United States Ex Rel. Hartpence v. Kinetic Concepts, Inc.
792 F.3d 1121
| 9th Cir. | 2015Background
- Hartpence and Godecke, former KCI employees, filed separate FCA qui tam actions alleging KCI submitted fraudulent Medicare claims.
- Public disclosures of the alleged fraud existed before relators filed their suits, including a 2007 federal audit and an ALJ decision.
- District court dismissed for lack of jurisdiction under public disclosure and original source theories and due to first-to-file concerns.
- Relators amended complaints and the district court analyzed original-source requirements under Wang and related precedent.
- En banc court overruled Wang, held the original-source test contains two elements, and remanded for jurisdictional analysis consistent with the two-element test.
- Court also held the first-to-file bar did not bar Godecke’s second and third counts because they allege different material facts from Hartpence’s claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Original-source standard governing public-disclosure bar | Hartpence and Godecke contend no hand-in-public-disclosure is required. | Defendants rely on Wang and its hand-in-public-disclosure requirement. | Two-element test; no hand-in-public-disclosure requirement needed. |
| Two elements to qualify as original source | Relators have direct, independent knowledge and pre-filing disclosure to government. | Relators fail to meet criteria for original source. | Original-source requires direct and independent knowledge and voluntary pre-filing disclosure. |
| Effect of public disclosures on jurisdiction | Relators can proceed if they meet original-source requirements. | Public disclosures bar jurisdiction unless original source; Wang controls. | Wang overruled; original-source two-element test governs; remand for determination. |
| First-to-file bar applicability to Godecke’s claims | Second/third counts involve different facts and are not barred. | First-to-file bar bars later suits based on same material facts. | Second and third counts not barred; not identical facts; not precluded. |
Key Cases Cited
- Wang ex rel. United States v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992) (three-part original-source test; third prong adopted prior to Rockwell)
- Rockwell International Corp. v. United States, 549 U.S. 457 (Supreme Court, 2007) (information refers to information underlying relators’ allegations; informs original-source interpretation)
- United States ex rel. Dick v. Long Island Lighting Co., 912 F.2d 13 (2d Cir. 1990) (original-source interpretation pre-Wang; indirect source concept)
- Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 559 U.S. 280 (S. Ct. 2010) (public-disclosure bar; discussion of original-source purpose)
- Lujan v. Hughes Aircraft Co., 243 F.3d 1181 (9th Cir. 2001) (first-to-file bar purposes; incentive structure)
- Meyer v. Horizon Health Corp., 565 F.3d 1195 (9th Cir. 2009) (reinforces Wang-based approach prior to overruling)