Knox County ex rel. Environmental Termite & Pest Control, Inc. v. Arrow Exterminators, Inc.

After a local vendor of termite control services discovered that two of its competitors had overbilled Knox County for services, the vendor presented a report of its findings to county officials. When the County delayed taking remedial action, the vendor filed a qui tam suit pursuant to Tenn. Code Ann. 4-18-104(c) against the companies in chancery court. The County joined the vendor's lawsuit and eventually settled with the defendants. When the qui tam plaintiff sought a share of the County's settlement with one of the vendors, the County asserted that the qui tam plaintiff was not eligible to receive any of the settlement proceeds. The trial court held that the qui tam plaintiff was an "original source" for the purpose of section 4-18-104(c) and, therefore, was entitled to receive twenty-eight percent of the settlement proceeds, or $71,546. The court of appeals affirmed but remanded the case to redetermine the value of the settlement proceeds. The Supreme Court affirmed the decisions of both the trial court and the court of appeals that the qui tam plaintiff was an "original source" and, therefore, was eligible to receive a portion of the proceeds from the County's settlement with one of the vendors.