United States of America, Ex Rel. James M. Hagood v. Sonoma County Water Agency, James M. Hagood v. Sonoma County Water Agency

James M. Hagood brought suit under the qui tarn provision of the False Claims Act, 31 U.S.C. §§ 3729-3733 , alleging its violation by the Sonoma County Water Agency (the Water Agency). The district court dismissed his third amended complaint for failure to state a cause of action. On appeal, the United States filed a brief as amicus curiae, arguing that the district court was incorrect in its reasoning but right in its result, because the court had no jurisdiction of Hagood’s complaint. The jurisdictional issue is novel. We decide it in favor of jurisdiction and reverse the district court on the question of whether Hagood stated a cause of action.

BACKGROUND

In February 1982, as the attachments to Hagood’s complaint make clear, Hagood was assistant district counsel to the San Francisco District of the Army Corps of Engineers (the Corps) and was assigned to represent the district counsel to handle the renegotiation of the Warm Springs Dam Water Supply contract with the Water Agency. Hagood came to the conclusion that the proposed cost allocations for the new contract, which would govern the Water Agency’s repayment obligations, did not comply with the terms of the 1958 Water…