Ninth Circuit Panel Subtly Back-Pedals Prior Ruling on the Application of the Public Disclosure Bar in the False Claims Act Context

We previously wrote here regarding the Ninth Circuit’s decision in United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 76 F.4th 843 (9th Cir. Aug. 3, 2023) (Valeant).  Earlier this month, the same panel denied Valeant Pharmaceuticals’ petition for a rehearing en banc, but also issued a revised decision, significantly curtailing its original opinion.

(more…)

Chiding DOJ for “Inexcusable” Delay in Deciding to Intervene, Fifth Circuit Makes Notable Determinations on Materiality and Statute of Limitations

Chastising DOJ for asking eighteen times to extend the seal period, the Fifth Circuit recently held that due to its “dilatory conduct,” DOJ could not avail itself of the FCA’s tolling provision.  In the same opinion, the court held that continued reimbursement does not defeat materiality where there are “valid reasons why an agency may continue to pay claims despite allegations of fraud.”

(more…)

Court Certifies Interlocutory Appeal to First Circuit on Causation Standard Connecting AKS Violations and the FCA

Last week a court in the District of Massachusetts took the rare step of allowing an FCA defendant to pursue an interlocutory appeal arising from the summary judgment stage of an FCA case in which DOJ is seeking $10 billion in damages and penalties.  The question on appeal asks the First Circuit to take a side in an expanding circuit split on the requisite causation requirement for AKS violations to trigger FCA liability.

(more…)

Ninth Circuit Excludes Inter Partes Review Proceedings from Public Disclosure Bar and Greenlights Relator’s Qui Tam Claims Based on Patent Activity

In a recent decision, United States ex rel. Silbersher v. Valeant Pharmaceuticals Int’l Inc., 2023 WL 4940429 (9th Cir. Aug. 3, 2023) (“Valeant”), the Ninth Circuit ruled that the False Claims Act’s (“FCA”) public disclosure bar does not apply to inter partes review (“IPR”) proceedings—holding that, unlike patent prosecutions, IPRs are not a qualifying channel for disclosures under the bar.  The panel also ruled that the qualifying disclosures the Valeant defendants did identify did “not disclose a combination of facts sufficient to permit a reasonable inference of fraud.” The panel’s decision reversed a district court’s conclusion that the bar did apply, greenlighting the relator’s lawsuit to proceed to its merits.

(more…)

First Court of Appeals to Apply Polansky Upholds DOJ’s Dismissal

The Eleventh Circuit recently became the first Court of Appeals to apply the Supreme Court’s decision in United States ex rel. Polansky v. Executive Health Resources, Inc., 143 S. Ct. 1720 (2023), when it affirmed a district court’s decision to grant DOJ’s motion to dismiss a qui tam suit over a relator’s objections.  In Polansky, which we analyzed in detail here, the Supreme Court held that the United States may move to dismiss under 31 U.S.C. § 3730(c)(2)(A) regardless of when it intervened in the case and that courts should review any such motion under Federal Rule of Civil Procedure 41(a).  The Eleventh Circuit’s decision underscores the United States’ broad dismissal power in False Claims Act cases.

(more…)

Supreme Court Affirms Broad DOJ Dismissal Authority

On June 16, 2023, the Supreme Court issued its opinion in United States ex rel. Polansky v. Executive Health Resources, affirming that courts should grant DOJ motions to dismiss over relator objections “in all but the most exceptional cases.”  Prior coverage of this case is here and here.

(more…)

Sixth Circuit Adopts Limited Definition of AKS “Remuneration,” Robust Standard for Causation in AKS Qui Tams

On March 28, 2023, the Sixth Circuit issued a notable decision rejecting broad theories from DOJ and relators about (1) the definition of remuneration under the Anti-Kickback Statute (AKS) and (2) the causation requirement for AKS violations that trigger FCA liability.  See United States ex rel. Martin v. Hathaway, No. 22-1463 (6th Cir. 2023).  On the first, the court held that “remuneration” under the AKS “covers just payments and other transfers of value,” not “any act that may be valuable to another.”  On the second, the court held that FCA liability attaches only if the claim would not have been submitted but for the AKS violation.

(more…)

Court Finds That Qui Tam Relator Who Built Case From Patent Records Is Not an Original Source

A relator who scours public patent filings to “uncover” an alleged fraud against the government cannot avoid the False Claims Act’s public disclosure bar by claiming to be an original source, the Northern District of California held this week.

(more…)

Supreme Court Mulls Scope of DOJ Dismissal Authority

On December 6, 2022, the Supreme Court heard oral argument in United States ex rel. Polansky v. Executive Health Resources, which presents the question of whether the government has the authority to dismiss a qui tam suit after initially declining to intervene, and if so, what standard of review applies to the government’s motion to dismiss.  Overall, the lines of questioning suggest that the Court will conclude that the government may dismiss qui tam suits after initially declining to intervene.  However, there was no clear consensus around how to define a judicially enforceable standard for evaluating the government’s dismissal authority.

(more…)

Supreme Court Declines to Address Application of 9(b) to the FCA

Yesterday the Supreme Court denied cert in a trio of cases seeking clarification as to the pleading standard required in FCA cases under Rule 9(b).  The petitioners urged the Court to remedy what they characterized as a circuit split over how much detail whistleblowers and the government must supply about alleged false claims in order to survive a motion to dismiss.  As discussed further here, the Solicitor General opposed these cert petitions and argued that the circuits have “largely converged” in their application of Rule 9(b) to FCA complaints.

(more…)