell Intl Corp, defendant Boeing

North Amer re: entry of judgment on

verdict [747-1] (former empl)

(Entered: 04/19/1999)

APPENDIX filed by defendant

Rockwell Intl Corp, defendant Boeing

North Amer re: brief [751-1] (former

empl) (Entered: 04/19/1999)

* * *

05/04/1999

05/06/1999

05/10/1999

05/13/1999

760

761

764

766

770

772

JA-28

RESPONSE by plaintiff James S.

Stone, plaintiff USA to brief [751-1]

(former empl) (Entered: 05/07/1999)

RESPONSE by plaintiff James S.

Stone to brief [751-1] (former empl)

(Entered: 05/07/1999)

* * *

SUPPLEMENT by plaintiff USA

response [760-1] (former empl)

(Entered: 05/07/1999)

* * +

REPLY by defendant Rockwell Intl

Corp, defendant Boeing North Amer

response [761-1] (former empl)

(Entered: 05/07/1999)

* * *

TRANSCRIPT of proceedings of

5/7/99 ( 20 pages) Prepared By:

Federal Reporting Service (former

empl) (Entered: 05/11/1999)

ORDER by Chief Judge Richard P.

Matsch Clk to enter final jgm under

RRCP 54(b) awarding pif

compensatory damages of $4,172,325

and pymt to US of civil penalty of

$15,000 on Count 1 of Amended

Complaint; jgm to enter for defs

dismissing w/prejudice counts 2-5 of

amended complaint; bill of costs due

10 day from entry of j gm (ce: all

counsel) entry date: 5/13/99 (former

empl) (Entered: 05/13/1999)

05/13/1999

05/26/1999

05/27/1999

773

777

776

778

781

J A-29

JUDGMENT: by Clerk James R.

Manspeaker, approved by Chief

Judge Matsch regarding [772-1]

order; plf to recover from defs

compensatory damages of $4,172,325

on Count One of Amended

Complaint; defs to pay to US civil

penalty of $15,000 on Count 1 of

Amended Complaint; counts 2-5 of

amended complaint dismissed

w/prejudice; bill of costs to be

submitted within 10 days (cc: all

counsel); entry date: 5/13/99 (former

empl) (Entered: 05/13/1999)

AFFIDAVIT of William R. Gray

motion for attorney fees and

expenses [776-1] (former empl)

Entered: 05/28/1999)

~ * *

MOTION by plaintiff James S. Stone

for attorney fees and expenses

(former empl) (Entered: 05/28/1999)

MOTION by defendant Rockwell Intl

Corp to dismiss for lack of jurisd, or

for hearing (former empl) (Entered:

05/28/1999)

* * *

SUPPLEMENT (submission of

predecessor counsel’s fees and costs)

by plaintiff James S. Stone motion for

attorney fees and expenses [776-1]

(former empl) (Entered: 06/01/1999)

* * *

06/10/1999

08/09/1999

786

790

792

794

JA-30

ORDER by Chief Judge Richard P.

Matsch regarding [776-1] motion for

attorney fees and expenses ruling

reserved pending outcome of appeals

(ce: all counsel); entry date: 6/10/99

(former empl) (Entered: 06/10/1999)

* * *

ORDER by Chief Judge Richard P.

Matsch granting motion for order

correcting clerical error in jgm [775-

1] (ec: all counsel) ; entry date:

6/10/99 (former empl) (Entered:

06/10/1999)

+ * *

AMENDMENT to judgment; plf

shall have and recover from dfts

$4,172,327.40 on count 1; dfts shall

pay civil penalty of $15,000 on count

1, counts 2-5 of the amend comp

dismissed w/prej; interest to accrue

at 4.727% plus costs [773-1] (former

emp1) (Entered: 06/10/1999)

* * *

MOTION by defts Rockwell Intl

Corp, Boeing North Amer for

written order of ruling on renewed

motion to dismiss plts claim for lack

of jurisdiction or in the alternative

for hearing on such motion (gms)

(Entered: 08/09/1999)

JA-31

08/09/1999 795 NOTICE OF APPEAL by plaintiff

James S. Stone in re: amended final

judgment of 6/10/99 [792-1], order

[789-1] of 6/10/99 and any other

adverse orders or rulings that

impacted the jury’s erroneous

damages verdict under False Claims

Act; Notice of transcript order form

due 8/19/99 ; Notice mailed to all

counsel on 8/9/99 (gms) (Entered:

08/09/1999)

08/09/1999 N/A $100.00 fee and $5.00 fee paid.

Receipt No 208224. re: appeal [795-1]

(gms) (Entered: 08/09/1999)

08/09/1999 796 NOTICE OF APPEAL by defts

Rockwell Int! Corp, Boeing North

Amer in re: judgment [773-1] of

5/13/99 as amended [792-1] on 6/10/99; —

Notice mailed to all counsel on 8/9/99

(gms) (Entered: 08/09/1999)

_ 08/09/1999 N/A $100.00 fee and $5.00 fee paid.

Receipt No 208233. re: appeal [796-1]

(gms) Entered: 08/09/1999)

08/09/1999 797 NOTICE OF APPEAL by plaintiff

USA in re: amended judgment of

6/10/99 [792-1], order for entry of final

judgment pursuant to Rule 54 (b)

[772-1], order denying pltfs’ motion

for new trial re: damages [789-1] &

order [791-1] denying pltf USA’s

motion to alter or amend judgment;

Notice mailed to all counsel on 8/9/99

Fee Status: USA (gms) (Entered:

08/09/1999)

* + *

08/11/1999 799

08/12/1999 800

J A-32

ORDER by Chief Judge Richard P.

Matsch denying nunc pro tunc 6/

10/99 motion to dismiss for lack of

jurisd [778-1}, denying motion for

hearing [778-2] (cc: all counsel) ; entry

date: 8/12/99 (former empl) Entered:

08/12/1999)

RESPONSE by plaintiff James S.

Stone to motion for written order of

ruling on renewed motion to dismiss

pltfs claim for lack of jurisdiction or

in the alternative for hearing on such

motion [794-1] (former empl)

(Entered: 08/12/1999)

* * *

03/06/2002 809

04/04/2002

810

811

JA-33

Copy of ORDER on Rehearing and

Published Opinion from Court of

Appeals {797-1}, (796-1], [795-1] the

petition for rehearing by the panel

has been considered by the panel and

it has been’ determined _ that

rehearing is granted for the limited

purpose of modifying the opinion and

ordering a limited remand to the

USDC; the limited remand to the

USDC is for the purpose of making

findings of fact and conclusions

concerning the issue of disclosure

prior to filing of this acting in

accordance w/the False Claims Act,

concerning the saltcrete, pondcrete

and irrigation matters and any

further proceedings in the USDC

which the Judge deems necessary;

upon completion, a suppl record will

be transmitted to the USCA and the

USCA will | otherwise _ retain

jurisdiction of this cause; upon

receipt of the suppl record, final

disposition of these appeals will be

made (former empl) (Entered:

03/06/2002)

MOTION by plaintiff James S. Stone

for a finding on limited remand that

Mr. Stone made the _ requisite

disclosures to the Government prior

to filing this action (lam) (Entered:

04/04/2002)

Memorandum (BRIEF) by plaintiff

James S. Stone in support of motion

for a finding on limited remand (810-

1} (lam) (Entered: 04/04/2002)

04/04/2002

04/04/2002,

04/24/2002

05/07/2002

812

813

814

815

817

819

JA-34

AFFIDAVIT of Maria T. Vullo in

support of motion for a finding on

limited remand {810-1} (lam)

(Entered: 04/04/2002)

Excerpts from the RECORD

(Volume I of II) by plaintiff James S.

Stone (placed in exhibit room) (lam)

(Entered: 04/04/2002)

Excerpts from the RECORD

(Volume II of II) by plaintiff James

S. Stone (placed in exhibit room)

(lam) (Entered: 04/04/2002)

RESPONSE by defendants to

plaintiff Stone’s motion for a finding

that he made the requisite pre-filing

disclosures to the government [810-1]

- (lam) (Entered: 04/25/2002)

Additional RECORD on Remand by

_ defendants (placed in exhibit room)

(lam) (Entered: 04/25/2002)

Additional Excerpts from Appellate

RECORD by defendants (placed in

exhibit room) (lam) (Entered:

04/25/2002)

* * *

MOTION by defendants for finding

that plf Stone lacked direct &

independent knowledge of info on

which his spray irrigation allegations

are based (lam) Modified on

05/22/2002 (Entered: 05/08/2002)

05/09/2002

05/22/2002

06/06/2002

12/02/2002

821

J A-35

REPLY Memorandum by plaintiff

James S. Stone to response to motion

for a finding on limited remand [810-

1} (lam) (Entered: 05/10/2002)

RESPONSE by plaintiff James S.

Stone to Rockwell’s motion for

finding regarding “Direct and

Independent Knowledge” [819-1]

(jam) (Entered: 05/22/2002)

AFFIDAVIT of Maria T. Vullo in

support of Stone’s motion response

[821-1], to Rockwell’s motion for

finding regarding “Direct and

Independent Knowledge” [819-1]

(lam) (Entered: 05/22/2002)

REPLY Brief by defendants in

support of motion for a finding that

pla Stone lacked direct &

independent knowledge of info on

which his spray irrigation allegations

are based [819-1] (lam) (Entered:

06/07/2002)

+. * *

TRANSCRIPT of Oral Argument on

Limited Remand on 11/25/02 before

Judge Matsch (pages: 1-54) Prepared

By: Federal Reporting Service, Inc.

(certified copy) (lam) (Entered:

01/21/2003)

12/17/2002

12/23/2002

01/24/2003

828

829

830

840

JA-36

ORDER by Judge Richard P. Matsch

denying dfts’ motion for finding that

plf Stone lacked direct & independent

of info on which his spray irrigation

allegations are based [819-1] (cc: all

counsel) ; entry date: 12/18/02 (lam)

(Entered: 12/18/2002)

Findings and Conclusions on Limited

Remand (ORDER) by Judge Richard

P. Matsch regarding [828-1] order,

regarding [809-1] appeal. Order

findings and conclusions to be

forwarded to clerk of USCA together

with papers filed subsequent to order

of limited remand as a supplemental

record on pending appeal (cc: all

counsel) ; entry date: 12/23/02 (msn)

(Entered: 12/23/2002)

RECORD on appeal, consisting of

supplemental volumes I, II, and III

re: appeal [797-1], appeal [796-1],

appeal [795-1] transmitted to the

Court of Appeals. (msn) (Entered:

12/23/2002)

* * *

LETTER (Re: [795-1], [796-1], [797-

1]) to USCA supplementing the

preliminary record with a current

copy of docket sheet, Plaintiff James

S. Stone’s Motion for Reconsideration

and to Supplement the Record of

12/24/02 and Order of 1/21/03. (msn)

(Entered: 01/24/2003)

» * *

04/05/2006

04/17/2006 856

10/12/2006

855

857

J A-37

ORDER of USCA re: [796] Notice of

Appeal, [797] Notice of Appeal and

{795} Notice of Appeal. Plaintiffs

motion for an award of attorneys’

fees is granted and the matter is

remanded to district court for a

determination of a reasonable fee

award.(gms, ) (Entered: 04/07/2006)

Letter from 10CCA regarding writ of

certiorari was filed on 4/4/06 re [796}

Notice of Appeal, [797] Notice of

Appeal, [795] Notice of Appeal and

assigned Supreme Court No. 05-1272.

(Appeal No. 99-1351, 99-1352, 99-

1353) (djs, ) (Entered: 04/19/2006)

USCA LETTER re Appeals: The

Clerk of the Supreme Court has

notified us that a petition for writ of

certiorari limited to Question 1

presented by the petition filed in the

captioned cases was_ granted.

(Supreme Court case no. 05-1272)

(USCA case No’s. 99-1351, 99-1352,

99-1353) (bjr2, ) (Entered: 10/13/2006)

JA-38

[filed 7-5-89]

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

| [Clerk’s Stamp Illegible] |

Civil Action No. _ 89 C 1154

UNITED STATES OF AMERICA,

ex rel.,and JAMES S. STONE,

Plaintiffs,

ROCKWELL INTERNATIONAL

CORPORATION, a corporation,

Defendant.

COMPLAINT UNDER FALSE CLAIMS ACT

DEMAND FORJURY TRIAL

FILED INCAMERA AND UNDER SEAL

I. INTRODUCTION

1. This is an action to recover damages and civil

penalties for the wrongful conduct and acts of defendant

Rockwell International Corporation, (“Rockwell”) including,

but not limited to, the making of false or fraudulent claims,

the making of false records or statements, the entering into

of a conspiracy to defraud the United States Government,

and the concealing of deficient deliveries of property, al) to

induce the United States Government to pay and continue

to pay billions of dollars, in violation of the Federal False

Claims Act, 31 U.S.C. §3729, et seq. (as amended, Pub.L. 99-

JA-39

562, Oct. 27, 1986, 100 Stat. 3153, et seq.) hereinafter

referred to as the “False Claims Act”.

2. This is also an action for damages, including

reinstatement of employment with other relief, brought by

JAMES S. STONE (hereinafter “Stone”), a former

employee of Rockwell, arising from the vindictive acts

committed by said defendant against Stone in retaliation for

the lawful acts of Stone, including the investigation of

matters underlying the initiation of this action.

3. The False Claims Act, originally enacted in 1863

during the United States Civil War, was substantially

amended by the False Claims Amendments Act of 1986,

signed into law on October 27, 1986. The purpose of said

amendments was to enhance the Government’s ability to

recover for losses, sustained as a result of false or fraudulent

means used against the United States Government to obtain

payment or receipt of monies. After finding that false and

fraudulent practices in federal programs and procurement

were so pervasive, the Government determined that the

False Claims Act, characterized as the primary tool for

combating such practices in government contracting, was in

need of modernization. Consequently the 1986 amendments

were intended by Congress to create incentives to persons,

who are aware of such false or fraudulent practices used

against the Government, to disclose such information

without fear of reprisal or Government inaction.

