In the case of U.S. ex rel. Osheroff v. Humana, Inc., et al., 2015 WL 223705 (Jan. 16, 2015 11th Cir), the Eleventh Circuit clarified a number of key issues concerning the "public disclosure bar" of the False Claims Act, as amended by the Patient Protection and Affordable Care Act (2010), 31 U.S.C. 3730(e)(4). See a helpful redline of the pre/amended versions of the public disclosure bar, 31 U.S.C. 3730(e)(4), found at the HelmerMartins blog entry, "False Claims Act Redline."
- The Eleventh Circuit applied the pre-amendment version of the public disclosure bar to conduct occurring before the amendment’s effective date (which the Court stated was March 23, 2010) and the post-amendment version to conduct occurring after the effective date of the amendment.
- The Eleventh Circuit decided that the amended version of the public disclosure provision is no longer jurisdictional.
- As the amended version of the public disclosure bar is no longer jurisdictional, the Court held that a motion to dismiss under Rule 12(b)(6) is the appropriate vehicle for asserting the public disclosure bar regarding conduct subject to the amended version of the statute rather than a motion under Rule 12(b)(1).
- In considering a Rule 12(b)(1) motion regarding conduct that is subject to the pre-amendment version of the provision, the district court is permitted to look at extrinsic documents.
- While the Court found that a district court generally may not look beyond the pleadings in considering a Rule 12(b)(6) motion for conduct that is subject to the post-amendment version of the statute, district courts may consider extrinsic documents if they are central to a relator’s claim and their authenticity is not challenged.
- For example, the Court found that in deciding a 12(b)(6) motion to dismiss, the district court properly took judicial notice of newspaper advertisements, and publicly available websites in determining whether there was a prior public disclosure of the relator's allegations. The Court explained that the term "news media as used in 3730(e)(4)" has a "broad sweep" and as a result "newspaper advertisements and the [defendant] clinics' publicly available websites qualify as news media for the purposes of the public disclosure provision." These advertisements and websites, like the newspaper articles, discussed the clinics' "free services" which the relator claimed gave rise to violations of the Anti-Kickback Statute.
- The Eleventh Circuit clarified its prior decision in Cooper v. Blue Cross Blue Shield of Florida, Inc. 19 F.3d 562 (11th Cir. 1994), and stated that it does not require that the public disclosure contain an allegation of wrongdoing. Rather, the Court found that the disclosures referenced the defendant's clinics' "free services" as being "paid for by taxpayer dollars"; this was "sufficient to raise an inference of fraud" under the Anti-Kickback Statute or the Civil Monetary Penalties Act.
- The Court found that the "significant overlap between the [relator's] allegations and the public disclosures is sufficient to show that the disclosed information forms the basis of this lawsuit and is substantially similar to the allegations of the complaint."
- The Court held that the relator was not an original source even though the relator argued that he "conducted his own investigation of the programs offered at the clinics", and his complaint included "some details that are not present in the public disclosure." The Court found that such allegations, "at most" add "background information and details relating to the value of the services offered." Such background information, the Court observed, only "helps one understand or contextualize a public disclosure" but is "insufficient" to grant original source status to a relator under either the pre-amendment or post-amendment versions of the False Claims Act.
Overall, Osheroff joins an increasing number of courts that find the amended 2010 version of the public disclosure bar NOT to be jurisdictional and subject to attack only by a 12(b)(6) motion to dismiss. Though the Court made it look easy in this case to take judicial notice of newspaper articles and websites in applying the public disclosure bar, the Court's ruling will make it much harder in practice to assert this defense if only "undisputed" evidence can be introduced at the motion to dismiss stage. To deal with this, defendants will likely have to seek early summary judgments on the public disclosure defense.