P. v. Big Oil & Tire

 

 

 

 

 

 

 

 

Filed 7/11/13  P. v. Big Oil & Tire CA3

 

 

 

 

 

 

NOT TO BE PUBLISHED

 

 

 

California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

 

 

 

 

 

 

IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE
DISTRICT

(Sacramento)

 

 

 

 

 
>

THE PEOPLE ex rel. GREG SOUNHEIN,                           Plaintiff and Appellant,               v.   BIG OIL & TIRE CO. et al.,                           Defendants and Appellants.

C066021   (Super. Ct. No. 34200800016772CUMCGDS)

 

 

 

            >Qui tam plaintiff Greg Sounhein appeals
from a defense judgment on his False Claims Act cause of action ( ADDIN BA xc <@st> xl 26 s
GYOFAP000001 xpl 1 l "Gov. Code, § 12650 et seq."
Gov. Code, § 12650 et
seq.)href="#_ftn1" name="_ftnref1" title="">[1] after the granting of a motion for judgment
in a nonjury trial ( ADDIN BA xc <@st> xl 24 s
GYOFAP000002 xpl 1 l "Code Civ. Proc., § 631.8"
Code Civ. Proc., §
631.8).  The href="http://www.fearnotlaw.com/">trial
court concluded that it lacked jurisdiction under
 ADDIN BA xc <@osdv> xl 36 s
GYOFAP000029 l "section 12652, subdivision
(d)(3)(A)" section 12652, former
subdivision (d)(3)(A), which stated in pertinent part that “[n]o court
shall have jurisdiction over an action under this article based upon the public
disclosure of allegations or transactions in a href="http://www.mcmillanlaw.com/">criminal,
civil, or administrative hearing, in an investigation, report, hearing, or
audit conducted by or at the request of the Senate, Assembly, auditor, or
governing body of a political subdivision, or by the news media, unless . . .
the action is an original source of the information.”href="#_ftn2" name="_ftnref2" title="">[2] 
Sounhein contends the trial court erred in concluding it lacked
jurisdiction because there was no public disclosure, and even if there was, the
disclosure was not made in any of the statutorily enumerated forums, and in any
event, he was the original source of the information.

            Defendants Big Oil & Tire Co.
(Big Oil) and its president Richard Pomrehn appeal from postjudgment orders
denying their motion to strike and/or tax Sounhein’s cost bill and awarding
Sounhein costs in the amount of $10,298.79.  
They contend the trial court erred in declaring plaintiff the prevailing
party because the focus of the litigation was the False Claims Act cause of
action, and the only relief he received in connection with his other cause of action
for violations of the unfair competition law ( ADDIN BA xc <@st> xl 34 s
GYOFAP000003 xpl 1 l "Bus. & Prof. Code, §
17200 et seq." Bus. & Prof. Code,
§ 17200 et seq.) was injunctive. 
Alternatively, defendants assert that Sounhein should be denied all
costs incurred after March 31, 2010, the date on which defendants made an offer
to compromise pursuant to  ADDIN
BA xc <@st> xl 35 s GYOFAP000004 l "Code of Civil Procedure section 998" Code of Civil
Procedure section 998, which Sounhein rejected.

            We shall conclude that the trial
court erred in ruling that it lacked jurisdiction over Sounhein’s False Claims
Act cause of action because even assuming there has been a public disclosure of
allegations or transactions substantially similar to those that form the basis
of Sounhein’s cause of action, there is no evidence the disclosure was made in
one of the statutorily enumerated forums. 
(
ADDIN BA xc <@osdv> xl 24 s GYOFAP000030 xpl 1 l "§ 12652, subd. (d)(3)(A)" § 12652, former subd.
(d)(3)(A).)   Accordingly, we shall
reverse the judgment entered in favor of defendants as to the False Claims Act
cause of action and remand the matter to the trial court for a new trial
limited to determining the amount of penalties and damages, liability having
been established in connection with the unfair competition cause of
action.  We shall further conclude that
the issues raised in defendants’ appeal concerning the cost award have been
rendered premature by our decision to reverse the judgment in defendants’ favor
on the False Claims Act cause of action.

FACTUAL AND PROCEDURAL BACKGROUNDhref="#_ftn3" name="_ftnref3" title="">[3]

            Big Oil owns and operates
approximately 13 gas stations in several small towns along the North Coast. 
Pomrehn has an ownership interest in and is the president of Big
Oil.  Sounhein is an environmental
consultant, doing business as SounPacific, who was hired by Big Oil to perform
environmental services related to the cleanup of releases from underground
storage tanks for several of its properties.

