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The Public Disclosure Bar and Original Source Exception
Creation of the Rules
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The Public Disclosure Bar Is Narrowed in 2010
The 2010 amendments to the FCA changes the public disclosure bar in many respects to the benefit of both the Government and qui tam relators. The Patient Protection and Affordable Care Act (PPACA) further narrows the public disclosure defense in three significant ways.
- First, the PPACA provides that the court shall dismiss a case if there has been public disclosure unless “opposed by the Government.” Under the amended version of the law, the Government has a ‘veto’ over the defendant’s motion to dismiss on public disclosure grounds.
- Second, the public disclosure defense is no longer labeled as “jurisdictional.” Consequently, it is now much more difficult to resolve the public disclosure issue at the outset of the case, prior to the expense process associated with discovery.
- Third, public disclosures are narrowed solely to federal investigations, hearings, reports, and audits. Overruling a recent Supreme Court Case, the amendment excludes state reports, investigations, and audits from qualifying as public disclosures. Additionally, the amendment excludes information disclosed during private litigation unless the federal government or its agent was a party. Effectively, information from state proceedings and private litigation will not trigger the public disclosure defense unless it was reported in the news media or in a federal proceeding.
The Original Source Exception Is Expanded in 2010
The PPACA also eliminates the “direct and independent” knowledge requirement pertaining to original sources. Now a plaintiff meets the original source exception if:
- 1) the plaintiff disclosed the information to the government before the public disclosure is made, OR
- 2) the plaintiff had knowledge independent of the disclosure that “materially adds” to the disclosure and is provided to the government before the plaintiff files his or her lawsuit.
These amendments apply to conduct occurring after March 23, 2010.
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