On November 30, 2018, the Solicitor General of the United States filed an amicus curiae brief in the closely watched False Claims Act (FCA) lawsuit, Gilead Sciences Inc. v. U.S. ex rel. Campie. In what appears to be an unprecedented move, the Solicitor General stated in an amicus brief filed with the Supreme Court – without any prior indication – that the Department of Justice (DOJ) will move to dismiss the relator’s complaint if the case is remanded back to the district court because allowing the case to proceed “would impinge on agency decision making and discretion and would disserve the interests of the United States.”

Defendant Gilead Seeks Review of Ninth Circuit Decision

Two relators filed an FCA lawsuit against Gilead Sciences, Inc. in 2010 alleging that the pharmaceutical manufacturer misrepresented to the government that it obtained an active ingredient in three of its HIV drugs from specifically approved facilities. The relators also allege that Gilead provided false or inaccurate information to the Food and Drug Administration (FDA) in an attempt to gain approval to receive ingredients from an alternate facility. The relators argue that the government would not have reimbursed Gilead for the drugs at issue had it known the truth about the source of the drugs’ active ingredients. Continue Reading DOJ Informs Supreme Court that It Will Dismiss FCA Case if Remanded to District Court

On November 16, 2018, the U.S. Supreme Court granted certiorari in Cochise Consultancy, Inc. v. U.S. ex rel. Hunt, agreeing to decide how the FCA’s statute of limitations applies in qui tam actions brought by a private relator in which the government declined to intervene. The Court’s decision in Hunt should bring sorely needed clarity to a question that has deeply divided the federal courts of appeals.

The Supreme Court Will Review the Eleventh Circuit’s Interpretation of 31 U.S.C. § 3731(b)(2)

The FCA’s statute of limitations provision, 31 U.S.C. § 3731(b), states that a civil action may not be brought under the FCA:

  • more than 6 years after the date on which the violation of section 3729 is committed, or
  • more than 3 years after the date when facts material to the right of action are known or should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed,

whichever occurs last.

The specific question presented in Hunt is whether § 3731(b)(2), which operates as a tolling provision to the six-year limitations period of § 3731(b)(1), applies to FCA actions brought by a relator in which the government declined to intervene, and if so, whether the government’s knowledge or the relator’s knowledge is the relevant trigger for the limitations period.

Continue Reading Supreme Court Agrees to Resolve Circuit Split on FCA Statute of Limitations

On Tuesday, November 20, 2018, Defendants-Petitioners Brookdale Senior Living Communities, Inc. et al. (Brookdale) filed a petition for a writ of certiorari with the U.S. Supreme Court asking the Court to resolve circuit splits regarding enforcement of the materiality and scienter elements of the False Claims Act (FCA) in cases involving the implied false certification theory of liability. The relator in the case, styled Brookdale Senior Living Communities, Inc. v. U.S. ex rel. Prather, is a former Brookdale utilization review nurse who alleges that Brookdale did not obtain physician signatures on home health certifications as soon as possible after the physician established a plan of care, in violation of Medicare regulations. The U.S. District Court for the Middle District of Tennessee previously dismissed the lawsuit for failure to plead falsity, but the case was revived on appeal by a divided panel of the Court of Appeals for the Sixth Circuit, which held that the relator adequately pleaded a regulatory violation. After the relator amended her complaint in light of the Supreme Court’s 2016 decision in Universal Health Services, Inc. v. U.S. ex rel. Escobar, which addressed the FCA’s materiality requirement, the district court dismissed the case for failure to plead materiality. On appeal, however, the Sixth Circuit again reversed in a 2-1 decision, finding that the relator adequately pleaded materiality and scienter. Continue Reading Supreme Court Review Sought on FCA Materiality, Scienter Elements

Matt Curley Provides Insight on Supreme Court's Refusal to Weigh In on Pleading of FCA SuitsBass, Berry & Sims attorney Matt Curley provided insight to Law360 for an article analyzing the Supreme Court’s decision to deny certiorari concerning a case that may have addressed the discrepancies surrounding how False Claims Act (FCA) suits are pleaded. There is currently a split within the federal appellate courts regarding how the heightened pleading requirements of Rule 9(b) should be applied to FCA claims.

Continue Reading Matt Curley Provides Insight on Supreme Court’s Refusal to Weigh In on Pleading of FCA Suits

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 will take a closer look at recent legal developments involving the FCA. This week, we examine the Supreme Court’s opinion in Escobar and its impact on the question of the FCA’s materiality requirement.

In addition to tackling the viability of the implied certification theory of liability in Escobar, the Supreme Court also held that the FCA does not restrict liability to noncompliance with express conditions of payment, stating that “[w]hether a provision is labeled a condition of payment is relevant to but not dispositive of the materiality inquiry.”  The Supreme Court explained that any concerns about fair notice or open-ended liability without such a restriction on liability can be addressed through “strict enforcement” of the FCA’s “demanding” and “rigorous” materiality requirement, as well as the FCA’s scienter requirement. 

Continue Reading FCA Deeper Dive: Escobar and Its Aftermath – Part II

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 are taking a closer look at recent legal developments involving the FCA. This week, we examine the Supreme Court’s opinion in Escobar and its impact on the theory of implied certification.

Continue Reading FCA Deeper Dive: Escobar and Its Aftermath – Part I

The Supreme Court held that a relator’s breach of the seal in a qui tam case does not require mandatory dismissal of the complaint, but the Court declined to articulate what factors are appropriate to consider in determining whether dismissal is appropriate.  The Court wrote only that appropriateness of dismissal in a given case should be left to the sound discretion of the district court. The district court in this case had not abused its discretion in declining to dismiss the case, and the appropriate test could be taken up in future cases.

Continue Reading Supreme Court Rejects Mandatory Dismissal for an FCA Seal Breach

On June 16, 2016, the U.S. Supreme Court issued its much-anticipated opinion in Universal Health Services, Inc. v. United States ex rel. Escobar regarding the implied certification theory of False Claims Act (FCA) liability.  The Court’s unanimous opinion, drafted by Justice Clarence Thomas, is significant in three respects, detailed further below:  (1) the Court ruled that, in certain circumstances, the implied certification theory can be a basis for FCA liability; (2) the Court held that an express condition of payment in a statutory, regulatory or contractual requirement is relevant—but “not automatically dispositive”—in determining FCA liability; and (3) the Court clarified how the FCA’s materiality requirement should be enforced by lower courts addressing FCA suits premised on an implied false certification theory.

Continue Reading In Escobar, Supreme Court Endorses, but “Materially” Refines, Implied Certification Theory of False Claims Act Liability

There are a number of key issues that will drive the government’s enforcement efforts in the coming year and that will have a significant impact on how healthcare fraud matters are pursued by relators asserting FCA claims and are defended on behalf of healthcare providers. In the coming weeks, we will examine these issues in greater depth and why healthcare providers should keep a close eye on these issues. This week, we examine the future of implied certification as a viable FCA theory of falsity.

In December 2015, the U.S. Supreme Court granted the petition for writ of certiorari in Universal Health Services, Inc. v. Escobar and will consider whether and to what extent the implied certification theory is a viable theory of falsity under the FCA.  This case undoubtedly will be one of the most closely watched FCA cases to be argued before the Supreme Court since the 1986 amendments to the FCA.

Continue Reading FCA Issues to Watch: The Future of the FCA’s Implied Certification Theory of Falsity

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