Category: Procedure

Court Rules that “Upon Information And Belief” Allegations of FCA Violations Leveled Against Competitor Fail to Withstand Pleading Requirements

Peter R. Mayer

A Federal court in Ohio recently dismissed a qui tam lawsuit brought under the False Claims Act by Kustom Products, Inc. against Hupp & Associates, Inc., a defense contractor, and in so doing provided judicial treatment of the common practice of alleging facts “upon information and belief.”  United States ex rel. Kustom Prods. v. Hupp & Assocs., No. 2:15-cv-03101, 2017 U.S. Dist. LEXIS 72814 (S.D. Ohio May...

Jury Verdict in Declined Civil FCA Action Need Not Bar Criminal Prosecution for Same Conduct

Betsy Sellers

The qui tam provisions of the False Claims Act allow private citizens to file FCA claims on behalf of the government.  The government may elect to intervene in the action—or it may not.  The United States District Court for the Western District of Virginia held earlier this month that when the government does not intervene, it is a party in interest, but not a party to...

Supreme Court Concludes that Violation of FCA Seal Provision Does Not Necessarily Mandate Dismissal of Qui Tam Suits

Peter R. Mayer

The Supreme Court held yesterday that a violation of the False Claims Act’s seal provision does not mandate dismissal of a relator’s complaint.  Justice Kennedy authored the Court’s opinion in the unanimous 8-0 decision.  State Farm was accused of defrauding the government by falsely classifying wind damage caused by Hurricane Katrina as flood damage, which would allow State Farm’s costs to be covered by the...

Second Circuit Finds FCA Claims about Night-Vision Goggles Lack Sufficient Particularity

Angela Porter

On Wednesday, May 25, 2016, the Second Circuit affirmed the district court’s decision to dismiss FCA claims alleging that defendants supplied $1.5 billion worth of deficient night-vision goggles to the U.S. military.  United States ex rel. Ladas v. Exelis Inc. et al., No. 14-4155 (2d Cir. May 25, 2016).  The court found that the relator, Michael Ladas, failed to plead the fraud claims with sufficient...

First Circuit Permits Supplementation of Complaint to Cure First-to-File Jurisdictional Defects

Benjamin Greenberg

The FCA first-to-file bar provides that if an action involving the same subject matter is already pending, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”  31 U.S.C. § 3730(b)(5).  Courts are thus deprived of jurisdiction to entertain opportunistic qui tam lawsuits based on facts similar to an already-filed lawsuit.  In May 2015, the...

New York Trial Court Dismisses FCA Tax Case against Vanguard; Determines Relator Violated Confidentiality Provisions of State Attorney Ethics Rules

Jeremy Schlosser

On November 13, 2015, the New York State Supreme Court dismissed a qui tam action brought under New York State Finance Law §§ 187-194 (“False Claims Act”) against The Vanguard Group Inc., The Vanguard Group of Mutual Funds, and Vanguard Marketing Corporation (collectively, “Vanguard”) by a former Vanguard in-house tax attorney because the Court found that plaintiff had improperly relied on confidential information obtained through...

Eighth Circuit Vacates Relators’ FCA Settlement Recovery; Concludes that the FCA “Allows Relators to Recover a Percentage of the Proceeds of the Settlement of ‘the Claim’ Brought by the Relators, and Only That Claim”

Jeremy Schlosser

The U.S. Court of Appeals for the Eighth Circuit recently vacated an award of settlement proceeds to relators of several related qui tam actions because the district court failed to make factual findings as to whether the government’s settlement with one of the defendants was based on claims that factually overlapped with the claims brought by the relators. Rille v. PricewaterhouseCoopers LLP, et al., No....

Supreme Court Asked To Clarify Application of Rule 9(b) in FCA Cases

Matthew Buckley

On September 21, 2015, counsel for AT&T, Inc., and other telecommunications providers asked the U.S. Supreme Court to resolve a circuit split over what relators asserting FCA claims must do to meet Federal Rule of Civil Procedure 9(b)’s requirement of particularity. Pet. for a Writ of Cert., AT&T, Inc. v. United States of America ex rel. Heath, No. 15-363 (Sept. 21, 2015). Under the Universal...

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

Robert McGarry

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....

Third Circuit Upholds Application of pre-ACA Public Disclosure Bar to FCA Claims Filed after the ACA’s Effective Date

Christina Hanson

On August 26, the United States Court of Appeals for the Third Circuit upheld a district court’s decision to apply the version of the FCA’s public disclosure bar in existence before the enactment of the Patient Protection and Affordable Care Act (“ACA”) to qui tam claims filed after the ACA’s effective date. United States ex rel. Judd v. Quest Diagnostics Inc., No. 14-3156 (3d Cir....