05 December 2014

Ninth Circuit Agrees to Consider En Banc Whether to Loosen Original Source Requirement

On December 3, the Ninth Circuit ordered rehearing en banc in two consolidated False Claims Act cases addressing the FCA’s “original source” exception to the public disclosure bar. The district court dismissed the relators’ complaints on the ground (in part) that their claims were based on publicly disclosed information, and that the relators were not original sources. The district court, relying on the Ninth Circuit’s opinion in U.S. ex rel. Wang v. FMC Corp., 975 F. 2d 1412 (9th Cir. 1992), held that to qualify as an original source, the relator must have “played a part in publicly disclosing the allegations and information on which their suits were based.” The relators argue that this “hand in the disclosure” requirement was abrogated by the Supreme Court’s decision in Rockwell Int’l Corp., v. United States, 549 U.S. 457 (2007), in which the Court stated that the information about which the relator must have “direct and independent knowledge” to qualify as an original source is the information on which his or her claims are based. Relators contend that Rockwell abrogates Wang’s requirement that original source status be linked to the public disclosures at issue, i.e., that so long as a relator has direct and independent knowledge of the information on which his or her claims are based, it is irrelevant that the relator played no role in the public disclosure of those allegations. It is this issue which the Ninth Circuit is posed to consider en banc. If the Court concludes that Wang is no longer good law, it will be easier for relators to establish original source status in the Ninth Circuit.

The cases are US ex rel. Hartpence v. Kinetic Concepts, Inc. (12-55396) and US ex rel. Godecke v. Kinetic Concepts, Inc. (12-56117). The matter is scheduled to be reargued during the week of March 16, 2015.

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