QUI TAM/FALSE CLAIMS

Campbell v. Redding Med. Ctr., No. 03-17082 (9th Cir. Aug. 22, 2005)

A physician brought a qui tam complaint under the False Claims Act against a medical center, alleging fraudulent billing of Medicare. Three days earlier, a medical center patient and his friend had filed a similar qui tam suit against the medical center with the same allegations, in which the government intervened. The government filed a motion to dismiss the physician's claim because it was not the first qui tam suit to be filed, which the district court granted. On appeal, the physician argued that because the patient and his friend were not original sources of the whistleblower information, the district court had no jurisdiction over their case, and thus their action could not be considered pending for the first-to-file qui tam bar. After the government notified the district court that it had reached a $54 million settlement with the medical center and Tenet Healthcare Corporation and intended to pay $8.1 million to the medical center patient and his friend as the relator's share, the physician filed objections to the settlement and sought a hearing on its fairness. The district court denied that motion. The physician appealed both district court rulings.

The Ninth Circuit Court of Appeals stated the rule that if the first-filed qui tam provision did not come from an original source, and therefore is not jurisdictionally cognizable, it does not provide a bar against a subsequent qui tam provision under the first-to-file rule. The Ninth Circuit therefore overturned the district court's motion to dismiss the physician's qui tam action. It sent the case back to the district court, instructing the court to determine whether the medical center patient and his friend were original sources and strongly suggesting that the two cases be consolidated.