On June 1, the U.S. Supreme Court unanimously refused to apply the Safeco objective knowledge standard to the False Claims Act (FCA), holding instead in U.S. ex rel. Schutte v. Supervalu Inc. that the FCA’s scienter element turns on a defendant’s “knowledge and subjective beliefs,” not on “what an objectively reasonable person may have known or believed.”
Sixth Circuit Reins In Anti-Kickback Statute
On March 28, the Sixth Circuit issued an important decision on the meanings of “remuneration” and “causation” under the Anti-Kickback Statute (AKS), holding that remuneration “covers just payments and other transfers of value” and not “any act that may be valuable to another,” and that to establish False Claims Act (FCA) liability based on AKS violations, a relator or the government must prove a causal link between the alleged kickback scheme and the alleged false claim.
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Supreme Court Review of False Claims Act Scienter Standard
I was quoted in a recent Law360 article examining the potential impact of the U.S. Supreme Court’s decision to hear a pair of False Claims Act cases about the proper standard for establishing scienter under the False Claims Act.
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D.C. Circuit Holds that False Claims Act Damages Must Be Reduced Dollar-for-Dollar by Other Defendants’ Settlements
On August 30, the U.S. Court of Appeals for the D.C. Circuit held, as a matter of first impression, that damages in False Claims Act cases are subject to pro tanto (dollar-for-dollar) settlement offsets in cases involving multiple jointly and severally liable defendants.
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Ninth Circuit Affirms Broad Scope of False Claims Act’s Public Disclosure Bar
On August 25, the U.S. Court of Appeals for the Ninth Circuit issued an opinion in which it held that ex parte patent prosecutions by the Patent and Trademark Office (PTO) qualify as “other Federal . . . hearing[s]” under prong (ii) of the False Claims Act’s Public Disclosure Bar. In so ruling, the Ninth Circuit affirmed that the Public Disclosure Bar should not be read in a restrictive manner but should be given a broad construction.
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Fifth Circuit Affirms Criminal Healthcare Fraud Convictions of Hospice and Home Health Executives
On March 24, the U.S. Court of Appeals for the Fifth Circuit affirmed the criminal healthcare fraud convictions of two individuals who ran a network of home health and hospice centers in Texas. According to the Fifth Circuit, the defendants operated a “reimburse-first-verify-later system” for nearly ten years, under which an estimated 70 to 85 percent of patients were ineligible for the care they received. The Fifth Circuit provided colorful examples to show that “many certifications were not borderline cases”:
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False Claims Act Fundamentals: How to Respond to a Civil Investigative Demand
What Is a Civil Investigative Demand
A civil investigative demand (CID) is a tool, like a subpoena, that the government uses to obtain documents and information to investigate potential violations of the False Claims Act.
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A New Year of Changes at Inside the FCA
We wanted to update readers on improvements to our blog that you will see over the next few months.
Along with giving the web page a new look, we will be publishing a series of posts to enhance our readers’ understanding of key False Claims Act issues. Each series will serve a different purpose, and the series will focus on the following:
Fourth Circuit Adopts Safeco’s Objective Reasonableness Standard for False Claims Act
On January 25, in a 2-1 decision in U.S. ex rel. Sheldon v. Allergan Sales, LLC, 2022 WL 211172, the Fourth Circuit became the most recent federal appellate court to hold that the objective scienter standard in the Supreme Court’s Safeco decision applies to the False Claims Act (FCA). Under the Fourth Circuit’s decision, the FCA’s scienter element cannot be met if the defendant’s interpretation of applicable statutory or regulatory requirements was objectively reasonable and no authoritative guidance from a circuit court or government agency warned the defendant away from its interpretation.
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Eleventh Circuit Becomes First Appeals Court to Hold that Excessive Fines Clause Applies in Declined FCA Cases
The Eleventh Circuit has become the first federal court of appeals to directly address whether the Eighth Amendment’s Excessive Fines Clause applies to the monetary award in a declined False Claims Act (FCA) case. And in an opinion issued December 29, 2021, the court held that it does. See U.S. ex rel. Yates v. Pinellas Hematology & Oncology, P.A., __ F. 4th __, 2021 WL 6133175 (11th Cir. 2021).
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