            At all relevant times herein, the
parties agreed that SounPacific would be paid for its services after Big Oil
was reimbursed for such services by the state’s Underground Storage Tank
Cleanup Fund (Fund).href="#_ftn4" name="_ftnref4" title="">[4] 
“Wait-and-pay” arrangements were commonly used by Fund claimants, like
Big Oil, during the relevant time period. 
Claimants that utilize wait and pay arrangements must pay all reimbursed
costs they have incurred, but have not yet paid, “[w]ithin 30 days of receipt
of reimbursement from the Fund . . . . 
If a claimant has not paid such costs within 30 days, the claimant shall
return the unpaid funds to the Board.”href="#_ftn5" name="_ftnref5" title="">[5]  ( ADDIN BA xc <@st> xl 43 s
GYOFAP000009 xpl 1 l "Cal. Code Regs., tit. 23, §
2812, subd. (g)" Cal. Code Regs., tit.
23, § 2812, subd. (g).)  Pomrehn submitted
certifications signed under penalty of perjury along with his requests for
reimbursement indicating he would comply with the 30-day requirement.

            Claimants that utilize wait and pay
arrangements also are required to submit “proof of payment” that in the form of
a cancelled check showing that they paid the previous reimbursement to the
service provider before the Fund will process any subsequent reimbursement
requests.  Fund staff routinely review
the cancelled checks to make sure that claimants are complying with the 30-day
requirement, and violations are noted.

            During the years that Sounhein
served as Big Oil’s environmental consultant, some reimbursement payments were
made more than 30 days after Big Oil was reimbursed by the Fund.  By early 2005, Fund manager Allan Patton was
aware that defendants were not remitting payment to service providers within 30
days of claim reimbursements.  As Fund
manager, Patton had authority to act with respect to the late payment issue.

            When Big Oil received a reimbursement,
it was deposited into Big Oil’s operating account, and payments were made to
SounPacific from that account.  In 2007,
Big Oil experienced severe cash flow issues, and Pomrehn began intentionally
diverting reimbursement funds to pay for Big Oil’s business expenses, excluding
SounPacific.  As a result SounPacific was
unable to pay its vendors and had to lay off about a dozen employees.

            When SounPacific began to experience
its own cash flow problems, Sounhein directed his employees to investigate the
cause of the shortfall and learned that Big Oil was being paid by the Fund but
was not paying SounPacific on time. 
Sounhein sought the assistance of Fund personnel to induce Big Oil to
tender payment to him.  On June 27, 2008,
Fund personnel instructed defendants to either pay SounPacific reimbursements
Big Oil had received on eight claims (13556, 13557, 13559, 13560, 13779, 16921,
17560 and 18098) or return the monies to the Fund.

            Over the next two months, after
funds became available, both from a commercial lender and the Fund, and
following the filing of a lawsuit in Humboldt County by Sounhein against
defendants, defendants paid SounPacific. 
In many cases, SounPacific was paid many months after Big Oil was reimbursed
by the Fund.href="#_ftn6" name="_ftnref6" title="">[6]

            On July 23, 2008, Sounhein initiated
the instant action, alleging two causes of action:  the first for violations of the False Claims
Act, which he brought as a qui tam
relator on behalf of the state; and the second for violations of the unfair
competition law, which he brought in his individual capacity.  The unfair competition cause of action was
predicated, in part, on defendants’ alleged violations of the False Claims Act.

            A bench trial was held in July
2010.  At the close of Sounhein’s case,
defendants moved for judgment in their favor as to both causes of action.  ( ADDIN BA xc <@st> xl 41 s
GYOFAP000010 xpl 1 l "Code Civ. Proc., § 631.8,
subdivision (a)" Code Civ. Proc., §
631.8, subd. (a).)href="#_ftn7" name="_ftnref7" title="">[7]  As
to the False Claims Act cause of action, defendants argued the trial court
lacked subject matter jurisdiction because the Fund knew about late payment
issues relating to Big Oil before Sounhein
brought it to the Fund’s attention.  As
to the unfair competition cause of action, defendants argued Sounhein lacked
standing to pursue it, or alternatively, failed to present evidence sufficient
to support it.

