The False Claims Act’s statute of limitations is, easily, the most confusing portion of the False Claims Act. On November 16, the Supreme Court granted certiorari in case that has
Continue Reading Supreme Court To Address False Claims Act Statute of Limitations
Each year, billions of dollars in damages are paid to the government as a result of False Claims Act (FCA) settlements and judgments. A significant percentage of those damages are
Continue Reading Seventh Circuit Affirms Dismissal Of An Opportunistic Relator’s False Claims Act Lawsuit That Alleged Violations Of The Trade Agreements Act
A Memorandum dated January 10, 2018 and authored by Michael Granston, Director of the Commercial Litigation Branch of the Fraud Section of the U.S. Department of Justice, was published on January 24, 2018 (the “Memorandum”). The Memorandum, addressed to DOJ attorneys, describes the factors that government attorneys should consider in deciding whether the government should voluntarily dismiss unmeritorious qui tam suits pursuant to 31 U.S.C. § 3730(c)(2)(A). This policy guidance, which was picked up by the legal press just yesterday, comes after a three-month period in which the DOJ, the relator’s bar, and the defense bar alike have paid more than customary attention to the circumstances under which DOJ might dismiss an unmeritorious qui tam suit.
Continue Reading DOJ Formalizes Guidance for Government Dismissal of Unmeritorious Qui Tam Suits
In United States, et al., ex rel. Ruckh v. Salus Rehabilitation, LLC, et al., Case No. 8:11-cv-1303-T-23TBM (M.D. Fl. Jan. 11, 2018), a federal district court judge offered a thoughtful, cogent analysis of both the letter and spirit of the Supreme Court’s decision in Universal Health Services, Inc. v. Escobar, 136 S. Ct. 1989 (2016) to reverse a jury’s $350 million verdict in favor of the United States and Florida (as well as the relator). The decision provides valuable guidance concerning how the Escobar holding should be applied to analyzing the actual evidence established under a False Claims Act (“FCA”) case, as distinguished from mere allegations. The lesson is that while Escobar will undoubtedly affect the standard of pleading required in motions to dismiss, its greater potential impact is on motions for summary judgment, where mere allegations without substantiating evidence will be insufficient to survive dismissal.
Continue Reading FCA Materiality: It’s One thing to Proclaim but It’s Another Thing to Prove
Yesterday’s argument before the Supreme Court in Universal Health Services, Inc. v. U.S. ex rel. Escobar had the potential to put false claims based on an “implied certification” in the crosshairs. Instead, based on the weight of questioning by a plurality of justices, it appears that some form of implied certification theory may survive. (We previously reported on this case, here.)
Continue Reading Did the FCA’s “Implied Certification” Theory Dodge a Bullet?
We previously reported on a D.C. Circuit case in which a three-judge panel held that when the government is silent, there is no False Claims Act (FCA) liability for a contractor’s “objectively reasonable” interpretation of an ambiguous contract provision. The government is now seeking a rehearing en banc (a rehearing by all of the D.C. Circuit judges) in the hopes of rolling back the panel’s ruling.
Continue Reading DOJ Seeks Rehearing in D.C. Circuit Case, Hoping to Resurrect Liability for a Contractor’s “Objectively Reasonable” Interpretation of an Ambiguous Contract Provision
Setting the stage for what may be a far-reaching interpretation of the False Claims Act (FCA), the Supreme Court of the United States granted certiorari to resolve a circuit split over whether “implied certification” is a viable theory of liability under the FCA. Universal Health Servs., Inc. v. United States ex rel. Escobar, No. 15-7. Unlike a typical false certification case—in which a person explicitly but falsely certifies compliance with a statute, regulation, or contract provision—an implied certification case does not require an express certification of compliance. Instead, it merely requires failure to comply with a statutory, regulatory or contractual requirement that is condition of payment.
Continue Reading Supreme Implications: High Court to Decide Fate of “Implied False Certification” Theory
In a significant win for government contractors, health care providers, and financial institutions who operate in an increasingly onerous regulatory environment, the United States Court of Appeals for the D.C. Circuit issued an important False Claims Act (FCA) ruling in United States ex rel. Purcell v. MWI Corporation, No. 14-5210 (D.C. Cir. Nov. 24, 2015). In Purcell, the D.C. Circuit held that the government cannot establish that a defendant “knowingly” submitted a false claim when it certifies compliance with an ambiguous contract provision based on its objectively reasonable interpretation of that ambiguous provision, and when the government had not officially warned the defendant away from its otherwise objectively reasonable interpretation of that provision. The case provides some relief for those contractors who rely on their good faith interpretations of ambiguous regulations and contract provisions where there is otherwise no guidance or direction from the government. It is also another example of the Justice Department expanding its FCA docket beyond traditional government contractor and health care defendants.
Continue Reading D.C. Circuit: When The Government Is Silent, There Is No FCA Liability For A Contractor’s “Objectively Reasonable” Interpretation Of An Ambiguous Contract Provision
With two recent False Claims Act cases (and six in the last decade), relators have taken aim at a new target for FCA enforcement and liability: Managed Care Plans. Managed Care providers should be aware of this growing threat and take steps to reduce their exposure.
Continue Reading Managed Care Plans: New Targets for Whistleblowers
In a potentially influential decision, the Federal Court for the Southern District of New York has in effect recognized a safe-harbor exception to the strict 60-day overpayment return rule, which was incorporated into the False Claims Act, 31 U.S.C. §§ 3729 et seq. (“FCA”).
Continue Reading Kane et al., v. Healthfirst, Inc., et al. Is There Now a Judicially Created Return of Over-Payment Safe Harbor?
A relator bringing an action under the civil False Claims Act (FCA) is required to be an “original source” of the allegations. 31 U.S.C. § 3730(e)(4). To qualify as an original source under the statute, the relator must (1) have “direct and independent knowledge” of the information giving rise to the claims and (2) “provide[] the information to the Government before filing the action.” For the past 23 years, the Ninth Circuit also had a third requirement to qualify as an original source: the relator must have had “a hand in the public disclosure of allegations that are a part of [the] suit.” That third requirement, however, came to an abrupt end on July 7, 2015, when the Ninth Circuit in United States ex rel. Hartpence v. Kinetic Concepts reversed course, ruling that its holding in United States ex rel. Wang v. FMC Corp., 975 F.2d 1412 (9th Cir. 1992) was “wrongly decided” and that only the two requirements specified in the statutory language of the FCA must be satisfied for a relator to qualify as an original source. Plaintiffs’ lawyers throughout the Ninth Circuit are rejoicing.
Continue Reading The Ninth Circuit Overrules Decades of Precedent To Make It Easier For Relators To Qualify As An “Original Source”