In This Issue:

U.S. SUPREME COURT DECLINES TO SETTLE CIRCUIT SPLIT ON IMPACT OF FAILURE TO FOLLOW FCA'S FILING-UNDER-SEAL PROCEDURES

The Supreme Court of the United States on June 27, 2011, denied certiorari in U.S. ex rel. Summers v. LHC Group, Inc., 623 F.3d 287 (6th Cir. 2010), leaving unsettled a split within the circuits over the impact of a relator's failure to comply with the filing-under-seal provisions of the federal False Claims Act ("FCA"). The relator in Summers filed suit under the FCA's qui tam provisions but did so on the public docket rather than under seal, as required by § 3730 of the statute. Her later efforts to have the complaint sealed were unsuccessful, and the district court ultimately dismissed her complaint on grounds that the failure to comply with the seal procedures was "a fatal deficiency" depriving her of the right to pursue her FCA claim and frustrating the procedure's underlying purposes. The relator appealed to the U.S. Court of Appeals for the Sixth Circuit, arguing that the district court should have applied a balancing test where the nature and circumstances of her procedural violation would be taken into account in considering dismissal...

DOJ AND HHS WITHDRAW APPROVAL OF 14 STATE FALSE CLAIM ACTS, DENY APPROVAL OF 10 MORE

Section 1909 of the Social Security Act provides a financial incentive for states to enact their own false claims acts. Those states with qualifying acts, as determined by the Department of Justice ("DOJ") in consultation with the Department of Health and Human Services ("HHS"), will receive a 10-percentage-point increase in their share of any amounts recovered under their statute. To qualify, a state statute must meet four requirements, among them that it establish liability of a similar breadth as the federal FCA and that the state statute contain provisions at least as effective as its federal counterpart's for rewarding and facilitating qui tam actions. During the past several years, the DOJ and HHS had approved the respective false claims acts of 14 states – California, Georgia, Hawaii, Illinois, Indiana, Massachusetts, Michigan, Nevada, New York, Rhode Island, Tennessee, Texas, Virginia, and Wisconsin...