False Claims Act Statistics, News & Analysis

False Claims Act Cert. Monitor: Relator Asks Court to Extend Benefit of FCA Statute of Limitations Tolling Provision to Relators

As FCA aficionados know, the FCA’s statute of limitations provides that claims are timely only if they are brought either (1) within 6 years of the FCA violation, or (2) within 3 years of “the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances,” up to 10 years after the FCA violation. A new FCA cert. petition raises the question whether relators in non-intervened qui tam cases can take advantage of the latter provision to toll the limitations period.

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Nursing Homes Save Payment for Another Day as Court Grants Emergency Motion to Stay $347 Million in Judgments Against Them

We last reported on United States and Florida ex rel. Ruckh v. CMC II, LLC, et al., 8:11-cv-1303 (M.D. Fl.) earlier this month, when a federal jury returned a verdict for $115 million against the defendant nursing homes, finding that defendants had submitted false claims to Medicare and Medicaid for unnecessary patient care or patient care that was never supplied.  After trebling and additional penalties, CMC II and the other corporate defendants now face over $347 million in damages.  In an unusual turn of events, the defendants filed an emergency motion on March 13 in which they asked the court to stay the execution of judgments pending the Court’s consideration of one or more post-trial motions to be filed by the end of March.  The emergency motion went unopposed, and the court granted the motion.

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Ding, Dong, the Case is Dead – Which Old Case, the Barko Case

This spring’s winter blast may dampen this year’s cherry blossoms but didn’t dim the spirits of your friends at LLB, especially those who represented KBR in the long-running Barko qui tam case. Huddled indoors on Tuesday, we received an unexpected, but welcome glimmer of sunshine. Over three years after the motion was filed, the district court issued a more than 60-page decision granting summary judgment for KBR. United States ex rel. Barko v. Halliburton Co., et al., No. 05-cv-1276. Judge Royce Lamberth, who penned the decision, is the third district judge to sit on this case since its inception a dozen years ago, having inherited the case (and then-pending summary judgment motion) from Judge James Gwin, who had in turn taken over the case from Judge Emmet Sullivan at the motion to dismiss stage. This non-intervened case, filed under seal in 2005, alleged that KBR violated the FCA in a number of ways, including by accepting kickbacks, rigging subcontractor bids, and billing the government for duplicative or poorly performed work under the LOGCAP cost reimbursement contract under which KBR provided logistical support to the U.S. military during the conflicts in Iraq and Afghanistan.

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  • 10
  • March
  • 2017

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Moody’s Manhandles Materiality: Court Finds Materiality Defeated by Government’s Continued Payment after News Reports and Congressional Hearings

On the heels of the D.C. Circuit’s favorable materiality decision in U.S. ex rel. McBride v. Halliburton, which we wrote about previously, the Southern District of New York on March 2 issued another helpful materiality decision for defendants. In U.S. ex rel. Kolchinsky v. Moody’s Corp., the district court found that congressional investigations and news reports about a relator’s allegations put federal agencies on notice of the relator’s allegations. No. 12-cv-1399, 2017 WL 825478 (S.D.N.Y. Mar. 2, 2017). Because the government paid the defendant’s claims after those public investigations and reports, the court concluded the relator’s allegations failed Escobar’s materiality test.

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D.C. Court Declines to Find U.S. Postal Service Suffered No Damages from Lance Armstrong’s Doping Admissions and Greenlights $100 Million FCA Case for Trial

Just a few short weeks ago, the D.C. District Court issued an opinion ruling on cross-motions for summary judgment in the infamous Lance Armstrong FCA case. United States ex rel. Landis v. Tailwind Sports Corp., No. 10-cv-00976, 2017 WL 573470 (D.D.C. Feb. 13, 2017). This case is premised on allegedly false claims made under sponsorship agreements between the U.S. Postal Service (“Postal Service”) and the cycling team headed by Lance Armstrong because Armstrong and his team members were secretly using performance-enhancing drugs (“PED”) in violation of the terms of the sponsorship agreements. Originally filed under seal in 2010 by former teammate and admitted PED user Floyd Landis, the government has since intervened and now seeks over $32 million in damages, which after trebling and application of penalties could soar as high as $100 million. This amount would likely be paid in large part by Armstrong himself, as the team’s highest-paid rider. The Court’s summary judgment decision sets the stage for an interesting and high-stakes race to the November 6, 2017 trial date.

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A Roll of the Dice: FCA Jury Verdict Finds Over $115 Million in Damages

After betting it all on a federal jury in Florida, four defendants in a non-intervened qui tam FCA action now face more than $347 million in damages. The jury returned a verdict for $115 million, which the court then trebled and tacked on more than $2.4 million in penalties. In United States and Florida ex rel. Ruckh v. CMC II, LLC, et al., 8:11-cv-1303 (M.D. Fl.), the four corporate defendants—CMC II LLC, Salus Rehabilitation LLC, 207 Marshall Drive Operations LLC, and 803 Oak Street Operations LLC—were found to have submitted, or caused to be submitted, false claims to Medicare and Medicaid for patient care that was unneeded, or not supplied at all, at 53 skilled nursing facilities (“SNFs”) in Florida. In rare jury verdicts like this and the verdict we covered last year, the jury’s verdict is only the first bad draw for defendants: trebling, penalties, attorney’s fees, reasonable expenses, and costs are all part of the second wave of misfortune when an FCA defendant loses at trial.

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