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When is a claim submitted to the United States?

By Zachary Kitts on November 23, 2019 in federal False Claims Act

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SECOND CIRCUIT ISSUES IMPORTANT NEW OPINION ON THE TOPIC OF “CLAIMS” TO THE UNITED STATES

As regular readers of this blog know, one of the central issues for lawyers litigating qui tam/false claims act cases is finding the “claims” at issue.  In my humble opinion, the best way to analyze any false claims act case is to find the claim first, and work backwards from there.

Today we will look at an interesting new opinion issued last week on this topic by the United States Court of Appeals for the Second Circuit.  The case is styled United States ex rel. Krause and Bishop v. Wells Fargo, N.A.

But first, a word of caution.  The Federal Reserve System was established in 1913 when the world economy (and even our national economy) was considerably less complex.  As the world-economic system has grown and developed over the last 106 years so too has our understanding of the Fed and what it does.

As Judge Katzman is quick to point out early on in his opinion, the ruling in this case is a narrow one and may well not apply to other issues involving the Fed.  That was likley a wise exercise of judicial restraint, because he recognized that any opinion interpretating critical and fundamental definitions at the Fed could have wide ramifications indeed.

THE FEDERAL RESERVE BANK SYSTEM

“The Fed” is comprised of twelve FRBs, which are separately incorporated banks dispersed geographically throughout the country, and a Board, which is based in Washington, D.C.  The Fed is an independent agency within the executive branch. See 12 U.S.C. §§ 241‐252, 264, 341‐362.

Many people are not aware of this, but when a person “negotiates” a check delivered to them (which is legalese for saying they deposit the check into thier bank account or cash it), they do not actually present a claim to the bank on which the check is drawn.  Rather, they present a claim to the FRB, which then, in turn, presents the claim to the bank on which the check is drawn.  So, in this instance, the FRB serves as a clearinghouse for all checks.

As it turns out, this is most likley the simplest thing the FRB does.  The functions of the Fed are many and varied and, in case anyone has been in a cave recently,  the Fed has a major impact on the world economy.

But alas, the Fed is not financed using tax dollars.  Instead, the Fed is financed by its member institutions — i.e., American banks.  Just as consumers maintain bank accounts at banks like Wachovia and Wells Fargo, banks like Wachovia and Wells Fargo maintain bank accounts at the FRBs.

Also of interest:  by law, the United States Treasury controls the issue of coins, but the Federal Reserve controls the issue of paper money.

THE ALLEGATIONS OF THE QUI TAM COMPLAINT

Relators filed thier case in 2011 in the Southern District of New York.  They alleged that Wells Fargo and Wachovia fraudulently requested loans from the FRBs and that, through the Fed’s emergency lending facilities, “the United States provided significant funding . . . to the Defendants, amounting to at least tens of billions of dollars.”

The relators asserted two theories of liability:  implied false certification and express false certification.

The question is whether a fraudulent loan request made to one of the FRBs is an effort to defraud a private entity or an effort to defraud the United States.  Even more specifically, this question breaks down into three distinct questions:  (1) Are FRB officers and employees officers and employees of the federal government? (2) Are the FRBs “agents of the United States” as defined in the FCA? and (3) Are fraudulent loan requests to the Fed claims to the United States?

The answer to the first question is no, yes and yes, at least in the context of this case…

THE COURT’S NARROW RULING

The opinion makes for an interesting and complex read — in order to do it the justice it deserves, I will cover it some detail in a second post…stay tuned readers.

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Updated two-volume set on Employment Law in Virginia is on its way

By Zachary Kitts on November 5, 2019 in False Claims Act Practice in Virginia

 

 

 

 

Updated two-volume set on Employment Law in Virginia is on its way

After some delays, I finally sent off my updated chapter to the two-volume set Employment Law in Virginia. This set was last published in 2016, so it was time for an update.

As in prior years, I contributed Chapter 6 on Qui Tam Whistleblower litigation.  While my chapter on qui tam litigation is not, perhaps, really about employment law, the folks at VaCLE say there is a lot of interest in it and feel like it should be published somewhere.  I think this two-volume set, which is among the best-sellers at VaCLE, is as good as a place as any for it.

This got me thinking about how we, as lawyers and the public, categorize qui tam/false claims/whistleblower practice, so I thought I would write about that today.  One frequent place we see qui tam (or false claims act) litigation categorized is under employment law — so lets start with that.

