Marchand & Rossi, L.L.P., nka Marchand Law, L.L.P. v. Bryan K. White, et al.

The federal False Claims Act (“FCA”), 31 U.S.C. § 3730, includes an interrelated series of provisions intended to incentivize, through monetary awards, private reporting and prosecution of schemes to defraud the United States. The state of Texas has enacted a parallel statutory scheme to protect state interests. Petitioner Marchand Law, L.L.P. investigated a fraudulent scheme and filed a lawsuit on behalf of its “whistleblower” clients pursuant to the FCA and parallel Texas enactment. Unbeknownst to them, another whistleblower previously had initiated a FCA lawsuit regarding a non-intersecting scheme, which had select actors in common, but discrete features and objectives. There was no evidence either set of whistleblowers independently would have discovered or prosecuted both schemes for the benefit of the United States or state of Texas. There moreover was no evidence the United States or Texas would have discovered both schemes based on knowledge of only one. The district court nevertheless dismissed the suit filed by Marchand Law, L.L.P.’s clients based on the FCA “firstto-file” rule, which the district court treated as a jurisdictional bar to any subsequent federal or state lawsuit. The Fifth Circuit Court of Appeals affirmed based on circuit precedent. The questions presented are as follows: 1. Whether the fundamental utility of the FCA—to incentivize private citizen investigation and