4. As amended, the False Claims Act expressly

establishes civil liability for any person who commits certain

acts, including knowingly presenting a false or fraudulent

claim for payment or approval, knowingly making or using a

false record or statement to obtain payment or approval of a

false claim, conspiring to defraud the Government to induce

payments, concealing or delivering a deficient amount of

property used or to be used by the Government, and making

or delivering a document certifying receipt of property

without knowing that the information on the receipt is true.

The liability that flows from said acts includes a civil penalty

JA-40

of not less than $5000 and not more than $10,000 for each

such act, plus three times the amount of the damages

sustained by the Government because of the said act. The

False Claims Act allows any person having knowledge of

such acts to bring an action in the United States District

Court for himself and for the United States Government,

and to share in any recovery. The complaint is to be filed in

camera and under seal for 60 days (without service on the

defendant during the 60 day period) to enable to

Government to determine whether it wishes to proceed with

the action. At or about the time the Complaint is filed, a

copy of the Complaint and written disclosure of

substantially all material evidence and information the

individual plaintiff possesses shall be served on the

Government pursuant to Rule 4(d)(4) of the Federal Rules

of Civil Procedures.

5. Based on the aforesaid provisions, Stone seeks

through this action to recover for the United States

Government and for himself damages and civil penalties

arising from acts of Rockwell perpetrated under, or

associated with, contracts with the U.S. Department of

Energy (“D.0.E.”) and Department of Defense (“D.O.D.”).

The amount of damages, not including any civil penalties or

treble damages provisions that may be assessed, sustained

by the Government as a result of the defendant’s acts, is in

excess of $1 billion.

6. At about the time of the filing of this Complaint,

plaintiff Stone shall file, in camera and under seal, proof of

service of plaintiffs written disclosure of materiar evidence

and information, along with a copy of this Complaint, on the

Government pursuant to Rule 4(d)(4) of-the Federal Rules

of Civil Procedure.

Il. PARTIES

7. Stone is a citizen of the United States and a

resident of the State of New Jersey. He is a Professional

Engineer, registered as such in the States of Colorado,

Wyoming, Idaho, Utah and New Mexico. Stone has

JA-41

extensive experience and qualifications, covering more than

40 years, in engineering and defense contracting related

matters. Attached hereto as Exhibit “A” is a copy of

Stone’s resume with attached documents evidencing his

engineering achievements and commendations. Stone was

employed by defendant Rockwell from November 1980 until

March 1986 as an engineer, holding various titles including

that of Lead Principal Engineer in the Utility Design

Department, Facility Engineering Division, of Rockwell’s

Rocky Flats operations near Golden, Colorado.

8. On behalf of himself and the United States

Government pursuant to 31 U.S.C. §3730, et seq., Stone

brings this action against Rockwell by reason of the

egregious violations by defendant of the False Claims Act.

To the extent that this action may be based on the public

disclosure 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,

Stone is the “original source” of the information as that term

is defined in 31 U.S.C. §3730(e) (4) (B) .

9. Defendant Rockwell is a Delaware corporation,

engaged in the design and manufacture of military weapons

and electronics equipment, space systems and rocket

engines. Rockwell is one of the largest industrial companies

in the United States of America with about $12 billion in

sales and approximately $800 million in profits for 1988.

Rockwell has operated the D.O.E. facility at Rocky Flats,

Colorado (“Rocky Flats Plant”) under contract with D.O.E.

since about 1975. Rockwell’s present contract with D.O.E.,

for a term of 5 years, would produce gross revenue of

approximately $2.5 billion. (See attached Exhibit “B” which

a true copy of a June 20, 1989 Rocky Mountain News

“Special Report.”) The Rocky Flats Plant is located

approximately eight miles south of Boulder, Colorado, in

Jefferson County, Colorado, with postal delivery at Golden,

Colorado.

J A-42

Ill. JURISDICTION AND VENUE

10. This is a civil action arising under the laws of the

United States to redress violations of 31 U.S.C. §3729, et

seq., also known as the “False Claims Act”. As such, this

Court has jurisdiction over the subject matter of this action

pursuant to 28 U.S.C. §1331 and 31 U.S.C. §3732, which

specifically confers jurisdiction on this Court for actions

brought pursuant to §§3729 and 3730 of Title 31.

11. This Court also has jurisdiction pursuant to 28

U.S.C. $1332, in that there is diversity of citizenship as

between Stone and Rockwell, and the amount in

controversy exceeds $10,000, exclusive of interest and costs.

12. The Court has jurisdiction over Rockwell, pursuant

to 31 U.S.C. §3732(a), as defendant committed wrongful acts

and submitted false claims to the United States Government

through its operations at the Rocky Flats Plant to obtain

payment or approval by the United States Government.

13. Venue is proper in this District pursuant to 3]

U.S.C. §3732(a) as Rockwell has transacted business in the

District of Colorado and committed in this district the acts

proscribed by 31 U.S.C. 3729, et seq.

IV. FACTS

14. From at least as early as November 1980, and

continuing thereafter, Rockwell has been legally required to

comply with certain federal and state regulations, statues,

laws, and agreements, including but not limited to:

(a) D.O.E. Orders including 5483.1, as superceded by

5483.1A, for Occupational Safety and Health Program

for Government-Owned Contractor-Operated facilities,

6430.1, the D.O.E. General Design Criteria Manual, and

5480.2 (“D.O.E. Orders”);

(b) Colorado Statutes including Hazardous Substances

at C.R.S. 25-5-501, et seq., the Air Quality Control

Program at C.R.S. §§25-7-101, et seq., Asbestos Control

at C.R.S. 25-7-501, et seq., the Colorado Hazardous

Waste Act at C.R.S. §§25-15-101, et seq., the Water

JA-43

Quality Control Act at C.R.S. 25-8-201, et seq.,

Radiation Control at C.R.S. 25-11-101, et seq.,

Hazardous Substance Incidents at C.R.S. §29-22-101, et

seq., and specific provisions defining prohibited acts and

reporting requirements with respect to hazardous

substances, for example C.R.S. §§ 25-5-503, 25-8-506

and 608, 25-15-308, 309, 310, 29-22-101 and 108, (such

state statutes and any applicable regulations

hereinafter referred to as the “Colorado Environmental

Laws”);

Health Act at 29 U.S.C. $651, et seq., the Atomic

Energy Act of 1954, as amended, at 42 U.S.C. §2011, et

seq, the Energy Reorganization Act of 1974 at 42 U.S.C.

$5801, et seq., the Water Pollution Prevention and

Control Act at 33 U.S.C. $1251, et seq., the Clean Air

Act at 42 U.S.C. §7401, et seq., the Resource

Conservation and Recovery Act at 42 U.S.C-$6961, et

seq., the Safe Drinking Water Act at 42 U.S.C. §300f, et

seq., and federal regulations applicable or enacted

under the foregoing statutes including, but not limited

to portions of Code of Federal Regulations, Titles 10,

29, 40, as well as Executive Order No. 12088,

(hereinafter said federal statutes, regulations, and

orders, are referred to as the “Federal Environmental

and Safety Laws”);

(d) Agreements including the June 4, 1986 Agreement

in Principle between D.O.E., the Environmental

Protection Agency (“EPA”) and the State of Colorado,

the July 30, 1986 Compliance Agreement between

D.O.E., EPA, and the State of Colorado, and the

January 8, 1975 Rockwell contract with D.O.E.,

renewals thereof, and jater dated contracts including a

Supplemental Agreement, effective January 1, 1989

(“the Rockwell-D.0.E. Contracts”).

15. Rockwell, from about November 1980 and

continuing thereafter, has committed and is presently

JA-44

committing numerous and repeated violations of the above

referenced D.O.E. Orders; Colorado Environmental Laws,

Federal Environmental and Safety Laws, and agreements

in connection with its operation of the Rocky Flats Plant. In

order to induce the government to make payments or

approvals, Rockwell committed numerous and continuing

acts, in violation of the False Claims Act, 31 U.S.C. Section

3729(a), including the following:

(a) Knowingly presenting or causing to be presented

to an officer or employee of the United States

Government, false and fraudulent claims for payment or

approval, including all requests or statements for

payment, statements for reimbursement of costs, and

applications for bonuses in connection with or under the

Rockwell-D.0.E. Contracts;

(b) Knowingly making, using, or causing to be made or

used, false records or statements intended to obtain

approval and payment of the monies referred to in

subpart (a), above;

States Government in order to obtain approval of a false —

or fraudulent-claim, and thereby induce approvals and

payments of the monies referred to in subpart (a)

above;

(d) Having possession, custody, or control of property

or money used, or to be used, by the United States

Government and intending to defraud the Government,

delivering or causing to be delivered to the Government

less property in quality and quantity than that to which

the Government was entitled;

(e) Making or delivering documents certifying receipt

of property used, or to be used, by the United States

Government and, with the intent to defraud the

Government, making or delivering a receipt without

completely knowing that the information on the receipt

is true; or

J A-45

(f) Knowingly making, using, or causing to be made or

used, false records or statements to conceal, avoid, or

decrease an obligation to pay or transmit money or

property to the United States Government.

16. Rockwell’s contractual and legal obligations to be

performed at the Rocky Flats Plant involved and presently

involves two aspects of the handling and production of

Government property which are of parameunt importance

to the national security of the United States: (1) the

production and re-processing of detonation devices

(“triggers”) for nuclear warheads, using materials including

plutonium and beryllium. (Said production and re-

processing is referred to hereinafter as “Nuclear Trigger

Operations”.); (2) the receiving, processing, and shipment of

materials, including hazardous wastes generated at Rocky

Flats, as well as wastes received from other facilities, which

have, in some instances, significant value as recoverable or

recyclable Government property. (Said material processing

is referred to hereinafter as “Waste and Recovery

Operations”.)

17. In performing the aforesaid Nuclear Trigger

Operations and Waste and Recovery Operations, Rockwell

knowingly caused the United States Government to receive

less property, or property of a diminished value or

usefulness, than that to which the United States

Government was entitled; and further that Rockwell has

concealed the relevant facts from the Government so as to

continue to receive payments or approvals. (A more

detailed statement of defendant’s violations in this regard

would require Stone to reveal information bearing upon

matters of national security.)

18. From at least November 1980 to the present all

monies and payments approved on application of Rockwell

and/or received by Rockwell, including annual guaranteed

fees, bonuses awarded due to Rockwell’s performance, and

reimbursement of the expenses and costs of operating the

Rocky Flats Plant, in a total amount presently

J A-46

unascertained, were so applied for and received by

defendant with the knowledge and intention on defendant’s

part to defraud and deceive the United States Government,

all in violation of the False Claims Act.

19. In committing the above alleged acts, Rockwell

knowingly concealed and intended to conceal the true nature

of its numerous and continuous violations of the D.O.E.

Orders, Colorado Environmental Laws, Federal

Environmental and Safety Laws, and agreements, as

alleged above, with the intent to induce the Government to

make and continue to make payments to Rockwell in

connection with the operation of Rocky Flats Plant. Had

the Government known the true nature and extent of

Rockwell’s violations, as wel) as its concealment of said

violations, it would not have made payments and continued

to make payments to Rockwell, as described herein.

20. At all relevant times, Rockwell conspired with

others to conceal the true nature and extent of its violations,

to ensure an uninterrupted stream of payments to Rockwell,

to resist clean-up and monitoring actions of the Rocky Flats

Plant by environmenta) and public health agencies, and to

avoid enforcement litigation brought by governmental

agencies or private citizens. Rockwell, and those it has

conspired with, have committed acts in furtherance of said

conspiracy in reckless disregard of the actual extent to

which their actions have endangered the health and safety

of the workers at Rocky Flats Plant and the nearly two

million citizens living and working in the surrounding

metropolitan area.

. (Under False Claims Act)

21. Plaintiffs reallege and hereby incorporate by

reference each and every allegation contained in paragraphs

1 through 20 of this Complaint.

22. This is a claim for treble damages and forfeitures

under the Federal False Claims Act, 31 U.S.C. §3729, et seq.

J A-47

(as amended, Pub.L. 99-562, Oct. 27, 1986, 100 Stat. 3153, et

seq.).

23. By virtue of the acts alleged, Rockwell has

obtained, and continues to obtain, payments and approvals

from the United States Government in connection with its

operation of the Rocky Flats Plant.

24. The United States Government, unaware of the

nature and extent of the wrongful acts committed by

Rockwell, made said payments and approvals, and may

continue to do so, in reliance on false information,

documents, reports, and statements made by Rockwell.

25. By reason of the aforesaid wrongful conduct and

acts of Rockwell, the United States of America has been

damaged in an amount estimated to be in excess of $1

billion. Plaintiffs will seek leave to amend the Complaint to

reflect the true nature and amounts of said damages, which

are continuing, when the same have been ascertained.

SECOND CLAIM FOR RELIEF

(Plaintiff James S. Stone’s Claim for Discrimination and

Harassment Under 31 U.S.C. §3730(h))

26. Stone realleges and hereby incorporates by

reference each and every allegation contained in paragraphs

1 through 25 of this Complaint.

27. This is a claim for reinstatement, with back pay,

special damages, litigation costs, and attorney’s fees under

the False Claims Act, 31 U.S.C. $3730(h).

28. As a result of his investigation underlying this

action, as well as reports and complaints made by Stone

consistent with the False Claims Act and the spirit thereof,

Stone was, on about March 17, 1986, discharged by Rockwell

from his employment as an engineer. Prior to his discharge,

Stone was suspended and subjected to employment actions

adversely affecting the terms and conditions of his

employment.

JA-48

29. Subsequent to Stone’s discharge, Rockwell has

subjected Stone to threats and harassment, including

_ threats to institute a criminal prosecution against him.

30. The provisions of 31 U.S.C. §3730(h) afford Stone a

private right of action, through an action brought in the

appropriate District Court of the United States.

DEMAND FOR JURY

31. Plaintiffs demand a jury as to all issues in this

action.

PRAYER

WHEREFORE, plaintiffs pray for judgment against

defendant Rockwell International Corporation as follows:

A. Onthe First Claim for Relief:

1. This Court enter judgment against defendant

Rockwell International Corporation in an amount equal to

three (3) times the amount of damages the United States

Government has sustained, plus a civil penalty of not less

than $5000 and not more than $10,000 for each act in

violation of 31 U.S.C. §3729;

2. Plaintiff James S. Stone be awarded the

maximum award as a Qui Tam plaintiff under the False

Claims Act;

3.. This Court make findings for and an award of

reasonable attorney’s fees and all expenses and costs

allowable under the False Claims Act; and

4. Such other and further relief as this Court

deems just and proper.

