The U.S. Court of Appeals for the Ninth Circuit issued a decision that reenforces the high bar for an award of attorneys’ fees above the lodestar amount in an FCA case. In United States ex rel. Thrower v. Academy Mortgage Corp., No. 24-4103 (9th Cir. Apr. 6, 2026), the Ninth Circuit reversed and remanded an order awarding more than $8.5M in attorneys’ fees in a case that resulted in a substantial settlement after the relator defeated not only the defendant’s motion to dismiss but also a rare motion to dismiss that the Government filed on its own behalf. The decision confirms that an award of attorneys’ fees over the lodestar amount must be supported by specific evidence, even if the relator obtained an exceptional result.
Last week, the Department of Justice (“DOJ”) announced a more than $17 million settlement with IBM to resolve allegations that the company violated the FCA by defying “anti-discrimination requirements as set forth in Title VII.” This is the first settlement to emerge from the DOJ’s Civil Rights Fraud Initiative, on which we previously reported here and here. Unveiled May 19, 2025, the Initiative aims to use the FCA to pursue claims against federal funding recipients that allegedly violate civil rights laws via “racist preferences, mandates . . . and activities”—including where those violations occurred in the context of companies operating diversity, equity, and inclusion programs. Notably, as we reported here, the Deputy Assistant Attorney General of DOJ’s Commercial Litigation Branch, Brenna Jenny, used an address at the Federal Bar Association’s Qui Tam Conference last February to stress DOJ’s commitment to enforcement premised on such discrimination.
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kristin Graham Koehlerhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKristin Graham Koehler2026-04-13 09:39:472026-04-13 09:39:47DOJ Announces First FCA Settlement Resolving Title VII Discrimination Allegations
A recent decision from the U.S. Court of Appeals for the Ninth Circuit significantly reshapes the intersection of the False Claims Act (FCA) and the 340B Drug Pricing Program (340B Program). In United States ex rel. Adventist Health System of West v. AbbVie, No. 24-2180 (9th Cir. Mar. 17, 2026), the court reversed the dismissal of a qui tam action alleging that pharmaceutical companies inflated drug prices in violation of the 340B statutory ceiling, holding that such claims may proceed under the FCA notwithstanding the absence of a private right of action under the 340B statute. The decision marks a notable departure from a district court ruling—and from prior assumptions about the scope of the Supreme Court’s decision Astra USA, Inc. v. Santa Clara County, 563 U.S. 110 (2011)—and opens the door to increased FCA exposure tied to 340B Program pricing practices.
A divided panel of the Fourth Circuit reversed the dismissal of a qui tam FCA suit alleging that the defendant pharmaceutical company underpaid Medicaid rebates by misreporting “best price” under the Medicaid Drug Rebate Statute. The decision marks the Fourth Circuit’s first application of the subjective scienter standard articulated by the Supreme Court in United States ex rel. Schutte v. SuperValu Inc., and underscores the difficulty defendants may face in securing dismissal at the pleading stage on the scienter element.
On March 9, 2026, a divided panel of the Fifth Circuit revived a long-running qui tam suit against Lockheed Martin and reversed a district court’s dismissal of the relator’s complaint on first-to-file grounds. United States of America ex rel. Ferguson v. Lockheed Martin Corp., No. 24-10713 (5th Cir. 2026) (“Ferguson”). Under the False Claims Act’s first-to-file bar “no person other than the Government may intervene or bring a related action based on the facts underlying” a pending, first-filed action. 31 U.S.C. § 3730(b)(5).
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Kenneth G. Coffinhttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngKenneth G. Coffin2026-03-13 09:05:432026-03-12 16:58:33Fifth Circuit Panel Produces Three Opinions Wrestling with Application of First to File Bar
The Second Circuit affirmed dismissal of an FCA qui tam based on allegedly faulty medical devices, an area marked for particular FCA scrutiny by the DOJ-HHS FCA Working Group, as discussed here. The Second Circuit held the relator failed to plead either a claim or materiality with the requisite specificity and affirmed the dismissal pursuant to Rule 9(b). Wood v. Siemens Med. Sols. USA, Inc., No. 25-864, 2026 WL 504530 (2d Cir. Feb. 24, 2026).
https://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.png00Jaime L.M. Joneshttps://fcablog.sidley.com/wp-content/uploads/sites/5/2022/08/sidleyLogo-e1643922598198.pngJaime L.M. Jones2026-03-04 10:22:032026-03-04 10:22:03Strictly Enforcing Rule 9(b), Second Circuit Affirms Dismissal of FCA Claim Based on Allegedly Defective Medical Devices
Recently a court took the rare step of granting a motion to dismiss a qui tam suit because the relator’s vague and conclusory scienter allegations failed to satisfy Rules 8 and 9(b). U.S. ex rel. Dietz v. Philips Respironics, No. 2:21-CV-00272 (W.D. Pa. Feb. 23, 2026).
In just the last week, the Texas Attorney General’s Office (“TX AG’s Office”) filed three actions against healthcare providers and entities, continuing an increasingly robust and aggressive enforcement regime that dates back to at least the beginning of 2025.
