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.
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.
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.
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).
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).
First Circuit Clarifies Application of Medicare’s “Reasonable and Necessary” Standard in FCA Cases Against Clinical Labs
Earlier this week, the First Circuit in OMNI Healthcare held that “in FCA cases alleging Medicare fraud based on laboratory testing, generally a laboratory can rely on a doctor’s order to show that the test is ‘reasonable and necessary’” under the Medicare statute. U.S. ex rel. OMNI Healthcare Inc. v. MD Spine Solutions LLC, No. 25-1110 (1st Cir. Dec. 1, 2025).
Eleventh Circuit Reverses Qui Tam Dismissal, Holds Facts Obtained in Discovery Can Be Used to Satisfy Rule 9(b)
The FCA’s qui tam provisions are intended to incentivize individuals who have legitimate information about fraud on the government that would otherwise go undetected to bring those issues forward. Increasingly, “whistleblowers” – including entities established for the sole purpose of seeking qui tam bounties – are filing lawsuits with sweeping but vague allegations and seeking to fill the gaps through discovery. Unfortunately, the Eleventh Circuit recently enabled this conduct in United States ex rel. Sedona Partners LLC v. Able Moving & Storage Inc., No. 22-13340 (11th Cir. July 25, 2025). There, the court reversed a dismissal of a qui tam complaint and held that relators can leverage discovery-based allegations to overcome Rule 9(b).
District Court Recognizes that Even Minimum FCA Civil Penalties Could Be Unconstitutional Under the Excessive Fines Clause
Recently, the Southern District of New York issued a decision imposing FCA penalties that provides further guidance on the circumstances under which such penalties may violate the Eighth Amendment.
First Circuit Affirms Dismissal of Qui Tam for Failing But-For Test Linking AKS Violations to FCA Liability
In U.S. ex rel. Flanagan v. Fresenius Med. Care Holdings, Inc., 23-1305 (1st Cir. June 27, 2025), the First Circuit recently affirmed dismissal of an FCA complaint because it failed to adequately plead that alleged kickbacks were the “but for” cause of claims submitted to the government. As we previously reported here, the First Circuit recently joined the growing majority of circuits requiring that for a claim to “result[] from” a kickback under the FCA, the kickback must be the “but-for” cause of the claim. In Flanagan, the First Circuit affirmed dismissal because the relator had not adequately alleged any referrals that would not have been made had the alleged kickback never been paid. (more…)
Eleventh Circuit Condemns “Shotgun Pleadings” in Florida FCA Suit
The Eleventh Circuit once again put effect to Rule 9(b), insisting on clarity and specificity in False Claims Act pleadings for them to survive. In Vargas v. Lincare, Inc., 24-11080, 2025 WL 1122196 (11th Cir. Apr. 16, 2025), the Eleventh Circuit reiterated the importance of pleading facts “showing that a false claim was actually submitted to the government” instead of merely “sketch[ing] out a theory.” In addition, the panel opinion’s author—the long-serving Judge Tjoflat—offered a concurrence condemning “shotgun pleadings” that “lump[] multiple claims together in one count,” imploring district courts to sua sponte strike such complaints “at the outset.”
