Full opinion text
ORDER ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT LEGGE, District Judge. TABLE OF CONTENTS INTRODUCTION 990 I. THE COMPLAINT.991 II. SUMMARY JUDGMENT STANDARD .991 III. FALSE CLAIMS.992 Jurisdictional Requirements. > HOPE VI and COMP Grants. W 1. Public Disclosure. 2. Original Source. YAP and ADPCT Grants. 0 Section 8 Certificates. 0 1. Public Disclosure and Original Source. 2. Sales of Housing Opportunities as False Claims. 3. Scienter . 1004 4. Does the FCA Authorize Private Suit Against a Local Governmental Entity Such as the SFHA? . 1005 a. The Vermont Agency Decision . 1006 b. Contentions of the Parties . 1007 c. Application of Vermont Agency to This Case. 1007 i. Cases Before Vermont Agency. 1008 ii. Cases Since Vermont Agency. 1009 iii. Analysis. 1009 (a) The SFHA is not a sovereign. 1010 (b) The SFHA is a statutory person. .... (c) The FCA’s Damages Provisions Do Not Preclude the SFHA from Being a Statutory Person. o I — 1 to 5. Damages. o I — 1 Ol 1016 a. The Text, Structure and Legislative History of the FCA Demonstrate that a Complex Combination of Compensation, Retribution and Deterrence Was Intended. 1022 b. The FCA as Applied to the SFHA Does Not Violate the Policies Articulated in Newport. IV. RETALIATION FOR WHISTLEBLOWING 1024 CONCLUSION. 1026 INTRODUCTION This matter comes before the Court on the motion for summary judgment or partial summary judgment of defendants the San Francisco Housing Authority (“SFHA”), the City and County of San Francisco (“San Francisco” or “the city”), and individual defendants Albert Nelson and David I. Gilmore (collectively “defendants”). Although this case was filed in 1995, it did not progress significantly between 1995 and 1997, when the United States finally decided not to intervene. Discovery commenced in early 1998. An amended complaint was filed in 1999, and the case was set for trial in late 1999. But extensive criminal proceedings were initiated in November of 1999 and have only recently been concluded. The court previously dismissed with prejudice the claims against the State of California. Defendants make the present motion for summary judgment or partial summary judgment on the first and third claims for relief of qui tom relators/plain-tiffs Carmen T. Rosales and Michael V. Meadows (“plaintiffs”). The court heard oral argument of the motion, but later stayed all proceedings pending the U.S. Supreme Court’s decision in Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). After Vermont Agency was decided on May 22, 2000, the parties submitted supplemental briefing on the applicability of that decision to the present case. The court then heard further argument. Having considered the oral arguments and written submissions of counsel, the evidence of record, and the applicable law, the court now issues the following order. I. THE COMPLAINT Plaintiffs Carmen T. Rosales and Michael V. Meadows filed this action alleging, among other things, violations of the federal False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733, by their employer the SFHA, the City and County of San Francisco, and individual employees of the SFHA. In their fourth amended complaint (“complaint”) plaintiffs allege that defendants made false and fraudulent statements to the Department of Housing and Urban Development (“HUD”) in order to receive grant funds for which the SFHA was not qualified. Plaintiffs also contend that defendants issued so-called “Section 8” subsidized housing certificates to ineligible individuals, and that SFHA employees charged personal fees for this service. Finally, plaintiffs claim that their supervisors retaliated against them for complaining about these improprieties and for making the allegations public. Plaintiffs’ complaint states three claims for relief. First, plaintiffs allege that all of the defendants participated in submitting false claims for payment to the United States government in violation of the FCA, 31 U.S.C. § 3729. Second, plaintiffs allege that defendants Nelson, Davis and the SFHA retaliated against them for complaining about the SFHA’s failure to comply with HUD regulations and guidelines. This retaliation allegedly consisted of derogatory remarks and epithets, unwarranted reprimands, exclusion from meetings, and office reorganizations eliminating plaintiffs’ employment positions. Plaintiffs claim that this retaliatory conduct was performed in derogation of their rights under the First and Fourteenth Amendments in violation of 42 U.S.C. § 1983. Third, plaintiffs also claim that this retaliatory conduct by Nelson, Davis and the SFHA violated the FCA’s anti-retaliation provision, 31 U.S.C. § 3730(h). Plaintiffs seek, inter alia, treble and punitive damages. Defendants’ present motion for summary judgment or partial summary judgment concerns only the first and third claims for relief. II. SUMMARY JUDGMENT STANDARD Summary judgment should be granted if “there is no genuine issue as to any material fact'and ... the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec. Industrial Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). “At the summary judgment stage, the district court is not to weigh the evidence or determine the truth of the matter but should only decide whether there is a genuine issue for trial.” Washington v. Garrett, 10 F.3d 1421, 1428 (9th Cir.1993) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The moving party bears the initial responsibility of “informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting from Fed.R.Civ.P. 56(c)). When the nonmoving party will bear the burden of proof at trial on a dispositive issue, she must then “go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’” Id. at 324, 106 S.Ct. 2548 (quoting from Fed.R. Civ.P. 56(c) & (e)). The court views all facts and draws all inferences therefrom in the light most favorable to the nonmoving party. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). If, however, the nonmoving party’s evidence is “merely colorable” or “not significantly probative,” summary judgment may be granted. Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted). III. FALSE CLAIMS Plaintiffs allege that defendants violated the False Claims Act (“FCA”) by submitting false claims for payment to the federal government. The allegations concern various grant and subsidy programs administered by HUD. To establish a violation of the FCA, plaintiffs must prove three elements: (1) a “false or fraudulent” claim; (2) which was presented, or caused to be presented, by defendants to the United States for payment or approval; (3) with knowledge that the claim was false. See United States v. Mackby, 243 F.3d 1159 (9th Cir.2001) (citing 31 U.S.C. §' 3729(a)(1)). Defendants argue that plaintiffs’ first claim for relief for violation of the FCA is barred by the FCA’s jurisdictional requirements. They further maintain that plaintiffs present no evidence that defendants’ allegedly false submissions to HUD wrongly qualified the SFHA for federal grant money, or that San Francisco and the SFHA had the requisite scienter. Finally, defendants contend that the FCA does not allow suit against San Francisco or the SFHA under Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). A. Jurisdictional Requirements Rosales and Meadows, as the qui tam plaintiffs, bear the burden of establishing subject matter jurisdiction by a preponderance of the evidence. See United States v. Alcan Electrical and Engineering, Inc., 197 F.3d 1014, 1018 (9th Cir.1999) (citing United States ex rel. Biddle v. Board of Trustees of the Leland Stanford, Jr. University, 161 F.3d 533, 540 (9th Cir.1998), cert. denied, 526 U.S. 1066, 119 S.Ct. 1457, 143 L.Ed.2d 543 (1999)). Section 3730(e)(4) of the FCA requires, in pertinent part: (A) No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions 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, unless ... the person bringing the action is an original source of the information. (B) For purposes of this paragraph, “original source” means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the government before filing an action under this section which is based on the information. 