FCA Alert : Lawyers & Attorneys for Whistleblower, False Claims Act & Qui Tam Defense : Kelley Drye & Warren LLP

Former employee, Ali Bahrani, filed a False Claims Act lawsuit against ConAgra, alleging that ConAgra altered thousands of meat and hide export certificates issued by the United States Department of Agriculture (USDA) to avoid paying fees charged by the USDA for replacement certificates.  Bahrani lost most of his claims at trial, winning a judgment of only $27,822.50 plus $9,274.16 in attorneys’ fees and costs.  Both sides appealed, and the Tenth Circuit held that all of Bahrani’s claims fail as a matter of law and reversed the judgment.  See United States ex rel. Bahrani v. Conagra, Inc., Nos. 09-1163, 09-1180, 09-1388, 2010 WL 4188251 (10th Cir. Oct. 26, 2010).

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A federal district court in the Southern District of Texas recently dismissed a qui tam False Claims Act complaint against Medtronic alleging improper off-label marketing.  See United States ex rel. Bennett v. Medtronic, Inc., No. H-08-3408 (S.D. Tex. Sept. 30, 2010).  Following a recent spate of high-dollar settlements of off-label marketing cases, the court’s decision applies some sensible and much needed pleading requirements on these types of claims.

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The Court of Appeals for the Ninth Circuit held that an insurance company was not liable under the False Claims Act for initially contesting coverage for the relator’s surgery while Medicare paid the hospital in the interim. See United States ex rel. Mason v. State Farm Mutual Automobile Insurance Co., No. 09-35819, 2010 U.S. App. LEXIS 20385 (9th Cir. Oct. 1, 2010).

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In a case where the government is alleging violations of the False Claims Act and the Anti-Kickback Statute, a Northern District of Mississippi Court rejected the government’s attempt to engage in a “fishing expedition” to support allegations of “unknown wrongs” against “unnamed entities.” See United States v. McKesson Corp., et al., Civil Action No. 2:08CV214-SA-DAS, 2010 WL 4021957 (N.D. Miss. Oct. 13, 2010).

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Earlier, we reported on recent amendments to the New York State False Claims Act.  Our report focused on the portions of the amendments to the New York FCA that tracked amendments to the federal False Claims Act.  Recently, we spoke with Greg Krakower, special counsel to the majority at the New York State Senate, about another significant change included in the amendments:  the New York FCA is now the first FCA in the nation to cover tax fraud.

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A federal court in the Eastern District of Pennsylvania recently denied a relator’s motion seeking disclosure of all grand jury transcripts generated during the course of the government’s five-year criminal investigation of the relator’s allegations. The court noted that the request was premature and granted the relator permission to renew the request on a witness-by-witness basis should traditional discovery of each witness turn out to be inadequate.

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Amedisys, Inc., the largest home health care company in the U.S., has received a civil investigative demand pursuant to the False Claims Act from the Department of Justice.  According to reports from the Wall Street Journal, the CID received by Amedisys requests documents and information relating to “clinical and business operations, including reimbursement and billing claims submitted to Medicare.”

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