The False Claims Act‘s public disclosure provision barred a qui tam suit against businesses that applied for Paycheck Protection Program loans for which they were allegedly ineligible, a U.S. District Court judge has ruled.
Relator John Berkley brought a qui tam FCA action against six companies. He alleged that three of the companies submitted PPP applications falsely certifying that they satisfied affiliation and necessity rules under the federal Coronavirus AID, Relief and Economic Security, or CARES, Act, which created the PPP.
He also named certain private equity entities as defendants, alleging that they controlled or directed the PPP recipients’ alleged misconduct.
In a motion for summary judgment, the defendants argued that the essential facts Berkley alleged were already disclosed in publicly available sources and that Berkley was not an original source of such facts.
Accordingly, they argued, the FCA’s public disclosure bar precluded Berkley’s action.
Judge John J. McConnell Jr. agreed, rejecting Berkley’s argument that it was his expertise in private equity that allowed him, “mosaic-style,” to gather seemingly innocuous pieces of information from a variety of sources, both public and non-public, and apply his independent analysis to piece together...
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