On June 29, 2018, federal district courts in California and Kentucky issued conflicting decisions over the deference owed to prosecutors in seeking to dismiss frivolous False Claims Act (FCA) claims and the effect of the January 2018 Granston Memo, which recognized dismissal as an “important tool” to advance governmental interests, preserve limited resources and avoid adverse precedent.

In United States et al. v. Academy Mortgage Corporation (N.D. Cal.), the relator, an underwriter at Academy Mortgage Corporation (Academy), claimed that a mortgage loan originator violated the FCA by falsely certifying loans for government housing insurance. The government declined to intervene after the relator filed her initial complaint, which limited the alleged misconduct to a one-year period at the specific branch where the relator was employed. The relator next filed an amended complaint that included additional allegations and identified specific employees allegedly complicit in the fraud. This time, the government moved to dismiss the complaint under 31 U.S.C. § 3730(c)(2)(A), which authorizes the government to move to dismiss an FCA action even though it did not intervene in the litigation, as it remains the real party in interest.

In its motion to dismiss, the government argued that allowing the suit to continue would drain government resources and was not justified by a cost-benefit analysis. The government also argued that its conclusion that dismissal was appropriate was subject to deference.
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The government’s focus on the US opioid crisis has been consistently expanding over the past year beyond manufacturers to reach prescribers and health care providers who submit claims to federal health care programs for opioid prescriptions. These efforts increasingly include investigations under the False Claims Act and administrative actions, in addition to the more traditional

As first reported in the National Law Journal, the US Department of Justice (DOJ), Civil Division, recently issued an important memorandum to its lawyers handling qui tam cases filed under the False Claims Act (FCA) outlining circumstances under which the United States should seek to dismiss a case where it has declined intervention and, therefore, is not participating actively in the continued litigation of the case against the defendant by the qui tam relator.
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On January 11, 2018, a federal court in Florida overturned a $350 million False Claims Act (FCA) jury verdict against a nursing home operator, finding “an entire absence of evidence of the kind a disinterested observer, fully informed and fairly guided by Escobar, would confidently expect on the question of materiality.”

In United States ex. rel. Ruckh v. CMC II LLC et al., the relator claimed that a skilled nursing facility and its management company failed to maintain “comprehensive care plans” ostensibly required by Medicare regulations as well as a “handful of paperwork defects” (for example, unsigned or undated documents). In addition, the relator alleged a corporate-wide scheme to bill Medicare for services that were not provided or needed.
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Attendees at the Health Care Compliance Association’s Health Care Enforcement Compliance Institute are reporting that, Michael Granston, Director, Civil Frauds, Commercial Litigation Branch of the Civil Division of the US Department of Justice (DOJ), announced a significant shift in policy for the DOJ in dealing with False Claims Act (FCA) complaints that are deemed “frivolous” on the merits. Acknowledging the burden on the resources of all parties caused by the litigation of frivolous FCA matters, Mr. Granston reportedly stated that, going forward, once it has determined that the allegations of a qui tam complaint lack merit, the DOJ will more aggressively exercise its discretion to move to dismiss the case rather than leave to the qui tam relator in every instance the option of whether to continue the litigation. Senior management—including boards of directors, in-house corporate counsel and chief compliance officers—should take notice of this new, potentially meaningful, opportunity to extricate FCA defendants from burdensome qui tams pursued by relators purely for settlement value.
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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 of motions in limine (MILs) filed by the parties over the past few weeks suggest that the case may well be headed to trial this fall, and raise some notable legal issues to watch as it continues to unfold, including:
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In a decision issued August 8th, the Eighth Circuit affirmed the dismissal of a whistleblower’s False Claims Act (FCA) suit alleging the University of Minnesota Medical Center-Fairview (UMMC) wrongly claimed a “children’s hospital” exemption to Medicaid cuts based on a reasonable interpretation of an unclear state law.

In 2011, Minnesota passed an amendment

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