Karen Wilson, secretary at a Graham County, N.C. agency, notified state officials of misuse regarding federal aid money intended to be directed toward a flood cleanup operation. Wilson notified officials in 1996, but did not file a False Claims Act suit until 2001 against Graham and Cherokee Counties, as well as other conservation districts and other individual defendants. In between the time Wilson notified officials of the alleged conduct and the time she filed her suit, Graham County hired local accountants to identify the irregular spending. The state followed up and included these findings in its own report.

The False Claims Act does not allow what it calls “parasitic” whistleblower lawsuits that attempt to capitalize on public information. In 2007, federal district court judge Lacy Thornberg found the local audit and state follow-up report to constitute public disclosure under the FCA, thereby barring Wilson’s claim. The question of whether a local or state report constituting public disclosure under the FCA is one that has the federal circuits split almost evenly. The Supreme Court has granted certiorari to Wilson’s case and will address this issue and make a specific determination as to what exactly is meant by public disclosure. For more information on whistleblower lawsuits and the False Claims Act, contact a whistleblower lawyer.