Amendments Give New Life to 16-Year-Old FCA Allegations

Most courts have concluded that the False Claims Act Amendments of 2009 are not retroactive. However, in U.S. ex rel. Kirk v. Schindler Elevator Corp., 601 F.3d 94 (2d Cir. 2010), the Second Circuit went the other way, holding that the revised Section 3729(a)(2) liability provision, 31 U.S.C. §3729(a)(1)(B), applies to cases that were pending on June 7, 2009.

The Kirk decision set the table for one of the more remarkable court decisions of the year. In U.S. ex rel. Drake v. NSI, Inc., No. 3:94-cv-963, 2010 WL 3417854 (D. Conn. Aug. 26, 2010), the court reinstated FCA Section 3729(a)(2) allegations that were dismissed almost a decade ago. In this case, originally filed in 1994, a qui tam relator brought a number of claims against several defendants. In 2000, the relator’s 3729(a)(2) allegations were dismissed. See U.S. ex rel. Drake v. Norden Systems Inc., 2000 U.S. Dist. LEXIS 13371 (D. Conn. Aug. 24, 2000). Since then, the case has continued down a seemingly unending road, including a couple of side trips to the Second Circuit Court of Appeals.

Most importantly, the case was still in the litigative pipeline on June 7, 2009. In turn, in light of the FCA amendments, the relator sought reconsideration of the Section 3729(a)(2) ruling entered ten years ago. After going through the exercise of determining that the application of the revised FCA would not violate the Ex Post Facto Clause of the Constitution, the court ruled that newly minted FCA liability section could apply to the alleged conduct that occurred more than sixteen years ago. Thus, the court granted the relator’s motion to reinstate these claims.

For more information about qui tam law and health care fraud, contact Nolan & Auerbach, P.A.

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