PETITIONER: Graham County Soil and Water Conservation District, et al.
In 1995, a storm hit parts of western North Carolina causing extensive flooding and erosion. Graham and Cherokee Counties applied for assistance under the Emergency Watershed Protection Program ("EWPP"). Under the program, the counties would perform or hire to perform the necessary cleanup and repair work, paying for 25% of the costs, while the United States Department of Agriculture paid for the rest. During the cleanup, Karen Wilson, a secretary for the Graham Conservation District, raised concerns that she had about the legality of the awarded contracts. She filed suit in a North Carolina federal district court against Graham and Cherokee Counties, among others, under the False Claims Act. She alleged a conspiracy that tainted the execution of the EWPP contracts and rendered the claims for reimbursement false within the meaning of the False Claims Act. The defendants moved for summary judgment, arguing that the information underlying Ms. Wilson's claim was public disclosure and thus barred the court jurisdiction over the case. The court agreed and dismissed.
On appeal, the U.S. Court of Appeals for the Fourth Circuit reversed. It held that the audit reports that underlied Ms. Wilson's claim was not public disclosure for the purpose of the False Claim Act, and thus the district court was not barred from hearing her case.
Does an audit performed by a state or its political subdivisions constitute an administrative report within the meaning of the public disclosure jurisdictional bar of the False Claims Act?
Justice Stevens has our opinion this morning in case 08-304, Graham County Soil and Water Conservation District versus the United States.
The False Claims Act, which was enacted during the Civil War, authorizes not only the Attorney General, but also private parties known as qui tam relators to recover from those who make false or fraudulent claims for payment to the United States.
Since 1986, the Act has contained a provision known as the public disclosure bar that forbids qui tam suits when the underlying information has already entered the public domain through certain channels.
The question in this case is whether that public disclosure bar extends not just to federal administrative sources, but also to state and local sources.
For reasons set forth in an opinion filed with the clerk, we hold that the bar does apply to nonfederal sources and therefore reverse the judgment of the Court of Appeals in this case.
In a portion of the Patient Protection and Affordable Care Act, enacted a few days ago, Congress adopted an amendment to the False Claim Act that expressly limits the disclosure bar to Federal Administrative Reports.
Because that amendment is not retroactive, it does not affect our decision today.
Justice Sotomayor has filed a dissenting opinion in which Justice Breyer has joined.