Petition for Writ of Certiorari — Aloff v. Aster (No. 402)

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‘Supreme Court of the United States

OcTOBER TERM, 1960.

UNITED STATES OF AMERICA and JACK AI OFF,

Petitioner,

Vs.

JAY ASTER, Individually and Trading as WINGATE

CONSTRUCTION CO... NATIONAL, SURETY COR-

PORATION and THE CROUSE-HINDS CO.,

Respondents,

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PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES GOURT OF APPEALS FOR THE \

THIRD CIRCUIT. x

a ey

JACK ALOFF,

7338 Brockton Road,

Philadelphia 31, Pa

Rel aphte

1X Isle. 1025 Bankers Securities Bldg... Phila. 7, Pa. ,

ae ke INDEX

PAGE

Opinion Below Rinein ee REO ES ae a iemgp eee wants tots ]

Jurisdiction pias a eatate ok ate he aa warn ASST INS goo | , ig

Questions NEM PE COP YEE erg NMS eRe Es Ne en en 2

Statutes aa BEE TS Be ee a are ese ree, SONIA 3

Statement of. the Case AE AR ea a ten e falem ern 5

Reasons for. Allowing the Writ . Sere’ waren 8

CMON oc es bxee eee decd Keen eee 10

APPENDIX:

Opinion of the United States Distr... Court for the

Eastern District of Pennsylvania, 176 F. — 208, .

Petitioner's Exhibit A ........ Macatee enmetiks see?

Opinion of the United States Court of Appeals for the

Third Circuit, 275 F. 2d 281, Petitioner's Exhibit B .14

Petitioner's ExhibitC .......°...................... 18

Opinion Sur Petition for Rehearing of United States

. Court of Appeals for the Third Circuit, Petitioner's

ML Oe ceded neon ci ik ecnieaweees 29

Petitioner's Exhibit E .... 20... ooo lec c ccc cence. 30 |

Tue RI cee ee 32

ae

INDEX

CASES CITED

” PAGE —

U.S. ex rel. Bayarsky v. Brooks, C. A. 3 (N. J. 1954)

oe F ond 281 ..:....----- Bass aca paaute

U.’S. ex rel. McCans vs. Armour and Co., D: C. D. C.

(1956), 146 F. Supp. 546, affirmed 254 F. 2nd 90, 102

U.S. App. D. C. 391 ......-eeeeeee terete

U. S. ex rel. Sherr vs. Anaconda Wire and Cable Com-

pany, D.C. N. Y. 1944, 57 F. Supp. 106, affirmed

149 F. 2d 680, certiorari denied 66 S. Ct. 143.....

STATUTES CITED

96 U, SC. Section 1284 (1) ....65e- eee eee creer ness

False Claims Act, 31 U. S. C. §232(A), (B), (C)--..-

RECORD CITED

89 Congressional Record 10744-52 ......5- seer eeeees

8

$

4

SUPREME COURT OF THE UNITED STATES.

Octoser ‘TERM, 1960.

No.

—_—

' .

Uaatep Starss or America and J ACK ALOFF,

: Petitioner,

VS.

Jay Aster, Individually and Trading as Wr1ncaTE Con-

STRUCTION Co., NATIONAL SURETY CORPORATION, and ©

THE CrouseE-Hinps Co.,

.Respondents.

ee

PETITION FOR WRIT OF CERTIORARI TO THE -

UNITED STATES COURT ‘OF APPEALS FOR THE

THIRD nur.

—_—_——

The petition of the United States of America and Jack

Aloff alleges:

OPINION peer,

The order sought to bereviewed was made by the United

States Court of Appeals for the Third Circuit and entered

on February 17, 1960 (Petitioner's Exhibit B).. On June

2

16, 1960, the United States Court of Appeals for the Third

Circuit entered the following order:

“The pages submitted by appellant, Jack Aloff, are

‘accepted as a petition for rehearing and, under the cir-

cumstanées, as within time. The petition for rehear-

ing is denied.” (Petitioner's Exhibit D.)

' The opinion of the United States Court of Appeals for the

Third Circuit and the decision of the United States District

Court reviewed by the Court of Appeals are officially re-

ported. U.S. ex rel. Jack Aloff v. Jay Aster, et al., 176 F.

Supp. 209, 275 F. 2d 281. .

ee

JURISDICTION.

' Jurisdiction to review in the manner set forth herein

is granted this Court by 28 U.S. C. Seetion 1254(1). Juris-

diction of the District Court is claimed under the False

Claims Act 31 U.S. C. §232(A), (B); (€).

——

QUESTIONS PRESENTED.

‘Tue questions presented for review are as follows:

_ (zx) Whether the Attorney General of the United State-

at Washington, District of Columbia, under the provisions

of the False Claims Act 31 U. S. C. $232(C) has the right

to determine if the person bringing the suit has met the

- jurisdictional requirements of the statute?

(b) Whether a United States District Court has the right

to refuse to hear, try and determine a Qui Tam action after

the. Attorney General at Washington, District of Columbia.

0

3

bas made the decision that the »erson bringing the action

. has met the jurisdictional requirements of the statute, and

. where the Attorney General, within sixty days after service

‘of the required disclosure has declined to enter the action

under the authority contained in the provisions of 31

U. S.C. $232 (C)? ?

(c) | Whether the portion of section,232 (C) stating that

“The Court shall have no jurisdiction to proceed with any

such suit brought under clause (B) or pending suit brought

under this section whenever it shall be made to appear that.

_ such suit was based upon. evidence or information in the

‘possession. of the United States, or any agency, officer or

employee thereof, at the time such suit -was brought,”

means information which was original with the United

States of America, and not original withthe informant?

STATUTES INVOLVED.

The relevant sections are:

False. Claims Act 31 U. S. C. Section 232(A):

“The several district courts of the United States,

the District Court of the United States for the District

- of Columbia, the several district courts of the Terri-

tories of the United States, within whose jurisdictional

limits the person doing or committing such act shall ,

be found, shall, wheresoever such act may have been

done or committed, have full power and jurisdiction

‘to hear, try, and determine such suit.”