31 U.S.C. § 3730(e)(4) (emphases added). The United States Supreme Court, construing § 3730(e)(4), has stated that the FCA authorizes “qui tarn suits based on information in the government’s possession, except where the suit was based on information that had been publicly disclosed and was not brought by an original source of the information.” Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 946, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). To qualify as an “original source,” a qui tarn plaintiff must show that he or she: (1) has direct and independent knowledge of the information on which the allegations are based; (2) voluntarily provided the information to the government before filing the qui tarn action; and (3) had a hand in the public disclosure of allegations that are a part of the suit. See United States ex rel. Devlin v. California, 84 F.3d 358, 360 fn. 3 (9th Cir.1996), cert. denied, 519 U.S. 949, 117 S.Ct. 361, 136 L.Ed.2d 252 (1996). Accordingly, this court must examine each alleged false claim to determine whether the allegation or transaction had been publicly disclosed before filing of the suit, and if so whether plaintiffs were the original source of the information. If the jurisdictional hurdle is cleared as to each alleged false claim, the court will then address the further arguments raised by the parties. See Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 1865, 146 L.Ed.2d 836 (2000) (“Questions of jurisdiction, of course, should be given priority - since if there is no jurisdiction there is no authority to sit in judgment of anything else.”); Wang v. FMC Corp., 975 F.2d 1412, 1415 (9th Cir.1992) (“We must examine whether any of Wang’s claims are blocked by the jurisdictional bar of section 3730(e)(4) before we can consider any other question.”) (emphasis in original). B. HOPE VI and COMP Grants Plaintiffs allege that defendants knowingly made false claims for moneys to the United States by applying for and receiving HOPE VI and Comprehensive (“COMP”) grants from HUD based on inaccurate assessments of management performance under the Public Housing Management Assessment Program (“PHMAP”). Based on these falsified figures, HUD allegedly awarded the SFHA $49,992,377 in HOPE VI grant funds in 1994 and more than $58,173,963 in COMP grant funds for 1992-1995. The PHMAP is a system designed to allow HUD, in concert with local public housing authorities, to improve management of public housing programs by evaluating the authorities’ performance according to a number of key indicators. See 42 U.S.C. § 1437d(j). The indicators include vacancy rates, modernization, rents uncollected, operating reserves, routine operating expenses, and annual inspection of units and systems. See 24 C.F.R. §§ 901.10-901.45. Public housing authorities assign themselves a “score” on each indicator and certify the accuracy of the data. See 24 C.F.R. §§ 901.105, 901.100(a)-(b). Plaintiffs contend that from 1992 to 1995 the SFHA manipulated its PHMAP scores by knowingly misstating its operating reserves and occupancy/vacancy figures. The SFHA allegedly did so in 'order to appear to be in compliance with HUD regulations and gain removal from HUD’s “troubled” housing authority list, which the SFHA was on from 1989 to 1992. 1. Public Disclosure Citing two documents - a 1992 HUD Inspector General audit of the SFHA dated September 10, 1992 and a newspaper article dated September 8, 1992 - defendants argue that plaintiffs’ allegations were publicly disclosed before the filing of the present lawsuit on December 15, 1995. The HUD audit report, entitled “The SFHA’s Questionable Fiscal Year 1991 PHMAP Certification Led to HUD’s Premature Removal of the Authority’s ‘Troubled’ Designation,” certainly draws attention to irregularities in the SFHA’s PHMAP self-assessment and certification. See Def. Req. for Jud. Not., Exh. A (“HUD audit”). It states: “Based on our review, we believe that the SFHA’s PHMAP certification and PHMAP self-assessment were of questionable accuracy. Indications are that the SFHA scored itself higher than warranted and certified to questionable PHMAP performance data which prompted HUD to remove the Authority’s ‘troubled’ agency designation prematurely.” Id. at H00468. The HUD audit concluded, inter alia, that the SFHA had understated the actual number and percentage of vacancies by leasing vacant units and counting them as occupied even though they were not occupied. See id. at H00474. It also found that the SFHA had not overstated its operating reserves although there appeared to be some discrepancies in the reported figures. See id. at H00487-00488. The Employment and Housing Subcommittee on government Operations of the U.S. House of Representatives held a public hearing concerning the HUD audit on September 14, 1992. See Def. Req. for Jud. Not., Exh. D (“subcommittee hearing”). U.S. Representative Tom Lantos, chairman of the subcommittee, repeated many of the findings of the HUD audit. See, e.g., id. at 3 (“The IG found that the San Francisco Housing Authority was counting vacant units as occupied as of the dates they were leased to a new tenant, even though the units were empty and not yet habitable.”) Defendants also cite an article published in the San Francisco Independent on September 8, 1992, two days before release of the official HUD audit, entitled “Feds Slam Housing Authority.” See Def. Req. for Jud. Not., Exh. E (“Independent article”). The Independent article recapitulated many of the findings in the HUD audit. For example, the article reported that, according to a draft report of the HUD audit, “the Housing Authority provided HUD with an erroneous self-assessment in order to convince the federal office to remove the housing agency from the ‘troubled list.’ ” Id. at H02148. It also stated: “As part of that self-assessment, the Authority did not report all of its vacancies to HUD and knowingly submitted false information.” Id. The Independent article further reported that “[n]o acceptable documentation could be provided for the $7.8 million operating reserves reported by the Housing Authority.” Id. at H02149. Audits performed and released to the public by inspectors general qualify as public disclosures under 31 U.S.C. § 3730(e)(4)(a). See United States ex rel. Fine v. Chevron, Inc., 72 F.3d 740, 743 (9th Cir.1995) (en banc), cert. denied, 517 U.S. 1233, 116 S.Ct. 1877, 135 L.Ed.2d 173 (1996). Prior media coverage of allegations can also raise the jurisdictional bar. See, e.g., United States ex rel. Aflatooni v. Kitsap Physicians Services, 163 F.3d 516, 521 (9th Cir.1998) (citing United States ex rel. Biddle v. Board of Trustees of the Leland Stanford, Jr. University, [161] F.3d [533, 540] (9th Cir.1998)). “Where the information underlying the relator’s complaint has already been publicly disclosed, the government receives no additional benefit from the relator’s filing of a qui tarn suit.” Aflatooni, 163 F.3d at 522. Faced with the prior public information cited by defendants, plaintiffs make two arguments. First, citing Biddle, [161] F.3d at [537], they maintain that a qui tarn claim is not “based upon” a public disclosure within the meaning of 31 U.S.C. § 3730(e)(4)(a) unless the claim “repeats” information that has already been disclosed to the public. See Opposition at 6:20-25. Plaintiffs assert that their allegations go beyond mere overstatements of operating reserves and occupancy rates. The present lawsuit does not “repeat” the public disclosures, plaintiffs maintain, because the factual allegations underlying the suit are more specific and detailed than the previously disclosed information. See id. at 7:1-8:11. In support of their position, plaintiffs cite to evidence that SFHA Executive Director David Gilmore “instituted an aggressive leasing strategy to falsely inflate the SFHA’s [PHMAP] score by beginning to lease all possible vacant units, whether habitable or occupied, or not.” Jones Decl., Exh. D., Rosales Interrog. Resp. No. 2 at 3:11-13. Gilmore allegedly directed SFHA staff to indicate units were leased and occupied when they were not. See Jones Decl., Exh. B, Bains Depo. at 185:16-193:25. Gilmore reportedly asked staff to “pull a dollar from [their] own pocket if necessary to constitute deposits for the units, whether habitable or not, so they could be counted as rented for purposes of SFHA occupancy rates.” Jones Deck, Exh. C., Meadows Interrog. Resp. No.l at 3:3-6. Plaintiffs argue that these and other similar factual allegations do not “repeat” information disclosed in the HUD audit, the subcommittee hearing, or the Independent article and therefore do not trigger the FCA’s jurisdictional bar. Plaintiffs’ argument misinterprets the FCA’s public disclosure provisions. Biddle does not hold that publicly disclosed information must precisely mirror the allegations stated in the qui tam lawsuit in order for the jurisdictional bar to operate. Plaintiffs quote Biddle for the proposition that “a claim is ‘based upon’ public disclosure when the claim repeats allegations that have already been disclosed to the public.” See Opposition at 6:20-25 (citing Biddle, [161] F.3d at [537]). However, the full sentence from Biddle reads: “This language [ie., the language from Wang v. FMC Corp., 975 F.2d 1412, 1417 (9th Cir.1992) just cited by the court] supports [one party’s] view that a claim is ‘based upon’ public disclosure when the claim repeats allegations that have already been disclosed to the public.” Biddle, 161 F.3d at 537 (emphasis added). However, Biddle omitted the “repeats” language that plaintiffs emphasize: “We, therefore, hold that if at the time a relator files a qui tam complaint, the allegations or transactions of the complaint have been publicly disclosed, then the allegations are ‘based upon’ the publicly disclosed information, and the relator must show that he is an original source of the information in order for a district court to have jurisdiction over the lawsuit.” Id. at 540. The Ninth Circuit reached this conclusion relying on a passage from Wang that belies plaintiffs’ emphasis on the term “repeats”: It is true that Wang’s allegation about the Bradley is supported by a few factual assertions never before publicly disclosed; but “fairly characterized” the allegation repeats what the public already knows: that serious problems existed with the Bradley’s transmission. Biddle, 161 F.3d at 537 (quoting from Wang, 975 F.2d at 1417). Thus Biddle does not stand for the proposition that a plaintiffs allegation must precisely repeat a public disclosure for the jurisdictional bar to arise;, rather, it is the qui tam allegation, “fairly characterized,” that must be considered to determine whether it has already been disclosed to the public. In Wang the Ninth Circuit clarified that an “allegation” and the “information” on which the allegation is based are distinct concepts: Courts sometimes speak loosely of barring a qui tam suit because it is based on “publicly disclosed information.” ... But the Act bars suits based on publicly disclosed “allegations or transactions,” not information. [31] U.S.C. § 3730(e)(4)(A). The point is not mere semantics: the Act distinguishes between “allegations” and the “information on which the allegations are based.” [31] U.S.C. § 3730(e)(4)(B). The Act appears to be invoking the common logical distinction between an assertion and its proof. Although not empty, this distinction rarely matters in applying the Act, because where the public knows of information proving an allegation, it necessarily knows of the allegation itself. But the reverse is not always true. An allegation can be made public, even it its proof remains hidden. Wang, 975 F.2d at 1418 (citations omitted). As the Ninth Circuit has later stated, “allegations divorced from the information upon which they are based can constitute public disclosure.” United States v. Alcan Electrical and Engineering, Inc., 197 F.3d 1014, 1020 (9th Cir.1999) (citing Wang, 975 F.2d at 1418). • The gravamen of plaintiffs’ present claim, fairly characterized, is that the SFHA through its agents fraudulently manipulated SFHA’s PHMAP scores and certified their accuracy in order to gain removal from HUD’s “troubled” list and receive HOPE VI and COMP grant funds. This allegation was clearly publicized at least three years before plaintiffs filed the original complaint in this lawsuit. Although all of the purported means by which the SFHA’s fraud was perpetrated may not have been commonly known, the prior public disclosures contained enough information to enable the government to pursue an investigation into them. This is enough to trigger the jurisdictional bar. See id. at 1019 (citing United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir.1995)). Plaintiffs’ second argument concerns the timing of the public disclosures. Because the HUD audit, subcommittee testimony, and Independent article concerned transactions in 1992 and before, plaintiffs argue that posW1992 transactions were not publicly disclosed. Separate grant applications were made for each year after 1992, plaintiffs contend, so “[e]ach application constituted a new and separate transaction by which false statements were knowingly made to obtain grant funds.” Opposition at 8:13-14. This argument is also answered by the plain terms of the FCA and applicable Ninth Circuit precedent. Even if each allegedly fraudulent application for grant funding constitutes a “new transaction,” the FCA’s jurisdictional bar applies not only to