False Claims Act

Since 2010, the public disclosure bar to a False Claims Act qui tam action (31 USC 3730) has applied to bar Federal False Claims Act suits only if (1) the disclosure at issue occurred through one of the channels specified in the statute; (2) the disclosure was public; and (3) the relator’s action is substantially the same as the allegation… Read More

This decision holds that the US DOJ may move to dismiss a False Claims Act suit whenever it has intervened in the litigation, whether during the period the complaint remained sealed or thereafter.  However, the government must give the relator notice and an opportunity to be heard regarding the dismissal.  In deciding whether to approve dismissal, the court must apply… Read More

The federal False Claims Act prohibits "knowingly" submitting a false claim.  It defines knowingly to mean actual knowledge, deliberate ignorance, or reckless disregard of truth or falsity.  (31 U.S.C. §3729(b)(1)(A).)  This decision holds that especially as read against the background of common law fraud which the False Claims Act builds on, the statutory definition of "knowingly" sets a standard governed… Read More

This decision holds that a complaint alleging a false implied certification violation of the California False Claims Act must be pleaded with particularity.  But, it also holds that the plaintiff satisfied that standard in this case in which plaintiff claimed that remarketing agents had breached their contracts with local agencies in setting the interest rates on local agencies' variable rate… Read More

Under California's False Claims Act, there is a public disclosure bar to suit if the information on which the suit is based was publicly disclosed in a criminal, civil, or administrative hearing, in a report, hearing, audit or investigation by the Legislature, or in news media.  (Gov. Code 12652(d)(3)(A).)  This decision holds that interest rates on government bonds automatically reported… Read More

Under the state's False Claims Act and Insurance Frauds Prevention Act, a qui tam plaintiff must file the complaint under seal and send it to the Attorney General or Insuance Commissioner and district attorney.  Only after those entities decide not to intervene and take over prosecution of the action may the plaintiff serve the defendant(s) and proceed to litigate the… Read More

A Controller notice of noncompliance under CCP 1576 is not a prerequisite to a false claims action for failre to report (reverse false claim) and pay (conversion) unclaimed property to the State of California.  The complaint in this case adequately alleged that cashier's checks were similar written instruments to money orders and thus that the banks had an obligation to… Read More

Since 2010, the public disclosure bar to a False Claims Act qui tam action (31 USC 3730) has applied to public disclosure of the same claim in an "other" Federal "hearing."  This decision holds that ex parte patent prosecutions before the Patent Office are other hearings for this purpose.  The statute was intended to encompass public disclosures made in federal… Read More

The district court erred in granting defendant summary judgment in this False Claims Act case.  A genuine issue of triable fact existed as to whether defendant's use of the "KX" modifier in its Medicare reimbursement claims was material.  The modifier indicated compliance with local coverage determinations.  That certification was false, and it would be material if the trier of fact… Read More

Under 31 U.S.C.§ 3730, the government may dismiss a federal False Claims Act case despite the objection of the relator who filed it.  The DC Circuit has held that the executive branch wields unreviewable discretion in choosing to dismiss a False Claims Act suit.  (Swift v. United States (D.C. Cir. 2003) 318 F.3d 250, 252.)  The Ninth Circuit holds that… Read More

The United States chose not to intervene in Thrower's False Claims Act suit, but later filed a motion to dismiss the case.  The district court denied the motion to dismiss because it found the US had failed to meet its burden of demonstrating a valid governmental purpose related to the dismissal and because it failed to fully investigate the allegations… Read More

A plaintiff's success in fending off a demurrer, summary judgment motion, or other pretrial motions does not immunize it from a later finding that the False Claims Act cause of action was frivolous and corresponding award of attorney fees. Read More

Plaintiff's False Claims Act complaint alleged that all the defendant health insurers submitted false claims using false diagnoses of patients' medical condition from the same vendor, and no further differentiation among the health insurers was needed to satisfy Federal Rule of Civil Procedure 9(b) since they all acted the same way. Read More

Plaintiff avoided summary judgment in a False Claims Act suit by showing defendant expressly agreed, as a condition of receiving federal student aid, not to pay incentive compensation to its recruiters, but then violated that agreement and still submitted claims for student aid. Read More

Employee’s claim that employer had breached its fiduciary duties under ERISA in managing an employee benefit plan was not subject to arbitration since the benefit plan was not a party to the relevant arbitration agreement. Read More

Relators stated an actionable False Claims Act claim for fraud against defendant drug manufacturer, claiming that defendant had obtained a key active ingredient for HIV antiretroviral drugs it sold to the U.S. government from unapproved Chinese factories and that the improperly sourced ingredient was adulterated.  Read More

A federal False Claims Act suit was properly dismissed because the suit was based on facts publicly disclosed in a prior suit and the plaintiff was not the original source of that information, but learned it only as a party to the prior suit.  Read More

Resolution of the underlying lawsuit (here by a settlement) does not automatically moot an appeal by a person who unsuccessfully sought to intervene in the action, so long as effective relief may still potentially be awarded the would-be intervenor. Read More

For purposes of the False Claims Act, plaintiff (a New York Deputy AG) did not fall within the pre-2010 definition of an “original source,” because he had only suspicions—not direct knowledge—of defendant’s fraudulent overcharging of the government for wiretaps, and he disclosed those suspicions in response to a FCC inquiry rather than voluntarily.  Read More

Because no statute, regulation or contract provision required defendant to use a progress charting tool known as an earned value management system, defendant did not violate the False Claims Act, as plaintiff alleged, by an implied false certification that it used that tool.  Read More