False Claims Act 31 U. S. C.-Section 232(B):

“Except as hereinafter provided, such suit may be

brought and carried: on by -any person, as well for

himself as for the United States, the same shall be at

e. *

4 -

the sole cost and charge of such person, and shall be

in the name of the United States, but shall not be with-

- drawn or discontinued without the consent, in writing,

of the judge of the court and the district attorney, first

filed in the case, setting forth their reasons for such

consent.”

False Claims Act 31 U. S. C. Section 232(C):

“Whenever any such-suit shall be brought by any

person under clause (B) notice of the pendéncy of such

suit shall be given to the United States by serving

upon the United States Attorney for the district in

which such suit shall have been brought a copy of the

bill of complaint and by: sending, by registered mail, to

the Attorney General of the United States at Washing-

ton, District of Columbia, a copy of such bill together

with a disclosure in writing of substantially all evi-

dence and information in his possession material to the

effective prosecution of such suit. The United States

shall have sixty days, after service as above provided,

within which to enter appearance in such suit. If the

United States shall fail, or decline in writing to the

Court, during said period of sixty days to enter dny

such suit, such person may carry on such suit. If the

United States within said period shall enter appear-

ance in such suit.the same shall be carried on solely

_ by the -United States. In carrying. on such suit the

United States shall not be bound by any action taken

by the person who brought it, and may proceéd in all

respects as if-it were instituting, the suit: Provided,

That if the United States shall fail to carry on such

suit with due diligence within a period of six months

from the date of its appearance therein, or within such

additional time as the court after notice may allow,

such suit may be carried on by the person bringing the

same in accordance with clause. (B) above. The court

shall have no jurisdiction to proceed with any such suit .

eo?

-

.

a*

.

b)

brought under clause (By or pending suit brought

under this section whenever it shall be made to appear

that such suit was based upon evidence or informatien

in the possession of the United States. or any agency,

officer or employee thereof, at the time. such suit was

brought:, Provided, however, That no abatement shall

_be had as to a suit pending on December 23, 1943, if

‘before such suit was filed such person had in his pos-

session and voluntarily disclosed to the Attorney Gen-

eral substantial evidence and information which was

not theretofore in the possession of the Department of

Justice.” .

STATEMENT OF THE CASE.

On August 18, 1958, the petitioner, Jack Aloff, brought

an action in Qui Tam, in his name as well as in the name of

the United States of America, against Jay Aster, Individu-

ally and doing business as the Wingate Construction Com-

pany, the National Surety Corporation and the .Crouse-

Hinds Company, under the provisions of Title 31 U.S. C.

sections 231-233 and 235.

The complaint charged the reesendioks with having

conspired to defraud the United States Government through

the furnishing and installation of wrong materials under

Contract No. DA-36-109-Eng-6543 between the United

States Government and Wingate Construction Company of

Philadelphia, Pennsylvania, providing for the construction

of a swimming pool and bathhouse at McGuire Air Force

‘Base-New Jersey. The respondents knew that certain of

the materials furnished and installed were in violation of

the plans and specifications of the said contract, were con-

_ trary to Federal Laws pertaining to the National Bureau of

Standards and Federal Laws pertaiuing to the General

Services Administration, and were cuntrary to the specified

Q

‘ \

requirements of the Department of the Army. The com-

plaint also charged that’ the respondents conspired to

deprive the United States of the monetary value of tests re-

quired by the contract specifications in question. The com-

plaint further charged that ‘the respondents presented falsc

and fraudulent claims to the United States Government

upon which the Government relied in making disbursement

of substantial sums of money to the Wingate Construction

Company.

All three respondents epeened through counsel and filed

an answer to petitioner's complaint: in due season.

On November 4, 1958, the Attorney General of the United

States, at Washington, District of Columbia, determined

that when the relator brought the suit under clause (B)

of section 232 of the United States Code, Title 31, the relator

had given notice of the pendency of his suit to the United

States by serving upon the United States Attorney for the

District in which such suit was brought a copy of the bill of

complaint, and had sent, by registered mail, to the Attorney

General of the United States at Washington, District of

Columbia, a copy of his bill together with.a disclosure in

writing of substantially all evidence and information in- his

possession material to the effective prosecution of his suit.

and also determined that the relator’s suit was not based

upon evidence or information in the possession of the .

United States, or any ‘agency, officer or employee thereof,

at the time the suit was brought.

These determinations resulted in the sending of a letter |

dated November 4, 1958, by the United States Department

of Justice, Washington, District of Columbia, to the relator

stating, in part:

“Enclosed is a copy of the disclosure you submitted

- to us, pursuant to section 231 and 232 Title 31 of the

United States Code: While your handwritten dis-

closure was for the most part legible, there may be a

few minor errors in this copy. As indicated the dis-

closure satisfies the jurisdictional requirements of the

statute and apprises us of the nature of vour conten-.

tions.

“Under separate cover we are returning the docu-

mentary evidence submitted in Support of your allega-

tions.” (Petitioner’s Exhibit E.) p. 31.

On December 8, 1958, United States Attorney Harold K.

Wood and Assistant United States Attorney Charles M. .

Donnelly, in a Statement to the Court, said that after a

thorough invéstigation of the facts in the above’ entitled

matter the United States of Arnerica declined to enter the

action under the authority contained in the provisions of

31 U. S. C. §2821C). (Petitioner's Exhibit F.) p, 32."

On December 22, 1958, the respondents filed‘a motion and

notice of motion to dismiss the action. i:

On December 29, 1958, the petitioner, Jack Aloff, filed an

answer to respondents’ motion to dismiss, together with a

copy of notice of such answer to counsel for all respondents.

On May 11, 1959, the complaint was dismissed in the

United States District Court for the Eastern District of

. Pennsylvania (Petitioner's Exhibit A) p. 11, because:

“... In these circumstances this court finds no justi-

fication for a reading of the statute es narrower than

it appears on its face... The motion te dismiss will be

granted.”

