Former Prosecutor Loses Qui Tam Because Allegations Had Been Publicly Disclosed and He Wasn’t an “Original Source”

Prather v. AT&T, 2/6/17, 9th Cir.

Plaintiff Prather, a long-time prosecutor in New York, worked for the organized crime task force, overseeing hundreds of wire taps. Telecom companies are required by law to help with wiretaps and must be paid their “reasonable expenses.”  Various federal law enforcement agencies we concerned about telecom charges and asked the FCC to review them. The FCC requested comment on the issue, and New York’s AG submitted comments.  Plaintiff thought the government was being overcharged and he was asked to submit affidavits of part of NY AG’s submission. Submitting affidavits to the FCC was not part of his job description, but they were prepared during his work time and in his official capacity.  In 2009, before amendments to the False Claim Act (FCA), he filed a qui tam action against various telecom companies. The trial court granted defendants’ motion to dismiss his amended complaint without leave to amend because the allegations had been public disclosed and Prather didn’t qualify as an original source. Held: Affirmed.

Before 2010 to the FCA, courts lacked jurisdiction to hear a qui tam case based on publicly disclosed allegations unless the person bringing the action was an “original source.”  (The public disclosure bar is now an affirmative defense instead of jurisdictional, and that change doesn’t apply retroactively.)  Prior to 2010, the statute defined an “original source” as “an individual who [1] has direct and independent knowledge of the information on which the allegations are based and [2] has voluntarily provided the information to the Government before filing an action . . . based on the information.”

Prather didn’t have direct knowledge of the allegedly fraudulent overcharges.  He only saw one invoice and didn’t know about the internal cost and pricing structure of the telecoms.  His knowedge was more a vague belief that telecom companies were doing less but charging more.  That was not sufficient to meet the first element.

Second, 9C said his actions were not “voluntary.” He was asked by a colleague in his office to provide affidavits to the FCC in support of the NY AG’s submission to the FCC. As the trial court found: “his disclosure was involuntary because it was prompted by the FCC’s request for comment and submitted in his capacity as Deputy Attorney General in Charge of the Statewide Organized Crime Task Force, in support [of] the official comments of his superior, the Attorney General.”  Finally, 9C has long recognized that a government attorney is not a quintessential qui tam relator, a factor that worked against him.