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.
First, the old business: Of the eight
FCA cert. petitions we identified in our last Cert. Monitor post in September,
seven were denied, and the eighth, a petition in U.S. ex rel. Badr v. Triple Canopy,
was dismissed after the parties settled. A ninth petition, in Bi-State Development Agency of the
Missouri-Illinois Metropolitan District v. U.S. ex rel. Fields, No. 17-657,
raising the question of whether interstate compact entities are immune
from FCA liability under the Eleventh Amendment, was filed and denied since
our last post.
Fast-forwarding to the present, the FCA docket has heated up. In the
order the Court will likely consider them, the cases are:
- U.S. ex rel. Carter v. Kellogg Brown &
Root Services, No. 17-1060:
The petition raises the following questions: (1) Whether an action filed in
violation of the first-to-file
bar can be “automatically revived by the dismissal of the earlier-filed
actions,” an issue we have written
about previously; (2) whether it was appropriate to deny the relator leave
to amend his complaint; and (3) whether the first-to-file bar is
jurisdictional. On March 5, the Court invited the Solicitor General to file a
brief stating the views of the United States.
- Bellevue v. Universal Health Services of
Hartgrove, No. 17-842:
The question presented is whether, to successfully invoke the original
source exception to the public
disclosure bar, a relator “must materially add to the publicly disclosed
allegations to such an extent to cause the allegations on which the claims are
based to no longer be substantially similar to the publicly disclosed
allegations.” The petition has been distributed for consideration at the March
- U.S. ex rel. Little v. Triumph Gear Systems,
The petitioners seem to ask whether the Tenth Circuit inappropriately made the
factual determination under a de novo standard of review that the petitioners
were intervenors in a qui tam action,
and thus were barred under the first-to-file bar, given the district court
never reached that factual issue. Petitioners
maintain that they were the sealed “John Doe” plaintiffs named in the original
complaint. The petition has been distributed for the March 16 conference.
- Gilead Sciences, Inc. v. U.S. ex rel. Campie,
The petition concerns whether a violation is material
where the “Government continued to approve and pay for products after learning
of alleged regulatory infractions.” We
have written about this case in three prior posts.
The petition was filed December 26, and the response was filed on March 5. It will likely be considered at the Court’s
April 13 conference.
- Medical Device Business Services v. U.S. ex
rel. Nargol, No. 17-1108:
The petition asks the court to consider the appropriate pleading standard
under Rule 9(b), an issue that has come up many times before,
in cert. petitions. The petition was filed February 5, and the defendant
has waived its right to file a response.
- U.S. ex rel. Harman v. Trinity Industries,
Inc., No. 17-1149:
This petition seeks review of the Fifth Circuit’s decision vacating the $663
million judgment in the much-discussed case involving guard rails. It raises three
issues: (1) Whether “continued payment by the Government is a factor that may
be considered by the jury . . . or whether it is a determinative factor that
would cause the claim to be immaterial
as a matter of law”; (2) whether the actual knowledge and payment decision of
the state is relevant under Escobar’s
materiality analysis when the state, not the federal government, received the
false statement and was the decision-maker; and (3) whether Escobar’s materiality analysis applies
to express certification cases. The petition was filed February 12 and the
response is currently due March 19.
- Palin v. United States, No. 17-1221:
This petition arises out of a criminal conviction for healthcare fraud affirmed
by the Fourth Circuit, and raises two issues: (1) Whether materiality was
established under Escobar, even
though petitioner says the government’s agents knew about the alleged
misconduct and continued to pay; and (2) whether the indictment should have
been dismissed for failure to plead materiality with specificity. The Fourth Circuit’s decision is interesting
because it suggests that Escobar might
not apply to criminal cases, which the Fourth Circuit later confirmed in Raza, discussed below. The petition was filed February 22, and the
government’s response currently is due April 2.
- Raza v. United States, No. 17A732:
Petitioner’s application for a stay of the mandate suggests that petitioner
will raise the issue of whether Escobar’s
materiality standard applies to criminal cases, an issue which is in the
background of Palin. As noted above,
we have written about Raza previously.
Petitioner’s stay application was denied, and according to his application, the
petition is due March 19.
- U.S. ex rel. King v. Solvay Pharmaceuticals,
Petitioner’s application for an extension suggests the petition might address
the standard to establish a causal connection between a false statement and a
false claim, as well as the public disclosure bar. We have written about the lower court decision
previously. The petition is due March 26.
- U.S. ex rel. Conner v. FDIC, No. 17A908:
Petitioner’s application for an extension of time in which to file his cert.
petition indicates that the petition will seek review of a decision denying the
relator a share of an FDIC recovery from a bank, even though the relator had
made related allegations against the bank in an FCA action. The petition is due
We will continue to monitor and report on these and other new petitions.
Disclosure: V&E represents the defendants in Carter and amici in Gilead and Triple Canopy.