            The trial court granted the motion
as to the False Claims Act cause of action and denied it as to the unfair
competition cause of action.  In its
statement of decision, the trial court found that it lacked jurisdiction over
the False Claims Act cause of action based on Patton’s testimony that “he was
aware of late payment issues relating to defendants as early as 2005 -- a
period antedating Sounhein’s claim as ‘original source.’ â€  As for the unfair competition cause of
action, the trial court rejected defendants’ standing argument and found that
Sounhein presented evidence that defendants knowingly presented or caused to be
presented a false or fraudulent claim for payment or approval in violation of
the False Claims Act by executing and submitting various requests for
reimbursement to the Fund “with the intent to divert those funds to others and
not with the intent to reimburse Sounhein within the regulatory period,” and that
defendants use of such funds provided defendants with a competitive advantage
in violation of the unfair competition law. 
Judgment was entered on August 9, 2010.

            On August 17, 2010, Sounhein filed a
memorandum of costs, seeking $10,298.79 in total costs.  Defendants moved to strike and/or tax
Sounhein’s costs, arguing Sounhein was not the prevailing party because his
“focus throughout the litigation was on his False Claims Act cause of action,
and not on the injunctive relief ultimately awarded . . . .”  Alternatively, they argued that Sounhein
should be denied all costs incurred after March 31, 2010, the date on which
defendants made an offer to compromise pursuant to  ADDIN
BA xc <@$st> xl 35 s GYOFAP000004 Code of Civil
Procedure section 998, which Sounhein rejected.  Finally, defendants argued that a number of
the costs sought are not recoverable. 
The trial court rejected defendants’ arguments, designated Sounhein the
prevailing party, and awarded him $10,298.79 in costs.

DISCUSSION

I

The Trial Court Erred in Concluding It
Lacked Jurisdiction Over the False Claims Act Cause of Action

            Sounhein contends the trial court
erred in concluding that it lacked jurisdiction over the False Claims Act cause
of action under  ADDIN BA xc <@osdv> xl 33 s
GYOFAP000031 l "section 12652, subdivision
(d)(3)" section 12652, former
subdivision (d)(3), because the information upon which that cause of action
is based was not publicly disclosed, and even if it was, it was not disclosed
in one of the statutorily enumerated forums. 
We agree.

            An order granting a defense href="http://www.fearnotlaw.com/">motion
for judgment under  ADDIN
BA xc <@$st> xl 37 s GYOFAP000002 Code of Civil
Procedure section 631.8 in a nonjury trial is reviewed under the substantial
evidence standard.  ( ADDIN BA xc <@$cs> xl 79 s
GYOFAP000005 xhfl Rep xpl 1 San
Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc., supra, 73
Cal.App.4th at p. 528.)  We are bound
by the trial court’s findings that are supported by substantial evidence.  ( ADDIN BA xc <@cs> xl 89 s
GYOFAP000011 xhfl Rep xpl 1 l ">People ex rel. Dept. of Motor Vehicles v. Cars 4 Causes (2006)139 Cal.App.4th 1006, 1012" People ex rel. Dept. of Motor Vehicles v. Cars 4 Causes (2006) 139
Cal.App.4th 1006, 1012.)  “But, we
are not bound by a trial court’s interpretation of the law and independently
review the application of the law to undisputed facts.”  ( ADDIN BA xc <@$id> xl 5 s ID xpl
1 Ibid.)  
As
relevant here, the False Claims Act permits the recovery of href="http://www.mcmillanlaw.com/">civil
penalties and treble damages from any person who
knowingly presents a false claim for payment to the state or a political
subdivision or knowingly avoids an obligation to pay or transmit money to the
same.  ( ADDIN BA xc <@osdv> xl 27 s
GYOFAP000032 xpl 1 l "§ 12651, subds. (a)(1), (7)"
§ 12651, subds.
(a)(1), (7).)  A person may bring a
civil action for violations of the False Claims Act for himself and state if
any state funds are involved.  ( ADDIN BA xc <@osdv> xl 21 s
GYOFAP000033 xpl 1 l "§ 12652, subd. (c)(1)"
§ 12652, subd.
(c)(1).)  In such cases, the
plaintiff is known as the qui tam
plaintiff.  ( ADDIN BA xc <@$id> xl 5 s ID xpl
1 Ibid.)href="#_ftn8" name="_ftnref8" title="">[8]