B. Onthe Second Claim for Relief:

1. This Court order defendant Rockwell

International Corporation to reinstate plaintiff James S.

Stone in the Lead Principle Engineer Position, or its

equivalent, with seniority and an award of back pay, interest

on back pay, and lost benefits;

JA-49

2. This Court issue an award of compensatory

an/or special damages in order to make James S. Stone

whole under the terms of 31 U.S.C. §3730(h);

3. This Court make findings for and an award of

reasonable attorney’s fees, litigation costs, and court costs

pursuant to 31 U.S.C. §3730(h); and

4. Such other and further relief as this Court

deems just and proper.

Dated: July 4th, 1989. +4E¥AN&ALEEY

By /s/ Hartley David Alley _

Hartley David Alley

(Colo. Reg. No. 15389)

4251 Kipling Street, Suite 130

Wheat Ridge, Colorado 80033

(303) 431-8060

3345 Wilshire Blvd Suite 1107

Plaintiffs Address: LesAngetes, Gahfornte 90040

248+ Bada G2

158 Huntington Drive

Vicentown, NJ 08088 Attorneys for Plaintiffs and

Specifically for Qui Tam and

Individual Plaintiff,

JAMES S. STONE

JA-50

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Criminal Case No. 92-CR-107

UNITED STATES OF AMERICA,

Plaintiff,

ROCKWELL INTERNATIONAL

CORPORATION,

Defendant.

PLEA AGREEMENT AND STATEMENT OF

FACTUAL BASIS

Plaintiff UNITED STATES OF AMERICA and

Defendant ROCKWELL INTERNATIONAL

CORPORATION (“ROCKWELL”) submit this Plea

Agreement and Statement of Factual Basis, in connection

with criminal charges against. ROCKWELL concerning its

management and operation of the U.S. Department of

Energy’s Rocky Flats Plant (“Rocky Flats”) near Denver,

Colorado, as follows:

I. PLEA AGREEMENT

The UNITED STATES and ROCKWELL have entered

into a plea agreement, pursuant to Federal Rule of Criminal

Procedure 11(e)(1XC), whereby ROCKWELL will plead

guilty to ten criminal charges, involving violations of the

Resource Conservation & Recovery Act, 42 U.S.C. §$ 6901 —

et seq., and the Clean Water Act, 33 U.S.C. §§ 1251 et seq.,

and will pay total criminal fines of $18.5 million.

** *

JA-51

Ill. STATEMENT OF FACTUAL BASIS

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

each of the following facts, as set forth in this entire Section

III (including Counts 1 through 10), beyond a reasonable

doubt:

At all material times, the U.S. Department of Energy

(“DOE”) was a department and agency of the United States

Government responsible for making nuclear material for

defense programs. The basic mission of DOE’s defense

activities was to produce nuclear material for weapons and

naval fuel, and to manufacture nuclear weapons components.

One of DOE’s nuclear weapons facilities was Rocky Flats,

located sixteen miles northwest of Denver, Colorado, in

northern Jefferson County. The total site covers

approximately 6,550 acres and includes more than 100

buildings and other structures.

Several creeks, including North Walnut Creek, South

Walnut Creek and Woman Creek, cross Rocky Flats,

flowing generally west to east. Three series of holding

ponds known as the A, B and C series ponds have been built

in North Walnut Creek, South Walnut Creek and Woman

Creek, respectively. At all material times, “spray

irrigation” was practiced at Rocky Flats to dispose of

various wastewaters, contaminated groundwater and plant

runoff, by spraying these waters from sprinkler systems at

several “spray fields.” A spray field known as the East

Spray Field was used to dispose of water from the B-3 pond,

which received treated wastewater, contaminated

groundwater and plant runoff. The East Spray Field was

comprised of the North Spray Field, located north of the B-

series ponds (in the Walnut Creek drainage), and the South

Spray Field, located primarily south of the East Access

Road (in the Woman Creek drainage).

At all material times, ROCKWELL was a Delaware

corporation headquartered in El] Segundo, California.

ROCKWELL managed and operated Rocky Flats on DOE’s

JA-52

behalf from June 30, 1975, until December 31, 1989, under

several contracts.

The Resource Conservation and Recovery Act of 1976

(“RCRA”), Title 42, U.S.C. §§ 6901 et seq., as amended,

prohibits the treatment, storage and disposal of hazardous -

wastes without a permit or interim status. In order to

obtain a RCRA permit or interim status, a facility must

submit a RCRA Part A permit application and subsequently

a Part B application, which must be approved by federal

and/or state authorities. In order to treat, store or dispose

of hazardous wastes at an interim status facility, RCRA

requires compliance with rules and regulations promulgated

at Title 6, Colorado Code of Regulations 1007-3, Colorado

Hazardous Waste Regulations (“6 C.C.R. 1007-3”), Parts 265

and 270.

“Hazardous wastes” are those substances and materials

listed or otherwise identified as hazardous wastes in 6

C.C.R. 1007-3, Part 261. “Mixed wastes” or “mixed

hazardous wastes” are wastes which contain both

radioactive wastes and non-radioactive hazardous wastes.

“Low-level mixed wastes” are radioactive wastes containing

transuranic material at or below 100 nanocuries per gram

and also hazardous wastes.

On July 31, 1986, DOE, the United States

Environmental Protection Agency (“EPA”) and the

Colorado Department of Health (“CDH”) entered into a

compliance agreement in which DOE agreed that Rocky

Flats’ low-level mixed wastes were RCRA-regulated, by

EPA and CDH.

On May 1, 1987, DOE issued a “final interpretive rule”

clarifying the applicability of RCRA to all DOE mixed

wastes, including low-level mixed wastes. Under this rule,

effective June 1, 1987, DOE conceded that the non-

radioactive hazardous component of DOE mixed wastes was

subject to RCRA regulation. The radioactive component is

Subject to Atomic Energy Act regulation.

The Clean Water Act (“CWA”), 33 U.S.C. §§ 1251, et

JA-53

seq., prohibits the discharge of any pollutants from a point

source into waters of the United States except in accordance

with the terms and conditions of a National Pollutant

Discharge Elimination System (“NPDES”) permit, issued

pursuant to Title 33, United States Code, Section 1342. On

November 26, 1984, the EPA issued an NPDES permit to

Rocky Flats. The permit set specific limits on the kinds of

discharges that Rocky Flats could make, the amounts of

specific pollutants that could be discharged and where the

discharges could be made. The permit also required Rocky

Flats to monitor its discharges, and to report the results to

EPA.

RCRA CHARGES

The Information charges Defendant ROCKWELL with

four felony violations of the Resource Conservation and

Recovery Act, as follows:

COUNT 1

Count 1 charges ROCKWELL with illegal storage of

mixed hazardous wastes known as “pondcrete” and

“saltcrete,” in violation of RCRA interim status regulations.

A. Elements of the Offense.

The elements of this offense, pursuant to 42 U.S.C.

§ 6928(d)(2)(C), are that:

l. aperson

2. knowingly stored

3. one or more hazardous wastes

4. in knowing violation of a material requirement of

interim status regulations.

B. Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. Defendant ROCKWELL is a corporation and

therefore, under RCRA, a “person.” 42 U.S.C. § 6903(15).

JA-54

2. “Pondcrete” is a mixture of cement and sludge from

a surface impoundment at Rocky Flats known as Solar

Evaporation Pond 207A, shaped in large rectangular blocks

weighing approximately 1,500 to 1,800 pounds. At all

material times, solar pond sludge was treated, and

pondcrete was manufactured, in or about Building 788.

3. Ponderete is a low-level mixed waste exhibiting the

hazardous waste characteristic of EP toxicity for cadmium.

It is therefore a hazardous waste, pursuant to 42 U.S.C.

§ 6903(5) and 6 C.C.R. 1007-3, Part 261.

4. “Saltcrete” is mixture of cement, salts and salt brine

from liquid waste treatment processes in Building 374,

shaped in large rectangular blocks weighing approximately

1,500 to 3,000 pounds. At all material times, salts and salt

brine were treated, and saltcrete was manufactured, in or

about Building 374.

5. Saltcrete is a low-level mixed waste exhibiting the

hazardous waste characteristic of EP toxicity for chromium.

It is therefore a hazardous waste, pursuant to 42 U.S.C.

§ 6903(5) and 6 C.C.R. 1007-3, Part 261.

6. ROCKWELL was required to comply with RCRA

interim status storage requirements in storing pondcrete

and saltcrete.

7. Colorado Hazardous Waste Regulations, 6 C.C.R.

1007-3, § 265.31 required ROCKWELL to maintain and

operate its interim status facilities in such a way as to

“minimize the possibility of ... any unplanned sudden or non-

sudden release of hazardous wastes or hazardous waste

constituents to air, soil, or water which could threaten

human health or the environment.”

8. 6 C.C.R. 1007-3, § 265.173 required ROCKWELL to

handle and store pondcrete and saltcrete containers in a

manner that would prevent them from rupturing or leaking.

9. 6 C.C.R. 1007-3 § 265.15(c) required ROCKWELL to

“remedy any deterioration or malfunction of equipment or

structures ... on a schedule which ensure{d] that the

problem (did) not lead to an environmental or human health

JA-55

hazard. Where a hazard [was] imminent or ha[d)} already

occurred,” ROCKWELL was required to take immediate

remedial action.

10. 6 C.C.R. 1007-3, § 265.171 required ROCKWELL,

upon discovering that pondcrete and saltcrete containers

were not in good condition and had begun to leak, to

transfer such wastes to containers in good condition, and to

otherwise manage the wastes in compliance with interim

status requirements.

11. ROCKWELL was aware and knew of these

requirements.

12. On or about June 15-24, September 11-30 and

December 7-16, 1987, February 15-24, May 6-25, July 18-27,

September 14-23, 1988 and February 615, 1989,

ROCKWELL knowingly stored approximately 12,000

ponderete and saltcrete blocks on an outdoor pad known as

the 750 Pad.

13. On or about June 6-15, August 1-10 and December 5-

14, 1988 and June 1-10, 1989, ROCKWELL knowingly

stored approximately 5,000 pondcrete and saltcrete blocks

on another outdoor pad known as the 904 Pad.

14. During or about the same period, ROCKWELL

knew that a substantial number of pondcrete and saltcrete

blocks were not in fact solid. Pondcrete was often a sludge-

like or semi-liquid material. Saltcrete was prone to

expansion and crystallization.

15. ROCKWELL continued to manufacture pondcrete

and saltcrete, and stored these hazardous wastes on the

uncovered 750 and 904 Pads, in cardboard boxes with plastic

liners, covered with tarps that were not waterproof.

16. ROCKWELL was aware that various pondcrete and

salterete containers on the 750 and 904 Pads had

deteriorated, and failed to remedy their condition.

17. ROCKWELL was aware that pondcrete and

saltcrete constituents were leaching and being released

from the pondcrete and saltcrete containers onto the 750

and 904 Pads, and failed to remedy this condition.

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18. ROCKWELL was alsc aware that pondcrete and

saltcrete constituents were running off the 750 and 904

Pads, and failed to correct this condition.

19. ROCKWELL failed to comply with RCRA intorin

status storage requirements in storing pondcrete and

saltcrete.

COUNTS 2,3 AND 4

Counts 2, 3 and 4 charge ROCKWELL with illegal

treatment and/or storage of mixed hazardous wastes,

without a RCRA permit or interim status.

Elements of These Offenses.

The elements of these offenses, pursuant to 42 U.S.C.

§ 6928(d)(2)(A), are that:

a person

knowingly treated and/or stored

one or more hazardous wastes

without a permit or interim status.

COUNT 2

Count 2 charges ROCKWELL with illegal storage of

mixed hazardous wastes on the 904 Pad, without a RCRA

permit or interim status.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. Defendant ROCKWELL is a corporation and

therefore, under RCRA, a “person.” 42 U.S.C. § 6903(15).

2. “Pondcrete” is a mixture of cement and sludge from

a surface impoundment at Rocky Flats known as Solar

Evaporation Pond 207A, shaped in large rectangular blocks

weighing approximately 1,500 to 1,800 pounds. At all

material times, solar pond sludge was treated, and

pondcrete was manufactured, in or about Building 788.

3.. Pondcrete is a low-level mixed waste exhibiting the

JA-57

hazardous waste characteristic of EP toxicity for cadmium.

It is therefore a hazardous waste, pursuant to 42 U.S.C.

§ 6903(5) and 6 C.C.R. 1007-3, Part 261.

4. “Saltcrete” is a mixture of cement, salts and salt

brine from liquid waste treatment processes in Building 374,

shaped in large rectangular blocks weighing approximately

1,500 to 3,000 pounds. At all material times, salts and salt

brine were treated, and saltcrete was manufactured, in or

about Building 374.

5. Saltcrete is a low-level mixed waste exhibiting the

hazardous waste characteristic of EP toxicity for chromium.

It is therefore a hazardous waste, pursuant to 42 U.S.C.

§ 6903(5) and 6 C.C.R. 1007-3, Part 261.

6. Storage of saltcrete and pondcrete on the 904 Pad

required a RCRA permit or interim status.

7. ROCKWELL was aware and knew of this

requirement.

8. On or about October 5-9, November 16-20 and

December 14-18, 1987, and January 18-22, February 22-26,

March 21-25, April 18-22 and May 16-20, 1988, ROCKWELL

knowingly. stored approximately 5,000 pondcrete and

saltcrete blocks on the 904 Pad.

9. The 904 Pad did not have a RCA permit or interim

status to treat or store hazardous wastes.

** *

CLEAN WATER CHARGES

The Information charges Defendant ROCKWELL with

one felony violation of the Clean Water Act and five

misdemeanor violations. The UNITED STATES and

ROCKWELL agree that the UNITED STATES’ evidence

at trial would establish the following facts common to the

CWA charges:

1. Defendant ROCKWELL is a corporation and

therefore, under the CWA, a “person.” 33 U.S.C. § 1362(5).

