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USCellular urged the U.S. Supreme Court Wednesday to uphold a D.C. Circuit ruling that dismissed whistleblowers’ False Claims Act (FCA) claims alleging spectrum auction fraud, branding their request for review as “misleading.” The appeal centers on whether the plaintiffs, attorneys Mark O’Connor and Sara Leibman, can pursue claims barred under the FCA’s public disclosure rules.

The case traces back to 2015, when O’Connor and Leibman filed suit in D.C. federal court on behalf of the U.S. government, challenging USCellular and affiliated companies’ purchases of FCC spectrum rights at discounted rates.

Circuit Court Bars Claims Citing Public Disclosure

Earlier this year, the D.C. Circuit held that the whistleblowers’ allegations were “substantially the same” as those in a prior FCA case involving one of the same attorneys, triggering the disclosure bar that prevents qui tam claims when the allegations are already publicly available.

In Wednesday’s Supreme Court brief, USCellular argued that the decision does not create a split among federal courts requiring correction. The brief notes that the FCA’s public disclosure bar was designed precisely for situations like this, requiring dismissal when the “allegations or transactions” have already been aired publicly.

Original-Source Exception Disputed

The law allows an exception if the relators are the “original source” of new fraud information. USCellular contends that O’Connor and Leibman failed to meet that threshold.

The companies’ brief states, “Fully aware of a previous and nearly identical lawsuit that advanced the same alleged fraud theory, petitioners sought to plead around the public disclosure bar by alleging that they qualified as an ‘original source’ under federal law.”

The D.C. District Court ruled that even with the original-source exception, the “new” information did not materially add to previously public allegations — a key element in dismissing the claims.

Contrasting Rulings Highlight Tension in FCA Cases

A companion D.C. Circuit case in September found that related claims against another USCellular-affiliated company did materially add to public information, allowing those claims to proceed. The February ruling challenged in this appeal reached a different conclusion, prompting the whistleblowers to seek Supreme Court review.

O’Connor and Leibman argued that the panel decision undermines Congress’ intent to incentivize whistleblowers and conflicts with the Court’s recent ruling in Cunningham v. Cornell University. They question whether independent knowledge must be so substantial that it “is likely to prompt the government to intervene and prosecute the fraud,” a standard they say the D.C. Circuit imposed incorrectly.