Page 24 - ...in 31 U.S.C. § 3733(j)(5), Congress granted district courts jurisdiction to hear and determine matters presented by any petition filed "under this subsection" (i.e., subsection 3730(j)).

Page 25 - ...Although Textron is the subject of the false claims law investigation pursuant to which CID 88-22 was issued, the district court did not have subject-matter jurisdiction over a petition by Textron to set aside CID 88-22.

RELATIONSHIPS

Page 20 - While a qui tam complaint is still under seal, the Department is not representing a party to the proceeding...

Page 16 - Until the Department decides to intervene in a qui tam suit, the Government has not expended any resources in the prosecution of a lawsuit... determine whether such an expenditure is appropriate.

Page 10 - ...the relator is neither the agent of nor acts on behalf of the Attorney General at the time he files suit...

Page 15 - The filing of a sealed qui tam lawsuit is supposed to establish the relator's contingent right to recovery in the action and insure that the Department commences or proceeds with an investigation without delay, while not necessarily jeopardizing the confidentiality of an ongoing investigation.

COMMENCES

Page 7 - When a private individual files a qui tam complaint, as in this case, the Attorney General has not commenced any proceeding.

Page 13 - Congress proscribed the issuance of CIDs after the Department commences litigation because, at that point, the Department has already decided that a case is worth pursuing.

Page 7 - In the qui tam context, it is upon intervening in the lawsuit that the Attorney General "commences" a civil proceeding.

Page 10 - When a qui tam complaint has been filed, the Attorney General has not "commenced" any proceeding. The filing of a qui tam complaint is the unilateral decision of the relator, a private individual who is not a law enforcement officer exercising the authority of the Attorney General.

Page 10 - It is therefore only when the Department intervenes in a qui tam suit that the Attorney General has "commenced" litigation within the meaning of section 3733 with respect to that suit.

Page 10 - Ordinarily, it would only be upon intervening in the lawsuit that the Department could conduct and participate in discovery under the Federal Rules of Civil Procedure.

Page 11 - Upon intervention, and not before, the Department would have the right to file an amended complaint which would define the scope of the lawsuit from the Department's perspective. (Footnote 5 - Typically, when the Department takes over a qui tam lawsuit after investigation, its first action is to file an amended complaint.

HISTORY

Page 2 - ...alleged that Textron manufactured LTS-101 gas turbine engines ... knowing that these engines had potentially catastrophic design defects.

INVESTIGATION

Page 22 - (Footnote 11 - ...the allegations under investigation involve technical questions of engine design, as well as many transactions involving numerous individuals over a long period of time. See J.A. at 45-46.)

Page 8 - ...to evaluate the merits of the litigation before making a major commitment of its scarce resources.

Page 13 - ...Congress intended significantly to broaden the Civil Division's capacity to recognize and bring meritorious fraud cases, and to ferret out and avoid baseless prosecutions. See S. Rep. at 6, 33; H.R. Rep. No. 660, 99th Cong., 2d Sess. 26 (1986) ("H.R. Rep."). (Footnote 7 - Congress recognized that, in investigations such as the instant one, it is difficult for the Government to determine whether a fraud has occurred based solely on the review of a "paper trail." H. R. Rep. at 26. In recommending the creation of CID authority, the House Judiciary Committee reported, "[c]ircumstantial evidence and witness testimony is ... generally necessary in determining whether fraud has been committed." See 31 U.S.C. § 3730(c)(3).)

Page 14 - ...the Department must conduct an investigation for the purpose of determining whether or not the Department should "commence" litigation, whether by intervening in a qui tam action or...

Page 15 - ...The Government would need an opportunity to study and evaluate the information in either situation. S. Rep. at 24.

Page 15 - (Footnote 7 - ...As part of sound investigative techniques, the Department may always choose at some appropriate point to inform someone that he is under investigation without explicitly disclosing the existence of a qui tam complaint. The Department may choose to do this either by issuing a CID or, as Department officials have done in this case, by telling the subject directly. The 60-day sealing provision was merely designed to preclude the relator from forcing the Department to disclose the existence or subject-matter of an investigation prematurely. In any event, as of the present time neither CIDs nor Department officials have alerted Textron to the specific allegations contained in the qui tam complaint, so the sealing provision is still fulfilling its intended effect.)

CONGRESSIONAL INTENT

Page 18 - ...the overall purposes of the 1986 amendments,...to increase private enforcement of the False Claims Act.

Page 17 - ...one of the principal means through which Congress sought to combat fraud against the Government was by increasing the incentives for private individuals to expose such fraud. To this end, Congress revised the qui tam provisions of the False Claims Act in order "to encourage more private enforcement suits." S. Rep. at 23-24. Congress increased the financial recovery available to successful relators, and also greatly increased the circumstances under which relators would be eligible to prosecute False Claims Act lawsuits.

Page 25 - CONCLUSION - For all the foregoing reasons, as well as any others that may appear just to this Court, appellee requests that this Court affirm the judgment of the district court.

Page 26 - Respectfully submitted, JOHN R. BOLTON, Assistant Attorney General, JAY B. STEPHENS, United States Attorney, MICHAEL F. HERTZ, ROBERT L. VOGEL, Attorneys, Civil Division, U.S. Department of Justice, Washington, D.C. 20044, Telephone: (202) 724-7211, Dated: April 14, 1989