On February 17, 1960, the United States Court of Appeals

for the Third Circuit affirmed the order of dismissal. p. 14.:

On May 30, 1960, correspondence was mailed by the peti-

tioner, Jack Aloff, to the Honorable Justice Biggs, Chief

Judge of the United States Court of Appeals for the Third

Circuit, setting forth facts ‘material to the consideration of

the questions presented. (Petitioner's Exhibit C.) p. 18.

On June 16, 1960, the correspondence of May 30, 1960,

was accepted by the United States Court of Appeals fur the

Third Circuit as a Petition for Rehearing, which petition

was denied. p. 29.

The basis for Federal jurisdiction in the Court of first

instance is Section 232(A) of the. False Claims Act Title

31 U.S.C,

REASONS FOR ALLOWING THE WRIT.

1. The decision of the Court below is in conflict with the

decisions of the Courts of Appeals of other circuits.

In one court it was held: that the amendment to section

232, dated December 23, 1943, had for its purpose, inter alia,

the exclusion of “parasitical claims”, where the information

was not original with the informer, and where the infor-.

mation was acquired in government service. U. S. ex rel.

McCans vs. Armour and Co., D.C. D. C. (1956), 146 F. Supp.

546, affirmed 254 F. 2nd 90, 102 U. S. App. D. C. 391.

In U. S. ex rel. Sherr vs. Anaconda Wire and Cable Com-

pany, D. C. N. Y. 1944, 57 F Supp. 106, affirmed 149 F.2d

680, certiorari denied 66 S. Ct. 143, it was held that the —

purpose of section 232, as enacted in 1943, was tg eliminate

the former practice by which many persons filed suits based

on information and alleged facts obtained bodily from in-

dictments returned in the United States Courts, from news-

paper stories and from Congressional investigations with-

out basis of any original information in. the possession of

‘the informer. Here again the stress is upon the fact that

the information must originate with the informer.

2. The Court of Appeals below has rendered a determina-

.tion in conflict with its own previous determination. ,

In U. S. ex rel. Bayarsky vs. Brooks, C. A. 3 (N. J. 1954),

210 F. 2nd 257, it was held that the purpose of the-amend-

ment of section 232 was to stamp out the practice of would-

be informers basing civil suits on information taken from

pending Federal criminal prosecutions. Here again the in-

formation was already in the possession of the United States

before the suit in Qui Tam was filed, and was not original

_with the informer.

All of the information contained in the suit filed by the

‘ petitioner, Jack Aloff, and contained in any disclosure to

the Attorney General of the United States at Washington,

9

‘ District of Columbia, as required by section 232(C) of 31.

U. S. C. was original with the petitioner, Jack Alo. This

was confirmed by the opirtion of the Court of Appeals for

the Third Circuit which stated: “The information was

given by the informant to the government... .”

3. No interpretation of the amendment of section 232 of

31 U.S. C., dated December 23, 1943, has ever been made

by the United States Supreme Court involving the impor-

tant questions of Federal Law raised by this petitioner. A

Qui Tam action is not an action that must be confined to

one particular district. It canbe, and often is, national in

scope, as shown by the disclosure of the petitioner, Jack’

Aloff, to the Attorney General at Washington. Because of

the absence of such interpretation the United States of

America may be deprived of receiving just value for moneys

it may expend, or may have expended. Therefore, this

Court, the Supreme Court of the United States, should in-

terpret the amendment of December 23, 1943, to section 232

of 31 U. S. C. so that all the District Courts and Circuit

Courts of Appeal in the United States may be guided to

rule in‘ uniformity.

The United States Court of Appeals for the Third Circuit,

in its opinion filed February 17, 1960, And the United States

District Court for the Eastern District of Pennsylvania, in

its opinion filed May 11, 1959, ignored the determination

of the United States Department of Justice that-the “in-

formant” had met the jurisdictional requirements of the |

Statute. This right of determination is given the Attorney

General at Washington, District of Columbia, in section

232(C) of 31 U.S.C. The United States Government by

its Attorney Harold K. Wood, and its Assistant Attorney

Charles M. Donnelly, declined to enter the action under the

authority contained in the provisions of section 232(C) of

31 U.S. C., thus permitting the relator, Jack Aloff, to carry

on the suit. This is also in conformity with section 232(C)

of 31 U.S.C. At no place in this Statement to the Court

did the United States of America. through its attorneys,

State that the suit was without merit.

10

The District Court forthe Eastern District of Pennsyl- .

vania referred in its opinion to the Congressional Record

governing this sMMute. A reading of. the 89 Cong. Rec.

10744-52 appears to reveal an intent of Congress to rely

upon the judgment of only the Attorney Genern! of the

United States at Washington, District of Columbia, with its

broad investigative facilities, as to whether or not an “‘in-

formant” has met the jurisdictional requirements of the

statute. |

Further, the Congressional Record appears to reveal that

the intent of Congress was not to abolish the Qui Tam action

as a remedy of false claims.

4. The public’interest requires a determination by this

- Court of the questions herein involved. There are many —

instances wherein not only the United States Government

is deprived of receiving just value for moneys expended,

but wherein the safety of the public is jeopardized by the

failure of government contractors to carry out their con-

’ tractual obligations.

Unless a citizen, who has knowledge of such conspiracies

and failures to carry out such contractual obligations, is per-

mitted to act, the public may be harmed. ‘he violations

which may be perceived by a private citizen may not be

ascertainable by the public official due to his ‘manifold and

demanding duties which may prevent him from making an

exhaustive study.

The statute obviously sought to encoufage the private

citizen to act as a guardian of the interest of the public at

large.

CONCLUSION.

For the foregoing reasons, on beha!f of the United States

of America‘and myself, I respectfully submit that this peti-

tion for a writ of certiorari should be granted.

Respectfully submitted,

4.44 JACK ALOFF,

Relator.

11

— EXHIBIT A.

IN THE

UNITED STATES. DISTRICT COURT.

FoR THE EASTERN District OF PENNSYLVANIA.

THE UNITED STATES OF AMERICA and

JACK ALorFr, petitioners

V.

Jay ASTER, Individually and Trading

as THE WINGATE Construction | Civil Action.

COMPANY No. 25207.

: and ;

THe NATIONAL SURETY CORPORATION .

and .

