Category: Relators

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...

Court Examines Standard for Approval of Settlement of Qui Tam Over a Relator’s Objection

Betsy Sellers

The False Claims Act (FCA) allows plaintiffs/relators to bring qui tam actions, in which the government may then elect to intervene.  The FCA also provides that “[t]he Government may settle a [qui tam] action with the defendant notwithstanding the objections of the person initiating the action if the court determines, after a hearing, that the proposed settlement is fair, adequate, and reasonable under all the...

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...

Texas Diagnostic Imaging Service Settles FCA Allegations for $3.5 Million; Whistle-Blower to Receive $596,700

Nathan Ebnet

A recent settlement illustrates the substantial recovery available to whistle-blowers under the FCA’s qui tam provisions. Those provisions allow a qui tam plaintiff to receive typically between 15 percent and 25 percent of the proceeds of an FCA settlement.  31 U.S.C. § 3730(d). The settling party—Preferred Imaging—is a Dallas-based company that operates independent diagnostic facilities in Texas, Illinois, and Kansas. Preferred Imaging performs procedures involving the administration of contrast...

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...