Texas Federal Court Dismisses FCA Claims As Insufficiently Pled

In U.S. ex rel. Williams v. McKesson Corp., No. 3:12-CV-0371-B (N.D. Tex. July 9, 2014), a Texas federal court recently dismissed a qui tam whistleblower suit by a former employee of McKesson, a Texas-based entity that provides billing-related services to the health care industry, holding that the former employee failed to establish “the existence of a false or fraudulent claim submitted to the government for payment.”

Factual Background

During her employment with McKesson, Relator Leslie Ann Williams (Williams) allegedly uncovered a series of purported fraudulent Medicare and Medicaid claims submitted by Dr. Stephen Larson, a dentist at the University of Texas Health Science Center–Houston. Specifically, Williams alleged that McKesson sought reimbursement for services rendered by a dentist, Dr. Stephen Larson, that were allegedly “outside the scope of general dentistry and oral dentistry.” Williams alleged that she was terminated as a result of her repeatedly voicing concerns about Dr. Larson’s claims with her supervisors and the Company’s compliance department.

The Court’s Holding

In dismissing Williams’ claims under the False Claims Act (FCA), the court held that Williams’ “conclusory” supposition that Dr. Larson exceeded the scope of his license alone was insufficient to establish that the claims submitted to Medicare/Medicaid “were factually or legally false.” The court further noted that Williams did not meet the heightened pleading requirement under FRCP 9(b) because she did not allege in sufficient detail “how” or “when” Dr. Larson perpetrated the purported fraud. Accordingly, the court ruled that Williams failed to state a viable claim under the FCA.

Takeaway

This decision demonstrates that courts are not paying lip service to the heightened sufficiency and particularity pleading requirements under the Federal Rules of Civil Procedure. Employers should take note and carefully examine the sufficiency and specificity of the factual allegations pled in whistleblower retaliation complaints.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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