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False Claims Act Statistics, News & Analysis

Too Little and Too Late: First Circuit Rejects Relator's Claims of Possible Fraud and Refuses Unduly Delayed Leave to Amend

Again reiterating that Rule 9(b) is a formidable hurdle for relators, the First Circuit rebuffed a relator’s attempt to allege FCA violations based on broad inferences of fraudulent activity, without any specific facts or statistical evidence tying that conduct to false claims to the government. In United States ex rel. Hagerty v. Cyberonics, Inc., No. 16-1304, 2016 WL 7321224 (1st Cir. Dec. 16, 2016), a former sales representative for defendant Cyberonics, Inc. turned relator alleged that employees of Cyberonics had used fraudulent sales tactics to encourage medical providers to prematurely and unnecessarily replace batteries in medical devices used to treat patients with epilepsy, giving rise to false claims based on his presumption that providers that performed the unnecessary replacements then submitted reimbursement claims to the government for the procedures.

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