Ninth Circuit Rejects $8.5M Award Of Attorneys’ Fees to FCA Whistleblower
The U.S. Court of Appeals for the Ninth Circuit issued a decision that reenforces the high bar for an award of attorneys’ fees above the lodestar amount in an FCA case. In United States ex rel. Thrower v. Academy Mortgage Corp., No. 24-4103 (9th Cir. Apr. 6, 2026), the Ninth Circuit reversed and remanded an order awarding more than $8.5M in attorneys’ fees in a case that resulted in a substantial settlement after the relator defeated not only the defendant’s motion to dismiss but also a rare motion to dismiss that the Government filed on its own behalf. The decision confirms that an award of attorneys’ fees over the lodestar amount must be supported by specific evidence, even if the relator obtained an exceptional result.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Naomi A. Igra
San Francisco
naomi.igra@sidley.com
DOJ Announces First FCA Settlement Resolving Title VII Discrimination Allegations
Last week, the Department of Justice (“DOJ”) announced a more than $17 million settlement with IBM to resolve allegations that the company violated the FCA by defying “anti-discrimination requirements as set forth in Title VII.” This is the first settlement to emerge from the DOJ’s Civil Rights Fraud Initiative, on which we previously reported here and here. Unveiled May 19, 2025, the Initiative aims to use the FCA to pursue claims against federal funding recipients that allegedly violate civil rights laws via “racist preferences, mandates . . . and activities”—including where those violations occurred in the context of companies operating diversity, equity, and inclusion programs. Notably, as we reported here, the Deputy Assistant Attorney General of DOJ’s Commercial Litigation Branch, Brenna Jenny, used an address at the Federal Bar Association’s Qui Tam Conference last February to stress DOJ’s commitment to enforcement premised on such discrimination.
(more…)
Kristin Graham Koehler
Washington, D.C.
kkoehler@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
H. Boyd Greene IV
Washington, D.C.
bgreene@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Ninth Circuit Opens Door to FCA Liability for Alleged 340B Overcharges
A recent decision from the U.S. Court of Appeals for the Ninth Circuit significantly reshapes the intersection of the False Claims Act (FCA) and the 340B Drug Pricing Program (340B Program). In United States ex rel. Adventist Health System of West v. AbbVie, No. 24-2180 (9th Cir. Mar. 17, 2026), the court reversed the dismissal of a qui tam action alleging that pharmaceutical companies inflated drug prices in violation of the 340B statutory ceiling, holding that such claims may proceed under the FCA notwithstanding the absence of a private right of action under the 340B statute. The decision marks a notable departure from a district court ruling—and from prior assumptions about the scope of the Supreme Court’s decision Astra USA, Inc. v. Santa Clara County, 563 U.S. 110 (2011)—and opens the door to increased FCA exposure tied to 340B Program pricing practices.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Naomi A. Igra
San Francisco
naomi.igra@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Hannah Zobair
Chicago
hannah.zobair@sidley.com
Fourth Circuit Highlights Tougher Path to Dismissal of FCA Cases Post-SuperValu
A divided panel of the Fourth Circuit reversed the dismissal of a qui tam FCA suit alleging that the defendant pharmaceutical company underpaid Medicaid rebates by misreporting “best price” under the Medicaid Drug Rebate Statute. The decision marks the Fourth Circuit’s first application of the subjective scienter standard articulated by the Supreme Court in United States ex rel. Schutte v. SuperValu Inc., and underscores the difficulty defendants may face in securing dismissal at the pleading stage on the scienter element.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Matt Bergs
Chicago
mbergs@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
Fifth Circuit Panel Produces Three Opinions Wrestling with Application of First to File Bar
On March 9, 2026, a divided panel of the Fifth Circuit revived a long-running qui tam suit against Lockheed Martin and reversed a district court’s dismissal of the relator’s complaint on first-to-file grounds. United States of America ex rel. Ferguson v. Lockheed Martin Corp., No. 24-10713 (5th Cir. 2026) (“Ferguson”). Under the False Claims Act’s first-to-file bar “no person other than the Government may intervene or bring a related action based on the facts underlying” a pending, first-filed action. 31 U.S.C. § 3730(b)(5).
(more…)
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Strictly Enforcing Rule 9(b), Second Circuit Affirms Dismissal of FCA Claim Based on Allegedly Defective Medical Devices
The Second Circuit affirmed dismissal of an FCA qui tam based on allegedly faulty medical devices, an area marked for particular FCA scrutiny by the DOJ-HHS FCA Working Group, as discussed here. The Second Circuit held the relator failed to plead either a claim or materiality with the requisite specificity and affirmed the dismissal pursuant to Rule 9(b). Wood v. Siemens Med. Sols. USA, Inc., No. 25-864, 2026 WL 504530 (2d Cir. Feb. 24, 2026).
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Anna M. Schmitt
Chicago
anna.schmitt@sidley.com
Court Grants Motion to Dismiss FCA Claim for Failure Adequately to Plead Scienter
Recently a court took the rare step of granting a motion to dismiss a qui tam suit because the relator’s vague and conclusory scienter allegations failed to satisfy Rules 8 and 9(b). U.S. ex rel. Dietz v. Philips Respironics, No. 2:21-CV-00272 (W.D. Pa. Feb. 23, 2026).
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Scott D. Stein
Chicago
sstein@sidley.com
Joseph R. LoCascio
Chicago
joseph.locascio@sidley.com
Hannah Zobair
Chicago
hannah.zobair@sidley.com
TX AG’s Office Continues Aggressive Enforcement Against Healthcare Entities Operating in Texas
In just the last week, the Texas Attorney General’s Office (“TX AG’s Office”) filed three actions against healthcare providers and entities, continuing an increasingly robust and aggressive enforcement regime that dates back to at least the beginning of 2025.
(more…)
Jaime L.M. Jones
Chicago
jaime.jones@sidley.com
Kenneth G. Coffin
Dallas
kenneth.coffin@sidley.com
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