Qui Tam Relators Can Be “Original Source” Despite Prior Public Disclosures of Alleged Fraud

Steven Hartpence and Geraldine Godecke (“Relators”) each brought a qui tam case against their former employer, Kinetic, alleging that Kinetic had fraudulently claimed reimbursements from Medicare.  United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121 (9th Cir. 2015) (en band).  After the allegations of Medicare fraud had been publicly disclosed, Relators had each informed the government of the alleged fraud and then filed separate complaints in district court. Relying upon existing Ninth Circuit precedent, the district court dismissed Relators’ claims because they were not “original sources” of the information under the False Claims Act (“FCA”). 

In this opinion, the Ninth Circuit, sitting en banc, overruled its earlier decision in Wang ex rel. United States v. FMC Corp., 975 F.3d 1412 (9th Cir. 1992), 
as wrongly decided and remanded the actions to the district court to consider whether Relators were an “original source.”  The Court applied a two part test: (1) Before filing his or her action, the whistleblower must voluntarily inform the government of the facts that underlie the allegations of his or her complaint; and (2) He or she must have direct and independent knowledge of the allegations underlying the complaint. 

Abrogating its earlier precedent, the Court held that it does not matter whether the alleged whistleblower also played a role in the public disclosure of the allegations.

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