On January 4, 2016, the Seventh Circuit issued an opinion addressing the scope of the public disclosure bar under the False Claims Act (“FCA”). In United States ex rel. Bogine v. Medline Industries, Inc., 809 F.3d 365 (7th Cir. 2016), the court held that because the 2010 amendment to the definition of “original source” was a “clarifying rather than a substantive amendment,” the revised definition applies retroactively, id. at 369, and affirmed the district court’s dismissal of the case under the public disclosure bar.
BackgroundRelator August Bogina III filed suit in 2011 in the United States District Court for the Northern District of Illinois, alleging that Medline violated the FCA by using a system of rebates, bribes, and kickbacks to induce nursing facilities to purchase their products. The relator’s allegations centered on the relationship between Medline and the Tutera Group, a chain of nursing homes and a Medline customer. The relator claimed to have learned of the facts underlying his allegations through his business associate Michael Tutera, who is the brother of one of the current principals of Tutera and himself a former member of Tutera’s ownership group. The federal government declined to intervene.
The district court dismissed the complaint under the FCA’s public disclosure bar. In so holding, the district court focused on a similar suit filed in 2007 by Sean Mason, an employee of Medline; that suit alleged that Medline had given bribes and kickbacks to entities that purchased its medical equipment, though it did not name Tutera specifically. The suit brought by Mason was resolved in 2011 — before the relator in Bogine filed his complaint — with a settlement between Mason, Medline, and the United States. The district court held that the claims alleged by the relator were substantially similar to allegations and transactions that were publicly disclosed in the earlier qui tam suit against Medline, and so could not survive the...
