Category: False Statement

Third Circuit: False Claims Act Liability Premised on an Anti-Kickback Statute Violation Requires Proof that at Least One Federal Claim Resulted from an Improper Referral or Recommendation

Ben Kappelman

Federal scrutiny of charities that assist patients with accessing prescription drugs has increased with rising prescription drug prices.  Some prescription drug charities receive funding from medical providers or drug manufacturers, which can raise questions about whether the charities’ funders are using the charities to generate improper recommendations or referrals. In December 2017, the U.S. Department of Health and Human Services Office of Inspector General rescinded a...

Two Recent Justice Department Memoranda May Have Significant Consequences for Pending and Future False Claims Act Enforcement

Alex Hontos

In recent weeks, the United States Department of Justice (“DOJ”) issued two memoranda that might change the calculus of False Claims Act (“FCA”) cases.  The memoranda at a minimum provide organizations with new—or at least invigorated—defenses to qui tam actions and civil enforcement matters. First, on January 10, Michael Granston, Director of DOJ’s Civil Frauds section, issued a memorandum encouraging DOJ trial attorneys to consider dismissing...

Eighth Circuit Rejects Sovereign Immunity Defense to FCA Qui Tam Action

Betsy Sellers

Last month the Eighth Circuit considered and rejected an Eleventh Amendment sovereign immunity defense to a qui tam action under the False Claims Act.  In United States ex rel. Fields v. Bi-State Development Agency, No. 16-3783, 2017 U.S. App. LEXIS 13925 (8th Cir. August 1, 2017), a former employee of Bi-State alleged that the defendant interstate compact entity raised funds and required its employees to...

Supreme Court Applies Escobar to Reinstate Implied Certification Suit Against Bank Based on Compliance With Fed Rules

Erik Ruda

On Tuesday, February 21, 2017, the Supreme Court summarily vacated the judgment in Bishop v. Wells Fargo & Co. and remanded the case to the Second Circuit in light of the Court’s recent decision in Universal Health Servs. v. United States ex rel. Escobar, which recognized the implied certification liability theory in FCA suits. In Bishop, the plaintiffs originally brought FCA claims against Wells Fargo,...

Alleging Improper Use of Funds Legitimately Obtained from the Government Insufficient to State FCA Retaliation Claim

Ben Kappelman

The U.S. District Court for the Southern District of Texas has dismissed an FCA retaliation claim brought by a nurse who claimed to have blown the whistle on misuse of funds at a hospital that received significant federal revenue. In Endicott v. Oakbend Medical Center, the nurse alleged she was fired after she complained that several hospital executives were using hospital employee time to enrich...

Northern District of Illinois Dismisses Whistleblower’s FCA Suit for Failing to Connect Allegations of Misconduct with Submission of False Claims

Nathan Ebnet

In United States ex rel. Keen v. Teva Pharmaceuticals USA, Inc., relator Janice Keen sued her former employer—the pharmaceutical company Teva—for violations of the FCA.  According to Ms. Keen, Teva trained its sales force to misleadingly promote and sell a medicine used to treat muscle spasms.  Ms. Keen alleged that Teva’s deceptive practices caused physicians to prescribe the medicine in situations for which it was...

New Orleans Federal Court Dismisses Relators’ Improper Billing Claims against FEMA Temporary Housing Contractor Due to Insufficient Evidence

Jeremy Schlosser

On September 14, 2016, the United States District Court for the Eastern District of Louisiana granted a government contractor’s summary judgment motion and dismissed a lawsuit brought against it by False Claims Act relators (“Relators”) because Relators failed to identify evidence supporting the existence of a genuine issue of material fact regarding their claims that the contractor had improperly billed the Federal Emergency Management Agency...

Eighth Circuit Determines that Compliance with Reasonable Interpretation of Government Regulation Sufficient to Avoid FCA Liability (Absent a Government Warning to the Contrary)

Ben Kappelman

The Centers for Medicare and Medicaid Services (“CMS”) establishes requirements for how medical procedures must be performed for a medical provider to seek payment for those procedures.  Seeking payment without properly performing the procedure might expose the provider to alleged liability under the False Claims Act (“FCA”).  But what if the requirements for the procedure are ambiguous?  Will a provider’s reasonable interpretation of a requirement...

DOJ Files FCA Complaint Against Recipient of Grant Funding

Vanessa J. Szalapski

The FCA began as a response to procurement fraud by military contractors during the Civil War.  In the intervening years, its reach has extended and increasingly the government is using the FCA as a tool in the context of grant programs.  A recent civil complaint filed by the U.S. Attorney’s Office for the Eastern District of Kentucky is a good example. DOJ sued the medical device maker...

District Court Grants Motion to Dismiss Relators’ Claims in One of the First Post-Escobar Decisions

Katherine Arnold

The District Court for the Eastern District of Washington recently granted the defendants’ Motion to Dismiss relators’ claims in a consolidated False Claims Act lawsuit against Monaco Enterprises, Inc. (“MEI”). MEI provides security and fire detection products, installation, and services to a variety of customers, including the U.S. military. The lawsuit, brought by former employees of MEI, alleges that MEI fraudulently overbilled the government, charged...