The Connections Between Employment Law and Qui Tam Litigation

So why are qui tam litigation and employment law so frequently thought of together?  It’s a good question, and here is my attempt at an answer: most qui tam relators continue to be employees who discover wrongdoing (in the form of fraud or false claims to the government) during thier employment and decide to do something about it.  Therefore, many of the first lawyers to file these cases were employment lawyers, for the obvious reasons: they were the ones that had access to wrongfully termination employees.

However, we are beginning to see more qui tam actions filed by individuals other than employees.  I would say that small businesses seeking to correct anti-competitive behavior in the market place are probably the second largest group of qui tam relators after employees.  These folks generally have the kind of information needed to put together a qui tam action.

They also usually have the motivation necessary to organize and execute a qui tam case; this requirement is not to e underestimated.  Indeed, I even wrote a little book called How to be a Successful Qui Tam Whistleblower to assist potential qui tam relators organize thier thoughts (and documents) and find the right lawyer.

As always, feedback and comments are very welcome…stay tuned readers!

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K&G Law Group Partner Zachary Kitts is named “Qui Tam Lawyer of the Year”

By Zachary Kitts on August 20, 2019 in federal False Claims Act, lawyer professionalism, qui tam whistleblowers

Zachary Kitts is announced as Qui Tam Lawyer of the year

 

 

 

 

 

 

 

 

 

K&G Law Group Partner Zachary Kitts is named “Qui Tam Lawyer of the Year”

It is always nice to be included in any kind of honors list, but this year I am honored to announce my selection as “Qui Tam Lawyer of the Year” by the publication Best Lawyers in America.  Hopefully the addition of “Qui Tam Law” as a category in these honors listings means practice under the federal False Claims Act and Virginia Fraud Against Taxpayers Act is coming into its own as a practice area, although it is still very much a niche speciality.

This is the first year that a lawyer has been selected from each practice area as lawyer of the year.   According to the Best Lawyers press release, Lawyer of the Year honorees receive this award based on their overall feedback within specific practice areas and metropolitan regions. “Lawyer of the Year” recognitions were awarded in 137 practice areas across 182 metropolitan regions.

For the 2020 Edition of The Best Lawyers in America, 8.3 million votes were analyzed, which resulted in the inclusion of more than 62,000 lawyers, or approximately 5% of lawyers in
private practice in the United States.

ABOUT BEST LAWYERS

For almost 40 years, Best Lawyers has assisted those in need of legal services to identify the lawyers best qualified to represent them in distant jurisdictions or unfamiliar specialties.  Best Lawyers lists are published in leading local, regional, and national publications across the globe.

 

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VaQuiTamLaw.com author Zach Kitts is appointed to the Professionalism Committee of the Virginia State Bar

By Zachary Kitts on July 18, 2019 in lawyer professionalism, Legal Ethics

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VaQuiTamLaw.com author Zach Kitts is appointed to the the Virginia State Bar’s Professionalism Committee

I am honored to announce my appointment to a three year term on the Virginia State Bar’s Standing Committee on Professionalism.

This is different than my previous appointment to the faculty of the Mandatory Professionalism Course required of every Virginia lawyer.  The Standing Committee on Professionalism does, in part, administer the professionalism course, among other duties.

According to the Virginia State Bar’s website:

The Standing Committee on Professionalism is charged with responsibility for the administration and oversight of the mandatory course on professionalism, which is required of all newly admitted active members of the Virginia State Bar. The purpose of the course is to encourage attorneys to uphold and elevate the standards of honor, integrity, and courtesy in the legal profession. The committee designs and updates the curriculum of the course and selects and trains the faculty of more than eighty distinguished Virginia lawyers and judges.

It is an honor and I look forward to it!

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Judge Alston is confirmed to the U.S. District Court for the Eastern District of Virginia

By Zachary Kitts on June 11, 2019 in lawyer professionalism, U.S. District Court for the Eastern District of Virginia

 

Judge Alston is Confirmed to the U.S. District Court for the Eastern District of Virginia

I am pleased to announce that as of yesterday, June 10, 2019, Judge Alston has been confirmed to the U.S. District Court for the Eastern District of Virginia, Alexandria Division.  Like many judges these days, Judge Alston had quite a wait — I think it was close to a year and a half.  Virginia Lawyers Weekly has the full scoop here.

 

 

According to Virginia Lawyers Weekly, Alston, 62, was elected in 2009 to the Court of Appeals after service in both the circuit and juvenile and domestic relations courts of Prince William County. He spent nine years in private practice in Manassas and served as a commissioner in chancery and substitute judge. Before private practice, he worked for five years with the National Right to Work Legal Defense Foundation and for two years as a staff attorney with the National Labor Relations Board. He graduated from Averett University and from the North Carolina Central University law school.