2. North Walnut Creek (including the A-series ponds),

South Walnut Creek (including the B-series ponds) and

J A-58

Woman Creek (including the C-series ponds) are tributaries

to “waters of the United States,” including Great Western

. Reservoir, Standley Lake and the South Platte River, and

are therefore waters of the United States. 33 U.S.C.

§ 1362(7).

3. At all material times, Rocky Flats was an industrial

facility which discharged to waters of the United States, and

was required to have an NPDES permit concerning its

operations.

4. On November 26, 1984, EPA issued an NPDES

permit to Rocky Flats, pursuant to 33 U.S.C. § 1342. This

permit established various conditions and _limitatians

implementing the CWA, including 33 U.S.C. §§ 1311 and

1317.

COUNT 5

Count 5 charges Defendant ROCKWELL with

negligently violating conditions and limitations in Rocky

Flats’ NPDES permit by discharging and releasing non-

sanitary industrial wastes (including toxic and hazardous

substances) to Rocky Flats’ sewage treatment plant.

A. Elements of the Offense.

The elements of this offense, pursuant to 33 U.S.C.

§ 1319(c)(1)(A), are that:

l. aperson

2. operating under an NPDES permit issued pursuant

to 33 U.S.C. § 1342 and implementing §§ 1311 and

1317,

3. negligently violated a condition or limitation in such

_ permit implementing such sections.

B. Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. ROCKWELL is a person.

2. At all material times, ROCKWELL operated Rocky

Flats under an NPDES permit dated November 26, 1984,

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which was issued pursuant to 33 U.S.C. § 1342 and

established conditions and limitations implementing §§ 1311

and 1317.

3. The NPDES permit, Part Il, Section A

(Management Requirements), Paragraph 1 (Change in

Discharge) required that all discharges authorized by the

permit be consistent with its terms and conditions.

ROCKWELL was required to report to the EPA all new,

different or increased discharges of pollutants. Any new,

different or increased discharge of pollutants not authorized

by the permit violated the permit.

4. The NPDES permit, Part III (Other Requirements,

Management Practices Plan), required ROCKWELL to

maintain, implement and follow a Management Practices

Plan to prevent or minimize the potential for releasing

significant amounts of toxic or hazardous substances from

Rocky Flats to waters of the United States.

5. The NPDES permit, Part II, Section A

(Management Requirements), Paragraph 3 (Facilities

Operation), required ROCKWELL to “at all times maintain

in good working order and operate as efficiently as possible

all treatment or control facilities installed or used [at Rocky

Flats] to achieve compliance with the terms and conditions

of [the] permit.”

6. ROCKWELL was aware and knew of these_

requirements.

7. Rocky Flats’ sewage treatment plant (consisting

primarily of Building 995) was intended to receive and treat

only sanitary waste. It was also allowed to receive

uncontaminated cooling tower blowdown and steam

condensate. The sewage treatment plant was not designed

to receive and treat industrial or hazardous wastes, and did

not have a RCRA or other permit to do so.

8. On or about August 10-19 and November 12-21, 1987,

and March 7-16, April 11-20, May 9-18 and November 9-18,

1988, ROCKWELL negligently discharged and released

non-sanitary industrial wastes (including toxic and

JA-60

hazardous substances) to Rocky Flats’ sewage treatment

plant, including ignitable and corrosive hazardous wastes

(D001, D002), beryllium dust (P015), wastewater treatment

sludges (F006, F019), spent halogenated and non-

halogenated solvents (F001, F002, F003, F004 and F005),

acetone (U022), methylene chloride (U080) and 2-butanone

(U002), as well as various metal-bearing waste streams

described by ROCKWELL in its RCRA Part A permit

applications, on the basis of its process knowledge, as “EP

toxic” for silver (D011), cadmium (D006), chromium (D007)

and mercury (D009).

9. ROCKWELL negligently failed to report to EPA

the discharge and release of these pollutants, which were

not authorized by Rocky Flats’ NPDES permit.

10. ROCKWELL’s Management Practices Plan

negligently failed to prevent or minimize the release of toxic

and hazardous substances to the sewage treatment plant.

11. ROCKWELL negligently failed to maintain and

operate as efficiently as possible all treatment or control

facilities necessary to achieve compliance with Rocky Flats’

NPDES permit. There was no regular program to monitor

wastes being sent to the sewage treatment plant, and only

limited monitoring at the treatment plant itself.

12. Rocky Flats’ sewage treatment plant was not

designed to treat industrial or hazardous wastes, and the

unreported discharge of industrial wastes to the sewage

treatment plant impaired the plant’s performance.

13. Effluent from the sewage treatment plant was

generally discharged to the B-3 pond, where it was either

discharged through Outfall No. 001 to the B-4 and B-5 ponds

or spray irrigated.

COUNTS 6,7 AND 8

Counts 6, 7 and 8 charge Defendant ROCKWELL with

negligently violating Rocky Flats’ NPDES permit by

discharging water from the B-3 pond which exceeded the

permit limits for five-day Biological Oxygen Demand

(“BOD-5”) and/or fecal coliform, in March, April and May

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1988.

A. Elements of These Offenses.

The elements of these offenses, pursuant to 33 U.S.C.

§ 1319(c)(1)(A), are that:

l. aperson

2. operating under an NPDES permit issued pursuant

to 33 U.S.C. § 1342 and implementing §§ 1311 and

1317, ;

3. negligently violated a condition or limitation in such

permit implementing such sections.

B. Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts common to Counts 6, 7 and 8:

1. ROCKWELL is a personi.

2. BOD-5 and fecal coliform limits are used to

determine the adequacy of wastewater treatment.

Measurements of BOD-5 and fecal coliform above a

determined level indicate that a wastewater has not been

treated to the desired level.

3. At all material times, Rocky Flats’ NPDES permit

contained an effluent limitation implementing 33 U.S.C.

§ 1311 which required that discharges from the B-3 pond

(Outfall No. 001), on a thirty-day average basis, not exceed a

BOD-5 limit often milligrams per liter.

4. At all material times, Rocky Flats’ NPDES permit

also required that discharges from the B-3 pond (Outfall No.

001), on a thirty-day average basis, not exceed a fecal

coliform limit of 200 organisms per 100 milliliters.

5. ROCKWELL was aware and knew of these

requirements.

6. The discharge of industrial wastes (including toxic

and hazardous substances) to Rocky Flats’ sewage

treatment plant and ROCKWELL’s inadequate disposal of

accumulated sewage sludge impaired the plant’s ability to

meet the terms and conditions of Rocky Flats’ NPDES

—__—_—

J A-62

permit.

7. ROCKWELL was aware and knew of these

conditions.

COUNT 6

Count 6 charges that ROCKWELL negligently violated

the BOD-5 limit in Rocky Flats’ NPDES permit in March

1988.

Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. During March 1988, ROCKWELL discharged water

from the B-3 pond (Outfall No. 001).

2. On or about March 1, 15 and 30, 1988, ROCKWELL

negligently violated the BOD-5 limit in Rocky Flats’

NPDES permit.

3. The thirty-day average for BOD-5 was 21.3

milligrams per liter, which exceeded the permit limit.

OUNT7

Count 7 charges that ROCKWELL negligently violated

the BOD-5 and fecal coliform limits in Rocky Flats’ NPDES

permit in April 1988.

Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. Duripg-April 1988, ROCKWEEL discharged water

from the B-3 pond (Outfall No. 001).

2. On or about April 1, 8, 12, 16, 20 and 30, 1988,

ROCKWELL negligently violated the BOD-5 and fecal

eoliform limits in Rocky Flats’ NPDES permit.

3. The thirty-day average for BOD-5 was more than 27

milligrams per liter, which exceeded the permit limit.

4. The thirty-day average for fecal coliform was 312

—

rr ——

J A-63

organisms per 100 milliliters, which also exceeded the

permit limit.

COUNT 8

Count 8 charges that ROCKWELL negligently violated

the BOD-5 limit in Rocky Flats’ NPDES permit in May

1988.

Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. During May 1988, ROCKWELL discharged water

from the B-3 pond (Outfall No. 001).

2. On or about May 1, 15 and 30, 1988, ROCKWELL

negligently violated the BOD-5 limit in Rocky Flats’

NPDES permit.

3. The thirty-day average for BOD-5 was more than 11

milligrams per liter, which exceeded the permit limit.

COUNT 9

Count 9 charges Defendant ROCKWELL with

knowingly violating conditions and limitations in Rocky

Flats’ NPDES permit, by “spray irrigating” water from

Pond B-3 contrary to good engineering practices and in such

a manner as to bypass Rocky Flats facilities which were

necessary to maintain compliance with the plant’s NPDES

permit.

A. Elements of the Offense.

The elements of this offense, pursuant to 33 U.S.C.

§ 1319(c)(2)(A), are that:

l. aperson

2. operating under an NPDES permit issued pursuant

to 33 U.S.C. § 1342 and implementing §§ 1311 and

1317,

3. knowingly violated a condition or limitation in such

permit implementing such sections.

J A-64

B. Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. ROCKWELL is a person.

2. At all materia] times, ROCKWELL operated Rocky

Flats under an NPDES permit dated November 26, 1984.

3. The NPDES permit, Part I, Section A, Paragraph 1

(Effluent Limitations - Outfall No. 001, Discharge from

Pond B-3) required ROCKWELL to spray irrigate in

“accordance with good engineering practices.”

4. The NPDES permit, Part II, Section A

(Management Requirements), Paragraph 5 (Bypassing) and

Part III] (Other Requirements, Bypass of Treatment

Facilities) prohibited ROCKWELL from bypassing any

Rocky Flats facilities necessary to maintain compliance with

the permit’s terms and conditions.

5. ROCKWELL was aware and knew of these

requirements.

6. At all material times, ROCKWELL practiced spray

irrigation to dispose of water from the B-3 pond, which

received treated effluent from the sewage treatment plant,

contaminated groundwater and plant runoff. This water

was sprayed at the East Spray Field.

7. On or about May 18, June 19, July 9, 10 and 22,

August 4, November 15 and December 4, 8, 9 and 25, 1987,

January 4, March 2, April 22, May 19-20, November 14 and

December 2, 9, 15 and 27, 1988, and January 7, February 1,

2, 8, 13, 20 and 25, March 4, 9, 28 and 30, April 11 and 21,

May 10, 25 and 31 and June 5, 15 and 23, 1989, ROCKWELL

knowingly operated the East Spray Field in violation of

good engineering practices, in that ROCKWELL (a) spray

irrigated more effluent from Pond B-3 than the East Spray

Field had capacity to properly dispose of by evaporation

and/or infiltration; (b) spray irrigated during times when the

spray fields were’ saturated, during sub-freezing

temperatures, at night and when snow and ice were on the

J A-65

ground; and (c) spray irrigated over and adjacent to the

“East Trenches.” 2

8. The East Trenches are a group of old waste disposal

sites at Rocky Flats located east of the main plant, on the

north and south sides of the East Access Road. The disposal

sites contain approximately 275,000 pounds of uranium-

contaminated sewage sludge, 300 flattened uranium-

contaminated drums, various plutonium-contaminated

debris and volatile organic compounds, including 1-1-

dichloroethane, carbon tetrachloride and trichloroethane.

9 ROCKWELL knowingly violated good engineering

practices by irrigating over the East Trenches until April

1987, and thereafter irrigating adjacent to the East

Trenches, which sent substantial volumes of water into the

waste disposal area.

10. ROCKWELL was aware and otherwise knew that

its spray irrigation practices caused substantial runoff into

the North Walnut Creek drainage (including the A-4 pond),

the South Walnut Creek drainage (including the B-4 and B-5

ponds) and the Woman Creek drainage (including the C-2

pond).

11. By these practices, ROCKWELL bypassed Rocky

Flats facilities necessary to maintain compliance with the

plant’s NPDES permit, in that effluent from Pond B-3, by

means of spray irrigation and runoff into the other ponds

and drainages, bypassed the permitted discharge point from

Pond B-3 to the B-4 pond (Outfall No. 001), and was not

controlled or monitored at that location.

12. Spray irrigation was practiced in part to avoid

violations at Outfall No. 001 which would have occurred if

Outfall No. 001 had not been bypassed.

COUNT 10

Count 10 charges that ROCKWELL negligently

violated Rocky Flats’ NPDES permit in February and

March 1989, by allowing a chromic acid spill to reach Rocky

Flats’ sewage treatment plant and the B-3 pond, spray

irrigating the chrome-contaminated wastewater at the Easy

J A-66

Spray Field and bypassing facilities necessary to maintain

compliance with Rocky Flats’ NPDES permit.

The offense charged in Count 10, pursuant to 33 U.S.C.

§ 1319(c)(1)(A), includes the following elements:

A. Elements of the Offense.

1. That a person

2. operating under an NPDES permit issued pursuant

to 33 U.S.C. § 1342 and implementing §§ 1311 and

1317, |

3. negligently violated a condition or limitation in such

permit implementing such sections.

B. Factual Basis.

The UNITED STATES and ROCKWELL agree that

the UNITED STATES’ evidence at trial would establish

the following facts:

1. ROCKWELL is a person.

2. At all material times, ROCKWELL operated Rocky

Flats under an NPDES permit dated November 26, 1984,

which was issued pursuant to 33 U.S.C. § 1342 and

established conditions and limitations implementing §$§ 1311

and 1317.

3. Rocky Flats’ NPDES permit required ROCKWELL

to maintain, implement and follow a Management Practices

Plan which would prevent or minimize the potential release

of toxic and hazardous substances to waters of the United

States. ROCKWELL was also required to maintain all of

Rocky Flats’ treatment and control facilities in good

working order and to operate them at all times as efficiently

as possible.

4. Rocky Flats’ NPDES permit required ROCKWELL

to spray irrigate in accordance with good engineering

practices, and prohibited ROCKWELL from bypassing any

facilities necessary to maintain compliance with the permit’s

terms and conditions.

5. ROCKWELL was aware and knew of thése

requirements.

JA-67

6. On February 23-24, 1989, ROCKWELL negligently

failed to prevent the discharge of significant amounts of

chromic acid from Building 444 to the sewage treatment

plant and the B-3 pond.

