As covered in “Court Overturns $350 Million Judgment in FCA Case: Materiality, Scienter, and Causation Standards Preclude Liability by “’Zaps, Traps, and Zingers’”, Andy Bernasconi discusses a recent case, in which the Middle District of Florida issued a blistering opinion vacating a $350 million judgment in a False Claims Act (FCA) case and granting the defendants’ motion for judgment as a matter of law.
This is part of a growing list of decisions that have resulted in dismissal of FCA claims or defense judgments based on a variety of factors, signaling a possible trend in the industry to clamp down on overreaching FCA cases.
This most recent decision comes only months after a Fifth Circuit case in which the court overruled a jury finding of FCA liability, and erased the damages award of more than $663 million, after trebling and inclusion of civil penalties. This case was discussed in depth in “Significant FCA Decision Affirms the Importance of Materiality.”
And in late 2017, we saw the high-profile HCR ManorCare case, in which the DOJ dismissed with prejudice an FCA lawsuit, after the court found that the DOJ’s main expert witness had lied in her deposition.
While the government continues to use the FCA to identify fraud and recover overpayments in government programs, these recent decisions highlight that the courts are looking long and hard at the merits of such cases to determine if any fraud was committed.