United States, ex rel. James Heron v. Nationstar Mortgage, LLC
Securities Privacy JusticiabilityDoctri
What standard should courts use to determine whether a qui tam relator's allegations or alleged transactions are 'substantially the same' as those that have already been publicly disclosed, and what standard should courts use when determining whether a qui tam relator qualifies as an 'original source' under 31 U.S.C. § 3730(e)(4)(B)(2)?
QUESTIONS PRESENTED 1. The False Claims Act allows qui tam relators to sue those who violate the Act, but its “public-disclosure bar” requires courts to dismiss qui tam lawsuits “if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed— (i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from the news media.” 31 U.S.C. § 3730(e)(4)(A). Petitioner James Heron has brought a qui tam action against Nationstar for using forged promissory notes in foreclosure proceedings. The court of appeals, however, dismissed Mr. Heron’s qui tam lawsuit because it held that Mr. Heron’s allegations had already been “publicly disclosed” in four separate sources. Mr. Heron denies that the sources on which the court of appeals relied disclose anything remotely approaching the fraud that he has alleged against Nationstar, and the courts of appeals have adopted divergent and incompatible standards for determining whether a qui tam relator’s allegations or alleged transactions are “substantially the same” as those that have already been publicly disclosed. The issue presented is: What standard should courts use to determine whether a qui tam relator’s allegations or alleged transactions are “substantially the same” (i) as those that have already been publicly disclosed? 2. The “public-disclosure bar” provides an exception for qui tam relators who are an “original source of the information,” and it defines “original source” to include: an individual ... who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section. 31 U.S.C. § 3730(e)(4)(B)(2). Mr. Heron alleges in his complaint that he has the “knowledge” required by section 3730(e)(4)(B)(2),' and his complaint provides detailed examples of his knowledge of Nationstar’s fraud.’ The courts of appeals, however, are divided on the test to apply when determining whether a qui tam relator qualifies as an “original source” under 31 U.S.C. § 3730(e)(4)(B)(2). The issue presented is: What standard should courts use when determining whether a qui tam relator qualifies as an “original source”? under 31 #4US.C. § 3730(e)(4)(B)(2)? 1. See Second Amended Complaint, ECF No. 136, No. (D. Colo.) at 7 (122) (“Relator has knowledge that is independent of and materially adds to any publicly disclosed information relating to the allegations herein.”). 2. See Second Amended Complaint, ECF No. 136, No. (D. Colo.) at 7-98. (ii)