False Claims Act caselaw update – 1st half of August, 2018

by Ben Vernia | August 21st, 2018

In the first half of August, 2018, federal courts issued the following significant decisions concerning the False Claims Act:

  • US ex rel Woods v. Allergan, Inc., No. 17-2191-cv (2d Cir. Aug. 9, 2018) – On an issue certified for interlocutory appeal from the SDNY, the Second Circuit held that a violation of the FCA’s first-to-file bar (31 USC 3730(b)(5)) could not be cured by the filing of an amended complaint after the dismissal of the first-filed suit. The Court followed the DC Circuit’s approach, which conflicts with that taken by the First Circuit. The Court also declined to adopt a Sixth Circuit approach in which the underlying complaint would first be examined for compliance with FRCP 9(b). [Disclosure: the Vernia Law Firm represented Caryatid, LLC, relator in one of the first-filed qui tams mentioned in the case.]
  • US ex rel Carrel, et al., v. AIDS Healthcare Found., Inc., No. 17-13185 (11th Cir. Aug. 7, 2018) – The Eleventh Circuit, reviewing the dismissal of a declined qui tam suit for failure to comply with FRCP 9(b), held that bonuses the defendant paid for referrals fell within an Antikickback Statute safe harbor, and that the relators other allegations failed to plead fraud with particularity, and the complaint did not otherwise provide sufficient indicia of reliability that the defendant submitted false claims.
  • US ex rel. Stovall v. Webster Univ. No. 3:15-CV-03530-DCC (D.S.C. Aug 8, 2018) – District Court ordered the dismissal of a declined qui tam upon the Government’s motion (apparently a post-Granston memo exercise of this authority).
  • In re Spielman, Bktrcy. No. 15-B-17676 (Bktrcy. N. D. Ill Aug. 6, 2018) – Judgement City of Chicago obtained against Chapter 7 debtor was nondischargeable, including actual and treble damages, and civil penalties.

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