Overview

The False Claims Act permits most individuals who possess knowledge of fraud against the Government to file a qui tam action on  the Government’s behalf, including individuals who may have participated in some way in the fraud  (unless they are convicted of a crime involving the subject conduct).  The fact that a whistle-blowing insider may have some involvement in the underlying conduct has long been acknowledged –when the Act was first passed in 1863, Congress expressed no compunction about “setting a rogue to catch a rogue.”

A suit may be barred, however, if it is based on information that has been publicly disclosed in a manner proscribed under the Act. Generally, information that may implicate the “public disclosure bar” includes information disclosed either in 1) the news media, 2) in criminal, civil or administrative hearings, or 3) as a result of other government activity, such as reports, hearings, audits or investigations by Congress, the General Accounting Office, or other governmental bodies.  The Supreme Court has also held that responses to Freedom of Information Act requests are a type of “public disclosure.”

If there has been a “public disclosure,”  the whistleblower can generally only be assured of a share of the Government’s recovery if they were  the “original source” of the information, as defined under the Act.  Generally, whether a whistleblower will quality as an “original source,” depends upon how much personal knowledge the whistleblower has of the underlying facts and whether the whistleblower provided the information to the Government prior to any public disclosure, or prior to filing a qui tam action.

Case law surrounding the public disclosure and original source provisions of the False Claims Act is complex and can vary based on where the case is filed.  In addition, the public disclosure and original source provisions of the Act were amended in 2010, and the application of the bar may therefore vary depending upon when the underlying conduct or any public disclosure occurred.  When public disclosure is a potential issue, the facts of the particular case should be examined with counsel to review the law of the relevant venue/jurisdiction and the applicable version or versions of the Act.

Separately, under the “first-to-file” bar, a whistleblower action may be barred if another whistleblower has already filed a qui tam action based on the same facts.  Notably, where an action has already been filed by another whistleblower, it may still be under seal and therefore unknown to a subsequent whistleblower considering filing their own action.  Where the existence of a previously-filed action is a possibility, the potential application of the “first-to-file” bar is another issue that should be considered with counsel.