7. Chromic acid (containing hexavalent chrome) is a

toxic and hazardous substance.

8. ROCKWELL negligently failed to maintain and

implement adequate spil) detection, control and containment

procedures to prevent the chromic acid spill from entering

the environment, in that ROCKWELL (a) failed to maintain

spill detection and monitoring capability either upstream or

at the sewage treatment plant; (b) failed to maintain spill

containment capacity in the B-1 and B-2 ponds (or

elsewhere), contrary to ROCKWELL’s Management

Practices Plan; and (c) failed to terminate spray irrigation of

the contaminated wastewater from the B-3 pond.

9. On or about February 24-28 and March 2-3, 1989,

ROCKWELL negligently spray irrigated the chrome-

contaminated wastewater at the East Spray Field, contrary

to good engineering practices. In running off the spray

fields to the A-4, B-4, B-5 and C-2 ponds, the contaminated

wastewater bypassed Outfall No. 001 at Pond B-3 and

violated the permit.

Respectfully submitted this March 26, 1992.

U.S. DEPARTMENT OF HADDON, MORGAN &

JUSTICE FOREMAN

By: _/s/ Michael J. Norton. — By:_/s/_Lee D, Foreman _

MICHAEL J. NORTON LEE D. FOREMAN

United States Attorney

District of Colorado

JA-68

By:_/s/ Barry M. Hartman. _—By:_/s/_ Bryan Morgan

BARRY M. HARTMAN BRYAN MORGAN

Acting Asst. Attorney

General

Environment and Natural

Resources Division

U.S. Justice Department

By:_/s/Kenneth R. Fimberg By:_/s/ Harold A. Haddon _

KENNETH R.FIMBERG HAROLD A. HADDON

Assistant U.S. Attorney

District of Colorado ATTORNEYS FOR

DEFENDANT

ROCKWELL

INTERNATIONAL CORP.

By:_/s/ Peter J. Murtha _

PETERJ.MURTHA

Trial Attorney

Environmental Crimes

Section

Environment and Natural

Resources Division

U.S. Justice Department

ATTORNEYS FOR

PLAINTIFF

UNITED STATES OF

AMERICA

J A-69

PLEA AGREEMENT

THIS PLEA AGREEMENT, dated March 26, 1992, is

entered into by the United States Department of Justice

and Rockwell International Corporation (“Rockwell”),

concerning the criminal investigation at the Rocky Flats

Nuclear Weapons Plant (“Rocky Flats”) near Denver,

Colorado, as follows:

1. Pursuant to Federal Rule of Criminal Procedure

11(e)(1X(C), Rockwell will plead guilty to ten criminal

charges involving vidlations of the Resource Conservation

and Recovery Act (“RCRA”), 42 U.S.C. §§ 6901 et seg., and

the Clean Water Act (“CWA”), 33 U.S.C. §§ 1251 et seq., as

set forth in the attached charging document. In return, the

United States will not bring other environmental criminal

charges (or environmentally-related conspiracy, fraud or

false statement criminal charges) against Rockwell or its

present or former officers, directors or employees, as to all

such environmental and environmentally-related matters

concerning Rocky Flats which are presently known to the

Department of Justice on the date of this agreement.

2. The charges specific in Paragraph 1 may be brought

by indictment or information, and, in the event they are

brought by information, Rockwell will waive indictment. All

pleadings (including sentencing memoranda) will be

consistent with such charges and this agreement.

3. The United States and Rockwell agree, pursuant to

Federal Rule of Criminal Procedure 11l(e)(1)(C), that a

specific sentence is the appropriate disposition of this case.

In connection with the disposition outlined in Paragraph 1,

Rockwell, at the time of sentencing, will pay total criminal

fines of $18.5 million (except as provided in Paragraph 4).

All monies paid by Rockwell in disposing of the charges

outlined in Paragraph 1 shall be considered and otherwise

characterized as criminal] fines.

4. Contemporaneous with this agreement, Rockwell

has also entered into a settlement with the State of Colorado

(the “State Settlement”), and will pay the State of Colorado

JA-70

$2 million. The United States has considered the State

Settlement as a significant and material factor in entering

this agreement, in terms of the total dollars being paid. The

United States agrees that $2 million of the $18.5 million in

criminal fines will be remitted if Rockwell, at the time of

sentencing, establishes that it has paid $2 million to the

State, pursuant to the State Settlement.

5. In connection with this disposition, the United States

agrees that, as to all environmental matters at Rocky Flats

which are presently known to the Department of Justice or

the Environmental Protection Agency (“EPA”) on the date

of this agreement, the United States covenants not to sue or

take administrative action against Rockwell for civil

damages, penalties or other monetary relief based upon

alleged violations of RCRA, the CWA, §103 of the

Comprehensive Environmental Response, Compensation

and Liability Act (“CERCLA”), 42 U.S.C. § 9603, the Clean

Air Act, 42 U.S.C. §§ 7401 et seg., or the Toxic Substances

Control Act, 15 U.S.C. §§ 2601 et seq.

This covenant does not encompass (or preclude) (a) -

claims for recovery of response costs, natural resource

damages or injunctive relief brought pursuant to RCRA,

CERCLA or other authority, or for civil or administrative

penalties arising in connection with such relief or a consent

decree or administrative order mandating such relief; (b) the

ongoing civil or administrative investigation of possible

violations of 40 C.F.R. Part 761 concerning polychlorinated

biphenyls (“PCBs”) at Rocky Flats, including, without

limitation, Building 707; or (c) the issues raised in United

States of America, ex rel., and James S. Stone v. Rockwell

International Corporation, Civil Action No. 89-C-1154 (D.

Colo.) (“Stone”). After an independent review, the

Department of Justice-Civil Division has determined to file

a notice in Stone declining to intervene.

6. Rockwell will not seek to recover, pursuant to

indemnification provisions in Rockwell's contracts with the

U.S. Department of Energy (“DOE”) or otherwise, and will

JA-71

not recover from DOE, the criminal fines (or any portion

thereof) paid by Rockwell in connection with this

disposition, as outlined in Paragraphs 3 and 4, whether paid

as criminal fines or as payment to the State of Colorado,

pursuant to the State Settlement.

7. Except as provided in Paragraph 8, Rockwell will

not seek to recover, pursuant to indemnification provisions

in Rockwell’s contracts with DOE or otherwise, and will not

recover from DOE, the attorneys’ fees and costs incurred by

Rockwell in defending or preparing to defend the Rocky

Flats criminal investigation and prosecution (including this

disposition and sentencing), concerning the following

subjects: (a) the manufacture, storage, treatment, disposal

or other management of pondcrete and saltcrete; (b) the use

of the 207 solar ponds to receive, treat or store hazardous or

mixed wastes; (c) the manufacture, storage, treatment or

other management of vacuum filter sludge; (d) the operation

and management of the sewage treatment plant (including

its influent and effluent); (e) spray irrigation; (f) Rocky

Flats’ violation of the biological oxygen demand and fecal

coliform limits in its NPDES permit; and/or (g) the cromic

acid spill in February-March 1989.

8. As authorized by 41 U.S.C. § 256(c) and 10 C.F.R.

§ 970.3102-20(c), Rockwell may seek to recover from DOE

(and subject to DOE’s review and approval in accordance

with the relevant contract(s) and applicable law and

regulations): (a) attorneys’ fees and costs incurred by

Rockwell (on behalf of the corporation) prior to January 1,

1990 (but not thereafter); (b) attorneys’ fees and costs

incurred by Rockwell in providing legal representation to

past and present Rockwell employees; and (c) -costs

concerning a computer system which is also used in Rocky

F lats-related civil litigation.

9. Except as provided in Paragraphs 6, 7 and 8, the

effect and application of various indemnification provisions

in Rockwell’s contracts with DOE are matters for DOE’s

determination. While the Department of Justice will not, on

JA-72

its own, initiate action to invalidate such provisions to the

extent they ,are interpreted by DOE to allow

indemnification for environmental or related tort liability to

third-parties, the Department of Justice may represent

DOE in any litigation concerning these matters. For

purposes of the indemnification provisions in Rockwell’s

contracts with DOE, nothing in this agreement shall be

construed as an admission by Rockwell, or a determination

by the Department of Justice, of “willful misconduct or lack

of good faith” by Rockwell’s “managerial personnel,” as such

terms are used or defined in Contract DE-AC04-76DP03533,

but DOE shall be informed of this disposition and shall not

be precluded, concerning these matters, from considering

the same.

10. In connection with this disposition, the Department

of Justice will make the following statements at an

appropriate time:

a. Based on information presently known to the

Department of Justice, the conduct to which Rockwell has

pleaded guilty did not and has not resulted in substantial

physiological harm, or the imminent threat of substantial

physiological harm, to members of the public residing and

working outside Rocky Flats’ boundaries.

hb. The investigation has not revealed that

hazardous or mixed wastes were burned in the Building 771

incincerator during the period October 1988 to January

1989, or, at any time, in the Building 776 fluidized bed

incinerator.

J A-73

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

[FILED]

{UNITED STATES DISTRICT COURT]

[DENVER COLORADO]

[DEC 15 1992]

[JAMES R. MANSPEAKER]

[(CLERK}

Case No. 89-C-1154

UNITED STATES OF AMERICA

ex rel. James S. Stone,

Plaintiff,

ROCKWELL INTERNATIONAL

CORPORATION,

Defendant.

BRIEF IN SUPPORT OF DEFENDANT'S MOTION

TO DISMISS PLAINTIFF’S COMPLAINT UNDER

RULE 12(b)(1) FOR LACK OF SUBJECT MATTER

JURISDICTION

Williams, Youle & Koenigs, P.C.

Michael A. Williams

Christopher J. Koenigs

Thomas P. McMahon

1200 Seventeenth Street, Suite 1420

Denver, Colorado 80202

(303) 572-6700

Attorneys for Defendant

Rockwell International Corporation

JA-74

Defendant Rockwell International Corporation

(“Rockwell”) respectfully submits this brief in support of its

Motion To Dismiss Plaintiff's Complaint Under Rule 12(b)<1)

for Lack of Subject Matter Jurisdiction (“Motion”).

I. FACTS

In July 1989, relator James S. Stone (“Stone”) filed a

complaint against Rockwell under the qui tam provisions of

the False Claims Act, 31 U.S.C. §§ 3729-33, as amended in

1986 (the “FCA”).!

In his complaint Stone alleged that Rockwell violated

the FCA by concealing from the United States Government

its violations of various environmental, health and safety

statutes and regulations (the “ES&H provisions”) in its

operations at the Rocky Flats Plant, and by falsely

representing to the Government that it was in compliance

with those provisions. (Complaint 44 14, 15, 19 & 24.) Stone

further alleged that Rockwell concealed its ES&H violations

from the Government, and made false statements to the

Government concerning its compliance with ES&H

provisions, to obtain payments from the Government in

connection with Rockwell’s operation of the Rocky Flats

Plant. (Jd. 44.19 & 24.) Rockwell believes Stone has no

facts to support these allegations of false statements and

1 Rockwell contends that Stone’s claims are governed by the pre-

amendment, rather than the post-amendment, FCA—a contention

supported by the only appellate case on point. See United States v.

Murphy, 937 F.2d 1032, 1036-38 (6th Cir. 1991). Under the pre-

amendment FCA, Stone's claims are jurisdictionally barred if they

are “based upon evidence or information in the possession of the

United States ... at the time such suit was brought.” See 31 U.S.C.

§ 3730(b)(4) (1985), amended by 31 U.S.C. § 3730(e)(4) (1986). Stone

admits that his claims are based upon information in the

Government’s possession at the time this suit was brought. See

Attachments A-3 & A-4 (Interrogatory No. 1(k) and Stone’s

response thereto). Stone's claims are therefore barred under the

jurisdictional provisions of the pre-amendment FCA. Rockwell

assumes arguendo solely for purposes of this motion that Stone’s

claims are governed by the post-amendment Act. |

JA-75

concealments, and has accordingly filed a motion under Fed.

R. Civ. P. 56 seeking judgment in its favor as a matter of

law. For purposes of the present motion only, however,

Rockwell assumes arguendo that all of the allegations set

forth above are true.

Stone also alleged in his complaint that he was the

“original source” of the allegations set forth therein.

(Complaint 4 8.) Stone made this allegation in accordance

with 31 U.S.C. § 3730(e)(4), which provides in pertinent part:

(A) No court shall have jurisdiction over an

action under this section based upon the public

disclosure of allegations ... in a criminal ... hearing

.. or from the news media, unless ... the person

bringing the action is an original source of the

information.

(B) For purposes of this paragraph, “original

source” means an individual who [inter alia] has

direct and independent knowledge of the information

on which the allegations are based ....

Set forth below are undisputed facts bearing on the issues

raised by these two elements of section 3730(e)(4), 7.e.,

(1) whether this action is based upon the public disclosure of

allegations in a criminal hearing or in the news media, and

(2) whether Stone had direct and independent knowledge of

the information on which the allegations are based.

A. Public Disclosure of Allegations

On June 6, 1989—one month before Stone commenced

this action—the Federal Bureau of Investigation filed an

Application and Affidavit for Search Warrant (the “Search

Warrant Affidavit”) in In re Search of Rocky Flats Plant,

Magistrate’s Case No. 89-730M (D. Colo.). The Search

Warrant Affidavit, the pertinent pages of which are

attached to Rockwell’s Motion as Attachment A-1, stated

that it was based upon an investigation conducted by the

FBI, the Environmental Protection Agency (“EPA”), the

JA-76

Department of Justice and the U.S. Attorney’s Office for the

District of Colorado. (Attachment A-1, 4 1.4.) The affidavit

alleged there was probable cause to believe that Rockwell:

e “knowingly and falsely stated Rocky Flats’

compliance with environmental laws and regulations,

and concealed Rocky Flats’ ‘serious contamination”

(1d. | 2.10);

e “falsely certified in November 1985 that Rocky

Flats was ‘in compliance with all applicable [RCRA]

groundwater monitoring [requirements]” (id.

q 2.11);

e “provided DOE with erroneous and incomplete

reports on environmental, health and safety

matters” (id. J 2.12);

e “failed to report two discharges from Rocky

Flats in November 1988 into creeks crossing the

Rocky Flats property and leading to metropolitan

Denver drinking water suppiies,” and “failed to

disclose at least three illegal discharges in December

1988 ... from the plant’s sewage treatment facility”

(id. 4 2.13);

e “made false statements to or concealed material

facts from the EPA concerning discharges from

Rocky Flats to ‘navigable waters” (id. 4 9.25); and

e “certified that the solar ponds at Rocky Flats ...

were ‘in compliance with all applicable groundwater

monitoring and financial requirements stated or

referred to in [RCRA],” when “the certifications

were completely at odds with information known to

Rocky Flats officials” (id. 4 10.15).