            “The [False Claims Act], like its
federal counterpart ( ADDIN BA xc <@st> xl 24 s
GYOFAP000013 xpl 1 l "31 U.S.C. § 3729 et seq."
31 U.S.C. § 3729 et
seq.), erects 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.”  ( ADDIN BA xc <@cs> xl 96 s
GYOFAP000014 xhfl Rep xpl 1 l ">State of California ex rel Grayson v. Pacific Bell Telephone Co. (2006)142 Cal.App.4th 741, 748" State of California ex rel Grayson v. Pacific Bell Telephone Co.
(2006) 142 Cal.App.4th 741, 748 ( ADDIN BA xc <@$cs> xl 7 s
GYOFAP000014 xpl 2 Grayson).)   ADDIN
BA xc <@$osdv> xl 36 s GYOFAP000029 Section 12652, former
subdivision (d)(3)(A) provides, in part, that “[n]o court shall have
jurisdiction over an action under this article based upon the public disclosure
of allegations or transactions in a criminal, civil, or administrative hearing,
in an investigation, report, hearing, or audit conducted by or at the request
of the Senate, Assembly, auditor, or governing body of a political subdivision,
or by the news media, unless . . . the person bringing the action is an
original source of the information.” 

            “The jurisdictional 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.’ [Citation.]” 
(
ADDIN BA xc <@$cs> xl 41 s GYOFAP000014 xhfl Rep xpl 1 Grayson,
supra, 142 Cal.App.4th at p.
748.)  “A qui tam plaintiff bears the burden of establishing that the
exercise of the court’s jurisdiction is proper.” ( ADDIN BA xc <@$id> xl 5 s ID xpl
1 Ibid.)

            Here, Sounhein alleges defendants
violated the False Claims Act by retaining reimbursement payments from the Fund
for work Sounhein had done instead of paying him within 30 days or returning
the payments to the Fund after certifying that it would do so.  The trial court concluded that defendants’
failure to pay Sounhein within 30 days or return the money to the Fund was
publicly disclosed no later than early 2005 when Patton, the Fund manager,
became aware of late payment issues relating to Big Oil.

            “ â€˜[A] “public disclosure”
requires that there be some act of disclosure to the public outside of the
government.  The mere fact that the
disclosures are contained in government files someplace, or even that the
government is conducting an investigation behind the scenes, does not itself
constitute public disclosure.’ â€  ( ADDIN BA xc <@cs> xl 60 s
GYOFAP000015 xhfl Rep xpl 1 l ">Mao’s Kitchen, Inc. v. Mundy
(2012)209 Cal.App.4th 132, 149" Mao’s Kitchen, Inc. v. Mundy (2012) 209 Cal.App.4th 132, 149,
quoting  ADDIN BA xc <@cs> xl 66 s
GYOFAP000016 xhfl Rep xqt xpl 1 l "U.S. ex rel Rost v. Pfizer, Inc. (1st Cir. 2007)507 F.3d 720, 728" U.S. ex rel Rost v. Pfizer, Inc. (1st Cir. 2007) 507 F.3d 720, 728.)   As defendants point out, at least one
federal circuit court had held that information is publicly disclosed within
the meaning of the federal False Claims Act where the disclosure is made to a
“competent public official . . . who has managerial responsibility for the very
claims being made.”  ( ADDIN BA xc <@cs> xl 101 s
GYOFAP000017 xhfl Rep xpl 1 l ">U.S. v. Bank of Farmington (7th
Cir. 1999)166 F.3d 853, 861, overruled on other grounds"
U.S. v. Bank of Farmington (7th Cir. 1999) 166 F.3d 853, 861 (>Farmington), overruled on other grounds
by  ADDIN BA xc <@cs> xl 72 s
GYOFAP000018 xhfl Rep xpl 1 l ">Glaser v. Wound Care Consultants, Inc. (7th Cir. 2009)570 F.3d 907, 920" Glaser v. Wound Care Consultants, Inc. (7th Cir. 2009) 570 F.3d
907, 920.)href="#_ftn9" name="_ftnref9" title="">[9]  As
Fund manager, Patton’s duties extended to “late payments,” and thus, under  ADDIN
BA xc <@$cs> xl 10 s GYOFAP000017 Farmington,
the fact that Big Oil made late payments to its service providers was
publicly disclosed prior to 2007 when Sounhein first brought the issue to the
Fund’s attention.  That the information
was publicly disclosed, however, is not the end of the inquiry.