publicly disclosed transactions but also to publicly disclosed allegations. See 31 U.S.C. § 3730(e)(4)(A) (“the public disclosure of allegations or transactions”) (emphasis added); United States ex rel. Dunleavy v. County of Delaware, 123 F.3d 734, 740 (3d Cir.1997) (“It is clear that the FCA’s reference to ‘allegations or transactions’ is in the disjunctive, so that disclosures which reveal either the allegations of fraud or the elements of the underlying fraudulent transaction are sufficient to invoke the jurisdictional bar.”). As discussed above, plaintiffs’ allegations, fairly characterized, are that the SFHA defrauded the U.S. government by falsely inflating its PHMAP scores from 1992 to 1995. Although the fraudulent transactions may change with each iteration during the relevant period, the allegation of fraud remains substantially the same. The allegation was first disclosed in 1992; it cannot be reanimated simply by complaining that defendants performed the same fraudulent acts in succeeding years. This interpretation is supported by the Ninth Circuit’s decision in United States ex rel. Lujan v. Hughes Aircraft Co., 162 F.3d 1027 (9th Cir.1998). In Lujan the qui tam relator alleged that her employer submitted fraudulent claims to the U.S. government as a defense subcontractor on the B2 bomber and other projects from 1982 to 1989. Id. at 1029. In an earlier filed case, however, a qui tam relator named Schumer had already alleged fraud in connection with Hughes’ cost-sharing transactions, commonality agreements and radar program contracts. See id. at 1032-33. Schumer’s allegations concerned only false claims submitted to the government between 1982 and 1984. See id. at 1032. Noting the temporal discrepancy, the Lujan Court nevertheless held that Schumer’s publicly disclosed 1982-1984 allegations also disclosed Lujan’s 1982-1989 allegations, including the 1985-1989 allegations. “Lujan’s allegations are substantially similar to those disclosed in the earlier Schumer action, thereby constituting ‘public disclosure’ of Lujan’s qui tam claims.” Id. at 1033. The same is true in the present case. Regardless which annual grant application the court considers, plaintiffs’ allegations remain substantially the same as those previously disclosed, i.e., fraudulent PHMAP self-assessment and certification. As such, plaintiffs’ 1995 allegations were publicly disclosed by the 1992 HUD audit, the subcommittee hearing and the Independent article. 2. Original Source To avoid the jurisdictional bar, plaintiffs must therefore show that they were the original source of the information on which the publicly disclosed allegations were based. “A ‘whistleblower’ sounds the alarm; he does not echo it.” Wang, 975 F.2d at 1419. To qualify as an “original source,” a plaintiff must show that he or she: (1) has direct and independent knowledge of the information on which the allegations are based; (2) voluntarily provided the information to the government before filing the qui tam action; and (3) had a hand in the public disclosure of allegations that are a part of the suit. See United States ex rel. Devlin v. California, 84 F.3d 358, 360 fn. 3 (9th Cir.1996) (citing Wang, 975 F.2d at 1418). Defendants assert that neither Rosales nor Meadows: (1) had direct and independent knowledge of the information on which the allegations are based, or (2) had a hand in the public disclosure of the information. To satisfy the “direct and independent knowledge” requirement, plaintiffs must “see the fraud with their own eyes or obtain their knowledge of it through their own labor unmediated by anything else.” Id. at 361. Defendants cite plaintiff Meadows’ deposition testimony that he had no independent knowledge of the SFHA’s procedure for reporting vacancy rates in 1991. See Margolis Deck, Exh. C., Meadows Depo. at 186:7-11. Plaintiffs point out that Meadows had direct information concerning “Ronnie Davis’ alleged errant expenditure of COMP Grant funds.” Opposition at 10:23-24 (citing Jones Deck, Exh. F, Meadows Depo. at -323:12-329:4). The record does not demonstrate that either side has proffered substantial evidence concerning the directness and independence of Meadows’ knowledge of the allegations in suit. Defendants contend that plaintiff Rosales could not have observed firsthand or directly participated in the misreporting of vacancy rates for the periods when she was Director of Grants and was not Eligibility Manager, ie., the periods from March 1994 to November 1995, and April 1998 to the present. See Margolis Deck, Exh. B., Rosales Depo. at 26:1-11. Plaintiffs respond, to the contrary, that even as Director of Grants Rosales was present at staff meetings where the allegedly fraudulent conduct was encouraged by Gilmore. See Jones Deck, Exh. D., Rosales Interrog. Resp. No. 2. Defendants also assert that Rosales had no direct and independent knowledge concerning the SFHA operating reserves, and admitted receiving her information from Controller Lugenia Yates and Director of Finance Barry Stewart. See Margolis Deck, Exh. B, Rosales Depo. at 438:3-13. Plaintiffs do not counter this assertion. The record on the “direct and independent knowledge” prong of the Devlin test is, at best, inconclusive. Since plaintiffs bear the burden of establishing by a preponderance of the evidence that they were the original source of the public allegations, and bear their burdens under Celo-tex and Matsushita, this failure of proof weighs heavily against jurisdiction. However, there is another decisive reason why jurisdiction does not lie. Defendants contend that plaintiffs have offered no evidence that they had a hand in the public disclosures discussed above. Even though they are the parties bearing the burden of proof on the issue, plaintiffs have simply responded in conclusory fashion that they satisfy the third prong of the Devlin standard. See Opposition at 11:5-8. The only evidence proffered to support the contention that plaintiffs had a hand in the public disclosure of the allegations is a memorandum written by Rosales to Ronnie Davis dated December 10, 1996. See Rosales Deck (filed Oct. 19, 1999), Exh. A. This memo is dated after the filing of the present lawsuit and long after the HUD audit, the subcommittee hearing and the Independent article became public. Even if the memorandum had been disclosed before suit, though, it was addressed to Ronnie Davis, who was then Acting Director of the SFHA. Thus, without more, it does not appear to have been part of any “public” disclosure of the allegations. Because plaintiffs’ allegations regarding improprieties in the SFHA’s applications for HOPE VI and COMP grants were publicly disclosed before this suit, and plaintiffs have not established that they were original sources of the information, this court lack subject matter jurisdiction under 31 U.S.C. § 3730(e)(4). Accordingly, the court GRANTS summary judgment in favor of defendants on the HOPE VI and COMP grant claims. C. YAP and ADPCT Grants Plaintiffs allege that defendants made false claims to the United States by applying for and receiving Youth Apprenticeship Program (“YAP”) and Apprenticeship Demonstration Program in the Construction Trades (“ADPCT”) grant funds, despite