Defining The Bounds Of The Public Disclosure Bar And The Scope Of 'News Media'

On March 3, 2015, a court in the Southern District of Texas granted a defendant pharmaceutical company's motion for summary judgment on claims brought under the False Claims Act for alleged false claims made through various government programs, including Medicaid and Medicare, for reimbursement for prescription drugs. United States ex rel. King v. Solvay S.A., No. 4:06-cv-02662 (S.D. Tex. Mar. 3 2015). The court held that the relators' claims were barred by the False Claims Act's public disclosure bar because the fraud alleged by the relators, specifically off-label marketing, was publicly disclosed in a 2002 New Yorker article that discussed generally the possibility of the type of off-label marketing scheme described in the complaint. The court found that a public disclosure need "not perfectly mirror everything alleged in the original complaint .... [I]t just has to set the government on the trail of fraud." This decision is one of several recent decisions exploring the outer bounds of the public disclosure bar in an effort to determine the required form and substance of a public disclosure.

Relevant History of the False Claims Act and the Public Disclosure Bar

The False Claims Act ("FCA") was passed in 1863, during the Civil War, to combat fraud by defense contractors and has been amended several times since then. The FCA was most recently amended in 2010 by the Patient Protection and Affordable Care Act ("ACA"), which narrowed the FCA's public disclosure bar, defined health care claims that included kickbacks as "false claims" under the FCA, and imposed a 60-day time limit on repaying overpayments, after the ACA itself provided that retention of the overpayment could trigger FCA liability.

Prior to the passage of the ACA, the FCA contained a jurisdictional bar to qui tam actions "based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media."1 The FCA also contained an exception to the public disclosure bar for relators who were the "original source" of the information upon which the FCA action was based. "Original source" was defined as "an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information."2

The ACA amended the public disclosure bar so that...