The False Claims Act and the First to File Bar: DC Circuit Breaks with 10th, 7th, and 4th Circuits

I commend to you the recent post by Scott Stein and Catherine Kim of Sidley's Original Source blog and their article, "DC Circuit Opens Circuit Split on FCA's First-to-File Bar," addressing the D.C. Circuit's recent ruling in United States ex re Shea v. Cellco Partnership d/b/a Verizon Wireless, 2014 WL 1394687 (D.C. Cir. April 11, 2014). As they so ably explain, the Shea case is the first circuit court decision to adopt "the position that the first-to-file bar applies to an earlier-filed related suit, even after the original action is no longer 'pending.'" Applying a common sense construction to the "first-to-file" rule of 31 USC 3730(b)(5), the D.C. Circuit held in a 2-1 decision that the first-to-file rule bars relators from bringing subsequent suits alleging the same scheme as the first filed suit, even if the first filed suit is no longer pending and was not dismissed on the merits. Applying a plain language construction of the first-to-file rule, the 4th, 10th, and 7th Circuits have held that as long as a first filed qui tam suit is no longer pending, a subsequent relator may bring a qui tam on the same scheme as long as the second (or third) relator is an original source for the information contained in the second (or third) qui tam. See  In re Natural Gas Royalties Qui Tam Litigation, 566 F.3d 956 (10th Cir. 2009); U.S. ex rel. Chovanec v. Apria Healthcare Grp., Inc., 606 F.3d 361 (7th Cir. 2010); U.S. ex rel. May v. Purdue Pharma L.P., 737 F.3d 908 (4th Cir. 2013).

As Mr. Stein and Ms. Kim point out, "the D.C. Circuit’s decision provides significant protections for defendants by prohibiting relators from bringing suit when the government has already been put on notice of the relevant facts supporting the relator’s claims."

A. Brian Albritton

April 21, 2014