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Latest District Court Decision Confirms Escobar Two-Part Implied Certification Test

One of the most litigated issues following the Supreme Court’s Escobar decision is whether the Court created a limited, two-part test to define the implied certification theory under the False Claims Act. In the US Court of Appeals for the Second Circuit, the prevailing view confirms that the proper interpretation of Escobar is that the … Continue Reading

Ninth Circuit Remands False Claims Act Case against Tribal College for Determination of Sovereign Status

On July 10, 2017, US Circuit Court of Appeals for the Ninth Circuit reversed a December 3, 2014, district court dismissal of False Claims Act (FCA) claims against Salish Kootenai College (College), a tribal college of the Salish Kootenai Tribes (Tribe).  United States ex rel. Cain v. Salish Kootenai College, Inc. (July 10, 2017). The … Continue Reading

Motions in Limine Filed in Lance Armstrong/US Postal Service Litigation Raise FCA Damages, Government Knowledge and Relator Character Issues on Which Court’s Rulings May Have Widespread Impact

We reported back in March on the US District Court for the District of Columbia’s summary judgment decision in the Lance Armstrong/Floyd Landis/US Postal Service (USPS) False Claims Act (FCA) litigation, centered on Lance Armstrong’s use of performance enhancing drugs (PEDs) while he was leading a professional cycling team sponsored by the USPS. A pack … Continue Reading

Third Circuit Affirms Dismissal of FCA Suit against Genentech Based on Supreme Court’s Materiality Standard

On May 1, 2017, the US Court of Appeals for the Third Circuit affirmed the dismissal of United States ex rel. Petratos, et al. v. Genentech, Inc., et al., No. 15-3801 (3d. Cir. May 1, 2017). On appeal from the US District Court for the District of New Jersey, the Third Circuit reinforced the applicability … Continue Reading

Relators Denied Permanent Seal on FCA Case Record after Voluntary Dismissal

On March 20, 2017, the US District Court for the Southern District of Mississippi denied a motion to permanently seal the record of previously dismissed False Claims Act (FCA) claims.  The three relators, who initially brought the claims in US v. Apothetech Rx Specialty Pharmacy Corp., claimed they would face potential reputational damage and retaliatory … Continue Reading

Fourth Circuit Declines to Address FCA Sampling Dispute as “Issue of Fact” While Affirming That United States Has “Unreviewable Veto Power” to Deny Settlements

On February 14, 2017, after nearly two years of appellate proceedings, the US Court of Appeals for the Fourth Circuit declined to address the substance of an appeal related to the use of statistical sampling to prove liability in a False Claims Act (FCA) case in United States ex rel. Michaels, et al. v. Agape … Continue Reading

Court Rejects Criminal Defendant’s Attempt to Dismiss Indictment Based on Favorable Defense Verdict in Non-Intervened FCA Case

On January 26, 2017, the US District Court for the Western District of Virginia rejected a defendant’s attempt to invoke collateral estoppel principles to dismiss an indictment for fraud.  In United States v. Whyte, the defendant, Whyte, argued that the indictment should be thrown out because a jury had previously found in his favor after … Continue Reading

A Closer Look at Rigsby and the Supreme Court’s Rejection of Mandatory Dismissal for Seal Violations

In light of the rising civil monetary penalties under the False Claims Act (FCA) and the looming threat of bank-breaking treble damages, avenues to dismissal are paramount to defendants operating in industries vulnerable to FCA claims, including health care. The United States Supreme Court’s unanimous decision in State Farm Fire & Casualty Co. v. United … Continue Reading

DOJ Appealing AseraCare Loss

On May 27, 2016, the US Department of Justice said it will appeal to the Eleventh Circuit its loss in the False Claims Act (FCA) case against hospice chain AseraCare Inc. The government’s decision to appeal comes as no surprise, and it means that the substantial attention this case has received will continue. As a … Continue Reading

Court Dismisses FCA Case against AseraCare, Holding that Difference of Medical Opinion Insufficient to Establish Falsity

After granting a new trial based on error in a jury instruction and sua sponte re-opening summary judgment, on March 31, 2016, the U.S. District Court for the Northern District of Alabama granted summary judgment to AseraCare on all remaining counts in U.S. ex rel. Paradies v. AseraCare, Inc.  The outcome is significant because it … Continue Reading

Sixth Circuit Rejects FCA Claim Based on Health Data Breach

On March 7, 2016, the U.S. Court of Appeals for the Sixth Circuit decided United States ex rel. Sheldon v. Kettering Health Network, affirming a district court’s dismissal of a lawsuit alleging violations of the False Claims Act (FCA) relating to an alleged data breach.  The relator alleged that violations of the HITECH Act caused … Continue Reading

