Graham County Soil & Water: Can whistleblowers sue using state or county audits?

The federal False Claims Act (FCA) encourages private whistleblowers to sue, usually in partnership with the U.S. Department of Justice, to recover federal funds allegedly misspent by individuals, companies or local government agencies.

Rewards of blowing the whistle can be very substantial — up to 30% of the government’s recovery plus attorneys fees — but would-be whistleblowers must satisfy a number of stringent rules.  One of these is the so-called “public disclosure bar” of 31 U.S.C. § 3730(e)(4)(A) that bars most claims based on publicly available information the disputed definition of which is now before the U.S. Supreme Court in Graham County Soil & Water District, et al., v. U.S. ex rel Wilson (08-304).

In December 2008, after receiving briefs from the parties and various amici, the Supreme Court invited the U.S. Solicitor General to file a brief outlining the federal government’s interpretation of “public disclosure.”

The specific question in the Graham County case is whether, contrary to the 4th Circuit’s ruling, a whistleblower suit is barred if the information on which the suit is based is found in state or local government reports or audits as opposed to federal ones.