First Circuit Joins Sixth and Eighth Circuits in Requiring But-For Causation for FCA Claims Premised on AKS Violations
Earlier this week, the First Circuit Court of Appeals in Regeneron held that to show falsity in an FCA action premised on an Anti-Kickback Statute (“AKS”) violation, the violation must have been the but-for cause of the submitted claim. See United States v. Regeneron Pharma., Inc., No. 23-2086, 2025 WL 520466 (1st Cir. Feb. 18, 2025). In so holding, the First Circuit joined a circuit split on the meaning of the 2010 AKS amendment providing that claims “resulting from” AKS violations are false for purposes of the FCA (as previously discussed here). Like the First Circuit, the Sixth and Eighth Circuits require but-for causation (as previously discussed here and here). The Third Circuit, meanwhile, requires merely a “link” between an alleged kickback and a subsequent claim.
In Regeneron, the defendant manufactured a drug for age-related macular degeneration—“wet AMD.” The Government alleged that the defendant violated the AKS by indirectly providing copayment assistance to wet AMD patients via donations to independent charities. With regard to the AKS’s “resulting from” language, Regeneron argued that the Government “b[ore] the burden of proving that an AKS violation . . . actually caused [a] physician to provide different medical treatment (and thus caused the false claims).” The Government, however, argued that it needed to show merely that a particular patient was exposed to an illegal recommendation or referral and that a provider submitted a claim for reimbursement pertaining to that patient. The First Circuit sided with Regeneron.
According to the First Circuit, the “Supreme Court has held that a phrase like ‘resulting from’ ‘imposes . . . a requirement of actual causality.’ . . . [I]t is one of the traditional background principles ‘against which Congress legislate[s]’ that a phrase such as ‘result[ing] from’ imposes a requirement of but-for causation.’” Still, courts may deviate from the usual but-for causation standard, the First Circuit explained, based on textual or contextual indications.
The court found that no such deviation was appropriate here. Looking to textual indications, the court determined that there is “no language in the 2010 amendment that by itself runs counter to the presumption that ‘resulting from’ calls for proof of but-for causation.” The court then turned to the Government’s contextual arguments. First, the Government observed that to establish criminal liability under the AKS, the statute “requires no proof that the government would not have paid a claim but for the inducement of the offered kickback.” To the Government, that meant that civil liability under the FCA should similarly “require only that payments are meant to induce the provision of items or services and that those items or services are subsequently provided.” Regeneron, meanwhile, argued that “it is not unheard of for the same statute to impose different evidentiary burdens for related civil and criminal claims.”
The First Circuit agreed with Regeneron. The “criminal provisions of the AKS serve a different purpose than the provisions linking an AKS violation to FCA falsity. . . . [I]t makes sense for the AKS to criminalize even those kickbacks that do not ultimately cause a referral or purchase. By contrast, ‘the chief purpose’ of the FCA’s civil penalties is ‘to provide for restitution to the government of money taken from it by fraud.’” In this connection, the Court criticized the Government’s proposed standard for allowing claims for Regeneron’s drug to “‘result from’ a kickback even if that kickback had no causal impact whatsoever on a patient’s decision to opt for” the drug.
Second, the Government observed that Congress added the “resulting from” language “against a backdrop of false-certification cases.” Under a false certification theory of FCA liability, a claim certifies compliance with a requirement, such that the defendant’s noncompliance with that requirement renders the claim false. False certification theories, the Government argued, did not require proof of causation to demonstrate falsity under the AKS. And “when Congress passed the 2010 amendment,” the Government continued, “it did not clearly intend to alter false-certification caselaw by imposing a but-for causation requirement.” The First Circuit disagreed. Claims “under the 2010 amendment run on a separate track than do claims under a false-certification theory. There is no reason to think that, because false-certification claims require no proof of causation, Congress therefore eschewed any actual causation requirement under the 2010 amendment.”
Third, the Government turned to legislative history to argue that a senator who sponsored the 2010 amendment “stated that the provision would ‘ensure that all claims resulting from illegal kickbacks are ‘false or fraudulent,’ even when the claims are not submitted directly by the wrongdoers themselves.” The First Circuit responded that “[n]othing about [the senator’s] floor statement is inconsistent with an interpretation of the 2010 amendment that imposes but-for causation.”
The First Circuit also rejected the Government’s argument that a but-for standard would leave the “resulting from” language without effect—it can “sometimes be difficult,” the Government said, to prove why a doctor prescribed a particular drug. The First Circuit explained that “the same could be said about the requirement to prove other elements of a successful action under the FCA, such as scienter”—and “not even the government argues that it will rarely be able to prove but-for causation.”
A copy of the First Circuit’s opinion may be found here.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.
