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KNOX COUNTY EX REL. ENVIRONMENTAL TERMITE & PEST CONTROL, INC. v. Arrow Exterminators, Inc.
350 S.W.3d 511
Tenn.
2011
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Background

  • Environmental filed a qui tam action under Tennessee False Claims Act after identifying overbilling in Knox County termite contracts.
  • Environmental obtained and analyzed public records, then reported findings to County officials who had not discovered the fraud.
  • County delayed remedial action; Environmental filed a qui tam suit in Knox County Chancery Court, later consolidated with the County's action.
  • Parties settled Allied/Arrow overbilling; Environmental sought a share of the settlement proceeds; trial court awarded 28% ($71,546.46).
  • Court of Appeals affirmed the 28% award but remanded to redetermine settlement value; Knox County sought discretionary review.
  • Tennessee Supreme Court held Environmental is an “original source” under Tenn. Code Ann. § 4-18-104(d)(3)(A)-(B) and remanded for further proceedings.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Environmental is an original source under Tenn. Code Ann. § 4-18-104(d)(3)(A)-(B). Environmental has direct, independent knowledge, voluntarily disclosed before filing, and catalyzed the investigation. Environmental is not an original source under the statute. Yes; Environmental is an original source.

Key Cases Cited

  • United States v. Griswold, 24 F. 361 (D. Or. 1885) (early articulation of FCA purpose to deter fraud against the government)
  • United States ex rel. Reagan v. E. Tex. Med. Ctr. Reg'l Healthcare Sys., 384 F.3d 168 (5th Cir. 2004) (describes the qui tam private enforcement role)
  • United States ex rel. Merena v. Smithkline Beecham Corp., 114 F. Supp. 2d 352 (E.D. Pa. 2000) (discusses public disclosure and original source concepts)
  • Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) (explains scope of public disclosure bar and original source)
Read the full case

Case Details

Case Name: KNOX COUNTY EX REL. ENVIRONMENTAL TERMITE & PEST CONTROL, INC. v. Arrow Exterminators, Inc.
Court Name: Tennessee Supreme Court
Date Published: Jul 20, 2011
Citation: 350 S.W.3d 511
Docket Number: E2007-02827-SC-R11-CV
Court Abbreviation: Tenn.