the presence of a “union only” clause in the memorandum of understanding (“MOU”) in support of the grant application. In 1994-1995 the SFHA and San Francisco purportedly received $1,200,000 in YAP funds and $250,000 in ADPCT funds. But HUD regulations do not allow “union only” clauses in MOUs. Plaintiffs claim that the SFHA and San Francisco received the funds after promising to rewrite the MOU to comply with HUD regulations, a promise that was never kept. Defendants argue that plaintiffs’ allegations regarding the MOU were publicly disclosed by a prior lawsuit. United States ex rel. McKenzie v. BellSouth Tel., Inc., 123 F.3d 935, 939 (6th Cir.1997), cert. denied, 522 U.S. 1077, 118 S.Ct. 855, 139 L.Ed.2d 755 (1998) and Federal Recovery Servs., Inc. v. United States, 72 F.3d 447, 450 (5th Cir.1995) hold .that 31 U.S.C. § 3730(e)(4)(A) treats information disclosed through civil litigation and on file with the clerk’s office as a public disclosure of allegations. On December 5, 1995 certain labor unions brought suit in this court in San Francisco Building and Construction Trades Council, et al. v. United States Department of Housing and Urban Development, San Francisco Housing Authority, et. al., No. C96-4328 SBA. See Def. Req. for Jud. Not., Exh. C. That complaint alleged that the SFHA had not complied with the MOU because it had been informed by HUD that compliance would violate HUD regulations. See id. at ¶¶ 11, 14. The complaint was filed ten days before plaintiffs filed the present lawsuit. Plaintiffs do not make any arguments or offer any evidence to counter defendants’ point. In fact, the only trace of opposition occurs in a footnote that addresses the merits of the claim and not the threshold issue of jurisdiction. See Opposition at 12 fn.8. Given that plaintiffs bear the burden of proof on subject matter jurisdiction, this does not suffice. Defendants have established that the prior suit recited the contested terms of the MOU and aired the allegations that the MOU violated HUD regulations. Since plaintiffs fail to contest the public disclosure and offer no evidence that they were the original source of the information, this court lacks subject matter jurisdiction. The court therefore GRANTS summary judgment in favor of defendants on the YAP and ADPCT grant claims. D. Section 8 Certificates Plaintiffs allege that defendants knowingly made false claims to the United States by securing Section 8 subsidized housing certificates from HUD for individuals who were ineligible. Plaintiffs further allege that SFHA employees “sold” for their personal profit Section 8 housing certificates to the ineligible individuals with the actual or constructive knowledge of the SFHA. Under the Section 8 program “tenants make rental payments to private landlords based on the tenants’ income and ability to pay, and HUD subsidizes that rent with assistance payments intended to provide the landlord with a fair rent.” Bellevue Manor Associates v. United States, 165 F.3d 1249, 1250 (9th Cir.1999) (citing 42 U.S.C. § 1437f; Cisneros v. Alpine Ridge Group, 508 U.S. 10, 12, 113 S.Ct. 1898, 123 L.Ed.2d 572 (1993)). Congress mandated such assistance for “the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing.” 42 U.S.C. § 1437f(a). Each year, housing authorities like the SFHA enter into an Annual Contributions Contract (“ACC”) with HUD. See id. § 1437f(b). Under its ACC, the SFHA requisitions the funds from HUD for eligible participants, see id. § 1437n, and HUD disburses the money to the SFHA via electronic fund transfers. The SFHA in turn disburses Section 8 checks to landlords, or transfers funds to their designated financial institutions, as rental assistance for the Section 8 certificate holders. See Cal. Health & Saf.Code § 34327.3; Cal. Welf. & Inst.Code § 16517. Plaintiffs contend that at least 148 individuals who had not submitted applications and were not on the Section 8 waiting list received Section 8 housing, some at the behest of various San Francisco officials. They claim that the SFHA has not even accepted applications for Section 8 assistance since 1986 because the waiting list has been continuously full since that time. They also allege that their boss, former SFHA Executive Director David I. Gilmore, ordered plaintiff Rosales to issue Section 8 certificates to numerous individuals knowing that these individuals were not qualified under federal and state regulations. Beyond the mere improper issuance of certificates, plaintiffs allege that SFHA employees charged applicants a “fee” to procure Section 8 housing for ineligible persons. Plaintiffs claim that these employees knew that their conduct was contrary to federal and state regulations. They also contend that the SFHA and San Francisco were aware, or should have been aware, of this practice of selling Section 8 certificates for the personal profit of the employees. 1. Public Disclosure and Original Source Defendants argue that there was prior public disclosure of the Section 8 irregularities in Nguyen v. San Francisco Housing Authority, et al., No. C93-1127 FMS. See Motion at 8 — 9, 20-22; Def. Req. for Jud. Not., Exh. B. However, the Nguyen litigation concerned only the implementation of a so-called “priority transfer” policy. That case did not purport to address the wide-ranging fraud in procurement of Section 8 certificates alleged by plaintiffs in this case. This is defendants’ only evidence of prior public disclosure. Defendants cite evidence to support their argument that Meadows and Rosales were not the original source of the Section 8 allegations. See, e.g., Motion at 16:13-14, 17:7-19. However, plaintiffs do not have to demonstrate they were the original source of the information until it has been established that the allegations were publicly disclosed before their suit. See United States ex rel. Hagood v. Sonoma County Water Agency, 929 F.2d 1416, 1420 (9th Cir.1991) (original source analysis “comes into play only if an exception is sought to the bar of [31 U.S.C. § 3730(e)(4)(A) ]”). Because the fact of public disclosure is not established here, the original source analysis is unnecessary. The jurisdictional bar of 31 U.S.C. § 3730(e)(4)(A) does not apply. Accordingly, defendants’ further arguments for summary judgment on the Section 8 claims must be addressed. 