The Fifth Circuit recently sent a summary judgment ruling back to the Southern District of Texas for the second time for the lower court’s failure to apply the Circuit’s construction of the public disclosure bar. United States ex rel. Little v. Shell Exploration, No. 14-20156 (5th Cir. Feb. 23, 2015). Remarkably, the court also ordered that the case be assigned to a new judge because the lower court’s five-page “broad” and “conclusory” opinion failed to follow instructions for remand and was devoid of appropriate citations to the record or relevant law.
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In a February 25, 2015 opinion, the Sixth Circuit became the fifth circuit court effectively to narrow the scope of the FCA’s public disclosure bar by holding that disclosures to the government do not trigger the protections of that provision. The Sixth Circuit also expanded upon prior rulings in this regard, clarifying that even disclosures to government contractors and private consultants during the course of an administrative audit and investigation will not lead to the application of the public disclosure bar to FCA liability.
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February 27, 2015 12:15 PM
| Posted by Jaime L.M. Jones and Emily Van Wyck
| Topic(s): Retaliation
Earlier this week, Senators Chuck Grassley (Iowa) and Ron Wyden (Oregon) hosted a press conference to announce the launch of the Whistleblower Protection Caucus—a bipartisan group of Senators focused on raising awareness of the need for adequate protection from retaliation for whistleblowers.
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In a recent decision, the Third Circuit provided additional guidance on the scope of the original source exception to the FCA’s public disclosure bar. In U.S. ex rel. Morgan v. Express Scripts, Inc., the court affirmed the dismissal of a qui tam suit based on allegations – widely covered in numerous lawsuits and media reports – that defendants artificially inflated Average Wholesale Prices (“AWPs”) for brand-name drugs.
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February 23, 2015 5:33 PM
| Posted by Jaime L.M. Jones and Brenna Jenny
| Topic(s): Discovery, TN-ED
The Eastern District of Tennessee recently clarified the discovery implications of its September 2014 ruling (reported here) permitting the government to establish FCA liability based on a sampling of claims. See U.S. ex rel. Martin v. Life Care Centers of America, Inc., No. 08-cv-251 (E.D. Tenn. Feb. 18, 2015). In rejecting the defendant’s motion to compel discovery as to the allegedly false claims outside of the government’s sample, the court underscored the significance of its earlier ruling narrowing the evidence necessary to establish liability, and significantly constrained the government’s discovery obligations.
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February 16, 2015 8:48 AM
| Posted by Scott Stein and Brenna Jenny
| Topic(s): Overpayments
On Friday, February 13, 2015, CMS announced that it needs at least one more year to finalize regulations governing the report and return of “identified” overpayments by Part A/B providers under section 6402 of the Patient Protection and Affordable Care Act (“PPACA”). As we previously reported, CMS published a proposed rule in February 2012 for Medicare Part A and B, but, despite subsequently finalizing overpayment regulations for Medicare Advantage (“MA”) organizations and Part D sponsors, has not yet finalized a version of its 2012 proposal.
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February 11, 2015 12:12 PM
| Posted by Scott Stein and Emily Van Wyck
| Topic(s): Relators, NY-SD
Last week, a district court judge rejected a relator’s argument that the FCA restricts the award of costs against unsuccessful relators to only those cases where the suit was found to be frivolous, vexatious, or harassment, a bar significantly higher than that imposed on all other unsuccessful litigants under Federal Rule of Civil Procedure 54. See United States ex rel. Assocs. Against Outlier Fraud v. Huron Consulting Grp., Inc., No. 09-cv-01800-JSR (S.D.N.Y. Feb. 2, 2015). This decision confirms that relators are liable for costs on the same terms as any other unsuccessful litigant.
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In a recent decision, United States ex rel. Ceas v. Chrysler Group LLC, No. 12-CV-02870 (N.D. Ill. Jan. 28, 2015), a judge in the Northern District of Illinois provided guidance on the issue of successor liability for FCA claims in connection with a corporate asset sale in the bankruptcy context.
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Earlier this week, the Fourth Circuit followed five other Circuits and held that a disclosure of information made solely within the government does not constitute a “public disclosure” under the FCA. While the decision – United States ex rel. Wilson v. Graham Cnty. Soil & Water Conservation Dist., No. 13-2345 (4th Cir. Feb. 3, 2015) – addresses the pre-Patient Protection and Affordable Care Act (PPACA) version of the public disclosure bar, the PPACA amendments did not alter the requirement that triggering disclosures be “public.” Thus, the Fourth Circuit’s decision will have ongoing significance.
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DOJ recently took the unusual step of filing an amicus brief in a private lawsuit alleging violations of the Lanham Act and various state laws, which resulted from violations of the Stark Law and the Anti-Kickback Statute (“AKS”). See Brief for the United States Supporting Appellee, Ameritox, Ltd. v. Millennium Labs., Inc., No. 14-14281 (11th Cir. Jan. 21, 2015). DOJ explained that it was filing an amicus brief to correct what it views as Millennium’s mischaracterizations of how CMS and the OIG interpret exceptions to the statutory definitions of remuneration under the Stark Law and the AKS. It emphasized the importance of a “proper interpretation” of these statutes, both because the laws independently are key mechanisms for preventing fraud and abuse, and because they serve as predicates for FCA liability.
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