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

3. 3

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  Originally enacted to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

6. 6

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

13. 13

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 . . .

21. 21

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.’”

30. 30

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