Former Employees Could Proceed With Whistleblower Cases Under False Claims Act

United States ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121 (9th Cir. 2015) (en banc)

Steven Hartpence and Geraldine Godecke ("Relators") alleged in these consolidated qui tam cases that their former employer (Kinetic) had fraudulently claimed reimbursements from Medicare. After the allegations of Medicare fraud were publicly disclosed, Relators each informed the government of the alleged fraud and then filed separate complaints in district court. Relying upon existing Ninth Circuit precedent, the district court dismissed Relators' claims because they were not "original sources" of the information under the False Claims Act ("FCA"). In this opinion, the Ninth Circuit, sitting en banc, overruled its earlier decision in Wang ex rel. United States v. FMC Corp., 975 F.3d 1412 (9th Cir. 1992), as wrongly decided and remanded the actions to the district court to consider whether Relators were an "original source" based on the following test: (1) Before filing his or her action, the whistleblower must voluntarily inform the...