FCA NOW

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....

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

Nathan Ebnet

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...

Fourth Circuit Affirms Dismissal of FCA Complaint Alleging Contracting Fraud

Zachary Davison

In an unpublished decision issued on Thursday, August 13, 2015, the Fourth Circuit Court of Appeals reemphasized Federal Rule of Civil Procedure 9(b)’s “stringent particularity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...

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

Sydney Crowder

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...

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

David Couillard

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)...

Fourth Circuit Affirms $237 Million Jury Verdict for Stark and FCA Violations; Rejects Advice-of-Counsel Defense

Andrew Brantingham

On July 2, the U.S. Court of Appeals for the Fourth Circuit affirmed a jury verdict of more than $237 million against Tuomey Healthcare System, a nonprofit hospital in South Carolina, based on Stark Law and False Claims Act violations.  United States ex rel. Drakeford v. Tuomey Healthcare System, No. 13-2219 (4th Cir. July 2, 2015).  The Government’s claims in the case were based on...

Ninth Circuit Concludes that Conviction Precludes Relator Recovery

Benjamin Greenberg

The Ninth Circuit last week held that pursuant to 31 U.S.C. 3730(d)(3) of the False Claims Act (“FCA”), a qui tam relator who is convicted of conduct giving rise to the fraud that is the subject of the FCA lawsuit must be dismissed from the lawsuit and is not entitled to a share in any recovery, even if the relator played only a minor role...

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

Benjamin Greenberg

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...

Dialysis Provider Settles Whistleblower Lawsuit for $450 Million

Katherine Arnold

The Department of Justice and dialysis provider DaVita Healthcare Partners recently finalized a $450 million agreement settling claims that the company intentionally inflated Medicare billings.  The parties had filed a joint motion to stay the case, United States ex rel. et al. v. DaVita Inc., No. 07-02509 (N.D. Ga. Apr. 16, 2015), in April in order to focus on reaching a settlement. Relators Alon Vainer...

Ninth Circuit Unanimously Overrules Long-Standing “Original Source” Precedent; Makes it Easier to Qualify as an Original Source Under the FCA

Alex Hontos

For 23 years, the Ninth Circuit required that a relator establish three elements to qualify as an “original source” under the False Claims Act: (1) the relator must have direct and independent knowledge of the information on which her allegations are based; (2) the relator must have voluntarily provided that information to the government before filing her qui tam lawsuit; and (3) the relator must...