Ring

THE Crouse-Hinps CoMPpANY

OPINION. -

‘By HASTIE, Circuit Judge. (Filed May 11, 1959)

At issue here is a motion of the defendants to dismiss

this qui tam action brought by Aloff, an informer, pursuant

to the False Claims Act, 31 U. S. C. §‘231, 232,-charging the .

defendants with having made false and fraudulent claims

against the United States in connection with the supplying

and installing of certain materials under public contracts.

The United States did not initiate this action and has not

joined in it. Documentary evidence supporting the present

motion includes’ a detailed eight page statement of the

factual basis of the present claim which admittedly was

>

12 Re

submitted by Aloff to the Department of Justice several

months before the present suit was filed. Thus, the present

record shows and this court now finds that the essential in-

formation upon which the present suit is predicated was

supplied to and was in the possession of the United States

before this suit was filed. The question of law to be decided

is whether in these circumstances the present suit is barred

by the provision of Section 232 of Title 31 that “(t)he court

shall have no jurisdiction to proceed with any such suit...

brought under this section whenever it shall be made to

appear that such suit was based upon evidence in the pos-.

session of the United States, . . . at'the time such suit was

brought. ...”" On its face this language is comprehensive.

It is broad enough to cover informaticn obtained by the

government from any source whatever. However, the

plaintiff argues that the sense and purpose of this statutory

restriction dictate an implied exception of information sup-

plied by the very informer who later brings the suit after

the government has refused to do so.

This argument is predicated upon the assertion that the

statutory language in question was enacted to correct the

situation presented by the well known case of United States

ex rel? Marcus v. Hess, 1943, 317,U. S. 537, where an in-

former, using evidence collected by the government end

obtaized by him from public sources enriched himself by

instituting and successfully contesting a qui tam action.

But though this occurrencé apparently was the stimulus

which caused the executive branch of the national govern-

ment to recommend that Congress enact remedial legisla-

tion, it does not follow that the amendatory provision

either as proposed or as enacted was limited to this situa

tion. Indeed, the history of this legislation, conveniently

summarized in United:States v. Pittman, 5th Cir, 1945, 15!

F. 2d 851, shows that the bill introduced upon recommenda-

tion of the Attorney Genera! and actually passed by’ the

House of Representatives provided for the total abolition

of the informer’s qui tam action as a remedy for false

claims. However, the Senate approached the matter quite

13

differently and completely rewrote the bill to allow an in-

former to sue if his action was predicated upon information

original with him and if the Attorney General had declined

to act after receiving that information. Neither house of

Congress would accept the other's bill. so the matter went

to conference where the present rather different form of

the legislation was devised. Particularly noteworthy is the

debate which ensued:in the Senate where Senator Langer

vigorously attacked the conference compromise as practi-

cally abolishing the qui tam procedure and proposed re-

submission of the matter to the conference committee With

instructions that the Senate conferees insist that only the

parasitical action of the relator who uses public informa-

tion as the basis of his Suit--the situation of Marcus v.

Hess—should be abolished. 89 CONG. REC. 10746-5].

However, the Senate rejected this motion and adopted the

conference report. 89 CONG. REC: 10752.

In these circumstances this court finds no justification for

a reading of the statute as narrower than it appears on its

face. Accordingly, Section #2 of ‘Title 31 United States

Code is construed as prohibitir: any qui tam action based

on information already in th possession of the United

States, regardless of the sour“: from which that informa-

tion has come.

The motion to dismiss wij] be granted.

ORDER.

AND NOW, to wit, this 11th day of May. 1959, after hear-

ing on the defendants’ motion to dismiss the complaint and

pursuant to the opinion of the court, it is hereby ;

ORDERED that the complaint herein be and it is hereby

dismissed. °

(Sgd.) WILLIAM H. HASTIE,

Circuit Judge.

14

: : . EXHIBIT B.

UNITED STATES COURT OF APPEALS’

For THE THIRD CIRCUIT

i?)

—_—-————

No. 12,970

—_——_ +

THE UNITED STATES OF AMERICA anv

JACK ALOFF, '

Appellant,

v.

JAY ASTER, InpIvIpUALLY AND TRADING “as WINGATE

CONSTRUCTION CO., NATIONAL SURETY COR-

PORATION anv THE CROUSE:HINDS CO. :

—_—_—————

AppEAL FroM THE UNITED STATES District COURT FOR THE

EasTERN DisTRICT OF PENNSYLVANIA

———$—$————

°

Argued November 20, 1959

Before Bices, Chief Judge, and Gooprich an@ McLAUGHLIN,

Circuit Judges.

OPINION OF THE COURT.

(Filed February 17, 1960)

By McLaucuiy, Circuit Judge.

This is an appeal from:a dismissal of a qui tam or in-

former’s action brought under 31 U.S.C. £§231, 232, 233 —

and 235.

The district court found that the essential information

upon which the suit was predicated was in the possession

of the United States prior to the filing of the suit. Such

information was given to the government by the informer

who now brings this claim. The court construed Section

232(C) as depriving it of jurisdiction of any qui tam action

‘based on information already in the hands of the United’

States regardless of the source of that information.

Appellant asserts that he had been merely trying to

inform the United States of violations of law by the de-

fendants und that “His depositions clearly indicate * * *”

this. Actually, in appellant’s deposition which he does not

print and which was taken a month after he had commenced

the present suit, appellant testified that first, he turned

over all the information he had up to over a year prior to

the date of the deposition to the Inspector General’s Divi-

sion of the Corps of Engineers at Fort Belvoir, Virginia.

And the information he acquired after that as he said, “we

turned that over to the Justice Department in Washing-

_ ton * *-*. During the past five or six months.” He was

asked, ‘ ‘Have you made a fair disclosure to the government

of all the facts on which you rely in making that contention

(his claim that either Wingate Construction cr Crouse-

Hinds or The National Surety Company had in any way

defrauded the government). Appellant's answer to the

question was “Fair, in my estimation.”

