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Fourth Circuit Holds that Disclosure to the Government is Not a “Public Disclosure” and Reinstates Long-Running Qui Tam Case

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The United States Court of Appeals for the Fourth Circuit recently held that a disclosure outside of the government is required to trigger the False Claims Act’s public disclosure bar. The FCA’s public disclosure bar requires courts to dismiss a qui tam action if the action is based on information already made public, unless the relator bringing the action was the original source of the information.

In United States ex rel. Wilson v. Graham County Soil & Water Conservation Dist., Relator Karen Wilson alleged fraud in a federally-funded storm cleanup program in North Carolina. After discovering the fraud, Wilson wrote a letter to a government official disclosing her concerns. A few months later, a government agency prepared an audit report that included the information disclosed by Wilson. The report was distributed to other state and federal law agencies. Wilson’s case survived two trips to the Supreme Court and was most recently dismissed in district court for lack of jurisdiction based on the public disclosure bar.

The district court relied on a Seventh Circuit case to dismiss Wilson’s complaint, holding that disclosure to a public official is sufficient to trigger the bar, absent a disclosure to the public at large. In its February 3, 2015 decision, the Fourth Circuit rejected the Seven Circuit’s approach and, falling in line with five other circuits, reasoned that Congress did not intend public disclosure to extend to disclosure to the government.

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