District Court Judge Applies Public-Disclosure Bar to Dismiss FCA <i>Qui Tam</i> Suit With Prejudice
In a case defended by Sidley, a district court in the Central District recently granted a motion to dismiss with prejudice based on the public disclosure bar and, in doing so, clarified several important principles. United States of America, ex rel. Steven Mateski v. Raytheon Co., 2:06-cv-03614-ODW-FMO, Dkt. # 127. The Court recognized that the public-disclosure bar does not require a defendant to establish an exact one-to-one correspondence between public disclosures and allegations in a qui tam complaint. The Court rejected such a “particularity requirement” because the public disclosure bar broadly applies whenever a qui tam complaint rehashes “allegations or transactions” that are “substantially similar” to public disclosures. Slip op. at p. 4. “[P]ublic disclosures need not detail information underlying allegations or transactions so long as they supply enough information for the United States to pursue an investigation.” Id. at p. 6. In addition, the Court affirmed that a defendant need not prove that a qui tam complaint is “solely based upon” public disclosures to defeat jurisdiction – “a qui tam complaint partly based upon publicly disclosed information” is barred as well. Id. at p. 5. Finally, the Court found the relator failed to satisfy the three “independent source” requirements under Ninth Circuit law: (1) he did not “ha[ve] a hand in the public disclosure”; (2) he lacked “direct and independent knowledge” of the alleged fraud; and (3) he had not disclosed the basis of his qui tam allegations to the Government prior to filing the action. Id. pp. 7-9.