On February 23, 2022, Gregory E. Demske, Chief Counsel to the Inspector General for HHS’s Office of Inspector General (“OIG”), provided opening remarks and answered questions during the Federal Bar Association’s annual Qui Tam Conference. Mr. Demske spoke about OIG’s role in False Claims Act (“FCA”) enforcement and resolutions, and discussed enforcement priorities for the upcoming year.
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Fourth Circuit Sheldon Decision Confirms Objective Standard For Scienter Under FCA
On January 25, 2022, the Fourth Circuit joined the growing number of circuits to hold that under the False Claims Act, “a defendant cannot act ‘knowingly’ if it bases its actions on an objectively reasonable interpretation of the relevant statute when it has not be warned away from the interpretation by authoritative guidance” and that “this objective standard precludes inquiry into a defendant’s subjective intent.” United States ex rel. Sheldon v. Allergan, No. 20-2330, (4th Cir. Jan. 25, 2022) (“Opinion”) at 12.
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False Claims Act Update: District Court Rejects DOJ Motion to Intervene for Lack of “Good Cause”
When the United States government decides to intervene in False Claims Act litigation after initially declining intervention, it is not “déjà vu all over again.” Instead, as one court has recognized, the “government is getting on a moving train,”[1] and it can only be permitted to “intervene at a later date” if it can show “good cause” for doing so. See 31 U.S.C. § 3730(c)(3).
On February 24, 2021, a Tennessee federal district court offered a pointed reminder of this principle when it denied a government motion to intervene in a qui tam suit after DOJ originally had declined to intervene six months earlier. See U.S. ex rel. Odom v. Southeast Eye Specialists, No. 3:17-cv-00689 (M.D. Tenn. Feb. 24, 2021). In so ruling, the court vacated a magistrate judge’s Report & Recommendation (“R&R”), which found that DOJ had established “good cause” for intervention. Although motions to intervene pursuant to Section 3730(c) are often granted, the recent order issued in U.S. ex rel. Odom v. Southeast Eye Specialists illustrates that the “good cause” showing is not a hollow requirement and that it can serve as a meaningful constraint on belated attempts by DOJ to intervene to pursue a case after initially declining to do so.
Senior DOJ Attorneys Speak About FCA Enforcement Priorities, Dismissal, and Cooperation
On February 27 and 28, 2020, Joseph H. (Jody) Hunt, Assistant Attorney General for DOJ’s Civil Division, and Michael Granston, Deputy Assistant Attorney General, Commercial Litigation Branch, spoke about False Claims Act (“FCA”) enforcement at the Federal Bar Association’s annual Qui Tam Conference in Washington, D.C. They highlighted FCA enforcement priorities for 2020, and offered insights on the Department’s dismissal policy and cooperation policy – two topics that Deputy Associate Attorney General Stephen Cox also addressed in remarks earlier this year.
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