False Claims Act

Introduction “Statutory interpretation” refers to the process of understanding the words in a law that Congress wrote.[footnote] See Valerie C. Brannon, Cong. Rsch. Serv., R45153, Statutory Interpretation: Theories, Tools, and Trends 4 (2022) (describing how courts faced with a statute “do not simply determine, based on equity or natural justice, what would have been a reasonable course of action under the circumstances” but instead determine what the statute means and “apply the statutory law to resolve the dispute”).[/footnote] Sometimes—in easy cases—“statutory interpretation” just means reading. But other cases are tough and call for rigorous analysis to determine what the law really says. Congress, as it turns out, is not always clear. Rather than throw up their hands, judges reach for dictionaries,[footnote]See, e.g., Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 565–69 (2012) (citing more than ten dictionaries to interpret the meaning of “interpreter” in the Court Interpreters Act).[/footnote] history books,[footnote]See, e.g., Bostock v. Clayton County, 140 S. Ct. 1731, 1752 (2020) (interpreting the phrase “on the basis of sex” in the Civil Rights Act of 1964 and citing a book on that statute’s history).[/footnote] and sometimes even children’s books[footnote]See, e.g., Yates v. United States, 574 U.S. 528, 553 (2015) (Kagan, J., dissenting) (interpreting “tangible object” in the Sarbanes–Oxley Act with reference to Dr. Seuss, One Fish Two Fish Red Fish Blue Fish (1960)).[/footnote] to figure out what ambiguous statutes mean. No doubt, the solutions judges give can be just as puzzling as the questions they answer. But when they tell us to accept that tomatoes are vegetables[footnote]See Nix v. Hedden, 149 U.S. 304, 307 (1893) (holding that tomatoes are vegetables for the purpose of assessing tariffs, even though, “[b]otanically speaking, tomatoes are the fruit of a vine”).[/footnote] and fish are not tangible objects,[footnote]See Yates , 574 U.S. at 532 (noting that although a “fish is no doubt an object that is tangible,” it is not a “tangible object” under the Sarbanes–Oxley Act).[/footnote] they don’t just ask us to take their word. They provide reasoned and sometimes even thoughtful analysis to trace how they got there. So—setting aside whether their decisions are right—at least they show their work. But, unfortunately, not every question of statutory interpretation receives the attention it deserves. This Note considers one of those neglected questions: What does “news media” mean? That phrase appears in the False Claims Act (FCA), the principal federal statute making it illegal to defraud the government.[footnote]Press Release, DOJ, Justice Department’s False Claims Act Settlements and Judgments Exceed $5.6 Billion in Fiscal Year 2021 (Feb. 1, 2022), https://www.justice.gov/opa/pr/justice-department-s-false-claims-act-settlements-and-judgments-exceed-56-billion-fiscal-year [https://perma.cc/KQU4-R2N5] (“[T]he False Claims Act serves as the government’s primary civil tool to redress false claims involving a multitude of . . . government operations and functions.”).[/footnote] Unlike practically every other federal law on the books today,[footnote]See Charles Doyle, Cong. Rsch. Serv., R40785, Qui Tam: The False Claims Act and Related Federal Statutes 2 (2021) (noting only two existing federal qui tam statutes: the FCA and a Native American protection provision).[/footnote] the FCA not only empowers the Department of Justice (DOJ) to go after fraudsters, but it also enlists everyone else by promising a financial reward to individuals who bring claims on behalf of the government.[footnote]See infra section I.A (discussing the origins of qui tam).[/footnote] These so-called qui tam actions are based on the rationale that encouraging individuals (known as relators) to blow the whistle on fraud can help bring it to the government’s attention while deterring would-be fraudsters in the first place.[footnote]See infra section I.A (describing the history and policy underlying qui tam actions).[/footnote] As it turns out, this theory works in practice: In 2022, qui tam suits accounted for nearly ninety percent of the government’s $2.2 billion recovery under the FCA.[footnote]See Press Release, DOJ, False Claims Act Settlements and Judgments Exceed $2 Billion in Fiscal Year 2022 (Feb. 7, 2023), https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-2-billion-fiscal-year-2022 [https://perma.cc/7U95-H624]. In the past ten years, the portion of settlements and judgments resulting from qui tam suits has ranged from thirty percent (in 2021) to ninety-four percent (in 2013). See DOJ, Fraud Statistics – Overview: October 1, 1986 – September 30, 2022, https://www.justice.gov/opa/press-release/file/1567691/download [https://perma.cc/FVW5-LGUQ] (last visited Feb. 19, 2023).[/footnote] But there is a catch. Individuals who bring claims based on fraud that was already disclosed in the “news media” are ineligible to recover and may even have their cases tossed out entirely.[footnote]31 U.S.C. § 3730(e) (2018).[/footnote] That restriction lies in a provision of the FCA known as the public disclosure bar.