![ US ex rel Griffith et al. v Conn et al., No. 7:11-cv-
00157 (ED Ky 1/24/2015)
“When you work for the government and discover
wrongdoing in your midst, may you recover as a
whistleblower under the False Claims Act? [Is it] fair to
reward individuals for simply doing their job, which
they are already paid to do[?]”](https://image.slidesharecdn.com/c7b379d3-7570-4b56-950f-95f7e1a2b88a-150723031100-lva1-app6892/85/2015-ABA_Conference_Qui_Tam_Defenses_panel-34-320.jpg)
2015 ABA_Conference_Qui_Tam_Defenses_panel
- 2. Pamela C. Brecht, Esq. David J. Leviss, Esq. Ted Lotchin, Esq. Pietragallo Gordon Alfano Bosick & Raspanti, LLP Philadelphia, PA O'Melveny & Myers LLP Washington, D.C. Baker, Donelson, Bearman, Caldwell & Berkowitz Washington, D.C. PCB@Pietragallo.com dleviss@omm.com tlotchin@bakerdonelson.com
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- 4. Originally enacted to combat defense contractor fraud during the Civil War Gradually expanded over time into government’s primary fraud fighting tool in a wide range of industries 4
- 5. Knowing submission or causing the submission of false or fraudulent claims for payment Knowing submission or causing the submission of false or fraudulent records in support of a false claim Conspiracy to submit a false claim Submission of false records to reduce money owed to the U.S. (“reverse false claim”) 31 U.S.C. § 3729 5
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- 7. First to File Bar - 31 U.S.C. § 3730(b)(5) Public Disclosure Bar - 31 U.S.C. § 3730(e)(4)(A) Original Source - 31 U.S.C. § 3730(e)(4)(B) Fair, Adequate & Reasonable - 31 U.S.C. § 3730(c)(2)(B) Relator Share Award - 31 U.S.C. § 3730(d)(1) Attorney Fees Award - 31 U.S.C. § 3730(d)(1) Anti-Retaliation Provision - 31 U.S.C. § 3730(h) 7
- 8. Relator files complaint under seal Seal period Resolution Motion to Dismiss Discovery Summary Judgment Trial Relator shares in recovery (15%-30%) Relator recoveries are usually higher in DOJ-intervened cases 8
- 9. For Relators . . . Preview with Government Post-filing – Under Seal Partial Lift for Sharing of Complaint with Potential Overlap Negotiations with other relators Meetings with the government Conversations with the defendant(s)
- 10. For Relators (cont’d) Seal Lifted Motion to Dismiss Discovery limited to first to file/public disclosure Summary judgment Rule 60(b) – Relief from a judgment or order
- 11. For Defendants . . . Conversations with defense counsel and co- defendants Internal investigation and preliminary document review Meetings with the government Negotiation with relator(s) and counsel Litigation in a declined or non-intervened case
- 12. Defendant’s Motion to Dismiss First to File Bar - 31 U.S.C. § 3730(b)(5) Public Disclosure Bar - 31 U.S.C. § 3730(e)(4)(A) Original Source - 31 U.S.C. § 3730(e)(4)(B) 12
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- 14. “When 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.“ Questions: What is a “related action”? And when is a related action “pending”?
- 15. A later-filed qui tam that alleges all the essential facts of a previously-filed qui tam? A later-filed qui tam that alleges the same elements of a fraud described in a pending qui tam? Something else?
- 16. Most courts interpret "related action" broadly. The facts of the second qui tam suit need not be identical for the suit to be barred by the rule. The majority of courts interpret the first-to-file rule to bar a later-filed complaint that alleges: the same "type of fraud"; the same "essential elements“; or the same "material elements" of fraud
- 17. Does the second-filed action allege a different type of conduct or fraud than the conduct alleged in the prior qui tam? Does the second-filed action allege the same general type of fraud, but different material facts or elements? Does the second-filed action give rise to a separate and distinct recovery by the government?
- 18. Circuits are split on this question 4th, 7th, 10th have held that a case is not “pending” if the earlier related case has been dismissed United States ex rel. Carter v. Halliburton Co., 710 F.3d 171 (4th Cir. 2013) United States ex rel. Chovanec v. Apria Healthcare Group Inc., 606 F.3d 361, 362 (7th Cir. 2010) In re Natural Gas Royalties Qui Tam Litigation, 566 F.3d 956, 964 (10th Cir. 2009)
- 19. DC Circuit applies the bar more broadly United States ex rel. Shea v. Cellco Partnership, 748 F.3d 338, 343 (D.C. Cir. 2014) “We hold that the first-to-file bar applies even if the initial action is no longer pending, because we read the term ‘pending’ in the statutory phrase ‘pending action’ to distinguish the earlier-filed action from the later-filed action.”
