Ninth Circuit Notes Split Re Whether False Claims Act Requires Individuals to Inform Government Prior to Making a “Public Disclosure”

Per U.S. v. Johnson Controls, Inc., 457 F.3d 1009 (9th Cir. Aug 09, 2006):

This case requires us to interpret, once again, the statutory provisions relating to the "public disclosure" bar and the "original source" exception to that bar in the Federal False Claims Act (FCA), 31 U.S.C. §§ 3729-3733, and the California False Claims Act (CFCA), CAL. GOV'T CODE §§ 12650-12656. We hold that the federal and state statutes do not require that an individual report relevant information to the government prior to the "public disclosure" at issue to qualify as an "original source."

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Because of the similarity between the relevant wording and purposes of the CFCA and the FCA, as interpreted by our circuit and the Second Circuit, California courts would look to pertinent federal precedent in the Second and Ninth Circuits in interpreting the CFCA. Although there is a circuit split on whether the federal statute requires that individuals inform the government prior to making the "public disclosure" at issue, there is not a circuit split on whether the federal statute so requires in those circuits that recognize under the FCA the requirement that the CFCA explicitly states--that individuals play a role in the "public disclosure" at issue to qualify as "original sources." The question whether these statutes require notification to the government prior to public disclosure is, as established earlier, closely linked to the question whether these statutes require that individuals have a hand in the public disclosure. Because the CFCA incorporates the latter requirement, we expect that California courts would look to federal precedent from only those circuits recognizing that requirement in determining whether the former requirement obtains under the CFCA.