On June 25, 2020, the Eleventh Circuit affirmed in part and reversed in part a district court’s decision to set aside a jury’s $350 million verdict in favor of the relator. In Ruckh v. Salus Rehabilitation, LLC, Angela Ruckh, a registered nurse, alleged that two skilled nursing facilities (“SNFs”) and two related management services companies violated various Medicare and Florida Medicaid SNF regulations. The Eleventh Circuit’s decision adds further gloss to the FCA’s materiality and causation standards.
Earlier this month, a federal judge in Minnesota held that DOJ was required to articulate the factual basis for its allegation that Defendants’ claims for payment resulted from kickbacks, rejecting the argument that such information was irrelevant based on a legal presumption of causation. The Government alleges that defendants Precision Lens and Paul Ehlen provided kickbacks to physicians, including “lavish hunting, fishing and golf trips, private plane flights, frequent-flyer miles and other items of value,” to induce them to use products that Defendants supplied. The Government further alleges that these kickbacks violated the Anti-Kickback Statute (AKS), causing the submission of false claims to the Government.
Two years ago, the Seventh Circuit reversed itself by abandoning its “but-for” causation test in FCA cases in favor of a “proximate cause” rule that had been adopted by all other circuits that had addressed the issue. See United States v. Luce, 873 F.3d 999 (7th. Cir. 2017) (overruling United States v. First National Bank of Cicero, 957 F.2d 1362 (7th Cir. 1992)). The Seventh Circuit remanded the case to the district court with instructions to determine whether the government could establish that the defendant’s conduct proximately caused harm to the government. In an opinion issued last week, the district court strictly applied the new standard and concluded the government could not show proximate cause. United States v. Luce, 2019 U.S. Dist. LEXIS 114718 (N.D. Ill. July 10, 2019).
The U.S. District Court for the Northern District of Florida recently held that a False Claims Act suit can proceed against a Florida pharmacy and its owner, rejecting in particular the owner’s arguments that the complaint did not sufficiently allege that he acted with improper intent or caused the submission of false claims.
Last week, the Fifth Circuit affirmed summary judgment for Solvay Pharmaceuticals Inc. on allegations that the company violated the False Claims Act as a result of off-label marketing efforts and kickbacks to physicians, emphasizing the relator’s failure to demonstrate a causal link between the alleged improper conduct and any false claims. (more…)