Arguing that the First-to-File Bar under the Federal False Claims Act, Which Requires Dismissal by a District Court of a Qui Tam Claim that is Brought While a Related Claim is Pending, Does Not Permit an Appellate Court to Vacate the Dismissal if the Related Claim Has Been Dismissed While the Qui Tam Plaintiff’s Appeal of the Dismissal of His Case is Pending.
Click here to read the brief.
To prevent the proliferation of duplicative or parasitic lawsuits against Government contractors, Congress in 1986 added the “first-to-file” provision to the False Claim Act (“FCA”): “When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5) (emphasis added). At issue here, on a petition for certiorari to the United States Supreme Court, is whether the “first-to-file” provision is an absolute bar requiring a court to dismiss any lawsuit brought by a “whistleblowing” plaintiff on behalf of the Federal Government during the pendency of a related case, or whether, instead, the provision grants a court the discretion to stay the improperly filed lawsuit indefinitely, until the first-filed suit is dismissed. Surprisingly, the First Circuit (opinion by Selya, J.) in this case, alone among all of the other federal circuit courts to have decided the issue, took the latter view and reversed the District Court of Rhode Island’s dismissal of the lawsuit filed by qui tam plaintiff, Robert Gadbois, against PharMerica Corp. U.S. ex rel. Gadbois v. PharMerica Corp., 809 F.3d 1 (First Cir. 2015).
In his FCA qui tam claim, Gadbois alleges that PharMerica had overbilled the Medicare and Medicaid programs by seeking payment for medications dispensed without legally valid prescriptions. When Gadbois filed suit, however, a related case against PharMerica was pending in another federal district court. Accordingly, the trial court in this case dismissed Gadbois’ suit under the first-to-file bar. During Gadbois’ appeal to the First Circuit, however, the related case was dismissed. And so the First Circuit, paying scant attention to the statute’s plain language, ruled that the lower court erred in dismissing the claim and, instead, should have stayed the action indefinitely, pending resolution of the first-filed case. In its remand order, the First Circuit instructed the trial court to consider whether Gadbois may be permitted to supplement his complaint, under Fed. R. Civ. P. 15(d),* to allege the dismissal of the first-filed case and proceed with his qui tam claim. In so deciding, the First Circuit not only disregarded the first-to-file bar’s plain meaning but also rendered meaningless the FCA’s statutes of limitations and repose, discussed in n.1 above, which provide a business with the certainty that it won’t be exposed to potential liability for conduct after the passage of a definite number of years.
In its amicus brief in support of the Petitioner, NELF urged the Supreme Court to grant certiorari to resolve the Circuit split created by the First Circuit and to rule that the First-to-File bar requires a federal court to dismiss any qui tam that is brought while a related claim is pending. NELF argues, first, that the plain language of the statute clearly prohibits the filing here and mandated dismissal of plaintiff’s complaint. Second, NELF argues that the jurisdictional facts under the First-to-File bar must be determined as of the time when the relator files suit, not at some point after that has occurred. Finally, NELF argues that the First Circuit’s decide clearly undermines Congress’s intent in passing the First-to-File bar and defeats the very purpose for which the statute was enacted.
Once again, despite NELF’s arguments, the Supreme Court denied certiorari on June 27, 2016.
*“(d) Supplemental Pleadings. On motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented. The court may permit supplementation even though the original pleading is defective in stating a claim or defense. The court may order that the opposing party plead to the supplemental pleading within a specified time.” Fed. R. Civ. P. 15(d) (emphasis added).
Click here to read the brief.
To prevent the proliferation of duplicative or parasitic lawsuits against Government contractors, Congress in 1986 added the “first-to-file” provision to the False Claim Act (“FCA”): “When a person brings an action under this subsection, no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.” 31 U.S.C. § 3730(b)(5) (emphasis added). At issue here, on a petition for certiorari to the United States Supreme Court, is whether the “first-to-file” provision is an absolute bar requiring a court to dismiss any lawsuit brought by a “whistleblowing” plaintiff on behalf of the Federal Government during the pendency of a related case, or whether, instead, the provision grants a court the discretion to stay the improperly filed lawsuit indefinitely, until the first-filed suit is dismissed. Surprisingly, the First Circuit (opinion by Selya, J.) in this case, alone among all of the other federal circuit courts to have decided the issue, took the latter view and reversed the District Court of Rhode Island’s dismissal of the lawsuit filed by qui tam plaintiff, Robert Gadbois, against PharMerica Corp. U.S. ex rel. Gadbois v. PharMerica Corp., 809 F.3d 1 (First Cir. 2015).
In his FCA qui tam claim, Gadbois alleges that PharMerica had overbilled the Medicare and Medicaid programs by seeking payment for medications dispensed without legally valid prescriptions. When Gadbois filed suit, however, a related case against PharMerica was pending in another federal district court. Accordingly, the trial court in this case dismissed Gadbois’ suit under the first-to-file bar. During Gadbois’ appeal to the First Circuit, however, the related case was dismissed. And so the First Circuit, paying scant attention to the statute’s plain language, ruled that the lower court erred in dismissing the claim and, instead, should have stayed the action indefinitely, pending resolution of the first-filed case. In its remand order, the First Circuit instructed the trial court to consider whether Gadbois may be permitted to supplement his complaint, under Fed. R. Civ. P. 15(d),* to allege the dismissal of the first-filed case and proceed with his qui tam claim. In so deciding, the First Circuit not only disregarded the first-to-file bar’s plain meaning but also rendered meaningless the FCA’s statutes of limitations and repose, discussed in n.1 above, which provide a business with the certainty that it won’t be exposed to potential liability for conduct after the passage of a definite number of years.
In its amicus brief in support of the Petitioner, NELF urged the Supreme Court to grant certiorari to resolve the Circuit split created by the First Circuit and to rule that the First-to-File bar requires a federal court to dismiss any qui tam that is brought while a related claim is pending. NELF argues, first, that the plain language of the statute clearly prohibits the filing here and mandated dismissal of plaintiff’s complaint. Second, NELF argues that the jurisdictional facts under the First-to-File bar must be determined as of the time when the relator files suit, not at some point after that has occurred. Finally, NELF argues that the First Circuit’s decide clearly undermines Congress’s intent in passing the First-to-File bar and defeats the very purpose for which the statute was enacted.
Once again, despite NELF’s arguments, the Supreme Court denied certiorari on June 27, 2016.
*“(d) Supplemental Pleadings. On motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented. The court may permit supplementation even though the original pleading is defective in stating a claim or defense. The court may order that the opposing party plead to the supplemental pleading within a specified time.” Fed. R. Civ. P. 15(d) (emphasis added).
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