In the light of the above direct, unequivocal testimony

‘ee

16

of the appellant there was no dispute of fact here as to

whether this informer had turned over all of his informa-

tion to the government. In this case wherein he is the

plaintiff he has sworn not that he just tried to but that he

did. The district court had the right and the duty to so

-hold. The appellant complains of some early position taken

by the Attorney General that the data submitted by Aloff

“consists of generalizations and conclusions of law and

that the informant has failed to submit factual evidence as

required by said statute.” That statement: was made prior

to the deposition referred to and whatever might be the

worth of Aloff’s information he has made it very clear in

this suit that he furnished it to the government four @r five

months before he commenced his action. . :

Appellant’s other point concerns the pronouncement in

the ruling statute (31 U.S.C. (232(C)) that the district

court has no jurisdiction to proceed in this type of suit if

at any time during the proceeding:

«“® * ® it shall be made to appear that such suit was

based upon evidence or information in the possession

of the United States, or any agency, officer or employee

thereof, at the time such suit was brought * * *.”

Appellant would add an exception to the above quoted

law in effect reading “except where the informer who was

the source of the evidence or information brings the action”.

We find no merit in appellant’s conception of. the intent

of Section 232(C). This section sets out in detail the method

to be followed in bringing a qui tam action. Had Congréss

wished to provide an exception to the clause dealing with

jurisdiction, or lack of jurisdiction, of the courts, it is rea-

sonafle to assume that it would have done so with the

same care as found jn the remainder of the section. The

steps set forth require that when such cause is brought the

relator shall serve a copy of the bill of complaint on the

United States Attorney for the district in which suit is

brought and mail a copy of the bill together with a written

17°

a

disclosure of substantially al! material! evidence and infor-

mation in the possessidn of the relator to the Attorney

General of the United States. This presumes that the in-

formation has not already been made available to the gov-

ernment. The appellant here chose to impart his material

information to the United States for its use rather than first

bringing an action on his own initiative as provided for in

Section 232(B). By so doing he has brought himself within

the jurisdictional prohibition of Section 232(C).

The cases cited by appellant lend no support to his in-

genious theory. In one of them, United. States ex rel.

McCans v. Armour & Co., 146 F. Supp. 546 (D.C. D.C. 1956),

affd. 254 F. 2d 90 (D.C.App. 1958), the district court in dis.

missing a qui tam cause relied inter alia on the ground that

“on occasions” prior to suit informant did “bring her claim

'” “ against defendant to the attention *.* *” of govern-_

ment officials.

Since the inforrhation was already in the hands of the

United States, in accordance with the statute. the district

court had no jurisdiction to proceed and properly dismissed

the complaint on defendant's motion.

The order appealed from will be affirmed. °

v

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit. ;

\

18

EXHIBIT C.

UNITED. STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT.

————————

Tue Unirep STaTEs OF AMERICA

and Jack ALOFrF,

&

Appellant,

(CC No. 12,970.

Jay Aster, Individually and Trad- >} Opinion filed

ing as WrncATE CONSTRUCTION February 17, 1960

Co., NaTionaL Surety CorRpPo-

RATION, and THE CrousE-HINDS

CoMPANY.

—_————_——-

To Honorable Justice Biggs, Chief Judge of The United

States Court of Aypeals for the Third Circuit.

Honoreahle Sir: 5

On May 9, 1960, the file in the above matter was re-

turned to me by my counsel, and on May 24, 1960, I was

informed by letter that my counsel “was no longer in the

matter as counsel”. Immediately upon receipt of the file

I carefully examined the docket entries of the District

Court, and found that the date when the deposition of

myself, Jack .Aloff, taken by the Crouse-Hihds Company,

was not included among the entries made by the Clerk.

but only included among the entries was the date when —

Notice of Intent to take such deposition was filed, and the

date upon which the deposition was filed with the District-

Court.

19

On page 2, beginning with line 28, the Circuit Court, in

its opinion, stated: /

“The appellant complains of some early position

taken by the Attorney General that the data submitted

by Aloff ‘consists of generalizations and conclusions of

law and that the informant has failed to submit factual

evidence as required by said statute.’ That statement

was made prior to the deposition referred to .

o

The sequence of events as they actually occurred is as

follows:

' On September 25, 1958, at 2 P. M., in the offices of F. Hast-

ings Griffink Jr., Esquire, the deposition referred to was

taken, but it was not filed with the District Court until

November 19, 1958. On October 15, 1958, the United States:

Attorney filed with the Court the Statement To The Court

Stating among other things “. . . the information supplied

by the informant consists of generalizations and conclusions

of law, and that the informant has failed to submit factual

. evidence as required by said statute.” This statement to

the Court by the UnitgdrStates Attorney was attached to

my Answer to Motion of Defendants To Dismiss, filed with

the District Court by me on December 29, 1958, and-marked

Exhibit “A”,

On October 29, 1958, I presented myself to the‘office of

the Attorney General in Washington, upon written instruc-*

tions from the United States Attorney on October 20, 1958,

which stated in part “. .. We will therefore expect, you to

comply with your advice and proceed to Washington with

the necessary information.” On October 29, in Washington,

I made a disclosure in writing of substantially all evidence

and information in my possession material to the effective

prosecution of the above-captioned suit. On November 4.

. 1958, I received a letter from the U. S. Attorney General,

signed by-the Chief of the Frauds Section, which stated

in part “. . . As indicated the disclosure satisfies the juris-

|

20

diction.ai requirements of the statute and apprises us of the -

nature of your contentions.” This letter was attached to

my Answer To Motion Of Defendants To Dismiss the sub-

ject action and marked Exhibit —.

The statement of the United States Attorney with refer- ;

ence to generalizations was made subsequent to the taking

of the deposition. =; :

Contained in the disclosure made to the. Attorney Gen-

eral on October 29, 1958; were. facts that had never been

turned over by me to any government agency, Court of

Law, or to the Attorney General's office prior to the taking

of the deposition or the filing of the suit, and it also con-

tained facts that were not a part of the eight pages. filed

by the Defendant, Crouse-Hinds, in its brief to the District

Court—which eight pages were taken from a 35-page memo-

-randum to which the Attorney General referred on Oc-

tober 15, 1958, as generalizations and conclusions of law.