2. Sales of Housing Opportunities as False Claims Defendants’ first argument is that plaintiffs have no admissible evidence other than “hearsay, speculation, conjecture, rumor and innuendo” to support their claim that agents of the SFHA sold Section 8 certificates to ineligible individuals. Motion at 21:4-7. This position is untenable, both from the record in this ease and from the parallel criminal convictions. Plaintiffs have offered as evidence the criminal indictment filed on November 10, 1999, CR-99-0480 CAL, against SFHA employees Yolanda Bradley (a/k/a Yolanda Jones), Patricia Williams and others. Attached to the original criminal complaint was the sworn affidavit of Special Agent Juan C. Juarez of the HUD Office of Inspector General. The Juarez affidavit detailed several instances of fraudulent conduct in the procurement of Section 8 housing by SFHA employees and supervisors. Criminal defendants Yolanda Jones and Ena Coleman pled guilty to several charges arising from the sale of Section 8 certificates. Defendant and SFHA employee Patricia Williams was also convicted by a jury of one count of conspiracy (18 U.S.C. § 371), seven counts of accepting a bribe in programs receiving federal funds (18 U.S.C. § 666(a)(1)(B)), and twenty-two counts of submitting false documents to HUD (18 U.S.C. § 1001). In addition, numerous tenants pled guilty to charges of paying bribes and receiving Section 8 certificates for which they were not eligible. The record of fraud in the issuance of Section 8 certificates is overwhelming. The evidence is copious. Defendants then argue that the “sale” of Section 8 certificates by SFHA employees is not a false claim under the FCA because it does not result in harm to the U.S. Treasury. See Motion at 21:11— 19. The Ninth Circuit has recently rejected this argument. See Bly-Magee v. California, 236 F.3d 1014, 1017 (9th Cir.2001) (“a qui tam plaintiff need not prove that the federal government will suffer monetary harm to state a claim under the FCA.”) (citations omitted). More to the point, defendants’ argument understates plaintiffs’ allegations. Plaintiffs also allege that SFHA employees and supervisors knowingly and fraudulently certified ineligible individuals as eligible for Section 8 certificates. The false claim is not the SFHA agent’s receipt of money from an ineligible individual; rather, the false claim is the false information submitted to the government by the SFHA agent to secure the Section 8 certificates. The FCA defines a “claim” as: any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States government provides any portion of the money or property which is requested or demanded, or if the government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded. 31 U.S.C. § 3729(c). It is undisputed that holders of Section 8 certificates received subsidies from HUD to supplement the rent they paid to their landlords. See Bellevue Manor Associates v. United States, 165 F.3d 1249, 1250 (9th Cir.1999). That money came from the U.S. Treasury. If SFHA agents knowingly submitted false documentation to secure Section 8 certificates for ineligible individuals, as plaintiffs allege and is supported by evidence, this would be a “false claim” for purposes of the FCA. “It is the false certification of compliance which creates liability when certification is a prerequisite to obtaining a government benefit.” United States ex rel. Hopper v. Anton, 91 F.3d 1261, 1266 (9th Cir.1996), cert. denied, 519 U.S. 1115, 117 S.Ct. 958, 136 L.Ed.2d 844 (1997). See 42 U.S.C. § 1427d(c)(2). 3. Scienter Defendants next argue that neither the SFHA nor San Francisco had the requisite scienter to subject them to liability under the FCA. They contend that even if some SFHA employees used a scheme to make money on Section 8 certificates, plaintiffs have not established that the SFHA or San Francisco were “knowingly” involved in the submission of the false claims. See Motion at 21:19-22:3. Under the FCA liability can be imposed on anyone who “knowingly presents, or causes to be presented, to an officer or employee of the United States government ... a false or fraudulent claim for payment or approval”; or “knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the government”; or “conspires to defraud the government by. getting a false or fraudulent claim allowed or paid.” 31 U.S.C. § 3729(l)-(3). “Knowingly” and “knowingly” mean that a person, with respect to the false information: (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent is required. 31 U.S.C. § 3729(b). See United States ex rel. Hochman v. Nackman, 145 F.3d 1069, 1073 (9th Cir.1998). The evidence demonstrates that Patricia Williams, the SFHA’s Relocation Manager, knowingly submitted false documents to HUD to secure Section 8 certificates for ineligible individuals. She was convicted of doing so. Williams has described herself as “a management level employee” at the SFHA. See Jones Decl., Exh. J, Williams Decl. at 1. Yolanda Jones, Williams’ subordinate, also pled guilty to participating in the Section 8 scheme. In addition to the evidence against Williams and Jones, plaintiff Rosales testifies as follows: As Eligibility Manager at the SFHA I observed and was ordered to issue Section 8 housing certificates to individuals who had not submitted applications for same, and who were not on the waiting list for Section 8 housing. The SFHA has not accepted applications for Section 8 housing since 1986 because the wait list is full. Nonetheless, from approximately 1990 through January 1994, at least 148 Section 8 certificates were issued to individuals who were not on the SFHA waiting list for Section 8 housing or had submitted an application for the same. Jones Decl., Exh. H, Rosales Statement at U00004. Rosales specifically states that SFHA Executive Director David Gilmore ordered her to issue Section 8 certificates to several named persons even though Gilmore knew that those individuals had not submitted applications, were not on the waiting list, and were ineligible for Section 8 housing. See id. at U00004-00005. When, as here, managers and executives are implicated in the knowing submission of false claims to the government, there can be little question that the entity itself is answerable for their conduct. Defendants ask the court to require proof that the SFHA, and not just particular employees, “knowingly” submitted the false claims. This is a false distinction. Corporate entities such as the SFHA can only act through their agents. See Protectus Alpha Nav. Co., Ltd. v. North Pacific Grain Growers, Inc., 767 F.2d 1379, 1386 (9th Cir.1985) (“We agree that a corporation can act only through its agents and employees, and that no reasonable distinction can be made between the guilt of the employee in a managerial capacity acting within the scope of his employment and the guilt of the corporation.”). When an agent acts in the name of the entity, taking advantage of her unique position within the entity to secure government funding, the fraudulent intent of the agent is indistinguishable from the intent of the entity. So long as the agent has actual or apparent authority to bind the entity, the fraud of the agent is sufficient to support civil liability against the entity. See American Society of Mechanical Engineers v. Hydrolevel Corp., 456 U.S. 556, 568, 102 S.Ct. 1935, 72 L.Ed.2d 330 (1982) (discussing the “wide variety of areas” in which federal courts “have imposed liability upon principals for the misdeeds of agents acting with apparent authority”). Citing United States v. Ridglea State Bank, 357 F.2d 495, 498 (5th Cir.1966) and its progeny, defendants argue that under the FCA the scienter of employees can only be imputed to the agency if the employees “intended to benefit” the agency by making the false claims to the United States. See Def. Suppl. Mem. (filed Oct. 14, 1999) at 2:8-9, 7:13-18; Reply at 11:1-28. The cases on this issue from around the United States are inconclusive. Defendants point out that the Fifth and Eleventh Circuits have consistently applied the “intent to benefit” test because of the “drastically penal” nature of the sanctions