The U.S. Supreme Court’s decision to stay out of a dispute over the level of detail regarding claims submissions required to sustain a False Claims Act (FCA) complaint will have a significant impact on the type of cases allowed to move forward, McGuireWoods’ Michael J. Podberesky, co-chair of the firm’s False Claims Act Investigations, Litigation and Enforcement team, told Bloomberg Law in an Oct. 20, 2022, story.
Federal appeals courts have reached different conclusions about how much detail whistleblowers — known as relators under the FCA — need to include in their qui tam complaint to survive a motion to dismiss. The Supreme Court’s decision to reject a series of petitions asking it to clarify the issue makes life somewhat easier for relators, who can strategically file their suits in jurisdictions that use a more favorable standard, said Podberesky, a Washington, D.C., partner.
The U.S. Solicitor General had urged the high court to reject the petitions. If the court had opted to grant cert and ruled in favor of applying the more rigorous standard to complaints and require relators to provide details about specific false claims submitted to the government, that would have led to more cases being dismissed early in the litigation. The Justice Department “was more concerned about a uniform standard that is more favorable to defendants, and that is what they were trying to avoid,” Podberesky told Bloomberg Law.
Going forward, potential defendants should be careful to limit individuals’ access to claims records and submission data, and monitor who accesses that data, Podberesky added. Unusual access and download activity of claims data by employees should trigger alarms as “those individuals might be tomorrow’s relators,” he said.