The affidavit further alleged that “[tJhere is probable cause

to believe that ... false statements and concealment of

material facts have occurred, in violation of ... 18 U.S.C.

§ 1001.” (/d. | 5.55.) That statute imposes criminal liability

upon a person who, “in any matter within the jurisdiction of

any department or agency of the United States knowingly

and willfully falsifies, conceals or covers up ... a material

JA-77

fact, or makes any false, fictitious or fraudulent statements

or representations.”

On June 9, 1989, in response to motions filed by the

Government and the Rocky Mountain News, Magistrate

Judge Hilbert Schauer issued an order unsealing the Search

Warrant Affidavit. (See Attachment A-2.) There followed

numerous news reports concerning the allegations of false

statements and concealments by Rockwell. For example,

the June 10, 1989 Denver Post stated:

Investigators ... say Rocky Flats officials ... falsified

documents to hide environmental crimes.

* * *

Another group of allegations concerns false

statements and concealment to “keep the public from

knowing just how really bad the site is,” said the

affidavit ....

‘There is probable cause to believe that Rockwell

and (Energy Department) officials have knowingly

and falsely stated Rocky Flats compliance with

environmental laws and regulations, and concealed

Rocky Flats’ serious contamination,” the affidavit

said.

Also, the affidavit said, “false statements and

concealment of material facts have occurred” at the

plant.

The investigation also is looking into whether

performance bonuses were paid to Rockwell based

on falsified evaluations.

(Attachment A-10, p. 12.) The June 10, 1992 Rocky

Mountain News and Boulder Daily Camera similarly

described the affidavit’s allegations of false statements and

concealments by Rockwell. (/d. pp. 13-17.) And the June 21-

27, 1989 Westword stated:

A joint EPA and CDH inspection in 1983

established that Rockwell ... had been storing and

JA-78

disposing hazardous waste without the required

permit since at least 1981. Plant managers had

insisted a permit wasn’t necessary because the waste

fell below the minimum amount requiring a permit,

and none of it was stored longer than ninety days.

The inspection revealed both claims were false—and

Rockwell knew it. ;

** *

As early as 1985, regulators knew the plant was

illegally fouling the groundwater, and that Rockwell

had knowingly misrepresented its protection

measures.

(Id. p. 18) There were also numerous news reports on June

7-10, 1989 concerning the FBI’s investigation into, inter

alia, alleged false. statements and concealments by

Rockwell, including articles in the Boulder Daily Camera,

The Denver Post, The New York Times, the Wall Street

Journal, the Los Angeles Times, the Arvarda Sentinal, the

Westminster Sentinal, the Broomfield Enterprise and the

Austin (Texas) American-Statesman. (See id. pp. 1-11.)

B. Dire

the Search Warrant Affidavit and the news media of alleged

false statements and concealments by Rockwell—Stone filed

his FCA complaint alleging false statements and

concealments by Rockwell. Stone’s complaint did not

specify a single instance in which Rockwell had engaged in

such conduct. Instead, it alleged generally—as had the

Search Warrant Affidavit and news media—that Rockwell

“knowingly concealed ... its numerous and continuous

violations” of the ES&H provisions from the Government,

and that the Government, “unaware of the nature and

extent of the wrongful acts committed by Rockwell, made ...

payments ... in reliance on false ... statements made by

Rockwell.” (Complaint 44 19 & 24.)

JA-79

In December 1991 Rockwell submitted interrogatories

to Stone concerning his allegation that he was the “original

source” of these allegations (id. 4 8), i.e., that he had “direct

and independent knowledge” of false statements and

concealments by Rockwell. In response to Rockwell’s

request that Stone present his evidence of such false

statements or concealments (see Attachment A-5,

Interrogatory Nos. 1(/)-(0)), Stone stated:

Stone does not know the identities of specific

persons who may have either affirmatively

misrepresented to the government that Rockwell

was in compliance with the Environmental and

Safety Laws and Agreements which it had in fact

violated, or concealed such violations from the

government. Also, Stone does not know the

identities of specific documents which contain

affirmative misrepresentations or, when taken as a

whole with other submissions by Rockwell, reflect

concealments of those violations.

(Attachment A-8, p. 2.) Stone then added the following

statement purporting to be responsive to Rockwell’s

request for evidence supporting his allegations of false

statements and concealments by Rockwell:

[UJnder the terms of the contracts between

Rockwell and the U.S. Government [the

“Agreements”] ... Rockwell was required to comply

with ... statutes and regulations governing the

environment, health and safety. Furthermore,

Modification M111 to the base contract ... requires

that Rockwell affirmatively certify such compliance.

Accordingly, all conduct by Rockwell in seeking to

receive funds from the government ... when

Rockwell knew that it was in violation of applicable

environmental, safety and health laws, constitutes

knowing misrepresentation and concealment of the

actual facts from the government.

J A-80

(Id.) Stone did not have a copy of the Agreements, or of

Modification M111 to those Agreements, when he

commenced this action. Moreover, Stone admitted in his

deposition that he had no personal knowledge whatever

concerning Rockwell’s requests for funds from the

Government: -

Q. Do you have any personal knowledge or evidence

regarding Rockwell’s presentation of claims or

solicitations for payments or receipt of payments

from the government?

A. No.

Q. You don’t have any paperwork that Rockwell

might have submitted or that the government

reviewed or anything like that?

A. No.

(Attachment A-9 p. 123, ll. 14-22.) Stone also admitted in his

deposition that, even assuming Modification M111 required

Rockwell to certify its compliance with ES&H provisions, he

was not aware of a single document in which Rockwell

falsely certified that it was in compliance:

Q. Can you point me, Mr. Stone, or can you produce

to me or show me where to find any specific

documents where Rockwell falsely certified that it

was in compliance when it was not?

A. No.

(/d. p. 113, II. 2-7.) In fact, neither Modification M111 nor

any other provision of the Agreements required Rockwell to

certify that it was in compliance with the ES&H provisions,

and Rockwell did not so certify. (See Attachment A-11 4.)

Il. ARGUMENT

Under section 3730(e)(4) of the False Claims Act, this

Court lacks jurisdiction over Stone’s qui tam action if:

JA-81

(1)the action is “based upon the public disclosure of

allegations in ... a criminal hearing ... or from the news

media”; and (2) Stone did not have “direct and independent

knowledge of the information on which the allegations are

based.” The satisfaction of section 3730(e)(4) is an issue of

subject matter jurisdiction. United States ex rel. Precision

Co. v. Koch Industries, Inc., 971 F.2d 548, 551 (10th Cir.

1992). A number of well-established principles govern the

Court’s resolution of this issue.

First, since federal courts are courts of limited

jurisdiction, this Court must presume that no jurisdiction

exists absent a showing of proof by Stone. /d.; see also

Penteco Corp. Ltd. Partnership 1985A v. Union Gas

System, Inc., 929 F.2d 1519, 1521 (10th Cir. 1991) (party

invoking federal jurisdiction has burden of proof).

Second, the Court, and not a jury, must decide whether

subject matter jurisdiction exists. See, e.g., Williamson v.

Tucker, 645 F.2d 404, 413 (5th Cir.), cert. denied, 454 U.S.

897 (1981) (“Jurisdictional issues are for the court—not a

jury—to decide, whether they hinge on legal or factual

determinations.”); 54 C. Wright & A. Miller, Federal

Practice and Procedure § 1350 at 234-35 (2d ed. 1990).

Third, the Court must decide the issue of subject

matter jurisdiction before it- addresses the merits of Stone’s

claims. See, e.g., Wang v. FMC Corp., 975 F.2d 1412, 1415

(9th Cir. 1992) (“We must examine whether any of [the qui

-am plaintiffs] claims are blocked by the jurisdictional bar of

section 3730(e)(4) before we can consider any other

question.”) (emphasis in original); Gould, nc. v. Pechiney

Ugine Kuhlmann, 853 F.2d 445, 450 (6th Cir. 1988) (“A

motion under Fed.R.Civ.P. 12(b)(1) questioning subject

matter jurisdiction must be considered before other

challenges since the court must find jurisdiction before

determining the validity of a claim.”)

Finally, in this Motion Rockwell attacks the existence of

subject matter jurisdiction as a matter of fact, rather than

as a matter of pleadings. The importance of this distinction

J A-82

is described in Mortensen v. First Federal Savings and

Loan Ass'n, 549 F.2d 884 (3d Cir. 1977):

[W]e must emphasize a crucial distinction, often

overlooked, between 12(b)(1) motions that attack the

complaint on its face and 12(b)(1) motions that attack

the existence of subject matter juri®: tion in fact,

quite apart from any pleadings. The facial attack

does offer similar safeguards to the plaintiff: the

court must consider the allegations of the complaint

as true. The factual attack, however, differs greatly

for here the trial court may proceed as it never could _

under 12(b)(6) or Fed.R.Civ.P. 56. Because at issue

in a factual 12(b)(1) motion is the trial court’s

jurisdiction—its very power to hear the case—there

is substantial authority that the trial court is free to

weigh the evidence and satisfy itself as to the

existence of its power to hear the case. In short, no

presumptive truthfulness attaches to plaintiff's

allegations, and the existence of disputed material

facts will not preclude the trial court from

evaluating for itself the merits of jurisdictional

claims.

Id. at 891 (emphasis added). See also Thigpen v. United

States, 800 F.2d 393, 396 (4th Cir. 1986) (“[A] court asked to

dismiss for lack of jurisdiction may resolve factual disputes

to determine the proper disposition of the motion. ***

Were it otherwise, a party could bootstrap jurisdiction

simply by the use of artful pleading. The nature of

jurisdiction requires that courts establish in fact, rather

than assume blindly, their power to hear a dispute.”)

Because Rockwell is attacking the existence of subject

matter jurisdiction as a factual matter, this Court “may

gather evidence on the question of jurisdiction by affidavits

or otherwise in an effort to determine the facts as they

exist.” Koch Industries, 971 F.2d at 551 n.1, quoting

Schramm v. Oakes, 352 F.2d 143, 149 (10th Cir. 1965). -

It is undisputed that the allegations of false statements

and concealments by Rockwell were publicly disclosed in a

criminal hearing and in the news media before Stone

commenced this action. Indeed, the news media itself

recognized this fact. The November 14, 1990 Boulder Daily

Camera stated: “Most of the claims in Rocky Flats

whistleblower Jim Stone’s $1 billion lawsuit against

Rockwell aren’t new. They’ve been the subject of news

articles, public hearings, admissions or lawsuits.”

(Attachment A-10 p. 20.)

Both the Search Warrant Affidavit, which was made

available to the public pursuant to court order in a criminal

proceeding,? and the news media, including The Denver

Post, the Rocky Mountain News, the Boulder Daily

Camera, the Arvarda Sentinal, the Westminster Sentinal,

the Broomfield Enterprise, The New York Times, the Wall

Street Journal, the Los Angeles Times and the Austin

(Texas) American-Statesman, disclosed allegations of false

statements and concealments by Rockwell before Stone

commenced this action. See Attachment A-10. The

disclosure of such “allegations,” as distinguished from

information or evidence supporting the allegations, is all

that section 3730(e)(4)(A) requires. See Wang, 975 F.2d at

2 The public release of the affidavit pursuant to Magistrate Schauer’s

order is unquestionably a “public disclosure” in a “criminal hearing,”

within the meaning of section 3730(e)(4(A). See United States ex rel.

Stinson, Lyons, Gerlin & Bustamante, P_A. v. Prudential Insurance Co.,

944 F.2d 1149, 1156 (3d Cir. 1991) (“Stinson”) (section 3730(e)(4)(A)

“should be interpreted broadly to include allegations and information

disclosed in connection with ... criminal .. . litigation”). See also Black's

Law Dictionary, at 721 (6th ed. 1990) (the term “hearing” includes

“whatever takes place before magistrates clothed in judicial functions and

sitting without a jury at any stage of the proceedings subsequent to its

inception”). .

JA-84

1418 (“(The FCA] bars suits based on publicly disclosed

‘allegations or transactions,’ not information. * * * The Act

appears to be invoking the common logical distinction

between an assertion and its proof. *** An allegation can

be made public, even if its proof remains hidden.”)

Even if Stone based the allegations of false statements

and concealments set forth in his complaint on information

he developed independently of the Search Warrant Affidavit

and the news media—and he emphatically did not, for the

reasons discussed below—the “public disclosure” prong of

section 3730(e)(4) would still be satisfied. As the Second

Circuit declared in United States ex rel. Doe v. John Doe

Corp., 960 F.2d 318, 324 (2d Cir. 1992) (“Doe”):

The relator’s final argument is that his complaint

is not based upon allegations or transactions that

were publicly disclosed in a manner provided in the

statute. *** The relator’s argument misses the

point. The allegations in his complaint are the same

as those that had been publicly disclosed prior to the

filing of the qui tam suit. Public disclosure of the

allegations divests district courts of jurisdiction over

qui tam suits, regardless of where the relator

obtained his information. *** Were it otherwise,

parasitic actions would flourish.

Finally, even if Stone’s qui tam action were only partly

supported by the allegations disclosed in the Search

Warrant Affidavit and the news media, the “public

disclosure” prong of section 3730(e)(4) would be satisfied.

As the Tenth Circuit declared in Koch Industries:

[Section] 3730(e)(4)(A) states a qui tam action may

be barred only if the action is “based upon” the

public disclosure of “allegations or transactions.”

