FCA NOW

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...

District Court Rejects “Worthless Services” FCA Claim, Interprets First-to File Bar and Res Judicata in FCA Context

Betsy Sellers

Earlier this month, the U.S. District Court for the Eastern District of Virginia dismissed a 2-count False Claims Act (FCA) complaint against Unisys Corporation. United States ex rel. Soodavar v. Unisys Corp., 2016 WL 1367163 (April 5, 2016) (“Soodavar”).  The case addresses several important limits on FCA claims. Count I alleged that certain Unisys employees were so unqualified that their services, which involved installing and...

DOJ Intervenes In FCA Suit Against Subcontractor That Allegedly Failed to Comply With Specifications

Ben Kappelman

A recently unsealed False Claims Act case in Maine alleges a roof contractor knowingly failed to use materials that complied with the prime contracts for renovation of government buildings. According to the complaint filed by the United States in Emery v. Roof Systems of Maine Inc., 2:14-cv-00483-DBH (D. Me.), Roof Systems of Maine worked as a subcontractor at a National Guard installation at the former...

Ninth Circuit holds that Fannie Mae and Freddie Mac are not officers, employees, or agents of the United States under 31 U.S.C. § 3729(b)(2)(A)(i) of the False Claims Act

Christina Hanson

On February 22, the Ninth Circuit affirmed the dismissal of an FCA claim brought by relators alleging that various lenders and loan servicers made false certifications to Fannie Mae and Freddie Mac, concluding that claims presented to Fannie Mae or Freddie Mac could not give rise to liability under § 3729(b)(2)(A)(i) of the FCA. See U.S. ex rel. Adams v. Aurora Loan Servs., Inc., No....

District Court Rejects Government’s FCA Claim Seeking Return of Retained Benefits; Decides that Agency Policy Guidance Did Not Create an “Obligation” Under the Act

Nathan Ebnet

In an opinion issued earlier this month, the United States District Court for the Eastern District of Oklahoma refused to impose False Claims Act liability on a defendant who retained and invested his mother’s Social Security benefits after she went missing. The case adds to the growing body of law on the word “obligation” as it is used in the FCA; it also showcases the...

CMS Finalizes Rule Requiring Healthcare Providers to Return Overpayments

John Marti

Late last week, the Centers for Medicare & Medicaid Services (CMS) published its final rule regulating how healthcare providers must report and return overpayments. This rule implements the Affordable Care Act’s requirement that healthcare providers who receive an overpayment from Medicare return the overpayment within 60 days of its identification. Overpayments not returned within the 60-day limit become “obligations” to the Federal government within the...

University of Massachusetts Medical School Not a “Person” Under FCA; 1st Circuit Adopts “Arm-of-the-State” Test

Alex Hontos

In an opinion issued on January 27, 2016, the United States Court of Appeals for the First Circuit affirmed the dismissal of a qui tam lawsuit against the University of Massachusetts, holding that the University was “indistinguishable” from a state agency and, therefore, not a “person” subject to potential liability under the False Claims Act, 31 U.S.C. 3729(a)(1)(A). Relator Michael Willette, an employee of the University’s...

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

David Couillard

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”...

Nashville Pharmacy Services, LLC Settles FCA Allegations

Katherine Arnold

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 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...