Although I have never appeared before him, I have met him several times — he is a frequent speaker at the Mandatory Professionalism Seminar and I have read a number of his opinions.  What strikes me most about him is his independent streak; I fully trust that Judge Alston will follow the law and his conscience, and this is a critical element for a federal Judge, or indeed any Judge IMHO.

Judge Alston will be a welcome addition to the Alexandria bench.  According to some folks, the Court there has slowed down just a bit as a result of the retirements of several Judges, including, most recently, Judge Cacheris and Judge Lee.  (Rest assured, it is still the Rocket Docket!)   Judge Alston is young (relatively speaking) and I look forward to many years of court appearances before him.

 

 

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Deputy Attorney General designate Jeffrey A. Rosen’s Answers to the Senate Judiciary Committee

By Zachary Kitts on April 29, 2019 in federal False Claims Act litigation, lawyer professionalism, Legal Ethics, U.S. Department of Justice

Virginia Qui Tam and False Claims Act Lawyers

 

 

 

 

 

 

Deputy Attorney General designate Jeffrey A. Rosen’s Answers to the Senate Judiciary Committee

With all of the “stuff” going on in the political and legal world, thank goodness that we here at VaQuiTamLaw.com focus only on the federal False Claims Act and Virginia Fraud Against Taxpayers Act.  Along those lines, Deputy Attorney General designate Jeffrey A. Rosen prepared written answers to the Senate Judiciary Committee’s questions this month in advance of his testimony.  You can read the Deputy AG Rosen answers to all of the questions here.  

Specifically concerning the federal False Claims Act, Rosen responded to questions from Sen. Grassley as follows:

Specific Answers to Sen. Grassley’s Questions:

  1. Whistleblowers are critical to exposing government waste, fraud and abuse. They are our eyes and ears on the ground, and their courage to come forward and expose government malfeasance benefits us all. Will you commit to protecting whistleblowers from retaliation, and to promoting a culture that values their important contributions?

 

RESPONSE:  I strongly support federal laws that protect whistleblowers, and I am committed to upholding the letter and spirit of those laws. Whistleblowers perform an important service for the public and the Department of Justice when they truthfully report evidence of wrongdoing.  Such individuals should not be subjected to reprisal.

 

  1. In 1986, President Reagan signed into law some very important amendments to the False Claims Act. Since those 1986 amendments, the government has recovered more than $59 billion in taxpayer money. Most of that is because of whistleblowers who found the fraud and brought the cases at their own risk.

 

6.If confirmed, will you vigorously support and enforce the False Claims Act?

 

RESPONSE: The False Claims Act is a critically important tool used by the government to detect fraud and recover money.  If confirmed, I will diligently enforce the False Claims Act.

 

7. If confirmed, will you continue current staff and funding levels to properly support and prosecute False Claims Act cases?

 

RESPONSE:  Because I am not currently at the Department, I have not had the opportunity to evaluate the proper level of staff, funding, and support for False Claims Act cases.  If confirmed, I will consult with the relevant Department personnel about these issues to ensure that the False Claims Act is diligently enforced.

 

8. A new guidance document developed by the Justice Department last year, known as the “Granston memo,” provides a long list of reasons that the Department can use to dismiss False Claims Act cases. Some of them are pretty vague, such as “preserving government resources.” Of course the government can dismiss obviously meritless cases. But even when the Justice Department declines to participate in a False Claims Act case, the taxpayer can and in many cases still does recover financially. So it’s important to let whistleblowers pursue cases even when the Justice Department isn’t able to be involved.

 

9.Under what circumstances can, or should, the Justice Department move to dismiss a False Claims Act case?

 

RESPONSE: The False Claims Act is a critically important tool used by the government to detect fraud and recover money.  If confirmed, I will support the Department’s diligent enforcement of the False Claims Act.  In certain cases, it may be appropriate for the Department to move to dismiss a False Claims Act case.  This may true, for example, when the Department determines a case is meritless or when there is no evidence to support the allegations in the case. Any decision to dismiss a case should made only after thorough review of the case file and consultation with the litigating attorneys.

 

  1. In circumstances where the government does not intervene in a False Claims Act case, if confirmed, will you commit to ensuring that the Justice Department does not unnecessarily dismiss False Claims Act cases?

RESPONSE:  Please see my response to Question 6(a) above.

