ELR Citation: ELR 20106
No(s). 08-8004 (10th Cir. Mar 17, 2009)

The Tenth Circuit reversed a lower court decision dismissing a number of qui tam suits filed against natural gas pipeline companies and their affiliates for alleged underpayment of royalties in violation of the False Claims Act. The individual relator who filed the suits alleged that the companies underpaid royalties on the carbon dioxide (CO2) they produced from federal and Indian lands by making payments based on an artificially deflated value rather than the actual market value of CO2. The lower court found these suits jurisdictionally barred by the False Claims Act's first-to-file rule, 31 U.S.C. §3730(b)(5), because a 1996 suit had alleged the same essential facts. But while the allegations contained in the 1996 lawsuit might have been sufficient to put the government on notice of the fraud that the relator now alleges with respect to some of the current defendants, those companies were not defendants in the prior case. Without naming them as defendants, the two actions cannot be said to state the same essential claim.