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False Claims Act Statistics, News & Analysis

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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Two Courts Confirm Penalties Not Yet Issued Do Not Support Reverse False Claims

The D.C. Circuit and the Tenth Circuit recently joined several other circuits, including the Fifth, Sixth, and Eighth, in holding that liability for reverse false claims cannot be based on contingent obligations to pay the government (meaning obligations to pay that may arise after future discretionary actions), reaffirming that when Congress amended the FCA in 2009 to define the term “obligation,” it intended that liability would result for reverse false claims only where there are failures to pay specific, definite obligations owed to the government.

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The Gift That Keeps On Giving: Pre-ACA Public Disclosure Bar's Stringent Original Source Requirements Defeat Relator's Claim in the Fifth Circuit

As we have written about previously, although almost eight years have passed since the 2010 ACA amendments, because qui tam actions often stay under seal for many years, there are numerous cases before the courts to this day that involve conduct that occurred prior to the amendments. Most recently, the Fifth Circuit in United States ex rel Solomon v. Lockheed Martin Corp. upheld a grant of summary judgment in favor of defendants Lockheed Martin and Northrop Grumman where the relator failed to show that his knowledge of the allegedly false claim was not derived from earlier public disclosures under the pre-2010 amendments to the original source exception. 878 F.3d 139 (5th Cir. 2017).

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Time to Take Your Medicine: Fifth Circuit Decision Diagnoses Problems with Causation Arguments

Last month, we covered United States ex rel. King v. Solvay Pharmaceuticals, Inc. on the issue of the FCA’s public disclosure bar pre-Affordable Care Act. Today, we explore another aspect of that same opinion — the causation requirements necessary to sustain a fraudulent inducement FCA claim. The Fifth Circuit delivered relators a dose of bitter medicine in its opinion, affirming the district court’s grant of summary judgment to the defendant pharmaceutical company on the grounds that relators failed to demonstrate a causal link between the alleged false statements and any actual false claims.

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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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War Dogs Brings the False Claims Act to the Silver Screen, Offers Lessons to Government Contractors

While we here at LLB toiled away at our FCA mapFCA statistics, and FCA case law analysis in preparation for our August launch, we did poke our heads out of our cave long enough to notice that the FCA had just hit the big screen! No, we are not talking about the highly acclaimed FCA video that now appears on LLB. In August, mere weeks before we launched, the movie War Dogs hit theatres across the U.S., recounting the (highly-)dramatized but true tale of two twenty-somethings who cashed in on enormous profits by contracting to support military operations in Afghanistan and Iraq. Operating as AEY, Inc., the unlikely duo, working from their Miami apartment, won a $300 million ammunitions contract for the U.S. Army, and—allegedly—violated the FCA along the way.

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