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Sixth Circuit Revives Home Health Qui Tam Based on Pre-Escobar Standards; Dissent Criticizes Majority for Engaging in Rulemaking

On September 30, the US Court of Appeals for the Sixth Circuit reversed dismissal of a relator’s False Claims Act (FCA) claims against providers of home health services in U.S. ex rel. Prather v. Brookdale Senior Living Communities, Inc. et al. The relator was a utilization review nurse who alleged that physician certifications of patient need for home health care were not signed until well after the care had been provided, in violation of 42 C.F.R. § 424.22(a)(2), which requires that such certifications be completed at the time a plan of care is established or “as soon thereafter as possible.” While the regulation does not define “as soon thereafter as possible,” the Sixth Circuit held that the relator’s allegations that the requisite certifications were not completed for several months were sufficient to allege violations of both the regulation and the FCA. The Sixth Circuit reasoned that the phrase “as soon thereafter as possible” “suggests plainly that...

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Does Violation of the Seal Requirement Require Dismissal? Supreme Court Will Decide

On May 31, 2016, the Supreme Court of the United States granted certiorari in the False Claims Act (FCA) case of State Farm Fire and Casualty Co. v. United States ex rel. Cori Rigsby and Kerri Rigsby.  At issue is whether a qui tam relator’s violation of the seal requirement, 31 U.S.C. § 3730(b)(2), requires a court to dismiss the suit. Section 3730(b)(2) requires qui tam complaints to be filed under seal for at least 60 days and provides that they shall not be served on the defendants until the court so orders.  The purpose of the seal is to give the government time to investigate.  In practice, the government often seeks numerous extensions while it investigates the conduct alleged in the relator’s complaint.  This investigatory period can, on occasion, extend for years. According to State Farm’s petition for certiorari, the relators in this case intentionally violated the seal by alerting the media to the FCA allegations in their complaint.  State Farm...

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On Remand, Eastern District of Virginia Narrowly Construes Supreme Court’s KBR Holding

In a November 12, 2015 decision in a long running qui tam suit under the False Claims Act (FCA), the U.S. District Court for the Eastern District of Virginia dismissed a relator’s case pursuant to the first-to-file bar (31 U.S.C. § 3730(b)(5)) for the second time. The case, including the meaning of the first-to-file bar, was the subject of a May 26, 2015 Supreme Court decision on which we previously reported. (Kellogg Brown & Root Servs., Inc. v. United States ex rel. Carter, 135 S. Ct. 1970 (2015) ("KBR")). In that decision, the Supreme Court interpreted the word “pending” in the first-to-file bar to mean that the bar is inapplicable if the first-filed suit has been dismissed. On remand in the district court, the defendants again moved to dismiss on first-to-file grounds. The relator argued that although there were prior actions asserting similar claims pending at the time he filed his case, the fact that such actions had since been dismissed meant that,...

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Supreme Court Rules on Wartime Tolling of FCA Statute of Limitations and FCA’s First-to-File Bar in Kellogg Brown & Root v. United States ex rel. Carter

On May 26, 2015, the Supreme Court issued a unanimous opinion in Kellogg Brown & Root v. United States ex rel. Carter (S. Ct. No. 12-1497), a case addressing several important issues under the False Claims Act (FCA).  In a previous post, we laid out the two issues in this case.  First, when the United States is at war, does the Wartime Suspension of Limitations Act (WSLA) toll the statute of limitations in civil FCA lawsuits?  Second, does the FCA’s so-called “first-to-file” bar prevent all future cases based on the same alleged fraud, or is it a one-case-at-a-time rule, allowing duplicative claims in the future as long as the first action is settled or dismissed? The Court ruled in favor of Kellogg Brown & Root (KBR) on the first issue, holding that the WSLA only tolls the statute of limitations for criminal offenses, not in civil false claims like the relator filed against KBR.  The WSLA tolls the statute of limitations for “any offense” involving...

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Supreme Court Vets Wartime Tolling of FCA Statute of Limitations in Kellogg Brown & Root v. United States ex rel. Carter

On January 13, 2015, the Supreme Court held oral argument in the closely followed case of Kellogg Brown & Root v. United States ex rel. Carter.  Two questions with sweeping False Claims Act (FCA) enforcement implications were at issue:  first, whether the Wartime Suspension of Limitations Act (WSLA) tolls the statute of limitations in civil actions under the FCA while the nation is at war; and second, whether the FCA’s so-called “first-to-file” bar prohibits future filings based on the same alleged fraud or functions as a more permissive one-case-at-a-time rule, allowing duplicative claims in future actions.  The lower court, the Fourth Circuit, held that the qui tam relator’s claims were timely.  Kellogg Brown & Root (KBR) appealed. Made relevant by over a decade of global military action, the WSLA was a little known criminal code provision tolling the statute of limitations for “any offense” involving fraud against the  United States during war....

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