False Claims Act Whistleblowers Continue to Falter

In recent years, the federal False Claims Act has produced many verdicts with price tags of hundreds of millions of dollars.  However, in recent months federal courts have been reluctant to rule in favor of whistleblowers, causing speculation that the end of such FCA verdicts is looming.

For example, recently the U.S. Court of Appeals for the Eleventh Circuit denied a $320 million FCA claim against Chapters Health System.  Also, within the last month a $350 million jury verdict against a nursing home was wiped out in Ruckh v. Salus Rehab.  Moreover, in October of 2017, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a $682 million verdict against Trinity Industries.  While non-governmental plaintiffs have begun to struggle, it also looks like qui tam relators will as well (a “qui tam relator” is a term for a person or entity not personally harmed by the actions of the defendant, but the action is based on the relator’s direct and independent knowledge of wrongdoing).  Michael Granston, the director of commercial litigation at the Department of Justice’s Fraud Section, recently issued a memo calling for government lawyers to seek to have meritless FCA cases dismissed.  These trends may signal an end to the historical success of whistleblower suits.

The attorney’s at Rock Fusco and Connelly will follow the FCA and any related developments closely.  We are committed to maintaining an astute understanding of the issues businesses face and are ready to assist in such legal matters.

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