U.S. Brief Argues For Expansive View of Public Disclosure Bar

Posted by Kristin Graham Koehler and Joshua Fougere

In a peculiar twist on a familiar issue, the United States recently filed a brief taking a broad view of the so-called “public disclosure” bar to argue that the U.S. District Court for the Central District of California lacked subject matter jurisdiction over a relator’s claims.

By way of background, relator James Swoben filed suit against SCAN Health Plan and, eventually, a number of other defendants. The United States and California settled with SCAN in 2012 and subsequently declined to intervene against the remaining defendants. When Swoben sought a relator’s share of the SCAN settlement, however, the government refused and took the position that the basis for Swoben’s claims against SCAN had been publicly disclosed in a 2008 report by California’s Controller’s Office. Swoben then moved for partial summary judgment, arguing that the report did not trigger the public disclosure bar because his claims were not “based upon the public disclosure of allegations or transactions in” the report, as required under the then-effective FCA provision. See 31 U.S.C. § 3730(e)(4)(A)(2008).

The government filed a motion in opposition. Swoben’s complaint alleged that SCAN had received duplicate payments from Medicare and Medi-Cal for some of the same services, and, according to the government, the Controller’s report also “allege[d] that SCAN appeared to be doing so.” U.S. Br. 3. That high-level assertion set the tone for the remainder of the brief. In it, the government argued in no uncertain terms that the statute’s “based upon” and “allegations or transactions” language must be read liberally: it “did not matter” if the Controller’s report failed to allege fraud, false claims, or “[f]acts [s]howing the [s]ame.” Id. at 12–18. To the government’s eye, the report contained enough to say that Swoben’s claims were “‘based,’ at least in part, ‘upon'” it and “stated the material transactions underlying” the purported fraud that was alleged expressly and in more detail in Swoben’s complaint. Id.

These arguments may prove useful to FCA defendants down the road: whether or not the government intervenes, defendants should consider ways to invoke the United States’ expansive and firmly articulated view of the applicable public disclosure bar to argue for the dismissal of FCA claims.

Click here to view a copy of the relator’s brief and here to view the government’s brief.