             ADDIN
BA xc <@$osdv> xl 36 s GYOFAP000029 Section 12652, former
subdivision (d)(3)(A), clearly states that the jurisdictional bar applies
only where the disclosure is “in a criminal, civil, or administrative hearing,
in an investigation, report, hearing, or audit conducted by or at the request
of the Senate, Assembly, auditor, or governing body of a political subdivision,
or by the news media . . . .”  As this court recognized in  ADDIN
BA xc <@$cs> xl 7 s GYOFAP000014 Grayson, “the [False Claims Act] limits a court’s jurisdiction
when public disclosures were made in specific
venues.”  (Grayson, supra,  ADDIN
BA xc <@$cs> xl 25 s GYOFAP000014 xhfl Rep xpl 1 142 Cal.App.4th at p. 750, italics added;
see also  ADDIN BA xc <@$cs> xl 30 s
GYOFAP000017 xhfl Rep xpl 1 Farmington, supra, 166
F.3d at p. 862 [“The jurisdictional bar and the ‘original source’ exception
operate only when the information upon which a qui tam claim is based is publicly disclosed in a ‘criminal, civil,
or administrative hearing, in a congressional, administrative, or Government
Accounting Office report, hearing, audit, or investigation, or from the news
media.’   ADDIN
BA xc <@st> xl 25 s GYOFAP000021 xpl 2 l "31 U.S.C. § 3730(e)(4)(A)" 31 U.S.C. §
3730(e)(4)(A).”]

            In  ADDIN
BA xc <@$cs> xl 7 s GYOFAP000014 Grayson, the defendants asserted that the plaintiff’s alleged
fraud was disclosed in the news media.  ( ADDIN BA xc <@$cs> xl 41 s
GYOFAP000014 xhfl Rep xpl 1 Grayson, supra, 142
Cal.App.4th at p. 750.)  Here, defendants
do not specifically identify in which of the statutorily enumerated forums the
disclosure was made.  They assert only
that the information was disclosed during the course of the Fund’s “own
auditing process with respect to whether or not reimbursement [>sic] were paid -- and paid on time -- by
claimants to their vendors.”  Assuming
for arguments sake that the Fund’s routine process of verifying that claimants
are paying their service providers in a timely manner by requiring claimants to
submit copies of cancelled checks can fairly be construed as an “audit,” there
is no evidence that the audit was “conducted by or at the request of the
Senate, Assembly, auditor, or governing body of a political subdivision . . .
.”  ( ADDIN BA xc <@$osdv> xl 24 s
GYOFAP000030 xpl 1 § 12652, former subd.
(d)(3)(A).)  

            There is no question that the
purported audit was not conducted by or at the request of the Senate, Assembly,
or governing body of a political subdivision, which  ADDIN
BA xc <@osdv> xl 33 s GYOFAP000034 l "section 12650, subdivision (b)(5)" section 12650, former
subdivision (b)(5), now subdivision (b)(6), defines as “any city, city and
county, country, tax or assessment district, or other legally authorized local
governmental entity with jurisdictional boundaries.”  Thus, the question is whether the purported
audit was conducted by or at the request of “the . . . auditor.”  ( ADDIN BA xc <@$osdv> xl 24 s
GYOFAP000030 xpl 1 § 12652, former subd. (d)(3)(A).)  The use of the article “the” signifies a
particular auditor, here the State Auditor. 
Had the Legislature intended to divest trial courts of jurisdiction over
actions based on information disclosed in an investigation, report, hearing, or
audit conducted by or at the request of any
auditor, it would have used the indefinite article “an.”  By failing to do so, the Legislature
indicated its intent to limit the jurisdictional bar to information disclosed
in an investigation, report, hearing, or audit conduct by or at the request of
the State Auditor.  