[footnote]See infra section I.B (describing the genesis of the public disclosure bar).[/footnote] Despite its name, it does not block claims based broadly on information that has been publicly disclosed.[footnote]See Schindler Elevator Corp. v. United States ex rel. Kirk, 563 U.S. 401, 414 (2011) (“By its plain terms, the public disclosure bar applies to some methods of public disclosure and not to others.”); United States ex rel. Putnam v. E. Idaho Reg’l Med. Ctr., No. CIV. 07-192 E-BLW, 2009 WL 3806337, at *2 (D. Idaho Nov. 2, 2009) (“[A] disclosure of allegations underlying a qui tam action made outside of one of the enumerated fora—whether made at a public park or in a deposition—simply cannot constitute a ‘public disclosure’ under § 3730(e)(4)(A).”); Claire M. Sylvia, The False Claims Act: Fraud Against the Government § 11:40 (2022) (“Although nicknamed the ‘public disclosure bar,’ section 3730(e)(4) is not implicated by all public disclosures of information. Section 3730(e)(4) is implicated only by public disclosures of . . . information in certain fora. If those fora are not implicated, the inquiry is at an end.” (footnote omitted)).[/footnote] Instead, it bars claims based on information in three specific categories: (1) “Federal criminal, civil, or administrative hearing[s] in which the Government or its agent is a party”; (2) “congressional, Government Accountability Office, or other Federal report[s], hearing[s], audit[s], or investigation[s]”; or (3) “from the news media.”[footnote]31 U.S.C. § 3730(e)(4)(A).[/footnote] If a suit is based on “substantially the same” allegations as ones appearing in any of those categories, the defendant can move for dismissal.[footnote]Id.[/footnote] The public disclosure bar’s potential fatality to qui tam actions has made it the focus of significant attention: In 2010, Congress amended the provision’s first two categories,[footnote]Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 10104(j)(2), 124 Stat. 119, 901 (2010) (amending 31 U.S.C. § 3730(e)(4)).[/footnote] and the Supreme Court has considered the meaning of particular words appearing in those two categories’ statutory text three times since 2007.[footnote] Schindler , 563 U.S. at 404 (holding that a federal agency’s response to requests under the Freedom of Information Act is a “report” under the bar); Graham Cnty. Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280, 283 (2010) (interpreting “administrative” in the second prong of the public disclosure bar); Rockwell Int’l Corp. v. United States, 549 U.S. 457, 467 (2007) (interpreting the “original source” exception to the bar), superseded by statute, Pub. L. No. 111-148, §10104(j)(2), 124 Stat. 119, 901 (2010) (amending 31 U.S.C. § 3730(e)(4)).[/footnote] Meanwhile, the third category—“from the news media”—has evaded Supreme Court scrutiny as lower courts have interpreted the phrase in wildly expansive ways, with some going so far as to say that something can constitute news media merely by virtue of its publication online.[footnote]See, e.g., United States ex rel. Repko v. Guthrie Clinic, P.C., No. 3:04cv1556, 2011 WL 3875987, at *7 (M.D. Pa. Sept. 1, 2011) (“[P]ublically available websites can be public disclosures within the meaning of the FCA.”), aff’d, 490 F. App’x 502 (3d Cir. 2012); United States ex rel. Brown v. Walt Disney World Co., No. 6:06-cv-1943-Orl-22KRS, 2008 WL 2561975, at *4 & n.7 (M.D. Fla. June 24, 2008) (concluding that a Wikipedia page constitutes “news media” because “[t]he internet can qualify as ‘news media’”), aff’d, 361 F. App’x 66 (11th Cir. 2010).[/footnote] Plainly, courts have stretched the meaning of the phrase far beyond the text and policy of the statute. Despite the attention some parts of the FCA have garnered, this third category, “news media,” has been the subject of surprisingly little inquiry.[footnote]E.g., R. Ben Sperry, The False Claims Act’s Public Disclosure Bar: Does It Apply to ‘New Media’?, Westlaw J. Gov’t Cont., Nov. 29, 2010, at *1 (“Current jurisprudence on the disclosure bar has done little, though, to flesh out the limits of the meaning of ‘news media,’ which are frequent sources of information for qui tam relators.”).[/footnote] Beyond observing that the term reveals that the public disclosure bar, as a whole, has a “broad[] sweep,”[footnote] Graham Cnty ., 559 U.S. at 290.[/footnote] the Court has not confronted what “news media” means in light of recent lower court decisions interpreting the term broadly enough to capture health clinic websites and online university faculty profiles.[footnote]See United States ex rel. Osheroff v. Humana, Inc., 776 F.3d 805, 813 (11th Cir. 2015) (holding that health clinics’ websites constitute “news media”); United States ex rel. Juan Hong v. Newport Sensors, Inc., No. SACV 13-1164-JLS (JPRx), 2016 WL 8929246, at *5 (C.D. Cal. May 19, 2016) (finding that faculty profiles on the University of California, Irvine and Columbia University’s websites were publicly disclosed because “[i]nformation publicly available on the Internet generally qualifies as ‘news media’”), aff’d mem., 713 F. App’x 724 (9th Cir.), amended by 728 F. App’x 660 (9th Cir. 2018).