A look at selected soon-to-be-reported decisions on various False Claims Act issues.

This month we can glean three quick lessons:

1) A lesson for corporate executives: If you are the owner/CEO, don’t transfer company funds to your personal bank account, particularly if the funds represent Medicaid payments received from inappropriately submitted claims.

A home health care company, with a single owner/CEO and six employees, allegedly submitted claims for reimbursement to the D.C. Medicaid program for services provided to patients without adequate documentation of physician authorization in certain patients’ plans of care. The owner also allegedly transferred significant sums of money received as Medicaid reimbursement from the company’s accounts to his own personal accounts.

Standard summary judgment issues were at play, but the interesting aspect of this case is the Court of Appeal’s decision on how to hold the owner personally liable for the conduct of the company: The court reversed the lower court’s summary judgment ruling to pierce the corporate veil, but nevertheless held the owner of the company still was responsible under a “unity of interest” standard, stating that “insulating the owner from liability would lead to inequitable results.” U.S. v. Dynamic Visions, Inc., No. 17-5265, -- F.3d -- (D.C. Cir. August 21, 2020).

2) A lesson for relators: Relators need to retain a lawyer before filing a False Claims Act case.

Relators tried to proceed with qui tam claims under the False Claims Act without legal counsel. The U.S. Court of Appeals acknowledged that existing case law dictates dismissal if the relator is not represented by a lawyer. Interestingly, the court also said that the existing case law was “wrongly decided,” but was nevertheless binding on the court, and therefore, the case was dismissed without prejudice. Taylor v. Multiplan Network, Chubb Company (America), No. 20-11260, -- Fed. Appx. – (11th Cir. August 18, 2020)

3) A lesson for the government: What happens if the government tries to dismiss a False Claims Act case after it declined to intervene?

Answer: The case still gets dismissed, if you have a creative court. This lesson comes after back-to-back decisions out of the 9th and 7th Circuits.

In the 9th Circuit, the government declined to intervene in a qui tam action, then filed a motion seeking dismissal. The district court denied the motion to dismiss. The government sought an immediate appeal, which was dismissed for lack of jurisdiction, because the 9th Circuit held that the issue fell outside of the collateral order doctrine.U.S. el rel Thrower v. Academy Mortgage Corp., No. 18-16408, -- F.3d – (9th Cir. August 4, 2020).

Less than two weeks later, the 7th Circuit decided the same issue. In this case, however, the court construed the government’s motion to dismiss as a combination motion to dismiss and intervene, which avoided the procedural issues created in the Thrower case. The 7th Circuit still engaged in an interesting (if you like this kind of thing) and very detailed procedural discussion about the limits of government powers under the False Claims Act. Ultimately, by construing the government’s motion as including an implied motion to intervene, the court did not find any jurisdictional hurdles, and fully justified dismissal of the relator’s claims, even without a hearing. U.S. ex rel. Cimznhca, LLC v. UCB, Inc., No. 19-2273, -- F.3d -- (7th Cir. August 17, 2020). Government investigative agencies involved in FCA actions may now more carefully consider filing a combination motion to intervene and motion to dismiss, if they are interested in pursuing dismissal of certain actions after they declined intervention.

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