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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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  • 04
  • May
  • 2018

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Halfway to the Finish Line for FY2018

Fiscal Year 2018 is just over halfway through and by our count the government has recovered just over $1.1 billion dollars through April 2018. This year so far is consistent with last year, which clocked in at $1.2 billion by April 2017, but lags far behind FY16, which at this point had pulled down a hefty $3.8 billion already. Careful readers may recall that the FY16 numbers are a bit skewed by the single $1.2 billion Wells Fargo settlement, which landed on April 8, 2016. Yet even without Wells Fargo, FY16 remains the undisputed leader of recent years, and the DOJ of 2018 will have to do some serious sprinting if they want to catch up to the team of two years ago.

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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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Mikes v. Straus "Particularity" Requirement May Be Dead, But Materiality is Alive and Well Among District Courts in the Second Circuit

A New York district court recently held in United States v. Strock that Escobar’s materiality standard applies, at a minimum, to express false certification and fraudulent inducement FCA theories in addition to the implied false certification theory at issue in Escobar. The court further held that the government failed adequately to plead materiality under Escobar and dismissed the case.

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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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Risky Business: Reverse FCA Allegations Against Medicare Advantage Insurer Survive

In an early mixed valentine for both the government and a defendant Medicare Advantage Plan insurer, a district court in California on February 12 denied a motion to dismiss reverse FCA claims alleging the failure to correct known invalid diagnosis codes submitted for risk adjustment payments to Medicare. The court did dismiss, however, the government’s claims that the insurer’s false statements as to the validity of the diagnosis codes also violated the FCA. Poehling v. Unitedhealth Group, Inc., No. 2:16-cv-08697 (C.D. Cal. Feb. 12, 2018).

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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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Trap! Zap! Zing! — And Poof! A Florida Court Applies Escobar and Makes a $347 Million FCA Jury Verdict Disappear

On January 11, 2018, a Florida district court vacated a $350 million FCA jury verdict against defendants in U.S. ex rel. Angela Ruckh v. Salus Rehabilitation, LLC, No. 8:11-cv-1303 (M.D. Fla. Jan. 11, 2018). At trial in February 2017, relator claimed that the defendants, owners and operators of 53 specialized nursing facilities fraudulently inflated the amount of resources needed by their patients by upcoding Resource Utilization Group (“RUG”) levels to increase the amount they were able to bill Medicare and Medicaid. The jury agreed and found the defendants liable for $109.8 million in damages, which the judge then trebled to $347 million. The government had declined to intervene, but stood to reap the benefits of relator’s perseverance, but the court had other ideas.

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  • 26
  • January
  • 2018

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"The Granston Memorandum": Will DOJ Really Bite the Hands That Feed the FCA — Color LLB Skeptical

Last November, we reported that Michael Granston, Director of the DOJ Commercial Litigation Branch, Fraud Section, announced at a health care conference that in the future DOJ would move to dismiss meritless qui tam cases. We doubted that much would change, especially given that the speech was not accompanied by any type of policy memorandum. We also understood that DOJ had denied any formal change in policy, and yet, last week the other shoe dropped. The New York Law Journal obtained a copy of a memorandum issued by Granston and dated January 10 to all attorneys in the Fraud Section and all Assistant U.S. Attorneys handling FCA cases. The memorandum purports to encourage DOJ to “seek[] dismissal” of non-intervened qui tam cases that “lack substantial merit” and discusses at some length the factors that should guide the exercise of dismissal discretion. Perhaps the memorandum is some reason for optimism, but we at LLB will wait, as we do, for the statistics to see if this marks any real shift in government thinking on FCA enforcement or is mere window dressing.

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D.C. Circuit Affirms Summary Judgment to Defendant Where Relator "Utterly Failed to Tie" Alleged Kickbacks to a "Specific False Claim"

We have previously blogged about the long-running Barko qui tam litigation, in which V&E is defending KBR against FCA claims brought by Relator Harry Barko. As our prior post explains, Barko’s complaint centers primarily around an allegation that a KBR procurement employee took kickbacks from a subcontractor in return for purported favorable treatment, including awarding subcontracts with insufficient competition, allowing double-billing for goods and services (without back-charging the subcontractor), concealing poor performance, and other alleged wrongdoing. In March 2017, the district court granted summary judgment to KBR.

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  • 22
  • December
  • 2017

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LLB Hits DOJ's Recovery Stats On the Nose

Yesterday, on December 21, a little later and a bit more quietly than in past years, DOJ released its FCA recovery statistics for FY 2017. We are excited to share with our readers that this year LLB’s stats closely tracked DOJ’s! DOJ reports $3.70 billion in recoveries, compared to LLB’s estimate of a little under $3.58 billion. LLB also did well tracking industry recoveries. DOJ reports $2.47 billion versus LLB’s estimate of $2.60 billion in health care, $220 million versus LLB’s $149 million in defense, and $1.0 billion versus LLB’s $832 million in other industries.

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  • 19
  • December
  • 2017

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Escobar Makes No Dent in Criminal Materiality Rules in Fourth Circuit

Last year, we wrote about a then-pending criminal wire fraud case, United States v. Raza, and the potential impact that Escobar’s materiality holding might have on its outcome. The Fourth Circuit recently issued its opinion, deciding that Escobar, if it had any application whatsoever in the criminal law context, did not upset long-held understandings of the objective materiality standard.

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  • 31
  • October
  • 2017

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Escobar Continues to Bring More Treats Than Tricks For FCA Defendants — Seventh Circuit Overrules Longstanding Causation Precedent, Adopts Proximate Cause Standard

Handing out a pre-Halloween treat to FCA defendants, the Seventh Circuit last week overruled its 1992 decision adopting a “but-for” causation standard to join its sister circuits in holding that FCA plaintiffs must prove that a defendant’s false claim was both the but-for and proximate (i.e., foreseeable) cause of the government’s loss.

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  • 19
  • October
  • 2017

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Not a Bullseye, But the Government Hits Its Mark, Settling Triple Canopy for $2.6 Million

Earlier this week, the U.S. Attorney’s Office for the Eastern District of Virginia announced that defense contractor Triple Canopy has agreed to settle the long-running FCA suit related to its provision of security services in Iraq. Although a victory for the government, contractors can take some comfort from the fact that the $2.6 million settlement represents less than 25 percent of the damages sought in the government’s complaint-in-intervention (which totaled more than $12 million when trebled). $500,000 of the settlement will be paid to the relator pursuant to the FCA’s qui tam provisions.

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  • 13
  • October
  • 2017

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It’s Déjà vu All over Again: Resetting the FCA Stats Tracker for FY 2018

It’s that time again; time to press the reset button and reflect on the past fiscal year’s FCA statistics. Fiscal Year 2017, which came to a close on September 30th, was a big year here at LLB as it marks the first year we were able to track FCA statistics for the entire year in real time. LLB has been through some changes since the last time we did this; just recently, we premiered our new custom date range tool on the data set for increased precision in your searches and today we premiered a new copy link feature. However, one thing has remained constant: our readership’s interest in FCA enforcement statistics. With that in mind, we now present to you a breakdown of our preliminary assessment of FY 2017.

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