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False Claims Act Statistics, News & Analysis

FCA Cert. Monitor: Petitions Concerning Materiality After Escobar and the Original Source Exception Before the Court

After some dereliction of our FCA cert. monitoring duties, FCA Cert. Monitor is back. There currently are 10 FCA cases on the Supreme Court’s docket, raising materiality after Escobar, the first-to-file and public disclosure bars, and the Rule 9(b) pleading standard, among other issues.

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The Second Circuit Protests Too Much We Think — Disguising Deepening Split on Rule 9(b)

Injecting additional uncertainty into the already-muddled case law regarding what precisely must be pleaded with particularity under Rule 9(b), the Second Circuit in U.S. ex rel. Chorches v. American Medical Response, Inc., No. 15-3930, 2017 WL 3180616 (July 27, 2017), held that a relator need not identify a specific invoice in order to adequately plead that a false claim was presented to the government. While Chorches would seem to deepen a circuit split on Rule 9(b) — one the Supreme Court has repeatedly declined to take up — the Second Circuit goes to great lengths to downplay its existence. According to the Second Circuit, “the reports of a circuit split are, like those prematurely reporting Mark Twain’s death, greatly exaggerated.”

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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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Supreme Court Nominee Judge Gorsuch on the False Claims Act

President Trump recently announced that he was nominating Judge Neil M. Gorsuch to fill the Supreme Court seat vacated one year ago by the death of Justice Antonin Scalia. We at LLB went to work researching what a Justice Gorsuch might mean for future case law construing our favorite statute, the False Claims Act. Here is what we found.

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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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False Claims Act Cert. Monitor: Six FCA Cert. Petitions Bite the Dust, Five Remain

Denied petitions for certiorari are a dime a dozen. So it should not come as a surprise that most FCA cert. petitions that we write about fail. But still, we hate to see ’em go. Yet, here we are, in this first Cert. Monitor post of 2017, saying bon voyage to six FCA cert. petitions from our mid-term review, leaving just five more that remain pending.

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