On July 7, 2015, in US ex rel. Hartpence v. Kinetic Concepts, Inc. the US Court of Appeals for the Ninth Circuit overruled its own long-standing precedent regarding the conditions under which whistleblowing private citizens, known as relators, are entitled to recovery under the False Claims Act (FCA) (31 U.S.C. §§ 3729-3733) (No. 12-33396, ). Where a relator is the "original source" of the government's knowledge of a defendant's fraudulent claim for payment, the relator may now recover part of what a defendant is forced to reimburse the government if she:

Steven Hartpence commenced an action under the FCA alleging that his former employer, a medical device manufacturer, submitted fraudulent claims to Medicare through knowing misuse of a billing code intended for claims that did not require review for additional data. Six months later, Geraldine Godecke separately filed a complaint alleging that the same employer knowingly misused a billing code meant for claims based on a full month of treatment, even when treatment stopped and restarted during that month. Godecke also asserted that the company failed to collect certain documentation required by Medicare. Both plaintiffs alleged that the defendants retained overpayments resulting from these schemes.

The defendants moved for dismissal of the consolidated cases for lack subject matter jurisdiction. They argued that the case was subject to the public disclosure bar, which bars private qui tam actions based on the public disclosure of allegations concerning the fraud unless the relator was the original source of the information. The defendants asserted that neither relator qualified as an original source under the third prong of test in Wang ex. rel. United States, FMC Corp. (975 F.2d, 1412, 1418 (9th Cir. 1992)). In Wang, the Ninth Circuit held that, to qualify, the relator must:

The district court that federal audit report and a decision from an administrative law judge were public disclosures of the alleged Medicare fraud. It held that the relators were not original sources because they failed to show that they had a hand in those public disclosures. The district court also held that even if Godecke's complaint had not subject to the public disclosure bar, it would be barred by the first-to-file rule because Godecke's claims were similar to the claims asserted earlier by Hartpence.

On appeal, the Ninth Circuit concluded en banc that Wang impermissibly read a nonexistent, extra-textual third requirement that the plaintiff have a hand in the public disclosure of the fraud. The Ninth Circuit noted that the US Supreme Court's decision in Rockwell Int'l Corp. v. US makes clear that Congress did not intend to link "original source" status to the public disclosure of the relevant information (549 U.S. 457 (2007)). It overruled Wang as a wrongly decided case, and held that the relator may bring a qui tam suit regardless of whether the relator played any role in making the disclosure public.

The Ninth Circuit remanded the case for the district court's consideration under the new two-part test consisting of the first two elements in Wang, which were drawn directly from the text of the FCA. Additionally, the Ninth Circuit held that Godecke's complaint was not duplicative of Hartpence's claim and was therefore not barred by the first-to-file rule.

Counsel practicing in the Ninth Circuit should be aware of this shift in circuit precedent, which will allow a whistleblower to serve as a relator and bring a qui tam FCA action even if the whistleblower has not had a hand in the public disclosure of the violation.