Welcome to Original Source: The Sidley Austin False Claims Act Blog

The False Claims Act (FCA) has long been a key enforcement tool for the federal government in matters involving government contracts or other expenditures of government funds. FCA enforcement has traditionally focused primarily on two industries receiving a substantial amount of government funds: healthcare and defense and other government contractors. Recently, however, FCA enforcement has expanded to other industries, including financial services. Through the False Claims Act Blog, lawyers in Sidley’s White Collar, Healthcare, FDA, Government Contracting, Financial Services, Appellate, and other practices will provide timely updates on new and interesting developments relating to FCA enforcement and litigation.

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October 23, 2014 12:18 PM | Posted by Jaime L.M. Jones and Emily Van Wyck | Topic(s): Damages
A Florida federal district court granted a motion for a new trial on damages after an $89.6 million default judgment was entered for False Claims Act violations by a doctor and cancer treatment center. See United States ex rel. McBride v. Makar, No. 8:12-cv-792-T-27MAP, 2014 WL 5307469 (M.D. Fla. Oct. 15, 2014). The court entered a default judgment against the defendant physician and American Cancer Treatment Centers, Inc. (“ACTC”) after defendants failed to respond to the complaint. In calculating damages, the court relied on data compiled by the relator from Medicare records reflecting the total amount paid in reimbursement by the government for all claims submitted by defendants during the time period at issue. read more
October 13, 2014 11:57 AM | Posted by Jonathan F. Cohn and Brian P. Morrissey | Topic(s): Anti-Kickback Statute, Knowledge/Scienter, Stark Law, Privilege Issues
A federal district court in Georgia has ordered a defendant in a False Claims Act case to produce attorney-client privileged communications to the qui tam relator. See United States ex rel. Barker v. Columbus Regional Healthcare System, Inc., No. 4:12-cv-108 (CDL), 2014 WL 4287744 (M.D. Ga. Aug. 29, 2014). The court ruled that the defendant, Columbus Regional Healthcare System, impliedly waived the privilege by pleading in its answer that it did not knowingly violate the FCA and indicating that it would offer evidence at trial that it believed its conduct was lawful. read more
October 10, 2014 4:14 PM | Posted by Jonathan F. Cohn and Brian P. Morrissey | Topic(s): Public Disclosure, Relators, Privilege Issues
A federal magistrate judge in West Virginia has granted an FCA defendant’s request to depose relators’ counsel regarding non-privileged discussions in which relators learned of the conduct they alleged in their complaint, on the grounds that such information is central to defendants’ argument that relators’ claims are foreclosed by the public disclosure bar. United States ex rel. May v. Purdue Pharma L.P., No. 5:10-1423, 2014 WL 4960944 (S.D. W. Va. Oct. 2, 2014). read more
October 2, 2014 1:33 PM | Posted by Jaime L.M. Jones and Brenna Jenny | Topic(s): Rule 9(b)
Although relators and the government have long leveraged statistical inferences to estimate damages in FCA cases, in two recent opinions, courts have permitted the extension of these approaches to efforts to establish FCA liability. This is a troubling signal for defendants because, particularly when utilized in conjunction with the lower pleading standard of certain circuits, these decisions will make it easier for FCA plaintiffs to fend off a motion to dismiss. read more
September 30, 2014 11:51 AM | Posted by Jonathan Cohn | Topic(s): Enforcement, Health Care Providers, Civil Investigative Demands
Earlier this month, the Justice Department announced that federal prosecutors are increasing their scrutiny of whistleblower complaints that allege fraud against the government, in order to discover evidence of criminal conduct. read more
September 26, 2014 12:37 PM | Posted by Scott D. Stein and Brenna Jenny | Topic(s): Overpayments
We previously reported on the Department of Justice’s (“DOJ’s”) and the New York Attorney General’s pioneering suits against a provider network, based solely on a failure to timely refund overpayments. See U.S. ex rel. Kane v. Continuum Health Partners, Case No. 11-2325 (S.D.N.Y.). read more
September 24, 2014 11:51 AM | Posted by Scott Stein | Topic(s): Reports, Anti-Kickback Statute, Part D
On September 19, the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) issued a controversial report entitled Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs, along with a companion Special Advisory Bulletin. read more
September 22, 2014 2:07 PM | Posted by Ellyce Cooper and Collin Wedel | Topic(s): Successor Liability
On August 4, 2014, a federal jury in the Eastern District of Virginia levied a verdict of $100.6 million in damages and $24 million in civil penalties against Belgian shipping company Gosselin World Wide Moving NV (“Gosselin”), based on a finding that Gosselin’s repeated submissions of false invoices for moving services amounted to thousands of individual violations of the federal False Claims Act (a case we previously wrote about here and here). However, the government is seeking to hold a third-party, Government Logistics NV (“GovLog”), liable for the verdict against Gosselin under the theory of successor liability. read more
September 19, 2014 12:51 PM | Posted by Ellyce R. Cooper and Patrick E. Kennell III | Topic(s): False Statements, Constitutionality
In U.S. ex rel. De’von Cannon v. Rescare, Inc., No. 09-3068 (E.D. Pa. Sept. 16, 2014) (Dkt. No. ___) (“Slip Op.”) Judge Diamond of the Eastern District of Pennsylvania ruled that in its third try the Relator pled facts sufficient to survive a motion to dismiss. This time the Relator argued the applicability of the amended (2009) version of § 3729(a)(1) rather than the pre-2009 version. Judge Diamond’s ruling follows the majority of courts around the country that have found that the 2009 amendment can be applied retroactively because it is civil and not punitive in nature. read more
September 12, 2014 12:03 PM | Posted by Scott Stein | Topic(s): Relators, Counterclaims
A recent federal court decision from the District of New Jersey confirms that while the FCA protects employees’ right to blow the whistle, it does not give them carte blanche to ignore confidentiality obligations or employment agreements. Two former employees of a medical device manufacturer sued their former employer for allegedly promoting a medical device for off-label and medically unnecessary uses. After its motion to dismiss was denied, the manufacturer answered and filed a counterclaim against the former employees for breach of their employment agreements. The relators then moved to dismiss the counterclaims. read more
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