‘The substantial and essential additional.information given

to the Attorney General on October 29, 1958, has never

been filed with either the District Court or the Circuit

Court of Appeals, nor was it contained in the eight pages

submitted by Crouse-Hinds in their Brief in Support of De-

_fendants’ Motion to Dismiss. ~

_ A copy of what I gave the Attorney General on October

99. 1958*marked “Civil Action No. 25207, Proof of Allega- .

tions Contained Therein” is attached, and clearly shows the

additional information.

May I respectfully ask the Court to please advise me of

the following: 7

a. Whether the applicable portion of the opinion handed

down on February 17, 1960, will be corrected to conform

with the actual sequence of events:

b. Whether.this correction will in any way change the

opinion of the court,

c. Whether the opinion as it now stands covers. the at-

21

tached information given the .\trorney-General on October

29, 1958, or any portion thereof: and,

aoe

la?

d. Whether, if correction is made to any part of the opin-

ion, such correction would cover the attac hed “proof of al-

legations”, or any portion thereof.

Respectfully yours,

x Jack Aloff,

Relator

JA: A

Enclosure

COPY

Civil Action No. 25207

Proof of allegations contained therein

Answer to complaint filed September 22, 1958 with the

Clerk of the U. S. District Court for the Eastern District

of Pennsylvania by Jay Aster trading as the Wingate Con-

struction Company and his attorney Joseph M. Lieberman

agar contract No. DA-36-109-ENG-6543; dated December

. 1956 between Wingate Construction Company and the

U S. Government for the construction of an officers swim-

ming pool and bathhouse at the McGuire Air Force Base in

the State of New Jersey. Amount of contract $229,693.70.

Paragraph 30 of said contract. pages 10 and 11, headed .

“Accident Prevention” requires compliance with manual

“Safety requirements”, 16 December,:1941. Pages 29 and

40 of said manual requires underwater floodlights to be of

a type approved by the underwriters’ Laboratories, Inc..

or Factory Mutual -Laboratories, while installation and

maintenance of floodlights shall comply with the National

Electrical Safety Code, etc.

Page 25-2 of the contract noted the National Electrical

22

Safety Code as the Handbowk of the National Bureau of

Standards. : kes

Page 25-2, paragraph 25-03, makes the applicable Under-

writers’ Laboratories, Inc. Standard, a part of the contract.

and provides for certified test reports of an independent

testing laboratory.. : S

Letter from Underwriters’ Laboratories, Inc. dated May

2, 1957 contains that the Crouse-Hinds units are not listed

as having been approved.

Paragraph GC-6 page II-3 of the contract requires:equip-

ment to conform to standard specifications on tests.

Paragraph 9, page 2 of the general provisions of the con-:

tract, prescribed by the General Services Administration.

requires performance tests as described in the specifica-

tions. 7

Page 25-12 of the specifications requires that the reflector

of the underwater floodlights shall be adjustable. —

‘Page 2 of Exhibit “C”, filed in’ the U. S- District Court

by Wingate, makes a part of the record ‘of this action, all

the testimony transcribed by a court stenographer on No-

*\ember 18, 1957, November 25, 1957, December 2, 1957,

- December 9, 1957, and December 16, 1957.

Pages 107 and 108 of the notes of testimony show that

the Divisional Manager for the Crouse-Hinds Company tes-

‘tified and admitted that their lights were not approved by

the Underwriters. —.. sore

Page 110 of the notes cf testumony show that the said

Divisional Manager testitied that the lights that were

shipped meet the requirements of the job specifications.

with the one exception that they are not approved by the

underwriters. :

Page 117—the said Divisional Manager testified, that

Crouse-Hinds latest preduct did not correspond to specifi-

cations required under the Underwriters’ Laboratories ap

proval. ; ‘

Pages 114, 118 and 119—The said Divisional Manager

testified that the Crouse-Hinds fixtures had fixed reflectors.

although the specifications required adjustable reflectors.

' 23

Page 136—The said divisional manager testified that the

Crouse-Hinds illumination dept. makes changes on their

own authority, ;

Page 139—The said divisional manager testified that the

customer doesn’t know what “C” means in a Crouse-Hinds

‘ catalogue cut, any more than the first man you see walking

down the street.

Page 140—The said divisional manager testified that the

customer was not told about vanations made-by Crouse-

Hinds in the customer's order, if Crouse-Hinds regarded

the variation as not- being major. ‘Drawing number 934-

GH18, made a part of the record in this case, shows changes

made by Crouse-Hinds on 5-11-54, 6-98-54, 9-7-55. 10-10-55.

11-25-55, 1-24-56, 9-14-56, 3-11-57.

Page 126-—-Mr. Guertler, of Crouse-Hinds, read into the

record that the swimming pool ‘lights were in accordance

with the Corps of Engineers’ specifications, etc.

Page 127—Mr. Guertler admitted this letter isn’t accu-

rate. :

Page 127—Mr. Guertler testified that Mode! D was in--

stalled in the pool. The Crouse-Hinds Company packing

list and notice of shipment =F81450 lisied the shipment as

Model C.,_ - 7

_ Page 132 and 133—Mr. Miller. divisional manager at

Crouse-Hinds admitted that the contents of the letter that

he dictated to Jay Aster on May 24, 1957 are not correct.

Daily Progress Report dated 5-29-57, signed by Hickey,

Foreman for Wingate, bears statement by Hickey that Lt.

Williams noted his approval on a copy of the letter from

Crouse-Hinds to Jay Aster. Said report also notes that M.

Benjamin has promised to have an electrical foreman on. -

the job on Friday to start work and to-deliver 12 under-

water pool floodlights to the job the same day. :

Page 288—Jay Aster testified that the story related by

both Mr. Miller and Mr. Guenther, at Crouse-Hinds. ‘was

_ Substantially a correct one.

Page 365—Jay Aster admitted he was told about the lights

and the drawings being different.

24

Page 378, 379—Jay Aster admitted that the specifications

required Underwriters’ Laboratories’ approval of the under-

water lights, no matter whose they: were, and that he asked

the Government to. waive only the ynderwriters’ approval

‘requirement, only in connection with the Crouse-Hinds

lights. No waiver was requested by Aster for the specifica-

tion requirement for the adjustable reflectors, but fixed re-

flector type fixtures were installed anyway.

