By Cate Berenato

On January 29, 2016, the Fourth Circuit, in the published case U.S. v. Purdue Pharma, upheld the District Court for the Southern District of West Virginia’s dismissal of a qui tam action brought under the False Claims Act (“FCA”). The court found that the FCA’s public disclosure bar prohibited the action.

The issue in the case was whether the FCA’s federal disclosure bar stripped the district court of jurisdiction over the relator’s FCA claims. The Fourth Circuit held that the district court was correct when it ruled that it did not have jurisdiction over the claims because of the bar.

Mark and Angela Radcliffe’s Claims

Mark Radcliffe, a former sales manager for Purdue Pharma previously filed a qui tam action against Purdue under the FCA. Radcliffe alleged that Purdue fraudulently marketed OxyContin as having an inflated equianalgesic ratio, resulting in physicians prescribing and the government paying for the medication. The Fourth Circuit previously dismissed the case because Radcliffe signed a release before leaving Purdue.

After the Fourth Circuit dismissed that case, Radcliffe’s wife, Angela (“relator”), filed another qui tam action against Purdue. Her claims were nearly identical to her husband’s, and the attorney who filed her husband’s claims filed the relator’s. The district court dismissed the relator’s claims because it stated that the FCA’s public disclosure bar “stripped the court of subject matter jurisdiction.”

The FCA’s Public Disclosure Bar

 The FCA provides a cause of action for anyone who presents the government with a false or fraudulent claim for payment. The FCA’s public disclosure bar states that “[n]o court shall have jurisdiction over an action under this section based upon the public disclosure of allegations.” In other words, actions are precluded where the relator has partly or fully derived her qui tam action allegations from public disclosures, regardless of where the relator obtained the information.

The Public Disclosure Rule Barred this Claim

Here, the court stated, the relator derived her allegations from public disclosures. She did not independently discover the facts that formed her allegations. To the contrary, her knowledge of the facts came from her attorney’s involvement in Mr. Radcliffe’s previous qui tam action.

The court stated that the FCA’s purpose supported this decision. The FCA encourages whistleblowing while preventing “parasitic” qui tam actions where relators “simply feed off previous disclosures of government fraud.” Here, the relator did not provide any useful, new information but rather reiterated the substance of Mr. Radcliffe’s previous claim. Thus, the Fourth Circuit upheld the district court’s dismissal of the relator’s claim.

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