Opinion ID: 4538681
Heading Depth: 4
Heading Rank: 2

Heading: The Post-Amendment Public-Disclosure Bar

Text: Having held that Holloway’s claims do not survive the pre-amendment public-disclosure bar, we must decide whether they surmount the “more lenient” post-amendment publicdisclosure bar. See U.S. Bank, 816 F.3d at 430. The 2010 amendments to the public-disclosure bar replaced “based upon” with “substantially the same.” See 31 U.S.C. § 3730(e)(4)(A) (2010). Accordingly, the text now reads, “The court shall dismiss an [FCA] action or claim . . . if substantially the same allegations or transactions as alleged in the action or claim were publicly No. 19-3646 U.S. ex rel. Holloway Page 16 disclosed . . . .” Id. How we interpret the post-amendment public-disclosure bar is informed by the statutory text and the competing purposes of the qui tam provisions. Prior to the amendments, a majority of circuits adopted interpretations of “based upon” analogous to our “substantial-identity” test, using the same or slightly different language. See U.S. ex rel. Ondis v. City of Woonsocket, 587 F.3d 49, 57 (1st Cir. 2009) (collecting cases). Many circuits described their test as whether “the relator’s allegations are substantially similar to information disclosed publicly,” see id. (emphasis added),8 while others described their test as whether “the allegations in the complaint were substantially the same as allegations in the public disclosures,” U.S. ex rel. Fine v. Sandia Corp., 70 F.3d 568, 572 (10th Cir. 1995) (emphasis added).9 Still others asked whether “material elements” of the allegations were publicly disclosed, U.S. ex rel. Kirk v. Schindler Elevator Corp., 601 F.3d 94, 103 (2d Cir. 2010), rev’d on other grounds by Schindler Elevator Corp. v. U.S. ex rel. Kirk, 563 U.S. 401 (2011), or whether the relator made “essentially the same” allegations, U.S. ex rel. Reagan v. E. Tex. Med. Ctr. Reg’l Healthcare Sys., 384 F.3d 168, 176 (5th Cir. 2004).10 By the time the publicdisclosure bar was amended in 2010, all but one circuit had adopted some version of this interpretation. See Ondis, 587 F.3d at 57. The Fourth Circuit was the lonely outlier, interpreting “based upon” as barring suits only if the relator actually knew about the public information—a reading the majority of circuits rejected. See U.S. ex rel. Siller v. Becton Dickinson & Co., 21 F.3d 1339, 1348 (4th Cir. 1994) (barring suits “only where the relator has actually derived 8See U.S. ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 519–21 (3d Cir. 2007) (substantially similar); Glaser v. Wound Care Consultants, Inc., 570 F.3d 907, 910 (7th Cir. 2009) (substantially similar); U.S. ex rel. Newell v. City of St. Paul, 728 F.3d 791, 797 (8th Cir. 2013) (substantially similar); U.S. ex rel. Meyer v. Horizon Health Corp., 565 F.3d 1195, 1199 (9th Cir. 2009) (using “substantial identity” and “substantially similar” interchangeably), overruled on other grounds by U.S. ex rel. Hartpence v. Kinetic Concepts, Inc., 792 F.3d 1121, 1128 n.6 (9th Cir. 2015); U.S. ex rel. Osheroff v. Humana, Inc., 776 F.3d 805, 814 (11th Cir. 2015) (using “substantially similar” and “substantially the same” interchangeably); U.S. ex rel. Findley v. FPR-Boron Employees’ Club, 105 F.3d 675, 690 (D.C. Cir. 1997) (substantially similar), overruled on other grounds by U.S. ex rel. Davis v. District of Columbia, 679 F.3d 832, 838–39 (D.C. Cir. 2012). 9The Tenth Circuit has occasionally used the “substantial identity” language that our circuit has used. See, e.g., U.S. ex rel. Grynberg v. Praxair, Inc., 389 F.3d 1038, 1051 (10th Cir. 2004); U.S. ex rel. Precision Co. v. Koch Industries, Inc., 971 F.2d 548, 553–54 (10th Cir. 1992). 10The Fifth Circuit also used “substantively identical” in this case. See id. No. 19-3646 U.S. ex rel. Holloway Page 17 from that disclosure the allegations upon which his qui tam action is based” (emphasis added)); Ondis, 587 F.3d at 57. Unsurprisingly, then, the circuits that were in the majority have held that their preamendment precedent continues to control, to varying degrees.11 See Bellevue v. Universal Health Servs. of Hartgrove, Inc., 867 F.3d 712, 718 (7th Cir. 2017) (“The current version of the statute expressly incorporates the ‘substantially similar’ standard in accordance with the interpretation of this circuit and most other circuits.”); U.S. ex rel. Reed v. Keypoint Gov’t Sols., 923 F.3d 729, 743–45 (10th Cir. 2019) (holding that its pre-amendment precedent should “primarily guide” its post-amendment inquiry”); U.S. ex rel. Osheroff v. Humana, Inc., 776 F.3d 805, 812, 814 (11th Cir. 2015) (slotting the new “substantially the same” test into its existing analytical framework); U.S. ex rel. Winkelman v. CVS Caremark Corp., 827 F.3d 201, 208 n.4 (1st Cir. 2016) (stating that “[t]he revised statutory language—‘substantially the same’—merely confirms [its] earlier understanding,” but also that the amended language “has no substantive effect in this case” (emphasis added)). For our part, we indicated in an unpublished case, United States ex rel. Armes v. Garman, that we would continue to be guided by our “based