False Claims Act Litigation

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Congress enacted the False Claims Act (“FCA”) in 1863 to combat fraud committed by suppliers of goods to the Union Army during the Civil War.  The FCA lay largely dormant until Congress significantly revamped it in 1986.  From 1986 to 2013, the federal government recovered in excess of $35 billion as a result of cases filed under the FCA.  Although FCA cases can be brought in virtually any industry where the government spends money, nearly one-half of all recoveries have come from health-care related cases.

Vital to the success of the FCA are those who serve as whistleblowers, or “Relators.”  The FCA’s “qui tam” provisions allow these Relators to sue, on the government’s behalf, entities that are defrauding the government.  Once Relators file an FCA suit, the government conducts an investigation and eventually decides whether or not to intervene in the lawsuit.  Relators may also decide to litigate those cases where the government declines to intervene (“non-intervened” cases).  Relators are rewarded with a share of the recovery to the government: between 15% and 25% of the recovery in intervened cases and between 25% and 30% of the recovery in non-intervened cases.  Many states also have their own false claims act statutes which generally operate in a similar manner to the FCA.

Milberg attorneys have expertise in a wide range of federal and state false claims act cases.  Developing a strong factual foundation for a Relator’s claims is critical to persuading the Government to intervene in a Relator’s lawsuit.  To that end, Milberg attorneys work with in-house investigators to uncover additional evidence to bolster Relator’s claims.  However, even when the Government declines to intervene, Milberg has the resources and commitment necessary to continue prosecuting the action.

Milberg has returned hundreds of millions of dollars to federal and state treasuries in both intervened and non-intervened cases.  Milberg’s successful results include the following:

Bank of America:  Milberg represented a Relator who alleged that Bank of America had improperly recouped insurance proceeds from the U.S. Department of Housing and Urban Development to which it was not entitled.  That action was settled as part of the $16.65 billion global settlement regarding Bank of America’s mortgage practices – the largest civil settlement with a single entity in American history.

CareAll:  Milberg represented a Relator in a case brought against one of Tennessee’s largest home health providers (CareAll Management and its affiliated entities) in connection with the companies’ submission of fraudulent home healthcare claims to the Medicare and Medicaid programs.  The Government intervened, the case settled for $25 million and Milberg’s client received a $3.9 million share of the settlement.

Medline:  Milberg represented a Relator in a case against Medline arising from unlawful kickbacks, bribes, and other illegal remuneration to induce health care providers to continue to purchase defendant’s medical supplies in which the Government declined to intervene.  The resulting $85 million settlement is one of the largest settlements of a non-intervened FCA case to date.

BMS: Milberg represented one of the Relators in the FCA case brought against Bristol-Myers Squibb (“BMS”) in connection with the company’s “off-label” promotion and sales of the anti-psychotic drug, Abilify.  The case brought by Milberg’s client was one of seven FCA actions that formed the basis of the Government’s investigation into BMS’s illegal marketing tactics which resulted in a total settlement of over $515 million.

CTI: Milberg represented a Relator in an FCA case against Cell Therapeutics, Inc. (“CTI”) arising from CTI’s unlawful marketing campaign for its cancer drug, Trisenox, which included the payment of kickbacks to physicians.  The Government intervened and the case settled for $10.5 million.  In a landmark decision, the whistleblower was awarded a 15% share in the settlement amount for his efforts in identifying the fraud and assisting the government in prosecuting the case, despite the government’s contention that the whistleblower was a “planner and initiator” of the fraud who was not entitled to any share of the recovery.