[/footnote] The phrase has not yet produced a split among circuit courts, but given the FCA’s frequency on the Supreme Court’s docket[footnote]Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, 575 U.S. 650, 664 (2015) (noting that an action is no longer “pending” under the first-to-file rule when that suit is dismissed); Schindler , 563 U.S. at 404 (2011) (holding that a federal agency’s response to requests under the Freedom of Information Act constitutes a “report”); Graham Cnty ., 559 U.S. at 283 (interpreting the word “administrative”); Allison Engine Co. v. United States ex rel. Sanders, 553 U.S. 662, 665 (2008) (interpreting phrases that define the acts for which defendants are liable); Rockwell Int’l Corp ., 549 U.S. at 467 (interpreting the “original source” exception to the public disclosure bar); Cook County v. United States ex rel. Chandler, 538 U.S. 119, 122 (2003) (holding that a local government is a “person” who can be liable under the FCA); Vt. Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765, 787 (2000) (holding that a state or its agency is not a “person” who can be liable under the FCA).[/footnote] and courts’ boundary-pushing interpretations, one may be forming.[footnote]See United States ex rel. Integra Med Analytics LLC v. Providence Health & Servs., No. CV 17-1694 PSG (SSx), 2019 WL 3282619, at *14–16 (C.D. Cal. July 16, 2019) (criticizing expansive interpretations of the phrase and suggesting five guideposts to interpret “news media”), rev’d and remanded sub nom. Integra Med Analytics LLC v. Providence Health & Servs., 854 F. App’x 840 (9th Cir. 2021); see also Silbersher v. Allergan Inc., 506 F. Supp. 3d 772, 805–07 (N.D. Cal. 2020) (endorsing and applying the Integra guideposts to find that information on the Patent Application Information Retrieval website was not publicly disclosed), rev’d and remanded sub nom. United States v. Allergan, Inc., 46 F.4th 991, 999–1000 (9th Cir. 2022) (holding that the website does constitute a public disclosure as an “other Federal . . . hearing” in another prong of the bar without reaching the question of whether the “news media” bar applies).[/footnote] When it comes to understanding “news media,” courts offer little guidance and no consistency. These unbounded interpretations of the phrase “news media” are troubling as a matter of statutory interpretation and legal doctrine, but even more so because they pose a threat to the individuals who make justice under the FCA possible. Whether a source counts as news media matters to the individuals trying to raise claims under the FCA and to the corporate defendants trying to bury them. The problem lies not only with the courts who have read “news media” broadly. Other courts have been more restrained in their approaches to applying the category to novel sources, but they lack a cohesive and unified approach to interpreting the phrase.[footnote]See, e.g., United States ex rel. Moore & Co. v. Majestic Blue Fisheries, LLC, 69 F. Supp. 3d 416, 425 (D. Del. 2014) (emphasizing the source’s lack of journalistic quality in finding that material from CNN iReport did not constitute “news media”), rev’d, 812 F.3d 294 (3d Cir. 2016), remanded sub nom. United States v. Majestic Blue Fisheries, LLC, 196 F. Supp. 3d 436 (D. Del. 2016); United States v. Pac. Health Corp., No. CV 12-960 RSWL (SHx), 2014 WL 12859894, at *8 n.6 (C.D. Cal. May 30, 2014) (holding that a review accessible on Google Maps did not constitute “news media” because it did not resemble traditional news).[/footnote] Without a common foundation or set of principles to guide courts, broad readings of “news media” threaten to “swallow limitations that Congress specifically placed on the scope of the public disclosure bar” altogether.[footnote] Integra , 2019 WL 3282619, at *11.[/footnote] This Note intervenes by building on an innovative district court opinion[footnote]Id. at *14–16.[/footnote] and providing the first academic account of this phenomenon with a solution to courts’ unbounded interpretations of “news media.” In Part I, this Note discusses the history of the FCA as a Civil War statute with roots in Roman law. It traces the evolution of the public disclosure bar as Congress has sought to strike a balance between foreclosing opportunistic litigation on the one hand and deterring fraud on the other. Part II provides an overview of the jumble of “news media” interpretations and discusses how courts have tried to make sense of the phrase in light of modern conditions. Lastly, Part III looks to a trailblazing opinion and identifies three principles from the FCA’s statutory language to guide courts in interpreting “news media” in an age when information largely lives on the internet. Three guiding concepts—curation, independence, and accessibility—can help courts understand “news media” in ways that are faithful to the plain text of the FCA, consistent with the statute’s history, and normatively sound.

False Claims Act

MODERN PUBLIC DISCLOSURE: READING “NEWS MEDIA” IN THE FALSE CLAIMS ACT

REASONABLE, BUT WRONG: RECKLESS DISREGARD AND DELIBERATE IGNORANCE IN THE FALSE CLAIMS ACT AFTER HIXSON