 

Conclusion

Generally speaking, I think the FCA has become so ingrained in our jurisprudence and in our form of government that real damage to the statute (for example, the repeal of the FCA) would be unthinkable; moreover, I think that even drastic changes to enforcement of the FCA would be unthinkable…but we have to stay vigilant!

 

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Professionalism in Client Relations

By Zachary Kitts on March 13, 2019 in lawyer professionalism, Legal Ethics

Virginia Qui Tam and False Claims Act Lawyers

 

 

 

 

 

 

LAWYER PROFESSIONALISM IN CLIENT RELATIONS

As regular readers know, last year I was appointed to the faculty of the Virginia State Bar’s mandatory course on lawyer professionlism.  This course is otherwise known as the Harry L. Carrico Professionalism Course.  It is certainly an honor to be appointed to the faculty.  The appointment generally entails teaching one or two (or more) seminars per year.  From time to time, a lawyer may also be asked to give a lecture on one of a set of pre-determined topics.

The course is, in keeping with the seriousness of its nature, very structured.  The faculty is carefully screened and the contents are carefully assembled.  Participants attend series of lecutres and workshops over the course of an eight-hour day.  I was asked to give one of the lectures at the March 6, 2019 session of the course in Alexandria.  Well, I actually wasn’t asked exactly, but I would have accepted anyway and I considered it an honor.

My assigned topic was “Professionalism in client relationships.”  The other two lectures are entitled “Professionalism in relationships with other lawyers” and “Professionalism in relationships with the Court.”  The very precise instruction given by Judge Lannetti was to prepare a written lecture of 20 to 23 minutes.  The lecture is read, which is quite unlike any other speech one may give.  A lawyer is also required to email the lecture to Judge Lanneti one week before the course so he can approve or disapprove it.

This may seem strict but there is no other way to ensure a high quality year in and year out.  If lawyers were allowed to give thier lectures in any way they see fit, we would wind up with some brilliant speeches.  We would also wind up with some very lousy speeches. I think that would be completely contrary to the nature of professionalism.  It might even defeat the whole purpose of the course.

This was either my second or third time teaching the course, but it was the first time I was asked to give a lecture.  So, I am not sure if I did it right or not.  But since March 6 I have been emailed by a few participants asking for a copy of my lecture, so I thought it might be of broader interest.  I attach the lecture here.

VIRGINIA CONTINUES TO ATTRACT HIGH CALIBER NEW LAWYERS

Two things I have noticed that I think speak well of the new Virginia lawyers are the following:  first, few people learn the truly mandatory nature of the course the hard way.  In other words, by failing to take the course and having thier brand-new law license suspended.  I had thought that there would be at least two or three every year, but in fact it almost never happens.

One additional thing impresses me thus far, and I think this one is perhaps best of all — I almost never see a new lawyer on his or her phone during the seminar.  Judge Lanneti runs a tight ship, and each time we teach the seminar, he instructs us that phone or device use is absolutely prohibited.  The first time I taught the course, I was bracing to fight attendees over phone use.  Many people these days seem to have an addiction to thier phones…but I have been pleased that not one single new Virginia lawyer has been removed from the seminar for using a phone.

In short, the new Virginia lawyers I have had the privilege of teaching are a fine continuation of our long tradition of excellence in professionalism.

 

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It’s Official — K&G Law Group has the largest settlement in Virginia for 2018

By Zachary Kitts on February 15, 2019 in federal false claims act settlements in Virginia

 

 

 

 

 

 

 

 

I am quite pleased to announce that a case of mine — the $20.7 million settlement in the qui tam case styled U.S. ex rel. Arven v. Virginia Neurological Birth Injury Fund, et al., — has been named the largest civil settlement in Virginia for 2018.

This is the second year in a row that one of my cases has made the list of Virginia’s largest settlements — in 2017 the $4.2 million settlement in U.S. ex rel. Morrow v. Fredericksburg Hospitalist Group, et al., made the list at number 11.  And, longtime-readers will recall that in 2012 I just barely missed number one with my firm’s $18.1 million settlement in US ex rel. Chao v. Calnet, Inc., et al.

Many thanks are due to many different people, including of course the courageous clients, my esteemed co-counsel, Assistant United States Attorney Brian Hudak, former co-counsel John Thomas, and former AUSA Ted Radway, who initially had the case…

You can click here for the third-person version on my firm’s main webpage…and we will keep our fingers crossed for 2019!

