Prior to 2010, some courts misread the False Claims Act’s public disclosure bar to dismiss qui tam actions, even when the supposed “public disclosure” had little chance of alerting the government to the alleged fraud. Congress responded in 2010 by narrowing the public disclosure bar’s language and expanding its original source exception. At that time, Congress did not further clarify or define the type of “news media” that triggers the public disclosure bar, for the courts had been sensibly reading this language to apply only to legitimate news sources. In retrospect, further clarification may have been needed.
The latest aberrant reading of “news media” came out a few days ago from the Eleventh Circuit Court of Appeals. In this case, the Court held that promotional websites qualify as “news media,” thus triggering the False Claims Act’s public disclosure bar. United States ex rel. Osheroff v. Humana Inc., No. 13-15278 (11th Cir. Jan. 16, 2015). Specifically, the Court determined that the defendant’s promotional websites and newspaper advertisements supposedly touted its own alleged fraud, sufficiently triggering the public disclosure bar. The Court opined that these sources qualify as “news media” because they “disseminate information.”
Then, the Court ruled that the relator did not qualify for the public disclosure bar’s original source exception, for his detailed allegations did not “materially add” to the alleged fraud supposedly detailed on the defendant’s websites.
The Eleventh Circuit’s decision does not make sense. Congress amended the public disclosure bar in 2010 to rid the law of such readings that shield fraudsters. Hopefully, other courts will cast a jaundiced eye on this wayward decision.
More information for whistleblowers is located at the Nolan Auerbach & White website.