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Two Recent Court Decisions to Make it Easier for Whistleblowers to File Qui Tam Lawsuits

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Court Decisions Make it Easier to File Qui Tam Lawsuits

Court Decisions Make it Easier to File Qui Tam Lawsuits

Filing a qui tam lawsuit under the False Claims Act (FCA) will now be easier for whistleblowers, thanks to two recent court decisions.

The rulings center around the “public disclosure bar,” which dismisses a whistleblower’s case if it is “based upon the public exposure of allegations or transactions” in specific ways, such as via a government “report, hearing, audit or investigation.” The bar is not applicable if the whistleblower is the original source of the information.

The U.S. Court of Appeals for the Seventh Circuit ruled in 1999 that the public disclosure bar did apply if information given to a government official was also disclosed publicly. This meant that whistleblower cases could be dismissed if information was disclosed to the government but never shared with the general public.

The U.S. Court of Appeals for the Fourth Circuit recently rejected the Seventh Circuit’s ruling when it considered a case that has been ongoing for 14 years and considered whether “public disclosures” include reports that have been distributed within the government but not the general public. In that case, an employee of a county government program intended to help counties affected by storm damage raised concerns about fraud to the U.S. Department of Agriculture (USDA) in 1995. An audit was issued at one of the counties the following year, and a report was issued substantiating the whistleblower’s claims. A 1997 report generated after a second investigation substantiated the whistleblower’s claims. Various state and federal government agencies received these reports, but they were never shared with the public, and the Fourth Circuit ruled that the reports could not be considered “public disclosures.” The court ruled that the public disclosure bar only applies when the information is shared with the public, or considered public domain.

The U.S. Court of Appeals for the Sixth Circuit reached a similar conclusion a few weeks later. In that case, the whistleblower sued the operator of a hospital, alleging that the Defendant overbilled for certain services and submitted false claims to Medicare, Medicaid and other government-funded health care programs. The government began auditing the Defendant’s billing practices in 2006, which led to a 2009 administrative settlement. The case was dismissed by the district court based on the premise that the audit counted as “public disclosure,” even though the whistleblower was not aware of this information. The Sixth Circuit overturned the district court’s decision, ruling that since government is not “public,” information shared with the government could not be considered “public disclosure.”
 disclaimer: This article: Two Recent Court Decisions to Make it Easier for Whistleblowers to File Qui Tam Lawsuits was posted on Monday, March 9th, 2015 at 4:37 pm at and is filed under Fraud Lawsuits.

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