Ninth Circuit Narrows Qualifications for Being Qui Tam "Original Source"
Client Alert | 1 min read | 11.04.14
The Ninth Circuit, in Malhotra v. Steinberg (Oct. 29, 2014), held that, despite tipping off the government as to one kind of wrongdoing by the defendant, the FCA relators were not the "original source" of a different alleged act of wrongdoing perpetrated by the same defendant, a bankruptcy trustee. The relators independently discovered and alerted federal authorities to defendant trustee's scheme to sell property at a price lower than fair market value, but because that federal investigation led to the public disclosure of the defendant's receipt of kickbacks from those sales, the court held that the relators were not the original source of the kickback allegation which formed the basis of their qui tam action.
Insights
Client Alert | 3 min read | 11.21.25
On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.
Client Alert | 3 min read | 11.20.25
Client Alert | 3 min read | 11.20.25
Client Alert | 6 min read | 11.19.25