Page 386—Jay Aster, when asked, “Did you ever get a

release from all responsibility as related to this equipment?”

stated “No, I never did get an all-inclusive, release of that

type.” : ;

Page 298—Jay Aster testified “I intended to complete the

entire job as quickly as possible?”

Page 299-——"'I gave Benjamin Electric the contract on their

own terms” —testified Jay Aster.

Page 297—Jay Aster testified “We bought some of the

- material that was required for the job.”

Index digest, Decisions of the Comptroller General 7-1-48

go 6-30-51 U. 5. General Accounting Office

; %,

| Paragraph 6, page 63

Deviations from advertised specifications

Deviations in bid from advertised specifications relative

to design, parts, and delivery date of articles bid upon £0.

to substance of bid by affecting either price, quantity or

quality of articles so as to be prejudicial to rights of other

bidders. and therefore such deviations may not be waived

as mere bid informalities in considering bid for acceptance.

20 C.G.4, amplified 30:179.

_V1L3. Bidder’s liability generally upon acceptance.

Contractor who, prior to submission of bid, which was

accepted by the government, negligently failed to familiar-

25

ize itself with specifications and was for that reason unable

to furnish suitable material of grade required must bear

consequences of its negligence. 30:509 ee

XXXII 5. Government Agents’ authority in general.

When right to performance of contract strictly in accord-

ance with contract terms is vested in government, no officer

or employee has authority to modify such terms except in

interests of government. 26:280

(Note: Under constitutional law the ‘protection of the

public. health and regulations’in the interest of public

safety are proper and important exercises of the police

power, which cannot be delegated or bargained away. The

waiver of 1 March 1957 of the safety requirements of the

Dept. of the Army by .Lt. Williams, was issued without

authority andsis not binding upon the Government. )

Page 205

XLI 2. Mistake of fact.

Mistake. as to existing situation which leads either one

or both parties to enter into’ contract which they would

not have entered into had they been advised of actual facts

will not justiffreformation of contract. 26:744

By Comptroller General decision No. B-89692, Nov. 4,

1949, the Government was held entitled to a reduction in

contract price, by the amount of the cost of inspection not

performed, as the bidder is presumed to include the cost

of the specified inspection in his ‘bid.

The National Surety Corporation was notified April 6,

1957, April 16, 1957, April 27, 1957, and May 26, 1958 that

the‘main feeder cables had been installed contrary to specifi-

cations, and that Wingate was intending to violate Federal

26

laws and Federal safety requirements. (Note: ~The RH-

RW main feeder cables installed, do not meet page 26-18

of the specifications.) See exhibits attached.

Miller and Guertler, of Crouse-Hinds, and Aster ef Win-

gate and his attorney, J. Lieberman, all admitted tnat the }

Crouse-Hinds lights installed at the peol do not meet the

plans and spetification requirements as to testing and ad-

justability, and that this was known to ‘them prior to the

installation of the underwater lights. Yet as of July 10,

1958 the financial records of the Corps of Engineers in Phila- .

delphia show that Wingate collected $231,217.83 for its

work. — ei

How was the U. S. Government induced to make pay-

ments to Wingate as of July 10, 1958 in the amount of

$231,217.83?

(a) May 23, 1957, Wingate terminated the contract at

the Jack Aloff Company fer the installation of the under-

water pool lights.

(b) May 24, 1957, Crouse-Hinds wrote a letter to Jay.

Aster, said letter stating in part “In reference to your tele-

phone conversation with me this morning, please be ad-

vised that the 12°R. P. S. swimmirg pool lights, catalogue

No. 44133-C, that we furnished to our distributor, Franklin

Company, who received an order from Jack Aloff Company

for this material for installation at McGuire Air Force Base

swimming pool,.are -in accordance with the Corps of Engi-

neers’ specifications . .

(c) May 28, 1957: Graybar Electric Company of Phila-

delphia picked up one Crouse-Hinds. swimming pool light

from:-the Jack Aloff Co., and receipted for same.

(d) May 29, 1957:- M. Benjamin and H. Benjamin of

the Benjamin Electric Company of Philadelphia, W. Guert-

ler of Crousé-Hinds and P. J. Hickey of Wingate visited

| . ji

‘ 27

Lt. R. Williams at McGuire Air Force Base, at which time

Lt. Williams noted his approval on a copy of a letter from.

Crouse-Hinas to Jay Aster. Also on this occasion M. Ben.

jamin promised to have an electrical foreman on the job to

start work and to deliver 12 underwater pool floodlights .

to the job the same day. (See Wingate daily progress re-.

port dated May 29, 1957.)

‘e) June 4, 1957: The Jack Aloff Company was di-

rected to return 11 Crouse-Hinds underwater lights to

the Franklin Electric Company. The Franklin Electric Co.

issued a receipt'to the Jack Aloff Co. for eleven Crouse-

Hinds underwater lights. The receipt states “reason for

- Return: WRONG MATERIAL.” :

(f) Nov. 25, 1957: Mr. Guertler of Crouse-Hinds testi- -

fied that the lights that had“ been shipped by Crouse-Hinds

tu Aloff are the tights in place in the wall of the swimming

pool. See pages 123, 124, 125, of the notes of testimony.

(g} Dec. 2, 1957: Jay ASter testified that the actual

electrical work was performed by two electrical contractors,

| the Benjamin Electric Company and the MaGuire Engineer-

ing Company. : See notes of téstimony, page 297.

(h) Dec. 9; 1957: Pages 356 and 357 of the notes: of

‘estimony—Jay Aster testified that he periodically sent

letters to the Government setting forth the work ‘done at

Various times, in consequence of which he received govern-

ment payment estimates.

As of July 10, 1958 the U S. Government was induced

by said periodic letters to the government to pay out to

Wingate the total sum of $231,217.83.

Further actions and declarziions in aid, promotion, and

furtherance of.the collectior. by Wingate of money from the’

government for the construction of the swimming pool in

Molation of the contract specifications.

