United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 17-20 (1st Cir. 2009), cert. denied, 130 S. Ct. 3454 (2010)

United States ex rel. Duxbury v. Ortho Biotech Prods., L.P., 579 F.3d 13, 17-20 (1st Cir. 2009), cert. denied, 130 S. Ct. 3454 (2010).

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  Relator brought a qui tam action alleging that Ortho Biotech used an illegal scheme to promote sales of one of its drugs such that it caused providers to submit false claims to federal health care programs for those drugs.
  
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  Noting a distinction between qui tam actions like Duxbury’s that allege defendants induced third parties to file false claims to the government and qui tam actions that assert defendants themselves made the false claims, the First Circuit held that Rule 9(b) is satisfied for the former actions so long as a relator provides “factual or statistical evidence to strengthen the inference of fraud beyond possibility,” even without providing details of each false claim.
  

1. United States ex rel. Hopper v. Solvay Pharmaceuticals, 588 F.3d 1318, 1327, 1329-30 (11th Cir. 2009), cert. denied, 130 S. Ct. 3465 (2010).

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  Relator brought a qui tam action alleging that Solvay used an illegal off-label marketing campaign to promote sales of one of its drugs that caused providers to submit false claims to federal health care programs for those drugs.
  
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  The Eleventh Circuit held that the relator’s complaint was deficient because it did not contain particularized allegations that Solvay intended its false statements to influence the government’s decision to pay a false claim.
  
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  The court did not reach the question of how the particularity requirements of Rule 9(b) affect actions alleging that a third party submitted false claims to the government.
  

1. United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 190-91 (5th Cir. 2009).

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  Physician brought a qui tam action alleging a hospital and physicians billed Medicare and Medicaid for services not performed.
  
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  The Fifth Circuit held that Rule 9(b) permits a relator to bring a claim, despite the fact that he or she may not know the details of the fraudulent billing.
  
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  Rule 9(b) requires only allegations of circumstances constituting fraud, which must merely make relief plausible when accepted as true. Under the FCA, the contents of a presented bill need not be pled with particular detail.
  

1. United States ex rel. West v. Ortho-McNeil Pharm., Inc., No. 03 C 8239, 2007 WL 2091185, at *4 (N.D. Ill. July 20, 2007).

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  The relator, a former sales representative of Ortho-McNeil, alleged that, with the knowledge and consent of the defendant, sales representatives marketed Levaquin and Ultram for off-label uses.
  
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  Despite the relator’s allegations, the court dismissed his claim for failure to plead fraud with sufficient particularity. “While West need not plead every false statement made by Defendants or every false claim made, he does not set forth the circumstances of any particular false statement or cite a single example of a false claim or a provider that made a false claim.” Id. at *4. “[G]eneralized allegations are insufficient where ‘they do not even hint at the identity of those who made the misrepresentations, the time misrepresentations were made, or the places at which the misrepresentations were made.” Id.
  

8. Defense—Eighth Amendment: Excessive Fines

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  United States ex rel. Absher et al. v. Momence Meadows Nursing Center Inc. et al., United States Court of Appeals for the Seventh Circuit, Case. No. 04-2289 (Status Conference Reports dated February 11 and 12, 2013 [Dkt. 481, 482])
  

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  Allegations that nursing home had provided worthless services to residents and concealed its unlawful conduct. Jury awarded maximum $11,000 civil penalty for each of 1,729 bills nursing home submitted to the government, totaling $19 million, as well as government damages of more than $3 million (trebled to $9 million), among other damages.
  
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  However, the Court entered only the $9 million judgment, ruling that the other $19 million in penalties violated the Eighth Amendment’s prohibition on excessive fines.
  

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  United States ex rel. Drakeford v. Tuomey Healthcare System, Inc., 792 F.3d 364 (4th Cir. 2015)
  
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    The Fourth Circuit upheld a judgment against Tuomey Healthcare System of more than $237 million, noting that defendant’s conduct “involved repeated actions, as it submitted 21,730 false claims.”
    
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    “While the Court has been reluctant to fix a bright-line ratio that punitive damages cannot exceed for purposes of the Due Process Clause, it has suggested that an award of more than four times the amount of compensatory damages might be close to the line of constitutional impropriety. Here, the ratio of punitive damages to compensatory damages is approximately 3.6-to-1, which falls just under the ratio the Court deems constitutionally suspect. We therefore conclude that the damages award is constitutional under the Fifth and Eighth Amendments.”
    
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  United States ex rel. Bunk v. Gosselin World Wide Moving, N.V., 741 F.3d 390 (4th Cir. 2013)
  

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  Upholding $24 million FCA penalty under fraud-in-the-inducement theory despite absence of proof of any actual damage).
  
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  The Fourth Circuit reversed the district court’s ruling that the penalty violated the Eighth Amendment.
  

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