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Category: False Statement

Express Certification / False Statement / Procedure

30 Sep, 2015

Utah Court Dismisses False-Certification Case Alleging Submission of False Certificates of Conformance

On September 22, 2015, the U.S. District Court for the District of Utah dismissed a qui tam complaint brought against Triumph Gear Systems, Inc. (“TGS”) and its parent company Triumph Group, Inc. (“Triumph”).   In an opinion issued by District Judge Dale A. Kimball, the Court found that the complaint failed at the “most basic level” to identify a single false claim submitted to the government....

False Statement / Persons subject to FCA

26 Sep, 2015

Judge Dismisses FCA Claim Against City of Chicago; Concludes that “Subsequent Nonperformance of a Future Commitment” Was Not a Falsehood Under FCA

On September 16, 2015, the U.S. District Court for the Northern District of Chicago dismissed a False Claims Act (FCA) case against the City of Chicago, because the qui tam complaint did not satisfy the relevant pleading standard.   In an opinion issued by District Judge Andrea Wood, the court found that the complaint failed to allege facts with particularity as required under Federal Rule of...

False Statement / Scienter

22 Sep, 2015

Southern District of New York Opinion Provides Guidance on Satisfying Scienter Requirement Under False Claims Act

Not every mistake or negligent act gives rise to liability under the False Claims Act. That principle has long been central to the FCA. But the dividing line–  between making a mistake, on the one hand, and “knowingly” or “recklessly” submitting a false claim, on the other–can be murky. In United States ex Rel Kirk v. Schindler Elevator Corp., No. 05-cv-2917, 2015 WL 5296714 (S.D.N.Y....

Corporate Integrity Agreement / Enforcement / False Statement

21 Sep, 2015

New Justice Department Directive Underscores Focus on Individuals—and Importance of Cooperation—in False Claims Act Investigations

In a recent memorandum issued to Main Justice litigating components and United States Attorney’s offices nationwide, Deputy Attorney General Sally Quillan Yates emphasized that “fighting corporate fraud and other misconduct” remains a top priority for the Department and the Federal government’s vow to seek “individual accountability for corporate wrongdoing.” The memorandum, which appears to be designed to respond to criticism regarding the Department’s response to...

Byrd Amendment / False Statement / Settlements

27 Aug, 2015

Sandia Corporation Agrees to Pay $4.7 Million to Settle Allegations Related to its Lobbying Activities

On August 21, 2015, the Justice Department announced that Sandia Corporation—owned by Lockheed Martin, the world’s largest defense contractor—agreed to pay $4,790,042 to settle allegations that it violated the Byrd Amendment and the False Claims Act by using federal funds for lobbying activities. The settlement with Sandia is a recent example of the Justice Department’s willingness to use the Byrd Amendment as a hook for...

False Statement / Procedure

19 Aug, 2015

Fourth Circuit Affirms Dismissal of FCA Complaint Alleging Contracting Fraud

In an unpublished decision issued on Thursday, August 13, 2015, the Fourth Circuit Court of Appeals reemphasized Federal Rule of Civil Procedure 9(b)’s “stringent particularity requirement” when it affirmed a lower court’s dismissal of plaintiff’s FCA claim, finding “that the district court did not err in concluding that the amended complaint failed to plead fraud with the requisite specificity.” McLain v. KBR, Inc., No. 14-1816...

False Statement / Overpayments / Reverse False Claims

10 Aug, 2015

DOJ Settles “First of its Kind” FCA Suit Involving Retention of Overpayments

On August 3, the Department of Justice announced the first False Claims Act settlement of a case involving a health-care provider’s alleged failure to investigate, identify and refund overpayments from government programs, including Medicare, Medicaid and TRICARE.  Such claims (and settlements) may become more common given the recent amendments to the FCA in 2010, which provide that Medicare and Medicaid overpayments be reported and returned within “60...

Corporate Integrity Agreement / False Statement / Reverse False Claims

4 Aug, 2015

Court Concludes that Violation of a Corporate Integrity Agreement May Form the Basis for Reverse False Claim Liability

In late July, a federal district court in Pennsylvania denied a motion to dismiss brought by pharmaceutical company Cephalon, Inc., concluding that violations of a corporate integrity agreement (“CIA”) entered into by Cephalon and the federal government could give rise to “reverse false claim” liability.  United States ex rel. Boise v. Cephalon, Inc., No. 2:08-cv-00287-TON (E.D. Pa. July 21, 2015). Conduct prohibited under section 3729(a)(1)(G)...

False Statement / Implied Certification

16 Jul, 2015

D.C. Circuit Determines that Physical Possession of Medicare Records Not Required in Implied-Certification Claim Against the District of Columbia

On Friday, the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court’s grant of summary judgment in favor of a relator based on the district court’s finding of a violation of the False Claims Act.  United States ex rel. Davis v. District of Columbia, No. 14-7060 (D.C. Cir. July 10, 2015). The relator’s FCA theory–implied-certification liability–relied on his allegation that...

False Statement / Implied Certification

7 Jul, 2015

Seventh Circuit Rejects Implied Certification Theory of FCA Liability

Deepening a circuit split, the Seventh Circuit has joined the Fifth Circuit in rejecting the implied false certification theory of liability under the FCA.  United States v. Sanford-Brown, Ltd., No. 14-2506 (7th Cir., June 8, 2015).  The Fourth, Ninth, Tenth and District of Columbia Circuits have allowed implied false certification claims. The implied false certification theory holds that when an entity enters into an agreement...