To qualify as an original source under The False Claims Act, a relator must establish that he: (1) has direct and independent knowledge of the information on which the allegations are based; and (2) has voluntarily provided the information to the government before filing the action. A whistleblower who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the government before filing a qui tam lawsuit will be considered an “original source.” 31 U.S.C. § 3730(e)(4)(B)
In either case, the Relator must voluntarily disclose the information to the government before filing her qui tam lawsuit. The phrase “materially adds” was added in 2010 through the Affordable Care Act.
SCOTUS Interpretation of Public Disclosure Bar:
Rockwell Int’l Corp. v. United States, 549 U.S. 457 (2007) (“information on which the allegations are based” refers to the relator’s allegations rather than the publicly disclosed allegations; “allegations” includes those in the original complaint and any amended complaint).
Interpretation of “materially adds” across circuits:
- United States ex rel. Moore & Co., P.A. v. Majestic Blue Fisheries, LLC, 812 F.ed 294, 307 (3d Cir. Feb. 2, 2016) (information that helps supply the “who, what, when, where and how” of the fraud as required by Federal Rule of Civil Procedure 9(b) constitutes a material addition).
- United States ex rel. Osheroff v. Humana, Inc., 776 F.3d 805, 815 (11th Cir. 2015) (relator’s information must be more than merely “background information that helps one understand or contextualize a public disclosure.”).
- United States ex rel. Paulos v. Stryker Corp., 762 F.3d 688, 694 (8th Cir. 2014) (a material addition is anything that “materially contributes anything of import to the public knowledge about the alleged fraud.”).
4th Circuit Court of Appeals
United States ex rel. Black v. Health & Hosp. Corp., 494 Fed. Appx. 285 (4th Cir., Aug. 17, 2012)
- Relator alleging Defendant’s executives and state officials acted “in concert” to draft a proposed amendment to the Indiana State Plan that was designed to take advantage of the Medicaid upper payment limit (UPL) regulation that permitted state Medicaid agencies to claim and receive additional UPL payments if they actually expended such amounts on nursing facility care. Court held relator did not prove he was original source of information in complaint.
- In order to achieve original source status, Relator must prove beyond a preponderance of the evidence that he has “direct and independent knowledge of the information on which his allegations are based and has voluntarily provided the information to the Government[.]” 31 U.S.C. § 3730(e)(4)(B) (Pre-March 2010). Black, 494 Fed. Appx. 285, 295-96.
- A relator’s knowledge is “direct” if “he acquired it through his own efforts, without an intervening agency,” and it is “independent” if “the knowledge is not dependent on public disclosure.” Grayson, 221 F.3d at 583.
United States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337 (4th Cir., Feb. 12, 2009).
- Relator alleging Doctor performed medically unnecessary procedures on patients, billed for those, as well as billed for procedures that were not conducted. Court held Relator failed to provide specific facts, relied on generalities and conclusory statements.
- “[A] person’s “mere suspicion that there must be a false or fraudulent claim lurking around somewhere simply does not carry his burden of proving that he is entitled to original source status.” 555 F.3d at 353.