US ex rel Graves v Plaza Medical Centers Corp

Case No. 10-23382-CIV-MORENO (S.D.Fla. Oct. 8, 2014)

Defendants filed a Motion to Dismiss for failure to plead fraud with particularity. The trial court dismissed without prejudice, finding:

While Relator alleged specific conduct as to 28 patients, it did not offer a basis to even infer that other patients were similarly mis-diagnosed;

• Relator failed to allege any specific facts against each individual defendant; and
• Relator failed to provide evidence of an actual false claim submitted

The Court dismissed a conspiracy claim with prejudice, as it failed to allege “a single fact” to support the existence of an agreement to violate the FCA.

US ex rel Smith v Boeing

Case No. 05-1073-MLB (D.Kansas Oct. 8, 2014)

The court granted Boeing’s motion for summary judgment, finding that there were reasonable conflicting interpretations of the contract’s requirements, undermining any claim of knowing false certification, and that the FAA had specifically investigated and rejected Relator’s interpretations. The court also noted that the FAA has extensive technical expertise to judge compliance with its regulations, and “exceptionally broad remedial powers” to enforce those regulations, while federal judges and juries have no such expertise.

US ex rel Kelly v Serco

Case no. 11cv2975 /WQH-RBB (S.D.Cal. Oct. 6, 2014)

Relator alleged the Defendant failed to follow government time and cost reporting requirements. The court found that Defendant impliedly certified compliance with certain regulations. However, the court found that the regulations, which applied to the Department of Homeland Security, were not specifically incorporated into a Department of Defense contract, and therefore were not express conditions of payment. Defendant’s motion for summary judgment was granted.

US ex rel Cestra v Cephalon

Case No. 14-01842 (E.D.Penn. Oct. 9, 2014)

In considering a first-to-file challenge to jurisdiction, the court compared the other relator’s complaint to the instant relator’s initial complaint, not his subsequently amended complaint, as the original complaint offers the facts at the time the second action was brought. The court dismissed the latter complaint for lack of jurisdiction, finding that, while it did allege a separate cause of action, it was based upon the same underlying facts.

US ex rel May v Purdue Pharma

Defendant subpoenaed relators’ attorneys for deposition, to inquire into relators’ knowledge of the matters alleged in the Complaint, to challenge jurisdiction pursuant to the public disclosure bar of the FCA. The attorneys represented one relator’s husband on a nearly identical FCA action, which was dismissed. A Complaint was then filed by relators. The court found:

The facts germane to the issue of the application of the public disclosure bar pertaining to when and how Relators obtained knowledge of the substantive allegations of fraud are distinct from and not intertwined with the central merits of Relators’ fraud claims as set forth in their Amended Complaint.

The court, following 8th Circuit precedent in Pamida Inc v ES Originals Inc, allowed the deposition, finding the high hurdles protecting a party’s counsel from deposition were not intended to protect counsel from deposition about a previous case. The court noted the attorney-client privilege would continue to apply and the Defendant could not inquire into communications between the earlier client and the attorneys, but could conduct discovery “of facts underlying those communications.”

US ex rel Keltner v Lakeshore Medical Clinic

550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)

In an anti-trust case in which the Court evaluated the appropriate standard for courts to apply when considering motion to dismiss, it rejected the old and troublesome “no set of facts” standard that required courts to deny motions to dismiss unless there was “no set of fact” upon which a plaintiff could prevail. It was replaced by a new standard of “plausibility.”  The proper standard is that a complaint, to survive a motion to dismiss, must contain sufficient facts to “state a claim to relief that is plausible on its face.”  Id. at 570. The court, in determining whether a complaint meets the standard, must “draw on its judicial experience and common sense,” and where the court can only infer the mere possibility of misconduct, the motion to dismiss should be granted. Aschroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

For more information, please contact David B. Honig at dhonig@hallrender.com or (317) 977-1447.

290 F.3d 1301, (11th Cir. 2002).

To adequately plead a False Claims Act case under Fed.R.Civ.P. 9(b), a whistleblower may not merely plead a scheme to defraud. Rather, they whistleblower must plead and identify actual claims which are false.

For more information, please contact David B. Honig at dhonig@hallrender.com or (317) 977-1447.

314 F.3d 995, 1002 (9th Cir. 2002), the court ruled the relator, an insider, “must show ‘an actual false claims for payment being made to the Government.’” (emphasis in original). The court based its ruling upon the simple fact “(e)vidence of an actual false claim is ‘the sine qua non of a False Claims Act violation.’” Id.

For more information, please contact David B. Honig at dhonig@hallrender.com or (317) 977-1447.

570 F.3d 849, 844 (7^th Cir. 2009).

The Court of Appeals ruled that a whistleblower met Fed.R.Civ.P. 9(b)’s requirement to plead fraud “with particularity,” even where he did not produce actual invoices submitted to the government, where the contract required submission of invoices and the whistleblower alleged false certification of compliance with the contract.

The Court did affirm dismissal of another portion of the complaint for failure to plead fraud with particularity. The whistleblower alleged that Rolls Royce and the government negotiated a settlement of a prior dispute when the entire amount paid should have been refunded; however, he failed to provide any detail as to the negotations. For that reason, that portion of the complaint was properly dismissed.

For more information, please contact David B. Honig at dhonig@hallrender.com or (317) 977-1447.