It has long been known that the medical industry represents the top False Claim Act (FCA) defendants, and subsequent penalty payees, to the Government. It is oftentimes that the medical cases lead the way to where Government Contracting cases may follow and, most often, do follow. In the world of multi-billion dollar recoveries every year by the Department of Justice (DOJ), there is an occasional case that seems to give hope to those that think they were needlessly targeted by a relator (individual bringing a FCA that the DOJ may join).
Last week in the Fifth Circuit Court of Appeals such a case was decided in which the relator had to pay the defendants for taxable costs incurred due to the relator’s action when the action failed to survive a summary judgment motion. In John King, et al v. Solvay Pharmaceuticals, Inc., No. 16-20259 (5th Cir. Sept. 12, 2017), the relators appealed the district court’s grant of summary judgment as well as the court award of $232,809.92 in taxable costs to the defendants.
The Court of Appeals found the following
- The public disclosure bar does not allow relators to bring claims that are publicly known unless that person is the “original source” of the information. “Avoids parasitic suits by opportunistic late-comers.”
- No merit to the claim that the lobbying efforts to put the pharmaceutical company on the preferred lists for states constituted a FCA violation because not shown that such placement led to a false claim being submitted to Medicaid.
- Merely alleging that doctors who were on the compensated marketing programs and proscribed that company’s pharmaceuticals, it may be an inference this caused an up in that prescription, it is not actually a causal known.
- That the district court was correct in its award of taxable costs under Civ. R. Fed. P 54(d)(1), which allows a prevailing party to be awarded costs (excluding attorneys’ fees-unlike some state laws) of the litigation. These costs may include discovery costs like copying, transcription costs (of depositions, etc.) incurred for “use in the case.”
- This overruled the relators’ argument that only those costs should be awarded when the materials were actually used in the case at trial or as a summary judgment exhibits.