On October 2, 2015, the Supreme Court of the United States denied a petition for writ of certiorari in a case that sought to resolve an apparent circuit split concerning one of the most frequently litigated issues under the False Claims Act (FCA)—the circumstances in which the disclosure of allegations in a government audit or investigation can trigger the public disclosure bar. Chattanooga-Hamilton County Hospital Authority v. U.S. ex rel. Whipple, No. 15-96. The petition emanated from a decision we reported on in March 2015 that was issued by the United States Court of Appeals for the Sixth Circuit. U.S. ex rel. Whipple v. Chattanooga-Hamilton County Hospital Authority, 782 F.3d 260 (6th Cir. 2015). In Whipple, the Sixth Circuit held that information in the possession of the government does not trigger the public disclosure bar because it is not in the “public domain.”
In the petition to the Supreme Court, the petitioner framed the issue for review as involving two separate circuit splits: (1) whether investigatory disclosures to a responsible public official trigger the public disclosure bar (yes in the Seventh Circuit; no in the First, Fourth, Sixth, Ninth, Eleventh and D.C. Circuits, which require the disclosures to be made “outside” the government); and (2) whether investigatory disclosures to “innocent employees” (i.e., defendant “insiders” with no involvement in the alleged fraud) trigger the public disclosure bar (yes in the Second Circuit; no in the Sixth and Ninth Circuits). Although the Supreme Court declined to grant cert, the fact remains that the circuits take a somewhat different approach concerning the impact of information revealed during a government investigation on the application of the pre–2011 version of the public disclosure bar, particularly in circumstances where the investigation/audit is closed from the public. Regardless of the specific approach, government disclosures remain fertile territory to attack claims brought under the FCA.