upon” precedent as we embark on interpreting the amended public-disclosure bar. 719 F. App’x 459, 463 n.2 (6th Cir. 2017) (“Because this court had already interpreted the “based upon” language to mean a “substantial identity,” Poteet, 552 F.3d at 514, the 2010 amendment does not affect our public-disclosure analysis at this second step.”). But we have not expressly adopted our pre-amendment precedent in a published case. In one post-amendment case, both versions technically applied, but we used the “more lenient” amended version for the sake of simplicity because the relator would lose either way. U.S. Bank, 816 F.3d at 430. We implicitly adopted two principles from our preamendment precedent: (1) an action is barred if a prior disclosure puts the government on notice of the fraud alleged in the qui tam complaint, id. at 431, and (2) a broader prior disclosure bars a 11“Similar” obviously has a different meaning than “same.” “Same” means identical; “similar” means analogous, comparable, or resembling the other. The Merriam-Webster dictionary would have us believe otherwise, as it dubiously defines “same” as (among other things) “something identical with or similar to another.” Same, MERRIAM-WEBSTER ONLINE DICTIONARY (last visited Feb. 14, 2020). We instead are guided by the wisdom of Judge Learned Hand, that “it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary.” See Cabell v. Markham, 148 F.2d 737, 739 (2d Cir. 1945). No. 19-3646 U.S. ex rel. Holloway Page 18 qui tam action based on a narrower set of allegations stemming from the same fraud, id. at 432. In another case, we decided that the outcome would be the same under either version of the bar because, even after the amendments, “a common principle remains[:] public disclosure occurs ‘when enough information exists in the public domain to expose the fraudulent transaction.’” Ibanez, 874 F.3d at 918 (quoting Antoon, 788 F.3d at 614–15). We stated that courts must “look at the essential elements of alleged fraud to determine if enough information exists in the public domain to expose the fraudulent transaction.” Id. “Thus, the public disclosure bar is not implicated—even if one or more of a claim’s essential elements are in the public domain—unless the exposed elements, taken together, provide adequate notice that there has been a fraudulent transaction.” Id. at 918–19. So far, then, we have adopted principles from our pre-amendment cases that are compatible with the amended statutory text.12 From a textual standpoint, “substantially the same” facially demands a greater degree of similarity between the qui tam complaint and the prior disclosures than “based upon” does. And “substantially the same” undoubtedly is more rigorous than “even partly based upon,” as we interpreted “based upon” to mean. Without the “based upon” language in the statute, there is no textual hook for McKenzie’s “even-partly-based-upon” rule. See McKenzie, 123 F.3d at 940 (citing Precision, 971 F.2d at 552).13 We can think of no reason why that plain text interpretation of “based upon” should influence our reading of the amended text. At the same time, we continue to be guided by the statute’s general purpose of encouraging genuine whistleblower actions while snuffing out parasitic suits. See Walburn, 431 F.3d at 970. The public-disclosure bar was intended to be “wide-reaching,” Schindler, 563 U.S. at 408, but to stop short of “wip[ing] out qui tam suits that rest on genuinely new and material information,” Goldberg, 680 F.3d at 935–36. In light of this purpose and the statute’s 12We have not cited McKenzie in any of our binding post-amendment precedent. See U.S. Bank, 816 F.3d 428; Ibanez, 874 F.3d 905. 13The Tenth Circuit, which created the “even-partly-based upon” rule in Precision, conspicuously has avoided citing to that case for that rule in its post-amendment precedent. See Reed, 923 F.3d at 743–45. It has instead emphasized its substantial-identity test from Fine, 99 F.3d at 1006. See Reed, 923 F.3d at 743–45. Moreover, it has said only that prior precedent should “primarily guide [its] substantially-the-same inquiry.” Reed, 923 F.3d at 745 (emphasis added). No. 19-3646 U.S. ex rel. Holloway Page 19 plain text, we read “substantially the same” as more sensitive to differences between the qui tam complaint and prior disclosures than the prior “based upon” language. Holloway’s claims, nevertheless, cannot survive the more lenient post-amendment public-disclosure bar. As we have already described, Holloway’s allegations are substantially the same as those made in the South Carolina complaints. If anything, Holloway’s allegations add some new details to describe essentially the same scheme by the same corporate actor. We accordingly hold that Holloway’s claims must be dismissed under the amended public-disclosure bar as well. Because both versions of the public-disclosure bar apply, we need not address whether Holloway’s allegations were sufficient under Federal Rule of Civil Procedure 9(b) or the limited exception to that standard that we announced in Prather, 838 F.3d 750. The district court rightly dismissed Holloway’s claims.