Category

Rule 9(b)

14 February 2017

First Circuit Affirms Strict Limits of FCA Reach

In U.S. ex rel. Alex Booker and Edmund Hebron v. Pfizer, Inc., the U.S. Court of Appeals for the First Circuit affirmed two district court judgments rejecting allegations of the defendant’s sales and marketing activities related to its drug Geodon, noting that, after 6 years of litigation, the whistleblowers failed to provide sufficient evidence to show that defendant’s alleged conduct resulted in the actual submission of fraudulent claims.

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24 October 2016

FCA Case Against Nursing Home Remanded After Sixth Circuit Applies Relaxed FCA Pleading Standard for the First Time

On September 30, 2016, the Sixth Circuit remanded a False Claims Act (“FCA”) lawsuit against Brookdale Senior Living Solutions (the “defendant” or “Brookdale”), which alleges, among other things, that physician signatures on home care certifications and care plans were late and that Brookdale paid physicians to provide certifications for patients that did not require home care.  Specifically, the Sixth Circuit reversed and remanded the district court’s dismissal of United States ex rel. Prather v. Brookdale Senior Living Cmtys., Inc., Case No. 15-6377, holding that the relator “sufficiently plead the submission of particular claims to the government because she provided a detailed description of the alleged fraudulent scheme, and included her own personal knowledge of the review of Medicare claims for submission.”

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13 September 2016

Seventh Circuit Holds Allegations of Specific Claims Not Required to Satisfy Rule 9(b), but Sets High Bar For Pleading Claims Based on Allegations of Medically Unnecessary Services

In another recent False Claims Act (“FCA”) case decided on Rule 9(b) grounds, the Seventh Circuit rejected the contention that allegations regarding specific claims submitted are necessary to survive a motion to dismiss, but set a very high bar for pleading FCA claims premised on a lack of medical necessity.

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01 September 2016

Seventh Circuit Offers Guidance on Post-Escobar Pleading

In a recent case, affirming the dismissal of an FCA complaint against the City of Chicago, the Seventh Circuit provided guidance to those seeking to understand the pleading requirements for an implied certification claim after the Supreme Court’s recent decision in Escobar.  In United States ex rel. Hanna v. City of Chicago, No. 15-3305 (7th Cir. Aug. 22, 2016), the Court held that the relator failed to provide sufficient detail on the alleged statutory and regulatory violations and the link between those violations and the alleged false certification to meet the heightened Rule 9(b) standard.

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10 August 2016

Ninth Circuit Cautions Against Allowing Relators to Assert Expansive Claims Based Only On Specific Incidents of Alleged Wrongdoing

In a ruling earlier this week, the Ninth Circuit emphasized the demanding standard Federal Rule of Civil Procedure 9(b)’s particularity requirement imposes on qui tam relators alleging fraud, particularly when seeking to pursue an expansive scope of claims based on limited information.  In United States ex rel. Driscoll v. Todd Spencer M.D. Medical Group, Inc., No. 13-17624 (9th Cir. Aug. 9, 2016), a former radiologist employed by the defendant medical group, alleged that the group and its principal violated the FCA by submitting claims to Medicare for “unnecessary CT scans” and, separately, by “unbundling” single procedures into multiple claims to “increase billings artificially.”  Id. (slip op. at 3).  The relator alleged that this conduct persisted for at period of several years, from at least 2007 to 2010, and perhaps longer.  United States ex rel. Driscoll v. Todd Spencer M.D. Med. Grp., Inc., No. 1:11-cv-1776, 2013 WL 6243858, *5 (E.D. Cal. Dec. 3, 2013).  After allowing the relator one opportunity to amend his complaint, the district court dismissed the first amended complaint with prejudice, concluding that these allegations were insufficiently specific to withstand Rule 9(b)’s particularity requirement.  Id.

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06 July 2016

FCA Charges Dismissed Against Wal-Mart, Kmart, and Rite Aid Pharmacies for Relator’s Failure to Plead Specific Allegations

The U.S. District Court for the District of Massachusetts recently dismissed a False Claims Act (“FCA”) lawsuit against Wal-Mart, Kmart, and Rite Aid pharmacies (collectively, “the defendants”), alleging, among other things, that the companies dispensed expired prescription drugs that were reimbursed by Medicare and Medicaid.  In short, the court granted, in part, defendants’ motion to dismiss in U.S. ex. rel. Verrinder v. Wal-Mart Corp., Case No. 13-11147-PBS [here], holding that the relator’s allegations were not sufficiently connected to specific false claims for payment.

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28 June 2016

First Circuit Upholds Dismissal of FCA Claims with Prejudice Taking Middle-Ground Approach to Particularity Requirement

The First Circuit, in United States ex rel. Garcia v. Novartis AG, upheld the dismissal of a FCA claim with prejudice against Novartis Pharmaceutical Corporation, Novartis Corporation, Genentech, Inc. and Roche Holdings, Inc. (collectively “Defendants”) on the basis that the complaint did not include sufficient specific allegations regarding the who, what, where, and when of the fraud to satisfy Federal Rule of Civil Procedure 9(b).  In so doing, the First Circuit appears to have taken a fact-specific middle-ground approach to the Rule 9(b) particularity standard, rather than wholly following either side of the Circuit split on the particularity standard.

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11 January 2016

District Court in the Seventh Circuit Distinguishes Sanford-Brown, Finds Room for Implied Certification Claims Against Pharmaceutical Manufacturers

Although the Seventh Circuit last year became the first circuit court clearly to reject the “implied certification” doctrine of FCA liability, a district court in that circuit recently sought to cabin the impact of the ruling.  See United States ex rel. Kroening v. Forest Pharm., No. 12-cv-00366 (E.D. Wisc. Jan. 6, 2016).  As reported here, the Supreme Court will review the viability of the implied certification theory later this year.  While the Kroening court ultimately dismissed the relator’s claims under Rule 9(b), the opinion highlights the divergence of the viewpoints around the implied certification theory that the Supreme Court has been asked to help resolve.

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02 October 2015

District Court Denies Home Health Assessment Company’s Motion to Dismiss in Medicare Advantage Fraud Case, Dismisses Health Plan Defendants

A court in the Central District of California recently granted in part and denied in part the motions to dismiss of defendants—multiple Medicare Advantage (“MA”) plans and a home health assessment company—in a suit alleging that the sickness of patients had been inflated through illegitimate in-home assessments.  See United States ex rel. Silingo v. Mobile Med. Examination Servs., No. 13-cv-01348 (C.D. Cal. Sept. 29, 2015).  The case is one further development in the broader ongoing enforcement effort against private Medicare insurers (as reported here), and highlights the scrutiny by CMS of the role in-home assessments play in the MA program.

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07 August 2015

Fifth Circuit Affirms Dismissal of False Certification Claim For Failure to Plead A Specific Contract Provision or Regulation Violated

In a recent unpublished decision, the Fifth Circuit affirmed without oral argument the dismissal of an FCA implied certification claim for failure to comply with Rule 9(b).  The relators alleged that a defense contractor submitted certifications to the government falsely certifying that they “calibrated the government’s electromagnetic-energy-measuring instruments in accordance with applicable industry standards and specifications.”  The Fifth Circuit emphasized, however, that a false certification theory can succeed only “only when certification is a prerequisite to obtaining payment from the government.”  Because the relators’ complaint failed to identify any specific statute, regulation, or contract provision providing that compliance with the applicable standards, “let alone certification of compliance,” was a prerequisite to the government’s payments, the Fifth Circuit affirmed dismissal of the complaint.  A copy of the Fifth Circuit’s unpublished decision can be found here.

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