Two partnerships and infighting between relators recently produced a series of difficult questions addressed by the U.S. Court of Appeals for the Third Circuit in In re Plavix Mktg., Sales Practices & Prod. Liab. Litig. (No. II). Three individuals formed a limited liability partnership, JKJ, to bring a qui tam action against Sanofi-Aventis and Bristol-Myers Squibb, pharmaceutical companies that developed and marketed the anti-clotting drug Plavix.

After JKJ filed its qui tam complaint, however, its members had a falling out. One member left the partnership, and the two remaining members created a new partnership, also named JKJ, with a new third member. The old JKJ partnership was dissolved, and the new JKJ partnership filed an amended qui tam complaint.

The defendants moved to dismiss the amended qui tam complaint based on the False Claims Act’s (FCA) first-to-file bar. The first-to-file bar provides that “[w]hen a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” The defendants argued that filing the amended complaint violated the first-to-file bar because the new JKJ partnership was a new party to the action.
Continue Reading Corporate Maneuvering Leads to Thorny First-to-File Bar Issues

The U.S. Court of Appeals for the Sixth Circuit recently heard oral argument in connection with a decision by the U.S. District Court for the Eastern District of Tennessee that primarily raised two FCA questions:

  1. Did the relator’s amended complaint satisfy the FCA’s first-to-file rule?
  2. Did the amended complaint adequately plead fraud under Rule 9(b) of the Federal Rules of Civil Procedure? U.S. ex rel. Armes v. Garman, 2016 WL 3562062 (E.D. Tenn. June 24, 2016).


Continue Reading Sixth Circuit Hears Oral Argument in FCA Appeal

The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine the FCA’s first-to-file rule and its impact on a relator’s right to pursue FCA claims.

Continue Reading FCA Deeper Dive: FCA’s First-to-File Bar

The D.C. Circuit reversed the district court’s dismissal of a serial relator’s qui tam lawsuit under the FCA’s first-to-file bar in U.S. ex rel. Heath v. AT&T, Inc., finding that the relator’s two qui tam lawsuits targeted factually distinct types of frauds. The D.C. Circuit further determined that the relator’s qui tam lawsuit satisfied the pleading requirements of Rule 9(b).
Continue Reading D.C. Circuit Reverses District Court Dismissal of Qui Tam Lawsuit

In a long-awaited ruling, the Supreme Court held that the Wartime Suspension Limitations Act (WSLA) does not toll the statute of limitations in civil FCA actions, as the WSLA applies only to criminal actions.  After lying dormant for more than 40 years, the WSLA had threatened to upend the FCA’s limitations period and expose defendants to open-ended and extensive liability for otherwise stale FCA claims.

Amended in 2008, the WSLA provides that the statute of limitations applicable to any offense involving fraud against the United States during a time of war or when Congress has enacted a specific authorization for the use of military force is suspended until five years after the termination of hostilities.  In a number of recent cases, relators had begun relying on the WSLA as a means to avoid dismissal of claims brought outside of the FCA’s limitations period.


Continue Reading Supreme Court Limits WSLA to Criminal Offenses