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. The Supreme Court will rule later this year on cases accusing two pharmacies of overcharging Medicare and Medicaid for generic drugs and the appropriate standard of knowledge of wrongdoing.
Continue Reading Supreme Court Review of False Claims Act Scienter Standard
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.
Continue Reading D.C. Circuit Holds that False Claims Act Damages Must Be Reduced Dollar-for-Dollar by Other Defendants’ Settlements
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.
Continue Reading Ninth Circuit Affirms Broad Scope of False Claims Act’s Public Disclosure Bar
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”:
Continue Reading Fifth Circuit Affirms Criminal Healthcare Fraud Convictions of Hospice and Home Health Executives
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.
Continue Reading False Claims Act Fundamentals: How to Respond to a Civil Investigative Demand
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:
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.
Continue Reading Fourth Circuit Adopts Safeco’s Objective Reasonableness Standard for False Claims Act
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).
Continue Reading Eleventh Circuit Becomes First Appeals Court to Hold that Excessive Fines Clause Applies in Declined FCA Cases
Although this blog focuses mainly on the federal False Claims Act (FCA), other antifraud statutes feature in the qui tam relator and government enforcement toolkit. Key among them: the California Insurance Frauds Prevention Act (IFPA).
Continue Reading The California Insurance Frauds Prevention Act: What to Know About California’s Powerful Commercial Health Insurance Fraud Statute
How should a court evaluate the FCA’s materiality requirement when the government’s ability to deny claims is constrained? According to a recent decision from the Eleventh Circuit, the court should “broadly” consider the government’s “pattern of behavior as a whole,” and may find evidence of materiality in administrative actions that might not support materiality in other cases.
The case, U.S. ex rel. Donnell v. Mortgage Investors Corporation, was brought by two mortgage brokers who specialized in originating mortgage loans guaranteed by the United States Department of Veterans Affairs (VA). Under the program at issue, VA regulations limited the fees and costs lenders could collect from veterans and required lenders seeking VA guarantees to certify compliance with the fee-and-cost restrictions. The relators alleged that the defendant, Mortgage Investors Corporation (MIC), defrauded the VA by charging veterans prohibited fees and falsely certifying they had not done so.
After originating loans and obtaining VA guarantees, MIC typically sold its loans on the secondary market to holders in due course. This introduced an “important wrinkle,” the appeals court noted, because the VA is statutorily required to honor its guarantee when borrowers default on loans possessed by holders in due course.
Continue Reading Eleventh Circuit Broadens Materiality Analysis for Some Cases