The Original Source Doctrine is an exception to the False Claims Act (FCA), which, as we have said previously, is a whistleblower statute dating back to the Civil War. The FCA allows whistleblowers to file lawsuits temporarily under seal to inform the Department of Justice about fraud occurring against the federal government. The Original Source Doctrine in this litigation has varied in its interpretations from court-to-court, but typically it requires the whistleblower to:
Another exception to the FCA is the Public Disclosure bar, which typically prohibits a whistleblower from filing a FCA suit based on information publicly available, such as from a public news report. These exceptions are potentially deadly to a would-be whistleblower’s case and that’s why whistleblowers should consult a lawyer with FCA experience.
The U.S. District Court for the Central District of California ruled recently that a whistleblower attempting to claim part of a $322 million FCA settlement with Scan Health Plan (Scan) had failed to demonstrate that he was the original source of information. See United States of America v. Scan Health Plan, CV 09-5013-JFW (JEMx) (C.D. Cal. June 1, 2015). The whistleblower, James Swoben, quit Scan and informed a state senator about overpayments made by California’s Medicaid program for patients’ long-term care. The state senator referred the whistleblower’s information to the State Controller’s Office, which opened an investigation. The Controller’s Office drafted and issued a report that was sent to the whistleblower prior to his filing an FCA complaint in 2009. Scan paid $322 million to settle a U.S. Department of Justice investigation into overpayments in August 2010 and Swoben sought his whistleblower share of the settlement under the FCA.
The federal government opposed Swoben’s request for his whistleblower share, however, contending that the allegations in his 2009 complaint were substantially the same as those in the Controller’s 2010 report and that his claim triggered the FCA’s public disclosure bar. Swoben contended that his complaint was not based on the report because it contained a fraud allegation that Scan received inflated payments under Medicare Part C’s managed care system and inflated patients’ risk adjustment scores.
The Court denied a partial summary judgment motion for the whistleblower and found that the State Controller’s 2010 report and Swoben’s 2009 complaint alleged the same scheme. The whistleblower’s claim that his complaint contained additional fraud allegations did not overcome the Court’s conclusion that the complaint was duplicative of the State Controller’s report. The Court ruled that Swoben was not the “original source” of the informat ion and therefore he could not recover.
Cases such as the one mentioned above demonstrate the many hurdles whistleblowers face. Often they are not only in a battle against the company defrauding the government but sometimes are placed in a position of opposition against the government itself when they are trying to obtain the reward they are rightfully entitled to. This is why it is important that if you are considering blowing the whistle on corporate fraud, you should contact a competent FCA whistleblower lawyer like those at Beasley Allen.
If you have a potential whistleblower case and want to discuss it with our firm, contact Andrew Brashier at Andrew.Brashier@beasleyallen.com, Archie Grubb at Archie.Grubb@beasleyallen.com, Larry Golston at Larry.Golston@beasleyallen.com, or Lance Gould at Lance.Gould@beasleyallen.com, or at 800-898-2034 or 334-269-2343. Each of these lawyers handles whistleblower lawsuits and would be glad to talk with anybody who needs information or wants to discuss a potential claim.
Source: JDSUPRA Business Advisor
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