False Claims Act Statistics, News & Analysis

Specific Representations and Half-Truths Need Not Apply: D.C. District Court Finds Knowingly Billing at “Significantly Higher than Reasonable” Costs Sufficient for Implied False Certification

In a decision many in the defense bar will argue was wrongly decided, the U.S. District Court for the District of Columbia in U.S. v. DynCorp Int’l LLC ruled that knowingly billing for unreasonable costs can serve as the basis for an implied certification claim under the FCA. The court took an expansive view of implied certification that departs from the Supreme Court’s guidance in Escobar and, we would argue, sidesteps the rigorous materiality requirements emphasized by the Court.

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Bon Voyage, US ex rel ABLE v. US Bank: Cert. Denied in CVSG’d Public Disclosure Case

We have been writing about the relator’s cert. petition in U.S. ex rel. ABLE v. US Bank16-130since the earliest days of LLB, but today we say good-bye to that petition about the public disclosure bar because the Supreme Court denied cert, as the Solicitor General recommended.  In other news, because the “ex rel.” might catch some readers’ eyes, we note that the Court also denied cert. in U.S. ex rel. Bauchwitz v. Holloman16-1185, a cert. petition we did not cover because despite being a qui tam, it did not raise FCA issues.

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“Common Sense” and Concealment of Noncompliance Lead Fourth Circuit to Find Triple Canopy Invoices Hit Their Materiality Mark and Were Impliedly False Despite No Specific False Representations

Earlier this week, the Fourth Circuit issued its first substantive post-Escobar implied certification opinion in the closely watched U.S. ex rel. Badr v. Triple Canopy. Prior to Escobar, the Fourth Circuit found that the government’s complaint-in-intervention stated an implied certification FCA claim, causing Triple Canopy to seek cert. After issuing the Escobar opinion, the Supreme Court remanded the case to the Court of Appeals to reconsider in light of Escobar. The Fourth Circuit largely affirmed its prior decision, finding that the government had sufficiently alleged both falsity and materiality. [Disclosure:  Two of the authors of this piece represented amici in support of Triple Canopy’s cert. petition.]

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False Claims Act Cert. Monitor: Attorneys’ Fees, Reverse False Claims, Public Disclosure Bar, and Government Employees as Relators Feature in Three New Petitions

Three new FCA relator cert. petitions have landed in the past few weeks, covering the gamut of FCA legal issues.

First, the relator in U.S. ex rel. Harper v. Muskingum Watershed Conservancy District, 16-1278, takes us back to 1L Property, alleging that the Army in 1949 granted the defendant water district a “determinable fee simple estate subject to a possibility of reverter interest retained by the United States.” In other words, the government gave the water district government land to keep so long as the land was used for recreation, conservation, etc. The relator contends that when the defendant entered into oil and gas leases on the land but kept the land and the lease income, it knowingly and improperly avoided an obligation to return the property and income to the government—i.e., a conversion reverse false claim. The question presented to the Court is whether, for a reverse false claim, the relator needed to plead that the defendant subjectively knew that it was violating the terms of the deed and had not committed a mistake of law. A potential difficulty for this petition, however, is that neither Sixth Circuit’s majority nor the dissent focused on the question of subjective knowledge of mistake of law, but rather on whether the relator pleaded sufficient facts from which the court could infer that the defendant “knew or should have known” of the requirement to return the property. The response is currently due June 26, 2017.

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A Cure for the Common Qui Tam? Escobar’s Materiality Standard and Government Inaction has Pharma Defendant Feeling Good Again

The Third Circuit recently joined the growing number of circuits refusing to find materiality where the government fails to act or intervene in the face of alleged noncompliance. See United States ex rel. Petratos v. Genentech, No. 15-3805 (3rd Cir. May 1, 2017). The D.C. Circuit; First Circuit; and Seventh Circuit all have reached similar conclusions. The Ninth Circuit will address this issue in the coming months in United States ex rel. Rose v. Stephens Institute.

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Franks and the False Claims Act? District Court Uses Familiar Fourth Amendment Remedy to Dismiss Deceptive FCA Case

An “elaborate series of falsehoods, misrepresentations, and deceptive conduct” perpetrated by a relator’s counsel culminated last Friday with dismissal of a relator’s False Claims Act complaint by the U.S. District Court for the District of Massachusetts. In U.S. ex rel. Leysock v. Forest Labs., Inc., No. 12-11354, 2017 WL 1591833 (D. Mass. Apr. 28. 2017),  relator alleged off-label promotion of an Alzheimer drug, and to get over the Rule 9(b) “hump,” relied on a purported nationwide study of physician prescribing practices for the medication.  The study results were featured prominently in the complaint – including details about particular physicians and patients.  Turns out, however, that the “study” at issue was sponsored and directed entirely by relator’s counsel under false pretenses.

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