May 12025

Another Court Requires But-For Causation for AKS/FCA Claims; Cuts Nationwide Case Down to Two Physicians

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Jaime L.M. Jones, Brenna E. Jenny and Matt Bergs

Last week, the Northern District of Illinois issued a significant opinion in a False Claims Act (“FCA”) qui tam action alleging a nationwide kickback scheme by a pharmaceutical manufacturer to promote its gastrointestinal drugs.  United States ex rel. Wilkerson & Jackson v. Allergan Limited, No. 22-CV-3013 (N.D. Ill. Apr. 23, 2025).  The court provided important guidance on the pleading standards and causation requirements for FCA claims predicated on alleged Anti-Kickback Statute (“AKS”) violations.  Specifically, the court became the latest court to require that a kickback be the but-for cause of claims to establish those claims “resulted from” an AKS violation such that they are false under the FCA.  In adopting that standard, the Court largely followed the reasoning in the recent First, Sixth, and Eighth Circuit decisions requiring but-for causation (reported on here, here, and here).  The court’s subsequent, rigorous application of that standard to the relators’ complaint resulted in dismissal of the bulk of the relators’ AKS-based claims.

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Apr 182025

Seventh Circuit Clarifies the Bounds of Anti-Kickback Statute Elements

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Scott D. Stein, Jaime L.M. Jones and Joseph R. LoCascio

This week, the Seventh Circuit reversed a conviction under the Anti-Kickback Statute (AKS) because the payments at issue—to advertisers—did not reflect an intent “to induce.”  United States v. Sorensen, No. 24-1557 (7th Cir. Apr. 14, 2025).  The advertisers, after all, wielded no influence over healthcare decisions.  And advertising cannot be an AKS-prohibited “referral” in the first place.  In reaching these holdings, the Seventh Circuit notably circumscribed the “outer boundaries” of the AKS—violations of which are among the most important drivers of FCA liability.

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Apr 172025

Second Circuit Upholds District Court Ruling that FCA and AKS Scienter Is Not Present Where Defendant Previously Received Favorable HHS-OIG Advisory Opinions

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Jaime L.M. Jones, Brenna E. Jenny and Joseph T. McNally

This week, the Second Circuit upheld a dismissal from the Southern District of New York holding that a defendant did not fulfill the False Claims Act (“FCA”) or Anti-Kickback Statute (“AKS”) scienter requirements where the defendant sought and received favorable advisory opinions from the Department of Health and Human Services Office of Inspector General (“HHS-OIG”).  See United States ex rel. Stephen Sisselman v. Zocdoc, Inc., No. 24-2807 (2d Cir. Apr. 14, 2025).

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Feb 212025

First Circuit Joins Sixth and Eighth Circuits in Requiring But-For Causation for FCA Claims Premised on AKS Violations

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Jaime L.M. Jones, Brenna E. Jenny, Scott D. Stein and Joseph R. LoCascio

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.

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Feb 192025

Joining Circuit Split, First Circuit Adopts But-For Causal Standard for Establishing FCA Falsity Premised on AKS Violations

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Jaime L.M. Jones, Brenna E. Jenny, Scott D. Stein and Joseph R. LoCascio

In a significant opinion, the First Circuit held yesterday that to establish falsity in an FCA action premised on an Anti-Kickback Statute (AKS) violation, “the government must show that an illicit kickback was the but-for cause of a submitted claim.” That determination hinged on the text of the 2010 AKS amendment, which provides that claims “resulting from” AKS violations are false. With this holding, the First Circuit joins the circuit split on what the “resulting from” language requires. The First, Sixth, and Eighth Circuits have adopted the strict but-for standard, while the Third Circuit opted for a much looser approach. We have previously reported on the split here, here, and here. We will follow up with further analysis of the First Circuit’s opinion.

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Jan 132025

District Court Allows Summary Judgment on Medically Unnecessary and AKS Arguments, Joins Conversation on AKS Causation Standard

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Jaime L.M. Jones, Brenna E. Jenny and Lauren McBride

Judge Patti Saris in the District of Massachusetts recently granted a defense motion for summary judgment after concluding that relator failed to show that defendants knowingly submitted medically unnecessary tests or that any false claims were submitted as a result of independent contractor arrangements that allegedly violate the Anti-Kickback Statute (“AKS”).  See U.S. ex rel. Omni Healthcare v. MD Spine Solutions, 18-cv-12558 (D. Mass. Jan. 6, 2025).  With the latter ruling, Judge Saris joins a growing majority of courts holding that an AKS violation is only a false claim under the FCA if the claim would not have been submitted but for the kickback.

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Aug 62024

DOJ Faces Pushback At First Circuit On Expansive Causation Standard for AKS-Based FCA Claims

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Scott D. Stein, Jaime L.M. Jones, Joseph R. LoCascio and Jane E. Fisher

On July 22, 2024, the First Circuit Court of Appeals heard oral argument on what the appropriate standard of causation is for AKS-based FCA claims—specifically, whether a “claim” under the FCA “result[s] from” a kickback only if the claim would not have included the items or services but for the kickback. The District of Massachusetts certified this issue for appellate review after adopting the but-for causation standard in United States v. Regeneron Pharma., Inc., 2023 WL 6296393 (D. Mass. Sept. 27, 2023), as we previously reported here. The panel was made up of Judges O. Rogeriee Thompson, William Kayatta, and Lara Montecalvo, and their questioning suggests some optimism for those advocating for the but-for standard.

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May 82024

Seventh Circuit Rejects Constitutional Challenge to FCA Judgment, Recognizes Circuit Split on Causation Requirement for AKS-Based Claims

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Scott D. Stein, Jaime L.M. Jones, Brenna E. Jenny and Joseph R. LoCascio

In a recent decision, the Seventh Circuit acknowledged—but declined to pick sides in—a circuit split regarding the degree of causation required to establish FCA claims premised on AKS violations.  In the same opinion, the Seventh Circuit rejected an Eighth Amendment challenge to the amount of an FCA judgment.

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Feb 122024

Court Cuts False Claims Act Jury Verdict in Half in Rare Constitutional Decision

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Jaime L.M. Jones, Scott D. Stein, Brenna E. Jenny and Lauren McBride

On Thursday, a Minnesota district court judge more than halved a $490 million False Claims Act jury verdict against an ophthalmology distributor and its founder for Anti-Kickback Statute (“AKS”) violations, to $217 million, holding the damages were “notably severe” and “grossly disproportional” to the offense, and thus improper under the Excessive Fines Clause.

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Dec 112023

Court Requires But-For Causation for AKS-FCA Violations But Highlights Potential Defense Challenges from the Supervalu Decision

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Jaime L.M. Jones, Brenna E. Jenny and Lauren McBride

A recent decision from the District of Minnesota applying the Eighth Circuit’s new but-for causation requirement for connecting violations of the Anti-Kickback Statute (AKS) to FCA violations emphasizes the importance of the circuit split over the correct causation standard, while also highlighting challenges defendants can face post-Supervalu, particularly at the motion to dismiss stage, when arguing that their intent was inconsistent with the FCA’s scienter element.  See United States ex rel. Louderback v. Sunovian Pharmaceuticals, Inc., No. 17-cv-1719 (D. Minn. Nov. 27, 2023). (more…)

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