Search Site
Menu
Ninth Circuit Decision Makes it Easier for Whistleblowers to Bring Qui Tam Actions

In a new, important development for how False Claims Act cases will proceed, the U.S. Ninth Circuit Court of Appeals overturned precedent that had limited whistleblowers’ ability to recover money reimbursed to the federal government under the FCA to a more significant extent than a large number of other circuits. The ruling came in the case of United States ex rel. Hartpence v. Kinetic Concepts, Inc.

The FCA generally does not allow people to knowingly submit fraudulent or otherwise false claims to the federal government for payment. Private parties (referred to in the legal world as “relators”) are allowed to file civil suits called “qui tam actions” under the FCA on behalf of the U.S. government against any entities that are believed to have submitted fraudulent claims to the government for payment. If the government does not intervene in the suit, the relator could be paid between 25 and 30 percent of any money recovered.

However, the FCA does not allow federal courts jurisdiction over some qui tam actions because of the “public disclosure” barrier to recovery. What this means is that if the fraud has been publicly disclosed, federal courts do not have jurisdiction over FCA claims unless the relator in the case is an original source of the information. This can present of complexities, as the definition for the terms “information” and “original source” may vary. The Ninth Circuit used to use a three-part test to determine if a relator was an original source of the information.

In this case, the relators were Hartpence and Godecke, who allegedly uncovered information that Kinetic Concepts, Inc. (their employer) had knowingly submitted fraudulent Medicare claims by purposefully misusing a billing code. Before they filed the complaints, however, the fraud was publicly disclosed by KCI in a federal audit report — and so a district court ruled Hartpence and Godecke were not original sources because they could not prove they played a role in the information being publicly disclosed.

The Ninth Circuit, for its part, ruled the district court was mistaken, stating that other circuits have opted to not use the “having a hand in the public disclosure” requirement. Thus, whistleblowers acting as relators have a greater ability to recover funds when they report wrongdoing.

For more information on how this decision could affect a case, consult respected Dallas Attorney Steve Kardell with Whistleblower Law for Managers.

Leave a Reply

Your email address will not be published. Required fields are marked *

Honors
Our Office
  • Dallas Office
    4514 Cole Ave
    #600
    Dallas, Texas 75205
    Phone: 214-306-8045
    Fax: 469-729-9926
Testimonials
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Incredible knowledge of employee related concerns and equally brilliant knowledge of health care regulations, standards of practice. I would recommend this firm to anyone."  -V.B.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

FOLLOW US
Facebook Twitter Linkedin RSS Feed JD Supra