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Federal False Claims Act case against Virginia Birth Injury Fund settles for $20.7M

By Zachary Kitts on January 23, 2019 in federal False Claims Act litigation, federal false claims act settlements in Virginia, U.S. District Court for the Eastern District of Virginia

 

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Federal False Claims Act Settlement of $20.7 million against the Virginia Neurological Birth Injury Fund

I am pleased to announce some old/new news — late last year a federal False Claims Act case in which I was involved settled for $20.7 million against the Virginia Neurological Birth Injury Fund.

I was co-counsel on the case with Scott Austin of GentryLocke.  The Richmond-Times Dispatch had an article about the settlement recently; this was actually the second article in the RTD about the case.  The first came out in April of 2017 when the Fund itself confirmed the existence of a DoJ investigation into allegations that the Fund had violated the federal False Claims Act…

History and Purpose of the Virginia Neurological Birth Injury Fund

The Virginia Birth-Related Neurological Injury Compensation Program was created in 1987 to address a rise in medical malpractice insurance rates for obstetricians.  Such rates were — and still are — the highest of any health care provider.  There is a simple reason for this.  The monetary damages that result from serious birth-related injuries to children often require life-long care for the child.  In addition to the obvious expenses the child’s family incurs, the nature of neurological injuries often limits the ability of the child to work and earn a living.

The Program’s enabling legislation, codified at Va. Code. Ann. § 38.2-5000 et seq. removed these medical malpractice claims from the tort system.  The law provides an alternative means for compensating those affected by birth-related neurological injuries.  The Birth-Injury Program does not receive state funds.  Funding is instead provided through four sources: Participating physician and hospital fees; assessments of liability insurance carriers operating in Virginia; and assessments of non-participating physicians practicing in Virginia.

Monetary awards under the Program are exclusive.  If an injury is covered by the Program, the child is not entitled to compensation from a malpractice lawsuit.  Instead, the child is eligible for a lifetime of benefits from the Birth-Injury Program.  Admission to the Program is determined by the Virginia Worker’s Compensation Commission.

So far, so good.  So what went wrong at this innovative program that resulted in false claims to the United States?  That’s an easy one.

The Birth-Injury Fund Essentially Operated to the benefit of the Insurance and Healthcare Industries

The Fund is overseen by a nine-member volunteer board of directors.  As you might guess, the board came to be dominated by the insurance and health care industries.  Lest anyone dismiss this statement as hyperbole, the General Assembly’s Joint Legislative and Audit Review Committee (“JLARC”) issued a scathing 2002 review of the Program.   JLARC plainly stated that the primary interest of the Board has been to keep the premiums and other payments from health care industry participants as low as possible, without regard for the financial stability of the Fund.

The Fund Tried to Keep Fees and Costs as Low as Possible and in the process violated the federal False Claims Act

Between 1995 and 2000, the Board introduced a sliding scale assessment plan.  Under the scale, Program participants actually paid reduced dues based on the number of years that they had been involved in the Program.  This is the exact opposite of how most professional malpractice policies work.  Generally speaking, Professional liability insurance premiums increase over time because the longer the policy has been in effect, the higher the possibility that a claim will be made.

Similarly, insurance premiums also typically increase for high-volume providers.  This is also easy to understand.  Statistically speaking, a hospital that has 11,000 births per year year will have a greater chance of a serious birth injury.  Despite this mathematical certainty, hospitals were assessed a fee of $55 per live birth up to a maximum of $200,000.

By reducing the fees of these participating insurance companies, hospitals, and physicians, the Program reduced its own income by 65 percent.  In 1998, the Program received only $1,025,792 in annual dues from the participating liability insurers, participating hospitals, and non-participating physicians combined to provide for nearly 40 members of the Program.  Bearing in mind that neurological birth injuries are the most costly injuries of any medical malpractice case, the Program collected dues of only $26,300 per Program member in 1998.

Even more incredibly, in 1998 the Fund declared a complete moratorium on fees altogether.

“Dual-Eligibles” and the Birth Injury Fund

So what steps did the Fund take to limit its expenditures?  Part of the answer is that it passed expenses on for “dual eligible” patients.  To be dual eligible simply means that a person has overlapping coverage by both a government payer and a private plan.  In addition to paying for the care of a “dual eligible” beneficiary, private insurers are required to reimburse claims erroneously paid by Medicaid.

And that is because Medicaid is always the “payer of last resort.”

