The False Claims Act makes it illegal to obtain government money through false claims.  Under the Act a private party, known as a relator, may bring a civil suit on the government’s behalf against an entity that has allegedly violated the Act.  A relator stands to take home up to 30% of the amount the government recovers.

The Act contains some exceptions to the right to bring suit.  One exception is the “public disclosure bar,” prohibiting a suit based on allegations that were publicly disclosed before the suit was filed.

But this exception itself contains an exception—an exception to the exception.  The “original source” exception provides that if the relator is an “original source,” he may pursue his suit even though the matter has already been made public.

What is an “original source”?  For 23 years the Ninth Circuit required a relator to meet three conditions: (1) he had direct and independent knowledge of the allegations underlying the claim, (2) he voluntarily provided information to the government before filing, and (3) he “had a hand in the public disclosure” of the allegations.

Steven Hartpence and Geraldine Godecke filed suits against medical device maker Kinetic Concepts, alleging Medicare fraud.  The allegations had been publicly disclosed before the suits were filed.  Steven and Geraldine argued that they were “original sources” because they had direct and independent knowledge of the facts and had voluntarily informed the government before filing.

The district court ruled against them because they couldn’t meet the third of the three conditions:  they hadn’t “had a hand in the public disclosure.”

On appeal, the Ninth Circuit reversed the dismissal and in doing so expressly overruled its own precedent.  In something of a mea culpa, the court observed that the statutory text of the original source exception contains only the first two of the three conditions; the third is nowhere to be found.

The case is U.S. ex rel. Hartpence v. Kinetic Concepts, No. 12-55396, 2015 BL 215978.