Opinion ID: 204068
Heading Depth: 2
Heading Rank: 4

Heading: The Exception.

Text: There is an escape hatch from the public disclosure bar, available to relators who qualify as original sources. 31 U.S.C. § 3730(e)(4)(A). The statute defines an original source as: [A]n individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information. Id. § 3730(e)(4)(B). It is thus apparent that a relator, in order to qualify as an original source, must have both direct and independent knowledge of the information upon which his allegations are based. See Glaser, 570 F.3d at 921; Minn. Ass'n of Nurse Anesthetists, 276 F.3d at 1048. The Supreme Court recently held that the `information' to which [section 3730(e)(4)(B)] speaks is the information upon which the relator's allegations are based. Rockwell Int'l Corp. v. United States, 549 U.S. 457, 470-71, 127 S.Ct. 1397, 167 L.Ed.2d 190 (2007) (emphasis supplied). Thus, the appropriate inquiry in an FCA case is whether the relator had direct and independent knowledge of the information upon which his own allegations were based. 1. Direct Knowledge, We begin with whether the relator had direct knowledge of the information upon which he based his claim. Direct is defined as marked by absence of an intervening agency, instrumentality, or influence: immediate. Webster's Third New Int'l Dict., supra, at 640. Several courts have transplanted this sort of definition into the FCA. See, e.g., Minn. Ass'n of Nurse Anesthetists, 276 F.3d at 1048; Springfield, 14 F.3d at 656; United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 F.2d 1149, 1160 (3d Cir.1991). We agree that this definition signifies the proper meaning of direct as that word is used in the FCA. In this instance, the relator's knowledge was based on a private investigation, which consisted of directing his employees to review public records and interview third parties. A relator is not disqualified as an original source merely because his agents assisted in the investigation into the alleged fraud. [5] Here, however, the relator's knowledge was simply a compilation of publicly disclosed information. Knowledge that is based on research into public records, review of publicly disclosed materials, or some combination of these techniques is not direct. See Reagan, 384 F.3d at 178-79; United States ex rel. Barth v. Ridgedale Elec., Inc., 44 F.3d 699, 703 (8th Cir.1995). 2. Independent Knowledge. The relator also failed to show that he possessed independent knowledge. Virtually by definition, a relator whose knowledge is dependent upon the public disclosure of allegedly fraudulent transactions cannot be said to have independent knowledge of the fraud. See Glaser, 570 F.3d at 921; Minn. Ass'n of Nurse Anesthetists, 276 F.3d at 1048; Mistick, 186 F.3d at 389; Barth, 44 F.3d at 703; Springfield, 14 F.3d at 656. In this instance, the relator, whatever he may have suspected, would not have learned of the City's alleged misrepresentations to HUD but for the response to his FOIA request. Thus, the relator lacked independent knowledge. In an effort to dodge this bullet, the relator asserts that his background and experience as a developer of section 8 housing gave him a unique insight into the fraud that the City was perpetrating on the federal government. This is whistling past the graveyard. If a relator merely uses his or her unique expertise or training to conclude that the material elements already in the public domain constitute a false claim, then a qui tam action cannot proceed. Findley, 105 F.3d at 688. Expertise that enables a relator to understand the significance of publicly disclosed information, without more, is insufficient to qualify him as an original source. See id.; see also United States ex rel. Fried v. W. Indep. Sch. Dist., 527 F.3d 439, 443 (5th Cir.2008). For these reasons, the relator does not qualify for the original source exception.