Background
Relator, LLC filed a qui tam action under the False Claims Act alleging that CalCon Mutual Mortgage, LLC and its founder Joshua K. Erskine made false statements in a Paycheck Protection Program loan application. The district court dismissed the complaint, ruling that the public disclosure bar applied because information on PandemicOversight.gov disclosed the alleged fraud, and that the employee headcount allegations were speculative. The district court also denied leave to amend the complaint.
The court’s reasoning
The Ninth Circuit held that the information on PandemicOversight.gov did not substantially match the relator’s allegations because the NAICS code alone did not conclusively demonstrate ineligibility given statutory exceptions for certain mortgage companies. The court further ruled that CalCon’s website did not qualify as news media under the False Claims Act because its primary purpose was business promotion rather than disseminating news. While the court agreed the employee headcount theory was speculative, it found the district court abused its discretion by denying leave to amend without providing a clear opportunity to cure the deficiency.
We cannot determine on this record whether other public, online sources Relator references in the amended complaint qualify as news media. The district court should address the issue in the first instance.
RELATOR, LLC v. ERSKINE, 25-2073 (9th Cir. July 15, 2026)
What it means going forward
The decision clarifies that the public disclosure bar requires a precise match between public information and the specific elements of a fraud claim, including exceptions to eligibility rules. It also establishes a multi-factor test for determining whether a private website constitutes news media under the False Claims Act.