On March 17, 2016, the U.S. Department of Justice (“DOJ”) filed a brief in an eagerly anticipated case that addresses the use of statistical sampling in FCA cases for the first time at the appellate level. The case is United States ex rel. Michaels v. Agape Senior Community, Inc. et al., case nos. 15-2145 and 15-2147 (4th Cir. Sept. 29, 2015). The DOJ brief attempts to convince the United States Court of Appeals for the Fourth Circuit that it need not consider the statistical sampling issue in issuing its ruling in Agape.
As explained in a previous Health Headlines article, the Fourth Circuit agreed to hear on interlocutory appeal the issue of whether relators can use statistical sampling to prove liability against defendants, who are a network of nursing homes. The district court found that the use of sampling and extrapolation was inappropriate because this was not a situation where direct proof of damages was impossible. When the government objected to a settlement agreement between relator and defendants based on its argument that the government’s use of statistical sampling extrapolated to the universe of potential claims would yield higher damages, the district court decided to certify the case for interlocutory appeal.
In its brief, DOJ first argues that the United States has unreviewable authority to veto settlements in FCA cases, even when it has declined to intervene in the lawsuit. DOJ contends that if the Fourth Circuit agrees with this view, the court need not even consider whether statistical sampling can be used to establish FCA liability. DOJ proceeds to argue that if the Fourth Circuit does decide to consider the use of statistical sampling, there is no basis for the district court to “categorically reject” the use of statistical sampling in this case and that the district court’s decision reflected a “fundamental misunderstanding of the nature, purpose, and utility” of statistical sampling.
The DOJ brief is available here.
Reporter, Jennifer S. Lewin, Atlanta, +404 572 3569, jlewin@kslaw.com.
