When the Best Defense May Be a Good Offense: False Claims Act Counterclaims
A recent opinion from the Northern District of Georgia reminds False Claims Act defendants about a potentially powerful tool at their disposal—counterclaims. In United States ex rel. Cooley v. ERMI, LLC, the court permitted several counterclaims to proceed over the relator’s argument that they were against public policy, demonstrating how defendants can go on offense to hold relators accountable for their own misconduct. (more…)
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.
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.”
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.
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.
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.
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.”
