United States ex rel. Fiorisce, LLC v. Colorado Technical University, Inc.
No. 24-1047. 3/4/2025. D.Colo. Judge Matheson. Qui Tam Lawsuit—Appellate Jurisdiction—Collateral Source Doctrine—False Claims Act—Public Disclosure Bar—Motion to Dismiss.
March 4, 2025
Fiorisce, LLC’s sole principal was a faculty member at Colorado Technical University, Inc. (CTU). Fiorisce was created to protect its principal’s identity shortly before it filed this qui tam suit alleging that CTU and others violated the False Claims Act (FCA), 31 USC §§ 3729–33, by misrepresenting their compliance with federal credit hour requirements for universities and fraudulently billing the government for educational content that was not provided to students. CTU moved to dismiss Fiorisce’s claim for failure to state a claim, arguing that the FCA’s public disclosure bar precludes the suit because Fiorisce’s fraud allegations were substantially the same as those previously publicly disclosed. CTU also contended that Fiorisce did not meet the original source exception to the public disclosure bar. The district court denied CTU’s motion because Fiorisce’s allegations were not substantially the same as those previously disclosed, and even if the public disclosure bar applied, Fiorisce likely qualified for the original source exception under § 3730(e)(4)(B). CTU appealed the denial of its motion to dismiss, and Fiorisce moved to dismiss the appeal for lack of appellate jurisdiction.
On interlocutory appeal, CTU argued for the Tenth Circuit to exercise jurisdiction under the collateral order exception to the final judgment rule, maintaining that the denial of a motion to dismiss under the FCA’s public disclosure bar qualifies for immediate review because the denial is effectively unreviewable on appeal from final judgment. CTU contended that the public disclosure bar both precludes liability and is a right to avoid trial. CTU further argued that the denial of this right would harm separation of powers, efficiency, and government initiative. Denials of motions to dismiss are generally not appealable final orders under 28 USC § 1291. But as relevant here, the collateral order doctrine allows a non-final order to be immediately reviewable under § 1291 if such order is effectively unreviewable on appeal from a final judgment. The party seeking application of the doctrine has a high burden to show that the application is warranted. The FCA authorizes relators who have information regarding fraud against the government to sue for damages and civil penalties on behalf of the United States in qui tam suits. The public disclosure bar limits a relator’s right to bring a qui tam suit and mandates dismissal of an action when substantially the same allegations as those in the action have already been disclosed in certain public fora. Here, CTU failed to show that erroneous denials of public disclosure bar motions cannot be redressed on appeal from a final judgment, so CTU did not meet its heavy burden to expand the collateral order doctrine to include denials of motions to dismiss under the FCA’s public disclosure bar. Further, the public disclosure bar is not a right to avoid trial, because even when information underlying the fraud allegations was previously disclosed and the bar applies, the FCA action may continue under certain circumstances. So contrary to CTU’s assertions, denying immediate review of these orders does not raise concerns about separation of powers, jurisdiction, government efficiency, or government initiative. Accordingly, the Tenth Circuit concluded that the collateral order doctrine does not apply.
The motion to dismiss for lack of jurisdiction was granted and the appeal was dismissed.