On February 25, the U.S. District Court for the Western District of Tennessee dismissed a relator’s qui tam False Claims Act (FCA) suit alleging that the defendants had continued the “exact scheme” previously alleged in U.S. ex rel. Deming v. Jackson-Madison Cty. Gen. Hosp., et al. involving allegations of medically unnecessary cardiac testing and procedures.

The defendants in U.S. ex rel. Maur v. Cmty. Health Sys., Inc., et al., represented by Bass, Berry & Sims and others, moved to dismiss the relator’s action on two grounds. First, the defendants argued that the FCA’s public disclosure bar prohibited the relator’s action as the lawsuit raised substantially the same allegations as those publicly disclosed in the Deming action and subsequent press releases related to that lawsuit. Second, the defendants maintained that the relator had failed to plead any FCA claims with the requisite particularity under Federal Rule of Civil Procedure 9(b). The district court granted the defendants’ motions and dismissed the relator’s action on both grounds.

FCA’s Public Disclosure Bar Precludes Relator’s Action Alleging the “Same” Scheme Previously Disclosed in Prior Lawsuit

The FCA’s public disclosure bar prohibits a relator’s action when an earlier public disclosure of fraud reveals substantially similar allegations of fraud as that alleged in the relator’s action unless the relator qualifies as an “original source” of the allegations. The district court in Maur determined that the public disclosure bar applied using a three-part analysis:

• First, the court held the Deming action and subsequent press releases constituted public disclosures of the fraudulent conduct alleged by the relator.
• Second, the court concluded that the Deming action and press releases disclosed substantially the same allegations as those asserted by the relator. The court reasoned that, although the relator’s action involved some defendants and patient examples that differed from the Deming action, the relator alleged “the same fraudulent scheme” already disclosed in the Deming action and that the relator even lifted “phrases verbatim from the Deming ”
• Third, the court ruled that the relator did not qualify as an “original source” of the information in his complaint. The relator merely restated the scheme previously disclosed in the Deming action and, therefore, did not materially add to the information publicly disclosed by that action.

Complaint Fails to Plead Fraud with Particularity as Required by Federal Rule of Civil Procedure 9(b)

In addition to concluding that the public disclosure bar prohibited the relator’s action, the court also ruled that the relator’s complaint contained numerous pleading deficiencies dooming his case. The relator failed to identify with particularity any false claim that was submitted to the government for payment pursuant to the alleged fraudulent scheme. Although the relator also asserted a “reverse false claim” allegation under the FCA, he omitted allegations of any obligation that the defendants owed to the government as required to plead a reverse false claim. Finally, although he alleged an FCA conspiracy, the relator pleaded none of the requisite elements of a conspiracy claim. Thus, in addition to pleading allegations of fraud that previously were publicly disclosed, the district court held that the relator failed to provide specific factual allegations to support any of his FCA claims with the requisite particularity required under Rule 9(b). The relator’s qui tam complaint was dismissed in its entirety.