available under the FCA. See Def. Suppl. Mem. at 4-5 (citing Grand Union Co. v. United States, 696 F.2d 888, 891 (11th Cir.1983), United States v. Hangar One, Inc., 563 F.2d 1155, 1158 (5th Cir.1977) and Henry v. E. S., 424 F.2d 677, 679 (5th Cir.1970)). But there are cases to the contrary. See United States v. Fox Lake State Bank, 240 F.Supp. 720, 722 (N.D.Ill.1965) (concluding that under the FCA “the fraudulent acts of an agent clothed with authority by a principal are imputable to said principal despite his alleged lack of consent.”), aff'd in part and rev’d in part on other grounds, 366 F.2d 962 (7th Cir.1966); United States v. O’Connell, 890 F.2d 563, 569 (1st Cir.1989) (holding that a corporation can be liable under the FCA for the fraudulent representations of its agent under traditional agency principles “even if the corporation received no benefit from the agent’s fraud”); United States v. Incorporated Village of Island Park, 888 F.Supp. 419, 438 (E.D.N.Y.1995) (following O’Connell). See generally Deborah Sprenger, “Corporation’s Vicarious Liability for Fraud of its Agent under False Claims Act (31 U.S.CA. §§ 3729-3783),” 107 A.L.R.Fed. 665 (1992). However, there is no need for this court to address the conflicting authority from other circuits. It is clear that the Ninth Circuit has not embraced the “intent to benefit” rule of Ridglea. The Ninth Circuit has reiterated its conclusion that under the FCA “the requisite scienter is ‘the knowing presentation of what is known to be false’ and that ‘known to be false’ does not mean scientifically untrue; it means a lie.” United States ex rel. Hochman v. Nackman, 145 F.3d 1069, 1073 (9th Cir.1998) (citations omitted). The Ninth Circuit has given no indication that anything other than the traditional rules of vicarious liability apply in analyzing scienter, even if, as defendants assert, the damages at stake are substantial. See Protectus Alpha Nav. Co., Ltd. v. North Pacific Grain Growers, Inc., 767 F.2d 1379, 1387 (9th Cir.1985) (adopting the standard of Restatement (Second) of Torts § 909 and allowing “imposition of punitive damages” on a corporation for the “egregious acts of one employed in a managerial capacity and acting in the scope of employment”). This court will not take it upon itself to adopt an “intent to benefit” limitation that is absent from the statutory language of the FCA and the case law of this circuit. The evidence cited above suffices to establish a triable issue of fact regarding defendant SFHA’s knowledge of the false claims submitted by Williams and Rosales (upon Gilmore’s alleged orders) to HUD. As for defendant the City and County of San Francisco, however, plaintiffs offer only speculation. Plaintiff Rosales surmises that some of the Section 8 housing certificates “may have been issued by Mr. Gilmore as a political favor.” See Jones Deck, Exh. H, Rosales Statement at U00004. This statement is insufficient to survive a motion for summary judgment by the city. And the scienter of Williams, Jones and Gilmore - as agents of the SFHA which is, in turn, a legal agency of the city - is linked to the city by insufficient evidence for a reasonable jury to find in favor of plaintiffs on this point. Accordingly, the court GRANTS summary judgment in favor of the City and County of San Francisco on the Section 8 claims. Since none of the Section 8 allegations appear to involve defendant Albert Nelson, the court also GRANTS summary judgment in his favor on the first claim for relief. 4. Does the FCA Authorize Private Suit Against a Local Governmental Entity Such as the SFHA? Defendant SFHA argues that recent U.S. Supreme Court case law precludes private FCA claims against local governmental entities. Because this issue is a novel one, with little appellate authority directly on point, the court will address it in some detail. On June 24, 1999 the Supreme Court granted certiorari in United States ex rel. Stevens v. Vemont Agency of Natural Resources, a qui tarn action brought by a private plaintiff against a state agency under the FCA. See 527 U.S. 1034, 119 S.Ct. 2391, 144 L.Ed.2d 792 (1999). On November 19, 1999 the Supreme Court broadened its grant of certiorari to address the following question: “Does a private person have standing under Article III to litigate claims of fraud upon the government?” See 528 U.S. 1015, 120 S.Ct. 523, 145 L.Ed.2d 404 (1999). Ultimately, the Court addressed a relatively narrow question, to wit: “whether a private individual may bring suit in federal court on behalf of the United States against a State (or state agency) under the False Claims Act, 31 U.S.C. §§ 3729-3733.” Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765, 120 S.Ct. 1858, 1860, 146 L.Ed.2d 836 (2000). After Vermont Agency was decided, the parties submitted supplemental briefing on the applicability of that decision to the present case. This court heard further argument on the question. The issue now is whether the FCA, after the Vermont Agency decision, authorizes a private suit against a local entity such as the SFHA. a. The Vermont Agency Decision In Vermont Agency, the relator/plaintiff alleged that his former employer, the Vermont Agency of Natural Resources, had submitted false claims to the Environmental Protection Agency in connection with various federal grant programs. See id. at 1861. The United States elected not to intervene. See id. Defendant moved to dismiss, arguing that a state or state agency is not a “person” subject to liability under the FCA, and that a qui tarn action in federal court against a state or state agency is barred by the Eleventh Amendment. See id. The district court denied the motion, a divided panel of the Second Circuit affirmed on interlocutory appeal, and the Supreme Court granted certiorari. The Supreme Court, per Justice Scalia, reversed. “We hold that a private individual has standing to bring suit in federal court on behalf of the United States under the False Claims Act, 31 U.S.C. §§ 3729-3733, but that the False Claims Act does not subject a State (or state agency) to liability in such actions.” Id. at 1871. Since the Court resolved the question of state liability on statutory grounds, it did not reach the Eleventh Amendment defense. Id. at 1870. Analyzing the Article III limitations on qui tarn lawsuits brought by private individuals, the Court first restated what it called the “irreducible constitutional minimum” of standing. Id. at 1862 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The three requirements for a plaintiff to establish Article III standing are: (1) injury in fact; (2) causation; and (3) redressability. See id. at 1861-62. In the course of deciding that qui tarn relators do have standing under Article III, the Court focused most of its attention on the injury-in-fact requirement. Justice Scalia emphasized that the relator’s interest in the litigation, i.e., the bounty he will receive if successful, does not suffice to confer standing: “[A]n interest that is merely a ‘byproduct’ of the suit itself cannot give rise to a cognizable injury in fact for Article III standing purposes.” Id. at 1863. Rather, the Court concluded that the United States’ injury in fact suffices to confer standing on