Sidley lawyers publish article, Circuit Court Affirms High Pleading Standard For “Induced” False Claims Qui Tam Actions, as part of Washington Legal Foundation’s Counsel’s Advisory series

Posted by Kristin Graham Koehler and Brian P. Morrissey

Sidley lawyers Kristin Graham Koehler and Brian Morrissey have authored an article as a part of the Washington Legal Foundation’s Counsel’s Advisory series, entitled “Circuit Court Affirms High Pleading Standard For ‘Induced’ False Claims Qui Tam Actions.” The article examines the First Circuit’s recent ruling in United States ex rel. Ge v. Takeda Pharmaceutical Co., 737 F.3d 116 (1st Cir. 2013), a closely-watched case in which the relator alleged that a pharmaceutical manufacturer violated the FCA by failing adequately to comply with the FDA’s adverse-event reporting rules for pharmaceutical products. The First Circuit punted on the key issue that drew so much attention to the case, declining to decide whether a violation of FDA’s adverse-event reporting rules can be the basis for FCA liability. The Court nonetheless used the case as an opportunity to reemphasize the important principle that a qui tam relator cannot rely on a mere inference that false claims “necessarily follow” from a defendant’s alleged violation of a federal law or regulation; the relator must present specific “factual or statistical evidence” to justify that inference. Holding that the relator failed to carry that burden, the First Circuit affirmed dismissal of the case on Rule 9(b) grounds.

The article is available for download on the Washington Legal Foundation’s website: