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False Claims Act Statistics, News & Analysis

Impact of First Circuit's 2015 Gadbois' Decision on First-to-File Bar Limited by District Court on Remand

In a post right before the holidays, we noted that the district court in United States ex rel. Estate of Gadbois v. PharMerica Corp. interpreted the FCA’s government action bar as a perpetual bar to all claims brought by a relator in a qui tam action in which the government has intervened and settled, even when the government did not intervene in or settle all of the claims. No. 10-cv-471, 2017 WL 5466659 (D.R.I. Nov. 13, 2017). But there is more to the district court’s decision than the government action bar. In its government action bar analysis, the district court made a fairly technical civil procedure ruling that, if followed by other courts, should limit the ability of relators to use the First Circuit’s previous Gadbois decision to evade the FCA’s first-to-file bar and statute of limitations.

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Behind Bars: Partial Intervention and Settlement Bars Future Qui Tams Based on Government Action Bar in Two Recent Cases

The little-used government action bar has recently surfaced in two cases where relators had attempted to revive declined and unsettled allegations from earlier qui tam actions in which the government had intervened in part to settle other allegations. United States ex rel. Bennett v. Biotronik, Inc., No. 16-15919, 2017 WL 5907900 (9th Cir. Dec. 1, 2017), and United States ex rel. Estate of Gadbois v. PharMerica Corp., No. 10-cv-471, 2017 WL 5466659 (D.R.I. Nov. 13, 2017). These decisions show that a partial intervention and settlement by the government of some, but not all, claims in one relator’s complaint can protect defendants from future claims by later relators based on even unresolved allegations from the earlier complaint.

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The More Things Change, the More They Stay the Same: Analyzing Recoveries by Circuit for FY 2017

We’re back with the third installment of our series analyzing FCA statistics for DOJ FY 2017, this time taking a closer look at recoveries by circuit. After our prior posts describing the steep drop in recoveries overall from last year, it may not come as a surprise to LLB readers that the geographic analysis has changed a fair bit in the last year. Only one of the leaders from DOJ FY 2016 is still at the top in DOJ FY 2017: the Eleventh Circuit. Indeed, the Eleventh Circuit, which ranked third last year with $808 million across 100 recoveries, came out in front in DOJ FY 2017 with the DOJ raking in just over $1 billion across 26 recoveries. This means that the number of cases brought to conclusion in 2017 dropped 74% from the previous year, but DOJ’s payout increased by just over 24%. Does this signal a smarter, more targeted civil fraud bar in the Eleventh Circuit, or is this mathematical windfall simply a fluke? Impossible to say definitively, but it is worth noting that over a third of this year’s Eleventh Circuit total was recovered from just one matter (the Shire Pharmaceuticals LLC medical device case we blogged about last week) and another third is derived from a CMC II Judgment (though that judgment is currently stayed pending appeal).

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Healthcare Post-Mortem: Medical Industry Continues to be High-Value Target for FCA Enforcement

Last week we gave you the bottom line of how much DOJ (and relators) recovered in FY 2017. As we promised, we are doing a series of sector-specific posts – analyzing each for industry-specific trends. Today is Healthcare: Who’s paying, how often, and how much?

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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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Just What the Doctor Ordered: First Circuit Curtails Fraudulent-Inducement Theory Where Government Took No Action After Learning of FCA Allegations

In a pro-Defense bar, post-Escobar decision handed down shortly before the holidays, the First Circuit held that a relator could not proceed with an FCA claim based on alleged fraud in the inducement on the Food and Drug Administration because the FDA had not withdrawn or suspended its approval of the defendants’ medical device in response to relator’s allegations. D’Agostino v. ev3, Inc., No. 16-1126, 2016 WL 7422943 (1st Cir. Dec. 23, 2016). The opinion also doubles down on the First Circuit’s Cyberonics decision that we wrote about here, again rejecting as insufficiently particular under Rule 9(b), allegations that identify a fraudulent scheme but fail to show that false claims actually were submitted to the government as a result.

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