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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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Escobar The Sequel? — Perhaps Coming Soon to SCOTUS

On April 16, 2018, the Supreme Court called for the views of the Solicitor General (or “CVSG”) as to whether it should review the Ninth Circuit’s decision in Gilead Sciences, Inc. v. United States ex rel. Campie (that we at LLB believe was wrongly decided and have covered previously). The CVSG may indicate the Court’s willingness to provide much-needed clarification to Escobar’s materiality standard.

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Litigation Update: Ninth Circuit Stays Mandate to allow Gilead to Seek Cert on Key Post-Escobar Issues

We reported previously on yet another implied certification case raising significant questions about materiality and falsity in the post-Escobar world, United States ex. rel. Campie v. Gilead Sciences, Inc., in which the Ninth Circuit reversed the district court’s dismissal of the case.

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Open Season for FCA Relators? Ninth Circuit Finds Falsity in Gilead Case Despite Possible Discrepancy with Sister Court

We’re back with our second installment on the Ninth Circuit’s decision in United States ex. rel. Campie v. Gilead Sciences, Inc., No. 15-16380, 2017 WL 2884047 (9th Cir. July 7, 2017). If Gilead’s materiality ruling left you scratching your head, then best take a seat now, because the falsity analysis is even more puzzling. But peel back the problematic legal analysis, and what seems to have driven the Ninth Circuit to let this case proceed past the pleadings is that relators alleged specific examples of the defendant having misled the government about the product it was selling. Despite our other criticisms of this opinion, Gilead’s emphasis on alleged specific misrepresentations is a saving grace because it is consistent with Escobar’s two-part implied certification test, which requires (1) a specific representation that (2) is made a misleading half-truth by omission.

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A Year after U.S. ex rel. Escobar, Lower Courts Diverge on Key Question in Implied-False-Certification FCA Suits

Just over a year ago, False Claims Act (FCA) watchers eagerly awaited the US Supreme Court’s decision in U.S. ex rel. Escobar v. Universal Health Services, Inc., expecting that it would resolve once and for all whether implied false certification is a valid FCA theory. V&E’s Craig Margolis and Christian Sheehan provide a post-Escobar analysis in an article they recently wrote for Washington Legal Foundation (WLF).

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Made in China: Ninth Circuit Departs from Escobar and Rules Government’s Continued Payment of Claims Despite Knowledge of Chinese Origin of Drugs Not Enough to Defeat Materiality on the Pleadings

Since Escobar, FCA defendants have aggressively litigated materiality. They have asked courts to define when materiality can be defeated by a showing that the government knew of an alleged problem but paid anyway, which Escobar called “strong evidence” of immateriality. The Ninth Circuit in United States ex. rel. Campie v. Gilead Sciences, Inc. issued an opinion on July 7 that might make it more difficult for defendants in that circuit to obtain dismissal at the pleadings stage based on this “government knowledge” challenge to materiality. No. 15-16380, 2017 WL 2884047 (9th Cir. July 7, 2017). Fortunately, Gilead’s materiality ruling can likely be limited to the facts before the Court in that case, where the scope and timing of the government’s knowledge was unclear on the pleadings.

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