State of California v. Pacific Bell Telephone Co

In State of California v. Pacific Bell Telephone Co. (2006) 142 Cal.App.4th 741, the plaintiff, an attorney and telecommunications consultant, filed suit against a number of telephone companies, alleging that the unused balances on phone cards were "abandoned property" that should have been surrendered to the state. (142 Cal.App.4th at p. 747.) Grayson noted that "qui tam actions . . . 'present the danger of parasitic exploitation of the public coffers' by 'opportunistic plaintiffs who have no significant information to contribute of their own.'" (Id. at p. 746.) It characterized Government Code section 12652, subdivision (d)(3)(A) as "a jurisdictional bar to qui tam actions that do not assist the government in ferreting out fraud because the fraudulent allegations or transactions are already in the public domain." (142 Cal.App.4th at p. 748.) A proper qui tam plaintiff, the court noted, "must have acquired inside information that allowed him to 'sound the alarm' about undetected fraud . . . ." (Id. at p. 747.) "The public disclosure bar 'limits qui tam jurisdiction to those cases in which the relator played a role in exposing a fraud of which the public was previously unaware.' " (Id. at p. 749.) In service of this purpose, the court adopted the Ninth Circuit's interpretation of similar language in the federal act, holding that the bar is " 'triggered whenever a plaintiff files a qui tam complaint containing allegations or describing transactions "substantially similar" to those already in the public domain so that the publicly available information is already sufficient to place the government on notice of the alleged fraud.' " (142 Cal.App.4th at p. 748.) Because, the court found, there had been considerable public discussion in the telecommunications industry, both written and oral, about the status of unused balances as abandoned property, the bar precluded the plaintiff's action. (Id. at pp. 750-752.)