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FCA NOW

Government Solutions & Investigations Practice Group

False Statement / Reverse False Claims

28 Jan, 2016

DuPont Appeal May Clarify What Constitutes a Reverse False Claim “Obligation”

On January 20, a federal district court in Louisiana certified for appeal its 2014 ruling denying defendant DuPont’s motion for summary judgment, thereby permitting DuPont to seek appellate review of the district court’s ruling. Simoneaux v. E.I. du Pont Nemours & Co., No. 12-cv-00219 (M.D. La. Jan. 20, 2016).  Central to the district court’s now-certified ruling is the meaning and interpretation of the term “obligation”...

Enforcement / Healthcare

11 Jan, 2016

Nashville Pharmacy Services, LLC Settles FCA Allegations

Last week the Department Of Justice announced a settlement agreement with Nashville Pharmacy Services, LLC (“NPS”) and NPS majority owner Kevin Hartman.  Under the agreement, NPS and Mr. Hartman will pay up to $7.8 million to settle a lawsuit alleging violations of the False Claims Act.  The settlement agreement does not include any admission of liability on the part of NPS or Mr. Hartman. On...

First-To-File Rule / Procedure / Relators

31 Dec, 2015

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

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...

Persons subject to FCA

14 Dec, 2015

Sixth Circuit Joins Sister Circuits In Using Arm-Of-The-State Analysis To Define “Person” Under The False Claims Act

The FCA imposes liability on “any person” that makes a false statement in violation of the Act, 31 U.S.C. § 3729(a)(1).  Although the Act itself does not define “person,” the Supreme Court has said only that a person cannot include a state or state agency.   See Vermont Agnecy of Natural Resources v. Stevens, 529 U.S. 765, 784-85, 788 (2000) (observing that § 3733(l)(4) defines person...

Healthcare / Stark Law

11 Dec, 2015

California Court Permits FCA Claim Involving Medicare “Referral and Regeneration” Scheme to Proceed Against Healthcare CEO

In a recent opinion, the Northern District of California allowed FCA claims to proceed against the CEO of a skilled nursing facility operator.  John Orten, the whistleblower in the suit, was a former nursing home administrator for North American Health Care, Inc. (NAHC).  Orten claimed that he had witnessed the CEO of NAHC, John Sorensen, order company administrators to pay physicians who referred patients to...

Enforcement

8 Dec, 2015

Education Management Corporation Settles Significant FCA Claims

Education Management Corporation (EDMC), a Pittsburgh-based company that operates for-profit educational institutions, has agreed to pay $96 million in what attorneys involved in the case claim to be the largest settlement ever in a False Claims Act case involving the Department of Education.  The settlement was announced on November 16, 2015, and it resolved four cases spanning a period of eight years. The cases were...

Enforcement / Healthcare

3 Dec, 2015

Novartis Pharmaceuticals Settles $390MM FCA Allegations

Drugmaker Novartis Pharmaceuticals has agreed in principle to pay $390MM (including $20MM in civil forfeitures) to the Department of Justice.  This payment, in addition to modification and an extension of Novartis’s existing Corporate Integrity Agreement (“CIA”), settles claims that the company paid illegal kickbacks to specialty pharmacy companies in order to induce the pharmacies to recommend two drugs—Exjade and Myfortic—to their patients.  The Government sought...

Procedure / Relators

1 Dec, 2015

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

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...

False Statement / Scienter

18 Nov, 2015

District Court Rejects FCA Claim Against Healthcare Provider That Submitted False Claims But Did So Without Necessary Mental State

Healthcare provider Fresenius Medical Care North America claimed victory in a False Claims Act (“FCA”) lawsuit recently when a federal district court ruled that there was no evidence that its practice of billing for “overfill” medications was anything more than negligent, and therefore did not satisfy the knowledge requirement of the FCA. On October 30, 2015, the U.S. District Court for the Northern District of...

Corporate Integrity Agreement / Settlements / Stark Law

4 Nov, 2015

Tuomey Settles, Post-Judgment, Alleged Violations of FCA and Stark Law

The Department of Justice and Tuomey Healthcare have announced a $72.4 million settlement in a lawsuit that the DOJ touts as “another achievement for the [DOJ and DHS] Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative.” The settlement follows a 2013 trial in which a jury found Tuomey had violated the False Claims Act and Stark Law by filing more than 21,000 false...