Category: Pleading Standards

Escobar in Action: Physician-owners’ fraud claims against hospital defeated in Fifth Circuit appeal for lack of materiality

Siena Caruso

Following the passage of the Affordable Care Act (“ACA”), which placed new limits on physician-owned hospitals, St. Luke’s Health System (“System”) took action to change one of its hospital’s ownership structures through a buy-out of the physicians’ partnership interests pursuant to the Texas Securities Act (“TSA”). The TSA allows rescission for the original price paid for a security, plus interest, in exchange for a release...

Second Circuit Emphasizes Heightened Pleading Standard for Qui Tam FCA Suits

Jack Huerter

The Second Circuit Court of Appeals recently emphasized the heightened pleading standard that a relator in a qui tam False Claims Act (“FCA”) suit must satisfy to avoid dismissal under Rule 12(b)(6). United States ex rel. Gelbman v. City of New York, Case No. 18-3162, 2019 U.S. App. LEXIS 30889 (2d Cir. Oct. 17, 2019). In Gelbman, the relator, a former information specialist for the...

D.C. Circuit Weighs in on the FCA’s Anti-Retaliation Statute

Benjamin Greenberg

Last month, the D.C. Circuit revived a False Claims Act (“FCA”) retaliatory discrimination claim by a former employee of Howard University contending that she was fired by the University for objecting both internally and externally to the University’s alleged failure to maintain the humane laboratory animal living conditions on which the University’s receipt of federal funding was conditioned. See Singletary v. Howard University, No. 18-7158 (D.C. Cir. Sept. 20,...

Relator Failed to Sufficiently Plead its FCA Action by Relying on Big Data Alone, Resulting In Big Dismissal

Andrew Brantingham

In early August, the U.S. District Court for the Western District of Texas granted a hospital system’s motion to dismiss a False Claims Act case that illustrates the increasing intersections in FCA litigation between data analytics and health care providers’ efforts to increase revenue through aggressive management of coding and billing practices. United States ex rel. Integra Med Analytics, LLC v. Scott et al., No....

Another Qui Tam Suit Alleging a Scheme to Defraud by Reporting Inflated Drug Prices Survives Motion to Dismiss

Nathan Ebnet

Within the last five years, district courts in the Seventh Circuit have repeatedly denied motions to dismiss qui tam lawsuits brought under the FCA that allege a scheme to defraud government health programs by reporting inflated “usual and customary” prices for prescription drugs. By contrast, at least one district court in the Sixth Circuit recently granted such a motion under Rule 9(b). On March 7,...

Tribal Employees Cannot Shake FCA Claims Pleaded with Particularity When Sued in Their Personal Capacities

Caitlin Hull

Seven years after filing their initial complaint, a Montana federal court ruled that plaintiffs’ FCA action—at least on some claims and against some defendants—may finally proceed. Cain v. Salish Kootenai Coll., Inc., No. CV-12-181-M-BMM, 2019 U.S. Dist. LEXIS 26955 (D. Mont. Feb. 20, 2019). In 2012, plaintiffs, as relators in a qui tam action, alleged that a tribal college, its board of directors, and various...