D.C. Circuit Finds for FCA Defendant Where Liability Premised on Interpretation of Undefined, Ambiguous Term

In what is sure to be a frequently cited ruling, the D.C. Circuit has reversed a jury’s verdict against a False Claims Act (FCA) defendant, finding that there was insufficient evidence for the jury to find that the defendant “knowingly” made a false claim where the defendant relied upon a facially reasonable interpretation of an … Continue Reading

Re-Trial Order in AseraCare Confirms that Differences in Clinical Judgment Alone Insufficient to Establish Falsity

As we previously reported, in the FCA case against hospice-provider AseraCare, U.S. ex rel. Paradies v. AseraCare, Inc., the U.S. District Court for the Northern District of Alabama granted AseraCare’s motion for a new trial based on error in instructing the jury during the falsity phase of the trial (The trial was bifurcated into falsity … Continue Reading

Court Orders Re-Trial of AseraCare Falsity Phase Based on Jury Instruction Errors

We said we would provide updates based on any developments in U.S. ex rel. Paradies v. AseraCare, Inc., and we are reporting earlier than anticipated. Instead of moving the case along to the second phase of the bifurcated trial to address scienter, the court granted AseraCare’s motion for a new trial on the issue of … Continue Reading

AseraCare Trial Set To Move To Phase Two

The first round is over in U.S. ex rel. Paradies v. AseraCare, Inc., the False Claims Act (FCA) case pending in the U.S. District Court for the Northern District of Alabama that, as we previously reported, was the first in which a court bifurcated an FCA trial between the elements of falsity and scienter. The jury considered … 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

OIG Announces New Penalty and Exclusion Litigation Team to ‘Level the Playing Field’

The federal government’s health care fraud enforcement efforts expanded this week with an announcement by the Office of the Inspector General (OIG), of the U.S. Department of Health and Human Services, that it has created a new litigation team dedicated to pursuing civil penalty and exclusion cases. Read the full On the Subject discussing the … Continue Reading

Court Refuses To Reconsider Bifurcation Order

We previously posted on the U.S. Department of Justice’s motion for reconsideration of the United States District Court for the Northern District of Alabama’s order bifurcating the element of falsity from scienter (and the other False Claims Act (FCA) elements) at trial in U.S. ex rel. Paradies v. Aseracare, Inc. Last Thursday, the court denied … 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

Bifurcation Squarely Within Court’s Discretion, Notwithstanding DOJ’s Motion for Reconsideration

On June 10, 2015, the Department of Justice moved for reconsideration of the U.S. District Court for the Northern District of Alabama’s May 20 decision in U.S. ex rel. Paradies v. AseraCare, Inc., a False Claims Act (FCA) case in which the court ordered bifurcation of the element of falsity from the element of scienter … Continue Reading

Whistleblower Wins Reinstatement Fight, Demonstrating the Need for Detailed Personnel Files

In 2012, a jury concluded that Bayer Corporation (Bayer) unlawfully terminated a sales representative, Mike Townsend, because he reported to the Arkansas Attorney General that with the alleged knowledge of Bayer’s sales force, physicians were overbilling Medicaid for Bayer’s drugs. See Townsend v. Bayer Corp., 774 F.3d 446, 452 (8th Cir. 2014). Shortly before Townsend … Continue Reading

Court Revives “Fraudulent Inducement” FCA Case despite Relators’ Failure to Link False Statement to Government Payment

The United States Court of Appeals for the Eighth Circuit overturned a district court’s grant of summary judgment in favor of a for-profit college in United States ex rel. Miller v. Weston Educational, Inc. on April 29. The court revived the case despite the relator’s inability to connect an amount paid by the government to … Continue Reading

Jury Verdict for Prosecution Underscores Difficulty of Overcoming AKS Charges at Trial

On March 19, 2015, a federal jury convicted three former executives of Chicago’s Sacred Heart Hospital on violations of the federal Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(1) & (2) (AKS).  The government filed the criminal complaint on April 15, 2013, charging Edward Novak, former chief executive officer; Clarence Nagelvoort, former chief operating officer; and former … Continue Reading

First Circuit Rejects Relator’s Attempt to Revive FCA Case after Jury Verdict for Defendants

Yesterday, the U.S. Court of Appeals for the First Circuit affirmed a jury verdict for Massachusetts General Hospital, Brigham & Women’s Hospital and various other defendants in U.S. ex. Rel. Jones v. Massachusetts General Hospital, — F.3d —-, 2015 WL 1138442 (1st Cir. Mar. 16, 2015) (Jones II).  The case concerned allegedly false statements made … Continue Reading
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