The Eleventh Circuit today upheld dismissal of a qui tam case. United States ex rel. McElmurray v. Consolidated Gov’t of Augusta-Richmond County, No. 06-16493 (11th Cir. Oct. 1, 2007).
The relators alleged that a municipal wastewater plant in Augusta, Georgia, violated its permits by discharging filthy effluent onto their neighboring land. As the relators found out through discovery in their own civil lawsuits, Augusta lied about permit compliance in order to get federal loans. The district court dismissed the case under Rule 12(b)(1). The Eleventh Circuit held that the relators didn’t qualify as an "original source" of information regarding the fraud because civil discovery counts as "public disclosure" and because they didn’t base their claims entirely on non-public sources.
Blawgletter finds the Eleventh Circuit rule way too stingy. The relators brought the Augustan fraud to light not by Googling government files but by suffering contamination to their land and tracing it back to its financial source in Washington, DC.
But, as we pointed out in July, a large majority of the courts of appeals apply the Eleventh Circuit’s harsh standard. The Supreme Court — or Congress — will have to heal the split.