            Such an intent is confirmed in an
analysis of the False Claims Act before its enactment, prepared by the Center
for Law in the Public Interest (Center), which was the “source” of the bill in
the California Assembly and also the drafter of the federal enactment.  (See Sen. Rules Com., Off. of Sen. Floor
Analyses, 3d reading analysis of Assem. Bill No. 1441 (1987–1988 Reg. Sess.) as
amended Sept. 8, 1987, p. 1, 4; see also  ADDIN
BA xc <@cs> xl 80 s GYOFAP000022 xhfl Rep xpl 1 l "State ex rel. Harris v.
PricewaterhouseCoopers, LLP (2006)39
Cal.4th 1220, 1230" State
ex rel. Harris v. PricewaterhouseCoopers, LLP (2006) 39 Cal.4th 1220, 1230  [stating that the Center “participated in
drafting both the current federal and California false claims statutes”];  ADDIN
BA xc <@cs> xl 65 s GYOFAP000023 xhfl Rep xpl 1 l "State of California v. Altus
Finance (2005)36
Cal.4th 1284, 1296" State
of California v. Altus Finance (2005) 36 Cal.4th 1284, 1296 [describing
the Center as the “principal drafter of the statute”].)  The analysis, which was provided to the
author of the bill and was before the Senate and Assembly Judiciary Committees,
states that former “[s]ub[division] (d)(3) disallows jurisdiction for >qui tam actions based on allegations or
transactions disclosed . . . in an investigation, report, hearing, or audit
conducted by or at the request of the State Senate, State Assembly, State
Auditor, or governing body of a political subdivision . . . .”  (Center, Cal. False Claims Act
Section-by-Section Analysis (1987)  ADDIN
BA xc <@osdv> xl 6 s GYOFAP000035 xpl 1 l "§ 5(d)" § 5(d), p. I.2-8,
appen. to Boese, Civil False Claims and Qui Tam Actions (2011); see also  ADDIN
BA xc <@cs> xl 111 s GYOFAP000024 xhfl Rep xpl 1 l "San Francisco Unified School
Dist. ex rel. Contreras v. Laidlaw Transit, Inc. (2010)182 Cal. App. 4th 438, 449" San Francisco Unified School Dist. ex rel. Contreras v. Laidlaw
Transit, Inc. (2010) 182 Cal. App. 4th 438, 449 [relying on the
Center’s analysis in interpreting the False Claims Act];  ADDIN
BA xc <@cs> xl 78 s GYOFAP000025 xhfl Rep xpl 1 l "Armenta ex rel. City of
Burbank v. Mueller Co. (2006)142
Cal.App.4th 636, 648" Armenta
ex rel. City of Burbank v. Mueller Co. (2006) 142 Cal.App.4th 636, 648
[same];  ADDIN BA xc <@cs> xl 75 s
GYOFAP000026 xhfl Rep xpl 1 l ">Laraway v. Sutro & Co. (2002)96
Cal.App.4th 266, 275 [116 Cal.Rptr.2d 823]" Laraway v. Sutro & Co. (2002) 96 Cal.App.4th 266, 275 [same].)

            Because the disclosure relied upon
here was not made in any of the statutorily enumerated forums, Sounhein’s False
Claims Act cause of action is not subject to the jurisdictional bar set forth
in  ADDIN BA xc <@$osdv> xl 36 s
GYOFAP000029 section 12652, former
subdivision (d)(3)(A).href="#_ftn10" name="_ftnref10" title="">[10]  Accordingly,
the trial court erred in granting defendant’s motion for judgment as to the
first cause of action. 

II

Defendants’ Appeal of the Cost Award Is
Premature

            Defendants contend the trial court
erred in denying their motion to strike and/or tax Sounhein’s costs and
awarding Sounhein costs in excess of $10,000. 
Defendants base their contention primarily on Sounhein’s failure to
prevail on his False Claims Act cause of action or obtain any monetary relief.  Given our reversal of the judgment in
defendants’ favor as to the False Claims Act cause of action, coupled with the
trial court’s determination that defendants violated the False Claims Act in
connection with the unfair competition cause of action, we conclude that a
determination of the issues raised in defendants’ appeal would be
premature.  Defendants may raise those
issues in an appeal from the judgment entered after a new trial.

DISPOSITION

            The judgment is
reversed as to the False Claims Act cause of action (first cause of action),
and the matter is remanded to the trial court with directions to conduct a new
trial limited to determining the amount of penalties and damages, liability
having been established.  The judgment is
affirmed in all other respects.  Sounhein
shall recover his costs on appeal.  ( ADDIN BA xc <@ru> xl 35 s
GYOFAP000027 xpl 1 l "Cal. Rules of Ct., rule
8.278(a)(1)" Cal. Rules of Court,
rule 8.278(a)(1).)

 

 

                                                                            BLEASE                             , Acting
P. J.

 

 

We
concur:

 

 

                HULL                                 , J.

 

 

                ROBIE                                , J.