*** (4) As a matter of common usage, the phrase

“based upon” is properly understood to mean

“supported by.” In this context, an FCA qui tam

action even partly based upon publicly disclosed

JA-85

allegations or transactions is nonetheless “based

upon” such allegations or transactions. Congress

chose not to insert the adverb “solely,” and we

cannot, because to do so would dramatically alter the

statute’s plain meaning.

** *

[W]e conclude that a plaintiff whose qui tam action is

based in any part upon publicly disclosed allegations

or transactions is subject to the “original source”

jurisdictional requirement.

971 F.2d at 552 & 553.

Because Stone’s qui tam action is based at least in part

upon allegations publicly disclosed in the Search Warrant

Affidavit and the news media, the Court lacks subject

matter jurisdiction over this action unless Stone had “direct

and independent knowledge” of the information on which his

allegations of false statements and concealments by

Rockwell are based.

In Koch Industries, the Tenth Circuit stated:

Congress never intended a qui tam plaintiff to

benefit in whole or in part upon publicly disclosed

allegations or transactions unless that plaintiff can

demonstrate he was an original source as defined by

statute.

**x *

“Original source” is expressly defined as “[AJn

individual who has direct and _ independent

knowledge of the iniormation on which the

allegations are based and has voluntarily provided

JA-86

the information to the Government before filing an

action under this section which is based on the

information.” 31 U.S.C. § 3730(e)(4)(B).

Two jurisdictional requirements are evident from

the plain language of this provision: 1) a qui tam

plaintiff must have direct and independent

knowledge of the information on which the

allegations are based; and 2) a qui tam plaintiff must

have voluntarily provided such information to the

government prior to filing suit.

Id. at 553 (emphasis in original). In Doe, the Second Circuit

summarized the history of the False Claims Act leading up

to the enactment of section 3730(e)(4)(B)’s “original source”

requirement:

As originally enacted, the FCA did not require that

relators bring any new information to the

government’s attention; rather individuals were able

to bring suit based solely on information already

uncovered in the government’s investigation and,

then, share in the award. See, e.g., United States ex

rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87

L.Ed. 443 (1943). Qui tam suits by individuals

seeking quick cash without assisting in exposing the

fraud were aptly characterized by Attorney General

Biddle, in 1943, as “parasitic” actions.

Marcus represents the high-water mark for

parasitic qui tam actions. There, the relator’s civil

complaint appeared to be copied from a criminal

indictment. The Supreme Court held that nothing in

the FCA barred the relator’s action even if his

Knowledge of the fraud was solely a product of the

government’s investigation. Reacting to Marcus,

Congress immediately amended the qui tam

provisions of the FCA to bar all qui tam actions

based on information that the government already

possessed.

J A-87

960 F.2d at 321 (some citations omitted).

The court in Doe noted that the 1943 FCA amendments

had the effect of eviscerating qui tam actions, because most

qui tam plaintiffs reported defendants’ fraudulent conduct

to the government before filing suit under the FCA. In such

cases the qui tam plaintiffs FCA claim was deemed to be

jurisdictionally barred because the Government already

possessed the information on which the claim was based,

notwithstanding that the Government had acquired its

knowledge only through the qui tam plaintiffs disclosure.

Id. The court in Doe stated that Congress accordingly

further amended the FCA’s qui tam provisions in 1986 in an

attempt to “strike a balance between encouraging private

citizens to expose fraud and avoiding parasitic actions by

opportunists who attempt to capitalize on public

information without seriously contributing to the disclosure

of the fraud.” Id. (emphasis added).

Thus, while the 1986 amendments to the FCA’s qui tam

provisions were intended to encourage private citizens to

expose fraud, they were also intended to ensure that no qui

tam plaintiff could bring a parasitic suit like Marcus. See,

e.g., Stinson, 944 F.2d at 1163 (“the drafters of the 1986

amendments * * * did not want to restore the opportunity to

bring ‘parasitic’ suits like that encountered in Marcus”),

Doe, 960 F.2d at 322 (Congress drafted the 1986

amendments to the FCA’s qui tam provisions “to avoid the

blatant opportunism embodied in cases like Marcus”),

Brody, “Recent Developments in the Area of ‘Qui Tam,”

Fed. Bar & News J. 592, 595 (Dec. 1990) (“One of the

principal goals of barring qui tam actions based on public

disclosures is to prevent the ‘parasitical’ or ‘copycat’

lawsuit.”); Oparil, “The Coming Impact of the Amended

False Claims Act,” 22 Akron L. Rev. 525, 549 (1989)

(“Clearly, the purpose of the (1986] amendment was to

retain the 1943 Amendment’s bias against parasitic

lawsuits.”). As one court has noted, “{tJhe primary problem

in Marcus was that the relator had acted on information

JA-88

developed by the government in its own investigations, and

therefore provided the government with no new

information. * * * [S]uch a situation creates ‘unseemly races

for the opportunity of profiting from the government’s

investigations.” Stinson, 944 F.2d at 1163 (emphasis in

original) (quoting Marcus, 317 U.S. at 547).

Although the FCA’s qui tam provisions were plainly

intended to prevent qui tam plaintiffs from profiting from

information developed by the Government in its own

investigations, Stone has admitted that his FCA claim is

based almost entirely on such information. Rockwell’s

Interrogatory No. l(a) asked Stone to set forth the facts

constituting Rockwell’s alleged misconduct at Rocky Flats.

In his original response to that interrogatory, Stone stated

that those facts included:

1. Any and all facts ... discovered ... as a result of

the joint investigation of the [EPA, FBI and DOJ]

..-which produced the 121 page Search Warrant ...;

2. Any and all facts stated in or referred to in the

Search Warrant, or any documents or other things

seized thereunder. ..;

3. Any and all facts discovered, presented, testified

to, or otherwise obtained through or in connection

with the U.S. Grand Jury (No. 89-2) ...;

4. Any and all facts ... alleged in ... all indictments

or charges of violation of law made by or as a result

of the Grand Jury ....

(Attachment A-6, 44 1-4.) Lest there remain any doubt that

Stone was basing his FCA claim on information developed

by the Government in its own investigations, Stone

proclaimed that his suit was also based on information

discovered as a result of investigations conducted by:

(1) DOE’s Criticality Safety Assessment Team (id. 4 5);

(2) DOE’s Inspector General (id. § 7); (3) the Colorado

Department of Health (id. 4 8); (4) the House Subcommittee

JA-89

on Legislation and National Security (id. ¥ 15); and (5) the

House Committee on Transportation and Hazardous

Materials (id. § 16).

When Rockwell pressed Stone for more _ specific

information about Rockwell’s alleged wrongdoing, Stone

resorted to the technique used by the gui tam plaintiff in

Marcus: wholesale copying of allegations made by the

Government as a result of its own investigations. Stone’s

technique differed from Marcus’ principally with respect to

the documents from which he plagiarized: While Marcus

copied the allegations from a criminal indictment, Stone

_ copied the allegations from the Search Warrant Affidavit

and from the Government’s Sentencing Memorandum in

United States v. Rockwell, Case No. 92-CR-107 (D. Colo.).

As Attachment A-4 to Rockwell’s Motion reveals, Stone’s

Third Supplemental Response to Interrogatory No. Ka)

(Attachment A-7) contains 14 allegations that are

substantively identical to allegations contained in the Search

Warrant Affidavit, and 14 allegations that are substantively

identical to allegations contained in the Government’s

Sentencing Memorandum. The following is but one of these

28 instances of plagiarism by Stone:

—

JA-90

Search Warrant Affidavit

The resubmitted Part A

application estimated that

Rocky Flats generated,

stored or otherwise

accumulated approximately

13,000 pounds of hazardous

wastes on an annual basis

... Information submitted

by or obtained from DOE

and Rockwell show that

Rocky Flats’ in fact

generated or accumulated

at least 25,227 pounds of

RCRA hazardous wastes in

1984 (almost twice the

amount estimated in

August 1983) ...(Search

Warrant Affidavit 494 5.10

& 5.11.)

Stone’s Discovery

Response

The resubmitted Part A

application estimated RFP

gei.erated, stored or

otherwise accumulated

approximately 13,000 pounds

of hazardous wastes at RFP.

Information obtained by

EPA showed, in fact, that

RFP generated or

accumulated at least 25,227

pounds of RCRA hazardous

waste in 1984, nearly twice

the sum estimated in 1983.

(Stone’s Third Supplemental

Response 4 1(b)(11).)

Stone’s FCA action is precisely the kind of “copycat” or

“parasitical” lawsuit that Marcus embodied, and that the

amended FCA’s qui tam provisions were intended to

prevent. Stone will nevertheless argue that this case is

distinguishable from Marcus because he, unlike Marcus, was

an insider who blew the whistle on the defendant’s fraud

against the Government. This contention is both legally and

factually baseless.

The FCA’s qui tam provisions plainly require that the

qui tam plaintiff have direct and independent knowledge of

the defendant’s fraud. See, for example:

e Senate Report concerning 1986 FCA

Amendments: The purpose of the FCA is “to

encourage any individual knowing of Government

fraud to bring that information forward.” S. Rep.

JA-91

No. 345, 99th Cong., 2d Sess. 2, reprinted in 1986

U.S.C.C.A.N. 5266, 5267.

e House reporting concerning 1986 FCA

Amendments: “The purpose of the qui tam

provisions of the False Claims Act is to encourage

private individuals who are aware of fraud being

perpetrated against the Government to bring such

information forward.” H.R. Rep. No. 660, 99th

Cong., 2d Sess. 23 (1986).

e Stinson: “One theme recurring through the

legislative history in 1985 is the intent to encourage

persons with first-hand knowledge of fraudulent

misconduct to report fraud.” 944 F.2d at 1154.

e Doe: “By allowing qui tam relators to share in

any recovery, the FCA encourages those with

knowledge of fraud against the government to bring

that information to the fore.” 960 F.2d at 321.

(Emphases added throughout.)

Stone concurs in this interpretation of the amended

FCA’s qui tam provisions. See Complaint 43 (“the 1986

amendments [to the FCA] were intended by Congress to

create incentives to persons, who are aware of ... false or

fraudulent practices used against the Government, to

disciose such information”). Stone has also made it clear

that, while a portion of his case involves Rockwell’s alleged

ES&H violations, the “gist” of his case involves Rockwell’s

alleged concealment of those violations from the

Government, and false statements to the Government that

no such violations had occurred:

Unquestionably, a portion of Plaintiffs’ case involves

... violations of state and federal health, safety, and

environmental laws and regulations. However, the

gist of Plaintiffs’ complaint is ... that Rockwell

knowingly concealed [the ES&H violations] from

the Government, and falsely represented that it was

J A-92

in compliance with legal and_ contractual

requirements, so as to induce the Government to

continue to make payments in connection with the

operation of Rocky Flats Plant.

(Stone’s Response to Motion To Dismiss, p. 7 (emphasis

added; citations omitted).)

Thus, to avoid section 3730(e)(4)’s jurisdictional bar

Stone must prove that when he filed his FCA claim he had

“direct and independent knowledge” of the “gist” of that

claim, 2.e., false statements and concealments by Rockwell.

As the Third Circuit held in Stinson: “(T]he relator must

possess substantive information about the particular fraud,

rather than merely background information which enables a

putative relator to understand the significance of a publicly

disclosed transaction or allegation.” 944 F.2d at 1160

(emphasis added).

In fact, Stone has admitted that he not only lacks the

“direct and _ independent” knowledge of false

statements/concealments required by the FCA; he lacks any

knowledge of such misconduct. Specifically, Stone has

admitted that he cannot identify: (1)a single Rockwell

employee who falsely told the Government that Rockwell

was in compliance with the ES&H provisions; (2) a single

Rockwell employee who concealed ES&H violations from

the Government; (3) a single document which falsely stated

that Rockwell was in compliance with the ES&H provisions;

or (4) a single document indicating that Rockwell concealed

ES&H violations from the Government. Stone has also

admitted that has no personal knowledge regarding

Rockwell’s presentation to the Government of claims for

payment for the operation of Rocky Flats. See Stone’s

interrogatory and deposition answers quoted at pages 5-7.

Under these circumstances Stone cannot possibly satisfy the

FCA’s “direct and independent knowledge” test. Cf Koch

Industries, 971 F.2d at 554 (qui tam plaintiff failed “direct

and independent knowledge” test where its information was

“weak, informal and strikingly redundant”).

JA-93

II. CONCLUSION

A Court is without subject matter jurisdiction over a qui

tam plaintiffs FCA claim where, as here, (1) that claim is

based on publicly disclosed allegations of false

statements/concealments, and (2) the plaintiff lacks direct

and independent knowledge of information supporting those

allegations. Rockwell accordingly requests that the Court

enter an order dismissing this case for lack of subject matter

jurisdiction.

Dated: December 15, 1992.

WILLIAMS, YOULE & KOENIGS, P.C.

By: _/s/ Christopher J. Koenigs

Michael A. Williams

Christopher J. Koenigs

Thomas P. McMahon

One Tabor Center, Suite 1420

1200 Seventeenth Street

Denver, Colorado 80202

(303) 572-6700

Attorneys for Defendant

Rockwell International Corporation

JA-94

Gnited States District Court

_____ DISTRICT OF _COLORADO __

In the Matter of the Search of

* *k *

The Rocky Flats Plant

U.S. Department of APPLICATION AND

Energy : AFFIDAVIT FOR SEARCH

Rockwell International WARRANT

Corporation

Highway 93 CASE NUMBER

Golden, Colorado 80402

I____Jon S. Lipsky _ being duly sworn depose and

say:

I am a(n) Special Agent, Federal Bureau of

Investigation and have reason to believe that 0 on the

person of or & on the property or premises known as * * *

The Rocky Flats Plant, U.S. Department of Energy,

Rockwell International Corporation, Highway 93, Golden,

Colorado 80402, (as more particularly described in

Attachment | incorporated here by reference)

in the _ State and District of _ Colorado

there is now concealed a certain person or property, namely

** *

- the property described on Attachment 2 (incorporated

here by reference) which is

evidence or the means or instrumentalities of, or the

fruits or other results of, criminal violations of the Resource

Conservation and Recovery Act, 42 U.S.C. § 6928(d), the

Federal Water Pollution Control Act, 33 U.S.C. §§ 1311(a)

and 1319(c), and 18 U.S.C. §§ 1001 and 2.

