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False Claims Act Statistics, News & Analysis

Taking Out the Trash: District Court Grants Summary Judgment Where Federal Agencies Continued to Pay for Waste Removal Services Following Regulatory Violation

A Pennsylvania district court recently weighed in on the question of whether the government’s continued payment after the filing of a qui tam action defeats materiality under Escobar. In a decision helpful to FCA defendants, the court in United States ex rel. Cressman v. Solid Waste Services, Inc. granted the defendant summary judgment where the government continued to pay the defendant after the plaintiff filed his FCA action and DOJ declined to intervene.

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It Doesn’t Take an Eisenstein to See the Eleventh Circuit Missed the Mark: New Decision Allowing Relators to Extend Statute of Limitations Is Contrary to Supreme Court Precedent and Creates Circuit Split

While not rocket science, or even particle physics, the FCA was complicated enough without introducing yet a new circuit split. Yet, in United States ex rel. Hunt v. Cochise Consultancy, Inc., the Eleventh Circuit has disagreed with at least two other circuits (the Fourth and the Tenth) in holding that relators in non-intervened qui tam actions can rely on a statutory exception to the otherwise-applicable six-year statute of limitations that allows suit to be brought within three years of when the government learns of the potential fraud. The court parted ways with the majority view that only the government can rely on this alternative provision, a rule grounded in the sensible position that the government itself is only a party when it decides to intervene. The Supreme Court in U.S. ex rel. Eisenstein v. City of New York, 556 U.S. 928 (2009), recognized as much when it held that a relator in a non-intervened case could not take advantage of the government’s sixty-day appeal period and instead had only the usual thirty days available to an ordinary party. This was because, as the Court recognized, the United States itself is not a party to the appeal in a non-intervened case. Id. at 937. Without much analysis, the Eleventh Circuit simply found Eisenstein’s reasoning inapplicable and held there was no textual basis in the FCA to prevent relators from taking advantage of the three-year alternative found in 31 U.S.C. § 3731(b)(2). Again, without much reasoning or discussion, it simply found the Fourth and Tenth Circuits unpersuasive (never mind the multiple district courts that have sided with the majority rule). 

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Mikes v. Straus "Particularity" Requirement May Be Dead, But Materiality is Alive and Well Among District Courts in the Second Circuit

A New York district court recently held in United States v. Strock that Escobar’s materiality standard applies, at a minimum, to express false certification and fraudulent inducement FCA theories in addition to the implied false certification theory at issue in Escobar. The court further held that the government failed adequately to plead materiality under Escobar and dismissed the case.

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Escobar Matters for Discovery, Too: District Court Emphasizes Right to Broad Materiality Discovery

While most post-Escobar decisions have involved the merits, Escobar also has significant implications for the scope of materiality discovery under the FCA. Last week, in United States ex rel. California v. Paramedics Plus LLC, the U.S. District Court for the Eastern District of Texas became one of the first courts to directly tackle that issue in a written opinion, holding that Escobar affords FCA defendants the ability to broadly discover how the government has actually handled the disputed issue, both in that case and in other analogous situations.

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Holding a Mere Temporal Link Between Kickbacks and Medicare Claims Is Too Weak — the Third Circuit Says Goodbye to Relator's Case

Consistent with other recent decisions we have blogged about, the Third Circuit recently held in United States ex rel. Greenfield v. Medco Health Solutions, Inc., that to survive summary judgment, a relator must link alleged kickbacks to specific claims for payment submitted to the government; it is not enough to merely allege that the “taint” of a kickback scheme renders false every claim submitted while that scheme is ongoing. Finding no such link between the defendants’ Medicare claims and an alleged kickback scheme, the Third Circuit affirmed summary judgment for the defendants.

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  • 24
  • January
  • 2018

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"Taint" Theory of Damages Dead in the Seventh Circuit? One District Court Has Not Received the Message

Adopting a view that has been roundly rejected by federal circuit courts (including the Seventh Circuit), the U.S. District Court for the Northern District of Illinois in United States & City of Chicago ex rel. Chicago Regional Council of Carpenters v. Sound Solutions Windows & Doors, Inc. endorsed the “taint” theory of FCA damages, awarding the full value of contracts as damages based on the defendants’ non-compliance with a contractual term, notwithstanding their complete performance of the tangible work under the contracts.

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