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False Claims Act Statistics, News & Analysis

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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Risky Business: Reverse FCA Allegations Against Medicare Advantage Insurer Survive

In an early mixed valentine for both the government and a defendant Medicare Advantage Plan insurer, a district court in California on February 12 denied a motion to dismiss reverse FCA claims alleging the failure to correct known invalid diagnosis codes submitted for risk adjustment payments to Medicare. The court did dismiss, however, the government’s claims that the insurer’s false statements as to the validity of the diagnosis codes also violated the FCA. Poehling v. Unitedhealth Group, Inc., No. 2:16-cv-08697 (C.D. Cal. Feb. 12, 2018).

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  • 29
  • January
  • 2018

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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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False Claims Act Cert. Monitor: Defendant Asks Court to Resolve Asserted Rule 9(b) Split and Reverse FCA Liability for "Contingent" Obligations

Victaulic, a manufacturer of pipe fittings, asked the Supreme Court in late May to review a Third Circuit decision we have written about twice before in a petition captioned Victaulic Co. v. U.S. ex rel. Customs Fraud Investigations, LLC, No. 16-1398. Victaulic asks the Court to take up two issues: (1) whether Rule 9(b)’s pleading standard requires allegations of an “opportunity for fraud,” of “actual false claims,” or of “particular details of a scheme paired with reliable indicia of fraud,” and (2) whether an alleged failure to pay a “contingent” obligation that arises only after the exercise of discretion by the government is actionable as a reverse FCA claim.

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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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  • 11
  • April
  • 2017

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The Quicken Origin Story:  Michigan Federal Court Addresses False Claims Act

Last week we wrote about the opinion in United States v. Quicken Loans Inc., specifically discussing its ruling on causation of damages under the FCA. No. 16-CV-14050, 2017 WL 930039 (E.D. Mich. Mar. 9, 2017). As we noted, Quicken touches on other important FCA issues, including knowledge and materiality. But since liability necessarily precedes damages, let’s go back now to discuss certain of the court’s rulings on knowing violations of ambiguous rules under Safeco and on materiality after Escobar.

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