The Supreme Court held 3/27/2007 that whistleblowers who pursue claims under the False Claims Act (FCA) where allegations of fraud upon the federal government have already been disclosed to the public can only do so if they have personal knowledge of the fraud. Under the FCA, to collect a bounty, which can be as high as 30% of the government’s recovery, the whistleblower must be an “original source” of the information that resulted in the claims that were tried to the jury. The Court held that the whistleblower in this case was not an “original source,” as the government did not rely on the whistleblower’s theory related to defects in the piping system, but instead relied on an unrelated theory. Additionally, none of the witnesses he had identified as having relevant knowledge testified and none of the documents he provided was introduced at trial.
This decision is a victory for government contractors, who can face protracted and expensive litigation as a result of opportunistic whistleblower claims. It establishes the public disclosure bar as a mechanism to keep whistleblower litigation focused on only those claims where the whistleblower has the requisite personal knowledge of an alleged scheme to defraud the United States.