The facts to support a finding of Probable Cause are set

forth in Attachment C, incorporated here by reference.

| Continued on the attached | & Yes" O} No

sheet and made a part /s/{Name Illegible| __

hereof. Signature of Affiant

Sworn to before me, and

subscribed in my presence

Denver, Colorado

Date City and State

Name and Title of Judicial Officer Signature of Judicia) Officer

ATTACHMENT 1

JA-96

ATTACHMENT 3

1. INTRODUCTION

1.1. Your affiant is a Special Agent with the Federal

Bureau of Investigation (“FBI”) assigned at Denver,

Colorado. I have been an FBI agent since February, 1984.

The FBI derives its general investigatory jurisdiction from

Titles 18 and 28 of the United States Code. Title 28, U.S.C.

§535 gives the FBI jurisdiction to investigate alleged

crimes involving United States Government officers and

employees, and 42 U.S.C. § 2271(b) gives the FBI primary

jurisdiction concerning the investigation of alleged crimes

committed at United States Department of Energy (“DOE”)

facilities. The FBI has concurrent jurisdiction with the

United States Environmental Protection Agency (“EPA”)

to investigate the alleged violation of federal environmental

laws.

1.2. | have attended three different training sessions

concerning the investigation and prosecution of

environmental crimes, for a total of 13 days of intensive

course work, lectures and seminars on the Resource

Conservation and Recovery Act (“RCRA”), the Federal

Water Pollution Control Act (popularly known as the “Clean

Water Act” or “CWA”), and other federal environmental

laws. I have been the lead investigator or a substantial

participant in at least 13 investigations of environmental

crimes. I have been a lecturer or speaker at three FBI

training conferences concerning’ investigation of

environmental crimes. I have received five commendations

for my work in this area.

1.3. The other lead investigator concerning this matter

is William F. Smith. Mr. Smith is a Special Agent with

EPA’s Office of Criminal Investigations (“OCI”) and is also

assigned at Denver, Colorado. Agent Smith has been an

OCI Special Agent since November 1984, and also has seven

years’ experience in other federal law enforcement. In

addition to his extensive training concerning the

investigation of environmental crimes, Agent Smith has

JA-97

been involved in numerous environmental investigations,

has taught at five FBI training conferences concerning

environmental crimes and has supervised other OCI agents

in investigating such cases.

1.4. This Application is based upon the investigation

conducted to date by the FBI and the EPA, including

Special Agent Smith and EPA’s National Enforcement

Investigations Center, together with the United States

Department of Justice and the United States Attorney’s

Office for the District of Colorado. The following statements

are based upon a review of numerous studies, reports and

documents from federal, state and local governments and

agencies, including the EPA and the Colorado Department

of Health (“CDH”), as well as materials submitted to various

agencies by, or otherwise obtained from or concerning DOE

and Rockwell International Corporation (“Rockwell”). The

following statements are also based upon my own physical

observations and those of others, as well as interviews

conducted with various people. All legal analysis is based

upon the advice and assistance of the Department of Justice

and the United States Attorney’s Office. All referenced

exhibits are incorporated as part of this Application.

*x** *

False Statements and Concealment

2.10. Consistent with their efforts to keep the

public from knowing “just how really bad the site is,” July

1986 DOE Memorandum (emphasis added), there is

probable cause to believe that Rockwell and DOE officials

have knowingly and falsely stated Rocky Flats’ compliance

with environmental laws and regulations, and concealed

Rocky Flats’ “serious contamination.” Id.

2.11. While DOE concluded in December 1988 that

groundwater contamination at Rocky Flats was the greatest

single environmental hazard at all of DOE’s nuclear

weapons facilities, there is probable cause to believe that

Rockwell and DOE officials falsely certified in November

1985 that Rocky Flats was “in compliance with all applicable

J A-98

[RCRA] groundwater monitoring [requirements].” In fact,

and contrary to such certification, various Rockwell and

DOE officials were aware of serious contamination and were

informed that the monitoring system was deficient, did not

comply with RCRA, and produced data of limited (or

questionable) validity.

2.12. In or about May 1987, DOE awarded

Rockwell a performance bonus of approximately $8.6

million, based on Rockwell’s alleged “excellent”

management at Rocky Flats. DOE officials rated the health

and safety programs at Rocky Flats “very good” and said

that the plant’s programs to manage radioactive and toxic

wastes were “excellent,” despite other DOE findings that

some of Rocky Flats’ waste facilities were “patently

‘llegal,”” that Rockwell had significant problems in

controlling radioactive contamination at the plant and that

Rockwell provided DOE with erroneous and incomplete

reports on environmental, health and safety matters. In

addition, three separate DOE inspections at Rocky Flats

since 1986 have noted serious health and safety problems

and severely criticized Rocky Flats’ management. :

2.13. In December 1988, Rocky Flats officials

failed to report two discharges from Rocky Flats in

November 1988 into creeks crossing the Rocky Flats

property and leading to metropolitan Denver drinking

water supplies, which contained chemical pollutants not

authorized by Rocky Flats’ CWA permit. Rocky Flats also

failed to disclose at least three illegal discharges in

December 1988 ({ 2.8) from the plant’s sewage treatment

facility.

2.14. There is also probable cause to believe that

Rocky Flats operated the plant’s Building 771 incinerator in

December 1988 to treat or dispose of hazardous or mixed

wastes, contrary to public statements that Building 771 was

shutdown from October 1988 to late January 1989.

2.15. Such false statements and concealment are

apparent violations of various environmental statutes, such

JA-99

as 42 U.S.C. § 6928(d)(3), as well as 18 U.S.C. § 1001.

2.16. In sum, there is probable cause to believe

that environmenta! and other crimes have been committed

at Rocky Flats and that evidence of such crimes is located

. there.

** *

5.22. As part of Rocky Flats’ November 8, 1985

submission, DOE’s Albert E. Whiteman and Rockwell’s J.

E. Dorr also certified that Rocky Flats’ groundwater

monitoring system complied with RCRA’s requirements.

As discussed in Part 10, this certification was false, in

violation of 18 U.S.C. § 1001.

* * *

regulatory personnel to conduct the necessary permit

analysis. In its response dated May 2, 1989, DOE indicated

its willingness to request a continuance “until such time (as)

CDH [can] enhance Q-cleared staff and review, to its

satisfaction, information relative to the issuance of a final

permit.”

5.55. In sum, the investigation to date shows a

substantial history of RCRA issues and alleged violations at

Rocky Flats, and establishes DOE’s and Rockwell’s clear

knowledge of federal environmental law and regulation.

Rocky Flats does not have a RCRA permit and several

enforcement proceedings are ongoing. There is probable

cause to believe that hazardous and mixed wastes have been

illegally treated, stored and disposed of at Rocky Flats, in

violation of 42 U.S.C. § 6928(d)(2); that DOE and Rockwell

have repeatedly failed to provide EPA and CDH with

complete and accurate waste information necessary to

proper regulation; that wastes have been improperly mixed,

contrary to 42 U.S.C. § 6928(d)(2); and that false statements

and concealment of material facts have occurred, in violation

of 42 U.S.C. § 6928(d)(3) and 18 U.S.C. §1001. In

conjunction with ¥4 1.18 — 1.22, there is probable cause to

believe that evidence of such crimes is located at Rocky

Flats, in Buildings 111, 115, 122, 123, 706 and 776, as well as

JA-100

the Wind Systems Building.

9.25 There is probable cause to believe that DOE and/or

Rockwell have made false statements to or concealed

material facts from the EPA concerning discharges from

Rocky Flats to “navigable waters”, in violation of 18 U.S.C.

§ 1001, and has criminally violated the Clean Water Act, 33

U.S.C. §§ 1311(a) and 1319(c), by negligently or knowingly

discharging pollutants, into Walnut and Woman Creeks

since at least 1987, without a permit or in violation of Rocky

Flats’ permit conditions.

* * *

10.15. On November 8, 1985, DOE submitted a Part

B RCRA permit application to EPA, concerning Rocky

Flats’ status and operation as a RCRA hazardous waste

facility. Both DOE’s Acting Area Manager, Albert FE.

Whiteman, and Rockwell’s Vice President and General

Manager, J. E. Dorr, certified “under penalty of law” that

they had examined the application, that they were familiar

with its information and that such information was “true,

accurate and complete.” Mr. Whiteman and Mr. Dorr

certified that the solar ponds at Rocky Flats known as

Ponds 207A, 207B and 207C were “in compliance with all

applicable groundwater monitoring and financial

requirements stated or referred to in (RCRA), as amended.”

The certifications were footnoted as follows: “The present

solar pond groundwater monitoring system meets the spirit

of RCRA, i.e. detection of groundwater degradation.

Although initially designed for radiological purposes, the

groundwater monitoring program was modified in 1981 to

be essentially equivalent with the RCRA program .

(Emphasis added.) In fact, the certifications were

completely at odds with information known to Rocky Flats’

officials.

* * *

JA-101

10.35. There is probable cause to believe that

hazardous wastes have been illegally treated, stored and

disposed of at Rocky Flats, in violation of material interim

Status groundwater monitoring requirements, contrary to

42 U.S.C. § 6928(d)(2), and that false statements have been

made concerning the same, involving matters within EPA

jurisdiction, in violation of 42 U.S.C. § 6928(d)(3) and 18

U.S.C. § 1001. There is also probable cause to believe that

evidence of such crimes is located at Rocky Flats, in

Buildings 111, 115, 122, 123, 706 and 776, as well as the Wind

Systems Building, where relevant documents are likely to

be maintained.

* * *

J A-102

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Case No. 89-C-1154

UNITED STATES OF AMERICA

ex rel. James S. Stone,

Plaintiff,

ROCKWELL INTERNATIONAL

CORPORATION,

Defendant.

PLAINTIFF JAMES S. STONE’S AMENDED

RESPONSES TO INTERROGATORY NOS. 1(d), (1), (m),

(n)'AND (0), 5, 6, 7, 11(a), 12-16, 21(d), AND 23 (a), (b) AND

(d) OF DEFENDANT'S FIRST INTERROGATORIES

Plaintiff James S. Stone (“Stone”), by his attorneys

Hartley David Alley; Buchanan, Gray, Purvis & Schuetze;

McDermott, Hansen & Reilly; and Breit, Best, Richman and

Bosch, P.C., hereby submits the following amended

responses to Interrogatory Nos. 1(d), (1), (m), (n), and (0) ,4,

6, 7, 11(a), 12-16, 21(d) and 23 (a), (b) and(d) of Defendant’s

First Interrogatories:

Interrogatory No. 1 (d), (1), (m), (n), and (0):

Identify all Rockwell Employees who you contend

had actual knowledge of the facts constituting the

violation at the time Rockwell submitted any claim

to the Government that you contend was false;

State whether you contend that Rockwell

affirmatively misrepresented to the Government

that it was in compliance with the Environmental

and Safety Laws (including regulations thereunder)

JA-103

and Agreement that you contend were violated by

virtue of such facts;

m. If your answer to subpart (1) above is other than an

unqualified negative, identify (in accordance with

Instruction Nos. 9-10 above) each document or oral

communication in which Rockwell made _ such

misrepresentation to the Government;

n. State whether you contend that Rockwell concealed

from the Government the facts constituting the

violation of the Environmental and Safety Laws and

Agreements;

o. If your answer to subpart (n) above is other than an

unqualified negative; (i) identify ail Rockwell

Employees who to your knowledge concealed the

violation from the Government, and (ii) identify all

documents supporting your contention that Rockwell

concealed the violation from the Government;

Amended Response to Interrogatory Nos. 1(d), (1), (m), (n)

and (0):

The persons identified in the “Individuals” column of

Attachments 1 through 4 of Plaintiff's Consolidated

Answers and Responses to Discovery are persons whom

Stone believes had actual knowledge of some facts

constituting the violation at the time Rockwell submitted

false claims to the government. Concerning Instruction No.

8, neither Stone nor his attorneys know the current address,

telephone number, or employer of the individuals listed in

Plaintiffs Consolidated Answers and Responses. to

Discovery. ;

Stone does not know the identities of specific persons

who may have either affirmatively misrepresented to the

government that Rockwell was in compliance with the

Environmental and Safety Laws and Agreements which it

had in fact violated, or concealed such violations from the

government. Also, Stone does not know the identities of

specific documents which contain affirmative

misrepresentations or, when taken as a whole with other

JA-104

submissions by Rockwell, reflect concealment of these

violations. However, under the terms of the contracts

between Rockwell and the U.S. Government relative to the

operation of RFP (and Modifications thereto) previously

identified in the “Nexus” column of Attachments 1-4 to

Plaintiffs Consolidated Answers and Responses to

Discovery, Rockwell was required to comply with all laws

and regulations of the United States, which include laws,

statutes and regulations governing the environment, health

and safety. Furthermore, Modification 111 to the base

contract, previously identified in the “Nexus” column of

Attachments 1-4 to Plaintiffs Consolidated Answers and

Responses to Discovery, requires that Rockwell

affirmatively certify-sueh compliance. Accordingly, all

conduct by Rockwell in seeking to receive funds from the

government in payment of fixed fees, base fees and award

fees, as well as GAO payments, under the respective

agreements relative to the operation of RFP, when

Rockwell knew that it was in violation of applicable

environmental, safety and health laws, constitutes knowing

misrepresentation and concealment of the actual facts from

the government.

Interrogatory No. 5:

With respect to your allegations, set forth in paragraphs

15 and 20 of the Complaint, that Rockwell conspired with

others to (a) defraud the Government in order to obtain

approval of a false or fraudulent claim, and (b) conceal the

true nature and extent of its

** *

JA-105

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Case No. 89-C-1154

THE DEPOSITION OF JAMES S. STONE

VOLUME I

November 2, 1992

UNITED STATES OF AMERICA, ex rel. JAMES S.

STONE,

Plaintiff,

-VS-

ROCKWELL INTERNATIONAL CORPORATION,

Defendant.

PURSUANT TO NOTICE, the deposition of JAMES S.

STONE, VOLUME I, was taken on behalf of the Defendant,

pursuant to the pertinent Federal Rules of Civil Procedure,

at 9:15 a.m., this d

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