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When is a Whistleblower Case Barred by the Public Disclosure Rule?

When is a Whistleblower Case Barred by the Public Disclosure Rule: Business Litigation Attorneys Explain

The False Claims Act contains a provision commonly known as the public disclosure bar. This provision, in certain circumstances, prevents whistleblowers from bringing qui tam cases if those cases are based upon facts or fraudulent schemes that have already been disclosed to the public in certain limited ways. The underlying goal of the rule is to prevent a would-be whistleblower from claiming “credit” for information that the Government already knows or already had the opportunity to know. A person cannot learn about a fraud from watching the local TV news, for example, and then claim a qui tam reward for reporting that same fraud to the Government.

Under the public disclosure rule, a whistleblower’s lawsuit might be barred if substantially the same allegations or transactions were publicly disclosed in the following places: (1) in federal civil, criminal or administrative hearings where the Government was a party, (2) in Congressional or federal reports, hearings, audits or investigations, or (3) in the news media.

This rule has a number of exceptions. Most importantly, the public disclosure bar does not apply if the whistleblower is an “original source” of the information. An original source means a person who has voluntarily disclosed his or her information to the Government before the public disclosure took place, or a person who has knowledge that is independent of and materially adds to the publicly disclosed information. An original source must voluntarily provide his or her information to the Government before filing an action under the False Claims Act. This is spelled out in 31 U.S.C. 3730(e).

Public disclosure issues can be hotly litigated in False Claims Act cases. Many times, Defendants seize upon an alleged public disclosure in an effort to dismiss the whistleblower’s case. The lawyers frequently fight with one another over issues such as:

  • whether the alleged disclosure qualifies as a public disclosure under the False Claims Act;
  • whether the fraud set forth in the public disclosure is truly related or substantially the same as the fraud set forth in the whistleblower’s complaint; and
  • whether the whistleblower qualifies as an original source under the False Claims Act.

Moreover, even if a claim is barred by the public disclosure rule, Congress recently amended the False Claims Act to give the Government the power to oppose any dismissal based upon public disclosure grounds. In other words, the court cannot dismiss a whistleblower’s claim based upon public disclosure if the Government wants to keep the case alive.

If you are a potential whistleblower and you are worried that your information has already been publicly disclosed, you should contact a lawyer immediately to evaluate your situation. False Claims Act cases are highly specialized, so you should consult a lawyer who is familiar with these cases and has handled them successfully in the past. Call us at 877-915-4040 for a free and confidential consultation.

Contact our business litigation law firm in McCabe Rabin at 561-659-7878 for more information.

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