GRAYSON v. PACIFIC BELL TELEPHONE CO.
Filed 8/31/06
CERTIFIED FOR PUBLICATION
COPY
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
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| STATE OF CALIFORNIA ex rel. ALAN GRAYSON, Plaintiff and Appellant, v. PACIFIC BELL TELEPHONE CO. et al., Defendants and Respondents. | C050296
(Super. Ct. No. 02AS00790)
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APPEAL from a judgment of the Superior Court of Sacramento County, Thomas M. Cecil, J. Affirmed.
Brian Taugher; Bronster Crabtree & Hoshibata and Margery S. Bronster for Plaintiff and Appellant.
Pillsbury Winthrop, Christopher R. Ball; Sidley Austin, Mark E. Haddad, Steven A. Ellis, Robert A. Holland, Nitin Reddy; Keker & Van Nest, Robert A. Van Nest, Steven A. Hirsch, R. James Slaughter; Reed Smith, Michele Floyd, and Raymond Cardozo for Defendants and Respondents Pacific Bell Telephone Co., AT&T Corporation, AT&T Wireless Services, Inc., and Sprint Communications Company and its affiliates Sprint Co., Ltd. Partnership and Sprint Int'l. Communications Corp
Sheppard, Mullin, Richter & Hampton and Steven B. Sacks for Defendants and Respondents Nextel Communications, Inc., Nextel of California, Inc., Nextel Operations, Inc., and Nextel Retail Stores, Inc.
Qui tam relator Alan Grayson seeks a bounty under the False Claims Act (FCA; Gov. Code, § 12650 et seq.) for compelling telecommunication companies to escheat to the state balances on prepaid telephone cards by sidestepping the procedures provided by the Unclaimed Property Law (UPL; Code Civ. Proc., § 1500 et seq.) and circumventing the State Controller, the notice provisions, and the absence of any determination of liability under the law. Although in his third amended complaint he does not plead he had any specific inside knowledge of undisclosed fraud, he does allege that defendants' duty to escheat was public knowledge. We must decide whether the qui tam complaint has helped the government ferret out fraud it otherwise might not have uncovered or whether the allegations or transactions are substantially similar to information already in the public domain.
In sustaining defendant telecommunication companies'[1] demurrer to the third amended complaint without leave to amend, the trial court skipped the threshold issue of subject matter jurisdiction and decided that balances on prepaid telephone cards did not constitute property under the UPL. We affirm the dismissal of the complaint but for a different reason: the complaint does not overcome the jurisdictional bar established by section 12652 of the FCA. Nor does plaintiff have standing to pursue his unfair competition claims set forth in his second cause of action.
I
Legal Context: The UPL Hook for a Reverse False Claim
The Unclaimed Property Law
The UPL compels holders of certain classes of abandoned property subject to escheat to report and deliver the property to the State Controller (Controller), who is responsible for enforcing the UPL and may investigate suspected violations. (Code. Civ. Proc., §§ 1530, 1532, 1571.)[2] The Controller may examine the records of any person reasonably believed to have failed to report property subject to escheat. (§ 1571.) The Controller can opt to bring an action to enforce the right to an examination or to obtain a judicial determination that property is subject to escheat. (§ 1572, subd. (a)(1), (2).)
The UPL imposes penalties for the willful failure to report and deliver abandoned property subject to escheat but only after the Controller has given notice by certified mail of the violation and the violator has failed to respond. (§ 1576, subd. (c).) Section 1576 provides: â€
