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False Claims Act ruling alters whistleblower standards

Posted On: Jul. 8, 2015 12:00 AM CST

A whistleblower does not need to play a role in the public disclosure of a wrongdoing, a federal appeals court has ruled, reversing a lower court ruling that dismissed a case on the grounds that the whistleblowers were not involved in their claim becoming public.

The 9th U.S. Circuit Court of Appeals in San Francisco on Tuesday reversed the dismissals of U.S. ex rel. Steven J. Hartpence v. Kinetic Concepts Inc. and U.S. ex rel. Geraldine Godecke v. Kinetic Concepts Inc. by the U.S. District Court of the Central District of California in 2012 revising a past requirement of the 23-year-old False Claims Act in the process.

Steven Hartpence and Geraldine Godecke had filed complaints in 2008 that their former employer, medical device manufacturer Kinetic Concepts, had submitted fraudulent reimbursement claims to Medicare.

In its en banc ruling, the 9th Circuit stated it doesn’t matter if the whistleblower plays a role in the public disclosure of the allegations or not, revoking the original requirement of the False Claims Act, decided in Wang ex. rel. U.S. v. FMC Corp. in 1992, also by the 9th Circuit.

The current 9th Circuit judges decided the False Claims Act has only two requirements for a whistleblower to be an original source: The government must be informed of the allegations before they are filed, and the whistleblower must have direct knowledge of the allegations.