the qui tarn relator: “We believe ... that adequate basis for the relator’s suit for his bounty is to be found in the doctrine that the assignee of a claim has standing to assert the injury in fact suffered by the assignor.” Id. at 1863. In addressing whether states or state agencies are “persons” subject to qui tarn liability under the FCA, the Court ultimately held that the ambit of “person” in 31 U.S.C. § 3729(a) should not include states or state agencies: “In sum, we believe that various features of the FCA, both as originally enacted and as amended, far from providing the requisite affirmative indications that the term ‘person’ included States for purposes of qui tam liability, indicate quite the contrary.” Id. at 1870. The Court stated three reasons for concluding that “person,” within the meaning of 31 U.S.C. § 3729(a), does not comprehend States or state agencies. First, the Court adverted to the “longstanding interpretive presumption that ‘person’ does not include the sovereign.” Id. at 1866. Second, the Court reviewed the text and history of the FCA, from its enactment to the present day, finding no affirmative indication that the statute’s definition of “person” was ever intended to include States. See id. at 1867-68. Third, the Court analyzed three structural features of the current statutory scheme that are consistent with the presumption against imposing FCA liability on States or state agencies: (1) the express definition of “person” to include States in the FCA’s civil investigative demand provisions at 31 U.S.C. § 3733(Z)(4); (2) the availability of damages that are “essentially punitive in nature,” including treble damages and a civil penalty of up to $10,000 per claim, contrary to the common-law presumption against imposing punitive damages on “governmental entities”; and (3) the presence of a sister scheme to the FCA, the Program Fraud Civil Remedies Act of 1986, that does not include States as “persons” subject to liability. See id. at 1868-70. Finally, the Court mentioned two further considerations supporting the result: (1) the rule of statutory construction requiring Congress to make its intent to alter the usual constitutional balance between the States and the Federal government “unmistakably clear”; and (2) the doctrine that statutes should be construed so as to avoid difficult constitutional questions. See id. at 1870. The Court closed by reiterating that its statutory holding made it unnecessary to address the Eleventh Amendment issues raised, although it expressed “serious doubt” on that score. See id. In sum, the Vermont Agency decision stands for two propositions. First, private qui tam plaintiffs have Article III standing to sue under the FCA if the United States has suffered a cognizable injury in fact. Second, States and state agencies are not “persons” subject to liability under the FCA if the United States does not intervene in the suit. b. Contentions of the Parties The SFHA contends that Vermont Agency compels dismissal of plaintiffs’ first cause of action as a matter of law: In Vermont Agency, the Supreme Court held that although a private individual may have standing to bring suit in federal court on behalf of the United States under the False Claims Act, the individual may not sue states, state agencies, or other governmental entities under the Act. The Court grounded its decision on the language of the False Claims Act. It determined that a State is not a “person” within the meaning of 31 U.S.C. § 3729(a). A primary reason the court gave to support this result is that “the current version of the FCA imposes damages that are essentially punitive in nature, which would be inconsistent with state qui tam liability in light of the presumption against imposition of punitive damages on governmental entities.” Def. Notice (filed June 5, 2000) at 2 (citation omitted). Although the SFHA provides a more elaborate summary of Vermont Agency in its most recent brief, see Def. Suppl. Mem. (filed Aug. 11, 2000) at 3-5, it essentially advances the same argument. “In summary, Vermont Agency’s, broad language recognizing the presumptive immunity of ‘governmental entities’ from punitive statutes and remedies, as well as the entirety of its stated rationale, includes municipalities within its protective sweep.” Id. at 5. Plaintiffs argue to the contrary regarding the effect of Vermont Agency: “Plaintiffs respectfully submit that Vermont Agency does nothing more than establish their standing to maintain this action.” PI. Suppl. Mem. (filed Aug. 25, 2000) at 8. After reviewing the Supreme Court’s opinion with respect to the standing of qui tam relators, see id. at 3-4, plaintiffs contend that the Court’s holding as to states and state agencies is not applicable to local entities such as the SFHA. They say that, “[s]ince neither the SFHA nor San Francisco is a sovereign state or state agency, the Vermont Agency decision does not bar the FCA claim Plaintiffs assert against them.” Id. at 4. c. Application of Vermont Agency to This Case Plaintiffs are correct that Vermont Agency is not a bar to the present action. Defendants agree that the SFHA is neither a state nor state agency. The Supreme Court’s holding with respect to state defendants and their agencies under the FCA does not apply to the SFHA. Defendant SFHA seizes on language in Vermont Agency regarding “governmental entities” to get the protections of the Court’s holding. However, that language was dictum. In discussing the presumption against application of punitive statutes to “governmental entities,” the Court was simply explaining why its conclusion - ie., that the phrase “any person” in 31 U.S.C. § 3729(a) does not include states, or state agencies - is consistent with the FCA’s present features. There was no local entity before the Court in Vermont Agency, so it had no occasion to decide - and, contrary to the SFHA’s position, did not decide - that an entity such as the SFHA is protected from FCA liability. Given that the SFHA is not a state or state agency, plaintiffs are correct that the statutory holding in Vermont Agency does not bar plaintiffs’ claims in this case. But the Court did not hold that such local agencies are liable under the FCA. That issue is raised by defendant SFHA and is now before this court. So the Court’s reasoning in Vermont Agency is still relevant in deciding that issue. Since Vermont Agency and the cases preceding and following it provide guidance, some background is therefore appropriate. i. Cases Before Vermont Agency Before Vermont Agency, the few courts addressing the issue of local governmental liability were split. See Chandler v. Hektoen Institute for Medical Research, 35 F.Supp.2d 1078 (N.D.Ill.1999) (holding that county defendant is a “person” within meaning of FCA for purposes of suit by private plaintiff); U.S. ex rel. Garibaldi v. Orleans Parish School Board, 46 F.Supp.2d 546, 558-59 (E.D.La.1999) (concluding that states and municipalities are “persons” under the FCA); United States ex rel. Graber v. City of New York, 8 F.Supp.2d 343 (S.D.N.Y.1998) (holding that state and local governments and agencies are not “persons” under the FCA for purposes of suit by the U.S. government); see also United States e