Archives: Penalties

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Sixth Circuit Hits Federal Government with $450,000+ in Legal Fees to be Paid to FCA Defendant Under the Equal Access to Justice Act

In an unusual ruling on August 18, 2017, the US Court of Appeals for the Sixth Circuit reversed the Middle District of Tennessee’s denial of the defendant’s motion for attorneys’ fees, and remanded the case for an award of legal fees and expenses related to defending against the government’s “excessive” damages demand, as well as … Continue Reading

In Calculating FCA Damages, Another Court Rejects Government Windfalls Based on Purportedly “Tainted Claims”

Last month, the US District Court for the District of Columbia delivered another blow to the “tainted claims” theory of False Claims Act (FCA) damages frequently espoused by the government and qui tam relators. From the 1990s through 2004, the US Postal Service sponsored a professional cycling team led by Lance Armstrong, who won the … Continue Reading

Congressional Hearing Explores FCA Oversight and Reform

On April 28, 2016, the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice (Subcommittee) held a hearing on the False Claims Act (FCA). According to a statement of the Subcommittee chair, the hearing was called to examine FCA oversight and “what more can be done to prevent, detect, and eliminate false claims costing … Continue Reading

Sixth Circuit Slashes “Tainted Goods” FCA Damages Award by over 95%

The United States Court of Appeals for the Sixth Circuit issued a dramatic reduction to an False Claims Act (FCA) damages award on February 4, 2016, reducing the award from  $762,894.54 to a mere $14,748, and labeling the government’s “tainted goods” damage calculation as “fairyland rather than actual.” The Sixth Circuit’s ruling in United States … Continue Reading

“Operation Spinal Cap” Sees Former Hospital Executive, Physicians Charged for Their Roles in Kickback Scheme

Last week, the Department of Justice (DOJ) announced charges against a former hospital CFO, two orthopedic surgeons, a chiropractor, and a health care marketer for their alleged roles in a series of fraudulent referral and billing schemes.  According to the DOJ, these referral schemes paid illegal kickbacks to physicians for spinal surgery referrals and caused … Continue Reading

Fourth Circuit Upholds Judgment of Over $237 Million against Tuomey Healthcare System

On July 2, 2015, the U.S. Court of Appeals for the Fourth Circuit affirmed the U.S. District Court for the District of South Carolina’s judgment of $237,454,195 in damages and penalties against Tuomey Healthcare System in United States ex rel. Drakeford v. Tuomey Healthcare System, Inc. (No. 13-2219).  The judgment followed a rare False Claims … Continue Reading

Eastern District of Texas Awards Relator $218 Million Despite Fifth Circuit Caution That Claims Not Likely Material or Based on False Certifications

The Eastern District of Texas confirmed a jury verdict holding highway-guardrail manufacturer Trinity Industries liable for False Claims Act violations on June 9, 2015, resulting in a judgment of over $680 million against the company.  Out of the $663 million in damages and penalties, the court awarded the relator a 30 percent share of the … Continue Reading

New Fraud Alert Shows OIG Focus on Physicians

On June 9, 2015, the Office of Inspector General of the Department of Health and Human Services (OIG) issued a new fraud alert concerning physician compensation arrangements and compliance with the federal Anti-Kickback Statute (AKS). While the fraud alert itself does not break new ground interpreting the AKS, it signals OIG’s steadily increasing scrutiny and enforcement … Continue Reading

Determining FCA Damages: Sixth Circuit Urges Comparable Sales Analysis to Assess Fair Market Value, Even Where Number of Market Participants is Small

On April 6, 2015, the Sixth Circuit reversed a $657 million judgment previously labeled by the Justice Department as “the largest judgment in the history of the False Claims Act,” because the government failed to prove damages.  For the second time in U.S. v. United Technologies Corp., the Sixth Circuit remanded to the district court … Continue Reading

Update On False Claims Developments at the State Level

On March 21, 2015, the Maryland state senate passed a revised version of Bill No. 374, which, as previously noted, would create a state version of the federal False Claims Act (FCA) if signed into law.  As amended, however, the proposed statute is somewhat less plaintiff-friendly than before.  For example, it: imposes an absolute 10-year … Continue Reading

States Continue to Develop False Claims Act Analogs

On February 6, 2015, both houses of the Maryland legislature introduced bills that would add Maryland to the growing list of states with their own version of the False Claims Act (FCA).  If signed into law, Maryland will, effective October 1, 2015, impose a $10,000 civil penalty and triple damages for, inter alia, “knowingly present[ing] … Continue Reading
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