FCA NOW

District Court Grants Motion to Dismiss Relators’ Claims in One of the First Post-Escobar Decisions

Katherine Arnold

The District Court for the Eastern District of Washington recently granted the defendants’ Motion to Dismiss relators’ claims in a consolidated False Claims Act lawsuit against Monaco Enterprises, Inc. (“MEI”). MEI provides security and fire detection products, installation, and services to a variety of customers, including the U.S. military. The lawsuit, brought by former employees of MEI, alleges that MEI fraudulently overbilled the government, charged...

First Circuit Affirms Dismissal For CVS Caremark Under Public Disclosure Bar

Mike Rowe

The FCA’s public disclosure bar precludes liability when a relator’s allegations have been publicly disclosed in a list of statutorily enumerated sources.  Last week, the First Circuit added to the growing jurisprudence both interpreting the bar and an exception to the bar:  the original source exception. In United States ex rel. Winkelman v. CVS Caremark Corp., No. 15-1991 (June 30, 2016), the relators filed suit...

Federal Civil Penalties Going Up, Way Up.

John Marti

The United States Department of Justice (“DOJ”) published an Interim Final Rule on June 30th nearly doubling the per-claim civil penalties for violations of a number of laws, including the False Claims Act (FCA), the Program Fraud Civil Remedies Act, and the Anti-Kickback Act.  For example, the FCA provides for mandatory per-claim penalties on top of treble damages.  Currently, the FCA penalties are set at...

Implied Certification, Escobar, and the Impact on Healthcare Providers

Alissa Smith

On June 16, 2016, the Supreme Court issued a unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar upholding the “implied certification” theory of liability under the False Claims Act (“FCA”) but adopting a rigorous materiality standard for determining liability in such cases.  This case is a game changer.  For years, the government and plaintiffs have argued that the federal FCA...

D.C. Circuit Upholds Public-Disclosure-Bar Dismissal Based On Information Posted to Websites

Benjamin Greenberg

Last week, the U.S. Court of Appeals for the D.C. Circuit upheld a district court’s dismissal of a qui tam action under the oft-litigated, “public disclosure bar,” where the transactions that gave rise to an inference of fraud were “available” on the internet. See United States ex rel Oliver v. Phillip Morris USA Inc., No. 15-7049 (D.C. Cir. June 21, 2016).  The public disclosure bar...

Supreme Court Upholds Implied Certification Theory of Liability; Imposes Limitations on its Reach

RJ Zayed

In a unanimous decision, the Supreme Court today charted a middle course between competing interpretations of the scope of False Claims Act.  Universal Health Servs., Inc. v. United States ex rel. Escobar, Case No. 15-7 (June 16, 2016).  The Court upheld the viability of the so-called “implied-certification” theory under the FCA, but simultaneously clarified the contours of the theory and imposed significant limitations on its...

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...

Construction Subcontractor Settles FCA Allegations for $2.8 Million

Shannon McNeal

A recent settlement illustrates the broad reach of the FCA and the substantial liability that “mere retention” of an overpayment can impose on contractors several steps removed from a government contract.  The dispute involved alleged overpayments made to Bartlett Holdings Inc. (d/b/a BHI Energy/Sun Technical Services) during its performance as a subcontractor on a Federal project.  Bartlett is a supplier of radiological protection services and...

Former Medicaid Auditor for D.C. Government Permitted to Proceed with FCA Retaliation Claim

Annie Trimberger

The Federal District Court for the District of Columbia recently ruled that a former director of Medicaid audits in Washington D.C. can proceed with retaliation claims alleging he was fired for trying to stop his former bosses from covering up $100 million in improper payments to medical providers. Paul Hicks was hired by District of Columbia’s Office of the Inspector General (“OIG”) as an auditor in...

Failure to Disclose Best Pricing: Pharmaceutical Companies Settle FCA Claims for $784 Million

Alex Hontos

The Department of Justice announced late last month that pharmaceutical manufacturers Wyeth and Pfizer would pay $784 million to resolve a False Claims Act investigation and qui tam lawsuit arising from Wyeth’s failure to disclose its best pricing of drugs to the government.  The case was brought under the FCA’s qui tam provisions; the relators’ share of the recovery is nearly $100 million. The case...