=

28

(a) Allan Morton Levick, 7812 Oak Lane Road, Chelten-

ham, Pa., pages 295, 296. Show that Levick certified a

statement as to the expenses incurred by Wingate, and that

said expénses were incurred for work performed according

to plas and specifications.

(b) Jay Aster and his atwrney, Joseph H. Lieberman,

certified to the U. S. District Court in Philadelphia on Sept

22, 1958 that all of the facts set forth in “Exhibit A” are

true and correct. However pages 192, 193, 194, and 195 of

the notes of testimony along with letter from Loen Webster

Melcher, examiner of Questioned Writings and Documents,

dated Nov. 26, 1957, proves “Exhibit A” to be a forgery

(c)’ George I. Lovatt,’J. Johnstone Muir, and Frank M.

Steinberg, .with full knowledge of admitted forgery and

fraud on the government as reveai-d in pages 192 to 430

inclusive, of the notes of testimony, signed “Exhibit C”.

submitted to the U. S. District. Court on Sept. 22, 1956 by ©

Wingate, said exhibit stating in part “This testimony was

transcribed by the court stenographer and consisted of ap-

proximately one hundred and ninety pages.”

Decision shown to Government to justify release of funds

‘to Aster—see page lla--for conspiracy of

Other Government swimming pools affected by the in-

stallation of Crouse-Hinds underwater lights.

In the letter dated May 24, 1957 from Crouse-Hinds to

Jay Aster, Crouse-Hinds indicated that they had furnished

their underwater lights to other government swimming

pools. ik

Benjamin Steinberg, George I. Lovatt and J. Johnstone

Muir, with full knowledge of admitted forgery (page 192

of the notes of testimony), misrepresentation of material

to the government (pages 288, 289. 995, 296, 297, 298. 299.

379, 390, daily ‘progress report. Mr. Steinberg’s statement

page 101, 289, 356, perjury 262, 289, 364).

My records indicate that the’ pool at Dover Air Force

Base and the enlisted men's swimming pool at McGuire Air

ail

a De ed

_ ever had to do business with.”

29

Force Base were also equipped with the Crouse-Hinds

underwater lights.

Since the Crouse-Hinds Drawing Number 934-GH18 and

the records in this action show that ‘Crouse-Hinds made

annual changes to its underwater lights without the ap-

proval of the General Services Administration, National

Bureau of Standards, or the Underwriters’ Laboratories,

Inc., as required, the U. S. Government is entitled to re-

covery of penalty and damages in connection with the con-

struction of the other swimming pools equipped by con-

tractors with the untested Crouse-Hinds underwater lights.

Sept. 25, 1958—at deposition, when confronted with act

of filing forged document in a federal court, Lieberman

shouted at me “You are the dirtiest, rottinest person I have

_—_—————

EXHIBIT D.

UNITED STATES CQURT OF APPEALS

_ For THE Turrp Circutt.

en ae

No. 12,970.

THE UNITED STATES OF AMERICA

and JACK ALOFF,

: Appellant,

v. ?

JAY ASTER, Individually and Trading as WINGATE CON-

STRUCTION CO., NATIONAL SURETY CORPORA-

TION and THE CROUSE-HINDS Co.

30

SUR PETITION FOR REHEARING

—_———

Present: BIGGS, Chief Judge, and GOODRICH

and McLAUGHLIN, Circuit Judge

—---—— -——

The papers submitted by appellant, Jack Aloff, are ac-

cepted as a petition for reheai ing and, under the circum-

stances, as within time. The petition for rehearing }s

denied. ae

By the Court,

McLAUGHLIN

Circuit Judge.

Dated: June 16, 1960.

EXHIBIT E.

UNITED STATES DEPARTMENT OF JUSTICE

Washington, D.C. atd

GCD:JNF

46-62-403

Mr, Jack Aloff °

1381 Farrington Road

Philadelphia 31, Pennsylvania

Re: United States ex rel Jack Aloff v. Jay Aster

d/b/a Wingate Construction COmpany, et al.

E. D. Pa., Civil No. 25307

i i i a et le

.

31

.

Dear Mr. Aloff: - | :

™ Enclosed is’ a copy of the disclosure you submitted to us,

pursuant to Section 231 and 232 Title.31 of the United States

Code. While your handwritten disclosute was for the most

part legible, there may be a few minor errors in this copy.

As indicated the disclosure Satisfies the jurisdictional re-

quirements of the statute and apprises us of the nature of

your contentions. ‘

Under separate cover we are returning the documentary

evidence submitted in Support of your allegations.

Please be advised that we are evaluating the evidence in

this case, and while we have sixty days from the date the.

disclosure was submitted, to decide whether or-not to take

over prosecution of this case, we will notify you promptly

when we reach a decision in this matter.

Yours very truly,

GEORGE COCHRAN DOUB

Assistant Attorney General

“Civil Division

By: 's_ Frederick N. Curley

Frederick N. Curley

Chief, Frauds Section

Enclosure

32

EXHIBIT F.

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF PENNSYLVANIA

HKW/CMD/rk

File No. 48071

\

Tue Unirep STATES OF AMERICA

and Jack ALorr (Informant)

se oe Civil Action No. 25207

JAY ASTER, Ind. and TA THE (Filed: December 8.

WINGATE CONSTRUCTION COM- | 1958)

PANY, THE NATIONAL SURETY .

CoRPORATION and THE CROUSE- |,

Hrnps COMPANY

STATEMENT TO THE COURT

AND NOW, to wit, this 8th day of December, 1958, comes

the United States of America by its:attorneys HAROLD K.

WOOD, United States Attorney in and for the Eastern Dis-

trict of Pennsylvania, and CHARLES M. DONNELLY, As-

<istant United States Attorney for said District, who, after

a thorough investigation of the facts in the ‘above entitled

matter, decline to enter the action under the authority con-

tained in the provisions of 31 U. S.C. §232(C).

‘s/ Harold K. Wood

HAROLD K. WOOD

United States Attorney

s/ Charles M. Donnelly

CHARLES M. DONNELLY

Assistant. United States Attorney