- 20. Query: Which interpretation is more in keeping with policy and purpose of first to file bar? Supreme Court expected to settle the matter (soon?) Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter, 134 S. Ct. 2899 (2014) Is a first-filed case still deemed to be “pending” within the meaning of the FCA even after the case is settled or dismissed? And a minor issue with the Wartime Suspension of Limitations Act . . .
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- 22. “No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.”
- 23. “The court shall dismiss an action or claim under this section . . . if substantially the same allegations or transactions as alleged in the action or claim were publicly disclosed—(i) in a Federal criminal, civil, or administrative hearing in which the Government or its agent is a party; (ii) in a congressional, Government Accountability Office, or other Federal report, hearing, audit, or investigation; or (iii) from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.”
- 24. Significant implications for FCA litigation Prevailing view: No longer jurisdictional DOJ can veto the dismissal Definition of “publicly disclosed” narrowed to federal proceedings only Who counts as the “public”? “News Media” is still broadly construed But ACA amendments do not apply to cases pending at the time the statute was enacted
- 25. United States ex rel. Osheroff v. Humana, Inc., 2015 WL 223705 (11th Cir. Jan. 16, 2015) Pre-ACA language appropriate for claims that arose before enactment (March 2010), so jurisdictional bar still applies for some claims However, post-ACA language no longer jurisdictional for claims that arose after enactment Even though now a 12(b)(6) motion, court can still consider judicially noticeable materials outside the pleadings
- 26. United States ex rel. Osheroff v. Humana, Inc., 2015 WL 223705 (11th Cir. Jan. 16, 2015) Repudiated theory that public disclosure must contain “allegations of wrongdoing” Found that company websites and newspaper advertisements can be “news media”
- 27. State survey for Medicare certification Medicare quality reporting programs (Nursing Home Compare; etc.) Report to the National Practitioner Database Medicaid desk audit Employment discrimination complaint Others?
- 28. U.S. ex rel Whipple v. Chattanooga-Hamilton County Hospital Authority, No. 13-6645 (6th Cir. 1/25/2015) 2008-2009: HHS-OIG opens administrative investigation into allegations of overbilling. Hospital refunds nearly $500,000. Investigation closed. 2010: Relator files qui tam complaint.
- 29. U.S. ex rel Whipple v. Chattanooga-Hamilton County Hospital Authority, No. 13-6645 (6th Cir. 1/25/2015) 2015: 6th Circuit holds that government audit is not a public disclosure “The public-disclosure bar ‘clearly contemplates that the information be in the public domain in some capacity and the Government is not the equivalent of the public domain.’”
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- 31. “For purposes of this paragraph, ‘original source’ means an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the Government before filing an action under this section which is based on the information.“
- 32. “For purposes of this paragraph, ‘original source’ means an individual who either (1) prior to a public disclosure under subsection (e)(4)(a), has voluntarily disclosed to the Government the information on which allegations or transactions in a claim are based, or (2) who has knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and who has voluntarily provided the information to the Government before filing an action under this section.”
- 33. US ex rel. Sonnier v The Standard Fire insurance Co., et al., No. 4:12-cv-01065 (SD Texas- Houston, 1/29/2015)
- 34. US ex rel Griffith et al. v Conn et al., No. 7:11-cv- 00157 (ED Ky 1/24/2015) “When you work for the government and discover wrongdoing in your midst, may you recover as a whistleblower under the False Claims Act? [Is it] fair to reward individuals for simply doing their job, which they are already paid to do[?]”
- 35. U.S. ex rel. Randall L. Little et al. v. Shell Exploration & Production Co. et al., No. 14-20156 (5th Cir. 2/23/2015)
- 37. False Claims Act lawyer’s review of the Relator’s information Drafting the FCA complaint and statutory disclosures Filing the case and presenting the matter to the government Company’s response to an investigation Scouring the public record for material useful to a dismissal argument
- 38. Government’s determination of whether to join the case Relator’s involvement during the seal period and beyond Defendant’s cooperation with DOJ investigation while preserving its defenses Settlement and/or litigation phase of the action State false claims acts
- 39. 29 States have FCAs • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Illinois • Indiana • Iowa • Louisiana • Maryland • Massachusetts • Michigan • Minnesota • Montana • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • Oklahoma • Rhode Island • Tennessee • Texas • Virginia • Washington • Wisconsin HI CA NV AZ UT CO NM TX OK KS NE WY ID OR WA MT ND SD MN IA MO IL WI MI IN OH AR LA MS AL GA FL SC NC VAWV KY TN PA NY ME VT NH MA CT NJ DE MD RI DC