The Restoration of the False Claims Act’s Public Disclosure Bar

No provision of the federal False Claims Act has been more misunderstood than the Act’s public disclosure bar, 31 U.S.C. § 3729(e)(4). In drafting this language a quarter of century ago, Congress simply intended to bar parasitic relators who merely copy fraud allegations from specific types of public sources. However, through judicial ingenuity, some courts have attached various atextual requirements that have veered the bar off its intended goal.

Recently, Congress sought to put the Act back on track, when it amended the public disclosure bar provision. Unfortunately, when Congress righted the proverbial ship, it failed to include a retroactivity provision. The end result is that a generation of False Claims Act cases will have to wrestle with the old public disclosure bar provision and its wayward case law.

Hopefully, courts will look to the revised public disclosure bar as a guiding light for how to apply the old provision. Indeed, this appears to be the trend in recent court decisions. At the very least, courts have gone to greater lengths to preclude only truly parasitic qui tam suits, as opposed to those that mirror snippets of publicly disclosed information. For example, this week, in U.S. ex rel. Repko v. Guthrie Clinic, P.C., No. 3:04cv1556 (M.D. Pa. April 18, 2011), the court refused to preclude evidence that showed that the relator had not based his action on publicly disclosed allegations. Previously, the court would have compared the qui tam complaint with the publicly disclosed allegations, with little concern over whether the action was actually “based upon” the public disclosure. This is a giant step forward for the qui tam community and the public fisc..

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.