Stanford Journal of Complex Litigation (SJCL)

In July of 2013, the Seventh Circuit decided Leveski v. ITT Educational Services, Inc. On its face, it was a fairly innocuous outcome couched in the minutia of the for-profit education industry and illicit recruiter payment systems. Viewed within the larger fabric of the False Claims Act and its qui tam provisions, however, the case handled with unique clarity an issue that has divided and befuddled federal courts: the so-called ‘industry-wide’ public disclosure bar. In short, the Seventh Circuit gutted the doctrine, quietly distinguishing or rejecting the approaches taken by various federal courts and leaving in place a far more streamlined method. In light of this decision and continued struggles by federal courts to reach consensus, this examination seeks to understand both the unspoken problems with the public disclosure bar as applied to an entire industry as well as the future of False Claims Act law in light of recent developments. It first unpacks the underlying debates in the industry-wide public disclosure bar and the questions left unresolved by the patchwork approach by myriad courts. It then turns to the Seventh Circuit’s decision, untangling the court’s approach to clearly articulate the new test implied by the case. The decision reached in Leveski is, in most regards, a laudable attempt to undercut the industry-wide public disclosure bar and increase the administrability of FCA qui tam jurisprudence and the access to court by meretricious relators. This noble aim, however, may exacerbate the dangers of superfluous and excessive qui tam litigation by working counter to recent statutory revisions under the Affordable Care Act.