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Showing 18 posts in Circuit Court Opinions.

Recent Supreme Court Ruling Gives Whistleblowers More Time

SCOTUS delivered a unanimous opinion on May 13, 2019 affirming a Eleventh Circuit ruling that (1) the extended limitations period of up to 10 years applies to whistleblower-initiated False Claims Act lawsuits in which the government has declined to intervene and (2) whistleblowers in nonintervened cases are not "the official of the United States" referred to by the statute. This decision resolved a three circuit split. More

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An Overview of Nursing Home Fraud: False Claims Act Cases from the Last Three Years

The last three years have seen several FCA cases related to nursing home fraud achieve success. Two cases of note—one against a skilled nursing facility chain and one against a rehabilitation therapy provider—settled for over $100 million, and a recent Third Circuit decision revived a dismissed case against a pharmaceutical company and narrowed the public disclosure bar. Still other cases involving similar allegations of inflating reimbursement levels and engaging in illegal kickback schemes have settled for millions or involved criminal prosecution of the individuals responsible. More

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Escobar decision continues to affect major FCA cases

In 2016, the Supreme Court decided the landmark FCA case Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S.Ct. 1989 (2016). Escobar resolved a circuit split over the implied false certification theory of liability under the FCA, upholding the theory as valid but tightly circumscribing its scope through a "rigorous" interpretation of the Act's materiality and scienter requirements—holding that "[a] misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the Government's payment decision in order to be actionable under the False Claims Act." Escobar, 136 S.Ct. at 1996. This holding continues to percolate through the federal courts, proving determinative in several recent cases of interest. More

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Ninth Circuit Affirms FCA Grant Fraud Finding Against Chabad of California

On September 7, the Ninth Circuit affirmed that Chabad of California was liable for federal grant fraud under the False Claims Act for its noncompliance with financial management standards imposed as a condition of participation in the Urban Areas Security Initiative: Nonprofit Security Grant Program run by the Department of Homeland Security. See United States ex rel. Kozak v. Chabad of California, No. 15-17246 (9th Cir. Sept. 7, 2017). More

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Materiality after Escobar: Why Government Behavior after a Defendant Presents a False Claim Is Not Dispositive

In Universal Health Servs., Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), the Supreme Court resolved a circuit split over the implied false certification theory of liability under the False Claims Act (FCA). As opposed to express false certification, where the defendant allegedly has made an affirmative false statement regarding its compliance with underlying statutory or regulatory requirements, implied false certification is based on the defendant's failure to disclose its noncompliance with these requirements. In Escobar, the Court upheld implied false certification as a valid theory of liability under the FCA, but tightly circumscribed its scope through a "rigorous" interpretation of the Act's materiality and scienter requirements, holding that "[a] misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be material to the Government's payment decision in order to be actionable under the False Claims Act." Escobar, 136 S. Ct. at 1996. More

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Recoveries For FCA Claims Involving Fraud in 2016

In 2016, whistleblowers filed 702 qui tam suits and the Department of Justice recovered $2.9 billion in False Claims Act lawsuits initiated by whistleblowers.  In  qui tam lawsuits, whistleblowers, or “relators,” are entitled to receive up to 30% of the recovery.  And in 2016, whistleblowers recovered $519 million. More

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Trinity Appeals $663M FCA Guardrail Judgment to 5th Circuit Court

On December 7, 2016, the Fifth Circuit Court of Appeals heard argument in the case of The United States ex rel. Harman v. Trinity Industries, Inc., et al.  At issue was a nine-figure judgment which Joshua Harman obtained on behalf of the United States and other state governments against Trinity under the federal and related state False Claims Acts.  The jury found that Trinity had submitted knowingly false claims for payment for its highway guardrail products.  The falsity stemmed from the fact that Trinity had made changes to its guardrail product in order to save money but consciously concealed those changes from the Federal Highway Administration, thereby rendering the products ineligible for payment. More

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False Claims Act Cases and the Seal Provision: What Happens When the Seal is Breached?

Cases brought by whistleblowers under the False Claims Act (FCA) must be filed under seal, meaning that only the government and the court have access to the allegations of the complaint.  31 U.S.C. § 3730(b)(2).  One of the purposes of the seal provision is to prevent the whistleblower from tipping off the defendant about the case while the government conducts its investigation into the whistleblower's allegations.  Accordingly, the whistleblower is forbidden from disclosing the existence of the lawsuit before the court formally lifts the seal on the case.   More

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The Original Source Rule Under the FCA: What You Need to Know

The public disclosure bar of the False Claims Act generally prohibits suits based on facts that are publicly available. The original source rule, however, provides an exception to the public disclosure bar, so that whistleblowers who add valuable information to the publicly disclosed material can still pursue claims on behalf of the government.    More

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Why the False Claims Act Should be Read Broadly: Supreme Court Nominee Merrick Garland's Dissent in U.S. ex rel. Totten v. Bombardier Corp.

In U.S. ex rel. Totten v. Bombardier Corp., 380 F.3d 488 (D.C. Cir. 2004), Merrick Garland, president Obama's Supreme Court nominee, delivered a powerful dissent arguing that 31 U.S.C. 3729(a)(2) (now Section (a)(1)(B)) of the False Claims Act does not require a person to present a false claim directly to the Government; rather, liability should attach if a person made a false claim in order to get paid by the Government, whether the claim was presented to the Government or not (this construction of Section 3729(a)(2) was validated four years later by a unanimous Supreme Court in Allison Engine Co., Inc. v. U.S. ex rel. Sanders)More

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