The current Medicaid statute ( found at 42 U.S.C. §1396a(a)(25)(A)-(B)) requires States who receive federal funds for Medicaid to “take all reasonable measures to ascertain the legal liability of third parties … to pay for care and services available under the plan,” and requires States to “seek reimbursement from the third party,” and to “prohibit any health insurer (including … [a] party that is, by statute, contract, or agreement, legally responsible for payment of a claim…) … from taking into account that the individual is eligible for or is provided medical assistance under a plan under this title.”

The Fund qualified as a “party that is, by statute, contract, or agreement … legally responsible for the payment of a claim.”  Therefore, Medicaid properly covers only those expenses not paid for the Fund.  The Fund tried — and for years, succedded — in making itself the “payer of last resort.”  In the process, the Fund caused false claims to be submitted to government healthcare programs.

And that was the basis of the federal False Claims Act case filed by my firm and Gentry Locke in 2015.

The other part of the answer is that the Fund often took an combative approach to Fund participants.  And, what’s worse, the more expensive the benefit sought by a given participant, the more combative the Fund became.

But not any more.

The Settlement Agreement that resolved the federal False Claims Act cases is attached, as is the order of dismissal entered on September 22, 2018.  In addition to the payment, the Fund also agreed to make certain disclosures which you can also read on thier website.

 

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VaQuiTamLaw.com author Zachary Kitts quoted in Virginia Lawyers Weekly on pleading standards under the federal False Claims Act

By Zachary Kitts on January 9, 2019 in federal False Claims Act litigation, How to be a successful qui tam whistleblower

 

VaQuiTamLaw.com author Zachary Kitts quoted in Virginia Lawyers Weekly on pleading standards under the federal False Claims Act

cover of Virginia Lawyers Weekly

 

The latest version of Virginia Lawyers Weekly contains a quote by yours truly on the topic of federal pleading standards for federal False Claims Act cases and the recent Fourth Circuit opinion in .  Congrats to reporter Matt Chaney on his fine article, which also appeared in the South Carolina Lawyers Weekly

I do indeed find this opinion troubling.  The opinion is from December 26, 2018, but for the obvious reasons it didn’t get much publicity at first.  The caption of the case is United States ex rel. David Grant v. United Airlines ; the appeal arises from an Order of the U.S. District Court in South Carolina dismissing relator’s Second Amended Complaint.

Relator’s Second Amended Complaint Failed to Allege Sufficient Details

As regular readers know (because it has been a recurring theme on this blog for more than ten years) a well-pled Complaint is critical.  The heightened pleading requirements of Fed. R. Civ. P. 9(b) apply to FCA actions, and failure to comply with Rule 9(b) is treated as a failure to state a claim under Rule 12(b)(6).

Motions to dismiss pursuant to Fed. R. Civ. P. 9(b) are commonplace in FCA litigation, with nearly every defendant in nearly every case arguing that the relator has failed to plead his or her claims with sufficient particularity.  There are several reasons for the heightened-pleading standard under Fed. R. Civ. P. 9(b).   First, the defendant have a right to be on notice of the conduct alleged to be illegal.  Also, a stringent standard helps to eliminate fraud actions in which all the facts are learned after discovery and protects defendants from frivolous claims.

The primary reason why Rule 9(b) motions are common in FCA cases is that such a motion makes a purely legal argument.  The 9(b)/12(b)(6) motion argues that even if all of the facts alleged in the Complaint were true, the Complaint would still not state a case because it is legally deficient.  And the reason why that argument is necessary is because when a qui tam relator is present, there will normally be few — if any — facts in dispute.

Troubling aspects of the Fourth Circuit’s Opinion

Grant worked at United Airlines as a mechanic; his qui tam alleged several ways in which the airline committed violations of its contract with the United States.  For each of the violations, Grant alleged that United falsely certified that it had in fact followed the correct procedures.  In my view, the allegations of the Complaint had the kind of specificity I look for.  Grant alleged that specific tests were not performed, and he named the specific safety standards that were falsely certified; he also included the contractual provisions at issue.

However, Judge Duncan (writing for the majority) held that because Grant, as a maintenance technician, did not have access to evidence of how and if the government received or paid for the services, he could not state a claim under sections 3729(a)(1)(A) or (B).

My quote is as follows:

The majority appears to say that on one hand, you’d have to have boots-on-the-ground knowledge that an airline mechanic would have, and the person would simultaneously need to have knowledge of fairly high-level contractual dealings,” he said, “But it seems to me that they’re requiring a level of knowledge that no one person would ever have.

So yes, I find this troubling, to say the least…stay tuned readers!

 

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