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Federal Appeals Court Rejects Narrow View of “Original Source” Rule

Supreme Court PillarsThe United States Court of Appeals for the District of Columbia circuit released its opinion on Tuesday in the case of United States ex rel. Davis v. District of Columbia, No.  11-7039 (D.C. Cir. May, 15 2012), rejecting the Circuit’s previous restrictive reading of the “original source” provision of the False Claims Act and subsequently embracing an understanding of the provision consistent with the Supreme Court’s decision in Rockwell International v.United States, 549 U.S. 457 (2007) and amendments to the provision enacted by Congress in 2010 .

Prior to today’s opinion, the circuit court had held that a qui tam relator, commonly referred to as a whistleblower, must make a disclosure to the government concerning a False Claims Act allegation before the existence of any public disclosure regarding the same allegation.  Today’s decision recognizes that such a view of the “original source” provision of the False Claims Act “bars productive suits” and is ultimately inconsistent with the Supreme Court’s recent decision in Rockwell International.

Moreover, the court noted that recent congressional amendments to the False Claims Act definitively answer any questions left open by the prior law, recognizing that the False Claims Act now considers allowable original sources of information to include whistleblower with original knowledge of fraud that materially adds to an investigation, even where an allegation has already been publicly disclosed.

Although Congress and the Courts have recognized the intent of the False Claims Act as encouraging meritorious whistleblower actions to proceed, it remains an essential first step to ensure a sufficiently plead complaint is filed before a competing claim is filed on the same allegations, potentially precluding the ability to bring a False Claims Act action on behalf of the United States seeking financial penalties to recover from fraud on the government.