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Taul v. Nagle Enterprises, Inc.

United States District Court, N.D. Alabama, Southern Division

September 17, 2014

BARRY TAUL, Plaintiff,
v.
NAGLE ENTERPRISES, INC., et al., Defendants.

MEMORANDUM OPINION AND ORDER

VIRGINIA EMERSON HOPKINS, District Judge.

INTRODUCTION

This case involves a qui tam action filed by the plaintiff-relator (Mr. Taul) under the False Claims Act, 31 U.S.C. §§ 3729-3733. Mr. Taul claims that the defendants ("the Nagels"), who owned and maintained a mortuary and crematory, conspired to defraud the federal government with a fabricated tissue recovery and kickback scheme they had allegedly concocted with a local organ donor center. The Nagels have filed the present Motion to Dismiss Mr. Taul's action under Federal Rules of Civil Procedure 9(b), 12(b)(1), and 12(b)(6). The Nagels variously argue that this court lacks subject matter jurisdiction over the action, that Mr. Taul's Complaint does not describe fraud with the requisite particularity, and that, more generally, the Complaint does not allege facts upon which relief may be granted.

The Nagels' jurisdictional arguments directly implicate this court's ability to hear the case. The court must therefore address them first. The court finds that the Nagels are essentially mounting a factual attack on the court's subject matter jurisdiction. As disposing of this motion would necessarily entail the resolution of disputed facts, the court further concludes that Mr. Taul is entitled to discovery and a hearing on the issue before the court rules on it. Moreover, because the issue's resolution may itself foreclose Mr. Taul's action altogether, the court cannot address the Nagels' other arguments for dismissal at this juncture. For these reasons, the court will DENY their Motion to Dismiss.

DISCUSSION

The False Claims Act "eliminates federal court jurisdiction over actions under § 3730 of the Act that are based upon the public disclosure of allegations or transactions unless the action is brought by the Attorney General or the person bringing the action is an original source of the information." Rockwell Int'l Corp. v. United States, 549 U.S. 457, 460 (2007). The Nagels cite this jurisdictional bar in urging the court to dismiss this case. Doc. 15 ¶ 7. There are two recognized avenues of attacking subject matter jurisdiction under Rule 12(b)(1): the first is "facial, " and the second is "factual." The Eleventh Circuit has explained the distinction between these methods in the following manner:

A facial attack on the complaint requires the court merely to look and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in his complaint are taken as true for the purposes of the motion. Factual attacks, on the other hand, challenge the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits are considered.

McElmurray v. Consol. Gov't of Augusta-Richmond City, 501 F.3d 1244, 1250-51 (11th Cir. 2007) (internal citations and quotation marks omitted). In sum, a district court may dismiss an action for lack of subject matter jurisdiction under Rule 12(b)(1) on any of three bases:

• the complaint alone;
• the complaint supplemented by undisputed facts evidenced in the record;
or
• the complaint supplemented by undisputed facts plus the court's resolution of disputed facts.

Williamson v. Tucker, 645 F.2d 404, 412 (5th Cir. 1981).[1] In the latter case - that is, where a district court must make "factual determinations decisive of a motion to dismiss for lack of jurisdiction" - the court "must give the plaintiff an opportunity for discovery and for a hearing that is appropriate to the nature of the motion to dismiss." Id. at 414 (emphasis added); accord McElmurray, 501 F.3d at 1251 (citing Williamson in concluding that discovery was not necessary because the district court rightly treated the motion to dismiss as a facial jurisdictional attack and therefore only considered the complaint with its attached exhibits); U.S. ex rel. Saldivar v. Fresenius Med. Care Holdings, Inc., 906 F.Supp.2d 1264, 1268-69 (N.D.Ga. 2012) ("To compensate for this broader scope of review, the former Fifth Circuit established that in a factual challenge, the Court must give the plaintiff an opportunity for discovery and for an appropriate hearing.") (citing Williamson, 645 F.2d at 414; McElmurray, 501 F.3d at 1251); see also Eaton v. Dorchester Dev., Inc., 692 F.2d 727, 731 (11th Cir. 1982) ("[T]he rules entitle a plaintiff to elicit material through discovery before a claim may be dismissed for lack of jurisdiction.") (quoting Blanco v. Carigulf Lines, 632 F.2d 656, 658 (5th Cir. 1980)).

This situation presents itself here. Again, the False Claims Act bars jurisdiction over qui tam actions based on publicly-disclosed information unless the relator constitutes an original source of that information. The Act further defines an "original source" as "an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information." 31 U.S.C. § (e)(4)(B). In their Motion, the Nagels claim to be making both a facial and factual attack on Mr. Taul's claimed identity as an original source. The Nagels state, "Defendants make a facial attack on the complaint, the allegations of which clearly show that [Mr. Taul] does not meet the criteria of a person with direct and independent knowledge of the information on which the allegations are based.'" ...


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