United States Ex Rel Mateski v Ratheon

A complaint raising fraud based on disclosed information that is different in kind and degree from previously disclosed information is not “substantially similar” under the False Claims Act.

Mateski brought suit against Raytheon Co. alleging fraud by Raytheon Co. in performing a government contract. The district court dismissed the suit under the False Claims Act. Mateski appealed claiming that the District Court erred in concluding that the complaint was precluded by the public disclosure bar of the False Claims Act because it is based upon previous public disclosures. On appeal, the panel looked at whether Mateski’s action were based upon the allegations or transactions publicly disclosed. The public disclosure bar prevents a federal court from obtaining subject matter jurisdiction when fraud already publicly disclosed is alleged by a realtor, unless the realtor is an original source. That determination depends on whether Raytheon’s publicly available information contained an allegation or transaction of fraud. If it does, then the second inquiry is whether the complaint is based upon those allegation or transactions. The court found no allegation of fraud because the publicly disclosed information did not contain an explicit accusation of wrongdoing. Although delays and incompetence were mentioned in the reports, none described Raytheon engaging in deception. The court noted that it can infer that Raytheon falsely represented to the Government regarding the status of the project and the public statements show that Raytheon was still paid for its work. The district court's jurisdiction was not barred. REVERSED AND REMANDED.