FCA NOW

SCOTUS Denies Review of Dismissal at DOJ’s Request; Circuit Split Remains

On June 28, 2021, the United States Supreme Court denied review of a Seventh Circuit decision affirming the Department of Justice (“DOJ”)-requested dismissal of a False Claims Act (“FCA”) suit alleging a drug kickback scheme.  Cimznhca LLC v. United States, No. 20-1138, 2021 U.S. LEXIS 3404 (June 28, 2021).  As a result, the circuit split regarding the standard that applies to a Government’s motion to...

Eight Years Later: “Speculative” and “Straightforward” FCA Allegations Against Walmart Dismissed

Walmart successfully ended eight years of protracted litigation under the False Claims Act (“FCA”) on June 4, 2021, when the Sixth Circuit affirmed dismissal of Medicare and Medicaid fraud allegations against the major retailer.  The case was first filed in February 2013.  See United States ex rel. Sheoran v. Wal-Mart Stores E., No. 13-10568, 2019 U.S. Dist. LEXIS 140710, at *2 (E.D. Mich. Aug. 20,...

Northern District of Texas Refuses to Enforce Purported Pre-Filing Qui Tam Claim Release on Public Policy Grounds

On April 30, 2021, a Northern District of Texas judge denied a motion to dismiss an FCA qui tam action alleging “a fraudulent scheme to obtain Government subcontracting opportunities reserved for eligible small businesses under the Small Business Act.” United States ex rel. Haight v. RRSA (Commer. Div), LLC, 3:16-CV-1975-S, 2021 U.S. Dist. LEXIS 82894, at *1-4 (N.D. Tex. Apr. 30, 2021). In the complaint,...

District of New Jersey Rules Prescription Drug Events Tainted By Alleged Kickback Schemes Constitute False Claims

A federal judge recently ruled that submission of electronic data to the government can, under appropriate circumstances, give rise to liability under the False Claims Act. In U.S. ex rel. Marc Silver et al. v. Omnicare Inc. et al., 1:11-cv-01326 (D.N.J. Apr. 13, 2021), U.S. District Court Judge Noel C. Hillman granted a relator’s motion to amend his complaint to assert FCA claims premised on...

A New Circuit Split: FCA Protects Former Employees from Post-Employment Retaliation in the Sixth

Over a vigorous dissent last week, a panel of the U.S. Court of Appeals for the Sixth Circuit vacated a ruling from the U.S. District Court for the Eastern District of Michigan and held the False Claims Act’s anti-retaliation provision protects former employees alleging post-termination retaliation. United States ex rel. Felten v. William Beaumont Hosp., No. 20-1002, 2021 U.S. App. LEXIS 9387 (6th Cir. Mar....

Omnicare and CVS’s “Novel” Argument Fails to Defeat FCA Claims

On March 19, 2021, a Southern District of New York judge denied a motion to dismiss a False Claims Act (“FCA”) suit alleging that Omnicare—a subsidiary of CVS Health Corp.—“dispensed drugs based on invalid prescriptions to potentially tens of thousands of individuals living at more than 3,000 residential facilities.” See United States ex rel. Bassan v. Omnicare, Inc., No. 1:15-cv-4179 (CM), 2021 U.S. Dist. LEXIS...

False Claims Act Anti-Retaliation Claim Leveled at PPP Recipient

A former employee of Great Dane Petroleum Contractors, Inc. a full-service Pollutant Control and General Contractor based in Florida, alleged in a recently-filed lawsuit that the company misused nearly $3 million in Paycheck Protection Program (“PPP”) funds.  See Rucker v. Great Dane Petroleum Contractors, Inc., No. 21-cv-207 (M.D. Fla. Mar. 10, 2021).  As another wave of applications for PPP funds come in, employers must remain...

Supreme Court Declines to Resolve Circuit Split Regarding Standard for “Falsity” in FCA Claims

On February 22, 2021, the United States Supreme Court declined to resolve a circuit split regarding the proper standard under which False Claims Act (“FCA”) claims in the medical context should be reviewed. See Care Alternatives v. United States, No. 20-371, 2021 U.S. LEXIS 915 (Feb. 22, 2021). The Court’s decision leaves open the question of what constitutes “falsity” under the FCA and opens the...

Tread Carefully: District of Utah Grants Motion For Attorneys’ Fees After Unsupported FCA Claim

On February 3, 2020, the U.S. District Court for the District of Utah granted a motion for attorneys’ fees against Plaintiff Kelly Sorenson (“Sorenson”), finding that the claims Sorenson asserted against his former employer under the False Claims Act (“FCA”) were “clearly frivolous” and compensable under 31 U.S.C. § 3730(d)(4). United States ex rel. Sorenson v. Wadsworth Bros. Constr. Co., No. 2:16-cv-875, 2021 U.S. Dist....

Justice Department Annual Release Shows Decreased FCA Recoveries But Increased FCA Matters in FY2020, Suggesting Likely Uptick in 2021

On January 14, 2021, the United States Department of Justice (“DOJ”) issued its annual press release highlighting its recoveries from False Claims Act (“FCA”) enforcement over the last fiscal year.  Total recoveries in FY2020 exceeded $2.2 billion, with the majority—$1.8 billion—of those recoveries coming from the healthcare industry.  These totals are down substantially from FY2019, in which total recoveries exceeded $3 billion with $2.6 billion...