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Jun 2, 2021 by |

Los Angeles and Orange County Whistleblower Attorney: Important Ninth Circuit False Claims Act Decision

ATTORNEY NEWSLETTER

Ninth Circuit Revives Important Claim

 “Fraud on the FDA” Claim

How False Claims Cases Work

Individuals with credible, original information of false claims made to government agencies for payments and reimbursements can bring actions on behalf of the government against the offending companies under the federal False Claims Act (FCA), 31 U.S.C. § 3729 et seq.  The cases are known as qui tam cases and the whistleblowers in those FCA cases are referred to as “relators;” if the government recovers from the company perpetrating the fraud, the relator is entitled to a share of the recovery as a reward for his or her efforts.  31 U.S.C. § 3730.  Evans Law Firm, Inc. represents whistleblowers/relators in false claims cases of all varieties including cases involving healthcare fraud, which constitute a large percentage of FCA qui tam cases.  Healthcare entities may have committed fraud against the government by overcharging, billing for unapproved drugs or equipment or paying illegal kickbacks.  The companies responsible include pharmaceutical and medical equipment manufacturers, hospitals, clinics, labs and physician groups. If you have credible information for a false claims whistleblower case or any other whistleblower case in California, call us today at (415)441-8669 and we can help.

Recent Ninth Circuit Ruling

A qui tam complaint is filed under seal originally and the government is allowed a period of time (60 days or more by court extension) to review the allegations before the complaint is made public and the defendant served.  31 U.S.C. § 3730(b)(2).  Once the case is out from under seal, the defendant often tries to get the suit thrown out as a matter of law. (Similar to tactics used by defendants in most civil litigation.)  Sometimes, defendants are successful with such early motions, and the plaintiff has the right to appeal if the case is dismissed.  One recent Ninth Circuit decision,[1] the Court of Appeals revived a claim the lower court had dismissed in a large FCA healthcare case. Among other claims, the relator alleged that defendant fraudulently obtained clearance from the Food and Drug Administration (FDA) for certain spinal surgery implants by falsely representing their intended use in submissions to the FDA.  According to the complaint, some of these devices allegedly could not be used as indicated in defendant’s FDA submissions and the device’s labeling and, in fact, could only be used for a contraindicated use.  As such, the relator alleged that these devices were not properly approved or cleared by the FDA and thus would have been ineligible for reimbursement under Medicare but for the defendant’s alleged fraud. 

The district court dismissed this “fraud on the FDA” claim in 2019 for failure to state a claim, finding that its allegations were offered “solely as a predicate for the claim that the Subject Devices were intended for off-label use.”  On April 2, a panel of the Ninth Circuit reversed the district court’s decision as to the allegations related to the defendant’s “contraindicated-only devices”—that is, those devices that allegedly could only be used for their contraindicated use and not for their label-indicated use—noting that the relator did not allege mere off-label use for these devices.  Rather, the panel explained that the relator alleged that the “contraindicated-only devices” were not properly cleared for any use by the FDA and thus defendant’s representations in its clearance application for broad use of the device was an alleged misrepresentation. The Court found the allegation constituted a valid FCA claim[2].  In doing so, the Ninth Circuit relied heavily on United States ex rel. Campie v. Gilead Sciences, Inc., 862 F.3d 890, 899 (9th Cir. 2017).  Evans Law Firm, Inc. was counsel for relators in that significant case.

How FCA Cases Work

If you have credible information of fraud under the False Claims Act we recommend you consult  with counsel regarding how best to proceed.  To be eligible for a reward, whistleblowers must report the fraud through appropriate and timely court filings or an application addressed to the appropriate government agency.  That is where Evans Law Firm, Inc. can help.  We know the appropriate procedures for your type of allegation and know how to organize and present your credible, original information and documentation in the most effective way. The FCA and other whistleblower statutes protect you from retaliation by your employer for blowing the whistle on fraud. 31 U.S.C. § 3730(h).  You may be entitled to sue your employer in federal court and seek double back pay (with interest), reinstatement, reasonable attorneys’ fees, and reimbursement for certain costs in connection with the litigation.  We can represent you for your employment claims in addition to your underlying FCA claims.

Contact Us

If you have information that may be the basis for a False Claims Act qui tam case, call Ingrid M. Evans at Evans Law Firm, Inc. at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our firm handles cases involving bank fraud under FIRREA/FIAFEA, the Commodities Futures Trading Commission Whistleblower Program, the Securities and Exchange Commission Whistleblower Program, False Claims Act cases, the FINRA Whistleblower Office and the California False Claims Act.  If you have information regarding federal or California false claims, offshore tax avoidance schemes against the IRS, or securities fraud in violation of SEC and CFTC regulations,

[1] United States ex rel. The Dan Abrams Co. LLC v. Medtronic PLC et al., Case No. 19-56377 (9th Cir. April 2, 2021).  Evans Law Firm, Inc. was not involved in the reported case, but the firm has successfully overturned dismissals in other cases.

[2] The claim still remains only an allegation.  The matter has been remanded to the lower court and no decision has been reached on the merits of the claim.

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