A Kerr-McGee platform in the Gulf of Mexico.  Hurricane Ike should reach it any day now.

The Tenth Circuit held today that "the transfer of information between a federal employee and a state government auditor who is under a duty of confidentiality is not a public disclosure and therefore does not deprive the courts of jurisdiction" under the False Claims Act.  United States ex rel. Maxwell v. Kerr-McGee Oil & Gas Corp., No. 07-1193, slip op. at 2 (10th Cir. Sept. 10, 2008).  (The FCA authorizes qui tam suits to recover damages and other relief on behalf of the federal government in return for a cut of the proceeds.)  The court accordingly reversed the post-verdict dismissal of the case and remanded for further proceedings — presumably to decide whether to enter final judgment on the jury’s $7.5 million award.

Bobby Maxwell, the qui tam relator, worked as a senior government auditor for the Minerals Management Service, a part of the U.S. Department of the Interior.  He discovered in the course of his work that Kerr-McGee (now Anadarko Petroleum), as lessee of offshore oil and gas properties, short-paid on its royalty obligations to the lessor — the federal government.  Never mind how that happened (okay, Kerr-McGee paid the royalty percentage on $X – $ Y when it should have paid it on $X — with the Y representing fees K-M forked over to the buyer).

After trial, in which Mr. Maxwell scored $7,555,886.28 for the feds, the district court reconsidered whether it had jurisdiction.  Why?  Because the FCA prohibits jurisdiction over claims "based upon the public disclosure of allegations or transactions in a . . . Government Accounting Office report, hearing, audit, or investigation . . . ."  31 U.S.C. 3730(e)(4).  And because someone else in the Minerals Management Service told an auditor for the State of Louisiana about the suspicion that K-M underpaid.  The court held that the email to the Pelican State auditor occurred in confidence and therefore didn’t count as a "public disclosure".

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